Skinner v. Green Tree Servicing LLC

Filing 37

ORDER by Judge Joseph C. Spero granting in part and denying in part 25 Motion to Dismiss (jcslc2, COURT STAFF) (Filed on 12/14/2012)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JAMIE SKINNER,
Plaintiff,

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v.
GREEN TREE SERVICING LLC,

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Defendant.

Case No.: 3:12-cv-03834-JCS
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANT’S
MOTION TO DISMISS PLAINTIFF’S
FIRST AMENDED COMPLAINT
[Dkt. No. 25].

United States District Court
Northern District of California

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I.

INTRODUCTION
Plaintiff alleges that various phone calls from Defendant violated the Fair Debt Collection

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Practices Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq., and the Rosenthal Fair Debt Collection

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Practices Act (“Rosenthal Act”), Cal. Civ. Code §§ 1788 et seq., which prohibit debt collectors

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from engaging in abusive, deceptive and unfair debt collection practices. Defendant brings a

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Motion to Dismiss Plaintiff’s First Amended Complaint under Rule 12(b)(6) of the Federal Rules

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of Civil Procedure (“the Motion”). The parties have consented to the jurisdiction of the

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undersigned magistrate judge pursuant to 28 U.S.C. § 636(c). The Motion came on for hearing

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December 14, 2012, at 9:30a.m. For the reasons stated below, the Motion is GRANTED in part

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and DENIED in part.

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II.

BACKGROUND

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A.

Factual Allegations

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Plaintiff Jamie Skinner is a resident of Contra Costa, California. First Amended

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Compliant (“FAC”) ¶ 9. On November 2, 2005, Plaintiff executed a promissory note in the

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amount of $408,000 in favor of CMG Mortgage Services, Inc. (“CMG”) secured by a Deed of

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Trust to the property located at 3031 Mills Drive, Brentwood, California 94513. Defendant Green

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Tree’s Request for Judicial Notice in Support of its Motion to Dismiss Plaintiff’s Complaint

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(“RJN”) 1, Exh. A; see also FAC ¶ 17. That same day, Plaintiff executed a junior-priority

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promissory note in the amount of $102,000, which was also in favor of CMG and also secured by

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a Deed of Trust and Assignment of Rents to the same property. RJN, Exh. B; see also FAC ¶ 17.

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This second loan is the only loan relevant to this action and will hereafter be referred to as “the

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loan.” On February 2, 2012, the property was sold through a nonjudicial foreclosure. RJN, Exh.

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C; FAC ¶ 18.

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After the foreclosure, Plaintiff received a letter informing her that Green Tree Servicing
LLC (“Green Tree”) acquired the rights to the loan. See FAC ¶ 18. Plaintiff alleges that she used
the loan to purchase the property which underwent foreclosure, and therefore, she is not

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United States District Court
Northern District of California

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personally liable for the loan under California Code of Civil Procedure § 580b. FAC ¶¶ 17-18.

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Section 580b provides that “[n]o deficiency judgment shall lie” against a purchase money loan

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after foreclosure.2 Cal. Civ. Proc. Code § 580b.

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On March 1, 2012, Plaintiff received a letter from Green Tree informing Plaintiff that she

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owed $102,000 immediately because the amount due on the loan accelerated after default. Id.

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After receiving this letter, Plaintiff received a series of phone calls from Green Tree. The first

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phone call was between Plaintiff and a woman from Green Tree named Corina. Id. ¶ 19. After

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Defendants submitted the Request for Judicial Notice with the first motion to dismiss
Plaintiff’s original complaint. See Dkt. No. 14. Under Rule 201(b) of the Federal Rules of
Evidence, “a court may take judicial notice of ‘matters of public record.’” Lee v. City of Los
Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (citing Mack v. South Bay Beer Distrib., 798 F.2d
1279, 1282 (9th Cir.1986)). Because the documents submitted with Defendant’s Request for
Judicial Notice are publically-recorded Deeds of Trust and other publically-recorded documents,
the Court grants Defendant’s Request for Judicial Notice. See id.
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The text of section 580b states, in relevant part: “No deficiency judgment shall lie in
any event after a sale of real property or an estate for years therein for failure of the purchaser to
complete his or her contract of sale, or under a deed of trust or mortgage given to the vendor to
secure payment of the balance of the purchase price of that real property or estate for years
therein, or under a deed of trust or mortgage on a dwelling for not more than four families given
to a lender to secure repayment of a loan which was in fact used to pay all or part of the purchase
price of that dwelling occupied, entirely or in part, by the purchaser.” Cal. Civ. Proc. Code §
580b.

