Filed 8/30/23

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

PHIL HAGEY,

 Plaintiff and Appellant,

v.

SOLAR SERVICE EXPERTS, LLC,

 Defendant and Respondent.

 G061836

 (Super. Ct. No. 30-2021-01202580)

 O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, William 

D. Claster, Judge. Reversed and remanded with instructions. Request for judicial notice 

granted in part and denied in part.

Law Offices of Todd M. Friedman, Todd M. Friedman, Adrian R. Bacon 

and Thomas E. Wheeler for Plaintiff and Appellant.

Caldarelli Hejmanowski Page & Leer, Marisa Janine-Page and Ben West 

for Defendant and Respondent.
2

This case, which involves purportedly unlawful debt collection practices of 

defendant Solar Service Experts, LLC, calls on us to interpret aspects of the Rosenthal 

Fair Debt Collection Practices Act (Rosenthal Act) (Civ. Code, § 1788 et seq.).1 Plaintiff 

Phil Hagey appeals from a judgment of dismissal entered following the sustaining of a 

demurrer to his second amended complaint without leave to amend. The trial court 

concluded plaintiff did not, and could not, allege facts sufficient to constitute a consumer 

credit transaction, as statutorily defined. Plaintiff argues the court erroneously focused 

on the undisputed fact he did not owe the debt which defendant sought to collect and, in 

doing so, failed to recognize the Rosenthal Act applies to debt alleged to be due or owing 

by reason of a consumer credit transaction. We agree and reverse the judgment.

FACTS2

Plaintiff owns a home with a solar energy system (the system). At the time 

he purchased the home, the prior homeowner was party to a contract with a company, 

Kilowatt Systems, LLC (Kilowatt), which owned the system (the solar agreement). 

Among other terms, the solar agreement required the prior homeowner to purchase the 

energy produced by the system through monthly payments to Kilowatt.

1 All further statutory references are to the Civil Code unless otherwise 

stated.

2 Given the procedural posture of this case, the facts we recite are taken from 

the operative (second amended) complaint allegations. Defendant contended, and the 

trial court agreed, that certain factual allegations in the operative complaint were 

inconsistent with the contents of documents referenced in the operative complaint and 

allegations in the first amended complaint. At defendant’s request, the court took judicial 

notice of the first amended complaint, its ruling on defendant’s demurrer to the first 

amended complaint, and certain state government business records. Defendant asks us to

take judicial notice of those same documents. We take judicial notice of the court records 

but decline to take judicial notice of the business related records. (Evid. Code, § 459.) 

The latter documents are not relevant to the issue raised in this appeal; they appear to 

have been related to other aspects of the demurrer ruling not challenged by plaintiff.
3

In the event of a sale of the house, the solar agreement afforded the prior 

homeowner three options. The prior homeowner and plaintiff agreed to an option which 

allowed prepayment of all remaining monthly payments and a transfer of all solar 

agreement rights and obligations to plaintiff, except for the monthly payment 

responsibility. In conjunction with the sale of the house, prepayment occurred and the 

parties entered into the requisite transfer agreement.

At some later point in time, defendant began sending plaintiff monthly bills 

on Kilowatt’s behalf, demanding payments pursuant to the solar agreement. After 

receiving a bill, plaintiff spoke to a representative of defendant who told him he should

not have received the bill and the issue would be resolved. Thereafter, however, plaintiff 

received additional bills and at least one late payment notice which identified defendant 

as a debt collector. Plaintiff communicated with defendant’s representatives about the 

errors by phone and email, all to no avail.

Plaintiff filed a class action lawsuit against defendant. The complaint 

alleged, on behalf of the class, violation of California’s Unfair Competition Law

(Business & Prof. Code, § 17200 et seq.), and on behalf of plaintiff individually, 

violation of the Rosenthal Act. A first amended complaint added a cause of action, on 

behalf of the class, for violation of the Consumer Legal Remedies Act (CLRA) (§ 1750 

et seq.).

