Avery v. First Resolution Mgt ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROBIN L. AVERY, 
Plaintiff-Appellant,
v. No. 07-35726
FIRST RESOLUTION MANAGEMENT D.C. No.
CORPORATION, a foreign
corporation; FIRST RESOLUTION  CV-06-01812-HA
ORDER AND
INVESTMENT CORPORATION, an
AMENDED
unregistered entity; DERRICK E.
OPINION
MCGAVIC, Attorney; KRISTIN K.
FINNEY, Attorney,
Defendants-Appellees.

Appeal from the United States District Court
for the District of Oregon
Ancer L. Haggerty, District Judge, Presiding
Argued and Submitted
March 4, 2009—Portland, Oregon
Filed April 2, 2009
Amended May 22, 2009
Before: Susan P. Graber, Raymond C. Fisher and
Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.
6089
AVERY v. FIRST RESOLUTION MANAGEMENT 6091
COUNSEL
Danny H. Gerlt, Portland, Oregon, for the plaintiff-appellant.
David A. Jacobs, Luvaas Cobb, Eugene, Oregon; Daniel N.
Gordon P.C., Eugene, Oregon, for the defendants-appellees.
ORDER
The opinion filed April 2, 2009 is hereby amended to
include the following footnote, placed at the end of the sen-
6092 AVERY v. FIRST RESOLUTION MANAGEMENT
tence <>. Avery v. First Resolution Mgmt., No.
07-35726, slip op. at 3978.
Text of the footnote:
<>
The panel has unanimously voted to deny the petition for
rehearing en banc. The full court has been advised of the peti-
AVERY v. FIRST RESOLUTION MANAGEMENT 6093
tion for rehearing en banc and no judge of the court has
requested a vote on it. Fed. R. App. P. 35. Petitions for rehear-
ing and rehearing en banc concerning the amended opinion
will not be permitted. See Gen. Order 5.3(a).
Accordingly, with the filing of this amendment, the petition
for rehearing en banc is DENIED.
OPINION
MILAN D. SMITH, JR., Circuit Judge:
Plaintiff-Appellant Robin L. Avery appeals the district
court’s grant of summary judgment in favor of Defendants-
Appellees Derrick E. McGavic and Kristin K. Finney (collec-
tively, the Attorneys) and the district court’s denial of Avery’s
request for attorney’s fees from Defendants-Appellees First
Resolution Management Corporation and First Resolution
Investment Corporation (collectively, First Resolution).
Avery claims that the Attorneys attempted to collect a time-
barred debt against her in violation of the Fair Debt Collection
Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p. She also
claims that the district court’s refusal to accept supplemental
jurisdiction over First Resolution’s counterclaim against her
entitles her to attorney’s fees as a prevailing party. We have
jurisdiction under 28 U.S.C. § 1291, and we affirm the district
court.
FACTUAL AND PROCEDURAL BACKGROUND
Avery, an Oregon resident at all relevant times, received an
offer for a credit card from Providian National Bank
(Providian) in July 2001. Avery applied for and received the
card and used it to make several purchases. She received the
billing statements at her Oregon residence and made pay-
ments on her card balance, the last of which was credited to
6094 AVERY v. FIRST RESOLUTION MANAGEMENT
her account on November 5, 2001. At that time, Avery’s bal-
ance stood at $2,971.82. Under the terms of the credit card
agreement, Avery was charged interest at 23.99% per annum
on any unpaid balance. The agreement also provided that the
laws of New Hampshire would apply in case of a dispute,
regardless of Avery’s actual residence, and contained an attor-
ney’s fee clause. Avery defaulted on her account and made no
further payments after November 2001.
Providian assigned the account for collection, and First
Resolution purchased the debt. On November 15, 2004, First
Resolution sent Avery a notice identifying itself as the owner
of the debt and indicating that the account information would
be forwarded for collection to a lawyer in Avery’s area if the
debt was not resolved by December 6, 2004. Avery received
a letter dated December 29, 2004, from McGavic, one of the
Attorneys, informing her, as required by 15 U.S.C. § 1692(g)
and (e)(11), that she could dispute her debt in writing and that
First Resolution was considering filing suit. McGavic filed
suit against Avery on behalf of First Resolution on February
9, 2006, in the Washington County Circuit Court of Oregon.
