Tamara Diaz v. Kubler Corporation
2015 U.S. App. LEXIS 7817
| 9th Cir. | 2015Background
- Diaz, a consumer, alleged Kubler’s May 2012 letter demanding $3,144 principal and $298.03 interest violated FDCPA §1692f(1) and the Rosenthal Act.
- The district court granted Diaz summary judgment, finding prejudgment interest not permitted without a judgment.
- FDCPA §1692f(1) bars collection not authorized by the debt contract or law; the Rosenthal Act mirrors FDCPA remedies.
- California Civil Code §3287 allows prejudgment interest when damages are certain or capable of calculation; §3289 sets a 10% rate after breach if no contract rate is specified.
- Kubler appealed, arguing the letter sought interest that was authorized by law and could be recoverable without a prior judgment; the issue focused on when prejudgment interest vests under §3287(a).
- The Ninth Circuit reversed, determining that §3287(a) can vest prejudgment interest without a judgment and that the collection letter did not violate §1692f(1) or the Rosenthal Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether prejudgment interest can vest under §3287(a) without a prior judgment. | Diaz argued that Kubler’s claim for prejudgment interest was not valid without a judgment. | Kubler contended the debt could be certain and that interest could be sought under California law without a judgment. | Yes; §3287(a) can vest interest before a judgment, if damages are certain or calculable. |
| Whether the May 2012 letter seeking 10% interest violated FDCPA §1692f(1) or the Rosenthal Act. | Diaz maintained the letter sought unpermitted interest and violated §1692f(1) and the Rosenthal Act. | Kubler argued the interest was permitted by law and thus not a violation. | No; the letter did not violate §1692f(1) or the Rosenthal Act given a calculable, lawful interest rate under state law. |
| Whether the debt was certain or capable of being made certain by May 2012. | Diaz asserted uncertainty about the debt’s amount. | Kubler presented insurer and settlement evidence showing certainty of the amount. | The debt was sufficiently certain or calculable to support prejudgment interest under §3287(a). |
Key Cases Cited
- Evanston Ins. Co. v. OEA, Inc., 566 F.3d 915 (9th Cir. 2009) (vesting of prejudgment interest when damages are calculable under Cal. law)
- Unocal Corp. v. United States, 222 F.3d 528 (9th Cir. 2000) (prejudgment interest when damages are certain or calculable)
- Romero-Ruiz v. Mukasey, 538 F.3d 1057 (9th Cir. 2008) (interpretation of entitlement to prejudgment interest)
- Donohue v. Quick Collect, 592 F.3d 1027 (9th Cir. 2010) (FDCPA application to debt-collection litigation activities)
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA applies to litigating activities of lawyers)
- Allen ex rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364 (3d Cir. 2011) (FDCPA interpretation; state-law impact on remedies)
- Leff v. Gunter, 658 P.2d 740 (Cal. 1983) (when damages are calculable under Cal. law for §3287(a))
- Romero-Ruiz v. Mukasey, 538 F.3d 1057 (9th Cir. 2008) (statutory interpretation of entitlement to prejudgment interest)