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Plaintiff informed Corina that the loan was a purchase money loan under which she was not

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personally liable, “Corina agreed, but told Plaintiff it would still affect their credit unless Plaintiff

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settled by paying an agreed amount.” Id. Plaintiff received three more phone calls the morning

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of April 14, 2012. Id. Plaintiff did not answer the first call, the “phone hung up” on the second

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call, and the third call was a recording from Green Tree telling Plaintiff to call back. Id.

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On the morning of April 16, 2012, Plaintiff received another call from Green Tree.

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Plaintiff interrupted the man to tell him that the loan was a purchase money loan and the house

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had foreclosed. Id. Plaintiff “[t]old him not to call us anymore and that I had already stated that

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we were talking with our lawyer.” Id. Plaintiff alleges that the man “became very abrupt and
said ‘Well thank you for commanding the conversation like that but we do not sit around and wait

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Northern District of California

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for you to contact us.’” Id.

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On the morning of April 18, 2012, Plaintiff received another phone call from man who

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worked for Green Tree. Id. This man, presumably named Gary Rose, told Plaintiff she still owed

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$102,000 and “proceeded to bully” her. Id. Plaintiff alleges the following in her First Amended

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Compliant regarding the April 18th phone call:

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[He said] I stole this money from Countrywide and now they have a blank spot in
their bank account while we are living free! He said how can you be an American
and know that you are stealing this money …
He proceeded to tell me “wouldn’t it be nice for everyone to just say they have a
lawyer and things will go away, but somebody, YOU still need to pay your debt!”
He then also told me, that I felt like I knew more than him and I was choosing the
wrong decision to go up against BofA and that they will do everything in their
power to come after us to get all their money back.
He said they will contact my husband’s employer to verify that he is still working
and look into me if I am working because they can garnish our wages to pay back
the debt.
(By this point my heart is pounding and I can feel my blood pressure going thru
[sic] the roof!) I felt many times that he attacked my character and ability to ‘do
the right thing’!
He then stated that I am denying the offer to settle at a lower amount and that at
this point BofA will do everything to get their money and after the phone hangs up
I will no longer have the offer to settle at a lower payoff.
Id. (paragraphs inserted for ease of reading).

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Plaintiff alleges the foregoing acts “constitute numerous and multiple violations” of the

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FDCPA and the Rosenthal Act. Plaintiff alleges the loan constitutes “debt” as defined under the

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FDCPA. Id. ¶ 20. Plaintiff alleges that she is a “consumer” as defined by the FDCPA and a

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“debtor,” as defined under the Rosenthal Act. Id. ¶¶ 9-10. Plaintiff further alleges that Green

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Tree is a “debt collector” as defined by the FDCPA and Rosenthal Act, see id. ¶¶ 12-13, which is

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evidenced by Green Tree’s first letter to Plaintiff wherein Green Tree “admitted, in writing, that it

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was a debt collector,” id. ¶ 18. Plaintiff asserts violations of the FDCPA, “including but not

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limited to §§ 1692d, 1692d(2), 1692e, 1692e(2), 1692e(7), 1692e(10), and 1692f[,]” id. ¶ 22, and

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violations of the Rosenthal Act, “including 1788.11(a) and 1788.17,” id. ¶ 25. Plaintiff requests

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actual damages, statutory damages, and reasonable attorneys’ fees and costs. Id. ¶¶ 23, 26.

United States District Court
Northern District of California

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B.

