1

Filed 7/2/13 Lee v. American Agencies CA1/4 

NOT TO BE PUBLISHED IN OFFICIAL REPORTS 

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication 

or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA 

FIRST APPELLATE DISTRICT 

DIVISION FOUR 

FREIDA LEE, 

 Plaintiff and Appellant, 

v. 

AMERICAN AGENCIES, et al., 

 Defendants and Respondents. 

 A133016, A133752 

 (Alameda County 

 Super. Ct. No. RG09477598) 

 Plaintiff Freida Lee appeals a judgment and attorney fee award entered after the 

trial court granted summary judgment to defendants American Agencies, American 

Credit Agencies, Inc. (ACA, Inc.), and ACA Receivables Co., LLC (ACA Receivables) 

in this purported class action for unfair debt collection practices. She contends the trial 

court erred in granting summary judgment on her claims under the Rosenthal Fair Debt 

Collection Act (Civ. Code, § 1788 et seq.) and the federal Fair Debt Collection Practices 

Act (15 U.S.C. § 1692 et seq.) (FDCPA) and in awarding attorney fees to defendants. 

We shall reverse the award of attorney fees and otherwise affirm the judgment. 

I. BACKGROUND 

A. The Allegations of the Complaint 

 Plaintiff alleged in the operative complaint that on or about September 24, 2008, 

defendant American Agencies sent her an initial debt collection letter claiming she owed 

$831.06 on a past due bill from a third party and stating American Agency had purchased 

the debt from another debt collector. The letter said nothing about how or when the debt 

was incurred. In response, plaintiff sent a letter disputing the debt and requesting the 
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original name and address of the creditor and verification of the debt. She alleged 

American Agencies did not respond to the request for verification and that it continued to 

attempt to collect the debt. This attempt, according to the complaint, included reporting 

plaintiff’s debts to consumer credit reporting agencies. According to plaintiff, defendants 

had a practice of not validating or verifying debts upon consumer request, but instead 

continuing to call purported debtors and failing to ensure adverse credit reporting was 

discontinued. Plaintiff also alleged both that defendants were either parents and 

subsidiaries of each other and that they were in reality one company. 

 Plaintiff asserted causes of action for violation of the Rosenthal Fair Debt 

Collection Practices Act (Civ. Code, § 1788.17; see also 15 U.S.C. § 1692g), violation of 

California’s unfair competition law (Bus. & Prof. Code, § 17200), and declaratory and 

injunctive relief. 

B. Motion for Summary Judgment 

 Defendants moved for summary judgment, arguing that (1) they were not 

obligated to verify the debt if they discontinued collection efforts; (2) they did not 

continue collection efforts after plaintiff requested verification of the debt; and (3) they 

did not report the debt to credit bureaus after plaintiff requested verification. 

 The evidence submitted in support of the motion for summary judgment included 

the original letter from American Agencies demanding payment of a debt, the original 

creditor of which was “PACIFIC BELL TEL/dba SBC:CALIF.” The letter, which was 

dated September 24, 2008, notified plaintiff that “the above account, which was 

previously purchased, has now been assigned to this office for collection by Asset 

Acceptance, LLC,” and stated, “If you notify this office in writing within 30 days from 

receiving this notice that you dispute this debt, or any portion thereof, this office will 

obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such 

judgment or verification. If you request in writing within 30 days after receiving this 

notice, this office will provide you with the name and address of the original creditor if 

different from the current creditor.” 
3

 In a letter to American Agencies dated October 3, 2008, plaintiff responded: “I 

dispute the above purported debt. I request the original name and address of the original 

creditor and verification of the debt. I specifically request any document that shows I 

have any such obligation. [¶] If you have any question, do not hesitate to call.” 

 Leticia Holguin called plaintiff on October 16, 2008. Plaintiff did not answer the 

telephone, and Holguin left a message. In a declaration, she stated: “I attempted to 

contact Ms. Lee on October 16, 2008, pursuant to her express invitation to contact her, 

and solely for the purposes of inquiring about Ms. Lee’s request for verification. This 

attempt to contact Ms. Lee was not made for collection purposes.” 

Plaintiff sent another letter to American Agencies, dated December 8, 2008, 

stating, “On October 3, 2008, I disputed the above purported debt, requesting the original 

name and address of the original creditor and verification of the debt. I specifically 

requested any document that shows I have any such obligation. [¶] I have heard nothing 

from you. Please note the dispute and provide the verification forthwith. [¶] If you have 

any questions, do not hesitate to call.” 

