Case Name:   Portfolio Recovery Associates, LLC v. Mark A. Maselli

Case No.:       1-13-CV-240511

 

After full consideration of the arguments, authorities, and papers submitted by each party, the court makes the following rulings:

 

This is a debt collection action.  Plaintiff and cross-defendant Portfolio Recovery Associates, LLC (“Portfolio”) alleges that defendant and cross-complainant Mark Maselli (“Mr. Maselli”) entered in to a written agreement with Wells Fargo Bank, N.A. (“Wells Fargo”) pursuant to which Plaintiff received credit in the form of purchases, cash advances, and/or monies loaned in the amount of $6,446.71.  (See Complaint, ¶¶ 6-7, 9.)  On or about April 27, 2010, Mr. Maselli breached his agreement with Wells Fargo by failing to repay the $6,446.71. (See Complaint, ¶ 11.)  Wells Fargo and/or its successor-in-interest sold, assigned, or transferred its legal right to pursue collection of the debt to Portfolio.  (See Complaint, ¶ 6.)  Defendant has not repaid debt despite Portfolio’s demands for the same.  (See Complaint, ¶¶ 9, 12-13.)  On January 30, 2013, Portfolio filed a complaint against Mr. Maselli, alleging causes of action for breach of written contract and account stated.  On May 23, 2014, Mr. Maselli filed a cross-complaint asserting causes of action for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) and the Rosenthal Fair Debt Collection Practices Act, Civil Code § 1788, et seq. (“RFDCPA”).  (See Cross-Complaint, ¶¶ 1, 3.)

 

Mr. Maselli demurs to each of the affirmative defenses in Portfolio’s answer to the cross-complaint on the grounds of uncertainty and failure to allege sufficient facts to constitute a defense.  (See Code Civ. Proc., § 430.20, subds. (a) and (b).)

 

The demurrer to each of the affirmative defenses on the ground of uncertainty is OVERRULED.  Mr. Maselli’s single conclusory sentence that all of the affirmative defenses alleged by Portfolio are uncertain does not adequately establish how each affirmative defense is so incomprehensible that Mr. Maselli cannot reasonably respond to the same.  (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616 [“A demurrer for uncertainty is strictly construed, even where a [pleading] is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures”]; see also Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135 [a demurrer for uncertainty will be sustained only where the pleading is so incomprehensible that the opposing party cannot reasonably respond].)

 

The demurrer to the first affirmative defense on the ground of failure to state facts sufficient to constitute a defense is OVERRULED. The failure to state facts sufficient to constitute a cause of action is a challenge to a pleading that is never waived, there are no factual allegations which are necessary to raise the objection, and there does not appear to be any prejudice to the plaintiff in allowing such an objection to be made as an affirmative defense.  (See Code Civ. Proc. § 430.80, subd. (a); see also Weil & Brown, Cal. Prac. Guide: Civ. Pro. Before Trial (The Rutter Group 2013) ¶ 7:33, p. 7(l)-17, ¶ 7:34, p. 7-15; see also Henry v. Associated Indemnity Corp. (1990) 217 Cal.App.3d 1405, 1413.)

 

The demurrer to the second affirmative defense on the ground of failure to state facts sufficient to constitute a defense is SUSTAINED, with 10 days’ leave to amend.  The second affirmative defense does not state any facts to support the claim that the Mr. Maselli is comparatively at fault for the alleged harm, but merely alleges that Mr. Maselli’s acts or omissions cause or contributed to his damages.  (See Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 812-813 [“Affirmative defenses must not be pled as ‘terse legal conclusions,’ but rather … as facts ‘averred as carefully and with as much detail as the facts which constitute the cause of action and are alleged in the complaint.’”]; see also Provost v. Worrall (1956) 142 Cal.App.2d 367, 373; see also Knight v. Jewett (1992) 3 Cal.4th 296, 314 [the defense of contributory negligence must be specially pled by the defendant as the defense constitutes new matter that must be supported by facts.].)