On the day the suit was filed, Avery disputed the debt and
requested verification. Finney, the other of the Attorneys,
responded to Avery’s request for verification in May and pro-
vided Avery updates on the amount of the balance in June and
August. On September 13, 2006, McGavic served Avery with
a notice of intent to apply for an Order of Default Judgment.
On September 20, Finney received notice that Avery was rep-
resented. The next day, Finney filed a motion to dismiss the
underlying lawsuit without prejudice, allegedly because the
Attorneys had concluded it would be best to avoid protracted
litigation over such a small amount. The Attorneys denied that
the reason they decided to dismiss the lawsuit was because
Avery indicated her intention to pursue a statute of limitations
defense.
Avery filed suit against First Resolution and the Attorneys
on December 19, 2006, in the United States District Court for
AVERY v. FIRST RESOLUTION MANAGEMENT 6095
the District of Oregon. On January 31, 2007, First Resolution
filed a counterclaim seeking to collect the debt due on
Avery’s account. Avery moved to dismiss the claim for lack
of subject matter jurisdiction under Federal Rule of Civil Pro-
cedure 12(b)(1). The Attorneys moved for summary judgment
on Avery’s FDCPA claim that they had illegally attempted to
collect a time-barred debt, and Avery made a cross-motion for
summary judgment, arguing that the underlying debt at issue
was time-barred as a matter of law.
The district court found that the underlying debt was not
time-barred and granted the Attorneys’ motion for summary
judgment, denying Avery’s cross-motion for summary judg-
ment on the same issue. The district court also declined to
exercise supplemental jurisdiction over First Resolution’s
counterclaim and dismissed it accordingly, but did not award
Avery attorney’s fees. Avery appealed to this court.
STANDARD OF REVIEW
We review a district court’s decision on cross-motions for
summary judgment de novo. Arakaki v. Hawaii, 314 F.3d
1091, 1094 (9th Cir. 2002). Summary judgment is appropri-
ately awarded when, viewing the evidence in the light most
favorable to the nonmoving party, there are no genuine issues
of material fact and the district court has correctly applied the
underlying substantive law. Olsen v. Idaho State Bd. of Med.,
363 F.3d 916, 922 (9th Cir. 2004).
We review the district court’s denial of attorney’s fees and
costs for abuse of discretion. P.N. v. Seattle Sch. Dist., No. 1,
474 F.3d 1165, 1168 (9th Cir. 2007). Elements of legal analy-
sis and statutory interpretation underlying the district court’s
decision are reviewed de novo, and factual findings are
reviewed for clear error. Id.6096 AVERY v. FIRST RESOLUTION MANAGEMENT
DISCUSSION
A. Summary Judgment to the Attorneys
[1] Both parties agree that under the terms of the original
agreement between Avery and Providian National Bank, New
Hampshire law applies to this dispute. Under Oregon law,
applied by the district court sitting in diversity, if a claim is
based upon the law of another state, the limitations period of
that state applies, as do the laws of that state governing tolling
and accrual. OR. REV. STAT. §§ 12.430(1)(a), 12.440. Accord-
ingly, because New Hampshire law covers First Resolution’s
claim against Avery, New Hampshire law also controls the
applicable statute of limitations, as well as tolling and accrual
provisions.
[2] The New Hampshire statute of limitations for an action
on a credit card is three years. N.H. REV. STAT. ANN. § 508:4.
However, this statutory period is tolled if a defendant is
absent from and residing out of the state at the time the cause
of action accrued. Id. § 508:9 (“If the defendant in a personal
action was absent from and residing out of the state at the
time the cause of action accrued, or afterward, the time of
such absence shall be excluded in computing the time limited
for bringing the action.”). Avery contends that “the state”
referred to in the New Hampshire statute should be inter-
preted to mean “the forum state,” in this case, Oregon, and not
New Hampshire.