 In response to plaintiff’s December 8, 2008 letter, Holguin tried to contact plaintiff 

by telephone on December 24, 2008, and January 6, 2009, in order to inquire about her 

request for verification. Plaintiff did not answer the calls, and Holguin did not leave a 

message. 

 In her deposition, when asked if American Agencies had contacted her by 

telephone, plaintiff testified that she did not know if they had contacted her, that someone 

left messages on her main switchboard line, that the caller did not leave a name, that she 

called back to find out who the calls were for, and that “they couldn’t give [her] any 

information.” 

 The debt collection account was cancelled on April 3, 2009. 

 Craig Impelman, the Vice President of Operations at ACA Receivables Co., LLC, 

dba American Agencies, stated in a declaration that neither ACA Receivables nor ACA, 
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Inc. ever reported plaintiff’s alleged debt to any credit reporting agency.1

 Plaintiff’s 

credit report showed that the alleged debt had been reported to a credit agency by 

November 2007, and that plaintiff disputed the debt. Asset Acceptance, Inc. was named 

as the creditor. 

 Impelman also declared that “ACA Receivables Company, LLC dba American 

Agencies is the only entity that has ever had any involvement with Plaintiff Freida Lee’s 

collection account.” According to Impelman, American Agencies is a fictitious business 

name of ACA Receivables. ACA, Inc. previously owned the American Agencies 

fictitious business name. 

 In opposition to the motion for summary judgment, plaintiff submitted evidence 

that if a customer disputed a debt and defendants decided to cease and desist from 

collection, the macro “,496” should be used. The collection notes on plaintiff’s account 

do not reflect the macro “,496” to “cease and desist.” A document American Agencies 

used in training stated that if a consumer disputed the validity of a debt within 30 days of 

receiving a validation notice, federal law required the debt collector to obtain actual 

verification of the debt from the creditor and mail it to the consumer, as well as the name 

and address of the original creditor if requested by the consumer. The document also said 

that if the consumer disputes the debt, a debt collector should either “abandon collection 

efforts and close the account,” or “cease collection action until verification of the debt 

has been obtained from the creditor and mailed to the consumer.” If the consumer 

disputed the debt within the 30-day validation period, according to the training document, 

“American Agencies ceases all collection efforts and requests ‘full backup’ on the debt 

from the creditor. . . . [¶] Upon receipt, American Agencies then mails this information to 

the consumer at which point collection efforts may be resumed.” 

 Plaintiff submitted a portion of the Code of Ethics and Code of Operations of the 

Association of Credit and Collection Professionals, which provides that upon receipt of a 

 1

 In verifying responses to interrogatories, Impelman had identified himself as “VP 

of Operations” of American Agencies, ACA, and ACA Receivables. 
5

written request for verification of a debt, a debt collector should suspend collection 

activities and provide verification of the debt. If the debt collector does not or cannot 

provide verification of the debt, the debt collector should cease all collection efforts; 

“[d]irect or request removal of the item from the consumer’s credit report or report the 

item as disputed to the appropriate credit reporting agency”; when closing and returning 

an account, notify the credit grantor, client, or owner of the debt that collection activity 

was terminated due in inability to verify the debt; and if requested by the consumer in 

writing, notify the consumer that collection efforts have been terminated. 

 Plaintiff also submitted evidence that Holguin testified in her deposition that she 

called plaintiff to follow up on her dispute and left a message asking plaintiff to return 

her call. She had been trained that when she called about a disputed account to attempt to 

collect a balance, she should provide her own name, the name of the company, and a 

phone number when leaving messages. She had been trained that in handling a disputed 

account, she should “go over [the] dispute and see what they’re actually disputing so we 

can get the information to them [in] a timely manner.” Holguin testified she could also 

try to settle the matter. Plaintiff stated in a declaration that she did not perceive 

American Agencies’ telephone calls to be debt collection efforts at the time they were 

made, but that after reading the depositions and discovery responses, she had concluded 

they were debt collection efforts. 

 The trial court granted the motion for summary judgment. As to defendant 

American Agencies, it accepted the evidence that American Agencies was a fictitious 

business name owned by ACA Receivables, and ruled that plaintiff’s claims lay only 

against the owner of the fictitious business name. In granting summary judgment as to 

ACA, Inc., the trial court relied on the evidence that ACA, Inc.. sold the name “American 

Agencies” to ACA Receivables in 2005 and that it did not engage in debt collection. The 

court found that defendants did not have an independent duty to provide verification of 

the debt if they did not continue collection activities, and that they did not engage in 

collection activity after plaintiff requested verification of the debt. The court denied 

plaintiff’s request for a continuance to obtain additional discovery to oppose the motion. 
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C. Attorney Fees 

 Defendants moved for attorney fees under Civil Code section 1788.30, subdivision 

(c), which authorizes an award of attorney fees “to a prevailing creditor upon a finding by 

the court that the debtor’s prosecution or defense of the action was not in good faith.” 

