Case Number: BC535280 Hearing Date: February 09, 2015 Dept: 32

CASE NAME: Bahareh Safaie v. Resolution Physical Therapy
CASE NO.: BC535280
HEARING DATE: 02/09/15
SUBJECT: Plaintiff’s Motion for Summary Judgment
MOVING PARTY: Plaintiff Bahareh Safaie
RESP. PARTY: Defendant Resolution Physical Therapy

TENTATIVE RULING

Plaintiff’s Motion for Summary Judgment DENIED.

ANALYSIS

Plaintiff’s Evidentiary Objections

Declaration of Rachel Kilpatrick

(1) Overruled.
(2) Overruled.
(3) Overruled.
(4) Overruled.
(5) Overruled.
(6) Overruled.
(7) Overruled.
(8) Overruled.
(9) Overruled.
(10) Overruled.
(11) Overruled.
(12) Overruled.
(13) Overruled.
(14) Overruled.
(15) Overruled.
(16) Overruled.

Declaration of Ashley Kay Kagasoff, Esq.

(1) Overruled.
(2) Overruled. Sufficient foundation
(3) Sustained
(4) Sustained
(5) Sustained

Separate Statement

Defendant contends that Plaintiff’s separate statement goes out of numerical sequence. Plaintiff’s separate statement is reasonably clear, and Defendant shows no prejudice. The Court exercises its discretion to consider Plaintiff’s separate statement. (See CCP § 437c(b)(1.))

Motion for Summary Judgment

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (CCP § 437c(c).) There is a triable issue of fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) On its motion for summary judgment, the plaintiff maintains the burden that each of the elements has been proved and that there is no defense available. (Id.) Summary judgment motions are defined by the material allegations in the pleadings. (Baptist v. Robinson (2006) 143 Cal.App.4th 151, 159.)

Plaintiff moves for summary judgment on her sole cause of action for violation of the Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”). Plaintiff contends that she is entitled to a statutory penalty of $1,000 pursuant to Civ. Code § 1788.30(b). It is not clear from the moving papers whether Plaintiff contends she suffered actual damages as well. (See Mot. 11:10-11 [arguing that Plaintiff is entitled to statutory damages “in addition to actual damages”].)

Civ. Code Section 1788.14(c) states the following:

No debt collector shall collect or attempt to collect a consumer debt by means of the following practices: …[¶]

(c) Initiating communications, other than statements of account, with the debtor with regard to the consumer debt, when the debt collector has been previously notified in writing by the debtor’s attorney that the debtor is represented by such attorney with respect to the consumer debt and such notice includes the attorney’s name and address and a request by such attorney that all communications regarding the consumer debt be addressed to such attorney, unless the attorney fails to answer correspondence, return telephone calls, or discuss the obligation in question. This subdivision shall not apply where prior approval has been obtained from the debtor’s attorney, or where the communication is a response in the ordinary course of business to a debtor’s inquiry.

The following definitions from the Rosenthal Act, as provided in § 1788.2, are relevant to this motion:

(b) The term “debt collection” means any act or practice in connection with the collection of consumer debts.

(c) The term “debt collector” means any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection. The term includes any person who composes and sells, or offers to compose and sell, forms, letters, and other collection media used or intended to be used for debt collection, but does not include an attorney or counselor at law.

(d) The term “debt” means money, property or their equivalent which is due or owing or alleged to be due or owing from a natural person to another person.

(e) The term “consumer credit transaction” means a transaction between a natural person and another person in which property, services or money is acquired on credit by that natural person from such other person primarily for personal, family, or household purposes.

(f) The terms “consumer debt” and “consumer credit” mean money, property or their equivalent, due or owing or alleged to be due or owing from a natural person by reason of a consumer credit transaction.

(Civ. Code § 1788.2(b)-(f).)

Violation of Civ. Code Section 1788.14(c)

To show a “consumer credit transaction,” Plaintiff submits evidence that, once she was converted to a cash-paying patient by Defendant, Plaintiff received at least one session of services (worth $100) without payment up front. (UMF 10; Garcia Depo. 33-35.) Plaintiff submits evidence that if a cash-paying patient does not pay for the services up front, Defendant has an administrative process to collect payments. (UMF 13; Garcia Depo. 22-24, 30.) Plaintiff contends that at least for that one session, for which Plaintiff has not paid, Plaintiff acquired services on credit.

To show that Defendant is a “debt collector,” Plaintiff submits evidence that Defendant’s front desk collects monies from cash-paying patients in the regular course of business. (UMF 13; Garcia Depo. 22-24, 30.)

