Quigley v. Verizon Wireless et al

Filing 53

ORDER by Judge Edward M. Chen Granting in Part and Denying in Part 46 Convergent Defendants' Motion to Dismiss. (emcsec, COURT STAFF) (Filed on 5/30/2012)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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RODNEY J. QUIGLEY,

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Plaintiff,
v.

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For the Northern District of California

United States District Court

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No. C-11-6212 EMC

VERIZON WIRELESS, et al.,

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ORDER GRANTING IN PART AND
DENYING IN PART CONVERGENT
DEFENDANTS’ MOTION TO DISMISS

Defendants.
___________________________________/

(Docket No. 46)
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Previously, the Court granted a motion to dismiss filed by Convergent Resources, Inc. and

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ER Solutions, Inc. (“ER”), now known as Convergent Outsourcing, Inc. The Court dismissed with

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prejudice all of the claims asserted by Plaintiff Rodney J. Quigley, except for the claim for violation

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of the Fair Debt Collection Practices Act (“FDCPA”). The Court gave Mr. Quigley leave to amend

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that claim. The Court also instructed Mr. Quigley that, if he intended to name any parent companies

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of ER as defendants, he had to include allegations establishing a basis for parent liability. See

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Docket No. 42 (order). Subsequently, Mr. Quigley filed an amended complaint, in which the main

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defendants (i.e., the only defendants who have not settled) are as follows: (1) Convergent Resources,

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Inc.; (2) ER; (3) Convergent Outsourcing, Inc.; (4) Convergent Resources Holdings, LLC; and (5)

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Silver Oak Services Partners, LLC.1 These defendants shall be referred to collectively as the

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Convergent Defendants. Currently pending before the Court is a motion to dismiss filed by the

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Convergent Defendants.

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Although five different companies are identified as defendants, there are actually only
three defendants – i.e., ER (now known as Convergent Outsourcing, Inc.), Convergent Resources
Holdings, LLC (formerly known as Convergent Resources, Inc.), and Silver Oak Services Partners,
LLC.

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Having considered the parties’ briefs and the oral argument presented at the hearing on the

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motion to dismiss, the Court hereby GRANTS in part and DENIES in part the Convergent

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Defendants’ motion.

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I.

FACTUAL & PROCEDURAL BACKGROUND

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In his amended complaint, Mr. Quigley alleges as follows.

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In August 2008, Mr. Quigley entered into a contract with Cellco Partnership for 24 months

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For the Northern District of California

United States District Court

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of wireless service at a rate of about $160 per month. See FAC ¶ 15.
In August 2009, Cellco added an unknown charge of about $20 to Mr. Quigley’s bill. See
FAC ¶ 17. Mr. Quigley asked Cellco why he was being assessed this charge. After Cellco was
unable to explain or justify the charge, he told Cellco that he would not pay it. See FAC ¶¶ 18-19.
In September 2009, Cellco once again added an unknown charge of about $250 to Mr.

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Quigley’s bill. See FAC ¶ 20. Mr. Quigley again contacted Cellco about the charge and no

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explanation was given. See FAC ¶ 20.

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In October 2009, Cellco sent Mr. Quigley a letter stating that he owed $67.75 for the period

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August to October 2009. See FAC ¶ 21. (Presumably, Mr. Quigley had been assessed another $20

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for the month of October 2009, thus raising the total charge to more than $60.) In response, Mr.

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Quigley refused to pay and terminated his contract with Cellco. See FAC ¶ 23. In addition, Mr.

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Quigley sent a letter to Cellco in which he, inter alia, denied the debt and demanded that it verify its

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debt claim. See FAC ¶ 24.

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On February 4, 2010, a collection agency the name of North Shore Agency (not a defendant

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in the case) sent a letter to Mr. Quigley on Cellco’s behalf. In the letter, North Shore Agency stated

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that Mr. Quigley owed $467.75. The additional $400 was imposed as an early termination fee. See

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FAC ¶ 27.