The trial court awarded fees against plaintiff in the amount of $66,818.00. 

II. DISCUSSION 

A. Standard of Review on Summary Judgment 

“We review a grant of summary judgment de novo. [Citation.] In performing our 

de novo review, we employ a three-step analysis. ‘First, we identify the issues raised by 

the pleadings. Second, we determine whether the movant established entitlement to 

summary judgment, that is, whether the movant showed the opponent could not prevail 

on any theory raised by the pleadings. Third, if the movant has met its burden, we 

consider whether the opposition raised triable issues of fact.’ [Citations.] . . . Any 

evidence we evaluate is viewed in the light most favorable to the plaintiff as the losing 

party; we strictly scrutinize the defendant’s evidence and resolve any evidentiary doubts 

or ambiguities in the plaintiff’s favor. [Citation.]” (Barber v. Chang (2007) 151 

Cal.App.4th 1456, 1462–1463.) 

 In opposing a motion for summary judgment, plaintiffs “ ‘may not rely upon the 

mere allegations or denials of [their] pleadings,’ but must ‘set forth the specific facts 

showing that a triable issue of material fact exists.’ [Citation.] ‘The party opposing the 

summary judgment must make an independent showing by a proper declaration or by 

reference to a deposition or another discovery product that there is sufficient proof of the 

matters alleged to raise a triable question of fact if the moving party’s evidence, standing 

alone, is sufficient to entitle the party to judgment. [Citation.] To avoid summary 

judgment, admissible evidence presented to the trial court, not merely claims or theories, 

must reveal a triable, material factual issue. [Citation.] Moreover, the opposition to 

summary judgment will be deemed insufficient when it is essentially conclusionary, 

argumentative or based on conjecture and speculation.’ [Citation.]” (Trujillo v. First 

American Registry, Inc. (2007) 157 Cal.App.4th 628, 635.) 
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B. Duty to Verify Debt 

 We first examine whether there is any legal merit to plaintiff’s contention that 

defendants had a statutory obligation to verify the validity of the debt after they 

determined not to proceed with collection. Civil Code section 1788.17 provides in 

pertinent part, “every debt collector collecting or attempting to collect a consumer debt 

shall comply with the provisions of Section 1692b to 1692j, inclusive, of, and shall be 

subject to the remedies in Section 1692k of, Title 15 of the United States Code.” Our 

state statute thus incorporates portions of the FDCPA. 

 Plaintiff alleged defendants violated the state statutes by failing to comply with the 

provisions of the FDCPA requiring verification of debts and by continuing to collect 

disputed debts. The FDCPA, specifically section 1692g of title 15 of the United States 

Code (hereinafter § 1692g) requires a debt collector, with certain exceptions, to send to 

the consumer a written notice containing, inter alia, (1) “a statement that unless the 

consumer, within thirty days after receipt of the notice, disputes the validity of the debt, 

or any portion thereof, the debt will be assumed to be valid by the debt collector;” (2) “a 

statement that if the consumer notifies the debt collector in writing within the thirty-day 

period that the debt, or any portion thereof, is disputed, the debt collector will obtain 

verification of the debt or a copy of a judgment against the consumer and a copy of such 

verification or judgment will be mailed to the consumer by the debt collector;” and (3) “a 

statement that, upon the consumer’s written request within the thirty-day period, the debt 

collector will provide the consumer with the name and address of the original creditor, if 

different from the current creditor.” (§ 1692g, subd. (a), italics added.) 

 Under section 1692g, if the consumer notifies the debt collector within 30 days 

that a debt is disputed, or requests the name and address of the original credit, “the debt 

collector shall cease collection of the debt, or any disputed portion thereof, until the debt 

collector obtains verification of the debt or a copy of a judgment, or the name and 

address of the original creditor, and a copy of such verification or judgment, or name and 

address of the original creditor, is mailed to the consumer by the debt collector. . . .” 

(§ 1692g, subd. (b), italics added.) Plaintiff contends this language imposes upon 
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collection agencies the duty to verify the disputed debt whether or not they continue with 

debt collection efforts.2

 Three federal appellate courts have considered this issue, and 

each has rejected the position plaintiff espouses. 

