Lyon v. Bergstrom Law, Ltd.

Filing 18

ORDER Denying Defendant's 5 Motion to Dismiss, signed by District Judge Dale A. Drozd on 8/5/2016. (1) Defendant's 5 motion to dismiss the complaint is denied; and 2) Defendant is directed to file an answer within fourteen days after notice of this order.) (Gaumnitz, R)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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NICOLE LYON,

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Plaintiff,

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No. 1:16-cv-00401-DAD-SKO

ORDER DENYING DEFENDANT’S
MOTION TO DISMISS

v.
BERGSTROM LAW, LTD.,

(Doc. No. 5)

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Defendant.

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On March 24, 2016, plaintiff Nicole Lyon filed a complaint alleging damages against

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defendant Bergstrom Law, Ltd. for violations of (1) the Fair Debt Collections Practices Act

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(“FDCPA”), 15 U.S.C. §§ et seq. and (2) the Rosenthal Fair Debt Collection Practices Act

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(“Rosenthal Act”), Cal. Civ. Code §§ 1788-1788.32. (Doc. No. 1.) On May 31, 2016, defendant

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moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure

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to state a claim upon which relief can be granted. (Doc. No. 5.) On July 19, 2016, the court

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heard oral argument on the motion. (Doc. No. 17.) Attorneys Crosby Connolly and Robert Hyde

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appeared at the hearing telephonically for plaintiff. (Id.) Attorney Katherine Heidbrink appeared

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telephonically for defendant. (Id.) For the reasons set forth below, defendant’s motion to dismiss

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will be denied.

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BACKGROUND

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Plaintiff alleges that sometime before February 2016, she fell behind in payments

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allegedly owed on a debt. (Doc. No. 1, at 4.) On or about February 2016, defendant contacted

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plaintiff by telephone “in an attempt to collect [p]laintiff’s alleged debt and left [p]laintiff a

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voicemail.” (Id.) Defendant, however, did not disclose in this voicemail message that the

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communication was from a debt collector. (Id.) Plaintiff alleges that this conduct violated 15

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U.S.C. § 1692e(11)’s required disclosure that the communication is from a debt collector. (Id.)

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Because this portion of the FDCPA is incorporated by reference in the Rosenthal Act, plaintiff

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alleges that the conduct violated the Rosenthal Act as well. (Id.)

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Defendant has moved to dismiss plaintiff’s complaint on the grounds that voicemail

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messages providing only a name and callback number should not be deemed “communication”

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subject to § 1692e(11)’s required disclosure that the communication is from a debt collector

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because to make that disclosure in these circumstances could subject the debt collector to liability

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under violated 15 U.S.C. § 1692c(b) for the unintentional disclosure of the existence of debt to

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third parties. (Doc. No. 5.) Furthermore, defendant notes, courts have found that repeated calling

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by debt collectors and not leaving any message can violate the FDCPA as well. (Id.)

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LEGAL STANDARD

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The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal

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sufficiency of the complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir.

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1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of

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sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901

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F.2d 696, 699 (9th Cir. 1990). A plaintiff is required to allege “enough facts to state a claim to

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relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A

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claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw

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the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S.

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at 678.

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In determining whether a complaint states a claim on which relief may be granted, the

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court accepts as true the allegations in the complaint and construes the allegations in the light
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most favorable to the plaintiff. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984); Love v.

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United States, 915 F.2d 1242, 1245 (9th Cir. 1989). In general, pro se complaints are held to less

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stringent standards than formal pleadings drafted by lawyers. Haines v. Kerner, 404 U.S. 519,

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520-21 (1972). However, the court need not assume the truth of legal conclusions cast in the

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form of factual allegations. United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th

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Cir. 1986). While Rule 8(a) does not require detailed factual allegations, “it demands more than

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an unadorned, the defendant-unlawfully-harmed-me accusation.” Iqbal, 556 U.S. at 678. A

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pleading is insufficient if it offers mere “labels and conclusions” or “a formulaic recitation of the

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elements of a cause of action.” Twombly, 550 U.S. at 555. See also Iqbal, 556 U.S. at 676

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(“Threadbare recitals of the elements of a cause of action, supported by mere conclusory

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statements, do not suffice.”). Moreover, it is inappropriate to assume that the plaintiff “can prove

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facts which it has not alleged or that the defendants have violated the . . . laws in ways that have

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not been alleged.” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters,

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459 U.S. 519, 526 (1983).

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ANALYSIS
The purpose of the FDCPA is to protect against harassing, oppressive or abusive conduct

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by debt collectors. 15 U.S.C. § 1692d. Section 1692e of the FDCPA prohibits any “false,

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deceptive, or misleading representation or means in connection with the collection of any debt.”

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Id. at § 1692e. The Ninth Circuit has held that the statute is to be liberally construed so as to

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protect the “least sophisticated debtor.” Clark v. Capital Credit & Collection, Inc., 460 F.3d

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1162, 1171 (9th Cir. 2006). See also Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 938-39

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(9th Cir. 2007). This standard is to be applied in order to “ensure that the FDCPA protects all

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consumers, the gullible as well as the shrewd . . . the ignorant, the unthinking and the credulous.”