Motion to Dismiss

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On October 26, 2012, Defendant filed the instant Motion to Dismiss Plaintiff’s First

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Amended Complaint. Dkt. No. 25 (Motion to Dismiss Plaintiff’s First Amended Complaint)

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(“Motion”). Defendant first argues the First Amended Complaint should be dismissed because

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Plaintiff’s allegation that Defendant violated California’s anti-deficiency statute cannot, standing

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alone, give rise to a claim for unfair debt collection practices. Defendant cites Herrera v. LCS

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Fin. Servs. Corp., No. 09-2843, 2009 WL 2912517 (N.D. Cal. Sept. 9, 2009), where a court from

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this district considered whether California Code of Civil Procedure § 580b obliterated the

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existence of a debt, because if so, the debt collector would have been liable under FDCPA for

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misrepresenting the debt’s existence when the debt collector contacted the plaintiff. The Herrera

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court held:

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Section 580b, by its own terms, eliminates a creditor’s ability to seek a deficiency
judgment, but it does not eliminate the underlying debt. The fact of that debt’s
existence may be entirely theoretical, given that section 580b closes the courthouse
door on any creditor’s collection efforts against the mortgagor. However, the
claim that section 580b erases the debt, barring [the debt collector] from seeking
payment in any manner, must fail as a matter of law.

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See id. at *8. Defendant argues that under the reasoning of Herrera, Defendant was not barred

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from contacting Plaintiff and encouraging her to pay her debt because the debt was still in

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existence.
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In Plaintiff’s Opposition to Defendant’s Motion to Dismiss, Plaintiff concedes that

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Defendant was entitled to request payment on the debt despite the applicability of section 580b,

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and contends that “Plaintiff did not sue because Defendant simply requested payment.” Dkt. No.

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Complaint) (“Opp.”) at 3. Rather, Plaintiff contends that Defendant’s manner in attempting to

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collect the debt violates the FDCPA and the Rosenthal Act. Id. at 3-4. Because the parties agree

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that if section 580b applies to Plaintiff’s loan, Defendant would not be barred from merely

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contacting Plaintiff in an attempt to collect the debt, this is no longer a disputed issue and will not

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be addressed by the Court.

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Defendant next argues the First Amended Complaint should be dismissed because the

United States District Court
Northern District of California

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alleged communications between Plaintiff and Green Tree are not the type of behavior prohibited

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by the FDCPA and the Rosenthal Act. Without specifically referencing Plaintiff’s allegations,

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Defendant argues Green Tree enjoys a “qualified economic privilege” to protect its economic

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interests. Motion at 5-7. Defendant cites two California state cases to argue that the “privilege

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may be lost if the creditor uses outrageous and unreasonable means in seeking repayment,” see

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Opp. at 6 (quoting Symonds v. Mercury Savings & Loan Ass’n, 225 Cal.App.3d 1458, 1468

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(1990)), and that the “applicable test is whether or not the creditor goes beyond all reasonable

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bounds of decency in attempting to collect the debt,” see Opp. at 6 (quoting Bundren v. Superior

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Court, 145 Cal.App.3d 784, 789 (1983)). Plaintiff notes that neither case which Defendant cites

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involve claims for violations of the FDCPA or the Rosenthal Act. Rather, the Symonds and

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Bundren courts articulated legal principles in the context of claims for intentional infliction of

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emotional distress. Opp. at 4-5. Further, Plaintiff argues that “there exists no privilege which

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permits a debt collector to call borrowers un-American thieves.” Opp. at 4.

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As a final point in Defendant’s Motion, Defendant argues the First Amended Complaint

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“cannot withstand the pleading stage” because Plaintiff “has not adequately pled the elements

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necessary to recover actual damages.” Motion at 7-8. Defendant contends that in order to

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recover actual damages, a plaintiff must plead the elements of a claim for intentional infliction of

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emotional distress. Id. (citing Costa v. Nat’l Action Fin. Servs., 634 F.Supp.2d 1069, 1078 (E.D.
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Cal. 2007)). In response, Plaintiff contends she is not required to plead the elements of a claim

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for intentional infliction of emotional distress when her claims are for violations of the FDCPA

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and Rosenthal Act. Plaintiff contends that Defendant’s argument against the computation of

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actual damages is premature, and argues that “[e]ven if this Court were to find that Plaintiff is not

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entitled to all of the relief requested, Defendant would still not be entitled to an order of dismissal

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of this action.” Opp. at 8.

