Shannon v. Windsor Equity Group, Inc., No. 3:2012cv01124 - Document 33 (S.D. Cal. 2014)
Court Description: ORDER granting in part and denying in part Plaintiff's 21 Motion for Summary Judgment; granting in part and denying in part Defendant's 22 Cross-Motion for Partial Summary Judgment. Signed by Judge Thomas J. Whelan on 3/12/2014. (jah)
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Shannon v. Windsor Equity Group, Inc. Doc. 33 1 2 3 4 5 6 7 8 9 10 UNITED STATES DISTRICT COURT 11 SOUTHERN DISTRICT OF CALIFORNIA 12 13 SHAUN SHANNON, 14 Case No. 12-cv-1124-W(JMA) Plaintiff, ORDER: 15 (1) GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT [DOC. 21], AND v. 16 17 18 19 (2) GRANTING IN PART AND DENYING IN PART DEFENDANT’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT [DOC. 22] WINDSOR EQUITY GROUP, INC., 20 21 Defendant. 22 23 This action arises from Plaintiff Shaun Shannon’s allegations that Defendant 24 Windsor Equity Group, Inc. (“Windsor Group”) violated federal and state debt25 collection laws when it attempted to repossess an automobile. Now pending before the 26 Court are Mr. Shannon’s motion for summary judgment and Windsor Group’s cross27 motion for partial summary judgement. Both motions are opposed. 28 // -1- 12cv1124 Dockets.Justia.com 1 The Court decides the matter on the papers submitted and without oral 2 argument. See Civ. L.R. 7.1(d.1). For the following reasons, the Court GRANTS IN 3 PART and DENIES IN PART Plaintiff’s motion for summary judgment, and 4 GRANTS IN PART and DENIES IN PART Defendant’s cross-motion for partial 5 summary judgment. 6 7 I. BACKGROUND 8 A. 9 Windsor Group is a “loan servicing company” based in Dallas, Texas, that uses Windsor Equity Group, Inc. 10 various methods to “maximize recoveries” on their clients’ “delinquent consumer 11 vehicle loans.” (McCrary Dep. 34:10–25; McCrary Dep. Exs. B1, B3.) “Windsor 12 Group locates people and collateral—primarily vehicles—for its clients who have a 13 security interest in the collateral.” (McCrary Decl. (Oct.) ¶ 4.) 14 One of the services that Windsor Group provides is “skip tracing.” (McCrary 15 Dep. 31:12–19, 76:2–3; McCrary Decl. (Sept.)1 ¶ 3.) Windsor Group’s employee 16 training manual defines “skip tracing” as “following the trail, searching for, and 17 uncovering the location of an individual or item that has disappeared.” (McCrary Dep. 18 Ex. H.) After locating an individual or item, a skip tracer either arranges for 19 repossession or transfers the case to the client to potentially work out a payment plan 20 separately. (McCrary Dep. 31:12–19, 85:16–21.) Windsor Group also requires all of 21 its skip-tracer case workers to “follow[] state and federal regulations regarding 22 collection procedures,” including the Fair Debt Collection Practices Act (“FDCPA”). 23 (McCrary Dep. 33: 3–12; McCrary Dep. Ex. B2; McCrary Decl. (Oct.) ¶ 8.) FDCPA 24 compliance is even advertised to prospective clients, though Windsor Group explains 25 26 27 28 1 Windsor Group attaches two declarations of Cliff McCrary, Windsor Group’s CEO. The first is in support of Windsor Group’s opposition to Mr. Shannon’s summary-judgment motion dated September 20, 2013 (Doc. 23-1), and the second is in support of Windsor Group’s cross-motion for partial summary judgment dated October 14, 2013 (Doc. 22-2). The Court will distinguish one declaration from the other based on their respective dates. -2- 12cv1124 1 that the FDCPA is only used as a “best practices benchmark.” (McCrary Dep. Ex. B2; 2 McCrary Decl.(Oct.) ¶ 8.) 3 In addition to skip tracing, Windsor Group advertised that it offers services for 4 “National Repossession Management” to “efficiently manage all [their] clients’ 5 collateral recovery needs” and “Remarketing Management” to “help[] clients quickly 6 and efficiently remarket repossessed vehicles.” (McCrary Dep. Ex. B2.) The 7 remarketing management included services such as auction communication, 8 transportation, reconditioning and repair, floor pricing, live in-person representation, 9 online sales, and transfer of auction proceeds. (Id.) However, according to the 10 deposition testimony of Windsor Group’s CEO, Cliff McCrary, Windsor Group sold its 11 remarketing subsidiary in July 2012, but continues to offer its repossession services to 12 clients. (McCrary Dep. 25:1–11, 134:8–18.) 13 On or about October 20, 2011, Ally Financial, LLC referred a case to Windsor 14 Group. (McCrary Decl. ¶ 10.) The assignment was to locate a 2006 Cadillac Escalade 15 owned by Ina Bragg and arrange the vehicle’s repossession. (Id.) Ms. Bragg had 16 purchased the vehicle for personal use, but then had fallen behind on her payments. 