 A panel of the Ninth Circuit considered this question in Guerrero v. RJM 

Acquisitions LLC (9th Cir. 2007) 499 F.3d 926, 940 (Guerrero). It agreed with the 

reasoning of Jang v. A.M. Miller & Associates (7th Cir. 1997) 122 F.3d 480, 482–483 

(Jang), stating: “In Jang, consumer plaintiffs claimed that defendants, two debt 

collection agencies, violated the Act because they never verified the alleged debts after 

plaintiffs disputed them. [Citation.] The Seventh Circuit, affirming the district court’s 

grant of defendants’ motion to dismiss, noted correctly that the Act ‘does not require debt 

collectors to actually provide validation. Rather, it requires that the debt collector cease 

all collection activity until it provides the requested validation to the debtor.’ [Citation.] 

[¶] A collector, notified that a debt is disputed, thus has a choice. As the court in Jang

put it, the collector ‘may provide the requested validations and continue their [sic] debt 

collection activities, or [it] may cease all collection activities.’ [Citations.] It would 

make little sense to impose an independent obligation to verify an alleged debt on a 

collector who, for example, decides that a disputed debt is not worth the effort and 

chooses to close or sell the account. Or, as the court in Jang noted, on a collector who, 

upon receiving a dispute notice, realizes the consumer does not in fact owe the debt and 

so abandons all costly collection efforts.” (Guerrero, supra, 499 F.3d at p. 940.) 

 The Sixth Circuit reached a similar result in Smith v. Transworld Systems, Inc. (6th 

Cir. 1992) 953 F.2d 1025, 1031 (Smith), stating that because the defendant there ceased 

collection activities after receiving a cease and desist letter, “defendant was not obligated 

 2

 The requirement of verification has been construed to mean the debt collector, at 

a minimum, must “ ‘confirm[] in writing that the amount being demanded is what the 

creditor is claiming is owed.’ ” (Clark v. Capital Credit & Collection Serv. (9th Cir. 

2006) 460 F.3d 1162, 1173–1174.) This may include, for instance, obtaining from the 

creditor information about the debt and providing the debtor with documentary evidence 

of the debt. (Id. at p. 1174.) 
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to send a separate validation of the debt to plaintiff.” Similarly, the court in Sanchez v. 

United Collection Bureau, Inc. (N.D. Ga. 2009) 649 F.Supp.2d 1374, 1381 (Sanchez), 

stated, “When a consumer requests validation of a debt pursuant to the FDCPA, the debt 

collector is required to cease collection of the debt until it provides verification of the 

debt to the consumer. A debt collector is not required to verify the debt, but instead may 

cease all collection activity on the account.” (Accord, Sambor v. Omnia Credit Services, 

Inc. (D. Haw. 2002) 183 F.Supp.2d 1234, 1242, 1243 (Sambor) [because debt collector 

ceased collection activities, it did not violate FDCPA by failing to verify debt]; Zaborac 

v. Phillips and Cohen Associates, Ltd. (N.D. Ill. 2004) 330 F.Supp.2d 962, 966.)3

 Plaintiff argues that if the debt collector is not required to verify the debt, “the 

result of simply ceasing [collection efforts] may not be ceasing at all [but] the sale or 

assignment of the debt and continued collection efforts and roundelays of disputing and 

sale/assignment ad infinitum.” The court in Jang considered a similar argument and 

rejected it, noting first that there was no indication any such thing had happened in the 

case before it—as there is no indication it has happened here—and second, that “it is for 

Congress, and not the courts, to close this alleged loophole in the FDCPA.” (Jang, supra, 

122 F.3d at p. 484.) 

 3

 Lower federal courts have not always applied this rule consistently. The Ninth 

Circuit in Guerrero reversed the decision of the district court, which ruled that “even if 

Defendant had ceased with its efforts to collect the alleged debt, Defendant would still 

have been obligated to verify the debt.” (Guerrero v. RJM Acquisitions, LLC (D. Haw. 

July 9, 2004, Civ. No. 03-0038 HG-LEK) 2004 U.S. Dist. Lexis 15416, *27.) The 

district court also noted that the statute required the debt collector to inform a consumer 

that the collector would obtain and send verification on the debtor’s request, and 

concluded, “[t]he statute could not have required such a statement without intending that 

a debt collector be required to follow through with the promise to obtain and send 

verification.” (Id. at *27–28; see also Powell v. J.J. Mac Intyre Co. (D. Haw. January 23, 

2004, Civ. No. 03-00402 DAE BMK) 2004 U.S. Dist. Lexis 2811, *10–11 [concluding 

debt verification was required regardless of whether agency ceases collection, and 

distinguishing Sambor on ground that debt collector in Sambor had returned files to 

original creditor and hence was not in position to verify debt].) These cases were 

decided, of course, before the Ninth Circuit in Guerrero accepted the Jang rule that a 

debt collector who ceases collection efforts need not provide requested verifications. 