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Clomon v. Jackson, 988 F.2d 1314, 1318-19 (2d Cir. 1993). Both the language of the statute

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itself and the decisions of this circuit therefore demand a broad reading of the protections of the

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FDCPA.

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The definition of a “communication” under the FDCPA is “the conveying of information
regarding a debt directly or indirectly to any person through any medium.” 15 U.S.C. § 1692a(2).
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Many courts have found that voice mail messages left by debt collectors for debtors are

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“communications” within the meaning of the statute regardless of whether a debt is mentioned in

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the message. Berg v. Merchants Assoc. Collection Div., Inc., 586 F. Supp. 2d 1336 (S.D. Fla.

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2008) (citing Belin v. Litton Loan Servicing, LP, No. 8:06-cv-760-T24-EAJ, 2006 WL 1992410

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*4 (M.D. Fla. July 14, 2006) (holding that messages left on debtor’s answering machines were

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“communications” under the FDCPA)); Hosseinzadeh v. M.R.S. Assocs. Inc., 387 F. Supp. 2d

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1104, 1115-16 (C.D. Cal. 2005) (holding that a voice mail message is a “communication” under

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the FDCPA); but see Biggs v. Credit Collections Inc., No. CIV-07-0053-F, 2007 WL 4034997, at

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*4 (W.D. Okla. Nov. 15, 2007) (ruling that a voice mail message by a debt collector was not a

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communication because it contained no information regarding a debt); Koby v. ARS Nat. Services,

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Inc., No. 3:09-cv-00780-JMA, 2010 WL 1438763, at *3-4 (S.D. Cal. Mar. 29, 2010) (a message

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which merely stated caller’s name and asked for a return call, but did not convey directly or

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indirectly any information about the debt was not “communication” under the FDCPA).

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Section 1692e(11) includes a non-exclusive list of conduct that constitutes a false or

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misleading representations. Section 1692e(11) provides the following conduct is a violation of

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the FDCPA:

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The failure to disclose . . . in [the] initial oral communication that
the debt collector is attempting to collect a debt and that any
information obtained will be used for that purpose, and the failure
to disclose in subsequent communications that the communication
is from a debt collector . . . [.]

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Courts have held that not disclosing the above information in a message left for the debtor can be

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a violation of § 1692e(11). See Costa v. National Action Financial Services, 634 F. Supp. 2d

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1069 (E.D. Cal. 2007) (finding a voice mail message stating the caller received a phone call in her

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office for the plaintiff and asking her to return the call were “communications” within the

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definition of section 1692e(2)); Hosseinzadeh, 387 F. Supp. 2d at *1104 (finding messages

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conveying the fact there was an important matter to attend to and instructions how to do so were

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“communications” within the meaning of the statute); see also Foti v. NCO Financial Systems,

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Inc., 424 F. Supp. 2d 643 (S.D. N.Y. 2006) (finding that a message solely identifying the debt

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collector as “NCO Financial Systems” was insufficient to satisfy disclosure requirement of

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§ 1692e(11) when the message left for the plaintiff contained “no other suggestion or clue that the

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correspondence [was] from a debt collector”).

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Here, the message plaintiff alleges that defendant left on her answering machine

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constitutes “communication” within the meaning of § 1692a(2). Plaintiff alleges that “[o]n or

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about February, 2016, [d]efendant contacted [p]laintiff by telephone in an attempt to collect

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[p]laintiff’s alleged debt and left [p]laintiff a voicemail. In this February, 2016 voicemail,

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[d]efendant failed to disclose in this communication that the communication was from a debt

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collector.” (Doc. No. 1, at 4.) Although plaintiff has not alleged exactly what was said in the

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message, § 1692a(2) applies to information conveyed “directly or indirectly.” Hosseinzadeh, 387

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F. Supp. 2d at 1116. See also Belin, 2006 WL 1992410, at *4 (where messages were repeatedly

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left on plaintiff’s answering machine only giving the name of the caller, a phone number to call,

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directions to have plaintiff call that number, but not disclosing that they came from a debt

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collector found to be messages indirectly conveying information about a debt because their

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purpose was to have the debtor to return the call to discuss the debt).

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Accordingly, this court concludes the message allegedly left by defendant was a

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“communication,” subjecting defendant to the provisions of § 1692e. Since plaintiff alleges

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defendant did not disclose that this communication was from a debt collector, plaintiff has

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sufficiently alleged a violation of § 1692e(11). See Edwards v. Niagra Credit Solutions, Inc., 584

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F.3d 1350, at 1353-54 (7th Cir. 2009) (Alarcon, J. sitting by designation) (“It was not reasonable

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for [defendant] to violate § 1692e(11) of the Fair Debt Collection Practices Act with every

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message it left in order to avoid the possibility that some of those messages might lead to a

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violation of § 1692c(b).”)

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For the reasons set forth above,

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1) Defendant’s motion to dismiss the complaint (Doc. No. 5) is denied; and

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2) Defendant is directed to file an answer within fourteen days after notice of this order.

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IT IS SO ORDERED.
Dated:

August 5, 2016
UNITED STATES DISTRICT JUDGE

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