17 (McCrary Dep. 64:1–65:18) At the time, Windsor Group was contractually obligated 18 to Ally Financial to “provide Repossession Management services including skip tracing 19 to locate the vehicles and overseeing repossession of the vehicles.” (Id. ¶ 11.) Windsor 20 Group emphasizes that the agreement with Ally Financial explicitly states that Windsor 21 Group “will not engage in collection activity under any circumstances.” (Id.) And 22 regarding the 2006 Cadillac Escalade, Windsor Group contends that it did not attempt 23 to collect any debt from Ms. Bragg, but rather merely tried to locate the vehicle. (Id. 24 ¶ 12.) It attempted to locate the vehicle based on information received through a 25 telephone call from Ms. Bragg’s relative, who informed Windsor Group that Mr. 26 Shannon possessed the vehicle. (Id.) According to Windsor Group, one of its 27 employees then “attempted to call Mr. Shannon and his place of employment to 28 -3- 12cv1124 1 confirm that Mr. Shannon had the vehicle and arrange to have the vehicle picked-up 2 at the place of employment.” (Id.) 3 4 B. Patrick Cannon’s Phone Calls to Mr. Shannon at Jet Source, Inc. 5 Patrick Cannon was Windsor Group’s case worker assigned to arrange for the 6 repossession of the 2006 Cadillac Escalade. (Shannon Decl. ¶¶ 3–17.) At the time, 7 Mr. Shannon was employed by Jet Source, Inc., located at Palomar Airport in Carlsbad, 8 California. (Id. ¶ 2.) Based on the information received from Ms. Bragg’s relative, Mr. 9 Cannon began repeatedly contacting Mr. Shannon and his co-workers at Jet Source. 10 (Id. ¶¶ 3–17.) 11 The first communication occurred on January 5, 2012, when Mr. Cannon left a 12 message for Mr. Shannon at Jet Source. (Shannon Decl. ¶ 3.) When Mr. Shannon 13 returned his phone call, he asked Mr. Cannon for the reason for the call. (Id. ¶ 3–5.) 14 According to Mr. Shannon, Mr. Cannon told him that he had called earlier on behalf 15 of “Ina” and that Mr. Shannon “needed to return the car.” (Id. ¶ 6.) When Mr. 16 Shannon said that he did not know what Mr. Cannon was talking about, Mr. Cannon 17 raised his voice and said, “You know damn well what I am talking about.” (Id. ¶¶ 7–8.) 18 Mr. Shannon reiterated that he did not know the reason for the call and told Mr. 19 Cannon that he was not allowed to take personal calls at work. (Id. ¶ 9.) Mr. Cannon 20 then responded by yelling, and using profanities and threats that he would “make sure” 21 that Mr. Shannon would get fired, arrested, and sued. (Id. ¶¶ 10–11.) Eventually, Mr. 22 Shannon told Mr. Cannon not to call any more and hung up. (Id. ¶ 12.) 23 A few minutes later, Mr. Cannon called Mr. Shannon’s co-worker at Jet Source. 24 (Shannon Decl. ¶ 13.) According to the co-worker, Mr. Cannon became “abusive” and 25 “began yelling” at her. (Anderson Decl. ¶ 5.) After Mr. Shannon overheard who was 26 on the phone, he took the telephone, told Mr. Cannon to stop calling, and hung up. 27 (Shannon Decl. ¶ 15.) Almost immediately thereafter, Mr. Cannon called the same co28 worker back, demanding that she transfer him to Mr. Shannon’s supervisor. (Anderson -4- 12cv1124 1 Decl. ¶ 7.) Because she “did not want to deal with more abuse,” the co-coworker 2 transferred the call. (Id. ¶ 8.) 3 According to the supervisor, Mr. Cannon told the supervisor that he needed to 4 speak to Mr. Shannon, but the supervisor responded that he would give Mr. Shannon 5 Mr. Cannon’s message. (Bowers Decl. ¶ 5.) The supervisor refused to give Mr. Cannon 6 any information regarding Mr. Shannon’s location, work schedule, vehicle, and parking 7 location because Jet Source has a policy against giving out such information. (Id. ¶¶ 8 6–7.) Later that same day, Mr. Cannon called the supervisor again, and “became 9 abusive, demanding that [he] give him information regarding Shaun Shannon.” (Id. ¶ 10 8.) But when the supervisor explained that Mr. Cannon needs to speak with someone 11 from the Human Resources Department, Mr. Cannon “continued with his abusive 12 behavior,” so the supervisor ended the call. (Id. ¶ 9.) 13 Mr. Cannon continued to call throughout the following days. (Shannon Decl. 14 ¶ 16; Bowers Decl. ¶ 10; Anderson Decl. ¶¶ 11–13.) During that time period, Mr. 15 Cannon continued engaging in his aggressive conduct, including an instance when Mr. 16 Cannon “yelled” at the aforementioned co-worker that she “needed to get it through 17 [her] head” that he “needed access” to Palomar Airport. (Anderson Decl. ¶ 12.) 18 During another phone call, Mr. Cannon even informed Jet Source’s human resources 19 representative that Mr. Shannon had “stole[n] a vehicle from a little old lady, and that 20 [he] was in possession of a stolen vehicle.” (Shannon Decl. ¶ 17.) Mr. Shannon 21 declares under penalty of perjury that the accusations are false, and that he never has 22 been in possession of any stolen vehicle. (Id. ¶¶ 18–24.) The only times when he used 23 the 2006 Cadillac Escalade were when it was lent to him for three days in November 24 2011 when his vehicle was being repaired, and one evening in April 2012 when he was 25 asked to drive a friend home who had been drinking. (Id. ¶¶ 25–31.) The 2006 26 Cadillac Escalade was returned after both instances. (Id. ¶¶ 27, 31.) 27 According to Mr. Shannon, between January 5 and January 9, 2012, Mr. Cannon 28 called him between ten and twenty times at work. (Shannon Dep. 53: 21–25.) -5- 12cv1124 1 On May 8, 2012, Mr. Shannon commenced this action seeking relief under the 2 FDCPA, 15 U.S.C. § 1692, et seq., and the California Rosenthal Fair Debt Collection 3 Act (“Rosenthal Act”), California Civil Code §1788, et seq. On November 8, 2012, Mr. 4 Shannon amended his complaint to include a claim for defamation. The parties then 5 filed cross-motion for summary judgment. Both motions are opposed. 