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Komarova v. National Credit Acceptance

June 25, 2009


(San Francisco City and County Super. Ct. No. CGC-06-456891). Honorable Ernest Goldsmith.

The opinion of the court was delivered by: Marchiano, P.J.


This lawsuit arises from the efforts of defendant National Credit Acceptance, Inc. to collect a consumer debt from plaintiff Anastasiya Komarova that she did not owe. We review alleged debt collection abuse in the context of a mistaken identity case. Defendant appeals (A121316) from the judgment for plaintiff on jury verdicts finding defendant liable for violations of the Robbins-Rosenthal Fair Debt Collection Practices Act (Civ. Code, § 1788 et seq.; hereafter, the Rosenthal Act, or the Act) and for intentional infliction of emotional distress. Defendant also appeals (A122041) from the order awarding plaintiff attorney fees on her cause of action under the Rosenthal Act.

These consolidated appeals raise issues under the Act of apparent first impression in California state courts: (1) whether conduct violating the Act is shielded by the litigation privilege (Civ. Code, § 47, subd. (b))-our answer to that question is "no"; (2) whether the continuing violation doctrine permits recovery for violations of the Act that occurred beyond the statute of limitations-our answer, under the circumstances in this case, is "yes,"; and (3) whether a multiplier can be used in calculating attorney fees awarded under the Act-our answer is "yes."

Apart from defendant‟s arguments on these issues, the appeals have merit on the following issues. We conclude that the litigation privilege precludes liability on plaintiff‟s cause of action for intentional infliction of emotional distress, and that the court relied on an improper factor in granting an attorney fee multiplier. We therefore modify the judgment for plaintiff, and reverse the attorney fee order.

I. APPEAL NO. A121316

A. Background

(1) Facts

MBNA America Bank, N.A. (MBNA), issued a Visa card to Christopher Propper in 2001; Propper requested an additional card for "Anastasia Komarova," identified as his fiancée on the credit application, and she became an authorized user on the account. The account became delinquent, and was charged off by MBNA in November 2004, with an unpaid balance of $7,872.98. The account was purchased from MBNA by defendant in December 2004.

Plaintiff, whose first name, unlike that of the woman listed on Propper‟s credit application, includes the letter "y," was born in Russia and emigrated to the United States in 1995. In February 2005, plaintiff was working as an esthetician at An Essential Day Spa in Sunnyvale, California. The spa was owned by plaintiff‟s father-in-law, Monem Nayebi; he and plaintiff‟s husband, Nima Nayebi, worked there as hairstylists.

In January 2005, defendant obtained a credit report for plaintiff, which misspelled her name without the letter "y," listed addresses for her in the San Francisco Bay Area, and did not identify any MBNA account. Defendant‟s personnel tracked down the number of the spa and called there in February 2005, asking to speak to plaintiff or her "husband" Propper. Katherine Hinds, a receptionist at the spa who answered the call, informed the caller that plaintiff was not available and that Propper was not plaintiff‟s husband. The caller left a phone number and said that the call concerned a $7,000 debt.

Plaintiff returned the call later that day and spoke to a man who told her that she and Propper had defaulted on a credit card. She told the man that she knew no one by that name, and that the debt was not hers. She suggested that the mistake might have been associated with a theft of her wallet a few months earlier. She did not know "where this caller was calling from," and was alarmed when he identified her Social Security number, her current home address in San Francisco, and addresses where she had previously lived. She worried that she was speaking with "a criminal who knows my address and everything about me." The man gave her a fax number and suggested that she file a police report. She said that she reported the conversation to the police in Sunnyvale and San Francisco, and was informed that there were no grounds for lodging a police report. The police thought that the inquiry she received about the Propper debt "could be criminal activity," and told her that she should not give the caller any information.

The credit card agreement provided for arbitration before the National Arbitration Forum (NAF), and defendant filed a claim on the debt with the NAF in March 2005 against Propper and "Anastasia Komarova," who were both listed at an address in Long Beach, California. In June 2005, an NAF arbitrator issued defendant an award of $11,214.33, which included amounts for accrued interest and attorney fees, and found that the claim had been served in accordance with NAF rules.

Collection calls to the spa continued. Hinds described the calls as "quite persistent and rude." The callers spoke with plaintiff and left her messages, but never revealed that they were calling on behalf of defendant. Plaintiff testified that when she asked the callers to identify themselves they would say, "You know who we are. We have sent you plenty of mail, things like that. Sometimes they would hang up." Plaintiff was not informed until April that the debt she allegedly owed was on an account with MBNA, at which point she called MBNA and was advised that MBNA had no record of an account with her name or Social Security number.

Plaintiff received a call in early July 2005 from a man who identified himself as "Anthony" and said that "a judge [had] decided I was guilty." Plaintiff received a call on July 21, 2005, from a different man who identified himself as "Mark Anthony" and said, "We know you can pay. We know about your savings account." Mark Anthony said that she now owed over $11,000, which coincided with the amount she and Nima had in their savings account. She handed the phone to Nima, who demanded that they be sent a bill for the alleged debt. Mark Anthony agreed to send a "verification of debt" form and, for the first time, provided defendant‟s name and address. Plaintiff received in her mail at home a form that listed the MBNA account number, the dates the account was opened and closed, a balance due of $7,872.98, and a phone number for defendant‟s account manager, "P. Brown."

