Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-00992/USCOURTS-casd-3_15-cv-00992-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

---

- 1 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CHRISTOPHER ALARCON

Plaintiff,

vs.

VITAL RECOVERY SERVICES, INC., et 

al.,

Defendants.

CASE NO. 15cv992-LAB (KSC)

ORDER GRANTING DEFENDANTS’ 

MOTION TO DISMISS OR, IN THE 

ALTERNATIVE, MOTION FOR 

SUMMARY JUDGMENT [Dkt. 36]

Christopher Alarcon brought this action against Vital Recovery Services, Inc. 

(“Vital”) and Galaxy Asset Purchasing, LLC (“Galaxy”) alleging violations of the Fair Debt 

Collection Practices Act (“FDCPA”) and its California counterpart, the Rosenthal Fair Debt 

Collection Practices Act (“RFDCPA”). This Court dismissed his complaint with leave to 

amend for inadequately alleging facts to support standing. Alarcon filed his First 

Amended Complaint (“FAC”), and Defendants now move to dismiss, or in the alternative,

for summary judgment. For reasons stated below, Defendants’ motion is GRANTED.

FACTUAL BACKGROUND

In 2006, Alarcon borrowed approximately $14,000 from Beneficial California, Inc. 

(“Beneficial”). See Statement of Undisputed Facts, Dkt. 24 ¶ 1. Beneficial sued Alarcon 

in California state court to collect the balance on the loan, but the state court entered 

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 1 of 9
- 2 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

judgment in Alarcon’s favor. Id. ¶¶ 3-6. Beneficial then sold and assigned Alarcon’s debt 

account to Fortis Capital IV, LLC, who later transferred it to Galaxy. See Kochamba Decl., 

Dkt. 22-2, Exs. A-C.1 Alarcon says the state court judgment extinguished the debt and 

made it non-collectible, but he does not appear to dispute that the debt was purportedly

transferred from Beneficial to (eventually) Galaxy. See Alarcon’s Opposition, Dkt. 37 

(“There is no dispute that the debt at issue . . . was reduced to judgment . . . . The dispute 

is whether the judgment . . . extinguished the debt that Defendants continue to claim is 

due.”). After Galaxy purchased the debt, it hired three different agencies to collect on it. 

Each of these agencies contacted Alarcon, who informed them of the state court 

judgment. FAC ¶¶ 29-34. Those communications were the subject of other lawsuits and

are not at issue here. This case concerns the fourth agency hired by Galaxy, Vital, who 

called Alarcon multiple times and sent him a dunning letter to collect on the Beneficial

loan, the balance of which had grown to $23,507.36. FAC ¶¶ 35-36. 

Alarcon brought this suit, alleging that Galaxy and Vital’s actions violated the 

FDCPA and RFDCPA because the state court judgment extinguished the debt. In 

Plaintiff’s view, because the judgment extinguished the debt, the communications 

attempting to collect on that debt were necessarily misleading. There are no allegations 

that the communications were otherwise misleading or actionable. Defendants now move 

for dismissal or, in the alternative, summary judgment. 

/ / /

/ / /

 

1 These documents are competent evidence in support of a summary judgment motion. 

See Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773–74 (9th Cir. 2002) (“In a summary 

judgment motion, documents authenticated through personal knowledge must be 

attached to an affidavit that meets the requirements of [Fed.R.Civ.P.] 56(e) and the affiant 

must be a person through whom the exhibits could be admitted into evidence. However, 

a proper foundation need not be established through personal knowledge but can rest on 

any manner permitted by Federal Rule of Evidence 901(b) or 902.”) (internal citations and 

quotation marks omitted). Further, Alarcon has not made any evidentiary objections to 

the documents, so the Court treats their authenticity as undisputed.

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 2 of 9
- 3 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

JUDICIAL NOTICE

Defendants have asked the Court to take judicial notice of a series of documents, 

including, among other things, SEC filings, online articles, an arbitral award, and a 

transcript from the state court proceeding that was resolved in favor of Alarcon. Dkt. 23. 

Plaintiff objects to judicial notice as to four of these documents: the SEC filings, two online

articles, and the arbitral award. Dkt. 37-1. Plaintiff does not object to this Court taking 

judicial notice of the transcript from the state court proceeding. The Court GRANTS

Defendants’ request for judicial notice as to the state court transcript. Dkt. 23, Ex. 3. But 

the remaining documents are not relevant to the Court’s decision, so the request for 

judicial notice as to those documents is DENIED AS MOOT.

