Denicolo v. Viking Client Services, Inc.

Background

Ronald G. DeNicolo rented a car from a Hertz affiliate, Thrifty, on February 8, 2018, and returned it the next day. Hertz later referred an alleged vehicle-damage claim to Viking Client Services, LLC, doing business as Viking Billing Service. Viking called DeNicolo several times without identifying itself or explaining the reason for the calls. Its first letter, sent about 109 days after he returned the vehicle, demanded payment and did not include disclosures required by the federal Fair Debt Collection Practices Act (FDCPA), including disclosures about debt collection, disputing the debt, and requesting verification.

Michael Fox returned a Hertz rental vehicle on April 2, 2019. Viking sent him a letter on April 23 concerning an alleged damage claim. Fox disputed the claim and sent photographs. Viking then closed the file after Hertz confirmed that the claim was closed.

Summary-judgment standard

Summary judgment is appropriate only when there is no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court must view disputed facts favorably to the nonmoving party and may not weigh conflicting evidence or decide credibility questions that belong to a jury.

DeNicolo’s federal claims

DeNicolo alleged that Viking violated FDCPA sections 1692e and 1692f, which prohibit misleading representations and unfair or unconscionable collection methods. He also asserted claims under the Illinois Vehicle Code and for declaratory judgment. The court explained that the related Illinois and declaratory claims depended on the FDCPA issues presented in Viking’s motion.

Viking challenged whether DeNicolo’s alleged obligation was a consumer debt. Under the FDCPA, a covered debt must arise from a transaction primarily for personal, family, or household purposes. Viking presented evidence that DeNicolo traveled to San Francisco to meet a business client and testified that the trip had no personal aspect. But other evidence showed that DeNicolo booked his own travel, did not use a company credit card, and was the individual Viking contacted. Viking also treated rental-damage claims uniformly without determining whether the underlying rental was for business or personal reasons. Because the evidence pointed in both directions, the court held that the issue could not be resolved on summary judgment.

Viking also argued that it was not acting as a debt collector because the claim was not in default when Hertz assigned it. The court rejected Viking’s reliance on its agreement with Hertz because the agreement covered both billing before default and collection after default. The agreement stated that files were initially placed with Viking as a collection agency and that collection efforts had to begin within 24 hours. The rental agreement also provided that charges not known at the end of the rental were payable immediately upon receipt of an invoice.

The court further noted that Viking’s first notice to DeNicolo came after the period when Viking’s claims ordinarily moved from billing to collection services. The letter referred to a current balance, demanded a response within 30 days, and offered a settlement. This evidence could lead a reasonable person to believe that Viking considered the claim in default or treated it as though it were in default. The court therefore denied summary judgment on DeNicolo’s claims.

Fox’s California claims

Fox alleged that Viking violated the California Rosenthal Fair Debt Collection Practices Act by using misleading representations and unfair collection methods. His unfair-competition, consumer-remedies, and declaratory-judgment claims were derivative of the Rosenthal Act claim.

Viking argued that the damage claim was not yet “due or owing” when it sent Fox the letter. The court explained that the Rosenthal Act’s definition of a debt collector is broader than the FDCPA’s definition and does not exclude people collecting debts that are not yet in default. The court found that Viking’s contract with Hertz did not establish when Fox’s particular claim became due, delinquent, or subject to collection. Viking also failed to provide reliable evidence showing when it received Fox’s claim or when the alleged damage occurred. The incident report was incomplete and incorrect, and the court identified authentication and foundation problems with Viking’s submitted documents.

Because Viking did not establish that Fox’s claim was not due or owing, and because the evidence raised factual disputes about the claim, the court denied summary judgment on Fox’s claims as well. The court also noted that evidence concerning Fox’s alleged injury and lost money or property created a factual dispute relevant to his unfair-competition claim.

Disposition

Judge Yvonne Rogers denied Viking’s motion for summary judgment on all claims and terminated the motion docket entry. The order did not enter judgment for either side on the ultimate liability issues.