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Lange v. CIR Law Offices

June 22, 2010

BONNIE LANGE, PLAINTIFF,
v.
CIR LAW OFFICES, DEFENDANT.



The opinion of the court was delivered by: Cathy Ann Bencivengo United States Magistrate Judge

ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT; GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; AND DISMISSING CASE WITH PREJUDICE [Doc. Nos. 17 and 18]

Plaintiff Bonnie Lange ("Lange") alleges that defendant CIR Law Offices ("CIR") violated the Fair Debt Collection Practices Act ("FDCPA") and the California State Rosenthal Fair Debt Collection Practices Act ("Rosenthal Act"), by levying plaintiff's bank account which contained Social Security funds. On May 7, 2010, defendant filed a motion for summary judgment. [Doc. No. 17.] On May 14, 2010, plaintiff filed a cross-motion for summary judgment. [Doc. No. 18.] Both parties filed opposition briefs on May 28, 2010. [Doc. Nos. 19 & 20.] Both parties filed reply briefs on June 4, 2010. [Doc. Nos. 21 & 22.] The Court finds both motions suitable for determination on the papers submitted and without oral argument in accordance with Civil Local Rule 7.1(d)(1).

I. BACKGROUND

The following facts are undisputed. On or about August 27, 2001, a collection lawsuit was filed in San Diego Superior Court on behalf of Ford Motor Credit Company ("Ford") against Lange. [Doc. No. 17-1 at 1.] The state court entered default judgment against Lange in November, 2001, and issued an Abstract of Judgment in favor of Ford in the amount of $5,869.28 on December 7, 2001. [Doc. No. 17-3.] Lange did not challenge the state court judgment. [Doc. No. 17-1 at 2.] Moreover, Lange affirmatively represents in her opposition to defendant's summary judgment motion that she is not contesting or seeking to set aside the state court judgment. [Doc. No. 20 at 12.] She acknowledges that the debt exists and she is obligated to pay the debt. [Id.]

CIR represents Ford, the judgment creditor in the state court case. To satisfy the state court judgment for its client, CIR applied for a writ of execution with the clerk of court, which was directed to the Levying Officer in San Diego County, containing instructions to levy Lange's bank account at the Cabrillo Credit Union ("Credit Union"). [Doc. No. 17-1 at 1.] On May 14, 2009, the San Diego County Sheriff as Levying Officer issued the Notice of Levy to the Credit Union on Lange's accounts. [Doc. No. 17-4.] A copy of the Notice of Levy was sent to Lange and received by her prior to the garnishment of her bank account. [Doc. No. 18-2 at ¶6.] In response to the Notice of Levy, the Credit Union garnished funds from Lange's account and delivered the funds to the Levying Officer toward satisfaction of the state court judgment.

Statements for Lange's Credit Union account reflect that it is a deposit account in which payments of social security benefits are directly deposited by the government or its agent. [Doc. No. 17-5.] Social security benefits are exempt from levy, attachment, garnishment or other legal process. 42 U.S.C. § 407. Prior to the Notice of Levy being served, CIR asserts that Lange never notified CIR that funds in her Credit Union account were social security benefits and therefore exempt. [Doc. No. 17-1 at 7.] Lange does not dispute that representation or offer any evidence to the contrary. After the garnishment and the commencement of this lawsuit, Lange presented evidence to CIR that her Credit Union account contained social security benefits and CIR returned the garnished funds. [Doc. Nos. 18 at 5-6; 19 at 5.]

Based on these undisputed facts, Lange moves for summary judgment contending that: -- Lange's social security benefits were exempt from garnishment; -- CIR directed the Levying Officer to garnish an account which contained Lange's social security benefits; -- Lange's social security benefits were garnished as a result of CIR's directions; -- CIR did not investigate the source of the funds in Lange's account prior to the levy and since CIR's acts resulted in the garnishment of exempt funds, as a matter of law, CIR engaged in an unfair and unconscionable means of collection in violation of the FDCPA and Rosenthal Act.

Also based on the same undisputed facts, CIR moves for summary judgment contending that:*fn1

-- On behalf of its client Ford, CIR applied for a writ of execution on a valid judgment against Lange and obtained a Notice of Levy, pursuant to California Code of Civil Procedure § 699.510;

-- The Notice of Levy was directed to the Cabrillo Credit Union for Lange's deposit accounts at the financial institution;

-- Prior to service of the Notice of Levy on the Credit Union and Lange, CIR had no notice that Lange's account with the Credit Union contained Lange's social security benefits;

-- Lange did not notify CIR after being served with the Notice of Levy that the account contained her social security benefits;

-- The Credit Union garnished the exempt funds without notice to the levying officer or CIR that the deposit account contained exempt funds;

-- CIR returned all the garnished funds to Lange following receipt of account statements that demonstrated direct deposits of social ...


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