Plaintiff took the form to the San Francisco Police Department and told an officer of her concern that defendant "might be fraudulent." According to the police report, the officer called defendant, asked to speak to "P. Brown," and was told by a woman who refused to identify herself, "I don‟t know who you [are] talking about." The officer asked to speak to a manager, and was transferred to a man who identified himself as "Mr. Anthony." The officer asked whether defendant had a business license number, and Mr. Anthony said that a supervisor would call back shortly. The officer did not hear further from defendant, and wrote in the report that he was "unsure if the company National Credit Acceptance Inc. or Mr. Anthony are legitimate." Plaintiff said the officer advised her not to contact or send any information to defendant.

Nima testified that he and plaintiff learned, at some point between the July 21 phone call and September 2005, when plaintiff left her job at the spa, that there had been an arbitration and that plaintiff was now legally responsible for the alleged debt; he recalled that they went onto the internet to find out what an "arbitration" was.

Nima and Monem testified that collection calls to the spa continued into late December 2005. After the spa was closed in early November 2005, callers heard a recorded message that provided a new number, which was Monem‟s cell phone number until late November or early December, and Nima‟s cell phone number thereafter. Nima and Monem both received calls from defendant on their cell phones. Monem said that he never spoke with any of the collectors; he saved their messages for plaintiff, but stopped listening to them after May 2005. Nima said that he did not answer any of the calls he received from defendant on his cell phone, and that the callers to that phone left no messages. Nima said that the calls stopped in January 2006.

Monem testified that collection calls were placed to the spa "maybe every other day," or at the rate of "maybe three times a week." Plaintiff estimated that she received around 48 messages or voice mails from defendant. The calls continued even though plaintiff repeatedly asked the callers to stop contacting her and to check with MBNA to clear up the matter.

Plaintiff was served with a petition to confirm the NAF arbitration award on February 1, 2006. The petition was set for a hearing in the Long Beach Judicial District of the Los Angeles County Superior Court on February 15, 2006. Plaintiff testified that she had never heard of the NAF before receiving the petition to confirm the award, and had received no notice of the NAF arbitration.

On the day after receiving the petition, plaintiff faxed defendant‟s counsel a copy of the August 2005 San Francisco Police Department report and a letter stating in part: "I have been getting unnerving, rude and disruptive phone calls at work from National Credit Acceptance Inc. for the past 18 to 24 months now regarding this supposed debt. I have kept records of these calls. My husband and I have attempted to explain, to no avail, that they have the wrong person. The people I have spoken with are extremely unethical, and have simply yelled at me every-time they called, refusing to hear what I have to say. This is harassment, and we have repeatedly asked them to stop. My family and I have been put under stress. I‟m not sure if this is a case of identity theft or mistaken identity on your part, but it is definitely a violation of my privacy and rights. It has also been disruptive to my life as well as my husband‟s life, and has caused us extreme pain, suffering, anguish, expense, and time among other things.... [¶] [W]e have... called MBNA, the original creditor, and they have three times confirmed that I do not now, nor have EVER had an account with them.... [M]y legal and true name is not even spelled correctly in your documents. MBNA has also confirmed to me that they have an Anastasia Komarova in Glendale, CA. MBNA also stated that they don‟t have any Anastasia Komarova in San Francisco. [¶]... [¶] [P]lease call MBNA and confirm the information I have given you. The slightest research will assure you that you do indeed have the wrong person!" Plaintiff was able, with considerable effort, to find an attorney in Long Beach to represent her on the petition to confirm the arbitration award. Defendant took the February 15 hearing on the petition off calendar, and took no further action to collect the debt from plaintiff. April 5, 2006 entries in defendant‟s collection log for the credit card account stated: "Fraud investigation complete. Conclusion: Incorrect person identified as debtor two. Incorrect person served. No evidence of fraud." Despite these notes, defendant‟s president, Michael Sahlbach, testified that in his opinion defendant never received any information conclusively confirming that plaintiff was not the Komarova on the account. He said that defendant stopped pursuing plaintiff because it concluded that it could not prove that plaintiff was in fact the debtor, and "[t]he presumption in our company is if you can‟t prove it, they‟re not the one."

Sahlbach was asked why notice of the arbitration was served in Southern California after defendant had contacted plaintiff at a phone number in Northern California:

"A: It is not unusual for us to be unaware of a person‟s home address but potentially have a place of employment where they may work. Given the nature of the business that we‟re in, frequently we have missing bits and pieces of information concerning our customers.

Q: So you think that it was possible that Ms. Komarova commuted 5- or 600 miles to work?

A: Absolutely, yes.

Q: Absolutely yes?

A: Yes. She may well have been working there part-time, or she may not have been working there at all. It might have been a false lead." Sahlbach said that defendant‟s practice was to enclose with a verification of debt form a copy of any arbitration award that had been obtained, but admitted that he had no proof that defendant had done so in plaintiff‟s case.

Sahlbach said that defendant‟s records showed that Propper "and the resident identified as Komarova" had both been personally served with notice of the arbitration at the Long ...

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