Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-00074/USCOURTS-casd-3_05-cv-00074-1/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 

SOUTHERN DISTRICT OF CALIFORNIA 

Ernesto D. Sigala, 

Plaintiff, 

v. 

Arrow Financial Services, LLC, Rick 

Gonzalez, and David Fryer, 

Defendants. 

CASE NO. 05 CV 0074 (WMc) 

COURT’S FINDINGS OF FACT AND 

CONCLUSIONS OF LAW 

The trial in the above-captioned matter was conducted on November 15, 2006, 

and November 16, 2006. Robert L. Hyde, Esq. and Joshua Swigart, Esq., of Hyde and 

Swigart, appeared as counsel for the Plaintiff Ernesto D. Sigala (‘Sigala”); Melissa A. 

Blackburn, Esq., of Mulvaney, Kahan & Barry, appeared as counsel for the Defendants, 

Arrow Financial Services, LLC (“Arrow”), Rick Gonzalez (“Gonzalez”), and David Fryer 

(“Fryer”). 

Upon consideration of properly admitted testimony and evidence presented at 

trial and the arguments of counsel, the Court makes the following Findings of Fact and 

Conclusions of Law in support of its ruling. In the event and to the extent that a Finding 

of Fact is deemed to be a Conclusion of Law, it is adopted as such. Conversely, any 

Conclusion of Law deemed to be a Finding of Fact is adopted as such. Pursuant to the 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

Case No. 05 CV 0074 (WMc) 

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Jointly Submitted Final Pre-Trial Conference Order executed by the parties, dated June 

14, 2006 and submitted to the Court on that same date, (the “Pre-Trial Order”), the facts 

which were admitted therein are adopted and only the issues of fact and law designated 

to be litigated in the Pre-Trial Order, and no others, are the basis for this Court’s ruling 

herein. 

NOW, THEREFORE, the Court finds as follows: 

FINDINGS OF FACT

1. Defendant Arrow is in the receivables management industry, and is a 

“debt collector” as that term is defined by the Federal Fair Debt Collection Practices Act 

(“FDCPA”) and California’s Rosenthal Fair Debt Collection Practices Act (“RFDCPA”). 

15 U.S.C. § 1692a6; Cal. Civ. Code § 1788.2(d) (hereinafter collectively referred to as 

“the Acts”). 

2. Defendants Gonzalez and Fryer were at all relevant times employed by 

Arrow. (Pre-Trial Order, at Section III, ¶ 10). Sigala was also, at one time, employed by 

Arrow. (Reporter’s Transcript of Trial Proceeding, Volume 1, Page 5 (“RT1-5”). 

3. At all relevant times, Arrow maintained specific procedures and training to 

ensure compliance with the FDCPA and RFDCPA. It was at all relevant times Arrow’s 

policy not to call debtors at their places of employment when Arrow or its employees 

knew or reasonably should have known that the debtor’s employer prohibited such calls 

at work. This was amply demonstrated by the testimony of several witnesses, including 

Sigala himself. Specifically: 

 (a) Sigala testified as to Arrow’s training and monitoring practices. (RT 

1-6 to 1-8; RT1-40). Sigala also testified regarding Arrow’s policy and procedures to 

prevent violating the law when it came to contacting debtors at their places of 

employment (RT1-21 [3-10]). 

 (b) Gonzalez testified regarding the initial and ongoing training he 

received at Arrow, which included training in compliance with both the state and federal 

Fair Debt Collection Practices Acts, the monitoring by Arrow of its employees to 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

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ensure ongoing compliance with the Acts, performance reviews, and regular seminars. 

(RT1-128 to1-131). 

 (c) Fryer testified that, at Arrow, he underwent training and received 

updates, and was also required to undergo testing on various subjects of fair debt 

practices about twice a year. (RT1-199 [16-22]). 

 (d) Brian Cutler also summarized the training that Arrow’s employees 

undergo. (RT 2, 4). Cutler also testified that once a “hold” had been placed on a phone 

number, the telephone dialing system would prevent that number from automatically 

being dialed. (RT2 [112]) 

4. Before the subject dispute arose, Sigala had substantial experience in the 

debt collection industry and had substantial training in the Fair Debt Collection Practices 

Act (“FDCPA”). (RT1,39 [16] - 40 [12] and 88 [6-8]) 

5. While employed at Arrow, Sigala received negative performance reviews 

for actions which he took in violation of Arrow’s policies regarding proper debt collection. 