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On February 11, 2010, ER first started to take action regarding the alleged debt owed to

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Cellco. More specifically, ER called Mr. Quigley’s son on this date and asked him for information

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about Mr. Quigley. See FAC ¶ 28. ER called Mr. Quigley’s son four additional times thereafter –

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i.e., March 4, April 5, April 7, and April 8, 2010 – each time asking for the same information. See

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FAC ¶¶ 29, 32, 34-35.

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In addition, ER sent Mr. Quigley a letter on April 5, 2010, demanding payment of $551.94,

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see Compl. ¶ 31, and called Mr. Quigley himself on April 10, 2010. See Compl. ¶ 36. Mr. Quigley

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also alleges that, during this timeframe, ER reported to Experian – on two different occasions – a

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“false derogatory tradeline” against him. FAC ¶¶ 30, 33. According to Mr. Quigley, ER

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misrepresented to Experian that it was Cellco. See FAC ¶¶ 30, 33. During the April 10 phone call,

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Mr. Quigley denied that he owed Cellco money and “gave ER the stark ultimatum to cease all

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collection activity including the calls to [his] son.” FAC ¶ 36.

Wireless), ER, and Convergent Resources, Inc. (as well as other companies), in which he demanded

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that they stop all “collection activities” and “credit reporting” against him. FAC, Ex. A (Letter at 2).

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For the Northern District of California

The next day, April 11, 2010, Mr. Quigley sent a letter to Cellco (doing business as Verizon

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United States District Court

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In addition, Mr. Quigley demanded that they provide him with a “timely ‘verification’ of any claim

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that [he] owe[d] anything to anyone.” FAC, Ex. A (Letter at 2).

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On April 29, 2010, Mr. Quigley received a letter from Cellco (Verizon Wireless), stating that

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we are able to confirm that the remaining balance of $467.75 is valid
and owed. The charges are composed of your final month of service
as reflected on your November 16, 2009, statement. This includes
$210.00 in early termination fees, various taxes and surcharges, and a
past-due balance of $218.21.

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FAC, Ex. B. Cellco further informed Mr. Quigley that “this debt has been sold to an outside

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collections agency, ER Solutions.” FAC, Ex. B. The letter did not indicate when the debt had been

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sold.

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Although Cellco provided the above verification to Mr. Quigley, Mr. Quigley never received

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a verification from ER or Convergent Resources, Inc. See FAC ¶ 38.2 In addition, in spite of Mr.

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Quigley’s demand, ER continued to report false tradelines to credit reporting agencies. See FAC ¶¶

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40, 48-49. As of the date of the FAC, false tradelines were reported at least 22 different times. See

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FAC ¶ 49.

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In this paragraph, Mr. Quigley actually alleges that neither Cellco nor the Convergent
Defendants provided him with a verification. See FAC ¶ 38. However, Exhibit B attached to the
complaint establishes that Cellco at least did send a verification. In the complaint, Mr. Quigley tries
to discount the verification, stating that Cellco simply sent a “circular letter alleging that the $467.75
in charges were ‘proper’ because they are supported by past bills . . . the same bills I was
questioning.” FAC ¶ 39.

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On September 16, 2011, Mr. Quigley received a letter from a company hired by the

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Convergent Defendants (i.e., CBC), in which the company offered to settle the debt claim for

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$140.33. See FAC ¶ 44. It appears that Mr. Quigley never agreed to make a payment of any kind to

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the Convergent Defendants.

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Based on, inter alia, the above allegations, Mr. Quigley has brought various FDCPA claims

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against the Convergent Defendants. In addition, Mr. Quigley has included in his amended complaint

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claims for violation of California and Arizona state law – even though the Court’s order allowed him

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to amend only his FDCPA claim.

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A.

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For the Northern District of California

United States District Court

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II.

DISCUSSION

Legal Standard
The Convergent Defendants have moved to dismiss the complaint pursuant to Federal Rule

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of Civil Procedure 12(b)(6). A motion to dismiss based on Rule 12(b)(6) challenges the legal

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sufficiency of the claims alleged. See Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir.

