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Kaiser v. Cascade Capital, LLC

United States District Court, D. Oregon, Portland Division

December 4, 2017

MICHAEL KAISER and MARGARET J. LOEWEN, on behalf of themselves and others similarly situated, Plaintiffs,
v.
CASCADE CAPITAL, LLC, and GORDON AYLWORTH & TAMI, P.C., Defendants.

          FINDINGS AND RECOMMENDATION

          JOHN V. ACOSTA, UNITED STATES MAGISTRATE JUDGE.

         Introduction

         Plaintiffs Margaret Loewen (“Loewen”) and Michael Kaiser (“Kaiser”) (collectively, “Plaintiffs”) sued Cascade Capital LLC (“Cascade”) and Gordon, Aylworth & Tami, P.C. (“GAT”) (collectively, “Defendants”) alleging violations of the Fair Debt Collection Practices Act (“FDCPA”). 15 U.S.C. §§ 1692-1692p (2010). Kaiser's claims are currently stayed pending an arbitration decision on whether the claims are arbitrable. Loewen's claims have been challenged by a motion to dismiss, which this court recommended be granted in part and denied in part. That recommendation was initially adopted by Chief District Judge Michael Mosman but, for reasons set forth infra, that opinion was later withdrawn and the question of how to proceed was returned to this court. As explained below, this court again concludes Kaiser's claims are subject to arbitration and that Loewen's claims are not subject to arbitration, and thus recommends that Defendants' motion to dismiss be granted in part and denied in part, without a stay of Loewen's claims in this court.

         Background

         I. Loewen's Allegations.

         Loewen purchased a car in 2007, pursuant to a retail installment contract. (First. Am. Compl., ECF No. 14 (“FAC”), ¶ 16.) Sometime before 2010, Loewen defaulted on the contract, and the car was repossessed. (Id.) Cascade hired GAT to collect debts Cascade had previously purchased.[1] (FAC ¶ 15.) On August 3, 2015, GAT sent Loewen a collection letter for payment of the remaining balance of her retail installment contract. (FAC ¶ 17.) Two months later, Defendants filed a lawsuit against Loewen in state court to collect on the debt. (FAC ¶ 19). Defendants subsequently dismissed the lawsuit against Loewen. (Id.)

         II. Kaiser's Allegations.

         In 2006, Kaiser also bought a car, likewise pursuant to a retail installment contract. (FAC ¶ 21.) In 2009, Kaiser signed an amended agreement that included an arbitration provision under which Kaiser agreed to arbitrate “any claim . . . related to” his auto loan. (Findings and Recommendation on Defendants' Motion to Compel Arbitration, ECF No. 56 (“Arbitration F&R”) at 2, 8, adopted by Opinion and Order, ECF No. 85.)

         Kaiser defaulted on the contract in 2010. (Arbitration F&R at 2; FAC ¶¶ 21-22.) Five years later, Kaiser received a letter from GAT on behalf of Cascade, demanding payment and implying that if he did not pay, Cascade would file suit. (FAC ¶ 22.) Kaiser did not pay, and GAT filed suit in state court in August 2015. (FAC ¶ 23.) The case went to arbitration and Kaiser prevailed, but in the process incurred filing, attorney, and arbitration fees. (Id.) The arbitrator denied Kaiser attorney fees, and Kaiser appealed. (Id.) A state court reversed the arbitrator, awarding Kaiser a total judgment of $10, 223 against Cascade. (Id.)

         III. Common Claims for Relief.

         Based on the operative complaint, Loewen and Kaiser jointly assert the same claims for relief. Together, they allege that Defendants' failure to notify Plaintiffs that their respective debts were potentially barred by statute of limitations, along with Defendants' subsequent threatened and initiated legal actions constitute violations of FDCPA. (FAC ¶¶ 27-28.) Loewen also individually claims that Defendants' filing of the lawsuit against her and delivery of a “packet of papers” regarding the debt caused her emotional anxiety. (FAC ¶¶ 18-20.) Kaiser individually alleges Cascade's collection attempt caused his family significant stress and financial hardship. (FAC ¶ 24. Finally, Plaintiffs assert class allegations on behalf of all individuals residing in Oregon and Washington who received a letter or were sued by Defendants “seeking to collect debts arising from retail installment contracts for which no payment has been made . . . for over fours years after default . . . .” (FAC ¶ 30.) Plaintiffs have also filed a motion to certify that class, which remains pending before this court. (Plaintiffs' Motion to Certify Class, ECF No. 31.)

         Procedural History

         I. Motion to Compel Arbitration of Kaiser's Claims.

         Defendants moved to compel arbitration of Kaiser's claims. (Defs.' Mot. to Compel Arbitration (ECF No. 16).) At issue was whether Kaiser's arbitration agreement went into effect and formed a binding contract. The court granted that motion, holding that whether Kaiser's arbitration agreement encompasses his FDCPA claims is a matter for the arbitrator to decide. (Arbitration F&R at 13-14.) Accordingly, the court stayed the ...


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