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In the Reply, Defendant makes more specific arguments relating to Plaintiff’s claims in

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the First Amended Complaint. Dkt. No. 34 (Reply in Support of Defendant Green Tree’s Motion

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to Dismiss First Amended Complaint) (“Reply”). Defendant argues Plaintiff states no claim for
relief under section 1692d, which prohibits debt collectors from engaging “in any conduct the

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United States District Court
Northern District of California

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natural consequence of which is to harass, oppress, or abuse any person,” see § 1692d, because

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the First Amended Complaint “describes fairly typical debt collection conversations, with

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gradually increasing levels of pressure as Skinner continued to refuse to pay her debt.” Reply at

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4. Next, Defendant contends Plaintiff states no claim for relief under section 1692e, which

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prohibits debt collectors from using any “false, deceptive, or misleading representation or means,”

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see § 1692e, because Green Tree did not threaten to take illegal action or falsely represent the

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legal status of the debt because Green Tree may in fact be able to recover the debt through

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judicial action. Reply at 6-7. Finally, Defendant argues Plaintiff states no claim for relief under

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section 1692f, which forbids “unfair or unconscionable means to collect or attempt to collect any

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debt,” see § 1692f, because Plaintiff fails to allege any facts which would give rise to a cause of

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action under section 1692f.

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III.

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LEGAL STANDARD
A complaint may be dismissed for failure to state a claim for which relief can be granted

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under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 12(b)(6). “The

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

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complaint.” N.Star. Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). In ruling on

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a motion to dismiss under Rule 12(b)(6), the Court takes “all allegations of material fact as true

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and contrue(s) them in the lights most favorable to the non-moving party.” Parks Sch. of Bus. v.

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Symington, 51 F.3d 1480, 1484 (9th Cir. 1990).

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Generally, the plaintiff’s burden at the pleading stage is relatively light. Rule 8(a) requires

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a “short and plain statement of the claim showing that the pleader is entitled to relief.”

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Fed.R.Civ.P. 8(a)(2). The complaint need not contain “detailed factual allegations,” but must

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allege facts sufficient to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,

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556 U.S. 662, 663 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007)). The

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factual allegations must be definite enough to “raise a right to relief above the speculative level on

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the assumption that all of the complaint’s allegations are true.” Twombly, 550 U.S. at 545.
“[T]he tenet that a court must accept a complaint’s allegations as true is inapplicable to threadbare

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Northern District of California

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recitals of a cause of action’s elements, supported by mere conclusory statements.” Iqbal, 556

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U.S. at 663.

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IV.

DISCUSSION

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The purpose of the FDCPA is to “eliminate abusive debt collection practices by debt

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collectors, to insure that those debt collectors who refrain from using abusive debt collection

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practices are not competitively disadvantaged, and to promote consistent State action to protect

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consumers against debt collection abuses.” 15 U.S.C. § 1692(e). An aggrieved party may thus

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recover actual damages, statutory damages, and seek an award of attorney’s fees and costs where

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the provisions of the FDCPA have been violated. 15 U.S.C. § 1692k(a).

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The Rosenthal Act is California’s counterpart to the FDCPA and incorporates its salient

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provisions. See Cal. Civ. Code § 1788.17. Plaintiff’s only separate claim under the Rosenthal

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Act is that Defendant violated California Civil Code § 1788.11(a). This claim is the same as

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Plaintiff’s section 1692d claim because they both prohibit use of “obscene and profane language.”

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See 15 U.S.C. § 1692d(2); Cal. Civ. Code § 1788.11(a). Therefore, the Court does not undergo a

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separate analysis for the Rosenthal Act claim.

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A.

