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Puttner v. Debt Consultants of America

June 4, 2009

INGA-LENA PUTTNER, AN INDIVIDUAL, AND DAN DALTON, AN INDIVIDUAL, PLAINTIFFS,
v.
DEBT CONSULTANTS OF AMERICA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

ORDER

The matter before the Court is the Motion to Dismiss (Doc. # 14) filed by Defendant Client Services, Inc.

Background

On January 22, 2009, Plaintiffs initiated this action by filing the Complaint (Doc. # 1). The Complaint alleges claims against Defendants Debt Consultants of America ("Debt Consultants"); United Collection Bureau, Inc. ("UCB"); Client Services, Inc. ("Client Services"); Frederick J Hanna & Associates, P.C. ("Hanna"); First Platinum Corporation ("Platinum"); and Omni Credit Services of Florida, Inc. ("Omni").*fn1

The Complaint alleges that in July 2007, Puttner heard a radio commercial from Debt Consultants advertising their success in helping consumers become debt free. The Complaint alleges that the interest rates on Puttner's accounts, which at the time were in good standing, were increasing and becoming more difficult to manage. The Complaint alleges that Puttner contacted Debt Consultants "before she defaulted on her accounts to manage the spiraling balances." Complaint, ¶ 26. The Complaint alleges that a representative of Debt Consultants represented to Puttner that she would be debt free within a couple of years; that she would not have to pay the additional interest that would ordinarily accumulate on her accounts; and that her credit would not be damaged. The Complaint alleges that Debt Consultants sent Puttner an orientation package that falsely represented that it would eliminate Puttner's outstanding debt and that Puttner's accounts would be reported as settled-in-full or paid. The Complaint alleges that debt consultants advised Puttner to stop communicating with her creditors.

The Complaint alleges that Puttner paid Debt Consultants approximately $3,935.00 for their services. The Complaint alleges that Puttner "followed Debt Consultants' advice and stopped paying her accounts and stopped communicating with her creditors." Id., ¶ 35. The Complaint alleges that Debt Consultants did not settle any of Puttner's accounts and performed no services of benefit to Puttner. The Complaint alleges that "[e]ventually as Puttner's accounts went into default the other defendants began calling to collect Puttner's debts." Id., ¶ 38.

The Complaint alleges that Client Services is "a corporation doing business of collecting debts in California." Id., ¶ 7. The Complaint alleges that Client Services "called both Plaintiffs with such frequency and persistence as to constitute harassment in an attempt to collect a debt;" "called the parents of both plaintiffs [] and did not state they were calling to confirm or correct location information;" "called the Plaintiffs' parents more than one time;" "disclosed details regarding Puttner's debt to each set of parents;" "did not disclose that it was a debt collector in each communication;" and "did not provide meaningful disclose of its identity in each communication." Id., ¶¶ 49-54.

The Complaint alleges the following causes of action: (1) violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. section 1692, et seq., against all Defendants; (2) violation of the Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), Cal. Civ. Code section 1788, et seq., against all Defendants; (3) invasion of privacy against Defendants UCB, Client Services, Hanna, Platinum and Omni; (4) violation of the Credit Repair Organization Act, 15 U.S.C. section 1679, et seq. against Defendant Debt Consultants; (5) violation of the California Credit Services Act, Cal. Civ. Code section 1789.10, et seq., against Defendant Debt Consultants; and (6) negligence against Defendant Debt Consultants. The Complaint requests actual damages, statutory damages pursuant to 15 U.S.C. section 1692(k) and California Civil Code section 1788.30(a), costs and attorney's fees, and punitive damages.

