Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-01930/USCOURTS-azd-2_12-cv-01930-0/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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Most are facts alleged in Garcia’s complaint and admitted in Gurstel’s answer.

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

JOSHUA GARCIA, )

)

Plaintiff, ) 2:12-CV-1930 JWS

)

vs. ) ORDER AND OPINION

)

GURSTEL CHARGO, P.A., ) [Re: Motions at dockets 26 and 31]

)

Defendant. )

)

I. MOTIONS PRESENTED

At docket 26, defendant Gurstel Chargo, P.A. (“Gurstel”) moves for judgment on

the pleadings pursuant to Rule 12(c). Plaintiff Joshua Garcia (“Garcia”) responds at

docket 30. Gurstel’s reply is at docket 33. At docket 31, Garcia moves for summary

judgment pursuant to Rule 56. Gurstel responds at docket 34. Garcia’s reply is at

docket 37. Oral argument was not requested and would not be of aid to the court.

II. BACKGROUND

Except as otherwise noted, the facts recited in this section are not disputed.1

Acting as counsel for HSBC Bank Nevada, N.A. (“Bank”), Gurstel filed a state court

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2

The state court complaint appears to have been dismissed for lack of prosecution on

May 6, 2011. See, HSBC Bank Nevada, N.A. v. Joshua Garcia, Case No. CC2010-456208,

Kyrene Justice Court of the State of Arizona in the County of Maricopa.

3

FDCPA defines a “consumer” as a natural person obligated or allegedly obligated to

pay a debt. 15 U.S.C. § 1692a(3). In ¶ 5, the complaint alleges Garcia is a “consumer.” In a

remarkable bit of pettifogging, Gurstel’s answer responds in ¶ 5 that Gurstel lacks sufficient

information to admit or deny Garcia’s “consumer” status. Whether Gurstel is unsure Garcia is a

person, unsure he is allegedly obligated to pay a debt, or both is unclear. In any case the

response is ludicrous and of no moment. For purposes of Gurstel’s motion, the allegation of

consumer status must be accepted as true.

4

FDCPA defines a “debt collector” to be one who uses interstate commerce in a

business whose principal purpose is debt collection, or who regularly attempts to collect debts

for others. 15 U.S.C. § 1692a(6). Paragraph 6 of the complaint alleges Gurstel is a “debt

collector.” Gurstel’s droll response is that “it engages in the use of the mails and telephone in

attempting to collect a debt from Plaintff. To the extent that Paragraph 6 states a legal

conclusion, no admission or denial is required.” Doc. 7 at ¶ 6. Gurstel’s failure to deny that it is

a debt collector is an admission that it is. Fed. R. Civ. P. 8(b)(6).

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complaint against Garcia dated July 25, 2010. It sought to recover $3,919.60 plus

interest for credit extended by the Bank.2 Garcia is a “consumer” as defined in the

FDCPA3

 and Gurstel is a “debt collector” as defined by the FDCPA.4 On August 2,

2010, Garcia called Gurstel and spoke to Jennifer Wiedle, a Gurstel lawyer. Garcia

disputed the debt and told her there was fraudulent activity relating to another person’s

using his social security number. Gurstel sent a letter dated August 10, 2010, reciting

that Gurstel had been informed Garcia was claiming there was fraud relating to the

credit Gurstel was trying to collect. The letter included an identity theft affidavit and

asked Garcia to complete and return it. Garcia did so. Gurstel received the completed

affidavit on August 21, 2010.

On May 11, 2012, Gurstel wrote Garcia offering to settle the Bank’s claim for

50% of the balance. On May 30, Gurstel sent a second letter indicating it might be

possible to settle for less than the outstanding balance and asked Garcia to contact

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5

15 U.S.C. § 1692 et seq.

6

Doc. 1, ¶ 39.

7

Id. at ¶ 41.

8

Id. at ¶ 43.

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Gurstel by June 25, 2012, to discuss arrangements. Garcia’s complaint alleges that he

called Gurstel on June 4, and said he sent a fraud affidavit to Gurstel in 2010. On July

27, Gurstel sent Garcia a letter with text identical to the August 10, 2010 letter and

enclosed another identity theft affidavit to be completed and returned.

Garcia’s complaint pleads three Fair Debt Collection Practices Act (“FDCPA”)5

claims. Count I alleges that Gurstel “violated 15 U.S.C. § 1692c(c) by communicating

with Plaintiff after having received a letter from Plaintiff with a request to cease and

desist all collection contacts or a statement that Plaintiff refuses to pay the alleged

debt.”6

 Count II alleges that Gurstel “violated 15 U.S.C. § 1692e(2)(A) by falsely

representing the character, amount, or legal status of Plaintiff’s alleged debt.”7 Finally,

Count III alleges that Gurstel “violated 15 U.S.C. § 1692e(10) by using false

representations or deceptive practices in connection with the collection of an alleged

debt from Plaintiff.”8 Garcia seeks to recover statutory damages of $1,000, actual

damages, reasonable attorney fees and pre-judgment and post-judgment interest

together with any other relief that may be appropriate. Garcia’s complaint was filed on

September 11, 2012.

