Louie v. Asset Capital Recovery Group et al

Filing 29

ORDER by Judge Edward M. Chen Denying 13 Defendants' Motion to Dismiss. (emcsec, COURT STAFF) (Filed on 7/27/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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STEVEN C. LOUIE,

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For the Northern District of California

United States District Court

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No. C-15-1680 EMC

Plaintiff,
v.
ASSET CAPITAL RECOVERY
GROUP, LLC, et al.,

ORDER DENYING DEFENDANTS’
MOTION TO DISMISS
(Docket No. 13)

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Defendants.
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Pending before the Court is Defendants’ motion to dismiss. For the reasons stated on the

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record at the hearing on this matter, and for the additional reasons summarized below, Defendants’

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motion to dismiss is DENIED.

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Defendants first argue that the filing of their April 11, 2014, opposition brief cannot violate

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any proscription of the FDCPA as a matter of law because the Ninth Circuit has held that otherwise

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wrongful or misleading “communications directed solely to a debtor’s attorney are not actionable

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under the [FDCPA].” Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934 (9th Cir. 2007)

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(emphasis added). Guerrero is not controlling here, however, because the opposition brief is not a

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“communication,” and numerous other courts have recognized that the FDCPA can apply to

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litigation conduct, such as the filing of complaints or requests for admission. See McCollough v.

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Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939, 950-51 (9th Cir. 2011); Donohue v. Quick

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Collect, Inc., 592 F.3d 1027, 1031-32 (9th Cir. 2010); Phillips v. Asset Acceptance, LLC, 736 F.3d

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1076, 1082-83 (7th Cir. 2013). The FDCPA proscribes creditor conduct other than

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“communications.” See 15 U.S.C. § 1962e; 15 U.S.C. § 1962f. As discussed at the hearing,

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Plaintiff allegedly suffered injury and damages as a result of Defendants’ opposition to set aside the

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default judgment and refusal to remove the levy on Plaintiff’s bank accounts.

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Defendants’ potential liability under the Rosenthal Act for formally opposing Louie’s

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attempt to vacate the default judgment is even more clear. California law makes it expressly illegal

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to “collect or attempt to collect a consumer debt by means of judicial proceedings when the debt

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collector knows that service of process, where essential to jurisdiction over the debtor or his

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property, has not been legally effected.” Cal. Civ. Code § 1788.15(a); see also Komarova v.

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National Credit Acceptance, Inc., 175 Cal. App. 4th 324, 344 (2009) (recognizing that the Rosenthal
Act prohibits the knowing “[u]se of judicial proceedings to collect a debt without service of

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For the Northern District of California

United States District Court

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process”).

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As this Court has previously held, the “continuing violation doctrine may apply to debt

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collection claims” under the FDCPA. Joseph v. J.J. Mac Intyre Cos., L.L.C., 281 F. Supp. 2d 1156,

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1161 (N.D. Cal. 2003). As explained in Joseph, the “key” to applying the continuing violation

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doctrine is determining “whether the conduct complained of constitutes a continuing pattern and

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course of conduct as opposed to unrelated discrete acts. If there is a pattern, then the suit is timely if

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the action is filed within one year of the most recent date on which the defendant is alleged to have

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violated the FDCPA, and the entire course of conduct is at issue.” Id. Here, assuming the facts

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pleaded in Louie’s complaint regarding Defendants’ knowledge of the service defect are true, the

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Court finds that the relevant test for applying the continuing violation doctrine is met under both the

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FDCPA and Rosenthal Act. Plaintiff has alleged prior acts related to the litigation in which the

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opposition brief was filed. Indeed, application of the continuing violation doctrine is particularly

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appropriate under state law given that the Court of Appeal has specifically held that “[u]se of

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judicial proceedings to collect a debt without service of process (§ 1788.15, subd. (a)) will also be a

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continuing course of conduct insofar as the conduct involves multiple acts, such as obtaining and

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collecting on a judgment, that extend over a period of time before the proceedings are concluded.”

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Komarova, 175 Cal. App. 4th at 344.

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This order disposes of Docket No. 13.

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IT IS SO ORDERED.

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Dated: July 27, 2015

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_________________________
EDWARD M. CHEN
United States District Judge

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For the Northern District of California

United States District Court

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