6 7 II. LEGAL STANDARD 8 Summary judgment is appropriate under Rule 56(c) where the moving party 9 demonstrates the absence of a genuine issue of material fact and entitlement to 10 judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 11 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, 12 it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 13 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute about 14 a material fact is genuine if “the evidence is such that a reasonable jury could return a 15 verdict for the nonmoving party.” Anderson, 477 U.S. at 248. 16 A party seeking summary judgment always bears the initial burden of establishing 17 the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. The moving 18 party can satisfy this burden in two ways: (1) by presenting evidence that negates an 19 essential element of the nonmoving party’s case; or (2) by demonstrating that the 20 nonmoving party failed to make a showing sufficient to establish an element essential 21 to that party’s case on which that party will bear the burden of proof at trial. Id. at 32222 23. “Disputes over irrelevant or unnecessary facts will not preclude a grant of summary 23 judgment.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 626, 630 24 (9th Cir. 1987). 25 “The district court may limit its review to the documents submitted for the 26 purpose of summary judgment and those parts of the record specifically referenced 27 therein.” Carmen v. San Francisco Unified Sch. Dist., 237 F.3d 1026, 1030 (9th Cir. 28 2001). Therefore, the court is not obligated “to scour the record in search of a genuine -6- 12cv1124 1 issue of triable fact.” Keenan v. Allen, 91 F.3d 1275, 1279 (9th Cir. 1996) (citing 2 Richards v. Combined Ins. Co. of Am., 55 F.3d 247, 251 (7th Cir. 1995)). If the 3 moving party fails to discharge this initial burden, summary judgment must be denied 4 and the court need not consider the nonmoving party’s evidence. Adickes v. S.H. Kress 5 & Co., 398 U.S. 144, 159-60 (1970). 6 If the moving party meets this initial burden, the nonmoving party cannot defeat 7 summary judgment merely by demonstrating “that there is some metaphysical doubt as 8 to the material facts.” Matsushita Electric Indus. Co., Ltd. v. Zenith Radio Corp., 475 9 U.S. 574, 586 (1986); Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th 10 Cir. 1995) (“The mere existence of a scintilla of evidence in support of the nonmoving 11 party’s position is not sufficient.”) (citing Anderson, 477 U.S. at 242, 252). Rather, the 12 nonmoving party must “go beyond the pleadings” and by “the depositions, answers to 13 interrogatories, and admissions on file,” designate “specific facts showing that there is 14 a genuine issue for trial.’” Celotex, 477 U.S. at 324 (quoting Fed. R. Civ. P. 56(e)). 15 When making this determination, the court must view all inferences drawn from 16 the underlying facts in the light most favorable to the nonmoving party. See 17 Matsushita, 475 U.S. at 587. “Credibility determinations, the weighing of evidence, and 18 the drawing of legitimate inferences from the facts are jury functions, not those of a 19 judge, [when] he [or she] is ruling on a motion for summary judgment.” Anderson, 477 20 U.S. at 255. 21 The mere fact that the parties filed cross-motions “does not necessarily mean 22 there are no disputed issues of material fact and does not necessarily permit the judge 23 to render judgment in favor of one side or the other.” Starsky v. Williams, 512 F.2d 24 109, 112 (9th Cir. 1975). “[E]ach motion must be considered on its own merits.” Fair 25 Hous. Council of Riverside Cnty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 26 2001). Furthermore, the court must consider evidence submitted in support of and in 27 opposition to both motions before ruling on either one. Id. 28 // -7- 12cv1124 1 III. DISCUSSION 2 The FDCPA aims to “eliminate abusive debt collection practices by debt 3 collectors, to insure that those debt collectors who refrain from using abusive debt 4 collection practices are not competitively disadvantaged, and to promote consistent 5 State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). 6 Before enacting the FDCPA, Congress found that abusive debt collection practices 7 contributed to “personal bankruptcy, marital instability, the loss of employment, and 8 invasions of individual privacy.” Id. § 1692(a). The FDCPA sets limits for how debt 9 collectors may interact with consumer debtors and third parties while engaging in 10 activities connected to the collection of any debt. Id. § 1692, et seq. The Rosenthal 11 Act aims to achieve similar goals based on a similar findings. Cal. Civ. Code § 1788.1. 12 The parties filed cross-motions for summary judgment addressing several issues. 13 Both parties move for summary judgment regarding whether Windsor Group is a “debt 14 collector” under the FDCPA and Rosenthal Act—Mr. Shannon argues that Windsor 15 Group is a debt collector, and Windsor Group argues that it is not. Additionally, 16 Windsor Group argues that Mr. Shannon lacks standing to assert a claim under the 17 FDCPA and the Rosenthal Act, and Mr. Shannon also argues that Windsor Group is 18 liable under the FDCPA and Rosenthal Act. The Court addresses each issue below. 19 20 A. Windsor Group Is a “Debt Collector” Subject to the FDCPA. 