Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_04-cv-02266/USCOURTS-casd-3_04-cv-02266-1/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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- 1 - 04cv2266

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

CHERI J. NUTTER,

Plaintiff,

CASE NO. 04cv2266 DMS (RBB)

ORDER ADOPTING REPORT

AND RECOMMENDATION

vs.

NCO FINANCIAL SYSTEMS, INC.,

Defendant.

This Court entered a Final Order and Judgment in this class action case on April 21, 2006.

Pursuant to that Judgment, each Settlement Class Member with an open account with NCO Portfolio

Management, Inc. (“NCOP”) on the second Tuesday after Final Judgment Day with Right Party

Contact before September 30, 2005, was to receive a ten percent credit on their account, with a

maximum credit of $164. (See Final Order and Judgment, Ex. 1 at 13.) After this process was

completed, Plaintiff’s counsel complained to the Honorable Herbert B. Hoffman, who has been

appointed as a Special Master in this case, that Defendant improperly sold accounts that should have

received credits. The parties presented their respective positions on this issue to Judge Hoffman, and

on October 3, 2006, he prepared a Report and Recommendation (“R&R”) for this Court. One member

of Plaintiff’s legal team, Elizabeth J. Arleo, Esq., has filed objections to the R&R, and Defendant has

filed a reply to those objections. 

Judge Hoffman recommends the Court order Defendant to post approximately $15.8 million

in additional credits to all remaining, open NCOP accounts, pursuant to Defendant’s offer. He

presents four reasons for this recommendation. First, he states the parties’ Settlement Agreement does

Case 3:04-cv-02266-DMS-RBB Document 65 Filed 10/26/06 Page 1 of 2
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1

 In the absence of any contractual language on this issue, there is nothing for the Court to

interpret, either for or against Plaintiff. However, if there was any contractual language on this issue,

the Court would not interpret it against Plaintiff. (See Final Order and Judgment, Ex. 1 at 22) (“This

Agreement shall be deemed to have been drafted jointly by the Parties and, in construing and

interpreting this Agreement, no provision of this Agreement shall be construed or interpreted against

any party because such provision, or this Agreement as a whole, was purportedly prepared or

requested by such party.”) 

- 2 - 04cv2266

not prohibit the sale of any NCOP accounts. Second, he notes the Settlement Agreement should be

interpreted against Plaintiff because she could have demanded more clarity in the Agreement, but

failed to do so. Third, Judge Hoffman states NCOP does not have a contractual right to repurchase

its accounts. Finally, Judge Hoffman argues the repurchase and subsequent crediting of NCOP

accounts “would create insurmountable administrative problems for NCO and the Court.” (R&R at

4.) 

After reviewing the Final Order and Judgment, Judge Hoffman’s R&R, Ms. Arleo’s objections,

and Defendant’s reply, the Court adopts Judge Hoffman’s recommendation. As stated in the R&R,

the Final Order and Judgment does not prohibit the sale of any NCOP accounts.1 Furthermore, NCOP

has no right to repurchase its accounts under its contracts with those purchasers, nor does it have any

obligation to do so pursuant to the Settlement Agreement in this case. For these reasons, the Court

 adopts Judge Hoffman’s recommendation. Pursuant to its offer, NCO shall post approximately $15.8

million in additional credits to all remaining, open NCOP accounts within three weeks of this Order

being stamped “Filed.” 

IT IS SO ORDERED.

DATED: October 26, 2006

DANA M. SABRAW

United States District Judge

Case 3:04-cv-02266-DMS-RBB Document 65 Filed 10/26/06 Page 2 of 2