Forto v. Capital One Bank, National Association et al
Filing
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ORDER granting 45 Motion for Summary Judgment. Signed by Judge James Donato on March 20, 2017. (jdlc1S, COURT STAFF) (Filed on 3/20/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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Plaintiff,
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ORDER RE SUMMARY JUDGMENT
v.
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CAPITAL ONE BANK, N. A., et al.,
Defendants.
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United States District Court
Northern District of California
Case No. 14-cv-05611-JD
SIMONETTE D. FORTO,
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Plaintiff Simonette D. Forto sued defendants Capital One Bank, N.A. (“Capital One”), and
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United Recovery Systems, L.P. (“URS”), for unlawful and abusive debt collection practices under
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the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and the California
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Rosenthal Fair Debt Collection Practices Act (“RFDCPA”), Cal. Civ. Code §§ 1788-1788.32.
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Dkt. No. 1. Defendants have moved for summary judgment on all claims. Dkt. No. 45. The
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motion is granted and the case is dismissed.
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BACKGROUND
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The material facts are undisputed and straightforward. In April 2012, Forto opened a
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credit card account with defendant Capital One. Dkt. No. 46 (Forto Deposition - part 1)1 at 29:3-
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13. She stopped making payments on the account and it became delinquent. Id. at 29:22-30:15.
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By October 2013, Forto was $2,940.83 in arrears, and Capital One engaged defendant URS to
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collect the debt. Dkt. No. 47 (DeYoung Decl.) ¶ 4 and Exh. 1. On December 26, 2013, Forto
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called URS to resolve the debt and spoke to a URS representative in a recorded phone call. Dkt.
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No. 47-1. Forto said that she was on disability leave and asked for a monthly payment plan she
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Defendants filed their exhibits in a convoluted format. The Court has done its best to bring
clarity to the record by citing to ECF docket numbers and internal document descriptors.
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could afford. Id. at 3:8-5:5. After discussing possible amounts, the representative offered to settle
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the debt for $1,911.54 to be paid over 36 months in the amount of $53.10 per month. Id. at 12:23-
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13:5. Forto agreed to this proposal. Id. at 13:6.
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The representative advised Forto that URS would set up an automatic system to pay the
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monthly installments out of her checking account. Id. at 16:2-19. The representative asked for
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Forto’s checking account and bank routing numbers. Id. at 14:5-6. Forto provided an account
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number and the representative located the routing number for Forto’s Patelco Credit Union branch.
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Id. at 14:7-15:6, 19:6-24. The representative said URS would send a confirmation email for the
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settlement and “a reminder letter or a confirmation letter every month five to ten days before the
payment is set to come out.” Id. at 21:7-14. The checks were to be sent on the 27th of each month
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United States District Court
Northern District of California
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from December 2013 through November 2016. Id. at 20:6-20.
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These agreements and procedures fell apart immediately. URS could not get even one of
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the monthly payments out of Forto’s checking account. Dkt. No. 46-2 (Forto Deposition - part 3)
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at 120:3-7; Dkt. No. 47 (DeYoung Decl.) ¶ 8 and Exh. 1 at 3-4. The Patelco Credit Union rejected
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URS’s payment requests with error codes such as “no account.” Dkt. No. 47 (DeYoung Decl.) ¶ 8
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and Exh. 1 at 5. The same representative who negotiated the settlement with Forto called her
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again on January 3, 2014, to address the problem, but Forto cut the conversation short and said
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“I’m not talking to you, don’t call me.” Dkt. No. 47-2 at 2:2-20. URS tried to reach Forto over 20
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more times between January 3, 2014 and March 13, 2014, with no success or any cooperation by
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her. Dkt. No. 47 (DeYoung Decl.) ¶ 10 and Exh. 1 at 3-4. URS shared this information with
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Capital One. See Dkt. No. 50 at 12.
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In April 2014, a law firm representing Capital One sent a letter to Forto stating that she
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needed to resolve the debt or risk litigation. Dkt. No. 47-4 (D’Anna Decl.) ¶ 2 and Exh. 1. Forto
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says she never saw the letter. Dkt. No. 46-2 (Forto Deposition - part 3) at 104:16-25. In any
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event, Capital One sued Forto in June 2014 in California state court to collect the delinquent
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$2,940.83 she owed. Dkt. No. 47-4 (D’Anna Decl.) ¶ 3 and Exh. 2. For reasons not shared with
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the Court, the case appears to have been dismissed. Dkt. No. 49-1 (Forto Decl.) ¶ 15.
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Despite admitting that she never paid a dime on her debt, Dkt. No. 46-2 (Forto Deposition
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- part 3) at 120:3-7, Forto sued defendants in December 2014 for purportedly failing to abide by
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the terms of the repayment agreement. Dkt. No. 1. The gist of her legal theory is that she satisfied
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her obligations on the debt simply by providing defendants with access to her account, and the
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defendants’ subsequent collection efforts and claim that the debt is outstanding amount to illegal
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practices under the FDCPA and RFDCPA. See, e.g., id. ¶¶ 34-44.
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DISCUSSION
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Congress passed the FDCPA to “eliminate abusive debt collection practices by debt
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collectors.” 15 U.S.C. § 1692(e). To those ends, it generally prohibits a debt collector from using
“unfair or unconscionable means to collect or attempt to collect any debt” or engaging in any
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United States District Court
Northern District of California
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conduct “the natural consequence of which is to harass, oppress, or abuse any person in
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connection with the collection of a debt.” 15 U.S.C. §§ 1692d, f. While the list of prohibited
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actions is not exhaustive, the statute prohibits debt collectors from trying to collect any amount
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that is not “expressly authorized by the agreement creating the debt or permitted by law.”
