Robel Afewerki v. Anaya Law Group
2017 U.S. App. LEXIS 15657
| 9th Cir. | 2017Background
- Afewerki owed LAFCU on a credit card; LAFCU hired Anaya Law Group to sue for collection.
- Anaya filed a state-court complaint that overstated principal by $3,000 ($29,916.08 vs. $26,916.08) and overstated the interest rate by 0.315 percentage points.
- Afewerki (unrepresented at service) retained counsel and served a demand for a bill of particulars on June 6, 2014.
- Anaya discovered the errors on June 16, 2014 and filed a notice of errata correcting the complaint on June 18, 2014.
- Afewerki sued in federal court alleging violations of the FDCPA (against Anaya only) and California’s Rosenthal Act (against Anaya and LAFCU).
- The district court granted summary judgment to defendants as to both claims on the ground the misstatements were not material; Afewerki appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether modest overstatements of principal and interest in a collection complaint are "material" under §1692e (FDCPA) | Overstatement could mislead the least sophisticated debtor into overpaying or accepting an inflated judgment; materiality should be found | Errors were immaterial: amount would be corrected before any final judgment and Afewerki presented no evidence he would have acted differently | Vacated district court: the $3,000 principal overstatement (plus inflated rate) was material because it could disadvantage the least sophisticated debtor in responding to the complaint (remand for further proceedings) |
| Whether defendants may assert Rosenthal Act §1788.30(d) defense for curing the violation within 15 days | §1788.17 (making Rosenthal claims subject to §1692k remedies) eliminated §1788.30(d), so defense not available | §1788.17 addressed remedies, not defenses; Anaya cured within 15 days after discovery and served notice, satisfying §1788.30(d) | Affirmed district court: defendants invoked timely cure under §1788.30(d), so no Rosenthal Act liability |
Key Cases Cited
- Donohue v. Quick Collect, Inc., 592 F.3d 1027 (9th Cir.) (adopted materiality corollary to least-sophisticated-debtor standard)
- Tourgeman v. Collins Fin. Servs., Inc., 755 F.3d 1109 (9th Cir.) (material false representations harm least sophisticated debtor’s ability to respond)
- Guerrero v. RJM Acquisitions LLC, 499 F.3d 926 (9th Cir.) (FDCPA uses objective least-sophisticated-debtor test)
- Baker v. G.C. Servs. Corp., 677 F.2d 775 (9th Cir.) (advocating least-sophisticated-reader standard)
- Powell v. Palisades Acquisition XVI, LLC, 782 F.3d 119 (4th Cir.) (overstated judgment amount was material because it could cause consumer to pay more)
- Davis v. Hollins Law, 832 F.3d 962 (9th Cir.) (materiality inquiry can render some technical errors non-actionable where consumer clearly knew the collector)
- Hahn v. Triumph P’ships LLC, 557 F.3d 755 (7th Cir.) (FDCPA aims to provide information enabling intelligent consumer choices)
- Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055 (9th Cir.) (interpretation of §1788.17’s effect on Rosenthal Act remedies and limitations)