The opinion of the court was delivered by: Honorable Larry Alan Burns United States District Judge
ORDER ON DEFENDANT'S MOTION TO DISMISS
Chris Hutton alleges that the Law Offices of Collins & Lamore attempted to collect a debt in a manner that violated the Fair Debt Collection Practices Act ("FDCPA") and the Rosenthal Fair Debt Collection Practices Act. Specifically, Hutton claims that a dunning letter he received from Collins & Lamore demanded an amount of $22,519.17 but some unknown or confusing amount of interest, and therefore failed to include the totalamount of the debt as required by law. Now before the Court is Collins & Lamore's motion to dismiss.
The following facts are undisputed. Hutton was issued a credit card by Advanta Bank, and on November 5, 2008, Collins & Lamore (the "Firm") sent Hutton a dunning letter attempting to collect the outstanding balance. That letter said Dear CHRISTOPHER R HUTTON, Please be advised that this office has been retained by the above referenced client in regard to your outstanding balance due in the amount of $22,519.17, which may not include accruing interest (and does not account for changing exchange rates after the date of this letter, for accounts originated in a foreign country). As interest may continue to accrue, Please call our office to verify current balance if payment in full is made more than 30 days after the date of this letter. Please make all payments directly to this office and made payable to 'Collins Lamore Trust Account'.
I am, of course, willing to discuss the above with you. Please feel free to call me toll free at 1-800-864-1773 or email me at firstname.lastname@example.org (Collins Decl., Ex. 2.) Over one month later, on December 12, 2008, the Firm filed a collections lawsuit against Hutton in San Diego Superior Court.
Hutton filed this action on April 13, 2009. The Firm filed a motion to dismiss and an anti-SLAPP motion to strike on June 4, 2009. The motion to dismiss was also pled, in the alternative, as a motion for summary judgment. Both motions were thoroughly briefed by the parties, and the Court took them under submission on August 25, 2009.
A rule 12(b)(6) motion to dismiss for failure to state a claim challenges the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In considering such a motion, the Court accepts all allegations of material fact as true and construes them in the light most favorable to the non-moving party. Cedars-Sinai Med. Ctr. v. Nat'l League of Postmasters of U.S., 497 F.3d 972, 975 (9th Cir. 2007). That said, a complaint's factual allegations "must be enough to raise a right to relief above the speculative level . . . ." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[S]ome threshold of plausibility must be crossed at the outset" before a case can go forward. Id. at 558 (internal quotations omitted). While a court must draw all reasonable inferences in the plaintiff's favor, it need not "necessarily assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003) (internal quotations omitted).
The Firm makes two separate arguments in support of its motion to dismiss Hutton's action. The first is that the FDCPA isn't even in play because the debt at issue is business rather than personal debt. The second argument is that, notwithstanding the nonspecific reference to "interest" in the November 5, 2008 letter, the dunning letter did not sufficiently state the amount of Hutton's alleged debt. The Court will address these arguments in turn.
A. Nature of Hutton's Debt
The FDCPA defines the term "debt" as any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.
15 U.S.C. § 1692a(5) (emphasis added). In other words, the FDCPA applies to consumer debts and not business loans. Slenk v. Transworld Sys., Inc., 236 F.3d 1072, 1074 (9th Cir. 2001). The Firm argues that Hutton's debt isn't covered by the FDCPA, either because that debt was actually incurred for business purposes or because the credit extended to Hutton was intended for business purposes.*fn1 The basis for this argument is a "Business Card Agreement" between Advanta and Hutton that the Firm believes established the nature of Hutton's debt, and ...