SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

LINDA LEE CARLSON, individually and on behalf of all others similarly situated,

Plaintiff,

vs.

GATESTONE & CO. INTERNATIONAL, INC. a Delaware corporation; NICHOLAS C. WILSON, individually and in his official capacity; and DOES 1 through 10, inclusive,

Defendants.
Case No. 2017-1-CV-306698

TENTATIVE RULING RE: MOTION FOR SUMMARY JUDGMENT

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on June 29, 2018, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:
I. INTRODUCTION

This is a putative class action brought pursuant to the California Rosenthal Fair Debt Collection Practices Act (“RFDCPA”). According to the Class Action Complaint for Statutory Damages (“Complaint”), filed on February 23, 2017, plaintiff Linda Lee Carlson (“Plaintiff”), on behalf of herself and all persons similarly situated, seeks statutory damages against defendants Gatestone & Co. International, Inc. (“Gatestone”) and Nicholas C. Wilson (collectively, “Defendants”) arising from their routine practice of sending initial written communications that fail to provide the “Consumer Collection Notice” required by California Civil Code section 1812.700, subdivision (a), in a type-size that is at least the same type-size as that used to inform the debtor of his or her specific debt, or in at least 12-point type, in violation of California Civil Code section 1812.701, subdivision (b). (Complaint, ¶ 3.) The Complaint sets forth a single cause of action titled “California Consumer Collection Notice.”

Now before the Court is Defendants’ motion for summary judgment.

II. REQUESTS FOR JUDICIAL NOTICE

Defendants and Plaintiff each request judicial notice of certain legislative history materials. The requests for judicial notice are GRANTED with regard to the legislative history materials. (See In re Greg F. (2012) 55 Cal.4th 393, 409, fn. 2.)

Defendants also request judicial notice of an order granting a motion for summary in the case of Timlick v. NCB Management Services, Inc., Case No. CV416919 (Sup. Ct. Cal., County of Lake – Lakeport Division, Aug. 2, 2017), appeal pending in California Court of Appeal, First Appellate District, Case No. A152467. This case is not citable authority and is therefore not relevant to the Court’s decision. Accordingly, Defendants’ request for judicial notice of the order is DENIED. (See Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal. 4th 1057, 1063 [Although a court may judicially notice a variety of matters, only relevant material may be noticed.].)

III. DISCUSSION

A. Parties’ Arguments

Defendants provide evidence that Gatestone sent two collection letters to Plaintiff, dated March 5, 2016, in an attempt to collect a debt. (Defendant’s Statement of Undisputed Facts in Support of Motion for Summary Judgment (“UMF”), No. 1.) The collection letters notified Plaintiff of her debt in 10-point type and provided the notice required by Civil Code section 1812.700, subdivision (a), in 9-point type. (UMF, Nos. 3-4.)

On March 3, 2017, Gatestone was served with Plaintiff’s Complaint, informing Defendants that Gatestone had failed to provide the required notice in the required type-size. (UMF, Nos. 5-6.) On March 17, 2017, Gatestone sent two letters to Plaintiff, in care of her counsel, which included information notifying Plaintiff of her debt in 13-point type and included the required notice in 13-point type. (UMF, No. 7.)

Defendants argue the motion for summary judgment should be granted because they cured the type-size defect by sending the letters again in a larger type-size. Defendants rely on Civil Code section 1788.30, subdivision (d), which states:

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.

Plaintiff makes several arguments in opposition: (1) Plaintiff alleges a violation of Civil Code section 1812.701, subdivision (b) and seeks a remedy pursuant to section 1788.17, which does not contain a “cure” provision; (2) legislative history shows Civil Code section 1788.17 was intended to eliminate the overly abused “cure” provision; (3) Civil Code section 1788.30 only applies to violations of Title 1.6C, and the California Consumer Collection Notice statute (Civil Code section 1812.700, et seq.) is in Title 2.97; (4) the violation alleged in incurable; and (5) Gatestone failed to notify the debtor of the violation because the cure letters were sent to Plaintiff’s counsel, not Plaintiff.

B. Applicability of Cure Provision

Plaintiff contends the cure provision does not apply because it is part of Civil Code section 1788.30, not section 1788.17, and Plaintiff relies only on section 1788.17 for her remedy. Plaintiff alleges Defendants are liable for violating the type-size requirement of Civil Code section 1812.701 for the notice required to be provided pursuant to section 1812.700. (Complaint, ¶ 51.) Civil Code section 1812.702 makes a violation of the type-size requirement a violation of the RFDCPA in Title 1.6C. The cure provision is in section 1788.30, which is part of Title 1.6C. In other words, the cure provision applies because section 1812.702 expressly makes the alleged violation a violation of Title 1.6C and the cure provision expressly applies to liability under Title 1.6C.
Plaintiffs contend legislative history shows Civil Code section 1788.17 was specifically intended to eliminate the cure provision. While there is some discussion in the legislative history regarding the ability of violators to escape liability by curing the impact of an illegal practice, it is difficult to see how the cure provision was eliminated considering section 1788.30 has not been repealed. As the Ninth Circuit has explained:

[Section] 1788.17 did not delete [section] 1788.30, but rather nullified some of [section] 1788.30’s limitations on remedies to the extent that those limitations did not apply to the remedies described in [section] 1692k. [Citation.] There is nothing in [section] 1692k that would suggest nullification of [section] 1788.30(d)’s defense for cured violations. Accordingly, it appears to us that the defense provided by [section] 1788.30(d) remains available under the Rosenthal Act.

(Afewerki v. Anaya Law Group (9th Cir. 2017) 868 F.3d 771, 779.)
In sum, the cure provision of Civil Code section 1788.30, subdivision (d), is applicable.

C. Ability to Cure Violation

Plaintiff argues the violation is incurable because Civil Code section 1812.700 states the required notice shall be included with the first written notice to the debtor. Therefore, any subsequent communication intended to “cure” a defect in the first notice would no longer be the first written notice as required by the statute.
The required notice was included with the first written notice to the debtor. The problem is that the notice was defective due to the type-size. Defendant attempted to cure the defect by sending the notice again. Plaintiff cites to no code section or authority demonstrating this sort of defect is not curable. The only cases cited by Plaintiff are federal cases in which there is no analogous cure provision.

D. Receipt of Letter by Counsel Instead of Debtor

The cure provision in Civil Code section 1788.30, subdivision (d) requires the debt collector to notify the debtor of the violation. Plaintiff argues Gatestone sent the “cure letters” to Plaintiff’s counsel, not Plaintiff, so the letters were never sent to the “debtor.” Defendants correctly point out that a debt collector is prohibited from “[i]nitiating 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.” (Civ. Code, § 1788.14.) Defendants were aware Plaintiff was represented because Plaintiff served Gatestone with the Complaint. (UMF, No. 5.) Therefore, Defendants could not send the “cure letters” to Plaintiff directly, but instead had to send them to Plaintiff’s counsel.

E. Conclusion

Defendants meet their initial burden of producing evidence demonstrating they cured the defect in the letters sent to Plaintiff. Plaintiff fails to raise a triable issue of material fact. Accordingly, Defendants’ motion for summary judgment is GRANTED.

The Court finds, however, that Plaintiff should be allowed to find a new class representative. Defendants have shown they cured the alleged violation with regard to Plaintiff, but there is no indication of any cure for the unnamed class members. Consequently, the putative class members may still have viable claims. The parties are ordered to appear at the hearing to discuss the amendment of the Complaint and the substitution of a new class representative.