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9

Fed. R. Civ. P. 12(c). 

10Strigliabotti v. Franklin Resources, Inc., 398 F. Supp. 2d 1094, 1097 (N.D. Cal. 2005).

11See Aldabe v. Aldabe, 616 F.2d 1089, 1093 (9th Cir. 1980).

12Vignolo v. Miller, 120 F.3d 1075, 1077 (9th Cir. 1997).

13Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

14Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990).

15Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001).

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III. STANDARDS OF REVIEW

A. Rule 12(c) Standard

“After the pleadings are closed but within such time as not to delay the trial, any

party may move for judgment on the pleadings.”9

 Because “Rules 12(b)(6) and 12(c)

are substantially identical,”10 a motion for judgment on the pleadings is assessed under

the standard applicable to a motion to dismiss for failure to state a claim upon which

relief may be granted under Rule 12(b)(6).11

Rule 12(b)(6), tests the legal sufficiency of a plaintiff’s claims. In reviewing such

a motion, “[a]ll allegations of material fact in the complaint are taken as true and

construed in the light most favorable to the nonmoving party.”12 To be assumed true,

the allegations, “may not simply recite the elements of a cause of action, but must

contain sufficient allegations of underlying facts to give fair notice and to enable the

opposing party to defend itself effectively.”13 Dismissal for failure to state a claim can be

based on either “the lack of a cognizable legal theory or the absence of sufficient facts

alleged under a cognizable legal theory.”14 “Conclusory allegations of law . . . are

insufficient to defeat a motion to dismiss.”15 

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16Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009).

17Id.

18Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

19Id. (quoting Twombly, 550 U.S. at 557).

20Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009); see also Starr v. Baca,

652 F.3d 1202, 1216 (9th Cir. 2011).

21Fed. R. Civ. P. 56(a).

22Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 

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To avoid dismissal, a plaintiff must plead facts sufficient to “state a claim to relief

that is plausible on its face.”16 “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.”17 “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.”18 “Where a complaint pleads facts that are ‘merely consistent’

with a defendant’s liability, it ‘stops short of the line between possibility and plausibility of

entitlement to relief.’”19 “In sum, for a complaint to survive a motion to dismiss, the nonconclusory ‘factual content,’ and reasonable inferences from that content, must be

plausibly suggestive of a claim entitling the plaintiff to relief.”20

B. Summary Judgment Standard

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment

should be granted if there is no genuine dispute as to any material fact and the moving

party is entitled to judgment as a matter of law.21 The moving party has the burden of

showing that there is no genuine dispute as to any material fact.22 The moving party

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23Id. at 323-25.

24Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986).

25Id. at 255. 

26Id. at 248-49. 

27See Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007).

28See Lee, 250 F.3d at 688-89.

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need not present evidence; it need only point out the lack of any genuine dispute as to

material fact.23 Once the moving party has met this burden, the non-moving party must

set forth evidence of specific facts showing the existence of a genuine issue for trial.24

All evidence presented by the non-movant must be believed for purposes of summary

judgment and all justifiable inferences must be drawn in favor of the non-movant.25

However, the non-moving party may not rest upon mere allegations or denials, but must

show that there is sufficient evidence supporting the claimed factual dispute to require a

fact-finder to resolve the parties’ differing versions of the truth at trial.26

IV. DISCUSSION

A. Motion at Docket 26

When deciding Gurstel’s motion for judgment on the pleadings the court may

consider documents Garcia referenced and relied upon in his complaint even if they

were not exhibits to the complaint, so long as their authenticity is not in question.27 The

court may also take notice of matters of public record such as the proceedings in

Gurstel’s state court suit against Garcia.28

Gurstel first argues that Garcia’s claims are barred by FDCPA’s one year statute

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2915 U.S.C. § 1692k(d).

30575 F.3d 935, 940 (9th Cir. 2009).

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of limitation.29 The argument fails because the liability alleged in all three claims would

arise from the letters Gurstel sent to Garcia in May and July of 2012, well within the one

year period prior to the filing of Garcia’s complaint on September 11, 2012. Gurstel’s

reliance on Magnum v. Action Collection Service, Inc.30 is misplaced, because Garcia

could not have known nor had reason to know that Gurstel would send him letters in

2012 until he received the letters.

