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Batiste v. American General Finance

August 20, 2009


The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge


Defendant American General Finance ("AGF") moves for summary judgment on all of Plaintiff's claims. Plaintiff alleges a federal claim under the Fair Debt Collection Practices Act ("FDCPA") which confers federal question jurisdiction, and alleges numerous state claims over which supplemental jurisdiction is exercised under 28 U.S.C. § 1367. For the reasons stated below, Defendant's motion will be granted on the federal claim and the court declines to continue exercising supplemental jurisdiction over Plaintiff's state claims.


Plaintiff alleges in her complaint that Defendant is exposed to liability under the FDCPA as a debt collector since Defendant "in the ordinary course of business, regularly, on behalf of [itself] or others, engages in debt collection." (Compl. ¶¶ 3, 15.) However, Defendant shows in its motion that it is a creditor and therefore not liable under the FDCPA as Plaintiff alleges. (Def's Mot. 2:6-8.)

To be held liable under the FDCPA, a defendant must fall within the FDCPA's definition of "debt collector." 15 U.S.C. § 1692k; Heintz v. Jenkins, 514 U.S. 291, 294 (1995) (stating that the FDCPA "prohibits 'debt collector[s]' from making false or misleading representations and from engaging in various abusive and unfair practices." (citing 15 U.S.C. § 1692-1692o)); see also, Romine v. Diversified Collection Servs., 155 F.3d 1142, 1146 (9th Cir. 1998)(discussing the definition of "debt collectors" under the FDCPA).Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028, 1031 (9th Cir. 2009)(stating that a "'creditor' is not a 'debt collector' under the FDCPA" and thus not liable under this statute) (internal citations omitted); Oei v. N. Star Capital Acquisitions, LLC, 486 F.Supp. 2d 1089, 1097 (C.D. Cal. 2006) (finding the "'distinction between creditors and debt collectors is fundamental to the FDCPA,' because the Act 'does not regulate creditors' activities at all;'" a debt collector regularly collects debts on behalf of others, not its own debt)(citing Randolph v. IMBS, Inc., 368 F.3d 726, 729 (7th Cir. 2004)). The FDCPA was enacted to combat "abusive, deceptive, and unfair debt collection practices". 15 U.S.C. §1692(a)-(e).

A debt collector is defined as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts," or alternatively, a person "who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). The term "debt collectors" specifically "does not include any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor." Id. § 1692a(6)(A) (emphasis added). A creditor is "any person who offers or extends credit creating a debt or to whom a debt is owed . . . ." Id. § 1692a(4). One exception exists for creditors, however, who may be held liable as "debt collectors" if "in the process of collecting [their] own debts, [they] us[e] any name other than [their] own which would indicate that a third person is collecting or attempting to collect such debts." Id. § 1692a(6).

Defendant provides a Declaration from Lisa Wagner (a district manager for Defendant) in support of its position that it is not a debt collector, in which Wagner avers that "at all times AGF has been, and is, the lender, secured party, and owner of the [loan between Plaintiff and Defendant]." (Def's Mot. 5: 15-17; Def's Statement of Undisputed Facts ("SUF") ¶ 6; Wagner Decl. ¶ 8.) Defendant argues "AGF's principal business is not debt collection" and supports this position with a portion of Wagner's declaration, in which she declares: "during the course of my 32 years of my employment, AGF has been a major issuer of consumer loans in the United States . . . AGF's principal business is not debt collection, although when it becomes necessary, AGF does attempt to collect its overdue debts." (Def's SUF ¶ 14; Wagner Decl. ¶ 5.)

Plaintiff does not dispute Defendant's position that it "has been, and is, the lender, secured party, owner and creditor" of the loan between Plaintiff and Defendant. (Pl.'s SUF ¶ 6.) Plaintiff counters, however, that "AGF in its regular course of business, sends employees out on field calls to visit client's houses and collect debts owed," and therefore falls under the definition of "debt collector" as prescribed in the FDCPA, even if Defendant is also a "creditor." (Pl.'s SDF ¶ 20.) Plaintiff relies on Wagner's following deposition testimony as support for this position:

Q: Okay, that was probably a bad question. Beside the phone number -- besides the phone calls, besides the additional letter that are being sent out, are there any other means in which the --- American General takes to try to bring the account current?

A: Yes, there are.

Q: Okay. And what are those?

A: Actual visits to the home.

Q: Okay. And is there a standard policy as to the frequency ...

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