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Hadsell v. Cach, LLC

United States District Court, S.D. California

February 6, 2014

RICHARD A. HADSELL, Plaintiff,
v.
CACH, LLC and MANDARICH LAW GROUP, LLP, Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR RECONSIDERATION [DOC. 70]

M. JAMES LORENZ, District Judge.

On August 22, 2013, the Court denied Defendant CACH, LLC's ("CACH") and Defendant MANDARICH LAW GROUP, LLP's ("Mandarich") (collectively "Defendants") Motion for Summary Judgment. ( Order Den. Summ. J. [Doc. 66].) On September 12, 2013, Defendants moved for reconsideration of the aforementioned order. ( Mot. Recons. [Doc. 70].) Plaintiff Richard Hadsell ("Hadsell") opposes.

This Court found this motion suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). ( Order Re: Oral Arg. [Doc. 74].) For the following reasons, the Court GRANTS IN PART and DENIES IN PART Defendants' Motion for Reconsideration.

I. BACKGROUND

The detailed background of this case has been set out multiple times in previous orders by this Court. Plaintiff opened a credit account with MBNA with an initial 0% annual percentage rate on balance transfers and check cash advances through the statement closing date of February 2005. ( JSUF [Doc. 60] ¶¶ 1-2.) Plaintiff's account was later changed to a "WorldPoints" MBNA account with a contractual interest rate of 8.9% and then sold to Bank of America. ( Id. ¶¶ 3, 7.) After May 12, 2010, Plaintiff did not make another payment on the account. ( Id. ¶ 6.) On February 9, 2011, Plaintiff's account owing $5, 606.24 was sold, transferred and sent to CACH with the full authority to perform all acts necessary for collection, settlement, adjustment, compromise or satisfactions of the claim. ( Id. ¶ 7.) In November 2011, CACH contacted Mandarich to assist in collecting the debt Plaintiff owed ("the debt"). ( Id. ¶ 9.)

On December 29, 2011, Defendants commenced an action to collect the debt in the San Diego Superior Court alleging a cause of action for breach of contract and a common count for account stated ("State Action"). ( JSUF ¶ 11.) The state-court complaint included a request for 10% interest in the prayer for relief. ( Id. ¶ 12.)

On January 30, 2012, Plaintiff filed an action against Defendants in this Court for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). ( Compl. [Doc. 1]; Am. Compl. [Doc. 23] 1-2.) Plaintiff alleged multiple violations of the FDCPA; however, at this point, only two allegations remain. ( See generally Am. Compl.; Order to Dismiss Claim [Doc. 58].) First, he claims that Defendants violated 15 U.S.C. § 1692c(c) through illegal contact activity. ( Am. Compl. ¶¶ 24-25.) Plaintiff alleges that Defendants improperly contacted him after they received the cease and desist letter from Plaintiff. ( Id. ) Second, he claims that Defendants violated 15 U.S.C. §1692f(1) by requesting 10% interest in the prayer for relief in the State Action. ( Id. ¶¶ 21-23.) Plaintiff alleges that because the interest rate on the underlying debt was only 8.9%, the inclusion of 10% constituted unfair or unconscionable collection practices. ( Id. )

On March 12, 2013, both parties moved for summary judgment. ( Defs.' Mot. Summ. J. [Doc. 45]; Pl.'s Mot. Summ. J. [Doc. 46].) On August 22, 2013, this Court denied both motions. ( Order Den. Summ. J. )

On September 12, 2013, Defendants filed the instant Motion for Reconsideration of the Court's August 22, 2013 Order. ( Mot. Recons. ) Defendants argue that reconsideration is proper because the Court's decision to deny Defendants' Motion for Summary Judgment was "clear error." ( Id. 2.) Defendants argue that the August 22, 2013 order failed to address two of Defendants' arguments for summary judgment. ( Id. 2.) Plaintiff opposes, arguing that this Court has ruled on all of the necessary issues, that the Court need not address each particular argument made by Defendant, and that there are disputes of material fact concerning the two open issues Defendants contend were not addressed. ( Opp'n [Doc. 72].)

