Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-02231/USCOURTS-cand-3_06-cv-02231-6/pdf.json

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

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

EVANGELINA GALVAN NAVARRO,

Plaintiff,

 v.

ESKANOS & ADLER, ET AL.,

Defendants. /

No. C 06-02231 WHA

ORDER GRANTING

PLAINTIFF’S MOTION FOR

LEAVE TO FILE AN AMENDED

COMPLAINT

INTRODUCTION

In this action under the federal Fair Debt Collection Practices Act (FDCPA) and the

California Rosenthal Fair Debt Collection Practices Act (RFDCPA), plaintiff Evangelina

Galvan Navarro moves for leave to file an amended complaint. This order holds that plaintiff

has shown good cause and should be given leave to amend her complaint. Accordingly,

plaintiff’s motion is GRANTED. 

STATEMENT

Defendant Eskanos & Adler is a debt-collection agency that attempts to collect debts

that are due to others on others’ behalf (Compl. ¶ 7). Prior to June 2005, plaintiff Evangelina

Galvan Navarro incurred consumer debt on a credit card account owned by Discover Bank (id.

at ¶ 13). After the debt was incurred, it was transferred to defendant law firm for collection

from plaintiff (id. at ¶ 14). Eskanos & Adler sent Navarro a collection letter dated June 8, 2005

(id. at ¶ 17–18). In response, Navarro sent a letter to defendants asking them to cease and desist

Case 3:06-cv-02231-WHA Document 73 Filed 12/07/06 Page 1 of 6
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For the Northern District of California

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*

The case management order states that the deadline for leave to add new parties or amend the

complaint and the deadline for initial disclosures is July 7, 2007. This is clearly in error, as the trial is set on

April 2, 2007. The initial-disclosure deadline and the deadline for leave to add new parties or amend the

complaint was July 7, 2006.

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their efforts to collect on the account around June 25, 2005 (id. at ¶ 19). Despite this, on

August 1, 2005 defendants sent an additional letter attempting to collect on the debt (id. at ¶

26). 

Plaintiff filed suit against defendants on March 28, 2006 alleging violations of the

federal FDCPA and the California RFDCPA. A case management order was issued according

to FRCP 16 on June 30, 2006. The order set the deadline for seeking leave to add new parties

or to amend the complaint for June 7, 2007 [sic].*

 Pursuant to the order, plaintiff and

defendants were required to exchange initial disclosures by July 7, 2006. Responses were due

at a later date. On September 25, 2006, plaintiff noticed depositions for Donald Stebbins, Janet

Brown, Kurtiss Jacobs, and Jerome Yalon (Schwinn Decl. ¶ 5). Defendants responded with a

motion for a protective order on October 11, 2006 (id. at ¶ 6). The motion was denied on

October 17, 2006. 

On October 18, 2006, plaintiff’s counsel deposed defendant Kurtiss Jacobs, an attorney

working for Eskanos & Adler (id. at ¶ 8). Jacobs testified that his standard practice for signing

collection letters was to merely review the address block to ensure that it showed a viable

address, to verify that the debt was large enough on which to file a lawsuit, and to sign the

letter. No substantive reviews of the accounts were ever conducted. Donald Stebbins, another

attorney in Eskanos & Adler’s employ, testified to using similar practices when deposed on

October 19, 2006 (id. at ¶ 9). 

Plaintiff filed the extant motion for leave to file an amended complaint on November 2,

2006. The deadline for seeking leave to file an amended complaint had passed as of June 7,

2006. Based on the depositions of Jacobs and Stebbins, plaintiff asks leave to add claims under

15 USC 1692e(3) and 1692e(10) and California Civil Code 1788.13(c) and 1788.16. The

amended claims allege that defendants have routinely misrepresented that the collection letters

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are sent by someone acting in the capacity of a lawyer, when in reality, Eskanos & Adler’s

attorneys merely act as a rubber stamp in the collection process. 

ANALYSIS

Leave to amend a complaint shall be freely given when justice so requires under FRCP

15(a). This standard is applied liberally. “In the absence of any apparent or declared reason –

such as undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to

cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by

virtue of allowance of the amendment, etc. – the leave sought should, as the rules require, be

‘freely given.’” Foman v. Davis, 371 U.S. 178, 182 (1962); FRCP 15(a). Rule 15(a) does not

apply, however, when a district court has established a deadline for amended pleadings under

FRCP 16(b). See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607–608 (9th Cir.

1992). Once the Court has entered a scheduling order, the liberal policy favoring amendments

no long applies. Subsequent amendments are not allowed without a request to first modify the

scheduling order. At that point, any modification must be based on a showing of good cause. 

Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000). 

1. GOOD CAUSE FOR FILING AMENDED COMPLAINT.

The inquiry under Rule 16(b)’s good cause standard first focuses on the diligence of the

party seeking the amendment. “The district court may modify the pretrial schedule ‘if it cannot

reasonably be met despite the diligence of the party seeking the extension.’” Johnson, 975 F.2d

at 609 (quoting FRCP 15 advisory committee notes). If the party seeking modification was not

diligent, then the inquiry should end.

Plaintiff argues that she could not have discovered the basis for her new allegations until

after she had deposed defendants’ employees. Defendants respond, arguing that Navarro waited

until nearly five months after the deadline for filing an amended complaint had passed to file

this motion. Plaintiff maintains that she was diligent in asking leave to file her amended

complaint because she filed this motion within two weeks of discovering the basis of her new

allegations. 

