931 F. Supp. 2d 1080
E.D. Cal.2013Background
- Vo filed suit against U.S. Bank and law firm Nelson & Kennard for unfair debt collection practices; collection action against Vo occurred in 2009 with a default judgment entered without Vo being served.
- Default judgment and a recorded lien were entered against Vo in Sacramento County; Vo did not know of the action until 2012.
- Vo’s counsel sought to vacate the judgment; the court vacated and substituted Khoa T. Vo for Vo in the pleadings and judgment, prompting ongoing relations issues.
- Vo alleged FDCPA and Rosenthal Act violations, plus negligence, libel, and malicious prosecution.
- Bank moved to dismiss under Rule 12(b)(6) and for lack of jurisdiction under Rooker-Feldman; the court declined to dismiss some claims and dismissed others with prejudice or without prejudice as specified in the order.
- Court ordered Vo to file a Third Amended Complaint within 21 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FDCPA statute of limitations viability | Vo’s claims accrue when he learned of the actions (April 2012) | Collection action filing in 2009 truncates statute; time-bar | Timeliness rejected; tolling and continuing violation addressed; some claims remain viable |
| Whether U.S. Bank is a debt collector and vicariously liable | Bank can be vicariously liable for Nelson & Kennard’s FDCPA acts | Only debt collectors may be liable; vicarious liability limited | Court finds Bank can be vicariously liable under FDCPA |
| Rosenthal Act direct and vicarious liability | Law firm is within Rosenthal Act's scope; Bank liable for law firm | Attorney-law firm exemption excludes Rosenthal Act liability | Rosenthal Act claims against Bank allowed; law firm exemption rejected |
| Litigation privilege impact on negligence and libel | Privilege does not bar these tort claims | Privilege bars most tort claims arising from litigation | Negligence and libel claims dismissed due to litigation privilege |
| Malicious prosecution viability | Bank filed suit without probable cause and malice | Opposition to vacating judgment counters allegations | Malicious prosecution claim dismissed |
Key Cases Cited
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA threshold liability for debt collectors)
- Mangum v. Action Collection Serv., Inc., 575 F.3d 935 (9th Cir. 2009) (limitations run when plaintiff knows injury; notice issues in FDCPA actions)
- Naas v. Stolman, 130 F.3d 892 (9th Cir. 1997) (limitations when complaint filed if proper service/notice; Naas control on timely filing)
- Fox v. Citicorp Credit Serv., Inc., 15 F.3d 1507 (9th Cir. 1994) (imputing attorney actions to client for FDCPA purposes)
- Clark v. Capital Credit & Collection Serv., 460 F.3d 1162 (9th Cir. 2006) (test for vicarious FDCPA liability—whether principal controls agent)
- Oei v. N Star Capital Acquisitions, LLC, 486 F.Supp.2d 1089 (C.D. Cal. 2006) (district court on vicarious liability; FDCPA scope)
- Komarova v. National Credit Acceptance, Inc., 175 Cal.App.4th 324 (Cal. Ct. App. 2009) (Rosenthal Act not barred by litigation privilege; continuing violations theory supports timely claims)
- Carney v. Rotkin, Schmerin & McIntyre, 206 Cal.App.3d 1513 (Cal. Ct. App. 1988) (attorney exemption interpretation under Rosenthal Act; statutory construction discussion)
- Taylor v. Quall, 458 F.Supp.2d 1065 (C.D. Cal. 2006) (litigation privilege precludes Rosenthal Act claims in some contexts)
- Silberg v. Anderson, 50 Cal.3d 205 (Cal. 1990) (litigation privilege applied beyond defamation)