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Before considering the issue presently before the Court--whether Plaintiff has adequately

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Defendant’s Arguments in the Opening Brief

stated a claim for relief under the FDCPA and Rosenthal Act--the Court addresses Defendant’s
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meritless arguments from the Opening Brief. First, Defendant has provided no legal support for

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the contention that Green Tree enjoys “qualified economic privilege.” Defendant cites two

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California state cases which discuss qualified economic privilege in the context of claims for

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intentional infliction of emotional distress (“IIED”), not FDCPA or Rosenthal Act claims. See

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Bundren, 145 Cal.App.3d at 789; Symonds, 225 Cal.App.3d at 1468. The Bundren and Symonds

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courts sought to balance a creditor’s right to demand payments with an individual’s right to be

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free from intentional infliction of emotional distress. See id. However, in the context of the

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FDCPA and Rosenthal Act, Congress and the California Legislature have already struck the

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appropriate balance of these competing concerns by passing specific legislation which prohibits

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Northern District of California

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specific conduct.
In Fox v. Citicorp Credit Services, Inc., 15 F.3d 1507 (9th Cir. 1994), the Ninth Circuit

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reversed the district court’s conclusion that a plaintiff failed to establish a FDCPA claim by

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failing to demonstrate that the defendant’s actions were “unreasonable.” Id. at 1516. The Ninth

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Circuit noted that the “reasonableness” of the defendant’s actions was an “incorrect standard”

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because “[t]he FDCPA is not simply a federal codification of common-law negligence.” Id.

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(“Rather, each section specifies what kind of conduct supports FDCPA liability”). Here,

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Defendant is attempting to promote a similar “incorrect standard” by analogizing Plaintiff’s

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FDCPA and Rosenthal Act claims to IIED claims. Contrary to Defendant’s contention, however,

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the “applicable test” for claims arising under the FDCPA or Rosenthal Act is not “whether or not

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the creditor goes beyond all reasonable bounds of decency in attempting to collect the debt.”

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Opp. at 6 (citing Bundren, 145 Cal.App.3d at 789). That is the test for an IIED claim, see

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Bundren, 145 Cal.App.3d at 789, and will not be entertained here.

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Defendant’s next argument is similarly unavailing. Defendant contends the First

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Amended Complaint “cannot withstand the pleading stage” because Plaintiff has not adequately

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pled the elements of an IIED claim. Opp. at 8. Defendant cites cases in which some courts

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required the plaintiff to satisfy the elements of an IIED claim in order to recover “actual

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damages” for emotional distress under the FDCPA and/or Rosenthal Act.3 See, e.g., Costa v.

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Nat’l Action Fin. Servs., 634 F.Supp.2d 1069, 1078 (E.D. Cal. 2007) (“Costa”). However,

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Defendant’s sweeping argument fails for two reasons. First, Defendant cites no case in which a

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plaintiff was required to plead the IIED elements in order to survive dismissal. Rather, this

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principle is only applied when the plaintiff must actually prove her damages. See, e.g., Costa,

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634 F.Supp.2d at 1007 (decided at the summary judgment stage); Venes v. Prof'l Serv. Bureau,

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Inc., 353 N.W.2d 671, 674 (Minn. Ct. App. 1984) (IIED elements written into the jury

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instructions). Second, recovery of “actual damages” under the FDCPA or Rosenthal Act is not

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limited to damages for emotional distress. A plaintiff, for example, may recover “actual
damages” when a debt collector causes the termination of a plaintiff’s employment, and clearly

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Northern District of California

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such a plaintiff would not be required to plead the elements of an IIED claim.

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As discussed above, Defendant made specific arguments relating to Plaintiff’s claims in
the Reply, which will now be considered in the context of Plaintiff’s specific claims.
B.

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Plaintiff’s Claims for Relief
1.

Section 1692d

Section 1692d proscribes debt collectors from engaging “in conduct the natural

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consequence of which is to harass, oppress, or abuse any person[.]” 15 U.S.C. § 1692d. Section

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1692d contains a nonexhaustive list of specific conduct which constitutes a violation of the

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section, such as the “use or threat of use of violence or other criminal means to harm the physical

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person, reputation, or property,” § 1692d(1), the “use of obscene or profane language or language

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the natural consequence of which is to abuse the hearer or reader,” § 1692d(2), or “[c]ausing a

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telephone to ring or engaging any person in telephone conversation repeatedly or continuously

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with intent to annoy, abuse, or harass any person,” § 1692d(5).