21 Only persons or entities established as “debt collectors,” as provided in § 22 1692a(6), are subject to the FDCPA’s restrictions. Heintz v. Jenkins, 514 U.S. 291, 292 23 (1995); Romine v. Diversified Collection Servs., Inc., 155 F.3d 1142, 1146 (9th Cir. 24 1998). Determining whether a party is a “debt collector” under the FDCPA “depend[s] 25 upon the nature of the activities in the individual case,” not whether a party calls itself 26 a debt collector or a collection agency. Romine, 155 F.3d at 1149 (citing Jenkins v. 27 Heintz, 25 F.3d 536, 539 (7th Cir. 1994)). To define a party as a debt collector, the 28 courts should look to the plain language of the statute. Id. at 1145. The FDCPA -8- 12cv1124 1 defines a “debt collector” as follows: 2 3 4 5 6 7 Any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another . . . . For the purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests[.] 15 U.S.C. § 1692a(6). It also lists six categories of actors that are specifically excluded 8 from the classification as a debt collector. 15 U.S.C. § 1692a(6)(A)-(F). Skip tracers, 9 repossession-remarketing services, and repossession agencies are not among the six 10 categories explicitly listed as excluded from debt-collector status. See id. 11 Windsor Group argues it is not a debt collector for purposes of general FDCPA 12 application because it is not “in the business of debt collection and does not regularly 13 collect any debts.” (Def.’s Mot. 4:14–20; Def.’s Opp’n 6:14–20.) Rather, it asserts that 14 it “plays the role” of a skip-tracing company and a repossession-management agency 15 only, never demanding, accepting, or collecting any payment of debts. (Id.) The 16 parties appear to agree that Windsor Group’s activities do not constitute direct debt 17 collection. Instead, the dispute lies in the question of whether Windsor Group regularly 18 engaged in attempts to indirectly collect debts, and if so, whether Mr. Cannon’s contact 19 with Mr. Shannon was a violation of the FDCPA. As the parties point out in their 20 briefs, guidance regarding this issue is sparse.2 However, the Ninth Circuit has laid out 21 important principles for determining whether an entity has engaged in indirect debt 22 collection. See Romine, 155 F.3d at 1146; see also Freeman v. ABC Legal Servs., Inc., 23 827 F. Supp. 2d 1065, 1072 (N.D. Cal. 2011). 24 Indirect debt collection ranges from litigating and filing warrants on behalf of 25 creditors to simply retrieving phone numbers for creditors and debt-collection agencies. 26 See Heintz v. Jenkins, 514 U.S. at 299; Romine, 155 F.3d at 1147; Scott v. Jones, 964 27 28 2 The parties cite to many cases that are not binding on this Court regarding this issue. The Court will not address these cases unless doing so is particularly helpful. -9- 12cv1124 1 F.2d 314, 316 (4th Cir. 1992). “Moreover, the fact that the FDCPA specifically 2 exempts process servers from being debt collectors indicates that without this special 3 exemption, . . . the service of legal process in debt collection actions is generally 4 considered an indirect form of debt collection under the FDCPA.” Freeman, 827 F. 5 Supp. 2d at 1073. Romine strongly suggests that skip tracing when used to aid or 6 facilitate the collections process brings that service under the scope of the FDCPA. See 7 Romine, 155 F.3d at 1149. This measured approach is sensible because it protects 8 potential plaintiffs from debt collectors that use third parties as extensions for their 9 wrongful conduct or disingenuous organizational labels in order to circumvent the 10 FDCPA. 11 In Romine, the Ninth Circuit recognized that “one need not gain possession of 12 a debt, or personally benefit financially from the satisfaction of a debt, in order to 13 assume liability as a ‘debt collector’ under the FDCPA.” 155 F.3d at 1146. In that case, 14 defendant Western Union entered into a service agreement with a debt-collection 15 company to obtain the personal information of debtors. Id. at 1143-44. To achieve 16 that goal, Western Union sent debtors notices that they had received personal 17 telegrams, but when debtors called to retrieve their messages, Western Union required 18 the debtors to first provide their telephone numbers. Id. at 1144. That process was 19 known as an “automated voice telegram” (“AVT”) service. Id. After securing the 20 personal information, Western Union would read aloud the debt-collection message 21 that had been provided by the creditor and would then forward the previously unlisted 22 numbers to the debt-collection company. Id. Even though Western Union was a third 23 party that was not directly benefitting from the debt-collection practice, the court 24 nonetheless held that its role in the process could qualify as indirect debt collection 25 under the FDCPA. Id. at 1149. 26 The circumstances in this case are quite similar to those in Romine. To begin, 27 Windsor Group entered into a service agreement with Ally Financial to produce a 28 debtor’s personal information—in this case, that personal information was the location -10- 12cv1124 1 of a particular vehicle, Ms. Bragg’s 2006 Cadillac Escalade. Much like Western Union 2 in Romine, Windsor Group was a third party hired in order to obtain personal 3 information needed for the creditor apparently for the purpose of collecting a debt. 4 After locating an individual or item, a Windsor Group skip tracer would either arrange 5 for repossession or transfer the case to the creditor to work out payments separately. 