LEGAL STANDARD

The Court treats this motion as one for summary judgment.2 Summary judgment 

is appropriate where “there is no genuine issue as to any material fact and ... the moving 

party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). It is the moving 

party's burden to show there is no factual issue for trial. Celotex Corp. v. Catrett, 477 

U.S. 317, 323 (1986). If the moving party meets this requirement, the burden shifts to the 

non-moving party to show there is a genuine factual issue for trial. Id. at 324. The nonmoving party must produce admissible evidence, and cannot rely on mere allegations.

Estate of Tucker ex rel. Tucker v. Interscope Records, Inc., 515 F.3d 1019, 1033 n.14 

(9th Cir. 2008). This can be done by presenting evidence that would be admissible at 

trial, see Orr v. Bank of Am., 285 F.3d 764, 773 (9th Cir. 2002), or by pointing to facts or 

evidence that could be presented in admissible form at trial. See Fraser v. Goodale, 342 

 

2 Alarcon argues that summary judgment is premature because he has not yet had 

chance to take discovery regarding Defendants’ bona fide error defense. Dkt. 37 at 16. 

As discussed below, the Court resolves this motion on narrower grounds and does not 

reach the merits of Defendants’ bona fide error argument, so Alarcon’s need for discovery 

on that issue is moot. In any event, Alarcon has not satisfied Rule 56(d)’s requirement 

that he show, in affidavit form, the essential facts he hopes to elicit in discovery. See 

Family Home & Fin. Ctr., Inc. v. Fed. Home Loan Mortg. Corp., 525 F.3d 822, 827 (9th 

Cir. 2008). The Court finds it appropriate to proceed with the summary judgment analysis.

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 3 of 9
- 4 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

F.3d 1032, 1036 (9th Cir. 2003). But evidence that is not admissible and could not be 

presented at trial in admissible form is not enough to resist summary judgment. See Orr, 

285 F.3d at 773.

The Court does not make credibility determinations or weigh conflicting evidence. 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Rather, the Court determines 

whether the record “presents a sufficient disagreement to require submission to a jury or 

whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251–52.

Not all factual disputes will serve to forestall summary judgment; they must be both 

material and genuine. Id. at 247–49. Factual disputes whose resolution would not affect 

the outcome of the suit are irrelevant to the consideration of a motion for summary 

judgment. Id. at 248.

DISCUSSION

1. Standing

As discussed in the order dismissing Alarcon’s original complaint, the Court must 

first address the issue of standing. The Supreme Court’s recent decision in Spokeo is 

clear that a plaintiff cannot satisfy Article III’s standing requirement simply by pointing to 

defendant’s violation of a statute. See Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1549 

(2016) (“Congress' role in identifying and elevating intangible harms does not mean that 

a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants 

a person a statutory right and purports to authorize that person to sue to vindicate that 

right.”). Instead, a plaintiff must show they have suffered both a statutory violation and

some type of concrete harm. Id. This is not a high bar, but it’s a bar nonetheless. While 

the Ninth Circuit has not yet addressed the application of Spokeo to FDCPA claims like 

those Alarcon is asserting, its sister circuits have. The Eleventh Circuit has held that 

receiving a debt collection letter that omits the required FDCPA disclosures is in itself a 

concrete harm that confers standing. See Church v. Accretive Health, Inc., 654 F. App'x 

990, 994-95 (11th Cir. 2016). District courts within the Ninth Circuit have taken a similarly 

broad view of FDCPA standing. In Horowitz v. GC Servs. Ltd. P’ship, 2016 WL 7188238, 

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 4 of 9
- 5 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

at *5 (S.D. Cal. 2016), for example, the court found that a Plaintiff alleging violations of 

the FDCPA had standing because he received a phone call he alleged violated the 

FDCPA, “spent time returning the phone call, and lost one of the available minutes on the 

phone plan the he exclusively paid for.” 

