Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-01802/USCOURTS-casd-3_13-cv-01802-0/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

CRISTINA NEPOMUCENO,

Plaintiff,

v.

LEGAL RECOVERY LAW OFFICES,

INC.,

Defendant.

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Case No. 13-cv-1802-L (RBB)

ORDER DENYING MOTION TO

DISMISS [doc. #3]

This action arises from Plaintiff Cristina Nepomuceno’s allegation that a collection letter

sent by Defendant Legal Recovery Law Offices (“LRLO”) violated the Fair Debt Collection

Practices Act (“FDCPA”) and the Rosenthal Fair Debt Collection Practices Act (“Rosenthal

Act”). Defendant now moves to dismiss the claims under Federal Rule of Civil Procedure

12(b)(6). 

The Court found this motion suitable for determination on the papers submitted and

without oral argument. See CIV. L.R. 7.1(d.1). [doc. #6] For the following reasons, the Court

DENIES Defendant’s motion to dismiss.

//

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I. BACKGROUND

Plaintiff Cristina Nepomuceno is a resident of Poway, California. (Compl. ¶ 13.)

Defendant Legal Recovery Law Offices is located in San Diego, California. (Id. ¶ 14.) Plaintiff

alleges that she is a “consumer” as defined by the FDCPA and a “debtor” as defined under the

Rosenthal Act. (Id. ¶¶ 15, 17.) Plaintiff further alleges that Defendant regularly engages in debt

collection and therefore is a “debt collector” as defined by the FDCPA and the Rosenthal Act.

(Id. ¶¶ 16, 18.) 

Prior to August 3, 2012, Plaintiff is alleged to have incurred certain financial obligations.

(Compl. ¶ 20.) Sometime before August 3, 2012, Plaintiff allegedly fell behind in payments

owed on the alleged debt. (Id. ¶ 23.) Subsequently, the debt was assigned, placed, or otherwise

transferred to Defendant for collection. (Id. ¶ 24.) On August 3, 2012, Defendant mailed a

dunning letter to Plaintiff, which Plaintiff received a few days later. (Id. ¶ 25.) The letter states

that “[a]t this time, no attorney with this firm has personally reviewed the particular

circumstances of your account.” (Id. ¶ 29.) It further states that “[i]n the event that legal action is

pursued and judgement is ultimately obtained against you, the judgment may include court costs,

local attorney fees, and interest in addition to the principal amount currently owed.” (Id. ¶ 30.)

Finally, at the bottom of the letter, an attorney’s name, Andrew Rundquist, appears as the signor

of the letter. (Id. ¶ 32.) Therefore, the Plaintiff contends that “the letter was drafted and phrased

in a manner that would confuse and mislead the least sophisticated consumer as to whether or

not an attorney had reviewed the account, and whether legal action against Plaintiff could be

taken.” (Id. ¶ 33.) Based on these allegations, Plaintiff asserts that Defendant has violated the

FDCPA and the Rosenthal Act.1

 (Id. ¶ 34.)

On September 6, 2013, Defendant moved to dismiss the Complaint, arguing that

plaintiff’s factual allegations “are either legal conclusions not entitled to the assumption of truth

1

 The Rosenthal Act incorporates the substantive provisions of the FDCPA. Dupuy v.

Weltman, 442 F. Supp. 2d 822, 825 n. 1 (N.D. Cal. 2006); see also Alkan v. Citimortgage, Inc., 336 F. Supp. 2d 1061, 1065 (N.D. Cal. 2004). Specifically, Section 1788.17 of the Rosenthal Act

requires all debt collectors to comply with Section 1692b to Section 1692j of the FDCPA. CAL. CIV. CODE § 1788.17.

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or do nothing to factually enhance a cause of action” under the FDCPA and the Rosenthal Act.

On October 7, 2013, Plaintiff filed an opposition to the motion to dismiss, alleging that she has

stated a plausible claim. Defendant has not filed a reply.

II. LEGAL STANDARD

The court must dismiss a cause of action for failure to state a claim upon which relief can

be granted. FED. R. CIV. P. 12(b)(6). A motion to dismiss under Rule 12(b)(6) tests the legal

sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court

must accept all allegations of material fact as true and construe them in light most favorable to

the nonmoving party. Cedars-Sanai Med. Ctr. v. Nat’l League of Postmasters of U.S., 497 F.3d

972, 975 (9th Cir. 2007). Material allegations, even if doubtful in fact, are assumed to be true.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). However, the court need not “necessarily

assume the truth of legal conclusions merely because they are cast in the form of factual

allegations.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003)

(internal quotation marks omitted). In fact, the court does not need to accept any legal

conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed

factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlement to relief’

requires more than labels and conclusions, and a formulaic recitation of the elements of a cause

of action will not do.” Twombly, 550 U.S. at 555 (internal citations omitted). Instead, the

allegations in the complaint “must be enough to raise a right to relief above the speculative

level.” Id. Thus, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual

matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S.

at 678 (citing Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the reasonable inference that the defendant is

liable for the misconduct alleged.” Id. “The plausibility standard is not akin to a ‘probability

requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”

Id. A complaint may be dismissed as a matter of law either for lack of a cognizable legal theory

or for insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749

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F.2d 530, 534 (9th Cir. 1984).

III. DISCUSSION

A. Legal Standards Governing FDCPA

The purpose of the FDCPA is to “eliminate abusive debt collection practices by debt

collectors, to insure that those debt collectors who refrain from using abusive debt collection

practices are not competitively disadvantaged, and to promote consistent State action to protect

consumers against debt collection abuses.” 15 U.S.C. § 1692(e) (2006). To accomplish this goal,

the FDCPA prohibits debt collectors from “using any false, deceptive or misleading

representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e.