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1995). In considering such a motion, a court must take all allegations of material fact as true and

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construe them in the light most favorable to the nonmoving party, although “conclusory allegations

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of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal.” Cousins v.

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Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). While “a complaint need not contain detailed factual

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allegations . . . it must plead ‘enough facts to state a claim to relief that is plausible on its face.’” Id.

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

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draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.

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Iqbal, 129 S. Ct. 1937, 1949 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).

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“The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than sheer

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possibility that a defendant acted unlawfully.” Id. at 1949.

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B.

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Parent Liability
The Court addresses first the Convergent Defendants’ argument that the parent companies of

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ER – i.e., Convergent Resources Holdings LLC and Silver Oak Services Partners LLC – should be

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dismissed from the case because Mr. Quigley has failed to adequately allege a basis for parent

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liability.

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Based on the complaint, it appears that Mr. Quigley seeks to hold the parent companies liable

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on an alter ego theory. He alleges, for example, that “ER’s day-to-day operations are closely

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controlled and managed by Silver Oak Services Partners and/or its immediate parent company

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Convergent Resources Holdings, LLC.” FAC ¶ 5(a). He also alleges that the “day-to-day

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operations [of Convergent Resources Holdings, LLC] are supervised and closely managed and

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controlled by Silver Oak Services Partners LLC.” FAC ¶ 5(b).

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In determining whether alter ego liability applies, a federal court applies the law of the forum

ego law in a federal bankruptcy case); Towe Antique Ford Found. v. IRS, 999 F.2d 1387, 1391 (9th

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Cir. 1993) (“apply[ing] the law of the forum state in determining whether a corporation is an alter

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For the Northern District of California

state. See Schwarzkopf v. Brimes, 626 F.3d 1032, 1037 (9th Cir. 2010) (applying California alter

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United States District Court

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ego of the taxpayer”).

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California recognizes alter ego liability where two conditions
are met: First, where “there is such a unity of interest and ownership
that the individuality, or separateness, of the said person and
corporation has ceased;” and, second, where “adherence to the fiction
of the separate existence of the corporation would . . . sanction a fraud
or promote injustice.”

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Schwarzkopf, 626 F.3d at 1037. “Factors suggesting an alter ego relationship include the

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commingling of funds and other assets, the failure to segregate funds of separate entities, the

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disregard of legal formalities, or the manipulation of assets between entities so as to concentrate the

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assets in one and the liabilities in another.” FDIC v. CoreLogic Valuation Servs., LLC, No. SA CV

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11-0704 DOC (ANx), 2011 U.S. Dist. LEXIS 131956, at *26 (C.D. Cal. Nov. 14, 2011).

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At least two California district courts have held that broad allegations of control are not

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enough to establish alter ego liability because they are too conclusory. In Corelogic, for example,

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the district court held that the FDIC failed to adequately allege alter ego liability where, inter alia, it

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simply “aver[red] in conclusory language that CoreLogic, First American Information Services, and

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First American Solutions directed and controlled EA’s actions with regard to the appraisal services

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provided by EA to WaMu.” Id. at *27. The court also noted that the allegations did not establish

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that “an inequitable result would result from treatment of the corporation [EA] as a sole actor.” Id.

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at *28.

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Similarly, in United States EEOC v. American Laser Ctrs. LLC, No.

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1:09-CV-2247-AWI-DLB, 2010 U.S. Dist. LEXIS 82851 (E.D. Cal. Aug. 13, 2010), the district

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court determined that the EEOC failed to adequately allege alter ego liability based on allegations

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that each defendant “acted ‘as a successor, alter ego, joint employer, integrated enterprise, agent,

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employee....’ or ‘under the direction and control of the others.’” Id. at *13. The court stated that

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this was “merely a conclusory allegation.” Id.

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District courts outside of California have rendered similar opinions. See, e.g., Holzli v.

