Case Name: Credit Corp. Solutions, Inc. v. Gonzalez

Case No.: 19CV345863

Plaintiff/cross-defendant Credit Corp. Solutions, Inc. (“CCS”) moves for judgment on the pleadings as to the cross-complaint (“Cross-Complaint”) filed by defendant/cross-complainant Liliana Gonzalez (“Cross-Complainant or “Gonzalez”).

I. Background
II.

A. Factual
B.

This is an action to collect on an unpaid debt and a resulting cross-action for unfair debt practices relating to the collection of that debt. According to the allegations of the underlying complaint, a credit card was issued to Gonzalez by Synchrony Bank FKA GE Capital Retail Bank. (Complaint, ¶ 6.) Gonzalez used the credit card to make purchases and accrued a balance on the card. (Id.) She ultimately defaulted on the required payments, leaving an unpaid balance of $2,240.89. (Id., ¶ 8.) CCS was subsequently assigned and transferred all right, title and interest in the credit account. (Id., ¶ 6.) Based on Gonzalez’s failure to pay, CCS initiated the instant action on April 8, 2019, asserting claims for (1) account stated and (2) open book account.

Gonzalez filed the Cross-Complaint on June 10, 2019, alleging that CCS engaged in unlawful acts and abusive practices in connection with its attempt to collect the debt in violation of the Federal Fair Debt Collection Practices Act (the “FDCPA”) and its state counterpart, the Rosenthal Fair Debt Collection Practices Act (the “Rosenthal Act”).

On January 13, 2020, CCS filed the instant motion for judgment on the pleadings as to the Cross-Complaint and the two claims asserted therein. Gonzalez opposes the motion.

III. Cross-Complainant’s Request for Judicial Notice
IV.

In support of her opposition to CCS’s motion for judgment on the pleadings, Gonzalez requests that the Court take judicial notice of various pages from CCS’s website. While a court may take judicial notice of the existence a website under subdivision (h) of Evidence Code Section 452 as a fact or proposition that is not reasonably subject to dispute and is capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy, it cannot take judicial notice of its factual content. (See Duronslet v. Kamps (2012) 203 Cal.App.4th 717, 737.) Gonzalez’s referral to this item in her opposition makes it clear that she is seeking to offer it as proof that CCS is a “debt collector” under the FDCPA and thus requesting the Court to take judicial notice of the website’s factual content as true. The Court cannot do so, and while it can take judicial notice of the existence of the website, the affirmance of its existence has no bearing on the motion at bar. Because judicial notice is limited to matters which are relevant to the issue at hand (see Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301), Gonzalez’s request for judicial notice is DENIED.

V. CCS’s Motion for Judgment on the Pleadings
VI.

In demurring to the Cross-Complaint and each of the claims asserted therein, CCS makes the following arguments: (1) the first cause of action fails because CCS is not a “Debt Collector” within the meaning of the FDCPA; and (2) there are no facts pleaded setting forth the specific nature of CCS’s alleged wrongful conduct, only conclusory allegations, and therefore no claims for violation of the FDCPA and the Rosenthal Act have been stated.

A. CCS’s Status
B.

CCS first argues that no claim has (or can be) been stated against it for violation of the FDCPA because it is not a “debt collector” within the meaning of the statute.

The FDCPA applies only to the collection of “consumer debts” by “debt collectors,” and the latter is defined as a person who: regularly collects, or attempts to collect, consumer debts owed (or asserted to be owed) to others; or uses any instrumentality of interstate commerce or the mails in a business whose principal purpose is collecting consumer debts. (15 U.S.C. § 1692a(6).) Entities that regularly collect debts for their own account rather than for others, whether it originated or purchased the debt, do not fall under the FDCPA. (Henson v. Santander Consumer USA, Inc. (2017) 137 S.Ct. 1718, 1721-1722.)

Here, CCS argues that because it is seeking to collect a debt that it owns (see Compl. at ¶ 7 [stating that CCS “is the sole owner of the credit account at issue, or has the authority to assert the rights of all owners of the debt”], it is not a debt collector under the FDCPA. This argument is not persuasive, however, because it ignores case law which provides that an entity with the “principal purpose” of debt collection is a debt collector under the FDCPA regardless of whether it owns the sought-after debt. (Tepper v. Amos Fin’l, LLC (3rd Cir. 2018) 898 F.3d 365, 370-371.) In Tepper, the defendant was a company whose sole business was purchasing debts entered into by third parties and then attempting to collect them. The court held that the defendant was a debt collector regardless of the fact that it currently owned the debt it was attempting to collect because it admitted its sole business was collecting debts that it had purchased and it used the “mails and wires” to accomplish that purpose. Accordingly, the court explained, it could be no plainer that the defendant “use[d] any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts,” and therefore qualified as a debt collector under the FDCPA. (Tepper, 898 F.3d at 371, citing 15 U.S.C. § 1692a(4).)

Here, given the foregoing, the mere fact that CCS has alleged in the underlying complaint that it is the owner of the debt that it is attempting to collect from Gonzalez does not immediately disqualify it as a debt collector under the FDCPA. Moreover, Gonzalez expressly alleges in the Cross-Complaint that CCS is a “debt collector” as that term is defined by the FDCPA, and this allegation must be accepted as true for the purposes of demurrer. (See Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1626-1627.) Consequently, CCS’s contention that no claim for violation of the FDCPA has been stated against it because it is not a debt collector is without merit.

C. Failure to State Sufficient Facts
D.

Next, CCS argues that no claims for violation of the FDCPA or the Rosenthal Act have been stated because (1) it did not misled Gonzalez and (2) she fails to specify how it allegedly misrepresented the character, amount, or legal status of the alleged debt in the complaint.

As a general matter, statutory causes of action must be specifically pleaded, and every element of the statutory basis for liability must be alleged. (See Susman v. Los Angeles (1969) 269 Cal.App.2d 803, 809.) General allegations are regarded as inadequate. (Mittenhuber v. City of Redondo Beach (1983) 142 Cal.App.3d 1, 5.)

In the Cross-Complaint, Gonzalez very generally alleges that CCS violated the FDCPA and the Rosenthal Act by: making and using false, deceptive and misleading representations in an attempt to collect the alleged debt; misrepresenting the character, amount, or legal status of the alleged debt; and attempting to collect interest, fees, or other charges that are not expressly authorized by the agreement creating the alleged debt or otherwise permitted by law. (Cross-Complaint, ¶¶ 25, 35.) She does not specify, however, how CCS did the foregoing. She provides further details in this regard in her opposition, but this is not the operative pleading where her claims must be specifically pleaded. Thus, the Court agrees with CCS that Gonzalez has not sufficiently pleaded her FDCPA and Rosenthal Act claims in the Cross-Complaint, but will grant her leave to amend based on what is described in her opposing memorandum.

In accordance with the foregoing, CCS’s motion for judgment on the pleadings is GRANTED WITH 20 DAYS’ LEAVE TO AMEND.