(Guerrero, supra, 499 F.3d at p. 940.) 
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 Plaintiff also points to the language of section 1692g, subdivision (a), which 

requires a debt collector to notify the consumer that if the consumer disputes the debt, the 

debt collector “will obtain verification of the debt or a copy of the judgment” and a copy 

of the verification or judgment “will be mailed to the consumer.” This statutory 

language, she argues, indicates the debt collector must provide verification even if it 

ceases collection efforts after receiving notice of the dispute. The court in Jang rejected a 

similar argument, stating, “After requiring debt collectors to promise verification upon 

request, the statute allows debt collectors to sidestep this requirement by ceasing all 

collection activities. Although the statute might be more informative for debtors if it 

required a notice that the debt collector would either provide the requested verification or 

cease all collection activities, it is not our job to rewrite the statute.” (Jang, supra, 122 

F.3d at p. 484.) 

 Finally, Plaintiff argues that defendants’ own policies and procedures show they 

understood they were required to provide verification. The issue here, however, is what 

is required by the state and federal statutes. None of plaintiff’s arguments persuade us to 

depart from the rule of Jang, Smith, and Guerrero. We agree with the trial court that 

defendants were not required to verify plaintiff’s debt if they ceased collection efforts. 

C. Continued Collection Efforts 

 We next address plaintiff’s argument that defendants wrongfully continued 

collection efforts after receiving plaintiff’s dispute letter, as shown both by defendants’ 

failure to ensure that the debt was removed from her credit reports and by Holguin’s calls 

to plaintiff. 

1. Credit Reporting 

 It is undisputed that credit reporting may constitute debt collection. (See Davis v. 

Trans Union, LLC (W.D.N.C. 2007) 526 F.Supp.2d 577, 586–587.) Here, however, there 

is no evidence that defendants reported the debt to any credit agencies; rather, plaintiff 

acknowledged below that the debt was reported by Asset Acceptance in 2007, before it 

was assigned to defendants. Moreover, the credit report in the record shows the debt as 
11

disputed.4

 Plaintiff draws our attention to no authority suggesting that a debt collector 

who does not arrange for a prior creditor to remove a debt from a credit report thereby 

engages in collection activity. The court in Shimek v. Weissman, Nowack, Curry & 

Wilco, P.C. (N.D. Ga. 2003) 323 F.Supp.2d 1344, 1350, rejected a similar contention. 

The defendant there had already forwarded liens to a county clerk by the time the 

plaintiffs received debt collection letters. The clerk recorded the liens after the plaintiffs 

had requested verification of the debt, but before the defendant provided verification. 

The plaintiff argued the defendant “was obligated to ‘take positive action’ to prevent the 

Clerk from recording the liens once Plaintiffs requested verification of the debt.” (Ibid.) 

The court ruled otherwise, stating, “[t]he plain language of Section 1692g(b) . . . requires 

only that Defendant ‘cease collection of the debt’ once verification is requested,” and the 

defendant was not required to prevent the liens from being recorded during the 

verification period. (Ibid.) Similarly here, we find no statutory basis to conclude 

defendants were obliged to take steps—even if they had authority to do so—to have a 

debt previously reported by a third party removed from plaintiff’s credit report. 

2. Telephone Calls 

 Plaintiff contends summary judgment was inappropriate because there is a factual 

dispute about whether the telephone calls Holguin made constituted collection activity. 

Pursuant to section 1692g, subdivision (b), if the consumer notifies the debt collector 

within the 30-day period that a debt is disputed, “the debt collector shall cease collection 

of the debt, or any disputed portion, thereof, until the debt collector obtains verification 

of the debt or a copy of the judgment . . . .” 

 4

 Plaintiff points to the Code of Ethics and Code of Operations of the American 

Collectors Association International, which states that if a debt cannot be verified, the 

collector should cease all collection efforts and “[d]irect or request removal of the item 

from the consumer’s credit report or report the item as disputed to the appropriate credit 

reporting agency, at the member’s next available opportunity . . . .” Here, the debt was 

correctly reported as disputed. In any case, the issue before us is not whether defendants 

violated this code of ethics and operations, but whether they violated the applicable 

statutes. 
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 In ruling the telephone calls did not constitute collection activity, the trial court 

applied the “ ‘least sophisticated debtor’ standard.” As explained in Martin v. Sands (D. 