(RT1, 9[1-21] and 40[22-25]). One negative review at Arrow involved the falsification of 

documents. (RT 2, 10[5-9]). He was unhappy working at Arrow. (RT1,44 [4-17]). 

6. After leaving Arrow, Sigala was ultimately employed by the collection firm 

of Patenaude & Felix. (RT1-10 [5-10]). While employed at Patenaude & Felix, Sigala 

continued to receive training in federal and state collection laws. (RT1-11 [11-13]). 

7. On or about March 19, 2003 Sigala purchased an engagement ring for his 

fiancé on credit. Sigala defaulted on his payment obligations under the credit account. 

(RT1-47 [2-25]). The purchase by Sigala of the engagement ring gave rise to a 

“consumer debt” as that term is defined by the FDCPA and the RFDCPA. 15 U.S.C. § 

1692a(5); Cal. Civ. Code §1788.2(f). (Pre-Trial Order, Part III, ¶¶ 6-7.) 

8. The consumer debt for the engagement ring was assigned to Arrow for 

collection. (Pre-Trial Order, at Section III, ¶ 4). 

9. Pursuant to the Pre-Trial Order, Sigala’s only contention is whether two 

out of the three telephone calls placed to him by Arrow’s employees were made after 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

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he informed the employees that his employer prohibited such communications. See

Pre-Trial Order, at Section VI, ¶¶ 2-4. 

10. Neither the FDCPA nor the RFDCPA prohibit a debt collector from calling 

a debtor at work unless the debt collector knows or reasonably should know that the 

debtor’s employer prohibits such calls. 15 U.S.C. § 1692c(a)(3); Cal. Civ. Code § 

1788.17 (incorporating provisions of the Federal FDCPA). 

11. According to Sigala, his employer, Patenaude & Felix, did not enforce its 

policy against personal phone calls so long as the calls were less than three minutes. 

Each of the phone calls at issue in this case was less than three minutes. (RT1-104). 

In fact, both Sigala and a co-worker of his, Olga-Patel (Beth) Montoya, testified that they 

did, in fact, receive personal phone calls at work. (RT1-89 to 1-90; RT1-73). This factor 

alone is ground for finding in favor of Defendants. 

12. The Court also finds that, based on an examination of the testimony at 

trial, Arrow’s employees did not know or reasonably should have known that Sigala’s 

employer prohibited the calls until the last phone call which was made by defendant 

David Fryer. Specifically, on November 22, 2004, Gonzalez, on behalf of Arrow, 

contacted Sigala at his work for the purpose of discussing repayment of the debt. 

Gonzalez testified at trial that his notations made after the telephone call terminated 

stated: 

 Called co-applicant at place of employment. Spoke with customer. Gave 

balance in full. He said he couldn’t talk. He said he would call me back 

today after work. He didn’t want to disclose correct address or home 

phone. Said will call me back today. 

(RT1-136 [2-13]). 

Gonzalez testified that he remembered this conversation with Sigala, which stood out in 

Gonzalez’s mind because Sigala was himself a collection agent and a former employee 

of Arrow. (RT1-145 [1-10]). Gonzalez testified that the call ended mutually; if Sigala 

had hung up on Gonzalez on that occasion, Gonzalez would have made a notation in 

the file that Sigala had hung up on him, consistent with Arrow’s policy and 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

Case No. 05 CV 0074 (WMc) 

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requirement that its agents note all instances where a debtor hangs up the phone on the 

collection agent. (RT1-174 [6-25]). 

