Denicolo v. Viking Client Services, Inc. ( 2020 )

1 2 3 4 5 UNITED STATES DISTRICT COURT 6 NORTHERN DISTRICT OF CALIFORNIA 7 8 RONALD G. DENICOLO, ET AL., CASE NO. 19-cv-00210-YGR 9 Plaintiffs, ORDER DENYING MOTION OF DEFENDANT VIKING FOR SUMMARY JUDGMENT 10 vs. Dkt. No. 105 11 THE HERTZ CORPORATION, ET AL., 12 Defendants. 13 14 On January 11, 2019, plaintiff Ronald G. DeNicolo, Jr. filed this putative class action 15 complaint against Viking Client Services, LLC, d/b/a Viking Billing Service (“Viking”) and The 16 Hertz Corporation (“Hertz”). On October 14, 2019, plaintiff Fox was added by an amended 17 Complaint. DeNicolo alleges four claims against Viking: violation of the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. sections 1692f and 1692e; violation of the Illinois 18 Vehicle Code (“IVC”), 625 ILCS § 5/6-305.2; declaratory judgment under 28 U.S.C. § 2201. 19 Plaintiff Fox alleges four claims against Viking for: violation of California’s Rosenthal Fair Debt 20 Collection Practices Act (the “Rosenthal Act”), Cal. Code § 17.1800; California’s Unfair 21 Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq.; California Consumer 22 Remedies Act (“CCRA”), Cal. Civ. Code §§ 1750, et seq.; and declaratory judgment. 23 Presently before the Court is Viking’s motion for summary judgment on all claims asserted 24 by plaintiffs. (Dkt. No. 105.) Having carefully considered the papers submitted, the oral argument 25 of the parties, the admissible evidence, and the pleadings in this action, and for the reasons set 26 forth below, the Court DENIES the Motion for Summary Judgment. Viking has failed to set forth 27 admissible evidence to support its motion and has failed to carry its burden to show that the debts 1 I. BACKGROUND 2 A. Viking’s Contacts with DeNicolo 3 On February 8, 2018, plaintiff DeNicolo rented a car from a Hertz affiliate, Thrifty, at the San Francisco airport. DeNicolo had travelled to San Francisco to meet with a business client. He 4 testified that there was no “personal aspect” to the trip. (Motion, Exh F. [DeNicolo Depo.] at 32- 5 33.) DeNicolo stayed overnight and returned the car the next day, February 9, 2018, before 6 returning home. 7 On March 1, 2018, Hertz placed with Viking a claim of alleged damage to the rental car 8 during DeNicolo’s rental period. (Def. Fact 9.) Viking provides billing and collection services for 9 Hertz including billing for claims of damage to rental vehicles. (Belew Declaration in Support of 10 Opposition, Dkt. No. 111-2, Exh. 2, [Bacon Depo.] at 27:19-28:19.) That same date, Viking 11 requested that its letter vendor, RevSpring, issue a form letter regarding first written notice of loss 12 to DeNicolo. (Def. Fact 10.) Viking contends that this initial letter was flagged as having an 13 incorrect mailing address and a Viking employee updated the account with a valid address on 14 March 5, 2018, but no letter was sent at that time. 15 Viking attempted to contact DeNicolo by calling the cellphone number on the account four 16 times in March and April of 2018. Those calls either were not answered or were answered by 17 someone stating that it was a wrong number. (Def. Facts 14, 15, 17, 18; Pl. Addt’l Fact 42.) 18 During these calls, Viking did not identify itself, state that it was calling on behalf of the Hertz or 19 Thrifty rental agencies, or mention DeNicolo’s car rental in February 2018. (Pl. Addt’l Fact 43, 20 44.) On or around May 29, 2018, Viking sent its first letter to plaintiff DeNicolo, 109 days after 21 he had returned the rental vehicle. (Belew Decl. Exh 4.) The letter demanded immediate payment 22 and stated that “your payment must be received in our office within 30 days from the date of this 23 letter.” (Id.) It did not disclose that Viking was attempting to collect a debt, nor that any 24 information Viking gathered would be used for that purpose, as required by 15 U.S.C. § 25 1692e(11). Likewise, the letter did not state that DeNicolo could demand verification of the debt, 26 or that the debt would be assumed valid unless it was disputed within 30 days. 27 1 On June 6, 2018, DeNicolo called Viking and stated that he did not damage the vehicle. 2 (Def. Fact 19.) Viking’s representative offered to email DeNicolo supporting documentation and 3 provided contact information for a different representative who was handling the damage claim account. On June 7, 2018, Viking’s representative called DeNicolo at which time DeNicolo 4 advised that he had an attorney representing him on the matter. (Def. Fact 21.) 5 B. Viking’s Contacts with Fox 6 Plaintiff Fox returned a rental vehicle to Hertz on April 2, 2019. (Def. Fact 22.) Viking 7 offers a document entitled “incident report” apparently created by Hertz, dated April 2, 2019, in 8 which Fox was identified as the renter of a vehicle that was damaged. (Motion at Exh. P, Dkt. No. 9 105-17.)1 Hertz placed the claim for vehicle damage with Viking. (Def. Fact 9.) 10 On April 23, 2019, Viking mailed plaintiff Fox a letter that was Fox’s first notice of the 11 claimed damage bill. (Def. Fact 25; Belew Decl. Exh. 13.) The letter included a number to call to 12 discuss the claim process. (Def. Fact 26.) Fox initially contacted Hertz upon receipt of the letter 13 on April 26, 2019, and then called Viking and left a voicemail on May 2, 2019. (Def. Fact 27.) 14 Viking returned his call on May 3, 2019, at which time Fox spoke with the Viking representative 15 for approximately 10 minutes. (Def. Fact 29.) During the call, the agent immediately addressed 16 Fox’s assertion that he did not owe the damage claim and she never demanded payment, telling 17 Fox, “if it’s not yours, I don’t want you to pay it.” (Def. Facts 31, 33.) When plaintiff Fox 18 advised he had pictures proving he returned the car in the same condition as when he rented it, the 19 agent asked him to send her the pictures for review and, if everything matched up, Viking would 20 close the file. (Def. Fact 32.) Within two weeks of the call, plaintiff Fox received an email from Hertz confirming that the damage claim was closed. (Def. Fact 34.) 