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Reins v. Bryant

January 28, 2010

EDWARD REINS AND KATHY REINS, PLAINTIFFS,
v.
BRYANT, LAFAYETTE & ASSOCIATES, DEFENDANT.



FINDINGS AND RECOMMENDATIONS

This case was referred to the undersigned pursuant to Eastern District of California Local Rule 302(c)(19) and 28 U.S.C. § 636(b)(1) for hearing on plaintiffs' motion for entry of default judgment against defendant Bryant, Lafayette & Associates. On January 20, 2010, a hearing on the motion was held. Attorney Nicholas Bontrager appeared telephonically on behalf of plaintiffs; no appearance was made on behalf of defendant. For the reasons that follow, and as stated on the record at the hearing, the court recommends that plaintiffs' application for entry of default judgment be granted.

I. BACKGROUND

On June 17, 2009, plaintiffs filed a verified complaint against defendant Bryant, Lafayette & Associates for violations of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA") and the Rosenthal Fair Debt Collection Practices Act, California Civil Code §§ 1788 et seq. ("RFDCPA"). This court has jurisdiction over plaintiffs' claims pursuant to 15 U.S.C. § 1692k(d) and 28 U.S.C. § 1367. See 15 U.S.C. § 1692k(d) ("An action to enforce any liability created by this subchapter may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the date on which the violation occurs.").

Plaintiffs allege that they are consumers and defendant is a debt collector as those terms are defined in the FDCPA and RFDCPA, and that defendant sought to collect a consumer debt from plaintiffs. Dckt. No. 1, Compl. ¶¶ 8-9. Plaintiffs allege that defendant's agents and/or employees called them seeking and demanding payment for an alleged debt and falsely claiming that they were attorneys; repeatedly threatened plaintiffs with legal action and falsely informed plaintiffs that they were going to initiate legal proceedings against plaintiffs; falsely informed plaintiffs that plaintiffs had committed crimes by telling them that their failure to pay was a "federal offense" and a "felony"; failed to inform plaintiffs that defendant is a debt collector; and failed to provide plaintiffs with written correspondence informing them of their rights to dispute and/or seek validation of the alleged debt. Compl. ¶¶ 12-17. Plaintiffs contend that they have suffered emotional distress as a direct and proximate result of one or more or all of defendant's violations of the FDCPA and/or RFDCPA. Compl. ¶¶ 19, 27. Their complaint seeks declaratory relief, damages, and attorney fees and costs. Compl. ¶¶ 28-32.

Plaintiffs' complaint and summons were personally served on defendant on August 4, 2009. Dckt. No. 7. Because defendant failed to answer or otherwise respond to the complaint, on September 9, 2009, plaintiffs requested entry of default against defendant. Dckt. No. 8. The Clerk of this Court entered defendant's default on September 10, 2009. Dckt. No. 9.

Plaintiffs now seek default judgment against defendant pursuant to Federal Rule of Civil Procedure 55(b).*fn1 Their motion for default judgment, which was mailed served on defendant, seeks default judgment against defendant "in the amount of five thousand one hundred and twenty-three dollars and eighty cents ($5,123.80), representing statutory damages in the amount of two thousand dollars ($2,000.00), 15 U.S.C. § 1692(k)(a)(2)(A), Cal. Civ. Code § 1788.30(b), two thousand seven hundred seventy-three dollars and eighty cents ($2,773.80) in attorney fees plus three hundred and fifty dollars ($350.00) in costs (filing fee). 15 U.S.C. § 1692(k)(a)(3), Cal. Civ. Code § 1788.30(c)." Dckt. No. 13 at 2.

II. DISCUSSION

It is within the sound discretion of the district court to grant or deny an application for default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this determination, the court considers the following factors:

(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning the material facts, (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). "In applying this discretionary standard, default judgments are more often granted than denied." Philip Morris USA, Inc. v. Castworld Products, Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003) (quoting PepsiCo, Inc. v. Triunfo-Mex, Inc., 189 F.R.D. 431, 432 (C.D. Cal. 1999)).

As a general rule, once default is entered, the factual allegations of the complaint are taken as true, except for those allegations relating to damages. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (citations omitted). However, although well-pleaded allegations in the complaint are admitted by defendant's failure to respond, "necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default." Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992).

The FDCPA prohibits debt collectors from engaging "in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." 15 U.S.C. § 1692d. Included among the conduct prohibited by § 1692d is "[c]ausing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number." Id. § 1692d(5). The FDCPA also prohibits debt collectors from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." Id. § 1692e. Included among the conduct prohibited by § 1692e is:

(3) The false representation or implication that any individual is an attorney or that any communication is from an attorney.

(4) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful ...


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