[3] All available case law interpreting this statute suggests
that its intent and purpose is to toll New Hampshire’s statute
of limitations when the defendant is not available to be served
by a plaintiff suing in the state of New Hampshire. Bolduc v.
Richards, 142 A.2d 156, 158 (N.H. 1958) (holding that the
statute of limitations is only tolled when a defendant could not
otherwise be served in New Hampshire due to lack of per-
sonal jurisdiction); Quarles v. Bickford, 13 A. 642, 643 (N.H.
1887) (same); see also Atwood v. Bursch, 219 A.2d 285, 287
AVERY v. FIRST RESOLUTION MANAGEMENT 6097
(N.H. 1966) (holding that the statute of limitations runs only
in favor of those who are within the state).
[4] Although the analysis in this case is otherwise simple
enough to be addressed in an unpublished opinion, we address
this issue to hold that, under OR. REV. STAT. §§ 12.430 and
12.440, when parties lawfully adopt a state’s law for the pur-
poses of resolving disputes arising from an agreement, they
adopt that state’s statute of limitations provision and tolling
provision in toto. Avery agreed to abide by New Hampshire’s
statute of limitations as well as its tolling provisions, which
have consistently been interpreted by New Hampshire courts
to apply when defendants are absent from New Hampshire,
not from any other state.1
Avery’s theory rests on the premise that Oregon’s choice of
law regime converts the foreign jurisdiction’s substantive law
into Oregon’s for the purposes of that lawsuit. That premise
1
Several advocacy groups filed a brief as amici curiae in support of
Avery’s petition for rehearing en banc, suggesting that our opinion over-
looks the ramifications of allowing perpetual tolling against out-of-state
debtors under New Hampshire’s tolling provision. We do not purport to
construe definitively the scope of New Hampshire’s tolling provision or
to determine conclusively its effect when lawsuits are filed outside New
Hampshire courts. Rather, we address only the narrow statutory argument
Avery has made: that under Oregon’s choice of law regime, “the state”
referred to in N.H. REV. STAT. ANN. § 508:9 is Oregon when a lawsuit is
filed in Oregon but New Hampshire law otherwise governs.
We express no opinion on arguments Avery did not raise, including,
without limitation: (1) whether New Hampshire courts would construe
N.H. REV. STAT. ANN. § 508:9 to allow perpetual tolling against an out-of-
state defendant on a cause of action that could not, as a matter of law, be
brought in New Hampshire courts, see 15 U.S.C. § 1692i (requiring debt
collectors to bring action on debt against a consumer in the judicial district
where the consumer signed a contract or where the consumer resides); or
(2) whether a credit card agreement would be unconscionable under New
Hampshire law if it led to perpetual tolling when the debt collector was
free to sue the card holder at any time in the card holder’s home jurisdic-
tion.
6098 AVERY v. FIRST RESOLUTION MANAGEMENT
is not borne out by the plain language of the Oregon statutes.
See OR. REV. STAT. § 12.440 (providing “the other state’s stat-
utes and other rules of law governing tolling and accrual
apply”); OR. REV. STAT. § 81.120 (providing “the contractual
rights and duties of the parties are governed by the law or
laws that the parties have chosen”). Taken together, these pro-
visions simply require Oregon courts to apply the substantive
law of another jurisdiction as a court of the foreign jurisdic-
tion would, not to transform that foreign substantive law into
domestic law for a particular case. Avery’s suggested gloss of
New Hampshire’s tolling statute in light of Oregon’s conflict
of law regime is wholly unwarranted; it seeks to take advan-
tage of the portions of New Hampshire law that are favorable
to Avery and ignore the balance.
Plaintiff contests the constitutionality of the New Hamp-
shire tolling statute’s application to her, citing Abramson v.
Brownstein, 897 F.2d 389 (9th Cir. 1990), which in turn relied
on Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486
U.S. 888 (1988). We need not decide whether the New Hamp-
shire tolling statute’s application to Avery is unconstitutional
because, even if it were, Oregon law provides that Oregon’s
limitation period applies if the limitation period of another
state that otherwise would apply imposes an unfair burden in
defending against the claim. OR. REV. STAT. § 12.450. The
applicable Oregon statute of limitations for contractual claims
is six years, id. § 12.080, and the action against Avery was
filed within six years.