Defendant successfully demurred to the first amended complaint, leading 

plaintiff to file a second amended complaint. The trial court granted a demurrer to the 

entirety of the second amended complaint for failure to state a claim. With respect to the 

unfair competition and CLRA causes of action, the court granted leave to amend. It did 

not do so with respect to the Rosenthal Act cause of action.

Plaintiff requested entry of judgment dismissing the action so he could 

pursue an appeal. He timely appealed thereafter.
4

DISCUSSION

The sole issue presented in this appeal hinges on statutory interpretation of 

certain provisions of the Rosenthal Act. Plaintiff argues the trial court erred in 

concluding the operative complaint does not state a cause of action under the statutory 

scheme because it fails to allege a consumer credit transaction, as that term is defined by

statute. He contends the court overlooked a key aspect of the statutory definitions which 

encompasses debt alleged to be due or owing, not simply debt that is, in fact, due or 

owing. Defendant contends the court got it right—plaintiff did not acquire anything on 

credit and, therefore, was not party to a consumer credit transaction to which the statutory 

scheme applies. Plaintiff’s argument has merit.

Principles of statutory interpretation and standard of review

“The basic rules for statutory construction are well settled. [¶] . . . ‘[O]ur 

fundamental task . . . is to determine the Legislature’s intent so as to effectuate the law’s 

purpose.’ [Citation.] ‘We begin with the plain language of the statute, affording the 

words of the provision their ordinary and usual meaning and viewing them in their 

statutory context, because the language employed in the Legislature’s enactment 

generally is the most reliable indicator of legislative intent.’ [Citations.] The plain 

meaning controls if there is no ambiguity in the statutory language. [Citation.] If, 

however, ‘the statutory language may reasonably be given more than one interpretation, 

“‘“courts may consider various extrinsic aids, including the purpose of the statute, the 

evils to be remedied, the legislative history, public policy, and the statutory scheme 

encompassing the statute.””” [Citation.]” (People v. Cornett (2012) 53 Cal.4th 1261, 

1265.)

“[I]n reviewing a trial court’s order sustaining a demurrer without leave to 

amend[,] ‘[w]e independently review the ruling . . . and determine de novo whether the 

complaint alleges facts sufficient to state a cause of action. [Citation.] We assume the 
5

truth of the properly pleaded factual allegations, facts that reasonably can be inferred 

from those expressly pleaded, and matters of which judicial notice has been taken. 

[Citation.] We construe the pleading in a reasonable manner and read the allegations in 

context.’” (Davidson v. Seterus, Inc. (2018) 21 Cal.App.5th 283, 294 (Davidson).)

Collection of consumer debts

Enacted in 1977, the Rosenthal Act aims “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.” (§ 1788.1, 

subd. (b).) Among other matters, it generally requires “debt collector[s] collecting or 

attempting to collect a consumer debt” to comply with the provisions of its federal 

counterpart, the Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. § 1692 et seq.). 

(§ 1788.17; Davidson, supra, 21 Cal.App.5th at p. 295.) The legislation is “‘a remedial 

statute [that] should be interpreted broadly in order to effectuate its purpose.’” 

(Komarova v. National Credit Acceptance, Inc. (2009) 175 Cal.App.4th 324, 340.)

To determine whether defendant and its activities vis-à-vis plaintiff fall 

within its scope of the Rosenthal Act, we turn to the Act’s definitions. “Debt collector” is 

defined as “any person who, in the ordinary course of business, regularly, on behalf of 

that person or others, engages in debt collection.” (§ 1788.2, subd. (c).) “[D]ebt 

collection” consists of “any act or practice in connection with the collection of consumer 

debts.” (§ 1788.2, subd. (b).) In turn, “consumer debt” is defined to be “money, 

property, or their equivalent, due or owing or alleged to be due or owing from a natural 

person by reason of a consumer credit transaction.” (§ 1788.2, subd. (f).) A “consumer 

credit transaction” is “a transaction between a natural person and another person in which 

property, services, or money is acquired on credit by that natural person from the other 

person primarily for personal, family, or household purposes.” (§ 1788.2, subd. (e).)
6

Thus, for debt collection activity concerning money to fall within the scope 

of the Rosenthal Act, it must involve money due or owing, or alleged to be due or owing, 

by reason of a transaction in which property, services, or money is acquired on credit

primarily for personal, family, or household purposes.