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Deluca Enters., No. 11-06148 (JBS/KMW), 2012 U.S. Dist. LEXIS 38880, at *7 (D.N.J. Mar. 21,

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2012) (stating that “‘bare-boned allegations of undercapitalization and common control and/or
management, standing alone, do not rise to the level of plausibility required to survive a 12(b)(6)

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For the Northern District of California

United States District Court

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motion’”; adding that “‘parroting of the alter-ego factors alone is insufficient to satisfy the required

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pleading standards’”); Haley Paint Co. v. E.I. Dupont De Nemours & Co., 775 F. Supp. 2d 790, 799

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(D. Md. 2011) (noting that, “[a]side from making broad assertions regarding Cristal’s ‘control over

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Millennium’s marketing, purchasing, pricing, management, and/or operating policies,’ and Cristal’s

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‘role in approving Millennium’s significant business decisions, Plaintiffs provide no facts

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whatsoever in support of these claims[;] [u]nder Twombly and Iqbal, Plaintiffs’ conclusory

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allegations are not entitled to the presumption of truth”); Apex Mar. Co. v. OHM Enters., No. 10

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Civ. 8119 (SAS), 2011 U.S. Dist. LEXIS 35707, at *14-15 (S.D.N.Y. Mar. 30, 2011) (noting that,

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“[a]lthough the domination and control prong of the alter ego theory need only comply with Rule

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8(a)’s liberal pleading standard, conclusory statements are insufficient”; “[h]ere, the Complaint lacks

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any factual allegations supporting the conclusion that Amin and Bedi exercised domination and

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control over OHM or STARCO [–] “[t]he unadorned invocation of dominion and control is simply

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not enough’”); see also Sunlight Elec. Contr. Co. v. Turchi, No. 08-5834, 2011 U.S. Dist. LEXIS

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104192, at *11 n.6 (E.D. Pa. Sept. 13, 2011) (noting that “‘[l]egal conclusions masquerading as

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factual conclusions will not suffice to circumvent a motion to dismiss,’ so we need not credit such

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conclusory allegations in ruling on defendants’ motion”).

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Consistent with the above authority, the Court concludes that Mr. Quigley’s broad
allegations of control, standing alone, are not sufficient to meet the Rule 8 standard laid out in

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Twombly and Iqbal. Therefore, the Court dismisses all claims asserted against the parent companies.

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The dismissal is without prejudice.

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C.

FDCPA Claim – §§ 1692b(3) and 1692c(b)

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In his complaint, Mr. Quigley pleads two FDCPA claims based on ER’s five

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communications with his son. Those claims assert violations of 15 U.S.C. §§ 1692b(3) and

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1692c(b).

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Section 1692(b)(3) provides that

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[a]ny debt collector communicating with any person other than the
consumer for the purpose of acquiring location information about the
consumer shall . . . not communicate with any such person more than
once unless requested to do so by such person or unless the debt
collector reasonably believes that the earlier response of such person is
erroneous or incomplete and that such person now has correct or
complete location information.

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15 U.S.C. § 1692b(3). “Location information” is defined in 15 U.S.C. § 1692a(7) as “a consumer’s

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place of abode and his telephone number at such place, or his place of employment.” 15 U.S.C. §

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1692a(7). In his complaint, Mr. Quigley alleges that ER knew his “physical location, mailing

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address and telephone number.” FAC ¶ 59.

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For the Northern District of California

United States District Court

Section 1692b(3)

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At the hearing, ER argued that physical location and mailing address does not necessarily

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translate to place of abode, let alone place of employment. ER also pointed out that the statute

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requires the telephone number at the place of abode. In response, Mr. Quigley indicated that he was

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willing to amend his complaint a second time to make clear that ER knew his location information

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as defined by § 1692a(7) (i.e., his place of abode and his telephone number at such place, as well as

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his place of employment). Accordingly, the Court dismisses the § 1692b(3) claim but gives Mr.

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Quigley leave to amend to make clear that, at all times when ER was communicating with his son, it

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knew of his place of abode, his telephone number at such place, and his place of employment. Such

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allegations will suffice to state a claim under § 1692(b)(3).

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2.

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Section 1692c covers communications in connection with debt collection generally.

