Diaz v. Kubler Corp.
982 F. Supp. 2d 1146
S.D. Cal.2013Background
- In Spring 2011, Diaz received dental services from Parkway and incurred a debt to Parkway; Alternative Recovery Management (ARM) is the third‑party debt collector assigned to the case.
- Flores, ARM’s employee, makes calls and records contemporaneous notes; a “MINI” or “MINI I” entry indicates the FDCPA mini‑Miranda notice was provided and cannot be altered once entered.
- Around May 2012, Flores called Diaz twice and sent a letter seeking to collect principal plus 10% interest.
- Diaz’s daughter, Erika Diaz—an attorney—called Flores; after her letter, ARM stopped contacting Diaz and her daughter.
- Diaz filed suit on July 13, 2012; ARM was served July 30, 2012; ARM reported the debt to a credit agency on September 25, 2012; no judgment or wage garnishment occurred.
- Diaz moved for summary judgment on FDCPA and Rosenthal Act claims on August 26, 2013; court denied some aspects and granted others, ruling on various statutory theories including California law on interest and prejudgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Flores’ conduct violated § 1692d(6) and § 1692d | Diaz asserts Flores failed to identify as debt collector and made threats. | Flores identified himself as debt collector and did not threaten; notes show mini‑Miranda. | Genuine fact issues exist; summary judgment denied for these claims. |
| Whether Flores’ conduct violated § 1692e(4)/(5) and related disclosures | Diaz claims deceptive or threatening conduct and failure to disclose collection status. | Disputed contents of calls; credibility issue; no summary judgment on these claims. | Summary judgment denied for § 1692e claims. |
| Whether defendant violated § 1692f(1) by charging 10% interest without contract judgment | Interest charged beyond contract or law violates FDCPA. | Argues California Civil Code § 3289 permits 10% interest; however no judgment obtained. | Court grants summary judgment for § 1692f(1) against the debt collector. |
| Whether California Civil Code § 3289 permits prejudgment interest without judgment | Interest rate not recoverable without judgment; § 3289 not applicable. | Contends 3289(b) allows 10% prejudgment interest. | Not permitted without a judgment; court grants for § 1692f(1) but treats prejudgment interest issue as unresolved for those claims. |
| Whether Bona Fide Error defense applies to interest misinterpretation under FDCPA | Bona fide error should shield mere errors of law. | Defense not applicable to mistakes of law; relies on counsel's advice defense. | Bona fide error defense inapplicable; plaintiff’s § 1692f(1) claim favored. |
Key Cases Cited
- Hosseinzadeh v. M.R.S. Associates, Inc., 387 F.Supp.2d 1104 (C.D.Cal.2005) (meaningful disclosure requires name and capacity)
- Costa v. Nat'l Action Fin. Servs., 634 F.Supp.2d 1069 (E.D.Cal.2007) (meaningful disclosure standards for debt collectors)
- Coleman v. Quaker Oats Co., 232 F.3d 1271 (9th Cir.2000) (new theory at summary judgment is improper)
- McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939 (9th Cir.2011) (bona fide error defense requirements)
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (bona fide error defense does not cover mistakes of law)
- Hunt v. Check Recovery Sys., Inc., 478 F.Supp.2d 1157 (N.D. Cal.2007) (application limits of § 1692k(c) defense)
- Teachers’ Ret. Bd. v. Genest, 154 Cal.App.4th 1012 (Cal.App.2007) (calculation and timing of prejudgment interest under Cal. law)
- Unocal Corp. v. United States, 222 F.3d 528 (9th Cir.2000) (prejudgment interest when damages are certain or calculable)
- Chesapeake Indus. v. De La Torre, 149 Cal.App.3d 901 (Cal.App.1983) (certainty of damages for prejudgment interest)