21 II. APPLICABLE STANDARD 22 Summary judgment is appropriate when “there is no genuine dispute as to any material 23 fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is 24 25 1 The Court notes that, in addition to a lack of a declaration offering a foundation and 26 basis to authenticate this document, it is partially redacted without an accompanying motion to seal; the time and date of the incident are missing from the document; and the signature of the 27 customer bears no resemblance to the name Michael Fox. (Motion, Exh. P, Dkt. No. 105-17.) Plaintiff disputes Viking’s statement of facts based on this document. (See Def. Fact 23 and 1 “material” if it “might affect the outcome of the suit under the governing law,” and a dispute as 2 to a material fact is “genuine” if there is sufficient evidence for a reasonable trier of fact to 3 decide in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the initial burden of demonstrating the absence of a genuine 4 issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). For issues where the 5 opposing party has the burden of proof, the moving party need only point out “that there is an 6 absence of evidence to support the nonmoving party’s case.” Id. at 325. The burden then shifts 7 to the nonmoving party to set forth, by affidavit or as otherwise provided in Rule 56, “specific 8 facts showing that there is a genuine issue for trial.” Liberty Lobby, 477 U.S. at 250 (internal 9 quotation marks omitted). Summary judgment is mandated “against a party who fails to make 10 a showing sufficient to establish the existence of an element essential to that party’s case, and 11 on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 12 317, 322 (1986). 13 Where plaintiff bears the burden at trial, a moving party defendant bears the burden of 14 specifying the basis for the motion and the elements of the causes of action upon which the 15 plaintiff will be unable to establish a genuine issue of material fact. Id. at 323. The burden then 16 shifts to the plaintiff to establish the existence of a material fact that may affect the outcome of the 17 case under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 18 (1986). In the summary judgment context, a court construes all disputed facts in the light most 19 favorable to the non-moving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). 20 “When the moving party also bears the burden of persuasion at trial, to prevail on 21 summary judgment it must show that ‘the evidence is so powerful that no reasonable jury would 22 be free to disbelieve it.’” Shakur v. Schriro, 514 F.3d 878, 890 (9th Cir. 2008) (quoting 11–56 23 MOORE’S FEDERAL PRACTICE–CIVIL § 56.13); see also S. California Gas Co. v. City of Santa Ana, 24 336 F.3d 885, 888 (9th Cir. 2003) (“As the party with the burden of persuasion at trial, the Gas 25 Company must establish ‘beyond controversy every essential element of its’ Contract Clause 26 claim.”) (quoting William W Schwarzer, et al., CALIFORNIA PRACTICE GUIDE: FEDERAL CIVIL 27 1 PROCEDURE BEFORE TRIAL § 14:124–127 (Rutter Guide 2001)).2 2 In the summary judgment context, a court construes all disputed facts in the light most 3 favorable to the non-moving party. Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). If 4 the plaintiff “produces direct evidence of a material fact, the court may not assess the credibility of 5 this evidence nor weigh against it any conflicting evidence presented by” defendants. Mayes v. 6 WinCo Holdings, Inc., 846 F.3d 1274, 1277 (9th Cir. 2017). “[C]redibility determinations, the 7 weighing of the evidence, and the drawing of legitimate inferences from facts are jury functions, 8 not those of a judge.” George v. Edholm, 752 F.3d 1206, 1214 (9th Cir. 2014) (alteration in 9 original) (quotation omitted). Thus “where evidence is genuinely disputed on a particular issue— 10 such as by conflicting testimony—that issue is inappropriate for resolution on summary 11 judgment.” Zetwick v. Cty. of Yolo, 850 F.3d 436, 441 (9th Cir. 2017) (internal quotation mark 12 omitted); Santos v. Gates, 287 F.3d 846, 852 (9th Cir. 2002) (same). 13 III. DISCUSSION 14 A. DeNicolo’s Claims Based Upon Alleged FDCPA Violations 15 “[T]he FDCPA prohibits debt collectors ‘from making false or misleading representations and from engaging in various abusive and unfair practices.’” Donohue v. Quick Collect, Inc., 592 16 F.3d 1027, 1030 (9th Cir. 2010) (quoting Heintz v. Jenkins, 514 U.S. 291, 292 (1995)). “The 17 FDCPA comprehensively regulates the conduct of debt collectors, and is a strict liability statute.” 18 Tourgeman v. Collins Financial Services, Inc., 755 F.3d 1109, 1119 (9th Cir. 2014) (citation 19 omitted). Thus, debt collectors generally are liable for violating the consumer protections therein 20 regardless of intent, knowledge, or willfulness. Clark v. Capital Credit & Collection Servs., Inc., 21 460 F.3d 1162, 1175 (9th Cir. 2006), but see 15 U.S.C. § 1692k (“A debt collector may not be 22 held liable in any action brought under this subchapter if the debt collector shows by a 23 preponderance of evidence that the violation was not intentional and resulted from a bona fide 24 25 2 The Court notes that, while the procedural issue is not raised in the papers, Viking apparently would bear the burden of proof at trial on most if not all of the issues discussed herein, 26 which are raised as affirmative defenses. See Viking’s Answer (see Dkt. No. 84, Affirmative Defense 1 [FDCPA does not apply to billing service and account not in default]; Affirmative 27 Defense 2, 7 [bona fide error defenses]. The Court finds that, regardless of which party bears the 1 error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” 2 [the “bona fide error defense”]). 