6 Mr. Cannon successfully found Mr. Shannon in the process of locating the vehicle, and 7 then proceeded to contact him at his work place numerous times. Though the means 8 are a bit different, both Windsor Group and Western Union had the same purpose—to 9 aid or facilitate the collection process—and advertised their services for that very 10 purpose. 11 The Ninth Circuit found it particularly important that Western Union advertised 12 its AVT service specifically for the collection industry to “catalyze debt collection 13 activity.” Romine, 155 F.3d at 1147. Here, Windsor Group offered all of its services 14 to debt collectors and creditors for the explicit purpose of “maximizing recoveries for 15 delinquent auto loans.” (See McCrary Decl. ¶ 7; McCrary Dep. Exs. B1, B2, B3.) It 16 advertised all of its services to recover debts owed to creditors, calling itself a “loan 17 servicing company.” (See id.) Windsor Group even advertised the fact that they follow 18 FDCPA requirements. (See McCrary Dep. 33:3–12; McCrary Dep. Ex. B2; McCrary 19 Decl. ¶ 8.) It regularly offered its skip tracing, remarketing, and repossession services 20 in order to help resolve consumer debts. Furthermore, Windsor Group’s remarketing 21 service included transportation of repossessed automobiles, repairs, reconditioning, 22 pricing, auction, sales, and transfer of auction proceeds to their clients. (See McCrary 23 Dep. Exs. B2, D.) Compared to Western Union’s mere procurement of debtors’ phone 24 numbers through their AVT service, Windsor Group’s remarketing activity is much 25 more involved in the process of collecting automobile debts. Consequently, any 26 communications with consumer debtors or third parties in this process falls within the 27 scope of the FDCPA. See Romine, 155 F.3d at 1147. 28 // -11- 12cv1124 1 The legislative history of the FDCPA states that “the requirement that debt 2 collection be done ‘regularly’ would exclude a person who collects for another in an 3 isolated instance, but would include those who collect for others in the regular course 4 of business.” S. Rep. No. 95-382, 95th Cong. 1st Sess. 2 (1977), reprinted in 5 U.S.C.C.A.N. 1695, 1697-98. In Romine, Western Union’s telegram service to gather 6 personal information from debtors was advertised as being specially developed for the 7 credit and collections industry, and the service was well publicized as such. 155 F.3d 8 at 1146. That was enough for the Ninth Circuit to conclude that Western Union’s 9 service was in the regular course of business and not an isolated occurrence. Id. 10 As discussed above, Windsor Group advertised skip tracing, remarketing, and 11 repossession services, and it does not deny performing these services for its clients on 12 an ongoing basis. (See McCrary Dep. 25:1–11; McCrary Dep. Ex. B2.) There is no 13 reason to believe that any of these widely marketed services were performed only in 14 isolated instances. Consequently, following Romine, the Court also concludes that 15 Windsor Group’s activities were sufficiently regular to fall within the scope of the 16 FDCPA. See Romine, 155 F.3d at 1146. 17 In light of the foregoing, Windsor Group’s skip-tracing and other collection- 18 related services in addition to its advertisements of these services leads this Court to 19 conclude that Windsor Group is a debt collector under the FDCPA. See 15 U.S.C. § 20 1692a(6); Romine, 155 F.3d at 1149. Accordingly, the Court GRANTS Mr. 21 Shannon’s summary-judgment motion and DENIES Windsor Group’s cross-motion as 22 to Windsor Group’s status as a debt collector under the FDCPA. 23 24 B. Windsor Group Is a “Debt Collector” Subject to the Rosenthal Act. 25 The purpose of the Rosenthal Act is “to prohibit debt collectors from engaging 26 in unfair or deceptive acts or practices in the collection of consumer debts and to 27 require debtors to act fairly in entering into and honoring such debts.” Cal. Civ. Code 28 § 1788.1(b). Some of the prohibited practices contemplated by the legislature include -12- 12cv1124 1 “[u]sing obscene or profane language[,]” and “[c]ommunicating, by telephone or in 2 person, with the debtor with such frequency as to be unreasonable and to constitute an 3 harassment to the debtor under the circumstances.”3 Id. § 1788.11(a), (e). 4 Like the FDCPA, the Rosenthal Act applies only to debt collectors. Izenberg v. 5 ETS Servs., LLC, 589 F. Supp. 2d 1193, 1199 (C.D. Cal. 2008). However, the 6 definition of “debt collector” found in the Rosenthal Act is broader than the FDCPA’s. 7 Id. The Rosenthal Act defines a “debt collector” as “any person who, in the ordinary 8 course of business, regularly, on behalf of himself or herself or others, engages in debt 9 collection.” Cal. Civ. Code. § 1788.2(c). It also defines “debt” as “money, property or 10 their equivalent which is due or owing or alleged to be due or owing from a natural 11 person to another person,” and “debt collection” as “any act or practice in connection 12 with the collection of consumer debts.” Id. § 1788.2(b), (d). 