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15 U.S.C. § 1692f(1). The RFDCPA incorporates by reference the FDCPA’s requirements and
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“makes available the FDCPA’s remedies for violations.” Diaz v. Kubler Corp., 785 F.3d 1326,
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1328 (9th Cir. 2015) (internal quotation omitted).
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None of these important statutory concerns applies here because defendants did nothing
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that even comes close to an unscrupulous debt collection practice. As the record establishes,
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“[t]here is no dispute of material fact that Plaintiff has not paid a single cent toward the settlement
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of her Debt, which constituted a material breach in and of itself of the Settlement Agreement.”
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Dkt. No. 45 at 7. Defendants’ conduct was reasonable, fair and consistent with legal collection
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practices.
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Forto does not meaningfully dispute the facts leading to this conclusion. Her main
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response is that she upheld her side of the bargain just by providing a checking account number.
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Dkt. No. 49 at 11; Dkt. No. 49-1 (Forto Decl.) ¶ 11. That argument does not hold water. Under
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California law, which the parties agree governs here, “[t]he basic goal of contract interpretation is
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to give effect to the parties’ mutual intent at the time of contracting.” Founding Members of the
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Newport Beach Country Club v. Newport Beach Country Club, Inc., 109 Cal. App. 4th 944, 955
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(2003). That intent is found in the first instance in the words of the agreement as understood in
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their ordinary meaning and in a manner that avoids absurd results. Id. at 956; see also Reudy v.
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Clear Channel Outdoors, Inc., 693 F. Supp. 2d 1091, 1114 (N.D. Cal. 2010). The parties’
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agreement as recorded during the phone call is clear as day: URS agreed to compromise the
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outstanding debt to a reduced figure in exchange for Forto’s promise to pay a minimum amount
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each month until the reduced amount was paid off. Dkt. No. 47-1. The repayment agreement was
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reached because Forto herself called URS to negotiate her delinquent Capital One account, and the
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parties without question understood that they had reached a compromise where Forto would pay
$53.10 per month over 36 months in exchange for a total payment that was significantly lower
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United States District Court
Northern District of California
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than what she owed. Id. at 3:12-18, 12:24-13:10. For Forto to say now that her side of the deal
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was merely to give URS an account number and then wish it well flies in the face of the express
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terms she agreed to.
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Forto’s suggestion that she is off the hook because URS had an independent duty to obtain
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the correct number for her account is equally unavailing. The URS representative asked Forto to
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provide her account number and explained that the repayment system required this information.
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Id. at 14:5-15:17. Forto gave a number. Id. at 19:13-24. When her bank rejected the payment
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requests, URS reached out to her immediately and repeatedly to fix the problem. Dkt. No. 47
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(DeYoung Decl.) ¶¶ 8-10 and Exh. 1 at 3-4. Forto does not deny that she failed to give URS a
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usable account number or that she ignored URS’s follow-up calls. If there was an impediment to
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realizing the terms of the agreement, it was Forto’s own conduct, namely the failure to provide a
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usable account number, and she cannot bootstrap her own defaults to excuse performance under
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the agreement. See Schellinger Brothers v. Cotter, 2 Cal. App. 5th 984, 1006 (2016).
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Forto’s passing argument that the parties never discussed the “consequences if the
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payments were not made” is of no moment. Dkt. No. 49 at 7. At the very beginning, the URS
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representative expressly told Forto that her “account is up for possible legal action. That just
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basically means if there was no arrangements made on the account that they could pursue for the
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balance in full.” Dkt. No. 47-1 at 7:13-17. Forto had ample notice from the start that collection
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measures for the full amount were possible in the absence of a payment plan.
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Forto’s effort to find refuge in purported fact disputes over the parties’ agreement is also
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misdirected. She fails to show any genuine dispute of material fact here, and her subjective (and
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self-serving) interpretations of the agreement do not amount to a relevant consideration. Newport
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Beach Country Club, 109 Cal. App. 4th at 956; see also Edwards v. Symbolic Int’l. Inc., 414 Fed.
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Appx. 930, 932 (9th Cir. 2011) (“[T]he mere state of mind of the parties--with reference to the
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‘meeting of the minds’--is not the essential object of inquiry, the terms of the promise act being
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determinable by an external and not by an internal standard.”) (internal quotation omitted).
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If anything is striking here, it is that Forto’s complaint improperly inverts the law. Her
United States District Court
Northern District of California
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default excused defendants from any obligations to her under the repayment agreement, and not
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the other way around. Defendants were perfectly entitled to terminate the agreement with Forto
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after she failed to live up to the payment plan. Brown v. Grimes, 192 Cal. App. 4th 265, 277
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(2011). And given Forto’s “total failure in the performance of the contract,” a reasonable jury
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could not find that her breach was immaterial. See Rano v. Sipa Press, Inc., 987 F.2d 580, 586
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(9th Cir. 1993) (internal quotation omitted); Brown, 192 Cal. App. 4th at 277-78.
CONCLUSION
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Summary judgment is granted for defendants on all claims. The case is closed.
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IT IS SO ORDERED.
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Dated: March 20, 2017
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JAMES DONATO
United States District Judge
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