3 Section 1692e of the FDCPA provides that “[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 4 Section 1692f of the FDCPA provides that “[a] debt collector may not use unfair or 5 unconscionable means to collect or attempt to collect any debt.” “Whether conduct violates §§ 6 1692e or 1692f requires an objective analysis that takes into account whether ‘the least 7 sophisticated debtor would likely be misled by a communication.’” Donohue, 592 F.3d at 1030 8 (quoting Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934 (9th Cir. 2007)). 9 There are four elements of a FDCPA cause of action: (1) the plaintiff is a “consumer” 10 under 15 U.S.C. § 1692a(3); (2) the debt is one “arising out of a transaction . . . primarily for 11 personal, family, or household purposes”; (3) the defendant is a “debt collector” under 15 U.S.C. § 12 1692a(6); and (4) the defendant violated one of the prohibitions in the statute. See Lange v. Prof'l 13 Account Servs., Inc., No. 3:19-CV-0150-HRH, 2020 WL 1302512, at *3 (D. Alaska Mar. 18, 14 2020). Here, Viking moves for summary judgment on DeNicolo’s FDCPA claims on two of these 15 elements: (1) whether the debt was incurred for “personal, family, or household purposes”; and (2) 16 that Viking was not “debt collector” under the FDCPA because the debt was not in default at the 17 time it was assigned to Viking. Because DeNicolo’s claims under the IVC and for declaratory 18 judgment are contingent on the merits of the FDCPA violations, the motion as to all of the claims 19 turns on these two questions. 20 1. Debt Incurred for “Personal, Family, or Household Purposes” 21 “Because not all obligations to pay are considered debts under the FDCPA, a threshold 22 issue in a suit brought under the Act is whether or not the dispute involves a ‘debt’ within the 23 meaning of the statute.” Turner v. Cook, 362 F.3d 1219, 1226–27 (9th Cir. 2004) (citing Slenk v. 24 Transworld Sys., Inc., 236 F.3d 1072, 1075 (9th Cir.2001)). The FDCPA defines “debt” as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which 25 the money, property, insurance, or services which are the subject of the transaction are primarily 26 for personal, family, or household purposes. . . .” 15 U.S.C. § 1692a(5). “The Act does not define 27 “transaction,” but the consensus judicial interpretation is reflected in the Seventh Circuit's ruling 1 that the statute is limited in its reach “to those obligations to pay arising from consensual 2 transactions, where parties negotiate or contract for consumer-related goods or services.” Turner v. 3 Cook, 362 F.3d at 1227. In determining whether a debt is incurred “for personal, family, or household purposes” 4 (i.e., consumer) versus “business purposes” (i.e., commercial), the Ninth Circuit has directed 5 courts to “examine the transaction as a whole, paying particular attention to the purpose for which 6 the credit was extended in order to determine whether [the] transaction was primarily consumer or 7 commercial in nature.” Slenk v. Transworld Sys., Inc., 236 F.3d 1072, 1074 (9th Cir. 2001) 8 (quoting Bloom v. I.C. System, Inc., 972 F.2d 1067, 1075 (9th Cir. 1992.)). Courts must 9 “elevate[ ] substance over form,” giving neither the lender’s motivations nor the manner in which 10 the obligation is documented dispositive weight. Id.; see, e.g., Bloom, 972 F.2d at 1068 (FDCPA 11 “applies to consumer debts and not business loans,” fact that loan was made between friends and 12 lender did not specify use did not change business nature of use of funds to invest in a company); 13 Ellis v. Phillips & Cohen Assocs., Ltd., No. 5:14-CV-05539-EJD, 2016 WL 3566981, at *3 (N.D. 14 Cal. June 30, 2016) (denying summary judgment and finding triable issue as to business nature of 15 debt where “business” credit card, issued in the name of both individual and corporation, was used 16 for transactions that fell into “several varied categories from airfare to dry cleaning [which] are 17 neither uniquely commercial nor uniquely consumer in character such that only one conclusion 18 can be drawn from the evidence.”). 19 In Slenk, for instance, the Ninth Circuit reversed a district court’s grant of summary 20 judgment on the issue of whether the debt at issue was consumer in nature. Slenk, 236 F.3d at 1075-76. Slenk, the borrower, was the owner and sole employee of Slenk’s Builder, a general 21 contractor performing carpentry work. Id. at 1074. Slenk used loan funds for the purchase of a 22 backhoe. The invoice listed “Slenk Bldrs” as the purchaser and indicated payment of the lower 23 state sales tax applicable to business purchases versus consumer purchases. Id. at 1073. The 24 building permit documents identified the contractor as “Slenk’s Bldrs” and Slenk expensed the 25 cost of the backhoe as a business expense on his taxes. Id. at 1074. Despite these facts indicating 26 the debt was business-related, the Ninth Circuit held that “[t]he record is replete with undisputed 27 objective facts which, when viewed in the aggregate, create a genuine issue of material fact.” Id. 1 at 1075 (emphasis supplied). The court found evidence favoring a finding that the debt was a 2 personal, consumer debt included: the loan documents themselves indicated that the money was to 3 be used for the purchase of “excavation equipment and other personal goods;” the backhoe purchased for the purposes of building Slenk’s personal home; it was never used for any other 4 purpose than completing his home; it was sold immediately after; and his company was not 5 licensed to use a backhoe. Id. at 1075-76 (emphasis supplied). Taking all the evidence into 6 account, the Ninth Circuit held that the question of the nature of the debt should have gone to a 7 jury since it was “not the province of the district court to weigh conflicting evidence for purposes 8 of summary judgment.” Id. at 1076. 9 Following Slenk, the district court in Hansen v. Ticket Track, Inc. denied defendant’s 10 motion for summary judgment on the “fact driven” analysis required to determine whether a debt 11 was “primarily for personal, family, or household purposes.” 