Section 1692c(b)

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Subsection (b) covers communications with third parties specifically. The statute provides as

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follows:

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Except as provided in section 804 [15 U.S.C. § 1692b], without the
prior consent of the consumer given directly to the debt collector, or
the express permission of a court of competent jurisdiction, or as
reasonably necessary to effectuate a postjudgment judicial remedy, a
debt collector may not communicate, in connection with the collection
of any debt, with any person other than the consumer, his attorney, a
consumer reporting agency if otherwise permitted by law, the creditor,
the attorney of the creditor, or the attorney of the debt collector.

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15 U.S.C. § 1692c(b) (emphasis added).

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For the Northern District of California

United States District Court

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In the instant case, the critical language is the language italicized above. Essentially, §

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1692c(b) prohibits communications with third parties except as provided in § 1692b – and, as noted

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above, § 1692b(3) allows for communication with a third party to obtain location information. The

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§ 1692c(b) claim, therefore, rises or falls with the § 1692b(3) claim. Accordingly, the Court

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dismisses the § 1692c(b) claim but, as above, gives Mr. Quigley leave to amend to make clear that,

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at all times when ER was communicating with his son, it knew of his place of abode, his telephone

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number at such place, and his place of employment.

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D.

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FDCPA Claim – § 1692e(2), (8)
Section 1692e prohibits a debt collector from “us[ing] any false, deceptive, or misleading

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representation or means in connection with the collection of any debt.” Id. § 1692e. Section 1692e

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further provides that the following conduct is a violation of the statute:

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(2)

The false representation of –

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(A)

the character, amount, or legal status of any debt; or

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(B)

any services rendered or compensation which may be
lawfully received by any debt collector for the
collection of a debt.

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(8)

Communicating or threatening to communicate to any person
credit information which is known or which should be known
to be false, including the failure to communicate that a
disputed debt is disputed.

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Id. § 1692e(2), (8).

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Although not entirely clear, it appears that Mr. Quigley’s § 1692e(2) claim is based on the

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allegation that ER was asserting a debt even though it knew that the Cellco charges were actually

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improper. See FAC ¶ 75 (alleging that “[t]he un-explained charges that appears on my Cellco bills

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for August, September and October 2009 are charges that Cellco and Convergent knew to be

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improper and illegal under Cellco’s service contract with me”). As for the § 1692e(8) claim, that

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appears to be based on the allegation that ER reported a false tradeline to a credit reporting agency

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multiple times. See FAC ¶ 77.

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As the Convergent Defendants point out, Mr. Quigley’s § 1692e(2) claim is based on ER
allegedly knowing that the Cellco charges were improper. The problem for Mr. Quigley is that he

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For the Northern District of California

United States District Court

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has simply alleged in conclusory terms that ER knew this fact with providing any supporting factual

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allegations. This FDCPA claim, therefore, is dismissed but without prejudice. Mr. Quigley has

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leave to amend to include factual allegations establishing how ER knew that the Cellco charges were

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improper. Simply because ER purchased the debt from Cellco is, in and of itself, insufficient to

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establish that ER knew that the charges were improper.

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As for the § 1692e(8) claim, it too is problematic, at least in part. To the extent Mr. Quigley

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asserts a § 1692e(8) claim based on ER’s reporting a false tradeline to a credit reporting agency

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multiple times, it suffers from the same flaw as the § 1692e(2) claim – i.e., Mr. Quigley has failed to

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allege how ER knew that he Cellco charges were improper.

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Mr. Quigley, however, also indicates that ER violated § 1692e(8) in two other ways: (1)

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because it failed to report to the credit reporting agencies that Mr. Quigley disputed the debt, and (2)

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because ER misrepresented to the credit reporting agencies that Cellco was reporting the debt when

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in fact ER was doing so. See Opp’n at 8. The first claim appears to be viable. See, e.g., Wilhelm v.