To show an improper communication by Defendant, Plaintiff submits undisputed evidence that her attorney sent an email to Defendant on January 24, 2014 which provided the attorney’s contact information; informed Defendant that the attorney had been retained to represent Plaintiff on the alleged debt; and informed Defendant not to contact Plaintiff directly. (UMF 15-17; see Hartman Decl. ¶ 6, Exh. C.) Defendant does not dispute receiving the email. Plaintiff submits evidence that Defendant communicated directly with Plaintiff regarding the debt on January 31, 2014, and indicated that Defendant would charge Plaintiff’s credit card on file. (UMF 20-23; see Hartman Decl. Exh. D.)

Plaintiff contends that this evidence establishes a violation of Civ. Code § 1788.14(c). The evidence reflects that Plaintiff received physical therapy services before being charged on her credit card. There is evidence that Defendant has an administrative process to collect payments after services are rendered. Finally, there is evidence that Defendant contacted Plaintiff directly after written notification she was represented by counsel. Plaintiff contends that this evidence also shows a violation of 15 U.S.C. § 1692c(a)(2), which is incorporated into the Rosenthal Act. (See Civ. Code § 1788.17; see Mot. 7-8.)

However, as discussed below, there are triable issues as to whether Defendant violated the Rosenthal Act and as to the amount of a statutory penalty.

Debt Collector

The Rosenthal Act defines a “debt collector” as any person “who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engaged in debt collection.” Debt collection means any act or practice in connection with the collection of consumer debts.” Further., “Consumer debt” means money due or owing by reason of a “consumer credit transaction.” Finally, “consumer credit transaction” means a transaction between persons in which property, services or money is acquired on credit. Here, Plaintiff contends that “it is a regular course of business operations for Defendant to collect outstanding payments owed from cash payments.” UMF No. 13. Defendant disputes this fact, and offers the declaration of Rachel Kilpatrick in which she states that “it is the ordinary business custom of RPT to collect all payments for services upfront. We do not ordinarily extend credit to our customers for our services.” Kilpatrick also states that RPT’s agreements with patients in which they authorize payment on a credit card if insurance does not cover the costs of services is meant to avoid any kind of financial dispute. The evidence presented by Plaintiff herself documents that payments for services by cash paying patients are due at the time of service, and that it is uncommon for services to be provided if a patient shows up without payment. See deposition of Airiel Garcia, p. 30 lines 22- p. 31 line 11, Exh. B to Hartman declaration. Based on this dispute in the evidence, there is a triable issue of fact whether Defendant can be considered a “debt collector” regularly engaged in debt collection for purposes of the Rosenthal Act.

Statutory and Actual Damages

CCP § 437c does not permit the Court to grant summary judgment if the amount of damages is in dispute. (CCP § 437c(f)(1) and (l); see also Department of Industrial Relations v. UI Video Stores, Inc. (1997) 55 Cal.App.4th 1084, 1097.)

CCP §1788.30 states the following:

(a) Any debt collector who violates this title with respect to any debtor shall be liable to that debtor only in an individual action, and his liability therein to that debtor shall be in an amount equal to the sum of any actual damages sustained by the debtor as a result of the violation.

(b) Any debt collector who willfully and knowingly violates this title with respect to any debtor shall, in addition to actual damages sustained by the debtor as a result of the violation, also be liable to the debtor only in an individual action, and his additional liability therein to that debtor shall be for a penalty in such amount as the court may allow, which shall not be less than one hundred dollars ($100) nor greater than one thousand dollars ($1,000). (emphasis added.)

It is not clear from the moving papers whether Plaintiff contends she suffered actual damages. (See Mot. 11:10-11 [arguing that Plaintiff is entitled to statutory damages “in addition to actual damages”].) In reply, Plaintiff indicates that she is not seeking actual damages. (Reply Sec. V.) Plaintiff did not submit any evidence of actual damages. Thus, to the extent she is seeking actual damages, there is a triable issue as to the amount of her actual damages.

On this record, there is also a triable issue as to the amount of a statutory penalty that should be awarded if the court were to find that the Rosenthal Act applied. Although the Court may select the penalty (up to $1,000), that determination requires a weighing of evidence. In discussing statutory damages under both the Rosenthal Act and the FDCPA, a federal district court has indicated that ““some courts refuse to award any statutory damages where violations are technical or de minimis.” (Sanko v. Riverwalk Holdings, LTD (S.D. Cal. 2013) Slip Copy, 2013 WL 3821553, at *3.) Here, Plaintiff contends that there was one communication that violated the Rosenthal Act regarding a $100 “debt.” In opposition, Defendant’s co-owner submits evidence that Defendant acted cordially with Plaintiff and believed that it was authorized in charging her credit card. (Kilpatrick Decl. ¶¶ 5-18.) The Court would be required to weigh this evidence and determine the amount of a statutory penalty, if any, that is justified.

While Plaintiff contends the court should summarily adjudicate liability and leave the question of damages to be determined, that procedure is contrary to Code of Civil Procedure Section 437c.

The motion is DENIED.