 

The demurrer to the third affirmative defense on the ground of failure to state facts sufficient to constitute a defense is SUSTAINED, with 10 days’ leave to amend.  Portfolio has not specified the applicable section and, therefore, it has not sufficiently pled facts to support its third affirmative defense based on the statute of limitations.  (See Brown v. World Church (1969) 272 Cal.App.2d 684, 691 [“[i]t is necessary for defendant who pleads the statute of limitations to specify the applicable section, and, if such section is divided into subdivisions, to specify the particular subdivision or subdivisions thereof.  If he fails to do so the plea is insufficient”].)

 

The demurrer to the fourth affirmative defense on the ground of failure to state facts sufficient to constitute a defense is SUSTAINED, with 10 days’ leave to amend.  Portfolio has not pled facts sufficient to state the defense of laches because the fourth affirmative defense does not allege that Portfolio suffered any prejudice as a result of Mr. Maselli’s alleged delay in filing the cross-complaint.  (See Martin v. Santa Clara Unified School Dist. (2002) 102 Cal.App.4th 241, 257 [“A party asserting laches must show both unreasonable delay and prejudice resulting from the delay”]; see also Eperson v. Rosemond (1950) 100 Cal.App.2d 344, 345 [laches, like estoppel, is new matter that must be specially pleaded and that if the answer fails to raise the defense, it cannot be proved].)
The demurrer to the fifth affirmative defense on the ground of failure to state facts sufficient to constitute a defense is SUSTAINED, without leave to amend.  As a matter of law the litigation privilege is not a valid affirmative defense to Mr. Maselli’s claims under the FDCPA and RFDCPA. (See Heintz v. Jenkins (“Heintz”), 514 U.S. 291, 299 (U.S. 1995) [the FDCPA applies to litigation related activity conducted by an attorney]; see also Lopez Reyes v. Kenosian & Miele, LLP, 619 F. Supp. 2d 796, 804 (N.D. Cal. 2008) [“any common law or first amendment-based litigation immunity doctrine is trumped by the statutory language of the FDCPA and the Court’s holding in Heintz”]; see also Komarova v. National Credit Acceptance, Inc. (2009) 175 Cal. App. 4th 324, 337 [“[litigation] privilege cannot be used to shield violations of the [RFDCPA] … [w]ere the privilege to apply broadly to Rosenthal Act claims … it would effectively immunize conduct that the Act prohibits” and “render the protections it affords meaningless.”].)

 

The demurrer to the sixth affirmative defense on the ground of failure to state facts sufficient to constitute a defense is SUSTAINED, with 10 days’ leave to amend.  The sixth affirmative defense does not allege any specific facts, but merely asserts a legal conclusion that Portfolio’s actions were true, accurate, proper and legal under the relevant law or advisory opinion of the Bureau.  (See 15 U.S.C. 1692k, subd. (e) [“[n]o provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any advisory opinion of the Commission, notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.”].)

 

The demurrer to the seventh, eleventh, and twelfth affirmative defenses on the ground of failure to state facts sufficient to constitute a defense is OVERRULED.  The seventh, eleventh, and twelfth affirmative defenses are not affirmative defenses, but denials of the allegations in the cross-complaint; however, there does not appear to be any prejudice to Mr. Maselli in allowing such a denial to be made as an affirmative defense.

 

The demurrer to the eighth affirmative defense on the ground of failure to state facts sufficient to constitute a defense is OVERRULED.  Portfolio has pled all three elements necessary to establish the bona fide error defense.  (See Edwards v. Niagara Credit Solutions, Inc., 584 F.3d 1350, 1352-53 (11th Cir. 2009) [a debt collector asserting the bona fide error defense must show by a preponderance of the evidence that its violation of the Act: (1) was not intentional; (2) was a bona fide error; and (3) occurred despite the maintenance of procedures reasonably adapted to avoid any such error].)