Mass. 1999) 62 F.Supp.2d 196, 199, “When considering whether a particular collection 

notice violates the FDCPA, courts usually look to whether the objective ‘least 

sophisticated debtor’ would find the notice improperly threatening or misleading.” 

“[T]he ‘least sophistical debtor’ standard is ‘ “lower than simply examining whether 

particular language would deceive or mislead the reasonable debtor.” ’ [Citations.] . . . 

‘The basic purpose of the least-sophisticated-consumer standard is to ensure that the 

FDCPA protects all consumers, the gullible as well as the shrewd.’ ” (Wilson v. 

Quadramed Corp. (3d Cir. 2000) 225 F.3d 350, 354.) However, “although this standard 

protects naïve consumers, it 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.’ ” (Id. at 

pp. 354–355.) 

 Both plaintiff and defendants argue the trial court should not have applied the 

objective, least sophisticated debtor standard, but should instead have applied a 

subjective standard that looked to defendants’ intent in making the telephone calls—that 

is, to whether the calls were made in connection with debt collection. According to 

plaintiff, the least sophisticated debtor standard should be used only when the plaintiff 

has alleged that a communication is deceptive. 

 We need not resolve the question of whether the trial court properly applied the 

least sophisticated debtor standard because we conclude that, under any standard, there 

was no triable issue of fact as to whether defendants continued collection activities. The 

facts show that when plaintiff disputed the bill on October 3, 2008, she explicitly invited 

American Agencies to contact her if it had any questions. Holguin called her later that 

month. Holguin stated in her declaration that she called “solely for the purposes of 

inquiring about Ms. Lee’s request for verification.” In her deposition, Holguin testified 

that she called plaintiff to follow up on the dispute, and that she left a message asking 

plaintiff to return her call. Holguin had been trained that when she handled a disputed 
13

account, she should “go over [the] dispute and see what they’re actually disputing so we 

can get the information to them [in] a timely manner.” She also testified she could try to 

settle the matter. 

 In a second letter, in December 2008, plaintiff told American Agencies she had 

heard nothing in response to her dispute and again invited American Agencies to call if 

there were any questions. Holguin called twice more, but plaintiff did not answer her 

telephone and Holguin did not leave a message; she stated that the calls were made to 

inquire about the request for verification, not for collection purposes. On this record—

particularly in light of plaintiff’s express invitation for American Agencies to call if it had 

questions about her dispute—no trier of fact could conclude defendants continued with 

collection efforts after plaintiff disputed the debt.5

 (See Hubbard v. National Bond & 

Collection Assoc., Inc. (D. Del. 1991) 126 B.R. 422, 428 [verification process of 15 

U.S.C. § 1692g allows debt collector to learn “the reasons, if any, for the debtor’s refusal 

to pay” and “ensures a cost effective means by which a debtor and debt collector can 

exchange information”].) 

 We are not persuaded otherwise by plaintiff’s reliance on Allen v. ATG Credit LLC

(N.D. Ill. Dec. 14, 2004, No. 03-C-5971) 2004 U.S. Dist. Lexis 25304. In response to a 

letter informing her she could challenge the validity of a debt, the plaintiff there sent a 

letter to a debt collector requesting verification and documentation of the debt, and asked 

that future communications be made by mail, not telephone. (Id. at *2–3.) The debt 

collector responded by providing a list of charges that were allegedly owed. It then 

placed five phone calls to the plaintiff’s residence, assertedly to confirm that she had 

received the verification. The plaintiff did not receive the calls, and the debt collector did 

not leave a message. (Id. at *3.) In the course of denying the defendant debt collector’s 

 5

 The trial court sustained certain objections to the declaration of plaintiff’s 

counsel on the grounds that they contained improper legal conclusions, argument, and 

hearsay. Plaintiff contends that if, based on those sustained objections, the trial court 

failed to consider the evidence attached to counsel’s declaration as exhibits, the trial court 

erred. In our own review, we have considered the evidence included in the exhibits, and 

we conclude summary judgment was properly granted. 
14

motion for summary judgment on multiple grounds, the court stated, “[Defendant’s] 

business records show that it telephoned [plaintiff] approximately five times after the 

verification request. While [defendant] claims that it only attempted to contact [plaintiff] 

to verify that she had received the information she requested, the Court finds that the jury 

is in the better position to decipher [defendant’s] motivation.” (Id. at *10–11.) Here, in 

contrast, plaintiff herself invited American Agencies to call if it had any question about 

her dispute, and defendants submitted uncontradicted evidence that the calls were made 

in response to that invitation. 