13. Sigala, on the other hand, testified that he told Gonzalez on this occasion 

not to call him at work, and hung up the phone. (RT1-16 to 1-17). Even assuming that 

Sigala’s version of the conversation was enough to impart sufficient knowledge to 

Gonzales that Sigala’s employer allegedly prohibited such a call, the Court gives greater 

weight to Gonzalez’s testimony for the following reasons: 

 (a) Sigala refused to give Gonzalez an alternative telephone number 

where Sigala could be reached. It makes no sense for Sigala to take that position and 

also tell Gonzalez not to call him at work. Sigala did not testify that he told Gonzalez 

not to communicate with him in any format or at any time. In addition, Sigala told 

Gonzalez that he would call him back but failed to do so ever. As an experienced debt 

collection agent, Sigala had to have known that Gonzalez would call him back at work. 

 (b) Gonzalez prepared a written record of his conversation with Sigala 

after the phone call terminated. (RT1-135 [l6-25] to RT 1-136 [2-13]). Gonzalez had no 

motivation to falsely record information pertaining to the substance of his conversation 

with Sigala. 

 (c) Sigala is an unreliable witness. His testimony was impeached on at 

least three occasions during trial. (See, e.g., RT1-41 to 1-43; RT1-43 to 1-46; RT1-46 

to 1-47). 

 (d) Sigala admitted he was delinquent on other obligations he owed at 

around the same time that Gonzalez made his phone calls, such as his delinquent child 

support payments (RT1-48 to 1-53), student loan payments (RT1-53), a down-payment 

for an automobile (as evidenced by a collection letter dated October 21, 2004) (RT1-

87). Therefore, Sigala may have confused the calls from Arrow’s employees with calls 

that may have been made by other creditors. When Sigala was asked if he had 

received other communications from other creditors in November or December of 2004, 

Sigala was equivocal, saying, “I don’t know. I don’t think so.” (RT1-56 [5-9]). 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

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 (e) Sigala was formerly employed by Arrow, but received negative 

performance reviews there, and was unhappy working at Arrow. (RT1-9 [11-21] RT1-44 

[14-17]). 

14. On November 30, 2004, Gonzalez called Sigala again. Gonzalez testified 

at trial that Sigala simply stated “I told you not to call me,” and hung up the telephone 

(RT1-190 [19-25]). Gonzalez still had no reason to know whether Sigala’s 

employer may or may not prohibit receiving personal calls at work. In fact, Gonzalez 

testified that he believed that Sigala was confusing him with another debt collector, 

given the substance of their first communication. (RT1-140 to 1-141). 

15. Sigala, on the other hand, only after some prompting, testified, inter alia: 

“I believe I did tell him that, you know, I can’t receive his calls. I told you already not to 

call me here at work, you know, he can get me in trouble, and I just remember hanging 

up on him again.” (RT1-22). For many of the same reasons stated above, the Court 

gives greater weight to Gonzalez’s testimony. In addition, it appears by Sigala’s own 

testimony that he cannot specifically recall what was said, as evidenced by his 

qualifying statement that he “believes” he told Gonzalez that he could not receive calls 

at work. 

16. On December 29, 2004, Fryer, on Arrow’s behalf, contacted Sigala at 

work to discuss repayment of the account. On that date, according to Fryer’s testimony, 

Sigala clearly told Fryer that he could not receive phone calls at work. Fryer gave 

Sigala his phone number and terminated the phone call. Fryer also made a notation in 

Arrow’s records not to call Sigala at work, consistent with Arrow’s policies and practices 

in that regard. (RT1-203). Fryer testified that Sigala did not tell Fryer that Sigala had 

told anyone else not to call him at work. (RT1-204 [15-17]). Fryer’s conduct was 

exemplary. 

17. Olga Patel (Beth) Montoya, a witness for Sigala, testified in the affirmative 

when asked whether she overheard Sigala tell someone on the phone “stop calling my 

work.” (RT1-69 [13-16]). Ms. Montoya also testified that when Sigala hung up the 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

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phone, Sigala told her it was “Arrow Financial” calling (RT1-68 [1-8]). (She also 

specifically testified that she could not hear what the other party on the line said. (RT1-

65 [13] [18-21]). However, Ms. Montoya did not recall the specific date of that call, 

stating only that it was “around this time.” (RT1-68 [9-13]). Therefore, the telephone 

conversation referred to could have been Sigala’s conversation with Fryer. 