[5] Because Avery was absent from New Hampshire at all
relevant times, the statute of limitations on the claim against
her was tolled under New Hampshire law and had not run by
the time the Attorneys brought suit against her in Oregon.
Even if the New Hampshire tolling statute were unconstitu-
tional, OR. REV. STAT. § 12.450 would replace New Hamp-
shire’s statute of limitations with Oregon’s six-year
limitations period, under which the suit was timely. Accord-
ingly, the district court did not err in granting summary judg-
AVERY v. FIRST RESOLUTION MANAGEMENT 6099
ment to the Attorneys on the claim that they had violated the
FDCPA by attempting to collect on a time-barred debt. The
district court was also correct in denying Avery’s claim for
summary judgment on this issue.2
B. Attorney’s Fees
In an action where a federal district court exercises subject
matter jurisdiction over a state law claim, so long as state law
does not contradict a valid federal statute, “ ‘state law denying
the right to attorney’s fees or giving a right thereto, which
reflects a substantial policy of the state, should be followed.’ ”
MRO Commc’ns, Inc. v. AT&T Co., 197 F.3d 1276, 1281 (9th
Cir. 1999) (quoting Alyeska Pipeline Serv. Co. v. Wilderness
Soc’y, 421 U.S. 240, 259 n.31 (1975)); see also Mangold v.
Cal. Pub. Utils. Comm’n, 67 F.3d 1470, 1478 (9th Cir. 1995).
Under Oregon choice-of-law provisions, the state law chosen
by the parties to control the substantive issue under dispute
also controls the issue of attorney’s fees, unless doing so
would circumvent a fundamental public policy of Oregon law.
Fiedler v. Bowler, 843 P.2d 961, 963 (Or. Ct. App. 1992). In
this case, however, the district court explicitly declined to
exercise subject matter jurisdiction over the state law claim,
so it is unclear whether New Hampshire law or federal law
controls Avery’s entitlement to attorney’s fees on the state
law counterclaim. See MRO Commc’ns, 197 F.3d at 1281(holding state law controls entitlement to attorney’s fees if the
district court exercises subject matter jurisdiction over a state
law claim).
[6] We need not resolve this question, because Avery has
not established her entitlement to attorney’s fees under either
standard. Although the New Hampshire Supreme Court has
held a party is entitled to attorney’s fees under New Hamp-
2
Because the claim against Avery was not time-barred, we need not and
do not decide whether the FDCPA prohibits efforts to collect a time-
barred debt.
6100 AVERY v. FIRST RESOLUTION MANAGEMENT
shire law when the opposing party recovers nothing on a
claim after a jury trial, see Van Der Stok v. Van Voorhees, 866
A.2d 972, 978 (N.H. 2005), we have not found any case in
which a New Hampshire court held a party is entitled to attor-
ney’s fees when a claim against it is dismissed without preju-
dice. Under federal law, a prevailing party must have
experienced an alteration in the legal relationship of the par-
ties in order to be entitled to attorney’s fees. Buckhannon Bd.
& Care Home, Inc. v. W. Va. Dep’t of Health & Human Res.,
532 U.S. 598, 605 (2001). Avery’s legal relationship with
First Resolution was not altered by the district court’s dis-
missal without prejudice of the permissive state law counter-
claims because First Resolution was free to refile those
claims. See Oscar v. Alaska Dep’t of Educ. & Early Dev., 541
F.3d 978, 982 (9th Cir. 2008) (holding defendant was not a
prevailing party, because defendant “remains at risk that
Oscar will re-file his IDEA claim in federal court”); cf. Datt-
ner v. Conagra Foods, Inc., 458 F.3d 98, 103 (2d Cir. 2006)
(per curiam) (denying the defendant’s claim for attorney’s
fees because “[a] dismissal on the ground of forum non conve-
niens does not, after all, immunize a defendant from the risk
of further litigation on the merits of a plaintiff’s claims”).
Accordingly, the district court did not abuse its discretion in
denying Avery’s motion for attorney’s fees and costs.
AFFIRMED.