This background brings us to the question of whether the harm alleged here is 

sufficient to confer standing. The Court concludes it is. Alarcon alleges that Vital sent 

him one letter and also called him “on multiple occasions.” FAC ¶ 35-36. He claims these 

communications violated the FDCPA because the underlying debt was extinguished in 

the 2010 state court judgment.3 It is not obvious to the Court that receiving one letter 

could, by itself, confer standing. But Plaintiff also received multiple phone calls, and other

courts have found the time it takes to answer and respond to phone calls sufficient to 

confer standing. See, e.g., Horowitz, 2016 WL 7188238. For this reason, the Court finds

Alarcon has standing to bring this suit. 

Although it does not change the outcome, the Court must also address Plaintiff’s 

contention that Article III’s standing requirements are satisfied because Plaintiff was 

forced to “hire an attorney and incur a debt to that attorney, causing pecuniary damages.” 

Alarcon’s Opposition, Dkt. 37 at 21; see also FAC ¶ 41 (“Plaintiff incurred a significant 

debt to this attorney in direct response to Vital’s acts, and in an attempt to fend off this 

continued harassment.”). While incurring this debt may be a harm, it is not the type of

harm that could, by itself, provide standing. Such a holding would conflict with and 

undermine Spokeo’s holding that a bare procedural violation is insufficient to confer 

standing. If hiring an attorney and incurring legal debt were sufficient to confer standing, 

all procedural violations would confer standing so long as Plaintiff hired an attorney to 

attempt to make the violations stop. That’s not the law. The concrete harm that confers 

standing must be a direct result of the defendant’s statutory violation, not simply by 

plaintiff’s chosen response to the harm.

 

3 The Court accepts this allegation as true for the purposes of determining standing. 

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 5 of 9
- 6 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2. Motion for Summary Judgment

In order for a plaintiff to recover under the FDCPA, there are three threshold 

requirements: (1) the plaintiff must be a “consumer”; (2) the defendant must be a “debt 

collector”; and (3) the defendant must have committed some act or omission in violation 

of the FDCPA. See Robinson v. Managed Accounts Receivables Corp., 654 F. Supp. 2d 

1051, 1057 (C.D. Cal. 2009). Of these requirements, only the third is at issue here,4 and 

the outcome turns on whether the state court judgment precludes non-judicial attempts 

to collect on the debt. This is because Alarcon’s only alleged FDCPA and RFDCPA

violation is that Defendants attempted to collect an extinguished debt. Thus, if the state 

court judgment did not extinguish the debt, then defendants have not violated the statutes

by attempting to collect the debt through non-judicial means. 

The parties agree that Beneficial’s initial attempts to enforce the debt through 

judicial means failed, and that the state court entered judgment in favor of Alarcon. See 

Joint Statement, Dkt. 24 ¶ 6. The basis of that ruling appears to be evidentiary, not 

substantive. Beneficial, the plaintiff in that suit, submitted a declaration in lieu of personal 

testimony, and the judge found the declaration insufficient to support a finding that 

Alarcon, the defendant, defaulted on the loan:

“I looked at the declaration of the Plaintiff in lieu of the 

personal testimony, and I believe that the Plaintiff failed to 

meet its burden in this case. . . . And part of the problem, so 

that I could just tell you where my concern was, there was 

insufficient evidence by way of this declaration. In looking at 

Exhibit B, by way of example, I understand that the person 

who submitted the declaration is the custodian, but she 

certainly did not explain how Exhibit B was generated, and it 

really did not establish the default. I don’t know how she came 

up with the numbers. For me to sit down and try to interpret 

Exhibit B was virtually impossible, and there was nothing in 

the declaration that helped me. So the Plaintiff has failed to 

meet the burden, so I find in favor of the Defendant. Please 

prepare the judgment.” See Dkt. 23, Ex. 3. 

 

4 Galaxy also claims it is not a “debt collector,” but it is unnecessary for the Court to reach 

this question. 

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 6 of 9
- 7 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

The question presented in this case is whether that ruling in favor of Alarcon in 

state court bars Defendants’ subsequent non-judicial attempts to collect on the debt, and, 

if it does, whether such attempts would violate the FDCPA. The Court is not aware of 

any Ninth Circuit authority on the question, but Galaxy points to an instructive case from 

the Eastern District of Virginia, Wynne v. I.C. Sys., Inc., 124 F. Supp. 3d 734 (E.D. Va. 