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The new claims in plaintiff’s complaint allege that Eskanos & Adler’s collection letters

misrepresented that the substance of the accounts had been reviewed by an attorney, a violation

of 15 U.S.C. 1692e(3) and 1692e(10). Plaintiff could not have obtained information about the

role of Eskanos & Adler’s staff attorneys in collection practices until after conducting discovery

and deposing the employees. Navarro sought leave to file an amended complaint adding those

allegations approximately two weeks later. A two-week delay does not constitute a failure in

diligence. Defendants mistakenly focus on the length of time between the deadline for filing an

amended complaint and the plaintiff’s motion, instead of the time between plaintiff’s discovery

of the new facts and her asking leave of the court to file the amended complaint. See Zivkovic v.

S. Cal. Edison Corp., 302 F.3d 1080, 1087–88 (9th Cir. 2002). Plaintiff showed diligence by

seeking leave to amend her complaint upon learning of the basis of her new claims. Defendants

have also not alleged that the plaintiff is acting out of bad faith or with dilatory motives, thus

plaintiff has shown good cause to amend her complaint. 

2. RISK OF UNDUE PREJUDICE TO DEFENDANTS.

Prejudice to the non-moving party, though not required under FRCP 16(b), can supply

additional reasons to deny a motion. Coleman, 232 F.3d at 1295. “A need to reopen discovery

and therefore delay proceedings supports the district court’s finding of prejudice from a delayed

motion to amend the complaint.” Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d

980, 986 (9th Cir. 1999). 

Defendants argue that amending the complaint at this point will require them to

reevaluate their strategy and incur additional costs in responding to the new claims. This seems

far-fetched. The basic fact pattern will remain the same. All that is being added is another legal

string to the same old bow. Defendant also argues that the new claims will increase costs in

filing and briefing dispositive motions. This argument is marginal at best. 

Additionally, it is unlikely that additional costs related to these claims will be great. 

Section 1692e(3) and Section 1692e(10) require proof that the defendants have misrepresented

the substantial involvement of an attorney in the debt-collection process. Evidence, if any, will

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be found in defendants’ debt-collection practices. Plaintiff has already conducted discovery on

this subject. She has already deposed Eskanos & Adler’s employees and requested manuals,

videotapes, and materials related to employee training and standard procedures. Plaintiff states

in her brief that no further discovery will be required, and defendants fail to identify what

additional discovery is necessary. Defendants have not shown that they will suffer undue

prejudice if plaintiff is allowed to amend her complaint. 

3. FUTILITY OF AMENDMENT AND STATUTE OF LIMITATIONS.

“Leave to amend need not be granted when an amendment would be futile.” In re

Vantive Corp. Sec. Litig., 283 F.3d 1079, 1097 (9th Cir. 2002). Granting leave to amend is

futile where the added claim would be barred by the statute of limitations. Deutsch v. Turner

Corp., 324 F.3d 692, n.20 (9th Cir. 2003). Later-added claims, however, are timely filed if they

relate back to the original pleadings under FRCP 15(c)(2). The rule provides that “an

amendment of a pleading relates back to the date of the original pleading when (1) relation back

is permitted by the law that provides the statute of limitations applicable to the action, or (2) the

claim or defense asserted in the amended pleading arose out of the conduct, transaction, or

occurrence set forth or attempted to be set forth in the original pleading. . . .” FRCP 15(c). 

Here, defendants argue that the new claims are barred by the statute of limitations. 

Under 15 U.S.C. 1692k(d), an action under the federal FDCPA may be brought within one year

of the date of the violation. The statute of limitations under California state law is similarly one

year. Cal. Civ. Code 1788.30(f). The second collection letter, which forms the basis of

plaintiff’s claim, was sent to her on August 1, 2005, thus the one-year statute of limitations had

run as of this motion. Under the relation-back doctrine, plaintiff’s new claims are permitted if

they arose out of the same conduct, transaction or occurrence those in her original pleadings. 

Both the claims in plaintiff’s original complaint and her amended complaint arise from the

second letter sent to her by Eskanos & Adler. Plaintiff’s new claims relate back to her original

pleading, and so they are not barred by the statute of limitations. 

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G:\WHAALL\2006Civ\06-02231 Galvan Navarro\leave to file amended complaint.wpd 6

Defendant next argues that even if the amended claims relate back to the original

pleading, the statute of limitations under 15 U.S.C. 1692k(d) is a jurisdictional requirement. 

Defendant cites Naas v. Stolman, 130 F.3d 892, 893 (9th Cir. 1997), in support of this

proposition. Naas did not address whether or not the court could have jurisdiction over the

FDCPA claim through the relation back doctrine of FRCP 15(c), it merely held that plaintiffs

could not rely on an appeal of the action that formed the basis of the FDCPA claim to toll the

statute of limitations. The Eighth Circuit has held that the FDCPA’s statute of limitations is a

jurisdictional limitation, however, it too did not address the issue of relation back. Mattson v.

U.S. West Commc’ns., 967 F.2d 259, 261 (8th Cir. 1992). Plaintiff’s claims relate back to her

original pleadings, so she is not barred by the statute of limitations from bringing her new

claims. 

CONCLUSION

For the foregoing reasons, plaintiff Evangelina Galvan Navarro’s motion for leave to file

an amended complaint is GRANTED. 

IT IS SO ORDERED.

Dated: December 7, 2006 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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