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Credico, Inc., 519 F.3d 416, 418 (8th Cir. 2008) (taking note of 1988 Staff Commentary on FDCPA,

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which states that, “‘[i]f a debt collector knows that a debt is disputed by the consumer . . . and

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reports it to a credit bureau, he must report it as disputed’”).3 As for the second claim, it too appears

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In Mellinger v. Midwestern Audit Service, No. 11-CV-11326, 2012 U.S. Dist. LEXIS
15325 (E.D. Mich. Feb. 8, 2012), a district court held that a defendant is entitled to presume that a
debt is valid and does not have an obligation to communicate that the debt is disputed when

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viable – to the extent it is based on ER’s reporting the debt after it had purchased the debt from

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Cellco.4 However, the Court finds that the complaint, as currently pled, does not allege this

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specifically. Nor does the complaint allege that ER did more than simply indicate to the agencies

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that the underlying debt was originally owed to Cellco. Accordingly, the Court concludes that, as

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the complaint currently stands, Mr. Quigley has only stated a claim for relief based on § 1692e(8) to

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the extent he alleges that ER failed to report to the credit reporting agencies that Mr. Quigley

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disputed the debt. The other parts of the § 1692e(8) claim are dismissed with leave to amend.

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E.

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FDCPA Claim – § 1692g
Section 1692g deals with validation of debts. It provides in relevant part as follows:
(a)

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For the Northern District of California

United States District Court

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Notice of debt; contents. Within five days after the initial
communication with a consumer in connection with the
collection of any debt, a debt collector shall, unless the
following information is contained in the initial
communication or the consumer has paid the debt, send the
consumer a written notice containing –

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(1)

the amount of the debt;

(2)

the name of the creditor to whom the debt is owed;

(3)

a statement that unless the consumer, within thirty days
after receipt of the notice, disputes the validity of the
debt, or any portion thereof, the debt will be assumed to
be valid by the debt collector;

(4)

a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that the
debt, or any portion thereof, is disputed, the debt
collector will obtain verification of the debt or a copy
of a judgment against the consumer and a copy of such
verification or judgment will be mailed to the consumer
by the debt collector; and

(5)

a statement that, upon the consumer’s written request
within the thirty-day period, the debt collector will
provide the consumer with the name and address of the
original creditor, if different from the current creditor.

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(b)
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Disputed debts. If the consumer notifies the debt collector in
writing within the thirty-day period described in subsection (a)
that the debt, or any portion thereof, is disputed, or that the

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reporting it to credit agencies if the plaintiff does not dispute the debt within the thirty days required
by 15 U.S.C. § 1692g(a)(3).
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As noted above, it is not clear when the purchase took place.

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consumer requests the name and address of the original
creditor, the debt collector shall cease collection of the debt, or
any disputed portion thereof, until the debt collector obtains
verification of the debt or a copy of a judgment, or the name
and address of the original creditor, and a copy of such
verification or judgment, or name and address of the original
creditor, is mailed to the consumer by the debt collector.
Collection activities and communications that do not otherwise
violate this title may continue during the 30-day period
referred to in subsection (a) unless the consumer has notified
the debt collector in writing that the debt, or any portion of the
debt, is disputed or that the consumer requests the name and
address of the original creditor. Any collection activities and
communication during the 30-day period may not overshadow
or be inconsistent with the disclosure of the consumer’s right
to dispute the debt or request the name and address of the
original creditor.

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15 U.S.C. § 1692g(a)-(b) (emphasis added).

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For the Northern District of California

United States District Court

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In his complaint, Mr. Quigley alleges that ER violated § 1692g by failing to respond to his

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request for verification of the debt and thereafter continuing to attempt to collect. See FAC ¶ 76.

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By alleging the above, Mr. Quigley has adequately pled a claim for relief – in particular, a

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claim pursuant to § 1692g(b). In their motion to dismiss, the Convergent Defendants focus on

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compliance with § 1692g(a), see Mot. at 13 (stating that “there was no requirement for ER[] to send

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a debt validation notice because ER[] had already provided the requisite notices to plaintiff”)

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(emphasis in original), but that is beside the point because Mr. Quigley’s claim seems to be

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predicated on subsection (b), not (a). The Court assumes Mr. Quigley is asserting a claim only

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under § 1692(g)(b) and denies the motion to dismiss as to that claim.5

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F.

