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Winter v. I.C. System Inc.

February 5, 2008


The opinion of the court was delivered by: Hon. Jeffrey T. Miller United States District Judge


Plaintiff asserts claims for violation of (1) the Fair Debt Collection Practices Act (the "FDCPA" or the "Act"), (2) California's Rosenthal Fair Debt Collection Practices Act (the "Rosenthal Act"), and (3) California Business & Professions Code § 17200; (4) declaratory relief; (5) injunctive relief; and (6) rescission. Defendants I.C. System and Lynn Nelson move for judgment on the pleadings under Federal Rule of Civil Procedure ("FRCP") 12(c). Defendants argue that Plaintiff's claims are time-barred and preempted, and that no circumstances exist under which Plaintiff can state a viable claim. Plaintiff filed a timely opposition and Defendants a timely reply. For the reasons set forth below, the court GRANTS judgment on the pleadings as to the FDCPA and Rosenthal Act claims and DECLINES to exercise supplemental jurisdiction as to the remaining claims.


Plaintiff initially filed his complaint in California state court on February 14, 2007. Defendants removed the case on March 29, 2007 and filed answers on April 25, 2007. The following facts are taken from the complaint and are assumed to be true only for the purpose of reviewing the motion for judgment on the pleadings.

In 2001, Plaintiff lived in an apartment complex whose management had an exclusive television service agreement with Direct TV. Plaintiff purchased Direct TV equipment as a result. An independent reseller provided Direct TV services to the apartment complex. After installing the Direct TV equipment and service, Plaintiff moved. He believed that he had complied with the requirements for terminating his service, but he later learned that his credit report contained a "derogatory item" indicating he owed approximately $206 to Direct TV. Plaintiff believes this alleged debt stemmed from a charge for a satellite converter box -- "a charge he did not contract for and never agreed to incur." (Compl. at 4.)

The item was listed as a collection account under Defendant I.C. System's name. Plaintiff contacted I.C. System by letter and mail on numerous occasions, including a communique in which Plaintiff "asked that they agree to resolve the matter by admitting that it was the result of a simple breakdown in communications." (Compl. at 5.) Defendant Nelson, acting for I.C., "refused to either waive the debt or remove it from [Plaintiff's] credit reports." (Id.) Plaintiff contacted the consumer credit reporting agencies to challenge the accuracy of the debt, but I.C. told them the debt was valid and owed. Plaintiff believes the dissolution of the Direct TV reseller explains I.C.'s inability to locate records to verify the debt.

Plaintiff alleges that he has been damaged because his job requires high-level government security clearance, and the I.C. credit report entry causes him difficulty during his annual reviews. The credit entry also created added credit costs when he attempted to use his credit for purchases. "Under this extreme duress, and wishing to purchase a home, [Plaintiff] contacted Mr. Nelson and made arrangements to pay the account in full . . . confirming in the process that payment of the debt did not constitute an admission that the debt was valid." (Compl. at 6.)

After Plaintiff attempted to arrange financing to buy a home in October 2006, he learned that his credit report was lower than he had expected, and he believes the I.C. collection account was the only item that could have explained this score. His attorney contacted Defendants and disputed the debt, seeking to have the debt removed. Defendants refused to remove it.

I.C. Systems has never reported the debt to credit reporting agencies as a "disputed debt," although Plaintiff's attorney "made it quite clear to IC that [Plaintiff] did indeed dispute the debt -- as he had made clear all along." (Compl. at 7.) Further, I.C. did not verify the debt "in compliance with the FDCPA," and "continued to list it on [Plaintiff's] credit report -- an act of debt collection -- into 2007." (Id.) For instance, when Plaintiff attempted to refinance his car on January 8, 2007, the I.C. item was still on his credit report.


A. Legal Standards for a Rule 12(c) Motion for Judgment on the Pleadings

A Rule 12(c) motion challenges the legal sufficiency of an opposing party's pleadings. See FRCP 12(c). As with a Rule 12(b)(6) motion, the court must assume the truthfulness of the material facts alleged in the complaint and must construe all inferences reasonably drawn from the allegations in favor of the responding party. See General Conference Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir. 1989). "Judgment on the pleadings is proper when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law." Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1550 (9th Cir. 1989). Thus, judgment on the pleadings in favor of a defendant is not appropriate if the complaint raises issues of fact that, if proved, would support the plaintiff's legal theory. General Conference Corp., 887 F.2d at 230.

A. Claims for Violation of the FDCPA and ...

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