280 F.Supp.2d 1196, 1204 (W.D. 12 Wash. 2003). There, the debt concerned unpaid parking fees. The defendant argued that plaintiffs 13 could not verify whether they parked in the lots for business or personal purposes and therefore 14 could not establish the debt was covered by the FDCPA. Id. at 1199. The district court rejected 15 that argument: 16 In the present case, the Court finds the nearly-dispositive factor to be the identity 17 of the individual plaintiff and whether the debt was incurred and paid in their 18 personal capacities or some other capacity. It is undisputed that each of the three named plaintiffs paid the obligation out of personal funds. This was not a 19 transaction between two business entities. The defendant argues that a plaintiff's reason for parking in the lot, i.e. the errand that they happened to be running that 20 day, is the only relevant inquiry. While this factor is potentially relevant, in nearly every case it will be outweighed by the “identity” or “capacity” of the 21 debtor. The Court finds that context of the present case significantly distinct from 22 the loan context in the above-cited cases giving significant weight to the “purpose” of the obligation. This is so because the “purpose” of the obligation 23 incurred by the parking plaintiffs cannot be equated with the “purpose” of the errand they happened to be running. Here, where the debt was paid with personal 24 funds, the nature of the obligation is a personal one, not a business one. 25 Id. at 1204. 26 In Chyba, defendant claimed that plaintiff had incurred damage to a rental vehicle and that 27 summary judgment on the FDCPA claim should be granted because plaintiff failed to establish the 1 Inc., No. 12-CV-1721-BEN WVG, 2014 WL 1744136 (S.D. Cal. Apr. 30, 2014), aff'd, 671 F. 2 App’x 989 (9th Cir. 2016). Citing Slenk and Hansen, the court denied summary judgment as 3 follows: 4 this Court finds that Defendant has not met its burden of showing that no reasonable factfinder could conclude that the alleged debt is a consumer debt 5 within the meaning of FDCPA. Plaintiff allegedly rented a vehicle in her personal capacity. Her name appears on the paperwork, and no party has drawn this 6 Court's attention to any reference to a business on the rental documents. The fact 7 that certain statements in Plaintiff's deposition suggest that she sometimes rents cars for business purposes is far from sufficient to allow Defendant to meet its 8 burden, given the other evidence in the record. 9 Id. at *7.3 10 Here, on the one hand, Viking submits evidence that DeNicolo flew from Chicago to San 11 Francisco on the morning of Thursday, February 8, 2018 to meet with a client. He stayed 12 overnight and returned the car the next morning.4 When DeNicolo was asked at his deposition 13 3 The two out-of-circuit trial courts cited by parties have considered whether rental car 14 damage claims were personal or business debt and arrived at opposing conclusions. Compare Fagan v. Lawrence Nathan Assocs., Inc., 957 F.Supp.2d 784 (E.D. La. 2013) (treating attorneys’ 15 rental of car on firm corporate credit card while traveling on business as a covered debt for purposes of the FDCPA where “defendant treated and regarded [plaintiff] as a consumer who was 16 using the Budget vehicle for his personal use and thus individually liable to Budget, as evidenced by Defendant's attempts to collect the debt against [him] individually.”) with Forgeron v. Hough, 17 No. 10 C 6298, 2011 WL 3205295, at *5 (N.D. Ill. July 26, 2011) (vehicle rental agreement made on behalf of third party, but in furtherance of plaintiff’s plans to establish connections with third 18 party to aid in launching his music business, was not “primarily for personal, family, or household purposes”); see also Yelin v. Swartz, 790 F.Supp.2d 331, 335 (E.D. Pa. 2011) (damage claim 19 arising from car rental agreement was an FDCPA-covered debt: “Plaintiff's alleged financial obligation is not a matter of tort liability. Rather, if Plaintiff is responsible for the damage to the 20 rental car, it is because such a duty was imposed by the rental agreement, which is a contract.”) 4 Exhibit 10 to the Belew Declaration is a document provided to Denicolo from Viking in 21 support of the claim of damage. (Belew Decl. Exh. 10.) That document, headed “Thrifty Incident Report,” shows a date of February 10, 2018 at the top, and indicates the “incident date” was 22 February 9, 2018, but is also stamped with the date “Feb 14 2018” twice on the lower portion. (Belew Decl., Exh. 10.) Under the “Renter/Driver Statement” portion of the form, there is a 23 handwritten notation “customer doesn’t speak English.” (Id.) In the space where the customer is to enter their email address, there is a handwritten notation: “not available.” (Id.) Under “Type of 24 Rental” the box for “business” is checked. (Id.) The areas of the form for “credit card issuer” and “name of employer” are left blank. (Id.) The area of the form stating “Renter/Driver 25 acknowledges that damage to the rental vehicle as indicated occurred during their rental of the vehicle” does not include a signature under the “Renter/Driver Signature” box, but instead 26 contains a handwritten notation: “Station Report.” (Id.) A “station report” is a damage report made when the customer is not present. (Belew Decl., Exh. 2 [Bacon Depo.] at 66-67.) At a 27 minimum, the document indicates that it was not created on the date that DeNicolo returned the 1 whether there was any “personal aspect” of the trip, he said “no.” (Exh F. [DeNicolo Depo.] at 2 32-33.) On the other hand: (1) DeNicolo did not use a company credit card to pay for the rental. 3 (id. at 36); (2) he booked his own travel, including airfare and car rental (id.); and (3) Viking’s efforts to collect the debt for the vehicle damage were directed to DeNicolo individually, not to his 4 company. Indeed, Viking treats debts assigned by Hertz in a uniform manner, regardless of 5 whether the underlying rental was made for “business” or “personal” reasons and does not make it 6 a practice to determine from Hertz or the renter the purpose for which the rental was made. 7 (Belew Decl., Exh. 2 [Bacon Depo.] at 115:2-116:20.) 