 Because we conclude the trial court properly granted summary judgment on the 

ground that there was no statutory violation, we need not consider whether summary 

judgment was also proper as to American Agencies and ACA, Inc. on the independent 

grounds that American Agencies is a fictitious business name and that ACA, Inc. did not 

own the name American Agencies during the times relevant to this dispute. 

D. Request for Continuance 

 In her opposition to the motion for summary judgment, plaintiff sought a 

continuance in order to complete discovery regarding putative class members who may 

have been subject to the same practices alleged by plaintiff, and about whether 

defendants used the “,496” macro on the accounts of putative class members who 

disputed debts. According to plaintiff, such discovery was relevant to the question of 

defendants’ intent in making the telephone calls. She also sought discovery about 

defendants’ contract with Asset Acceptance—the assignor of the debt—which she 

asserted might “show notice of obligations regarding verification and credit reporting.” 

In a supporting declaration, plaintiff’s counsel stated that plaintiff had filed a motion to 

compel discovery regarding these putative class members, and that the court had twice 

issued directives indicating the discovery was not relevant to the issues pertinent to 

summary judgment and suggesting that the discovery motions be put off until after the 

summary judgment motion was heard. In a supplemental declaration, plaintiff’s counsel 

requested time to subpoena records of when and how the debt was reported to credit 

agencies. The trial court denied the request for a continuance, finding, “Plaintiff has not 
15

shown that facts essential to justify an opposition may exist or valid reasons that those 

facts could not have been obtained through more diligent efforts and presented with her 

opposition.” Plaintiff contends the trial court should have granted the continuance to 

allow further discovery. 

 Code of Civil Procedure section 437c, subdivision (h), provides: “If it appears 

from the affidavits submitted in opposition to a motion for summary judgment or 

summary adjudication or both that facts essential to justify opposition may exist but 

cannot, for reasons stated, then be presented, the court shall deny the motion, or order a 

continuance to permit affidavits to be obtained or discovery to be had or may make any 

other order as may be just. . . .” Thus, to be entitled to a continuance, a plaintiff is 

“required to show, by affidavit, that facts essential to his opposition to the summary 

judgment motion existed, and the reasons why they could not be presented at the time of 

the motion.” (Bushling v. Fremont Medical Center (2004) 117 Cal.App.4th 493, 511.) 

We review the trial court’s denial of a request for a continuance for abuse of discretion. 

(Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, 254.) 

 We find no abuse of discretion here. As we have explained, the undisputed facts 

show Holguin called plaintiff after plaintiff expressly invited American Agencies to do 

so, that defendants engaged in no other actions toward plaintiff after she disputed the 

debt, and that defendants did not report the debt to credit bureaus. On this record, the 

trial court could reasonably conclude plaintiff did not show that discovery about other 

putative class members and credit reporting would reveal facts essential to oppose the 

motion for summary judgment. 

E. Attorney Fees 

 Defendant sought attorney fees under Civil Code section 1788.30, subdivision (c), 

which authorizes an award of attorney fees “to a prevailing creditor upon a finding by the 

court that the debtor’s prosecution or defense of the action was not in good faith.” Upon 

defendants’ motion, the trial court awarded attorney fees against plaintiff in the amount 

of $66,818.00. Plaintiff contends this award was made in error. 
16

 An award of attorney fees under Civil Code section 1788.30, subdivision (c), is 

discretionary. (Gouskos v. Aptos Village Garage, Inc. (2001) 94 Cal.App.4th 754, 764.) 

The parties have not cited, and our own research has not disclosed, any California cases 

discussing the standard to be applied where a prevailing defendant seeks attorney fees 

under this statute. However, a nearly identical attorney fee provision may be found in 

Civil Code section 1780, subdivision (e), a portion of the Consumer Legal Remedies Act 

(Civ. Code. § 1750 et seq.), which provides in pertinent part: “Reasonable attorney’s fees 

may be awarded to a prevailing defendant upon a finding by the court that the plaintiff’s 

prosecution of the action was not in good faith.” This provision has been interpreted to 

require a finding of subjective bad faith. (Corbett v. Hayward Dodge, Inc. (2004) 119 

Cal.App.4th 915, 920–924 (Corbett); Shisler v. Sanfer Sports Cars, Inc. (2008) 167 