13 Windsor Group argues that it is not a debt collector under the Rosenthal Act for 14 two reasons: (1) based on the FDCPA and Rosenthal Act having “minor differences,” 15 it is not a debt collector under the Rosenthal Act because it is not one under the 16 FDCPA; and (2) foreclosing on mortgages and repossessions of automobiles are not 17 debt collection activities “envisioned” by the Rosenthal Act. (Def.’s Mot. 10:8–13:15.) 18 In contrast, Mr. Shannon focuses on the Rosenthal Act’s use of the word “property,” 19 arguing that the nature of the debt sought by Windsor Group is unequivocally within 20 the scope of the Rosenthal Act because automobiles are property. (Pl.’s Mot. 21 20:5–22:2.) Neither parties’ arguments are particularly compelling. 22 The relevance of Windsor Group’s emphasis on foreclosing mortgages is unclear. 23 It fails to present any evidence that this case involves a foreclosure of a mortgage. And 24 if it did include evidence of a foreclosure, then its briefs certainly do not cite to that 25 evidence. In fact, “foreclosure” is not mentioned anywhere in Windsor Group’s 26 summary-judgment motion or its opposition to Mr. Shannon’s motion except to present 27 3 Mr. Shannon argues that the debt at issue in this action is a consumer debt. (Pl.’s Mot. 28 22:4–21.) Windsor Group does not dispute that assertion, apparently conceding to its merits. Thus, the Court GRANTS Mr. Shannon’s summary-judgment motion as to that issue. -13- 12cv1124 1 this argument. All mentions of foreclosures are limited to pages 11 and 12 of Windsor 2 Group’s motion, and pages 15 and 16 of its opposition. (See Def.’s Mot. 11:10–12:14 3 (“foreclosure” is mentioned 8 times); Def.’s Opp’n 15:11–16:27 (“foreclosure” is 4 mentioned 11 times).) Thus, Windsor Group fails to provide any evidence that 5 remotely suggests that a foreclosure of a mortgage occurred in or is relevant to this 6 action. 7 Even if the Court interprets its argument as asserting that foreclosures and 8 repossessions are either the same or similar thereby providing an argument by analogy, 9 Windsor Group’s argument remains unpersuasive. The only proposition that Windsor 10 Group offers that could arguably support this interpretation is the following statement: 11 “While Plueger dealt specifically with automobile repossession, the court’s conclusion 12 that enforcement of a security interest does not fall within the scope of debt collection 13 under the Rosenthal Act has been confirmed in other contexts as well, most notably 14 with respect to the foreclosure of second mortgages.” (Def.’s Mot. 11:11–16.) Looking 15 more closely at Windsor Group’s attempt to connect mortgage foreclosures and 16 repossessions, Windsor Group fails to adequately explain that connection beyond the 17 aforementioned statement, or support it with any relevant legal authority. Merely 18 stating that something is true does not make it so. Thus, the Court rejects that 19 argument. 20 Windsor Group also fails to adequately support its argument that repossessions 21 are squarely outside the scope of the FDCPA and the Rosenthal Act with any binding 22 legal authority. For that proposition, Windsor Group relies almost exclusively on 23 Pflueger v. Auto Finance Group, Inc., No. CV-97-9499, 1999 WL 33740813 (C.D. Cal. 24 Apr. 26, 1999). Pflueger initially opines that repossession agencies “fall outside the 25 ambit of the FDCPA except for the provisions of § 1692f(6),” but it did so without 26 applying the principles laid out in Romine. See Pflueger, 1999 WL 33740813, at *3-4. 27 Specifically, Pflueger did not determine whether repossession agencies are services “that 28 aid or facilitate the collection process,” a consideration that Romine emphasizes. See -14- 12cv1124 1 Romine, 155 F.3d at 1149; Pflueger, 1999 WL 33740813, at *3-4. Rather, while 2 exclusively relying on cases outside of the Ninth Circuit, Pflueger summarily concluded 3 that repossession agencies are not debt collectors. Pflueger, 1999 WL 33740813, at *34 4 (citing Seibel v. Soc. Lease, Inc., 969 F. Supp. 713 (M.D. Fla. 1997); Clark v. Auto 5 Recovery Bureau Conn., Inc., 889 F. Supp. 543 (D. Conn. 1994); Jordan v. Kent 6 Recovery Servs., Inc., 731 F. Supp. 652 (D. Del. 1990)) (“[T]he Court must determine 7 whether [the alleged debt collector] is only a repossession agency, or if it falls within the 8 definition of ‘debt collector’ as defined by the Act.”). Pflueger’s analysis is not entirely 9 consistent with Romine’s, which refused to draw a bright line defining particular 10 services as “debt collectors,” and rather instructed that “an organizational label is 11 insufficient to insulate a party from liability under [the FDCPA]” and that 12 “determination would depend upon the nature of the activities in the individual case.” 13 Romine, 155 F.3d at 1149; see Pflueger, 1999 WL 33740813, at *3-4. Additionally, 14 Pflueger is not binding authority on this Court while Romine is. For these reasons, the 15 Court declines to follow Pflueger, and rejects Windsor Group’s contention that the 16 FDCPA and Rosenthal Act do not apply to it because it labels itself as a repossession 17 agency. 