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Professional Collection Consultants v. Lujan

California Court of Appeals, First District, Second Division

May 22, 2018

ROBERT M. LUJAN, Defendant and Respondent.


          San Francisco County Superior Court No. CGC-12-517685 Trial Judge Hon. Ernest H. Goldsmith

          Attorneys for Appellant: Law Offices of Clark Garen Clark Garen Rachel Zwernemann Brian C. Nelson

          Attorneys for Respondent: Law Office of Nathaniel Bigger Nathaniel Bigger, Consumer Law Center, Inc. Fred W. Schwinn Bacon R. Roulston Matthew C. Salmonsen

          TUCHER, JUDGE. [*]

         Professional Collection Consultants (PCC) filed this action to collect credit card debt that Lujan incurred. The parties agree that if Delaware's three-year statute of limitations applies the action is time-barred, but that if California's four-year statute applies the case is timely filed. The trial court applied the Delaware statute, granting summary judgment on statute of limitations grounds to defendant Robert Lujan. On this disposition of PCC's complaint we affirm.

         Lujan filed a cross-complaint alleging that the efforts of PCC and others to collect the time-barred debt violated federal and state consumer protection laws. In the unpublished portion of our opinion, we affirm in part and reverse in part the trial court's grant of summary judgment on Lujan's cross-complaint and we affirm the trial court's decision not to award Lujan statutory damages. We also affirm the trial court's postjudgment orders awarding attorney's fees and costs to Lujan and denying fees and costs to the cross-defendants.


         Lujan is a San Francisco resident, and has been for more than four decades. He had a credit card with Chase Bank USA, N.A. (Chase), which he used in San Francisco for personal and household expenses.

         Chase is a Delaware corporation, or at least Lujan so asserts.[1] The credit card account Lujan maintained with Chase was governed by a cardmember agreement with a choice-of-law provision stating that “federal law and the law of Delaware” govern the agreement. The same agreement also had a provision for attorney's fees. Chase informed cardmembers, “if you are in default because you have failed to pay us, you will pay our collection costs, attorney's fees, court costs, and all other expenses of enforcing our rights under this agreement.”

         When the last activity on Lujan's credit card account left an unpaid balance, sometime in the second half of 2007, Chase assigned away its claim against Lujan. Initially, Chase assigned the claim to Turtle Creek Assets, Ltd., which assigned it on to Wireless Receivables Acquisition Group (Wireless), which assigned it in turn to PCC. On June 21, 2011, PCC filed this case in the Contra Costa County Superior Court, alleging a cause of action for common counts. The complaint alleges both an open book account for money due and an account stated in writing, and specifies the amount owed as $8, 831.90. An attorney for the Law Offices of Clark Galen (salaried employees of PCC) filed the case, and PCC Vice President Todd Shields verified the complaint.

         After the case was transferred to San Francisco Superior Court, Lujan answered and cross-complained against PCC and Shields. His cross-complaint seeks damages for alleged violations of federal and state statutes: the Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. § 1692 et seq.), and the Rosenthal Fair Debt Collection Practices Act (RFDCPA) (Civ. Code, § 1788 et seq.). Subsequently, Lujan added Wireless and Galen as cross-defendants.

         The parties filed competing motions for summary judgment on both the complaint and cross-complaint. On the complaint, the trial court granted Lujan's motion for summary judgment. It reasoned that PCC's action was to recover a debt incurred under an agreement with a choice-of-law provision, so it applied Delaware's three-year statute of limitations and found PCC's claims time-barred. On the cross-complaint, the trial court granted summary judgment to cross-defendants Wireless, Shields, and Galen, finding that none of them meets the statutory definition of a debt collector. But PCC is a debt collector and filed this case after the statute of limitations had run, so the trial court concluded PCC violated both the FDCPA and the RFDCPA and granted Lujan summary judgment against cross-defendant PCC. Lujan's summary judgment motion sought from each cross-defendant the statutory maximum of $1, 000 for violating each of two different provisions of the FDCPA and the RFDCPA, but the court's order is silent on this request for statutory damages.

         The trial court signed a final judgment, which it entered on March 1, 2016. Before signing Lujan's proposed judgment, the trial court crossed out the sentence that would have awarded Lujan statutory damages, leaving him with only “attorney fees and costs of suit as provided by the respective statutes.” On July 12, 2016, the trial court issued two postjudgment orders addressing attorney's fees and costs. One order awarded Lujan $140, 550.51, representing a lodestar slightly reduced from his request, enhanced by a multiplier of 1.5. The other order denied fees to Wireless, Garen, and Shields, in part because the cross-complaint was not an action “ ‘on a contract' ” within the meaning of Civil Code section 1717 (section 1717).

         PCC filed timely notices of appeal on both the underlying judgment in the collection action (case No. A147922) and the order on attorney's fees and costs (case No. A148925). Lujan timely cross-appealed the summary judgment in favor of Wireless and the individual cross-defendants, and the trial court's failure to award statutory damages and to find a second violation of the FDCPA and the RFDCPA based on improper venue. The cross-defendants who won summary judgment appealed the denial of their attorney's fees motion (case No. A148925).


         We review de novo the trial court's entry of summary judgment. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860.) A party moving for summary judgment bears the initial burden of proof, as well as “the burden of persuasion that there is no triable issue of material fact and that [it is] entitled to judgment as a matter of law.” (Id. at p. 850.) When a defendant moves for summary judgment, if his moving papers make out a prima facie case entitling him to judgment, “the burden of production shifts to the plaintiff to make a prima facie showing of the existence of a triable issue of material fact.” (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945.) Likewise, if the plaintiff meets its initial burden, the defendant must show a triable issue of material fact to defeat summary judgment. (Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958 (Lauron).)

         We address first the trial court's grant of summary judgment in Lujan's favor on the complaint, then summary judgment for and against Lujan on the cross-complaint, and finally the trial court's orders granting attorney's fees and costs to Lujan and denying them to Wireless and the individual cross-defendants.


         In moving for summary judgment on PCC's complaint, Lujan makes a prima facie case that he was entitled to summary judgment on statute of limitations grounds. He points to Chase's cardmember agreement and argues that his use of the credit card constituted acceptance of the terms of that agreement. (See Anastas v. American Sav. Bank (In re Anastas) (9th Cir. 1996) 94 F.3d 1280, 1285.) He points to the Delaware choice-of-law provision in the cardmember agreement and to the three-year limitations period of 10 Delaware Code section 8106, a code section he plausibly asserts applies to actions for breach of contract, open book account, and account stated in writing. And Lujan applies California choice-of-law principles to argue that the election of Delaware law should be enforced: PCC's claims fall within the scope of the contract's choice-of-law provision; there is a reasonable basis for the parties to have chosen ...

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