8 As in Slenk, there is evidence in the record weighing both for and against a finding that the 9 alleged debt here was a “debt of a consumer to pay money arising out of a transaction in which the 10 money, property, insurance, or services which are the subject of the transaction are primarily for 11 personal, family, or household purposes.” 15 U.S.C. § 1692a(5). To find otherwise would require 12 the Court to weigh the scant evidence offered by Viking against the evidence indicating the debt 13 was personal. As instructed by the Ninth Circuit in Slenk, when the objective facts, though 14 undisputed, fall on both sides of a disputed issue, the court may not “weigh conflicting evidence 15 for purposes of summary judgment,” and the motion must be denied. Slenk, 236 F.3d at 1076. 16 2. Debt “Not In Default” When Assigned to Viking 17 Next, Viking contends it did not act as “debt collector” when it contacted DeNicolo 18 because DeNicolo’s account was not in default when obtained by Viking. The FDCPA was 19 enacted with the intent “to eliminate abusive debt collection practices by debt collectors.” 15 20 U.S.C. § 1692(e) (emphasis supplied). The FDCPA distinguishes “creditors” from “debt collectors,” defining a “debt collector” as “any person who uses any instrumentality of interstate 21 commerce or the mails in any business the principal purpose of which is the collection of any 22 debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or 23 asserted to be owed or due another.” 15 U.S.C. § 1692a(6). The definition of “debt collector” 24 excludes, among others: 25 26 submitted this document as evidence. (Motion at Exh. G, Dkt. No. 105-8.) However, given that 27 Viking did not authenticate this or any of the documents it submitted in support of its motion, nor any person collecting or attempting to collect any debt owed or due or asserted to 1 be owed or due another to the extent such activity . . . (iii) concerns a debt which was not in default at the time it was obtained by such person. . . . 2 3 15 U.S.C. § 1692a(6)(F)(iii) (emphasis supplied). Here, Viking contends that the debt at issue was not “in default” at the time it was 4 transferred from Hertz to Viking. “Although the [FDCPA] does not define ‘in default,’ courts 5 interpreting [section] 1692a(6)(F)(iii) look to any underlying contracts and applicable law 6 governing the debt at issue.” De Dios v. Int’l Realty & Invs., 641 F.3d 1071, 1074 (9th Cir. 2011). 7 “Whether a debt is in default is generally controlled by the terms of the contract creating the 8 indebtedness and applicable state law.” Id. (emphasis supplied, quoting Fed. Trade Comm’n, 9 Advisory Op. n. 2 (April 25, 1989)). Where there is no clear contractual provision explaining 10 when a debt goes into default and no applicable state law, the court is left to apply a “case-by-case 11 approach.” Mavris v. RSI Enterprises Inc., 86 F.Supp.3d 1079, 1084 (D. Ariz. 2015) (citing 12 Natividad v. Wells Fargo Bank, N.A., No. 3:12-CV-03646 JSC, 2013 WL 2299601, at *4 (N.D. 13 Cal. May 24, 2013); and De Dios, 641 F.3d at 1075 n.3). For example, in De Dios, the Ninth 14 Circuit examined the terms of a stipulated forbearance agreement to determine whether the debt 15 was considered in default at the time a property management agent, retained to collect rents, 16 demanded payment. The court concluded that the agent’s collection of overdue rents was not 17 collection on a debt “in default” because the “property management agent obtained the right to 18 collect rents on the landlord’s behalf before the rent became due.” De Dios, 641 F.3d at 1075. 19 Viking has not provided evidence of the contract creating the alleged indebtedness. 20 Instead, Viking proffers as evidence its contract with Hertz, arguing that the terms of that agreement demonstrate that neither Viking nor Hertz considered the debt to be in default when it 21 was placed with Viking. (Motion at 16:27-17:11.; see also Motion at 18:16-19 [“neither Viking 22 nor Hertz treated the account as being in default. To the contrary, their contract expressly 23 identifies the account as being “non-delinquent” and “not in default” at the time of assignment.”].) 24 Viking argues that it is “contracted with Hertz to providing billing services for non-delinquent 25 damage claims” such that, when it obtains a Hertz account for billing services, including 26 DeNicolo’s account, the subject debt is not in default. (Motion at 16:27-28.) Viking’s argument 27 fails for several reasons. 1 First, Viking’s argument elides the full terms of its agreement with Hertz, under which it 2 performs both billing (pre-default) and collection (post-default) services. Viking calls the 3 document the “Billing Services Agreement” between Viking and Hertz. (Motion at 7:1-9.) In reality, the document is entitled “Collection Services Agreement.” (Motion, Exh. B.)5 Further, 4 the main agreement concerns collections, not simply billing as Viking represents in its brief. 5 Paragraph 8 of the agreement states that “All files placed with [Viking] are initially placed as a 6 collection agency and collection efforts, i.e., letters, phone calls, etc. must commence within 24 7 hours of receipt by [Viking].” (Id. at ECF 4, emphasis supplied.) The billing services amendment 8 was added several years later and notes that “[e]xcept as expressly modified by this Amendment 9 No. 1 the terms and conditions of the Collection Services Agreement shall remain in full force and 10 effect.” (Id. at ECF 10.)6 Thus, the terms of that contract do not establish that the debt was not in 11 default at the time it was placed with Viking, nor do they preclude Viking acting as a “debt 12 collector” in the circumstances here. 13 Second, the agreement between the DeNicolo and Hertz indicates that “Charges not known 14 to [Hertz] at the completion of the rental are payable by You, or by the person, corporation or 15 other entity to whom such Charges are to be billed, immediately upon receipt of an invoice 16 therefore or by billing to the credit, charge or debit/check card presented at the time of rental. . . .” 