Case Name:   Portfolio Recovery Associates, LLC v. David I. Garza

Case No.:       1-14-CV-263787

Currently before the Court is the motion for judgment of the pleadings of plaintiff Portfolio Recovery Associates, LLC (“Plaintiff”). Plaintiff moves for judgment on the pleadings on the ground that the complaint states facts sufficient to constitute a cause of action and the answer does not state facts sufficient to constitute a defense. (See Code Civ. Proc., § 438, subd. (c)(1)(A).)

Plaintiff asserts that it properly sets out all of the allegations necessary for its cause of action for common counts. “In the common law action of general assumpsit, it is customary to plead an indebtedness using ‘common counts.’ [Citation omitted.] … The only essential allegations of a common count are ‘(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.” (See Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.)

Here, Plaintiff alleges each of the essential elements of a cause of action for common counts, namely, (1) defendant Garza (“Garza”) is indebted to Plaintiff in the amount of $2,084.82 (Compl., p. 3, ¶ 2), (2) Plaintiff’s predecessor-in-interest, CitiBank, N.A. (“CitiBank”) has provided money, goods, wares, and merchandise to Garza for which he promised to pay this sum (Compl., p. 3, ¶ 1), and (3) the $2,084.82 remains unpaid (Compl., p. 3, ¶ 2).

            In addition, Plaintiff argues that Garza does not deny any of the allegations of the complaint and therefore fails to state facts sufficient to constitute a defense. Plaintiff’s argument is meritorious.

Garza’s answer reads in its entirety: “I David Garza defendant in the [aforementioned case] of Portfolio Associates, LLC vs. David Garza am submitting a written response to the County Clerks Civil Disputes Office a notice of request to be heard and plead my case before a judge in good standing in the County of Santa Clara, California.”

As the above allegations make clear, Garza does not deny the allegations of the complaint or plead any facts in support of an affirmative defense. Therefore, Garza’s answer does not state facts sufficient to constitute a defense.

In the case of either a demurrer or a motion for judgment on the pleadings, leave to amend should be granted if there is a reasonable possibility that the party can state a cause of action or defense. (See Virginia G. v. ABC Unified School Dist. (1993) 15 Cal.App.4th 1848, 1852.)

In his opposition, Garza indicates that he opened a $300 line of credit with Citibank. (See Opp’n., p. 2:7-9.) Upon opening the account, Citibank charged him an activation fee of $100. (See Opp’n., p. 2:9-10.) Garza disputed the activation fee and requested that CitiBank cancel the card. (See Opp’n., p. 2:10-13.) He contends that the $2,084.82 debt at issue consists solely of six years of late fees and penalties, originating from this $100 activation fee and Citibank’s refusal to promptly cancel the card. (See Opp’n., p. 2:13-14.)

Liberally construed, these assertions indicate that there is a reasonable possibility that Garza can cure the defects in his answer. In particular, Garza puts forward specific facts denying the validity and amount of the indebtedness. Such allegations would necessarily traverse the material allegations of the complaint and would therefore state sufficient facts to constitute a defense. (See Barasch v. Epstein (1957) 147 Cal.App.2d 439, 440.)

Plaintiff contends, however, that Garza cannot cure any of the defects in his answer because he is deemed to have admitted all of the material allegations of the complaint.

Pursuant to Code of Civil Procedure section 431.20, “[e]very material allegation of the complaint … not controverted by the answer, shall, for the purposes of the action, be taken as true.” Thus, the failure to raise an issue by a proper denial or an affirmative allegation will operate as a judicial admission. (See 5 Witkin, Cal. Procedure

(5th ed. 2010) Pleading, § 1050; Hennefer v. Butcher (1986) 182 Cal.App.3d 492, 504-505.)  “A judicial admission in a pleading is not set in stone, however, because ‘[t]he trial judge … has discretion to relieve a party from the effects of a judicial admission by permitting amendment of a pleading….’ [Citation.]” (Barsegian v. Kessler & Kessler (2013) 215 Cal.App.4th 446, 452, fn. 2.)  When an admission in the pleadings is due to mistake, inadvertence, or inadequate knowledge of the facts, amendment should be liberally allowed. (See Jackson v. Pacific Gas & Elec. Co. (1949) 95 Cal.App.2d 204, 212; MacIssac v. Pozzo (1945) 26 Cal.2d 809, 815.)

Here, it is readily apparent that Garza is capable of alleging specific facts denying the amount and validity of the indebtedness and he failed to do so by accident or mistake. Therefore, given the policy of the law that cases should be tried and decided on the merits (Dobbins v. Hardister (1966) 242 Cal.App.2d 787, 796), Plaintiff’s motion for judgment on the pleadings is GRANTED WITH 30 DAYS’ LEAVE TO AMEND.