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Pavlovich v. Account Discovery Systems, LLC

United States District Court, S.D. California

April 3, 2018

Juan Pavlovich, Plaintiff,
v.
Account Discovery Systems, LLC and DNF Associates, LLC, Defendants.

          ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (DOC. NO. 60), AND DENYING ALL OTHER MOTIONS AS MOOT (DOC. NOS. 44, 48, 67, 77, 79).

          HON. ANTHONY J. BATTAGLIA, UNITED STATES DISTRICT JUDGE.

         Before the Court are various motions: two summary judgment motions, (Doc. Nos. 44, 60), a dismissal motion, (Doc. No. 48), two class certification motions, (Doc. Nos. 67, 77), and a motion to strike a declaration, (Doc. No. 79). Because the Court finds plaintiff failed to establish an underlying legal violation, the Court GRANTS defendant Account Discovery Systems, LLC's motion for summary judgment, (Doc. No. 60), and DENIES AS MOOT all other motions.

         I. BACKGROUND

         Plaintiff Juan Pavlovich brought a lawsuit against defendants DNF and Account Discovery Systems (“ADS”) for violations of the FDCPA, the Rosenthal Act, and the California FDBPA (against defendant DNF only). After Pavlovich accrued a debt, it was sold to DNF as a charge-off. (Doc. No. 40 at 5.) DNF then hired ADS to collect on the debt. (Id. at 6.) ADS sent Pavlovich a Validation Notice that he had a $1, 997.79 balance owed to DNF. (Doc. No. 1-2 at 1.)[1] The letter Pavlovich received forms the basis of his complaint. On the second page of the notice, it states:

“If applicable” INTEREST CHARGES & SETTLEMENTS - At our discretion, a statement or correspondence may include post charge off interest and/or offer a settlement amount less than the legal now due balance.

(Id. at 2) (emphasis added). The bolded portion of the sentence, Pavlovich alleges, violates the law because it “is not only unclear, but it is also false, misleading, deceptive, and confusing, and can be reasonably read to have two or more different meanings, one of which is inaccurate, all of which render the Validation Notice in violation of 15 U.S.C. 1692g(a), 1692e, 1692e(2)(A), and 1692(e)(10).” (Doc. No. 64 at 6-7.)

         II. LEGAL STANDARDS

         Summary judgment is appropriate under Federal Rule of Civil Procedure 56 if the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine if a reasonable jury could return a verdict for the nonmoving party. Id.

         A party seeking summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp., 477 U.S. at 323. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating the nonmoving party failed to establish an essential element of the nonmoving party's case on which the nonmoving party bears the burden of proving at trial. Id. at 322-23. If the moving party carries its initial burden, the burden of production shifts to the nonmoving party to set forth facts showing a genuine issue of a disputed fact remains. Id. at 330. When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

         III. DISCUSSION

         ADS argues summary judgment is appropriate because the “Validation Notice clearly and unequivocally provides the amount of Plaintiff's debt as of the date of the Validation Notice and does not contain anything that would cause the least sophisticated debtor” to believe otherwise. (Doc. No. 60-1 at 9.) Pavlovich asserts ADS and DNF violated these principles because it “is unclear whether the 1, 997.73 debt” listed on the Validation Notice “included the post-charge off interest or not.” (Doc. No. 40 ¶ 38.) Since neither DNF nor ADS “was adding interest post charge-off to the amount alleged . . . there was not any basis at all for including any claim of right to include[e] post charge-off interest.” (Id. ¶¶ 39-40.)

         Under the Fair Debt Collection Practices Act (“FDCPA”), a debt collector must send the consumer a notice including the amount of the debt. 15 U.S.C. § 1692g(a). The notice may not include “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692(e). A debt collector violates this rule by “use[ing] . . . any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” Id. § 1692e(10). The amount must be clearly stated as to not confuse the least sophisticated consumer. Clark v. Capital Credit & Collection Serv., Inc., 460 F.3d 1162, 1171 (9th Cir. 2006). The least sophisticated consumer includes “‘consumers of below average sophistication or intelligence, ' or those who are ‘uninformed or naive, ' particularly when those individuals are targeted by debt collectors.” Gonzales v. Arrow Financial Services, LLC, 660 F.3d 1055, 1062 (9th Cir. 2011) (citing Duffy v. Landberg, 215 F.3d 871, 874-75 (8th Cir. 2000)).

         In interpreting the contested language-“may include post charge off interest”-the Court looks not only at those words, but to the context of the surrounding paragraph for meaning. The Court includes the entire section containing the offending language for clarity:

PAYMENTS - Visit www.payadsllc.com to pay online with a credit card or for additional information regarding payments by personal check, money order, certified check, bank wire, check by phone, Western Union or Money Gram. DISPUTED PAYOFFS - If you are sending a payoff amount that you intend to be payment in full but is less than the now due balance, you must mail your disputed payoff remittance to Account Discovery Systems, LLC Disputed Payoff, 495 Commerce Drive, Suite 2, Amherst NY 14228. “If Applicable” INTEREST CHARGES & SETTLEMENTS - At our discretion, a statement or correspondence may include post charge off interest and/or offer a settlement amount less than the legal now due balance. Account Discovery ...

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