In support of the first cause of action, the Complaint alleges that "Plaintiffs are 'consumers'" and "Defendants 'are debt collectors' as defined by the FDCPA." Id., ¶¶ 12, 16. The Complaint alleges that "[t]he purported debt that Defendants attempted to collect from Plaintiffs was a 'debt' as defined by the FDCPA." Id., ¶ 17. The Complaint alleges that Defendants violated the FDCPA by "contacting a person other than the Plaintiff and failing to state that they were confirming or correcting location information concerning the Plaintiff;" by "communicating with persons other than the Plaintiff and stating that the Plaintiff owes debt;" by "communicating with persons other than the Plaintiff and contacting that person more than once;" by "communicating with a third person in connection with the collection of a debt;" by "engaging in conduct the natural consequence of which is to harass, oppress, and abuse persons in connection with the collection of the alleged debt;" by "causing the phone to ring or engaging a person in telephone conversations repeatedly with the intent to harass, oppress, and abuse the Plaintiff in connection with the collection of the Debt;" by "placing telephone calls without disclose of their identity;" by "using false, deceptive, and misleading representations or means in connection with the collection of a debt;" by "threatening to take action that could not legally be taken or that was not intended to be taken;" by "using a false representation and deceptive means to collect or attempt to collect any debt or to obtain information regarding a consumer;" by "failing to indicate that all communications were from a debt collector;" and by "using unfair or unconscionable means to collect or attempt to collect a debt." Id, ¶ 80.

In support of the second cause of action, the Complaint alleges that "Plaintiffs are 'debtors'" and that "Defendants are 'debt collectors' as defined by the [RFDCPA]." Id., ¶ 18. The Complaint alleges that "[t]he purported debt which Defendants attempted to collect from Plaintiffs was a 'consumer debt' as defined by the . . . [RFDCPA]." Id., ¶¶ 12, 19. The Complaint alleges that Defendants violated the RFDCPA by "placing telephone calls without disclosure of the caller's identity;" by "causing a telephone to ring repeatedly or continuously to annoy the person called;" by "communicating with the Plaintiff with such frequency as to be unreasonable and to constitute a[] harassment to the Plaintiff under the circumstances;" by "communicating information regarding a consumer debt to a member of the Plaintiff's family;" by "falsely representing that a legal proceeding has been, or about to be, or will be instituted unless payment of a consumer debt is made;" and "by failing to comply with the FDCPA as alleged above." Id, ¶ 82.

In support of the third cause of action, the Complaint alleges that "Plaintiffs had a reasonable expectation of privacy in their solitude, seclusion and private concerns and affairs." Id., ¶ 87. The Complaint alleges that Defendants UCD, Client Services, Hanna, Platinum and Omni "willfully and intentionally intruded into Plaintiff's solitude, seclusion and private affairs by repeatedly and unlawfully attempting to collect a debt;" that the "intrusions would be highly offensive to a reasonable person and did in fact offend Plaintiffs;" and that "[a]s a result of such invasions of privacy, Plaintiff was harmed and caused great mental and physical pain." Id., ¶¶ 88-90.

On March 24, 2009, Client Services filed the Motion to Dismiss. Client Services asserts that the Complaint fails to state a claim against Client Services for violation of the FDCPA, violation of the RFDCPA, and for invasion of privacy, and moves to dismiss the Complaint as to Client Services pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. On April 16, 2009, Plaintiffs filed the Opposition to the Motion to Dismiss (Doc. # 20). On April 24, 2009, Client Services filed the Reply (Doc. # 23).

Standard of Review

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal sufficiency of the pleadings. See De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). A complaint may be dismissed for failure to state a claim under Rule 12(b)(6) where the factual allegations do not raise the right to relief above the speculative level. See Bell Atlantic v. Twombly, 127 S.Ct. 1955, 1965 (2007). Conversely, a complaint may not be dismissed for failure to state a claim where the allegations plausibly show that the pleader is entitled to relief. See id. (citing Fed R. Civ. P. 8(a)(2)). In ruling on a motion pursuant to Rule 12(b)(6), a court must construe the pleadings in the light most favorable to the plaintiff, and must accept as true all material ...


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