 

The demurrer to the ninth affirmative defense on the ground of failure to state facts sufficient to constitute a defense is SUSTAINED, with 10 days’ leave to amend.  The ninth affirmative defense appears to be an additional attempt by Portfolio to assert a bona fide error defense, but Portfolio does not allege ultimate facts for each of the three elements.  (See Edwards v. Niagara Credit Solutions, Inc., 584 F.3d 1350, 1352-53 (11th Cir. 2009).)

 

The demurrer to the tenth affirmative defense on the ground of failure to state facts sufficient to constitute a defense is OVERRULED.  The tenth affirmative defense does not plead a new matter, but merely states that his damages are limited to those statutory provisions that are outlined in the prayer cross-complaint.  However, again there does not appear to be any prejudice to Mr. Maselli in allowing such a statement as an affirmative defense.

 

The demurrer to the thirteenth affirmative defense on the ground of failure to state facts sufficient to constitute a defense is SUSTAINED, with 10 days’ leave to amend. Portfolio has not allegedly any facts whatsoever in support of the thirteenth affirmative defense, but merely asserts a legal conclusion that Mr. Maselli’s claims are preempted.  (See Apollo Capital Fund LLC v. Roth Capital Partners, LLC (2007) 158 Cal. App. 4th 226, 251 [preemption is an affirmative defense as to which defendants have the burden of proof]; see e.g., Shepard v. Edward Mackay Enterprises, Inc. (2007) 148 Cal.App.4th 1092, 1101.)

 

The demurrer to the fourteenth and sixteenth affirmative defenses on the ground of failure to state facts sufficient to constitute a defense is OVERRULED.  Portfolio’s fourteenth and sixteenth affirmative defenses are essentially denials of causation but, there does not appear to be any prejudice to Plaintiff in allowing such denials as affirmative defenses.  (See Weil & Brown, Cal. Practice Guide:  Civil Procedure Before Trial (The Rutter Group 2013) ¶ 6:444 [“Normally, causation (or lack thereof) is in issue under a simple denial of plaintiff’s allegations of proximate causation”].)

 

The demurrer to the fifteenth and nineteenth affirmative defenses on the ground of failure to state facts sufficient to constitute a defense is OVERRULED.  Portfolio has alleged the requisite ultimate facts that it cured and/or corrected the errors within 15 days of receiving notice.  (See Civ. Code § 1788.30, subd. (d) [“a debt collector shall have no civil liability under this title if, within 15 days either after discovering a violation which is able to be cured, or after the receipt of a written notice of such violation, the debt collector notifies the debtor of the violation, and makes whatever adjustments or corrections are necessary to cure the violation with respect to the debtor”].)

 

The demurrer to the seventeenth affirmative defense is SUSTAINED, without leave to amend.  The seventeenth affirmative defense asserting a reservation of rights to amend the answer is simply not a recognized affirmative defense.  Portfolio’s statutory right to seek permission of the court to amend its answer under Code of Civil Procedure section 473 will be unaffected regardless of the ruling on the demurrer.  (See Code Civ. Proc., §§ 472 [a party may amend an answer once as a matter “of course” without seeking leave, but thereafter must seek leave from the court] and 473.)

 

The demurrer to the eighteenth affirmative defense on the ground of failure to state facts sufficient to constitute a defense is SUSTAINED, without leave to amend.  As a matter of law an individual cannot waive the protections of the FDCPA and RFDCPA and, therefore, consent is not a valid affirmative defense.  (See Clark v. Capital Credit & Collection Servs., 460 F.3d 1162, 1171, fn. 5 (9th Cir. Or. 2006) [“[o]ut of an abundance of caution, we further note what should be obvious: a consumer’s consent cannot waive protection from the practices the FDCPA seeks to eliminate, such as false, misleading, harassing or abusive communications. Permitting such a waiver would violate the public policy goals pursued by the FDCPA”]; see also Civ. Code § 1788.33 [“any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable”].)

The Court will prepare the order.