2015). In that case, the plaintiff, Wynne, incurred a debt to the defendants related to an 

overdrawn checking account. When Wynne defaulted on that debt, the defendants sued 

her in Virginia state court. The state court ultimately ruled in favor of Wynne, although it’s 

unclear on what grounds. Defendants then attempted to collect the debt through nonjudicial means. Wynne sued in federal court, alleging that these attempts to collect the 

debt were barred by the state court judgment and constituted violations of the FDCPA. 

The district court disagreed and dismissed the suit. One of the reasons for the dismissal 

was a finding that although collection was precluded through the judicial process, it may 

still be legally permitted through non-judicial means. Id. at 742. 

Alarcon pushes back on the holding of the Wynne case, noting that California’s 

standards for extinguishment are different than those in Virginia and would preclude 

subsequent attempts to collect on a debt reduced to judgment. California has adopted 

the definition of “bar” set out in the Restatement of Judgments. See, e.g., Ferraro v. 

Camarlinghi, 161 Cal. App. 4th 509, 531 (Cal. Ct. App. 2008). The rule of bar provides 

that “[i]f the judgment is in favor of the defendant, the claim is extinguished and the 

judgment bars a subsequent action on that claim.” Restatement (Second) of Judgments 

§ 17 (1982). In Alarcon’s view, the term “claim” is broader than (and subsumes) the term 

“debt,” and that, accordingly, Defendants are “barred’” from attempting to collect on this 

debt. This argument proves too much. The Restatement of Judgments provides that an 

underlying judgment bars a subsequent “action” on that claim. The term “action,” by its 

very definition, refers to a legal proceeding. See Cal. Civ. Proc. Code § 22 (“An action is 

an ordinary proceeding in a court of justice by which one party prosecutes another for the 

declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or 

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 7 of 9
- 8 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the punishment of a public offense.”). There is little doubt the state court judgment would 

preclude a subsequent legal proceeding to collect on the debt, but it does not follow that 

it also precludes Defendants from attempting to collect that debt through non-judicial 

means. Alarcon cannot state a cognizable FDCPA or RFDCPA5 claim based on 

Defendants’ attempts to collect the debt through non-judicial means, absent some other 

statutory violation. The Defendants are entitled to summary judgment. 

3. Bad Faith

Defendants urge the Court to find that this suit was brought in bad faith, which 

would allow them to recover attorneys’ fees under the FDCPA and RFDCPA. See 15 

U.S.C. § 1692k(a)(3); Cal. Civ. Code § 1788.30(c). In support of this argument, 

Defendants point out that Plaintiff has filed four separate federal lawsuits against various 

defendants involving the same underlying debt, and that each of these complaints were 

essentially boilerplate copies of one another. Alarcon’s counsel argues that a FDCPA 

plaintiff can only recover statutory damages once in each action, and thus suing all 

defendants in a single action would result in a smaller award for his client and might even 

constitute malpractice. The Court shares Defendants’ concerns about claim splitting and 

the administrative burden that four separate lawsuits places on both litigants and the 

judicial system. At this time, however, the Court cannot conclude the suit was brought in 

bad faith, so Defendants’ request for a bad faith determination is DENIED.

CONCLUSION

For these reasons, the Court finds that, as a matter of law, Defendants’ 

communications with Plaintiff did not violate the FDCPA or RFDCPA.

6

 Defendants’ 

 

5 The RFDCPA claim necessarily fails if the FDCPA claim does. See, e.g., Fleming v. 

Gordon & Wong Law Group, P.C., 723 F.Supp.2d 1219, 1224 n. 9 (N.D. Cal. 2010) (“The 

RFDCPA establishes liability under California law for violations of the FDCPA. Cal. Civ. 

Code § 1788.17. Thus, FDCPA and RFDCPA claims require identical analysis.”).

6 Given this finding, the Court does not reach Defendants’ other arguments regarding 

bona fide error, whether Galaxy was a “debt collector,” and whether Defendants were 

released by virtue of a previous settlement. 

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 8 of 9
- 9 -

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Motion for Summary Judgment is GRANTED. Dkt. 36. The clerk is directed to enter 

judgment in favor of the Defendants and close the case. 

IT IS SO ORDERED.

Dated: November 29, 2018

HONORABLE LARRY ALAN BURNS

United States District Judge

Case 3:15-cv-00992-LAB-KSC Document 40 Filed 11/30/18 PageID.<pageID> Page 9 of 9