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FDCPA Claim – § 1692f
Section 1692f provides that “[a] debt collector may not use unfair or unconscionable means

to collect or attempt to collect any debt.” Id. § 1692f. Although not entirely clear, Mr. Quigley
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That being said, the Court does take note that, even though ER did not respond to Mr.
Quigley’s request for a verification (at least as alleged), Cellco did (although Mr. Quigley claims to
the contrary). Given Cellco’s verification letter of April 29, 2010, see FAC, Ex. B (letter), any
actual damage to Mr. Quigley as a result of ER’s failure to respond may well amount to nothing.
For similar reasons, any request for statutory damages may be problematic. See 15 U.S.C. §
1692k(a) (providing that a debt collector who fails to comply is liable to the person for “any actual
damage sustained by such person as a result of such failure” and “such additional damages as the
court may allow, but not exceeding $1,000”); id. § 1692k(b) (providing that factors for a court to
consider include “the frequency and persistence of noncompliance by the debt collector, the nature
of such noncompliance, and the extent to which such noncompliance was intentional”). At this
juncture, however, the Court makes no concrete ruling on damages.

11

(2) ER’s reporting of a false tradeline to a credit reporting agency on multiple occasions. As the

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Convergent Defendants point out, this claim is largely redundant of other FDCPA claims as

4

discussed above. Therefore, the Court dismisses this claim as duplicative. See, e.g., Wood v.

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Midland Credit Mgmt., No. CV 05-3881 FMC (MANx), 2005 U.S. Dist. LEXIS 31923, at *5-6

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(C.D. Cal. July 29, 2005) (noting that the plaintiff failed to “allege[] that the Defendant’s actions

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violated any specific subsection of § 1692f”; adding that, to the extent the plaintiff “allege[d] that

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the Defendant has violated § 1692f by failing to provide the Plaintiff, upon written request, with

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verification of the validity of the debt, and persisting in attempts to collect the debt[,] . . . the proper

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vehicle for this type of claim is § 1692g(b), and not § 1692f” and so dismissing the § 1692f claim as

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For the Northern District of California

seems to making a claim pursuant to § 1692f based on (1) ER’s five telephone calls to his son and

2

United States District Court

1

“redundant”).

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G.

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Violation of the California Rosenthal Act
As noted above, the Court allowed Mr. Quigley to amend his FDCPA claim but, in the

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amended complaint, he included not only FDCPA claims but also a claim pursuant to the California

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Rosenthal Act. See Cal. Civ. Code § 1788 et seq. Although not entirely clear, Mr. Quigley seems to

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be making a Rosenthal Act claim based on (1) ER’s five telephone calls to his son and (2) ER’s

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reporting of a false tradeline to a credit reporting agency on multiple occasions.

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The problem for Mr. Rosenthal is that he has not pinpointed how this conduct constitutes a

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violation of the Rosenthal Act. However, the Act does require a debt collector to comply with the

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FDCPA (§§ 1692b to 1692j), see Cal. Civ. Code § 1788.17 (noting that failure to comply with the

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FDCPA provisions shall subject a debt collector to FDCPA remedies in § 1692k), and not all the

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FDCPA claims are being dismissed. The Court thus denies the motion to dismiss the Rosenthal Act

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claim to the extent any of the FDCPA claims survive dismissal.

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H.

Violation of Arizona Law

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Finally, Mr. Quigley’s Arizona law claims (which the Court did not give Mr. Quigley leave

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to add in its last order) are based on one statute and one regulation, namely Arizona Revised Statute

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§ 32-1053(3) and Arizona Administrative Code R20-4-1511.

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1

The statute-based claim is dismissed because, as the Convergent Defendants argue, there is

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nothing about the statute to indicate that it gives right to a private right of action. The statute

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provides in relevant part that “[t]he superintendent may deny a license to a person or suspend or

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revoke a license . . . if the superintendent finds that an applicant or licensee [e.g.] [h]as violated any

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applicable law, rule or order.” Ariz. Rev. Stat. § 32-1053(3). Nor does Mr. Quigley cite any case

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holding that there is a private right of action under the statute.

