Joseph Fangsrud Von Esch v. Legacy Salmon Creek Hospital ( 2018 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS SEP 13 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOSEPH FANGSRUD VON ESCH; No. 17-35659
RENNY FANGSRUD VON ESCH,
D.C. No. 3:16-cv-05842-RBL
Plaintiffs-Appellants,
v. MEMORANDUM*
LEGACY SALMON CREEK HOSPITAL,
a Washington company; ASSET SYSTEMS,
INC., DBA Asset Systems, pursuant to
Washington UBI No. 601474356, Asset
Systems, Inc.,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Washington
Ronald B. Leighton, District Judge, Presiding
Argued and Submitted August 30, 2018
Seattle, Washington
Before: McKEOWN, W. FLETCHER, and GOULD, Circuit Judges.
Plaintiffs-Appellants Joseph and Renny Fansgrud Von Esch appeal from the
district court’s grant of summary judgment in favor of Defendants-Appellees
Legacy Salmon Creek Hospital and Asset Systems, Inc. and denial of Plaintiffs’
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
request for leave to amend to add another claim. We affirm in part, reverse in part,
and remand.
Due to an error, Legacy sent Plaintiffs a medical bill for more than was
owed. In the following months, Legacy sent another bill reflecting the same
erroneous amount, and left phone messages regarding the bill. Plaintiffs did not
respond. Legacy transferred the account to debt collector Asset. About two years
later, Asset mailed Plaintiffs a demand for the erroneous amount due. Plaintiffs
disputed the debt, but Asset continued its attempts to collect until Legacy asked it
to close the account eight months later.
1. The district court did not err in granting summary judgment to Legacy on
Plaintiffs’ Washington Consumer Protection Act, Wash. Rev. Code § 19.86, claim.
An act or practice is not unfair under Washington law if the consumer can avoid
the injury. Merriman v. Am. Guarantee & Liab. Ins. Co., 396 P.3d 351, 368
(Wash. Ct. App. 2017). Here, Plaintiffs knew the bill was in error when they
received it from Legacy, and Legacy provided a toll-free number to call with
billing questions. Plaintiffs took no action until two years later when they received
the bill from Asset.
2. The district court erred in granting summary judgment to Asset on
Plaintiffs’ federal Fair Debt Collection Practices Act claim. One could reasonably
determine that Asset violated 15 U.S.C. § 1692e when it attempted to collect more
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than what was owed, continued to do so after Plaintiffs and their attorney told
Asset about the error, and despite having been told of the billing error, improperly
threatened a lawsuit without adequate inquiry. See Afewerki v. Anaya Law Grp.,
868 F.3d 771, 777 (9th Cir. 2017); Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d
1055, 10634 n.6 (9th Cir. 2011). On this record, Asset cannot establish as a
matter of law a bona fide error defense. See McCollough v. Johnson, Rodenburg &
Lauinger, LLC, 637 F.3d 939, 948 (9th Cir. 2011); Reichert v. Nat’l Credit Sys.,
531 F.3d 1002, 1007 (9th Cir. 2008).
3. The district court erred in granting summary judgment to Asset on
Plaintiffs’ Washington Consumer Protection Act claim. A jury could determine
that Asset’s attempts to collect the erroneous amount and threat of a lawsuit
violated the Act. See, e.g., Panag v. Farmers Ins. Co. of Wash., 204 P.3d 885,
89798 (Wash. 2009).
4. The district did not abuse its discretion in denying leave to amend to add a
claim against Legacy for “outrage” under Washington law. We agree that such
amendment would be futile. Wheeler v. City of Santa Clara, 894 F.3d 1046, 1059
(9th Cir. 2018); Kloepfel v. Bokor, 66 P.3d 630, 632 (Wash. 2003).
AFFIRMED in part, REVERSED in part, and remanded. Each party shall
bear its own costs on appeal.
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