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Herrera v. Allianceone Receivable Management, Inc.

United States District Court, S.D. California

June 18, 2015

GILVERTO HERRERA AND CLAUDIA HERRERA, Plaintiffs,
v.
ALLIANCEONE RECEIVABLE MANAGEMENT, INC. d.b.a. ALLIANCEONE, INC. and DOES 1-50, Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS; GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT; AND GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR LEAVE TO FILE AN AMENDED COMPLAINT

BARRY TED MOSKOWITZ, Chief District Judge.

Gilverto Herrera and Claudia Herrera ("Plaintiffs") brought an action against AllianceOne Receivable Management, Inc., ("Defendant"), arising out of Defendant's allegedly abusive debt collection practices. Defendant has collected $1, 496 from Plaintiffs for court-imposed traffic fines, while knowing that the fines were mistakenly attributed to Plaintiff Gilverto Herrera.

Plaintiffs' first Complaint was brought under the California Rosenthal Fair Debt Collection Practices Act ("Rosenthal Act"), the Fair Debt Collection Practices Act ("FDCPA"), and several state tort causes of action. Plaintiffs now seek to amend the first Complaint by adding ten new federal and state causes of action. Currently pending are: (1) Defendant's Motion for Partial Judgment on the Pleadings, Doc. 15, 15-1; (2) Defendant's Motion for Partial Summary Judgment, Doc. 19, and; (3) Plaintiffs' Motion for Leave to File an Amended Complaint, Doc. 23.

For the reasons below, Defendant's Motion for Partial Judgment on the Pleadings, Doc. 15, is GRANTED IN PART AND DENIED IN PART, Defendant's Motion for Partial Summary Judgment, Doc. 19, is GRANTED, and Plaintiffs' Motion for Leave to File an Amended Complaint, Doc. 23, is GRANTED IN PART AND DENIED IN PART.

I. BACKGROUND

The following undisputed facts are stated in Plaintiffs' first Complaint ("Compl.") and the parties' motions. In late 2010/early 2011, Defendant was assigned to collect several unpaid traffic fines by the San Diego County Superior Court assessed against Gilberto G. Herrera. Doc. 19-2, ¶ 2. Defendant used "skiptracing" to locate Gilberto G. Herrera by searching his last name and an address associated with the fines. Id. at ¶ 3. The search produced four results associated with the address, and one was Plaintiff Gilverto Herrera. Id. at ¶ 4.

In January 2012, Plaintiffs received a Demand for Payment-Court Ordered Debt Collection ("Demand") notice from the Franchise Tax Board ("FTB"), seeking $1, 496 to satisfy three outstanding orders for traffic fines. Compl. at ¶ 2. Plaintiffs learned that Defendant had submitted the Demand to the FTB as result of unpaid traffic fines, which the state court had issued to another person with a similar name but a different birth date. Id. at ¶ 3. In February 2012, Plaintiffs presented Defendant and the FTB with proof of their identities, and filed reports of potential identity theft with their creditors, banks, and the police department. Id. at ¶¶ 4-5. Plaintiffs allegedly contacted Defendant in person and by telephone in an effort to clear up the error. Id.

Plaintiffs' state income tax refund was then seized in March 2012 and $564.62 was sent to the FTB. Compl. at ¶¶ 2, 6. Plaintiffs made additional inquiries and learned through state court records that the fines were issued to persons driving a vehicle owned by "Gilberto Gamino Herrera." Compl. at ¶ 7. Plaintiffs filed a state court lawsuit and obtained an order on May 31, 2012 ("May 2012 Court Order" or "Court Order") from the Superior Court declaring them not responsible for the traffic fine debt. Compl. at ¶ 8; Doc. 28-2, at 37. The Court Order stated: "these cases be removed from Petitioner's credit record, AllianceOne and Franchise Tax Board. Any monies garnished from Petitioner are to be refunded." Id. Plaintiff Gilverto Herrera then successfully cleared the citations from his driving record. Compl. at ¶ 9. Plaintiffs provided actual notice of the Court Order to Defendant on the day it was issued. Id. at ¶ 8.

Even after Defendant had notice of the May 2012 Court Order, Defendant continued contacting Plaintiffs regarding the unpaid debt. Compl. at ¶ 10. Defendant's collection efforts continued by telephone and mail throughout the spring of 2012. Id. Defendant even reported the unpaid fines to the credit reporting agencies. Id. This decreased Plaintiffs' credit score by about 200 points and jeopardized Gilverto Herrera's government job, which requires him to maintain an active security clearance. Id. Plaintiffs also continued receiving IRS and FTB garnishment notices. Id.

As a result of Defendant's collection efforts, Plaintiffs allegedly suffered harm including, but not limited to physical injury, mental stress, medical expenses, and a decreased credit rating which, inter alia, prevented Plaintiffs from refinancing their home. Compl. at ¶¶ 11-12. Mr. Herrera also received an adverse work evaluation because he had to miss work to clear up the identity mistake. Plaintiffs contacted Defendant in writing in November 2012, attaching records of their medical expenses and adversely impacted credit, but continued receiving unauthorized robo-calls demanding payment throughout 2013. Compl. at ¶¶ 13.

Plaintiffs filed the present action in Superior Court on November 5, 2013. Defendants removed the case to this Court on August 6, 2014 relying on federal question jurisdiction. Although this Order dismisses Plaintiffs' single pending federal claim, infra section II.3.b., Plaintiffs' pending motion to amend their Complaint with several new federal claims is partially granted. Therefore, the Court continues to have federal question jurisdiction.

II. DISCUSSION

1. Causes of Action

Plaintiffs' first Complaint raises seven causes of action against Defendant for violation of: (1) the Rosenthal Act, Cal. Civ. Code ("CCC") § 1788, et seq; (2) the FDCPA, 15 U.S.C. § 1692, et seq; (3) Conversion; (4) California Business and Professions Code ("CBPC") § 17200, et. seq; (5) Negligence; (6) Intentionally Annoying or Harassing over the Telephone, California Penal Code ("CPC") § 653(m), and; (7) Invasion of Privacy. Doc. 1. Plaintiffs' five state law causes of action are subject to this Court's supplemental jurisdiction under 28 U.S.C. § 1367(a).

In response to facts raised in Defendant's pending motion for partial summary judgment, Plaintiffs filed a motion for leave to amend the Complaint, seeking to add ten new causes of action for: (8) Negligent Violation of the Telephone Consumer Protection Act, 47 U.S.C. §§ 227, et seq; (9) Willful/Intentional Violation of the Telephone Consumer Protection Act, 47 U.S.C. §§ 227, et seq; (10) Deprivation of Constitutional and Statutory Rights, CCC § 52.1, and violation of the following; (11) California Credit Reporting Agencies Act, CCC § 1785.25(a); (12) Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(b); (13) Rosenthal Act, CCC §1788.18(g), (14) Rosenthal Act, CCC § 1788.17; (15) FDCPA, 15 U.S.C. §1692(e)(8); (16) Deprivation of Liberty Without Due Process under the Fifth and Fourteenth Amendments to the United States and California Constitutions, and 42 U.S.C. § 1983, and; (17) Deprivation of Rights Pursuant to the Equal Protection Clause of the Fourteenth Amendment to the United States and California Constitutions, and 42 U.S.C. § 1983. See Doc. 23-2.

2. Motion for Partial Judgment on ...


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