17 (Belew Decl., Exh. 15 [Rental Jacket] at 3, emphasis supplied.) The record indicates an invoice 18 for repairs to the vehicle was generated on February 12, 2018. (Id. at Exh. 11.) 19 Even if no clear contractual provision establishes when the debt was “in default,” courts 20 generally apply a “case-by-case approach” considering the surrounding circumstances to determine whether defendant acted as a “debt collector.” See Mavris v. RSI Enterprises Inc., 86 21 F.Supp.3d 1079, 1084 (D. Ariz. 2015) (citing Natividad v. Wells Fargo Bank, N.A., No. 3:12-CV- 22 03646 JSC, 2013 WL 2299601, at *4 (N.D. Cal. May 24, 2013); and De Dios, 641 F.3d at 1075 23 24 25 5 The Court further notes that this exhibit, like all others proffered in support of the motion was merely attached to the motion itself as an exhibit, with no accompanying declaration. Viking 26 thus offered no evidence in an admissible form since it provided no foundation for admissibility or authentication of the documents. 27 6 Plaintiff submits evidence that Viking has performed debt collection activities for over 1 n.3). The district court in Mavris discussed matters to be taken into consideration in the analysis 2 as follows: 3 the guiding principle of the analysis would be the status of the debt, viewed objectively in light of all the circumstances. That is, at the time a third party 4 obtains a debt for collection, would a reasonable person in the debtor’s position believe that the creditor viewed the debt as being in default? Like the Slenk 5 approach, this framework would balance a variety of different factors, none of which would necessarily be dispositive in a given case. The relevant factors might include the number of times a creditor has requested payment, the time that 6 has elapsed since the first request, the urgency of the language used in those requests, the debtor's knowledge that she has been referred to a third party, the 7 creditor's internal policies, any representations made by or on behalf of the creditor—either publicly or to a specific debtor—about how it collects debts, and 8 apparent attempts by the creditor or third party to circumvent the FDCPA’s consumer protections. This list is not exhaustive; it necessarily captures only a 9 subset of the factors that could impact objective perceptions of default in any given case. 10 Mavris, 86 F.Supp.3d at 1086 (D. Ariz. 2015). Relying on Slenk and other authorities, the court 11 found that “[o]bjective indicia of a creditor’s treatment of a debt are entitled to greater weight” or 12 else “FDCPA protections would be subject to the whim of creditors” who could unilaterally 13 determine whether the debt was considered “in default” and keep “debtors completely in the dark 14 about when, if ever, those protections commence.” Id.; see also Echlin v. Dynamic Collectors, 15 Inc., 102 F.Supp.3d 1179, 1185 (W.D. Wash. 2015) (denying summary judgment on whether debt 16 “in default” where “[creditor’s] belief that Echlin’s account was not in default is not dispositive of 17 whether default had in fact occurred” and the record’s “[o]bjective indicators of the debt’s status 18 [were] limited”). 19 Viking’s reliance on Diaz v. Viking Client Services, Inc. is misplaced. 2016 WL 5796835 20 (D. Minn. Oct. 3, 2016). There, plaintiff alleged that Viking first notified him of the alleged 21 damage to the car less than 30 days after the letter stated the alleged incident occurred. Id. at *1 (providing agreement terms and stating that December 29 letter alleged damage occurred 22 December 8). Plaintiff called and explained to Viking that he did not return a car on that date but 23 had returned one more than two weeks prior, which caused Viking to close the claim. Id. The 24 terms of the rental agreement with Avis stated that amounts due under the agreement must be paid 25 “upon demand” or else be subject to a “past due balance” charge. Id. Based on these allegations, 26 the court found that he could not have been “in default” on a debt simultaneous with this first 27 demand. Id. at *4. While the court acknowledged that, even if the debt was not in default yet, 1 Viking could be considered a “debt collector” if it had treated it as such—for example by 2 repeatedly contacting plaintiff, using urgent language in its requests, or any apparent attempts to 3 bypass the FDCPA’s consumer protections—plaintiff there had not so alleged. Id. at *3-4 (citing Mavris, 86 F.Supp.3d at 1086). 4 On summary judgment here, plaintiff submits undisputed evidence that Viking never 5 provided DeNicolo with notice of any amount due until 109 days after Hertz placed the account 6 with it. The first and only letter mailed to DeNicolo was dated May 29, 2018, and stated: 7 8 Dear Ronaldgjlr [sic] Denicolo, 9 Viking Billing Service has been assigned a claim by Dollar Thrifty Corp for damages incurred to a vehicle you rented. As authorized agents, we would like to 10 extend an offer to you to resolve your claim balance for 80% of the current amount due. 11 To take advantage of this offer your payment must be received in our office within 30 days from the date of this letter. Upon completion of an agreed 12 settlement, your account will be considered settled with Viking Billing Service, and we will notify our client Dollar Thrifty Corp. We are not obligated to renew 13 this offer. If you have any questions regarding the terms of this settlement arrangement or if you need additional time to respond to this offer, please contact 14 us at 800-490-9786 to discuss. Should your settlement payment(s) be returned for any reason by your banking