The question before us is whether the operative complaint alleges activity

by defendant which falls within the ambit of consumer debt collection activity. The 

simple answer is it does. To begin, the allegations state defendant sent plaintiff bills and 

late payment notices about money which defendant claimed plaintiff owed. This satisfies 

the money “alleged to be due or owing” component of the statutory scheme.

Defendant incorrectly focuses on the apparently undisputed fact that 

plaintiff did not actually owe the money for which he was billed. The plain statutory 

language makes clear the Legislature did not choose to protect only those who owe 

money. (See Fausto v. Credigy Services Corp. (N.D. Cal. 2009) 598 F.Supp.2d 1049, 

1053 [reaching same conclusion with respect to similar language in FDCPA].) Indeed, 

the Rosenthal Act, like the FDCPA, was specifically designed “to ‘eliminate the recurring 

problem of debt collectors dunning the wrong person or attempting to collect debts which 

the consumer has already paid.’” (Swanson v. South Oregon Credit Service, Inc.

(9th Cir.1988) 869 F.2d 1222, 1225; see also Paredes v. Credit Consulting Services, Inc.

(2022) 82 Cal.App.5th 410, 425 (Paredes) [“The Rosenthal Act is modeled on, and 

applies more broadly than, the federal FDCPA.”].) “It is difficult to conceive of a more 

unfair debt collection practice than dunning the wrong person” or dunning a person for 

debt already paid. (Davis v. Midland Funding, LLC (E.D. Cal. 2014) 41 F.Supp.3d 919, 

925, italics in original.)

Turning to the second component of consumer debt, namely the reason for 

which the debt is alleged to be owing, the complaint alleges the outstanding monies were 

payments purportedly owed under the solar agreement. Pursuant to the solar agreement, 

Kilowatt agreed to install a solar panel system on the home, operate, maintain and repair 
7

it, and sell to the homeowner all electric energy produced by it. In exchange, the 

homeowner agreed to pay for all electricity produced and to use such electricity 

“primarily for personal, family or household purposes[.]” Pre-payment was not required, 

and each monthly payment was for past service (e.g., June bill was for electricity

generated in May).

Given this structure, the solar agreement embodies a transaction in which 

services were acquired on credit primarily for personal, family, or household purposes—

i.e., a consumer credit transaction. (See Davidson, supra, 21 Cal.App.5th at p. 296 

[concluding “on credit” as used in Rosenthal Act means “obtaining something of value 

without immediate payment on the promise to make a payment or payments in the 

future”]; Merriam-Webster Dict. Online (2023) <https://www.merriamwebster.com/dictionary/credit> [as of June 7, 2023] [defining “credit” as “the provision 

of money, goods, or services with the expectation of future payment”].) Once again, it is 

irrelevant all money due under the solar agreement was already paid. And it is equally 

irrelevant that plaintiff was not a party to the solar agreement. The focus is what 

defendant’s debt collection practices said about the supposed debt, namely that it was due 

and owing under the solar agreement.

Defendant argues sustaining of the demurrer should be affirmed because

plaintiff did not, and cannot, allege a transaction between him and defendant. But 

nothing in the Rosenthal Act requires a transaction between the debt collector and the 

alleged debtor. Quite the opposite, the legislation encompasses debt collection activity 

engaged in on behalf of another. (§ 1788.2, subd. (c).)

Because the operative complaint stated a cause of action under the 

Rosenthal Act, defendant’s demurrer should have been overruled as to that cause of 

action. The trial court erred in doing otherwise.
8

DISPOSITION

The judgment is reversed. On remand, the trial court shall vacate the 

judgment and the order sustaining defendant’s demurrer in full and shall enter a new 

order overruling the demurrer as to plaintiff’s Rosenthal Act cause of action. Plaintiff is 

entitled to costs on appeal.

DELANEY, J.

WE CONCUR:

SANCHEZ, ACTING P. J.

MOTOIKE, J.