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The Eleventh Circuit has stated that “claims under § 1692d should be viewed from the
perspective of a consumer whose circumstances makes him relatively more susceptible to

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Other courts have not demanded such a high standard. See Costa, 634 F.Supp.2d at 1078
(“District courts are split over whether a plaintiff’s claims for emotional distress damages under
the FDCPA are evaluated under the state law governing the tort of IIED or some lower
standard.”).
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harassment, oppression, or abuse.” Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1179 (11th Cir.

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1985); see also Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1033 (9th Cir. 2010) (the Ninth

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Circuit has stated that ‘the lease sophisticated debtor’ standard applies section 1692d). The

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Eleventh Circuit analogized this principle to the “least sophisticated consumer” standard courts

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apply to sections 1692e and 1692f, but noted how the concept is more nuanced in section 1962d

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because even the most sophisticated consumer will be more susceptible to harassment or abuse if

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he or she “is poor (i.e., has limited access to the legal system), is on probation, or is otherwise at

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the mercy of a power relationship.” Id.

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There is no bright-line rule establishing which conduct constitutes harassment or abuse
under section 1692d, but it is clear that some “conduct fails to establish harassment as a matter of

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Northern District of California

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law.” Artega v. Asset Acceptance, LLC, 733 F.Supp.2d 1218, 1227 (E.D. Cal. 2010). In Artega,

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a district court from the Eastern District of California collected various cases and articulated

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general guidelines as to what types of conduct fall within the scope of section 1692d. See id. at

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1227-29. The court stated that a debt collector may be liable for “immediately re-calling a debtor

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after a debtor has hung up the telephone[,]” or for “continuing to call the debtor after the debtor

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has requested that the debt collector cease and desist communication[,]” or for “calling a debtor

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outside of his or her home--by calling the debtor’s workplace or the homes of a debtor’s family

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and friends--or calling at inconvenient hours[.]” Id. at 1227-28. By contrast, a debt collector’s

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“single laugh” during a phone call initiated by the debtor, a statement that repayment was

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“urgent” and “time sensitive,” or telling the debtor they “were going to get their money one way

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or another, yelling that Georgia was a garnishable state, then hanging up,” has been found to not

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violate section 1692d as a matter of law. Id. at 1228-29.

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The Ninth Circuit’s most substantive analysis with regard to section 1692d, albeit brief,

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was in Fox v. Citicorp Credit Services, Inc., 15 F.3d 1507 (9th Cir. 1994) (“Fox”). The district

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court had granted summary judgment in favor of a debt collector on grounds that the plaintiff had

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failed to show the debt collector’s actions were unreasonable. Id. at 1516. The Ninth Circuit

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reversed, holding that “[t]hreatening and intimidating calls to a consumer at an inconvenient time

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or place could rationally support a jury finding of harassing conduct.” Id. The plaintiff in Fox
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had testified that the debt collector’s phone calls were “intimidating and threatening,” that the

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debt collector threatened to garnish the plaintiff’s wages and demanded overnight payments, and

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that the debt collector called the plaintiff at work after she requested to not be called there on two

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previous occasions. Id.

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Assuming Plaintiff’s allegations to be true, the Court finds that Plaintiff has stated a claim

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for relief under section 1692d. Two days after Plaintiff requested that Green Tree not call

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anymore, a debt collector from Green Tree called Plaintiff and “proceeded to bully” her. FAC ¶

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19; see Fox, 15 F.3d at 1516 (the debt collector called the plaintiff at work after being told not to

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call there, and those calls were “[t]hreatening and intimidating”). Plaintiff also alleges that the
debt collector said Plaintiff “was choosing the wrong decision to go up against BofA,” and further

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Northern District of California

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alleges that the debt collector “said they will contact [Plaintiff’s] husband’s employer… because

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they can garnish … wages to pay back the debt.” FAC ¶ 19; see Fox, 15 F.3d at 1516 (the debt

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collector threatened to garnish the plaintiff’s wages).

