Opinion ID: 2561867
Heading Depth: 3
Heading Rank: 2

Heading: Rawlings Collected Money or Any Other Forms of Indebtedness Alleged to be Due and Owing.

Text: A collection agency that collects or attempts to collect any money or any other forms of indebtedness alleged to be due and owing from a Hawai`i resident must register. HRS § 443B-3. The moneys collected from Plaintiffs by Rawlings would appear to fit under this broad category. At oral argument Rawlings asserted, for the first time, that the amounts it collected were not due and owing, and thus not subject to the registration requirement of HRS § 443B-3. Separate and apart from the fact that Rawlings failed to assert this argument in the circuit court, it fails on its merits. Rawlings did not present a clear factual argument for its assertion that the money it had collected from Plaintiffs was not alleged to be due and owing. At different points Rawlings recast its argument into separate assertions (1) that the amounts collected were unliquidated and (2) that they were not in default at the time Rawlings sought to collect upon them. However, contrary to Rawlings's argument, neither of these scenarios negates the conclusion that because of the loan obligation, these amounts were alleged to be due and owing when Rawlings collected upon them. Although it is true that the amounts collected were unliquidated, nothing in HRS chapter 443B limits its application to the collection of liquidated claims. The term unliquidated means not previously specified or determined. Black's Law Dictionary, supra at 1574. Black's defines the more specific term unliquidated debt as a debt that has not been reduced to a specific amount, and about which there may be a dispute, id. at 433, and the term unliquidated claim as a claim in which the amount owed has not been determined. Id. at 254. Even though the amounts collected by Rawlings were not liquidated, Rawlings nevertheless attempted to collect money . . . alleged to be due and owing. As its Notice of Lien letter indicated, the lien claim applie[d] to any amount now due or which may hereafter become payable out of recovery or recoveries collected or to be collected, whether by judgment, settlement or compromise, from any party hereby notified. As such, Rawlings clearly attempted to collect money that it alleged was due and owing. [14] Rawlings's assertion that the amounts collected were not in default at the time collection was sought is also not relevant to our HRS § 443B-3 analysis. Rawlings's argument appears to be based on the FDCPA, and not Hawaii law. In an unpublished decision of the United States District Court for the Middle District of Louisiana proffered to the court by Rawlings at oral argument, the District Court dismissed an FDCPA claim against Rawlings because the debt asserted was not in default at the time it was obtained. Dantin v. The Rawlings Co., Case 3:03-cv-00116-JVP-CN (M.D.La. Apr. 13, 2005). The court relied upon a statutory exception to the definition of debt collector under the FDCPA, according to which a party is not a debt collector if its collection activities concern[ a debt which was not in default at the time it was obtained by such person. . . . 15 U.S.C. § 1692a(6)(F)(iii). The District Court in Dantin concluded that this exception applied, because Rawlings had obtained information from the insurance company regarding payments made by the company on behalf of the plaintiff one year prior to the time at which the plaintiff received settlement funds from the third-party tortfeasor. Id. at 9. Therefore, there was no default, i.e., the amount owed to the insurance company based on the subrogation provision in its policy, at the time the debt was obtained by Rawlings for collection; default occurred only later, when the plaintiff reached a third-party settlement. Because HRS chapter 443B lacks the FDCPA exemption for debts not in default at the time obtained, the Dantin case has no relevance to Rawlings's status as a collection agency subject to the registration requirement of HRS § 443B-3. Therefore, based on the undisputed facts, Rawlings is a collection agency within the meaning of HRS chapter 443B, subject to the registration requirement of HRS § 443B-3. [15]