II. LEGAL STANDARD

"Federal Rule of Civil Procedure 54(b) states that a district court can modify an interlocutory order at any time' before entry of a final judgment, and [the Ninth Circuit has] long recognized the well-established rule that a district judge always has power to modify or to overturn an interlocutory order or decision while it remains interlocutory." Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119, 1124 (quoting Tanner Motor Livery, Ltd. v. Avis, Inc., 316 F.2d 804, 809 (9th Cir. 1963)). Although a district court may reconsider its decision for any reason it deems sufficient, generally a motion for reconsideration "is appropriate if the district court: (1) is presented with newly discovered evidence; (2) committed clear error or the initial decision was manifestly unjust; or (3) if there is an intervening change in controlling law." Sch. Dist. No. 1J, Multnomah Cnty. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir.1993); see also Hydranautics v. FilmTec Corp., 306 F.Supp.2d 958, 968 (S.D. Cal. 2003) (Whelan, J.).

Clear error occurs when "the reviewing court on the entire record is left with the definite and firm conviction that a mistake has been committed." Smith v. Clark County School Dist., 727 F.3d 950, 955 (9th Cir. 2013) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)). However, a motion for reconsideration may not be used to raise arguments or present evidence for the first time when they could reasonably have been raised earlier in the litigation. Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). It does not give parties a "second bite at the apple." See id. Moreover, "after thoughts" or "shifting of ground" do not constitute an appropriate basis for reconsideration. Ausmus v. Lexington Ins. Co., No. 08-CV-2342-L, 2009 WL 2058549, at *2 (S.D. Cal. July 15, 2009). Whether to grant a motion for reconsideration is in the sound discretion of the district court. Navajo Nation v. Norris, 331 F.3d 1041, 1046 (9th Cir. 2003) (citing Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 883 (9th Cir. 2000)).

III. DISCUSSION

Defendants argue that reconsideration is appropriate under the clear error standard because the Court's August 22, 2013 Order did not address Defendants' arguments that: (1) Plaintiff failed to present sufficient evidence to support a violation of § 1692c(c) concerning illegal contact activity; and (2) a request made in the prayer for relief is not an affirmative statement of the interest rate on the original debt, and therefore, does not constitute unfair or unconscionable conduct in violation of § 1692e[1] or § 1692f. ( Defs.' P.'s & A.'s [Doc. 70-1] 1.) Plaintiff generally opposes reconsideration on the grounds that the Court already addressed all relevant issues in its August 22, 2013 Order, and any remaining issues are within the Court's discretion to leave unaddressed. ( Opp'n 2-3.) Plaintiff specifically opposes on the following grounds: (1) Plaintiff has presented adequate evidence to raise a dispute of material fact concerning the illegal contact activity under § 1692c(c); and (2) Plaintiff has raised, and the Court has addressed, disputes of material fact concerning the propriety of Defendants requesting 10% interest in the prayer for relief, when the interest rate on the underlying debt was 8.9%. ( Opp'n 3-7.)

A. Defendants' Arguments Regarding the Cease and Desist Letter Were Not Previously Addressed and Deserve Reconsideration.

Defendants argue Plaintiff has not presented any evidence that Defendants committed a violation of § 1692c(c).[2] ( Defs.' P.'s & A.'s 4.) Specifically, Defendants point to Plaintiff's failure to provide evidence that (1) Defendants received the cease and desist letter, and (2) assuming, arguendo, that Defendants did receive the cease and desist letter, that Defendants communicated with Plaintiff subsequent to such receipt. ( Id. 4-5.) Defendants further argue that any claims regarding communications prior to January 30, 2011 are time barred by the one-year statute of limitations. ( Id. )

Under the FDCPA, "[i]f a consumer notifies a debt collector in writing... to cease further communication with the consumer, the debt collector shall not communicate further with the consumer... If such notice from the consumer is made by mail, notification shall be complete upon receipt." 15 U.S.C. § 1692c(c). Therefore, for Plaintiff to sustain a cause of action under § 1692c(c), Plaintiff must show that (1) Defendants received the cease and desist letter and (2) communicated with Plaintiff subsequent to such receipt. Additionally, "[a]n action to enforce any liability created by this ...


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