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Plaintiff’s allegations also specify that Defendant violated 1692d(2), which prohibits the

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use of “obscene or profane language.” See FAC ¶ 22. Plaintiff alleges that the debt collector

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accused her of stealing the money, and asked her how she could “be an American” while knowing

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that she stole this money. Id. While being called a thief and un-American is not “obscene or

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profane language” per se, section 1692d(2) also prohibits other “language the natural

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consequence of which is to abuse the hearer[.]” 15 U.S.C. § 1692d(2); see also Jeter, 760 F.2d at

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1178 (“subsection (2) was meant to deter offensive language which is at least akin to profanity or

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obscenity. Such offensive language might encompass name-calling, racial or ethnic slurs, and

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other derogatory remarks which are similar in their offensiveness to obscene or profane

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remarks.”). The Court finds the foregoing allegations sufficient to survive Defendant’s Motion to

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Dismiss on Plaintiff’s section 1692d claim.

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2.

Section 1692e

Section 1692e prohibits debt collectors from using “any false, deceptive, or misleading

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representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e.

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Courts consider section 1692e claims under the “least sophisticated consumer” standard.
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Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222 (9th Cir. 1988). In order to

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determine whether conduct violates section 1692e, courts must undergo “an objective analysis

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that takes into account whether ‘the least sophisticated debtor would likely be misled by a

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communication.’” Donohue, 592 F.3d at 1030 (citing Guerrero v. RJM Acquisitions LLC, 499

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F.3d 926, 934 (9th Cir. 2007)). Like the other sections of the FDCPA, section 1692e contains

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subsections which describe specific conduct which is in violation of the section.

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Two of Plaintiff’s allegations fit well within the scope of section 1692e. First, Plaintiff

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alleges that one of Green Tree’s personnel accused her of “stealing.” FAC ¶ 19. Under

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subsection (7), a debt collector violates section 1692e by falsely representing or implying “that
the consumer committed any crime or other conduct in order to disgrace the consumer.” 15

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Northern District of California

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U.S.C. § 1692e(7). Second, Plaintiff alleges that Green Tree threatened to contact Plaintiff’s

12

husband’s employer and stated that Green Tree can garnish his wages. FAC ¶ 19. Under

13

subsection (4), a debt collector violates section 1692e by representing or implying that

14

nonpayment will result in “garnishment” of “wages of any person unless such action is lawful and

15

the debt collector or creditor intends to take such action.”4 15 U.S.C. § 1692e(4). Reading the

16

allegations in the light most favorable to Plaintiff, the allegations imply that Defendant did not

17

intend to garnish the wages because such garnishment would have been unlawful. See id.

18

Therefore, the Court finds that Plaintiff has sufficiently pled a claim for relief under section

19

1692e.

20

Plaintiff’s other allegations may provide a further basis for Green Tree’s liability under

21

section 1692e. Subsection (2)(A) of section 1692e prohibits debt collectors from falsely

22

representing the “legal status” of a debt. 15 U.S.C. § 1692e(2)(A); see also 15 U.S.C. §

23

1692e(10) (a debt collector cannot use “false representation or deceptive means to collect or

24

attempt to collect any debt”). Plaintiff alleges that Green Tree personnel stated “they will do

25
4

26
27
28

The fact that Plaintiff did not specifically allege a violation of subsection (4) of section
1692e is immaterial. The subsections of each section are not separate causes of action. Rather,
the subsections provide a nonexhaustive list of examples which violate the section. See 15
U.S.C. § 1692e (“Without limiting the general application of the foregoing, the following conduct
is a violation of this section”) (emphasis added).
12

1

everything in their power to come after [Plaintiff and her husband] to get all their money back[.]”

2

FAC ¶ 19. This statement may have misrepresented the “legal status” of Plaintiff’s debt if

3

Defendant in fact had no further “power” than to request that Plaintiff pay the debt voluntarily.

4

Whether this was a misrepresentation of the debt’s “legal status” turns on whether Plaintiff’s debt

5

is protected by California Code of Civil Procedure § 580b, which “closes the courthouse door on

6

any creditor’s collection efforts against the mortgagor.” Herrera, 2009 WL 2912517, *8; Cal.

7

Code Civ. Proc. § 580b. This question requires, at the very least, proof that Plaintiff’s loan was a

8

purchase money loan, and therefore cannot be answered until the Court can consider evidence.