institution, this settlement offer will be considered 15 null and void. 16 (Belew Decl., Exh. 4, emphasis supplied.) While Viking previously called the cell phone on 17 DeNicolo’s account, it never stated why it was contacting him or left a message. Ryan Bacon, 18 Assistant Vice President of Operations and Director of Strategy and Analytics for Viking, testified 19 that all claims Hertz places with Viking for “billing” services automatically “roll-over” to 20 “collection” services between 91 to 105 days after placement unless the claim is subject to some 21 exclusion. (Belew Decl. Exh 2 [Bacon Depo.] at 9-10; 143:3-9, 210:10- 211:18.) Viking’s first 22 time connecting with DeNicolo after Hertz placed the debt with Viking was within the period 23 when the debt would have “rolled over” into collections, i.e., when Viking act as a “collection 24 agency” for claims placed by Hertz. The letter gives rise to a reasonable inference that, even if the 25 debt were not considered “in default” under the terms of the rental agreement, Viking was treating 26 it as such by informing DeNicolo he had a “current balance due” on an established debt and must 27 respond quickly to accept a settlement offer. (Belew Decl. Exh. 4.) From this evidence, the court 1 position would believe that the Viking considered the debt to be in default or acted as if it were in 2 default when it was assigned. 3 For the foregoing reasons, the motion for summary judgment on DeNicolo’s claims7 is 4 DENIED. 5 B. Fox’s Claims Based Upon Rosenthal Act Violations Fox alleges that Viking violated Section 1788.17 of the California Rosenthal Debt 6 Collection Practices Act when it used “false, deceptive, or misleading” representations in 7 connection with the collection of debt and “unfair or unconscionable means” to collect, citing 8 FDCPA 15 U.S.C. sections 1692e and 1692f. He also alleges that Viking failed to include in its 9 “initial written communication with the consumer. . . that the debt collector is attempting to collect 10 a debt and that any information obtained will be used for that purpose” or other disclosures 11 regarding time limits on disputing or requesting verification of the debt. 15 U.S.C. §§ 1692e(11), 12 1692g(a)(3)-(5). (FAC ¶¶ 79-85.) 13 Viking moves for summary judgment on Fox’s claims on the grounds that the damage 14 claim it processed was not “due or owing” at the time the letter was sent, and therefore not subject 15 to the Rosenthal Act. Because Fox’s claims for violation of the UCL and CCRA, and request for 16 declaratory judgment, are all derivative of the Rosenthal Act violation, the Court’s analysis again 17 turns on the “due or owing” question under that Act. 18 Section 1788.17 of the Rosenthal Act incorporates by reference certain consumer 19 protections set forth in the FDCPA and remedies for its violation but expands the definition of 20 “debt collectors” who must comply with those consumer protections. As explained in a decision 21 from this district: 22 Under Section 1788.17 of the California Civil Code, the Rosenthal Act incorporates all of the substantive provisions applicable to debt collectors under 23 the FDCPA, as well as the remedies for violations of those provisions, 15 U.S.C. 24 7 In its motion, Viking briefly raised the additional argument that DeNicolo incorrectly 25 interpreted the IVC as requiring a rental company to reach an agreement on damages or file suit before attempting collection. (Motion at 20:1-7.) Although it failed to offer authority in its 26 motion on this point, it significantly expanded its discussion of the IVC claim for the first time on reply. (See Reply, Dkt. No. 116, at 10:2-12:5.) However, Viking conceded at the hearing that the 27 IVC claim rose or fell based upon the FDCPA violations. For this reason, the Court declines to reach the merits of summary judgment on the IVC claim for reasons other than the consumer 1692b-k. Section 1692a of the federal act, where debt collector is defined, was 1 one of the few sections of the FDCPA that the California legislature did not incorporate in the Rosenthal Act. 2 3 Sudhir v. PHH Mortg. Corp., No. C 16-06088 WHA, 2017 WL 219681, at *2–3 (N.D. Cal. Jan. 19, 2017). Section 1788.17 states: 4 5 Notwithstanding any other provision of this title, every debt collector collecting or attempting to collect a consumer debt shall comply with the provisions of Sections 1692b to 1692j, inclusive, of, and shall be subject to the remedies in 6 Section 1692k of, Title 15 of the United States Code. However, subsection (11) of Section 1692e and Section 1692g shall not apply to any person specified in 7 paragraphs (A) and (B) of subsection (6) of Section 1692a of Title 15 of the United States Code or that person’s principal. The references to federal codes in 8 this section refer to those codes as they read January 1, 2001. 9 Cal. Civ. Code § 1788.17 (emphasis supplied). 10 Under the Rosenthal Act, a “debt collector” is defined as “any person who, in the ordinary 11 course of business, regularly, on behalf of himself or herself or others, engages in debt collection.” 12 Cal. Civ. Code § 1788.2(c). The term “consumer debt” is defined as “money, property or their equivalent, due or owing or alleged to be due or owing from a natural person by reason of a 13 consumer credit transaction.” Cal. Civ. Code § 1788.2(d) (emphasis supplied). 14 The statute does not define the phrase “due or owing.” The California Office of the 15 Attorney General issued an opinion on the question of what constitutes “due or owing” under the 16 statute: 17 The first issue to be addressed with respect to the Act concerns when a debt is 18 “due [or] owing.” These terms have not been defined in the Act and may have different meanings depending upon their context. “Due” generally means “having 19 reached the date at which payment is required” or “[i]mmediately enforceable.” “Owing” generally means “due to be paid” or “[t]hat is yet to be paid” or “owed.” 20 We have examined the statutory history of the Act’s provisions in some detail. The legislative purposes appear to be focused entirely upon debts that have 21 become delinquent and subject to immediate collection activities. This construction of the phrase “due [or] owing” would have the effect of conforming 22 the Act’s provisions to federal law. Accordingly, the Act applies to debts that have become delinquent, making them subject to collection. 