Frost v. Resurgent Capital Services, L.P.

          ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

          EDWARD J. DAVM, United States District Judge

         Plaintiff Leslie Frost (“Plaintiff”) filed a complaint against Defendant Resurgent Capital Services, LP (“Defendant”) alleging that Defendant violated multiple sections of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et. seq., and the Rosenthal Fair Debt Collection Practices Act (“RFDCPA”), California Civil Code § 1788 et. seq., by attempting to collect post charge-off^[1] interest on the debt allegedly owed by Plaintiff. Dkt. No. 18 (“FAC”) at ¶16.

         Federal jurisdiction arises pursuant to 28 U.S.C. § 1331. Presently before the court is Defendant’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Dkt. No. 20 (“Mot”). Plaintiff opposes the motion. Dkt. No. 21 (“Opp”). Having carefully reviewed the relevant papers, the Court GRANTS Defendant’s Motion to Dismiss for the reasons explained below.

         I. BACKGROUND

         Plaintiff alleges Defendant contacted her multiple times in the year prior to the filing of the complaint to collect a debt purportedly owed by Plaintiff to General Electric (“GE”). FAC at ¶ 4. GE, the original creditor and owner of the debt, sold it to Defendant on or about September 25, 2012, which was identified as the debt’s approximate date of charge-off. Id. at ¶ 7. The debt, when sold to Defendant, amounted to $547.96. Id. at 14.

         Thereafter, Plaintiff alleges GE stopped sending her monthly statements, ceased charging interest on the debt in accordance with its regular business practice, and effectively waived its right to collect post charge-off interest. Id. at ¶¶ 6, 8, 10. Finally, Plaintiff alleges Defendant attempted to collect $604.01 on January 14, 2015 - an amount in excess of the $547.96 debt allegedly owed - in a violation of the FDCPA and the RFDCPA. Id. at ¶¶ 15, 16, 19.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient specificity to “give the defendant fair notice of what the...claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotations omitted). The factual allegations “must be enough to raise a right to relief above the speculative level” such that the claim “is plausible on its face.” Id. at 556-57. A complaint which falls short of the Rule 8(a) standard may be dismissed if it fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

         When deciding whether to grant a motion to dismiss, the court must generally accept as true all “well-pleaded factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). The court must also construe the alleged facts in the light most favorable to the plaintiff. Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1988). However, “courts are not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678.

         III. DISCUSSION

         A. FDCPA

         The FDCPA is a remedial statute aimed at curbing what Congress considered “an industry-wide pattern of and propensity towards abusing debtors.” Caudillo v. Portfolio Recovery Assoc’s, LLC, No. 12-CV-200-IEG, 2013 WL 4102155, at *2 (S.D. Cal. Aug. 13, 2013). To that end, the statute prohibits debt collectors from trying to collect any amount that is not “expressly authorized by the agreement creating the debt or permitted by law.” 15 U.S.C. § 1692f(1). A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. 15 U.S.C. 1692(f). In order to state a claim under the FDCPA, a plaintiff must allege facts that establish the following: (1) plaintiff has been the object of collection activity arising from a consumer debt; (2) the defendant qualifies as a “debt collector” under the FDCPA; and (3) the defendant has engaged in a prohibited act or has failed to perform a requirement imposed by the FDCPA. Dang v CitiMortgage, Inc., No:11-CV-05036-EJD, 2012 WL762329, at *3 (N.D. Cal. Mar. 7, 2012).

         Plaintiff alleges sufficient facts to satisfy the first two prongs. Plaintiff was the object of collection activity because she alleges Defendant sent her a debt collection letter in an attempt to collect $604.01. The second prong is satisfied because Defendant admits that it is a debt collector as defined by the FDCPA. As such, the motion’s outcome will depend on whether Plaintiff alleged sufficient facts to establish that Defendant engaged in a prohibited act or failed to perform a requirement imposed by the FDCPA.

         i. Defendant is entitled to collect interest ...