Wash. Appeals Court Overturns Ruling for Collector

The Court of Appeals for the State of Washington has reversed a lower court’s ruling and has held a debt collector vicariously liable for the creditor refusing to return an individual’s security deposit when she abandoned the lease for her townhome and required the collector to pay attorney fees and costs for the plaintiff covering two appeals of the original ruling.

A copy of the ruling in the case of Gebreseralse v. Columbia Debt Recovery can be accessed by clicking here.

The plaintiff signed a one-year lease in April 2017 and provided a $1,400 security deposit. She moved out of the townhome in October 2017. The landlord sent the plaintiff a statement that included forfeiture of the security deposit. The defendant filed a collection suit against the plaintiff, seeking to recover the unpaid balance. The plaintiff filed a lawsuit of her own in Washington state court, alleging the defendant violated the Fair Debt Collection Practices Act and state law in Washington. The case was removed to federal court and a District Court judge granted partial summary judgment for the plaintiff.

The defendant appealed the ruling to King County Superior Court in Washington, which reversed the district court’s order and granted the defendant the full balance that was owed. The plaintiff appealed that ruling to the state Court of Appeals.

After first ruling that the defendant was an assignee of the landlord’s claim and subject to both the rights and the defenses applicable to the landlord, the Appeals Court then moved to the issue of the security deposit. Ultimately, the landlord is entitled to recover rent that would have otherwise been lost when a lease is abandoned, but does not entitle it to a financial “windfall.”

Both the plaintiff and defendant also requested fees and costs under the terms of the lease. Because the plaintiff was the prevailing party in this case, the Appeals Court awarded her fees and costs covering both this appeal as well as the appeal heard before the Superior Court.

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