State Appeals Court Partially Overturns Ruling Against Collection Law Firm

A state Appeals Court in Washington has partially affirmed — and partially overturned — a lower court’s dismissal of a case against a creditor and collection law firm, ruling that the plaintiff pleaded sufficient facts to survive a motion to dismiss that the firm violated state law by not disclosing required information when filing a collection lawsuit and that the firm was licensed in the state.

A copy of the ruling in the case of Scott v. American Express National Bank and Suttell & Hammer can be accessed by clicking here.

The law firm filed a collection lawsuit on behalf of the creditor to collect on an unpaid debt. The case was dismissed for failure to prosecute. After the case was dismissed, the law firm filed a motion for summary judgment. On the day the hearing was scheduled, the plaintiff learned the case had been dismissed more than two years prior.

The plaintiff filed suit, alleging the defendants violated Washington’s Consumer Protection Act. The defendants filed a motion to dismiss, alleging they were immune from liability because they acted within a judicial proceeding and because the plaintiff did not suffer any injury. A trial court judge granted the motion, which the plaintiff appealed.

Ultimately, the Appeals Court affirmed all of the lower court’s rulings except for one — the CPA claim against the collection law firm. State law in Washington requires the first written communication with an individual to include the amount owed, interest charged, costs, and other charges, collection costs, and attorneys’ fees, and that no action may be brought without proving that the agency bringing the action is licenses and has satisfied the bonding requirements.

At the motion to dismiss stage, the court must assume that all the allegations made in a complaint are true. Since the plaintiff’s allegations satisfied the five criteria needed to prevail against a motion to dismiss for a CPA claim, the lower court erred in granting the motion to dismiss, the Appeals Court ruled.

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