2:16-cv-00545
C.D. Cal.Sep 27, 2017Background
- Kevin Moda (plaintiff) lived in an apartment and received a January 18, 2016 demand letter from the Law Offices of Robert C. Aronoff (defendants) claiming $15,600 in unpaid rent and threatening eviction and collection.
- The letter was the first contact between the parties; it was addressed to Moda and a company/guarantor (Notis/Notis Enterprises) and was signed by Aronoff.
- Moda replied disputing the amount and asserting he had paid rent; Aronoff followed up by email demanding proof of payment and warning that litigation would proceed and that the lease required Moda to pay landlord legal fees.
- Defendants later filed unlawful detainer proceedings and Moda was ordered to vacate; defendants then discovered the arrears were for one month, not four as the letter had stated.
- Evidence showed Aronoff Law did some unlawful detainer and transactional work but did not primarily engage in consumer debt collection: few collection matters, no dedicated collection staff or systems, and only one prior judgment-collection matter in four years.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants are "debt collectors" under the FDCPA | Moda: defendants sent a collection letter seeking rent and thus are debt collectors | Aronoff: firm does not have debt collection as principal business nor regularly collect debts for others | Court: Not debt collectors — plaintiff failed to prove either definition (principal purpose or regular collection) |
| Whether the FDCPA applies to the rental obligation at issue | Moda: rent is consumer debt arising from personal residence | Aronoff: no dispute rent is consumer debt but FDCPA status depends on collector, not debt | Court: did not reach merits because plaintiff failed to prove collector status |
| Whether the January 18 letter violated FDCPA substantive requirements | Moda: letter was false/misleading (claimed four months owed) and nonconforming | Aronoff: based on landlord representations and lease, letter was permissible; error corrected later | Court: not decided — dismissal based on failure to show collectors status so substantive claims not addressed |
| Whether defendants regularly engage in consumer-debt-collection activity | Moda: pattern of collection conduct (argued) | Aronoff: minimal collection work, mostly transactional and corporate eviction matters; refer residential evictions out | Court: held defendants do not regularly collect consumer debts; plaintiff failed burden |
Key Cases Cited
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (describing FDCPA purposes in eliminating abusive debt collection practices)
- Heintz v. Jenkins, 514 U.S. 291 (1995) (FDCPA applies to attorneys who regularly engage in consumer-debt-collection activity)
- Schlegel v. Wells Fargo Bank, N.A., 720 F.3d 1204 (9th Cir. 2013) (defines "debt collector" and requires principal-business or regular-collection showing)
- McCollough v. Johnson, Rodenburg & Lauinger, LLC, 637 F.3d 939 (9th Cir. 2011) (FDCPA covers attorneys who regularly collect consumer debts, including via litigation)
- Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carroll & Bertolotti, 374 F.3d 56 (2d Cir. 2004) (plaintiff bears burden of proving defendant is a debt collector under the FDCPA)
- Turner v. Cook, 362 F.3d 1219 (9th Cir. 2004) (distinguishing types of obligations that may fall outside FDCPA's definition of debt)