Next, Gurstel argues that Count I should be dismissed, because Garcia neither

informed it in writing that he refused to pay the debt nor informed Gurstel in writing that

he wanted it to cease communications, a predicate to liability under 15 U.S.C. §

1692c(c). That statue provides as follows:

If a consumer notifies a debt collector in writing that the consumer refuses

to pay a debt or that the consumer wishes the debt collector to cease

further communication with the consumer, the debt collector shall not

communicate further with the consumer with respect to such debt, except-

(1) to advise the consumer that the debt collector’s further

efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor

may invoke specified remedies which are ordinarily invoked

by such debt collector or creditor; or 

(3) where applicable, to notify the consumer that the debt

collector or creditor intends to invoke a specified remedy.

The only written communication Garcia sent to Gurstel prior to July 2012, was

the fraud affidavit which Gurstel received on August 21, 2010. Gurstel contends that

Garcia’s communication is penned on a document it provided which nowhere includes a

statement that Garcia wished Gurstel to cease communications, and nowhere includes

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31Clark v. Capital Credit & Collection Serv., 460 F.3d 1162, 1169-70 (9th Cir. 2006)

(citation omitted).

32Id. at 1171 (citations omitted).

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a statement that Garcia refused to pay. 

“Congress enacted [FDCPA] to protect consumers from ‘improper conduct’ and

illegitimate collection practices ‘without imposing unnecessary restrictions on ethical

debt collectors.’”31 Toward that end courts employ the “least sophisticated debtor”

standard.

In judging the actions of a debt collector, we invariably ask whether the

information provided was or its actions were confusing or misleading. 

Quite simply, we seek to ensure that even the least sophisticated debtor is

able to understand, make informed decisions about, and participate fully

and meaningfully in the debt collection process. * * * That goal–and,

therefore, the least sophisticated debtor standard–is no less important or

relevant when considering the actions of the debtor than when considering

the actions of a debt collector.32

With the least sophisticated debtor standard in mind, the court must consider

whether the fraud affidavit should be considered an adequate written notice to Gurstel

that Garcia refused to pay or that Gurstel should cease communications. To begin with,

Gurstel’s own conduct in soliciting the fraud affidavit after having been told verbally that

the debt was disputed and related to fraudulent use of Garcia’s social security number

could easily be confusing or misleading to an unsophisticated debtor. The request for

the affidavit would appear to an unsophisticated debtor to be follow-up paperwork

showing the debt would not be paid by the debtor. Similarly, Garcia’s completion and

return of the fraud affidavit would readily support a least sophisticated debtor’s

expectation that the debt collector understood that the debtor refused to pay the debt.

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33“ID Theft Affidavit,” doc. 27-3 at ¶¶ 11 - 14.

34Id. at ¶ 16.

3515 U.S.C. § 1692c(c).

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The least sophisticated debtor standard aside, it is hard to read the fraud affidavit

without concluding that Garcia was not going to pay the debt. The affidavit contained a

number of responses to questions posed by Gurstel which are consistent with a refusal

to pay the debt and inconsistent with the notion that Garcia would pay the debt. More

specifically, in his responses Garcia averred that he did not authorize anyone to use his

name or personal information to obtain the credit, that he had not received any benefit

as a result of the credit extension, that his identification documents were stolen, and

that the person who obtained the credit was David Moffett.33 In summarizing his

position Garcia wrote “I have received a summons for a credit that I have never had nor

used . . . Dave Moffett had used my social security number.”34 The fraud affidavit was

sufficient to put Gurstel on notice that Garcia would not pay the debt.

The court agrees with Gurstel that the fraud affidavit does not communicate a

request that Gurstel cease communicating with Garcia. But that makes no difference,

because the controlling statute requires the debt collector to cease communications if

the debtor indicates either a desire to terminate communications or, as happened here,

a refusal to pay the debt.35

Perhaps realizing the ice was too thin to support either of its first two arguments,

Gurstel also contends that the May and July 2012 communications fall into an exception

to the prohibition on communications. There are three statutory exceptions. The

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3615 U.S.C. § 1692c(c) (1), (2) and (3).

37Doc. 33 at p. 3.

38Id.

39135 F.3d 389 (6th Cir. 1998).

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exceptions are for communications advising the debtor (1) that the debt collector’s

further efforts are terminated, (2) that the debt collector “may invoke specified remedies

which are ordinarily invoked,” or (3) that the debt collector “intends to invoke a specified

remedy.”36 Gurstel relies on second exception.37 Gurstel suggests that the “remedy”

was offering Garcia “an avenue to discuss resolution of the debt if he was interested in

doing so.”38

The second exception applies when a debt collector is giving notice of a specific

remedy it may invoke. Such a remedy might be a demand for arbitration or the filing of

a lawsuit. The May 2012 communications do not refer to any specific remedy that may

be pursued. Rather, they essentially offer to compromise the dispute. At first blush, the

May 2012 letters might appear to fall outside the second exception. However, this court

finds the discussion in a Sixth Circuit decision cited by Gurstel to be instructive. In

Lewis v. ACB Business Services, Inc.,39 the debtor sent the debt collector a written

demand to cease communications. A few weeks later, the debt collector sent the debtor

a communication which in character and tone is indistinguishable from the two May

2012 communications at issue here. Holding that the communication in Lewis fell

within the exception established by 15 U.S.C. § 1692c(c)(2), the appellate court

explained:

We believe that [debtor’s] interpretation of § 1692c(c)(2), which would

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40Lewis, 135 F.3d at 399 (internal citation omitted).