18 Moving on, the Court agrees with Mr. Shannon that the Rosenthal Act defines 19 debt to include property. See Cal. Civ. Code. § 1788.2(d). One does not need to go 20 beyond the plain language of the statute to make that determination. See id. Windsor 21 Group attempts to refute Mr. Shannon’s contention by factually distinguishing cases 22 that Mr. Shannon cites, and then tries to replace his definition by referring to its 23 “overwhelming authority.” (See Def.’s Opp’n 16:10–21.) But that “overwhelming 24 authority” addresses foreclosures and mortgages, which are not relevant to this case. 25 (See id. at 15:18–16:9.) Windsor Group tries to make its “overwhelming authority” 26 relevant by appending the statement, “This is true even though a house is indisputably 27 ‘property’”, but without any further explanation, that is a futile attempt at best. (See 28 id. at 16:9.) Ultimately though, determining whether a debt includes property such as -15- 12cv1124 1 an automobile is not particularly important; the primary issue that the Court needs to 2 consider to determine whether Windsor Group is a debt collector is whether it 3 “regularly . . . engages in debt collection” and whether its practices are “connect[ed] 4 with the collection of consumer debts.” Cal. Civ. Code § 1788.2(c)-(d). There is 5 evidence before the Court that the repossession attempt is connected to a consumer 6 debt incurred by Ms. Bragg, and that it generally provides its services in connection 7 with “delinquent consumer loans.” Consequently, Windsor Group’s skip-tracing, 8 remarketing, and repossession services, or some combination of the three can all serve 9 as a basis to find that it is a debt collector. 10 In light of the foregoing, and incorporating the Court’s earlier analysis finding 11 that Windsor Group is a debt collector under the FDCPA, the Court also concludes 12 that Windsor Group is a debt collector under the Rosenthal Act. See Cal. Civ. Code 13 § 1788.2. Therefore, the Court GRANTS Mr. Shannon’s summary-judgment motion 14 and DENIES Windsor Group’s cross-motion as to Windsor Group’s status as a debt 15 collector under the Rosenthal Act. 16 17 C. Mr. Shannon Has Standing under the FDCPA and the Rosenthal Act. 18 The FDCPA prohibits a debt collector from “engag[ing] in any conduct the 19 natural consequence of which is to harass, oppress, or abuse any person in connection 20 with the collection of a debt.” 15 U.S.C. § 1692d (emphasis added). It also prohibits 21 any debt collector from “communicating with any person other than the consumer for 22 the purpose of acquiring location information about the consumer . . . more than once 23 unless requested to do so by such person or unless the debt collector believes that the 24 earlier response of such person is erroneous or incomplete and that such person now has 25 correct or complete location information.” Id. § 1692b(3) (emphasis added). 26 The Rosenthal Act has similar provisions that apply generally to individuals. For 27 example, the Rosenthal Act prohibits “[t]he use, or threat of use, of physical force or 28 violence or any criminal means to cause harm to the person, or the reputation, or the -16- 12cv1124 1 property of any person.” Cal. Civ. Code § 1788.10(a) (emphasis added). It also 2 prohibits “[t]he threat to any person that nonpayment of the consumer debt may result 3 in the arrest of the debtor or the seizure, garnishment, attachment or sale of any 4 property or the garnishment or attachment of wages of the debtor, unless such action 5 is in fact contemplated by the debt collector and permitted by the law.” Id. § 6 1788.10(e) (emphasis added). Though § 1788.30 appears to limit liability of debt 7 collectors to debtors, § 1788.17 provides that “[n]otwithstanding any other provision 8 of this title, every debt collector collecting or attempting to collect a consumer debt 9 shall comply with the provisions of Sections 1692b to 1692j . . . and shall be subject to 10 the remedies in [15 U.S.C.] Section 1692k[.]” 11 After reviewing the language of the FDCPA and the evidence that the parties 12 present, the Court concludes that Mr. Shannon has standing to assert his claims under 13 the FDCPA at least for alleged violations of § 1692d and §1692b(3), both of which 14 apply to non-debtors. That conclusion is supported by the plain language of the 15 FDCPA. However, Windsor Group is correct insofar as the remaining provisions under 16 which Mr. Shannon asserts an FDCPA violation, which require the plaintiff to be a 17 consumer debtor. See 15 U.S.C. §§ 1692b(2), 1692c, 1692e, 1692f, 1692g. Mr. 18 Shannon fails to present a valid justification that he is a consumer debtor who should 19 be permitted to continue pursuing his claim under these remaining provisions of the 20 FDCPA. Thus, insofar as the remaining provisions, and because of Mr. Shannon’s 21 apparent concession regarding the issue, the Court finds that Mr. Shannon lacks 22 standing to assert a claim under the remaining provisions of the FDCPA. See 15 U.S.C. 23 §§ 1692b(2), 1692c, 1692e, 1692f, 1692g. 24 For similar reasons as above, and because the Rosenthal Act requires debt 25 collectors to comply with Sections 1692b to 1692j under the FDCPA, Mr. Shannon also 26 has standing to assert a claim under the Rosenthal Act. Applying the transitive 27 property, if an individual has standing to assert a claim under Sections 1692b to 1692j 28 under the FDCPA, that individual must also having standing to assert a claim under the -17- 12cv1124 1 Rosenthal Act. See Cal. Civ. Code § 1788.17. Here, the Court found that Mr. 2 Shannon has standing to at least assert claims under § 1692d and § 1692b(3) of the 3 FDCPA, therefore he also has standing to assert these claims under the Rosenthal Act. 4 Insofar as standing under the remaining provisions of the Rosenthal Act, the 5 statute applies to debtors, which the statute defines as “a natural person from whom a 6 debt collector seeks to collect a consumer debt which is due and owing or alleged to be 7 due and owing from such person.” Cal. Civ. Code §§ 1788.2, 1788.30 (emphasis added). 