18. After Fryer’s conversation with Sigala on December 29, 2004, no further 

phone calls were made to Sigala at work. (RT1-103 [6-15]). Sixteen days later, on 

January 14, 2005, Sigala filed the instant action against Arrow, Gonzalez and Fryer for 

alleged violations of the FDCPA and RFDCPA. Arrow never received written notice of 

any alleged violation prior to the time Sigala filed his Complaint. (Pre-Trial Order, 

Section III, ¶ 9.) 

19. While at Patenaude & Felix Sigala received several disciplinary write-ups 

for tardiness and poor production and one disciplinary write-up for receiving a telephone 

call at work from an apparent debt collector. (RT1, 32[3] – 35 [22]). The latter write-up 

did not provide the identity of the apparent debt collector. (Exh. 1) 

20. Patenaude & Felix terminated Sigala because of his poor performance 

and not for any other reason. (RT1, 55 [16-21]). 

CONCLUSIONS OF LAW

21. The dispute between the parties is controlled by Federal Fair Dept 

Collection Practices Act (“FDCPA”), 15 U.S.C. §§1692 - 1692o and California’s 

Rosenthal Fair Debt Collection Practices Act (“RFDCPA”), California Civil Code §§1788 

- 1788.33, hereinafter referred to collectively as “the Acts”. 

22. With certain exceptions set forth in California Civil Code §1788.17, the 

RFDCPA incorporates the FDCPA. 

23. In enacting the FDCPA, Congress intended to protect consumers from 

“improper conduct” and illegitimate collection practices “without imposing unnecessary 

restrictions on ethical debt collectors.” Clark v. Capital Credit & Collection 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

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Services, Inc., 460 F.3d at 1169-1170 citing S.Rep. No. 95-382, at 1 (1977), reprinted in

1977 U.S.C.C.A.N, 1695, 1696, 1698-99. Indeed, the statutorily-stated purpose of the 

FDCPA is to prevent “abusive, deceptive, and unfair debt collection practices.” 15 

U.S.C. § 1692(a). For its part, California’s RFDCPA provides that its purpose is to 

“prohibit debt collectors from engaging in unfair or deceptive acts or practices in the 

collection of consumer debts and to require debtors to act fairly in entering into and 

honoring such debts....” Cal. Civ. Code § 1788.1. 

24. Plaintiff has the burden of proving that Defendants violated the Acts. 

25. Neither the FDCPA nor the RFDCPA prohibit a debt collector from calling 

a debtor numerous times, unless the debt collector calls at a time or place that the debt 

collector knows, or should know, is inconvenient or unless the debtor indicates, in 

writing, that he or she does not wish to be contacted further. A time is presumed to be 

convenient if made between the hours of 8:00 a.m. and 9:00 p.m.), 15 U.S.C. § 

1692c(a)(1) & (b). Cal. Civ. Code § 1788.17 (incorporating provisions of the Federal 

FDCPA). 

26. In the present case, Sigala does not contend that he ever gave Arrow with 

any written notice (RT1-91 [11-15]), nor does he contend anywhere in the Pre-Trial 

Order that the calls were made at any time other than between the hours of 8:00 a.m. 

and 9:00 p.m. See, Pre-Trial Order, Section VI, ¶¶ 2-4. 

27. Rather, Sigala contends that he instructed Gonzalez on November 22, 

2004 and November 30, 2004, that he could not receive collection calls at his place of 

employment. Neither the FDCPA nor the RFDCPA prohibit a debt collector from calling 

a debtor at work unless the debt collector knows or reasonably should know that the 

debtor’s employer prohibits such calls. 15 U.S.C. § 1692c(a)(3); Cal. Civ. Code § 

1788.17 (incorporating provisions of the Federal FDCPA). 

28. As discussed supra, Sigala’s employer, Patenaude & Felix, did not 

enforce its policy against personal phone calls so long as the calls were less than three 

minutes, and each one of the phone calls at issue in this case was less than three 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

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minutes. Both Sigala and Olga Patel (Beth) Montoya, a co-worker, testified that they 

did, in fact, receive personal phone calls at work. Therefore, Sigala cannot prevail on 

his causes of action as a matter of law. 

29. Furthermore, as discussed above, Sigala’s testimony is not credible. The 

Court finds that Gonzalez’s testimony regarding the substance of the parties’ telephone 

conversation on November 22, 2004, is more credible for the reasons discussed above. 