41Doc. 30 at p. 10. 

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prohibit collectors from sending noncoercive settlement offers as a

remedy, is ‘plainly at variance with the policy of the legislation as a whole.’ 

To hold that a debt collector cannot offer payment options as part of an

effort to resolve an outstanding debt, possibly without litigation, would

force honest debt collectors seeking a peaceful resolution of the debt to

file suit in order to advance efforts to resolve the debt–something that is

clearly at odds with the language and purpose of the FDCPA.40

Following the decision in the Lewis case the court concludes that the May 2012

communications fall within the second exception. Similarly, the July 2012 solicitation of

a second fraud affidavit represents an effort by Gurstel to help resolve the matter

amicably. Gurstel is entitled to dismissal of Count I.

Gurstel contends that Count II should be dismissed, because the 2012

communications did not falsely represent “the character, amount or legal status of any

debt” as required to establish liability under 15 U.S.C. § 1692e(2)(A). Garcia responds

that the 2012 communications “falsely represented that Mr. Garcia owed a debt that did

not belong to him.”41 The character (type) of the debt and its amount are not disputed. 

The only possible basis for Count II is that the 2012 communications falsely represented

the legal status of the debt. While for purposes of the motion at hand, Garcia’s

assertion that he did not owe the debt must be accepted as true, there is nothing in the

2012 communications which actually asserted that the legal status of the debt was that

Garcia was responsible to pay it. Rather, the 2012 communications invited further

dialogue about the debt and even provided a second opportunity for Garcia to contend

that the debt was not Garcia’s debt. Under the least sophisticated debtor standard

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4215 U.S.C. § 1692e(10).

43Campzano-Burger v. Midland Credit Mgmt., 550 F.3d 294, 298 (3d Cir. 2008).

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applied in the context of a Rule 12(c) motion, Garcia’s position is untenable. The 2012

communications cannot reasonably be construed to falsely represent the character,

amount or legal status of the debt. Gurstel is entitled to dismissal of Count II. 

Furthermore, to allow Count II to proceed on the basis that the efforts to compromise

the alleged debt amounted to a false representation of legal status would be

inconsistent with the rationale of the appellate court decision in Lewis quoted in the text

above.

To succeed on Count III, Garcia would need to prove that Gurstel used false

representations or deceptive means to collect the debt or to obtain information from

Garcia.42 It is Garcia’s position that because he had notified Gurstel that Garcia would

not pay the debt, the May and July 2012 communications constitute false

representations or an attempt to deceive him. As discussed in the preceding

paragraph, the May and July 2012 communications do not constitute false

representations.

The question remains whether they were deceptive communications. The Third

Circuit has explained that, “[a] communication is deceptive for purposes of [FDCPA] if it

can be reasonably read to have two or more different meanings, one of which is

inaccurate.”43 Garcia’s complaint does not ascribe any particular inaccurate meaning to

the 2012 communications. His complaint simply asserts in the most general of terms

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44Doc. 1 at p. 8.

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that the communications were “false representations or deceptive practices.”44

Argument in Garcia’s briefing is limited to the proposition that these communications

wrongly asserted that he owed the debt, an argument already addressed. The court

finds nothing otherwise inaccurate about the 2012 communications even when

considered in light of the least sophisticated debtor standard. The May communications

invited Garcia to compromise the dispute and the July communication offered a way for

him to provide more information.

In summary, Gurstel is entitled to judgment on the pleadings. Applying the Rule

12(c) standard as informed by the least sophisticated debtor analytical approach, the

court concludes that Counts I, II and III fail to state a facially plausible claim which

entitles Garcia to relief.

B. Motion at Docket 31

The court having determined that Gurstel is entitled to judgment, Garcia’s motion

for summary judgment at docket 31 must be denied as moot.

V. CONCLUSION

For the reasons set forth above, the motion at docket 26 is GRANTED and the

motion at docket 31 is DENIED as moot. The Clerk will please enter judgment that

plaintiff take nothing from defendant.

DATED this 19th day of August 2013.

 /S/ 

JOHN W. SEDWICK

UNITED STATES DISTRICT JUDGE

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