Specifically, section 1692e(3) prohibits “the false representation or implication that any

individual is an attorney or that any communication is from an attorney.” Section 1692e(10)

prohibits the “use of any false representation or deceptive means to collect or attempt to collect

any debt or to obtain information concerning a consumer.” In deciding whether a statement in a

debt collection letter violates these prohibitions, courts make an objective analysis that takes into

account whether the “least sophisticated debtor would likely be misled by a communication.”

Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934 (9th Cir. 2007); see also Swanson v. S.

Or. Credit Serv., Inc., 869 F.2d 1222, 1227 (9th Cir. 1988). In this circuit, a debt collector’s

liability under § 1692e of the FDCPA is an issue of law. Terran v. Kaplan, 109 F.3d 1428, 1432

(9th Cir. 1997).

The “least sophisticated debtor” standard is “lower than simply examining whether

particular language would deceive or mislead a reasonable debtor.” Swanson, 869 F.2d at 1227.

The standard is “designed to protect consumers of below average sophistication or intelligence,”

or those who are “uninformed or naive,” particularly when those individuals are targeted by debt

collectors. Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1062 (9th Cir. 2011) (citing Duffy v.

Landberg, 215 F.3d 871, 874-75 (8th Cir. 2000)). At the same time, “the standard also prevents

liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient

of reasonableness and presuming a basic level of understanding and willingness to read with

care.” United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131, 136 (4th Cir. 1996) (citing Clomon v.

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Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)); see also Gonzales, 660 F.3d at 1062.

B. Plaintiff’s Section 1692e Claim

Plaintiff asserts that Defendant has violated Section 1692e(3) and Section 1692e(10) of

the FDCPA because the “letter was drafted and phrased in a manner that would confuse and

mislead the least sophisticated consumer as to whether or not an attorney had reviewed the

account, and whether legal action against Plaintiff could be taken.” (Compl. ¶ 33.) 

The FDCPA prohibits collection letters that “appear to be sent by an attorney without the

attorney’s having both reviewed the debtor’s file and gained some knowledge about the specific

debt.” Irwin v. Mascott, 112 F. Supp. 2d 937, 949 (N.D. Cal. 2000). Thus, “[i]f the attorney did

not first conduct an individual review of the debtor’s case, or if the attorney did not determine if

a particular letter should be sent, or if the attorney did not know the identity of the person to

whom the letter was sent, the communication is false and misleading under § 1692e(3).” Id. The

use of an attorney’s letterhead and signature on a collection letter is “sufficient to give the least

sophisticated consumer the impression that the letters [are] communications from an attorney.”

Dupuy v. Weltman, Wienberg & Reis Co., 442 F. Supp. 2d 822, 825 (N.D. Cal. 2006) (citing

Clomon, 988 F.2d at 1320-21). A collection letter from an attorney that contains a disclaimer

may not violate the FDCPA if the least sophisticated consumer would understand that the

attorney had not reviewed the facts of his or her case. Murphy v. Bronson, Cawley, & Bergmann,

LLP, No. 3:10-CV-01929 AJB, 2011 WL 2413447, at *7 (S.D. Cal. June 13, 2011) (citing Greco

v. Trauner, Cohen & Thomas, L.L.P., 412 F.3d 360, 363 (2d Cir. 2005)).

Here, the letter was signed by an attorney, Andrew Rundquist. Although the use of an

attorney’s signature alone may not violate the FDCPA, the legal language in the letter here

crosses the line. The letter states that “[i]n the event that legal action is pursued and judgment is

ultimately obtained against you, the judgment may include court costs, local attorney fees, and

interest in addition to the principal amount currently owed.” (emphasis added). This legal

statement contradicts and overshadows the disclaimer that “no attorney with this firm has

personally reviewed the particular circumstances of your account.” The threatening language

such as “legal action,” “judgment,” and “court costs” could give the least sophisticated consumer

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the impression of impending litigation. See Robertson v. Richard J. Boudreau & Assocs., LLC,

No. C09-1681 BZ, 2009 WL 5108479 at *2 (N.D. Cal. Dec. 18, 2009) (finding false

representation of attorney involvement based on the fact that the disclaimer is contradicted and

overshadowed by the threatening language such as “legal dispute,” “legal defense,” and “cost of

litigation”).

Defendant’s reliance on Greco is unpersuasive. Greco, 412 F.3d 360. First, the Second

Circuit case is not binding in this jurisdiction. More importantly, the short letter in Greco does

not use any language that suggests impending litigation. Id. at 361. This case is different. The

use of “legal action,” “judgment,” “court costs,” and “attorney fees” in the letter, coupled with

an attorney’s signature, overshadows the express disclaimer that no attorney had reviewed the

file. Therefore, the Court finds that the letter here could mislead the least sophisticated consumer

as to attorney involvement. Accordingly, the Court finds that Plaintiff has stated a plausible

claim under Section 1692e(3) and Section 1692e(10) of the FDCPA. Because the Rosenthal Act

incorporates the substantive provisions of the FDCPA, Defendant’s violations of the FDCPA

also establish violations of the Rosenthal Act. For the same reasons, the Court finds plaintiff has

stated a plausible claim under the Rosenthal Act.

IV. CONCLUSION & ORDER

In light of the foregoing, the Court DENIES Defendant’s motion to dismiss. 

IT IS SO ORDERED.

DATED: June 16, 2014

M. James Lorenz

United States District Court Judge

COPY TO: 

HON. RUBEN B. BROOKS

UNITED STATES MAGISTRATE JUDGE

ALL PARTIES/COUNSEL

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