23 85 Cal. Op. Att’y Gen. 215 (2002) (internal citations omitted). 24 As plaintiff notes, the Rosenthal Act does not mirror the definition of debt collector in the 25 FDCPA or exclude from the definition those who collect on debts “not in default.” As stated by 26 the California Court of Appeal: 27 the FDCPA statutory definition of “debt collector” differs significantly from the definition of “debt collector” provided under the Rosenthal Act; the definition of the FDCPA. . . .Rather, the Rosenthal Act considers anyone who regularly 1 engages in the act or practice of collecting money, property or their equivalent that is due or owing by a natural person as a result of a transaction between that 2 person and another person in which the natural person acquired property, services, or money on credit, primarily for personal, family, or household purposes to be a 3 “debt collector.” 4 Davidson v. Seterus, Inc., 21 Cal.App.5th 283, 304 (2018), review denied (June 13, 2018) (emphasis in original); see also Stock v. Firstmark Servs., No. SA-CV-18-01363-CJC-KESX, 5 2018 WL 8193373, at *6 (C.D. Cal. Dec. 12, 2018) (“Unlike the FDCPA, the Rosenthal Act does 6 not exclude, from its definition of debt collector, those who collect debts that are not in default.”) 7 The possibility that a state might adopt a more expansive definition of ‘debt collector’ than is 8 provided by the FDCPA is contemplated by the FDCPA’s preemption provision, which 9 specifically allows for a state law to provide for greater consumer protections than the FDCPA.” 10 Davidson, 21 Cal. App. 5th at 304 n. 15 (quoting 15 U.S.C. § 1692n (“a State law is not 11 inconsistent with this [subchapter] if the protection such law affords any consumer is greater than 12 the protection provided by” the FDCPA.)). 13 In its motion, Viking contends that (1) “pursuant to their contract, Hertz places non- 14 delinquent, non-defaulted damage claims with Viking for billing services” (Motion at 22:16-19) 15 and (2) that “the rationale set forth in Diaz (discussed above) for why Viking’s billing statement is 16 not in “default” under the FDCPA applies equally for why the billing statement is not “due and 17 owing” under the Rosenthal Act (id. at 22:5-7).8 18 First, for the same reasons as set forth above with respect to DeNicolo’s claims, Viking’s 19 suggestion that its contract with Hertz establishes that the claims placed with it (and particularly 20 here, Hertz’s damage claim against Fox) are not in default finds no support in the contract itself, which authorizes both billing services and collection services. The contract establishes nothing 21 whatsoever about whether all claims, or this particular claim, were considered in default or 22 delinquent at the time they were placed with Viking. 23 Second, even assuming the contract and the other evidence submitted by Viking were 24 admissible, none of the evidence establishes when the claim was forwarded to Viking or, indeed, 25 26 8 In addition to being inapposite on the merits here, Viking’s citation of the unpublished decision in Leon v. Emergency Med. Grp. of Watsonville, No. H040521, 2016 WL 3773933 (Cal. 27 Ct. App. July 11, 2016) was improper. See Cal. Rules of Court 8.1115 (opinion that is not 1 when the incident leading to the damage was alleged to have occurred. The incident report with 2 || Fox’s name on it does not include any information in the “date and time of incident” section of the 3 form. (Motion, Exh. P.) And as Viking eventually conceded, the incident report was incorrect, as 4 shown by evidence Fox provided to Viking. (Def. Fact 34.) As with the discussion of the □□□ 5 default” issue above, Viking offers no evidence to establish when the claim would be considered 6 due and owing either in the contract between Hertz and Fox or directly from Hertz. Thus, contrary 7 to Viking’s assertion, the evidence it offers does not establish that Viking received the claim 20 3 days after Hertz identified damage, nor that Hertz had not determined the amount was due or owing prior to forwarding the claim. Fox does not dispute that the notice Viking sent him on 9 April 23, 2019, was the first time he learned of the damage claim, nor that the letter prompted him 10 to contact Viking and inform its representative that Hertz was mistaken. However, these facts do 11 not foreclose Fox’s claim that Viking was a debt collector under the Rosenthal Act and that its 12 contacts with him violated sections 1692e and 1692f, 1692¢ of the FDCPA.? 13 Consequently, the motion for summary judgment must be denied as to Fox’s claim as well. 14 || 1. CONCLUSION 15 For the foregoing reasons, Viking’s motion for summary judgment is DENIED. A 16 This terminates Docket No. 105. s 17 IT Is SO ORDERED. 18 Dated: September 30, 2020 19 YVONNE ZA ROGE NITED STATES DISTRICT COURT JUDGE 20 21 22 23 24 fp 25 ? Viking raises the additional argument that, under the UCL, a plaintiff must show he suffered injury in fact and lost money or property as a result of the alleged unfair business 26 || Practice. Cal. Bus. & Prof. Code § 17204. In opposition, plaintiff provides testimony from Fox stating that he would not have rented from Hertz had he known he would have been assessed 07 improper charges and subjected to illegal debt collection practices. (Pl. Addt’] Fact 46 [Belew Decl., Exh. 14].) That Viking submits additional evidence for the first time on reply in an effort to 28 dispute Fox’s statement only demonstrates that there are disputed issues of fact material to the claim that preclude summary judgment.