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Joseph v. J.J. Mac Intyre Companies

December 12, 2002

RUBY JOSEPH, PLAINTIFF,
v.
J.J. MAC INTYRE COMPANIES, L.L.C., DEFENDANT



The opinion of the court was delivered by: Chen, United States Magistrate Judge.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS OR IN THE ALTERNATIVE FOR SUMMARY JUDGMENT (Docket No. 2 and No. 3)

Plaintiff, a San Francisco resident, brought suit alleging five causes of action against the Defendant, a debt collection agency located in Riverside County, California, in connection with Defendant's efforts to collect on debts owed by Plaintiff for patient care at San Francisco General Hospital. Plaintiff alleges: (1) violation of the Rosenthal Fair Debt Collection Practices Act (California Civil Code § 1788 et seq.); (2) violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692; (3) an invasion of privacy; (4) tort-in-se; and (5) violation of Cal. Business and Professions Code § 17200 et seq. First Amended Complaint (hereinafter "FAC"). Plaintiff Ruby Joseph (hereinafter referred to as "Joseph" or "Plaintiff") sought injunctive relief, restitution and damages. Id.

The suit was initiated in the San Francisco Superior Court on May 2, 2002. On June 10, 2002, defendant J.J. Mac Intyre Companies, L.L.C. (hereinafter referred to as "Defendant") removed this matter to federal court pursuant to 28 U.S.C. §§ 1357 and 1367. Both parties consented to proceed before the Court pursuant to 28 U.S.C. § 636(c)(1). On June 10, 2002, Defendant filed a motion to dismiss or, in the alternative, a motion for summary judgment. On September 17, 2002, this Court ordered Defendant to show cause why this case should not be remanded to state court because it did not appear there was federal jurisdiction since the original complaint did not assert a federal claim. On October 11, 2002, the parties stipulated to permitting Plaintiff leave to file a First Amended Complaint which added allegations that Defendant violated the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692. On October 28, 2002, this Court ordered additional briefing on whether on the face of the allegations in the first amended complaint, this Court retains jurisdiction in light of the FDCPA's one-year statute of limitations. § 1692k(d). The parties agreed the statute does not bar the FDCPA claim.

Satisfied that the Court has jurisdiction over this case, a hearing on the merits of Defendant's motions to dismiss and/or summary judgment was held on November 20, 2002. Based on the Court's review of the record in this case, as well as the moving papers, accompanying declarations and oral argument heard before the Court on November 20, 2002, the Court GRANTS IN PART and DENIES IN PART the motion.

STATEMENT OF FACTS

Sometime prior to March 1999, plaintiff Ruby Joseph, physically disabled, sought and received medical services from San Francisco General Hospital, owned and operated by the City and County of San Francisco. Joseph is not indigent. Joseph incurred debt at San Francisco General Hospital in the amount of $2,356.62. Joseph's debt was assigned to a debt collection agency, CODAR, Inc., d/b/a J.J. Mac Intyre Company. Defendant's Motion to Dismiss, at 2.

In March 1999, Defendant began sending collection letters to Joseph in an attempt to collect interest on and the principal debt owed by her. In addition to collection letters, Defendant also used an automated dialing system with a pre-recorded voice to call Joseph. Joseph alleges that through this system, Defendant called Joseph at odd hours and as often as three times a day over a year and a half period, even though Joseph had begun making $50 monthly payments towards her debt. FAC ¶¶ 8-17.

ANALYSIS

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint. North Star Int'l v. Arizona Corp. Comm'n, 720 F.2d 578, 581 (9th Cir.1983). Dismissal of an action pursuant to Rule 12(b)(6) is appropriate only where it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Levine v. Diamanthuset, Inc., 950 F.2d 1478, 1482 (9th Cir.1991); Allwaste, Inc. v. Hecht, 65 F.3d 1523, 1527 (9th Cir.1995). The issue is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to offer evidence to support his or her claims. Gilligan v. Jamco Development Corp., 108 F.3d 246, 249 (9th Cir.1997).

Federal Rule of Civil Procedure 12(b)(6) provides that if, on a motion to dismiss for failure to state a claim upon which relief can be granted, "matters outside the pleading are presented and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56." Fed.R.Civ.P. 12(b)(6); see also Pool Water Products v. Olin Corp., 258 F.3d 1024, 1033 (9th Cir.2001). Since Defendant presented outside materials such as telephone records in connection with some of Plaintiff's claims, the Court will treat those aspects of Defendant's motion as one for summary judgment. Federal Rule of Civil Procedure 56 provides that summary judgment shall be granted upon showing that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

Where the Court considers matters outside the pleadings, the Court must view said evidence in a light most favorable to the non-moving party. See Coca-Cola Co. v. Overland, Inc., 692 F.2d 1250, 1253 (9th Cir.1982) ("Summary judgment is proper if the pleadings and evidence submitted in support of the motion show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law."). The moving party possesses the initial burden of showing the absence of a genuine issue of fact. See Blair Foods, Inc. v. Ranchers Cotton Oil, 610 F.2d 665, 668 (9th Cir.1980). An issue of fact is "genuine" only if there is sufficient evidence for a reasonable fact finder to find for the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Aydin Corp. v. Loral. Corp., 718 F.2d 897, 902 (9th Cir.1983) (stating that a genuine issue is found where "a judge or jury [must] resolve the parties' differing versions of the truth at trial"). Justifiable inferences are to be drawn in the non-moving party's favor. Anderson, supra, 477 U.S. at 255, 106 S.Ct. 2505.

The Court addresses each of plaintiff Joseph's claims.

I. Collection of Interest

Plaintiff alleges that Defendant impermissibly attempted to collect interest on her county hospital debt, in violation of California Civil Code § 1788.13(e)*fn1 and § 1692f(1)*fn2 of the FDCPA. FAC ¶¶ 22, 34. Plaintiff argues that as a county hospital, San Francisco General may not collect interest on debts under California Welfare and Institutions Code § 17401. FAC ¶ 21. Defendant counters that § 17401 is inapplicable to Plaintiff because it pertains only to the collection of liens by a county for hospital services provided to indigent patients. Defendant's Motion to Dismiss, at 2, 5. The issue appears to be one of first impression.

Section 17401 is titled "Liens; suspension of enforcement; release; subordination; exempt property" and states:

No lien taken by a county pursuant to Section 17109 for care provided to a person in a county hospital shall be enforced against the home of that person (1) during his lifetime or that of his spouse, or (2) during the minority of his children if they reside in the home, or (3) during the lifetime of any dependent adult child who resides in the home and who is incapable of selfsupport because of mental or physical disability.

Any lien taken by a county for county hospital care shall be released immediately when the amount owing the county for that care is paid. The county shall render to a person to whom care has been provided in a county hospital a statement setting forth the charges upon which its claim for reimbursement is based. No interest or carrying charge shall be charged in connection with any debt incurred for county hospital care.

If a person against whose home a lien has been imposed for county hospital care desires to sell his home, the county shall release its lien against the original home and transfer it to the new home, provided that it finds that its security will not be impaired. If the person desires to borrow money for the purpose of making improvements to his home, using his home for security, the county shall subordinate its lien to the mortgage or other security interest given for the loan, if the county finds that its security will not be impaired.

If a person against whose home a lien has been imposed for county hospital care has the home acquired by a public entity for public use, the county shall release its lien against the original home ...


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