Therefore, on November 22, 2004, Arrow and its employees did not know, and could 

not reasonably have known, whether or not Patenaude & Felix allegedly prohibited such 

calls. 

30. The Court also finds that Gonzalez’s testimony regarding the substance of 

the parties’ telephone conversation on November 30, 2004, is more credible for the 

reasons discussed above. Therefore, on November 30, 2004, Arrow and its employees 

did not know and could not reasonably have known whether or not Patenaude & Felix 

allegedly prohibited such calls. 

31. Plaintiff did not carry his burden of proof that Defendants violated the Acts 

as a result of the telephone calls of November 22, November 30 and December 29, 

2004. 

32. Plaintiff failed to establish by a preponderance of the evidence that the 

telephone call Olga Patel Beth Montoya overheard occurred on November 23, 

November 30 or December 29, 2004. 

33. Plaintiff failed to establish by a preponderance of the evidence that the 

telephone call(s) which gave rise to Patenaude & Felix’s written warning dated 

December 29, 2004 (Exh. 1) resulted from any of the three telephone calls from 

Defendants as opposed to calls from other creditors. Moreover, Fryer’s telephone call 

of December 29, 2004, complied with the Acts. 

Finally, both the FDCPA and the RFDCPA exempt debt collectors from liability 

for any damages if the debt collector shows by a preponderance of the evidence that 

the alleged violation was not intentional and resulted from a bona fide error 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

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notwithstanding the maintenance of procedures reasonably adapted to avoid any such 

error. 15 U.S.C. § 1692k(c); Cal. Civ. Code § 1788.30(e); Clark v. Capital Credit & 

Collection Services, Inc., 460 F.3d 1162, 1177 (9th Cir. 2006) (debt collector’s false 

representation need not be intentional to find a violation of Section 1692e, but debt 

collector may nevertheless avoid liability through application of the bona fide error 

defense). See also Lewis v. ACB Business Services, Inc., 135 F.3d 389, 401-402 (6th 

Cir. 1998) (no liability existed where telephone call made to debtor after the debtor had 

given notice not to call again, and after the debt collector had been notified that the 

debtor was represented by counsel, since the call was a result of bona fide error where 

the debtor's account was miscoded accidentally in the debt collector's computer). 

34. In the present case, Arrow established by a preponderance of the 

evidence that it maintained specific procedures and training to ensure compliance with 

the FDCPA and the RFDCPA. Therefore, even if an error had occurred in Gonzalez’s 

failure to place on “hold” on Sigala’s work phone number, there was sufficient testimony 

from Gonzalez that his alleged failure to do so was unintentional and, furthermore, was 

made notwithstanding the maintenance of policies, practices, and procedures by Arrow 

reasonably adapted and intended to avoid such error. Moreover, Fryer’s conduct was 

exemplary. 

35. Sigala’s termination from Patenaude & Felix was unrelated to any activity 

by Defendants. (RT1, 55 [16-21]). 

36. Sigala did not carry his burden of proof that Defendants’ activities caused 

him to sustain legally cognizable injury (e.g., personal humiliation, embarrassment, 

mental anguish or emotional distress) under the Acts. See Denis vs. New Horizon 

Credit, Inc. 2006 WL 1965779 (D. Conn.), pg. 2

37. Plaintiff did not carry his burden of proof that Defendants’ activities caused 

him to sustain actual damages under the Acts. See Denis vs. New Horizon Credit, Inc. 

2006 WL 1965779 (D. Conn.), pg. 2. 

Defendants are not liable to Sigala in any amount whatsoever, including, 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

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but not limited to, costs and attorneys fees incurred in this matter. 

38. Judgment shall be entered in favor of the Defendants and against 

Plaintiff. 

 IT IS SO ORDERED. 

Dated: February 22, 2007 

 _______________________________ 

 William McCurine, Jr. 

 U.S. Magistrate Judge 

 United States District Court 

 

AFS.121.159583.1 

COURT’S FINDINGS OF FACT AND CONCLUSIONS 

OF LAW 

Case No. 05 CV 0074 (WMc) 

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