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Syria v. Allianceone Receivables Management Inc.

United States District Court, W.D. Washington, Seattle

July 18, 2018

DANA SYRIA, individually and on behalf of all others similarly situated, Plaintiff,



         THIS MATTER comes before the Court on a motion for summary judgment brought by defendant AllianceOne Receivables Management, Inc. (“AllianceOne”), docket no. 69. Having reviewed all papers filed in support of, and in opposition to, the motion, the Court enters the following order.


         Pursuant to RCW 3.02.045(1), the King County District Court entered into a contract with AllianceOne pursuant to which AllianceOne would collect for the King County District Court unpaid legal financial obligations (“LFOs”) imposed in connection with criminal sentences. See Ex. 2 to Bolden Decl. (docket no. 54-2); see also 1st Am. Compl. at ¶¶ 3.1 & 3.4 (docket no. 1-1). The contract between the King County District Court and AllianceOne was in effect from August 1, 2009, through July 31, 2010, and then automatically renewed for one-year terms thereafter, until it was terminated. See Ex. 2 to Bolden Decl. (docket no. 54-2).[1] Under the agreement, AllianceOne absorbed all costs in processing credit cards, and it could charge and retain a “nominal convenience fee” for credit card transactions. Ex. 4 to Bolden Decl. (docket no. 54-4). AllianceOne's credit card fee is the subject of this litigation.

         During the relevant period, AllianceOne accepted payment via cash, check, or money order without charging a transaction fee. See Silvernale Decl. at ¶ 2 (docket no. 10-24). AllianceOne was not required to permit payment by credit card, but it did so as a convenience to debtors. See id. In contrast to cash payments, which require a debtor to travel to a courthouse pay station, credit card transactions could be completed online or by phone. See id. at ¶¶ 2 & 3. Moreover, unlike payments by check, credit card transactions were not subject to any waiting period, and were immediately posted in the same manner as cash. Id. at ¶ 2; see Ex. 4 to Bolden Decl. (docket no. 54-4) (a 14-day holdover was placed on personal checks, after which time AllianceOne would “absorb all checks returned” for insufficient funds or otherwise). Thus, by using a credit card, a debtor could wait until the due date to make payment without incurring any late penalties. See Silvernale Decl. at ¶ 2 (docket no. 10-24).

         In written communications with debtors, AllianceOne advised that a convenience fee would be charged for each credit card transaction. See Ex. 4 to Bolden Decl. (docket no. 54-4). The convenience fee was initially $5, but increased to $10 during the timeframe at issue in this litigation. See id.; Brimer Decl. at ¶ 2.A (docket no. 9-17). In addition, when debtors called or went online to make credit card payments, they were told about the associated transaction fee, as well as the fee-free payment options, namely walk-in cash payments or payments by check via mail. Silvernale Decl. at ¶ 3 (docket no. 10-24).

         On July 22, 2010, plaintiff Dana Syria pleaded guilty to a misdemeanor, and the King County District Court imposed LFOs in the amount of $1, 720.50. 1st Am. Compl. at ¶ 3.3 (docket no. 1-1). Between November 2011 and October 2012, plaintiff made four payments to AllianceOne via credit card in connection with the LFOs imposed by the King County District Court, and each time incurred a $10 charge for using a credit card. Id. at ¶ 3.5. Plaintiff alleges that AllianceOne's assessment of credit card fees was prohibited by Washington's Collection Agency Act (“WCAA”) and therefore constituted an unfair or deceptive trade practice in violation of Washington's Consumer Protection Act (“CPA”). Id. at ¶ 5.2. Plaintiff asserts her CPA claim on behalf of a class of all persons who paid AllianceOne a transaction fee for use of a credit or debit card to pay down an alleged debt. Id. at ¶ 4.4(i).[2] AllianceOne now moves for summary judgment, seeking dismissal of plaintiff's CPA claim.


         A. Standard for Summary Judgment

         The Court shall grant summary judgment if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). When the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party on matters as to which such party will bear the burden of proof at trial, summary judgment is warranted. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986).

         B. Washington's Consumer Protection Act

         To establish a violation of the CPA, a private plaintiff must prove that: (i) the defendant engaged in an unfair or deceptive act or practice; (ii) such act or practice occurred within a trade or business; (iii) such act or practice affected the public interest; (iv) the plaintiff suffered an injury to his or her business or property; and (v) a causal relationship exists between the defendant's act or practice and the plaintiff's injury. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 785-93, 719 P.2d 531 (1986). In its motion for summary judgment, AllianceOne contends that plaintiff cannot establish any of the five elements of a CPA claim. The Court concludes, as a matter of law, that plaintiff has not met her burden, with respect to the first element, of showing AllianceOne engaged in an unfair or deceptive act or practice by imposing the credit card transaction fee at issue and, as a result, the Court does not reach the other arguments raised by AllianceOne.

         Whether conduct constitutes an unfair or deceptive trade practice within the meaning of the CPA constitutes a question of law. Robinson v. Avis Rent A Car Sys., Inc., 106 Wn.App. 104, 114, 22 P.3d 818 (2001). An act or practice can be deemed unfair or deceptive in one of two ways: (i) when it violates a statute in which the Washington Legislature has declared such violation to be a “per se” unfair or deceptive trade practice, Hangman Ridge, 105 Wn.2d at 786; or (ii) when it is either unfair or deceptive under the criteria developed in Washington jurisprudence, see Rush v. Blackburn, 190 Wn.App. 945, 962-63, 361 P.3d 217 (2015) (outlining a three-part test for “unfair” acts[3] and a separate standard for “deceptive” practices[4]). Plaintiff has not satisfied either test for an unfair or deceptive trade practice.

         Certain violations of the WCAA are “per se” unfair acts or practices for purposes of the CPA, including commission by a licensed collection agency of an act or practice prohibited by RCW 19.16.250. See RCW 19.16.440. Plaintiff alleges that AllianceOne is a collection agency within the meaning of the WCAA and that it violated one of the provisions of RCW 19.16.250, namely subsection (21), which precludes a collection agency from collecting or attempting to collect “in addition to the principal amount of a claim any sum other than allowable interest, collection costs or handling fees expressly authorized by statute, and, in the case of suit, attorney's fees and taxable court costs.” RCW 19.16.250(21) (emphasis added). AllianceOne responds that this language did not apply to its collection activities because LFOs are not a “claim” as defined by the WCAA. The Court agrees. Under the WCAA, a “claim” is an ...

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