Valentin v. Grant Mercantile Agency, Inc.
1:17-cv-01019
E.D. Cal.Dec 27, 2017Background
- Plaintiff Evelyn Valentin incurred a medical debt for 2014 treatment; she paid $767 by check and her insurer paid $110, but collection efforts continued.
- Grant Mercantile Agency, a debt collector, sent four collection letters (beginning March 3, 2017) listing creditor/reference info as "CMP/Community Foundation Med" and asserting interest and a remaining balance.
- Plaintiff sued under the FDCPA (15 U.S.C. § 1692 et seq.) and California's Rosenthal Act (Cal. Civ. Code § 1788 et seq.), alleging failure to meaningfully identify the current creditor and attempts to collect unauthorized interest/incorrect amounts.
- Defendant was served but did not answer; clerk’s default was entered and Plaintiff moved for default judgment.
- The magistrate judge applied the Eitel factors, found they favor default judgment, and recommended a reduced damages and fee award totaling $4,937.00 (statutory damages $1,200; fees and costs $3,737).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether default judgment should be entered | Grant default judgment because Defendant failed to respond to the complaint or oppose the motion. | No opposition or appearance; no argument presented. | Default judgment recommended: Eitel factors favor entry (prejudice, merits, sufficiency, lack of dispute, no excusable neglect). |
| Whether March 3, 2017 letter violated § 1692g(a)(2) by failing to identify the current creditor | Valentin: letter did not "meaningfully convey" the current creditor; reference line and generic "collection agency" language left ambiguity. | No response. | Held that complaint sufficiently alleges a § 1692g(a)(2) violation because the letter did not clearly identify the current creditor. |
| Whether letters violated §§ 1692e, 1692e(2)(A), and 1692f(1) by misstating amount and seeking interest | Valentin: letters sought interest and asserted balances while debt was disputed and not "calculable," so interest collection was unauthorized and misleading. | No response. | Held that allegations state violations: attempting to collect interest before debt was calculable and misstating amounts violated § 1692e and § 1692f(1) (and Rosenthal Act). |
| Reasonableness of requested statutory damages, attorney fees, and costs | Valentin sought $1,000 FDCPA + $1,000 Rosenthal statutory damages and $3,500 fees + $510 costs | No opposition; court scrutinized hours, rates, and deductions. | Court reduced statutory damages to $600 (FDCPA) + $600 (Rosenthal) and awarded $3,227 in fees plus $510 costs (total fees & costs $3,737); overall recommended award $4,937. |
Key Cases Cited
- Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986) (factors court considers in deciding default-judgment motions)
- Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915 (9th Cir. 1987) (on accepting well-pleaded allegations as true after default)
- Gonzales v. Arrow Financial Services, Inc., 660 F.3d 1055 (9th Cir. 2011) (FDCPA is broad remedial, strict-liability consumer-protection statute)
- Hernandez v. Williams, Zinman & Parham, P.C., 829 F.3d 1068 (9th Cir. 2016) (purpose of § 1692g; need for adequate creditor identification)
- Donohue v. Quick Collect, Inc., 592 F.3d 1027 (9th Cir. 2010) (materiality requirement for § 1692e claims)
- Tourgeman v. Collins Financial Services, Inc., 755 F.3d 1109 (9th Cir. 2014) (deceptive collection letters can violate § 1692e when ambiguous or misleading)