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As for the regulation-based claim, Arizona Administrative Code R20-4-1511does bar a

pay a debt.” Ariz. Admin. Code R20-4-1511. However, the regulation specifies that a collection

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agency who violates the regulation is subject to penalties listed in Arizona Revised Statute § 32-

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For the Northern District of California

collection agency from “us[ing] unauthorized or oppressive tactics designed to harass any person to

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United States District Court

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1056(B) – none of which is civil damages. See Ariz. Rev. Stat. § 32-1056(B) (referring to

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revocation of a license and a class 1 misdemeanor). While the administrative code also states that a

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debt collector is further subject to “other liabilities imposed under any other provision of law,” Ariz.

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Admin. Code R20-4-1511, Mr. Quigley has not pointed to another provision of law which provides

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for civil damages for the conduct at issue.

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Accordingly, the Arizona-based claims are dismissed with prejudice.

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III.

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CONCLUSION

For the foregoing reasons, the Convergent Defendants’ motion to dismiss is granted in part

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and denied in part. More specifically, the Court rules as follows.

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(1)

All claims against the parent companies of ER are dismissed without prejudice.

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(2)

The motion to dismiss the §§ 1692b(3) and 1692c(b) claims is granted. However, Mr.

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Quigley has leave to amend the claim to make clear that, at all times when ER was communicating

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with his son, it knew of his place of abode, his telephone number at such place, and his place of

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employment.

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(3)

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amend to include factual allegations establishing how ER knew that the Cellco charges were

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improper.

The motion to dismiss the § 1692e(2) claim is granted. However, Mr. Quigley has leave to

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13

1

(4)

2

is dismissed to the extent Mr. Quigley asserts a claim based on ER’s reporting a false tradeline to a

3

credit reporting agency multiple times. As noted above, Mr. Quigley does not allege how ER knew

4

that the Cellco charges were improper. The § 1692e(8) claim is also dismissed to the extent Mr.

5

Quigley asserts a claim that ER misrepresented to the credit reporting agencies that Cellco was

6

reporting the debt when in fact ER was doing so. The complaint does not clearly allege that ER

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reported the debt after it had purchased the debt from Cellco, nor does the complaint allege that ER

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did more than simply indicate to the agencies that the underlying debt was originally owed to Cellco.

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However, the § 1692e(8) is not dismissed to the extent Mr. Quigley alleges that ER failed to report

The motion to dismiss the § 1692e(8) claim is granted in part and denied in part. The claim

to the credit reporting agencies that Mr. Quigley disputed the debt. To the extent the Court has

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For the Northern District of California

United States District Court

10

dismissed parts of the § 1692e(8) claim, Mr. Quigley has leave to amend to address the deficiencies

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above.

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(5)

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asserting a claim under § 1692g(a).

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(6)

The motion to dismiss the § 1692f claim is granted. The dismissal is without prejudice.

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(7)

The motion to dismiss the Rosenthal Act claim is granted in part and denied in part. The

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Rosenthal claim rises or falls with the FDCPA claims.

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(8)

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///

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///

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///

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///

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///

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///

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///

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///

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///

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///

The motion to dismiss the § 1692g(b) claim is denied. The Court assumes Mr. Quigley is not

The motion to dismiss the Arizona-based claims is granted. The dismissal is with prejudice.

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1

With respect to those claims where the Court has expressly allowed an amendment, Mr.

2

Quigley must file an amended complaint within thirty (30) days of the date of this order. No

3

amendments, except for those expressly permitted by this order, are allowed. The Court emphasizes

4

that, pursuant to Federal Rule of Civil Procedure 11, Mr. Quigley must have a good faith basis for

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any factual allegation that he makes in his amendment or he risks being subjected to sanctions.

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This order disposes of Docket No. 46.

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8

IT IS SO ORDERED.

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Dated: May 30, 2012

11
For the Northern District of California

United States District Court

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_________________________
EDWARD M. CHEN
United States District Judge

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