9

For purposes of Defendant’s Motion to Dismiss, however, the Court finds that Plaintiff’s

10

allegations are sufficient.5

United States District Court
Northern District of California

11
12

3.

Section 1692f

Section 1692f proscribes debt collectors from using “unfair or unconscionable means to

13

collect or attempt to collect any debt.” 15 U.S.C. § 1692f. Like section 1692e, determining

14

whether conduct violates section 1692f “requires an objective analysis that takes into account

15

whether ‘the least sophisticated debtor would likely be misled by a communication.’” Donohue,

16

592 F.3d at 1030 (citing Guerrero, 499 F.3d at 934). Moreover, as with the other FDCPA

17

sections, section 1692f provides a nonexhaustive list of examples of “unfair or unconscionable

18

means to collect or attempt to collect any debt.” See id. For instance, a debt collector violates

19

section 1692f by collecting more than what is owed by contract (§ 1692f(1)), by accepting,

20

soliciting or depositing a postdated check (§ 1692f(2)-(4)), by charging a debtor for

21

communications (i.e. collect calls) by concealing the true purpose of the communication (§

22

1692f(5)), by threatening to take nonjudicial action to effect dispossession or disablement of

23

property (§ 1692f(6)), by communicating with the debtor via post card (§ 1692f(7)), or by using

24

any language or symbol other than the debt collector’s address on an envelope (§ 1692f(8)).

25
26
27
28

Here, Plaintiff does not allege that Green Tree attempted to collect more than the amount
of her debt or that Green Tree engaged in any other “unfair or unconscionable” conduct as
5

The Court does not decide at this time whether Plaintiff’s loan fits within the scope of
California Code of Civil Procedure § 580b because that question is not necessary for purposes of
this Motion.
13

1

des
scribed sectio 1692f’s other subsect
on
o
tions. Altho
ough the subsections provide a nonex
xhaustive

2

list of examples these exam
s,
mples are ins
structive as t the type o conduct w
to
of
which violates section

3

169
92f. Plaintif does not al
ff
llege any fac which co me close to the conduct prohibited b section
cts
by

4

169
92f. This case is not like Fox in this regard, whe the Ninth Circuit rev
e
ere
h
versed the dis
strict

5

cou
urt’s grant of summary ju
f
udgment on the section 1692f claim because “a j
jury could ra
ationally

6

find the filing of an applica
d
o
ation for a wr of garnish
rit
hment when the Foxes w current in
n
were

7

pay
yments … to constitute an unfair or unconsciona
o
a
u
able means o collection or attempted
of
d

8

collection.” Fo 15 F.3d at 1517. Plai
ox,
a
intiff’s First Amended C
t
Complaint on includes a
nly

9

con
nclusory alle
egation that Green Tree’s actions wer “unfair an unconscio
G
s
re
nd
onable,” but such an
alle
egation does not pass Ru 8(a) must
ule
ter. See Iqba 556 U.S. at 663 (“the tenet that a court must
al,
e

11
United States District Court
Northern District of California

10

acc a complaint’s allega
cept
ations as true is inapplica
e
able to … mere concluso statemen
ory
nts”).

12

The
erefore, Plain
ntiff’s sectio 1692f clai is dismis
on
im
ssed without prejudice.

13

V.

14

CONCL
LUSION
For the foregoing re
easons, Defe
endant’s Mot
tion to Dism Plaintiff First Ame
miss
f’s
ended

15

Com
mplaint is DENIED as to Plaintiff’s §§ 1692d an 1692e cla
D
o
nd
aims, and GR
RANTED as to
s

16

Pla
aintiff’s § 1692f claim. The § 1692f claim is dism
T
missed with leave to am
h
mend. If Plaintiff

17

cho
ooses to ame the comp
end
plaint, she must file an a
m
amended com
mplaint withi thirty (30) days of
in

18

the date of this Order.

19
20

O
ED.
IT IS SO ORDERE
Dat
ted: Decemb 14, 2012
ber
2

21

__________
___________
________
___
Jos
seph C. Sper
ro
Un
nited States M
Magistrate Ju
udge

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25
26
27
28
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