8 Windsor Group is correct that it is undisputed that Mr. Shannon was not a debtor. 9 The remaining question is whether Windsor Group sought to collect a consumer 10 debt which was alleged to be due and owing from Mr. Shannon. See Cal. Civ. Code §§ 11 1788.2, 1788.30. Windsor Group directs the Court’s attention to Mr. Shannon’s 12 deposition testimony to support its position that it did not seek to collect a consumer 13 debt alleged to be due and owing from Mr. Shannon. (Def.’s Opp’n 18:28–19:2.) In 14 that deposition, in response to the question if he believed that Windsor Group “was 15 trying to collect any debt from [him],” Mr. Shannon stated that he “can’t call it a debt 16 because [he does not] owe them anything.” (Shannon Dep. 79:3–9.) The deposition 17 continues with Mr. Shannon stating that Windsor Group did not ask him to “pay 18 anything,” but did question him in order to “try to find the Cadillac Escalade.” (Id. 19 79:11–22.) Windsor Group fails to provide any legal authority that supports the 20 proposition that merely not asking for a debt adequately insulates it from the Rosenthal 21 Act. Given the evidence of Mr. Cannon’s aggressive conduct on Windsor Group’s 22 behalf, there is question of fact that remains regarding what that conduct suggests about 23 Windsor Group’s intentions in contacting Mr. Shannon. At this point, the Court is 24 reluctant to insulate Windsor Group from the Rosenthal Act merely because it did not 25 explicitly request payment. Rather, the Court defers the issue of Mr. Shannon’s 26 standing as to the remaining provisions under the Rosenthal Act until these questions 27 of fact are resolved. 28 // -18- 12cv1124 1 Accordingly, the Court GRANTS IN PART and DENIES IN PART Windsor 2 Group’s cross-motion for partial summary judgment as to Mr. Shannon’s standing under 3 the FDCPA. The Court also DENIES Windsor Group’s cross-motion as to Mr. 4 Shannon’s standing under the Rosenthal Act. 5 6 7 8 D. There Are Genuine Issues of Material Facts Regarding Windsor Group’s Conduct. Mr. Shannon argues that the Court should find Windsor Group liable under the 9 FDCPA and the Rosenthal Act. (Pl.’s Mot. 23:8–24:20.) With respect to the FDCPA, 10 Mr. Shannon explains that “[o]nce we establish that Windsor Group is a debt collector, 11 there is little real dispute left on liability.” (Id.) His justification for liability under the 12 Rosenthal Act is equally cryptic: “Windsor Group is certainly a debt collector under the 13 Rosenthal Act’s broader definition, which includes collection of property, and the acts 14 described above clearly violate the portions of the FDCPA incorporated into the 15 Rosenthal Act.” (Id.) Mr. Shannon’s reply brief fails to elaborate on either of these 16 aforementioned explanations. 17 Windsor Group responds by identifying several triable issues of fact. (Def.’s 18 Opp’n 19:8–20:20.) It contends that it was only engaged in repossession services when 19 Mr. Cannon contacted Mr. Shannon, and liability of under § 1692d presents issues that 20 should be determined by a jury, such as, among others, whether the natural 21 consequence of Mr. Cannon’s conduct was to “harass, abuse or oppress,” and whether 22 Mr. Cannon repeatedly caused the telephone to ring “with the intent to annoy, abuse, 23 or harass.” See 15 U.S.C. § 1692d. Windsor Group also maintains that its “bona fide 24 error defense” should be determined by a jury. (Def.’s Opp’n 19:8–20:20.) 25 The Court agrees with Windsor Group that many of the issues that it presents 26 probably should be resolved by a jury. However, ultimately, Mr. Shannon fails to meet 27 his burden under Rule 56(c) to demonstrate that there is an absence of genuine issues 28 of material fact. See Fed. R. Civ. P. 56(c); Celotex, 477 U.S. at 322. His terse attempts -19- 12cv1124 1 to argue otherwise are wholly inadequate. Therefore, based on Mr. Shannon’s failure 2 to demonstrate an absence of genuine issues of material fact, the Court DENIES Mr. 3 Shannon’s summary-judgment motion as to Windsor Group’s liability under the 4 FDCPA and the Rosenthal Act. 5 6 IV. CONCLUSION & ORDER 7 In light of the foregoing, the Court GRANTS IN PART and DENIES IN 8 PART Plaintiff’s motion for summary judgment (Doc. 21), and GRANTS IN PART 9 and DENIES IN PART Defendant’s cross-motion for partial summary judgment (Doc. 10 22). 11 IT IS SO ORDERED. 12 13 DATE: March 12, 2014 14 HON. THOMAS J. WHELAN United States District Court Southern District of California 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -20- 12cv1124
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