Cal.App.4th 1, 9.) “When a tactic or action utterly lacks merit, a court is entitled to infer 

the party knew it lacked merit yet pursued the action for some ulterior motive.” (Corbett, 

supra, 119 Cal.App.4th at p. 928.) “Good faith, or its absence, involves a factual inquiry 

into the plaintiff’s subjective state of mind [citations]: Did he or she believe the action 

was valid? What was his or her intent or purpose in pursuing it? A subjective state of 

mind will rarely be susceptible of direct proof; usually the trial court will be required to 

infer it from circumstantial evidence. Because the good faith issue is factual, the question 

on appeal will be whether the evidence of record was sufficient to sustain the trial court’s 

finding.” (Knight v. City of Capitola (1992) 4 Cal.App.4th 918, 932, overruled on 

another point in Reid v. Google, Inc. (2010) 50 Cal.4th 512, 532, fn. 7.) 

 The trial court here found plaintiff did not act in good faith in pursuing her action. 

It concluded that many of plaintiff’s allegations “were baseless (or put another way, were 

not ‘minimally colorable’).”6

 The court noted that the contention that defendants were 

obliged to verify the debt even if they did not continue collections had “been firmly 

 6

 The FDCPA allows an award of attorney fees to a defendant where the court 

finds an action “was brought in bad faith and for the purpose of harassment . . . .” (15 

U.S.C. § 1692k, subd. (a)(3).) This statute has been construed to allow fees where a 

plaintiff’s claims are not “minimally colorable.” (Guerrero, supra, 499 F.3d at p. 940; 

Sanchez, supra, 649 F.Supp.2d at p. 1382.) 
17

rejected by three Federal Courts of Appeals and accepted by none,” and that plaintiff had 

not identified any sound basis for the court to disagree with those decisions. The court 

found “[e]ven more troubling . . . Plaintiff’s repeated insistence that the Defendants 

reported the debt in question to credit reporting bureaus.” According to the court, 

“Plaintiff made this charge, ignored Defendants’ sworn declaration to the contrary that 

was provided early in the case, and never obtained any evidence to support it. . . . And 

when Defendants subpoenaed credit agencies in order to lay this issue to rest, Plaintiff 

refused to consent, forcing Defendants to file a motion to obtain credit reporting records, 

which confirmed that no Defendant had reported the disputed item to any credit agency.” 

The court went on, “Plaintiff’s refusal strongly suggests an intent to obstruct, rather than 

resolve, this litigation. Both this claim and Plaintiff’s tactics in litigating the claim were 

completely meritless.” The court also found that plaintiff’s attempts to “recast” this 

claim to argue that defendants “were obligated to attempt to remove items reported by 

another agency from Plaintiff’s credit report” was legally unsupported. The court 

concluded, “the circumstances in which this case arose are not entirely above suspicion; 

the manner in which Plaintiff’s counsel prosecuted the case is not admirable; and the 

Court cannot find even a minimally colorable claim or position taken by Plaintiff.” 

 Although this is a close issue, and counsel’s dubious litigation tactics 

notwithstanding, we conclude plaintiff had at least one colorable claim. It is clear from 

the record that defendants did not report the debt to credit bureaus, and that there is no 

legal basis to conclude a debt collector has a duty to ensure that others remove a debt 

from a credit report. It is also true that every federal appellate court that has considered 

whether a debt collector who ceases collection efforts has a duty to provide verification 

has answered that question in the negative, and we agree that those cases are correctly 

decided. (See, e.g., Guerrero, supra, 499 F3d at p. 940; Jang, supra, 122 F.3d at pp. 

482–483; Smith, supra, 953 F.2d at p. 1031.) However, as plaintiff points out—and as 

the court in Jang, supra, 122 F.3d at p. 482 acknowledged—in addition to requiring a 

debt collector to cease collection of a disputed debt “until the debt collector obtains 

verification of the debt or a copy of the judgment” (§ 1692g, subd. (b)), the FDCPA also 
18

requires the debt collector, in the notice of debt, to include a statement that if the 

consumer notifies the debt collector of the dispute in writing during the 30-day period, 

“the debt collector will obtain verification of the debt or a copy of a judgment against the 

consumer and a copy of such verification or judgment will be mailed to the consumer by 

the debt collector.” (§ 1692g, subd. (a)(4).) Thus, there is at least an arguable tension 

between the requirements of subdivision (a) of this statute, which requires the debt 

collector to tell the consumer it will obtain and mail verification, and subdivision (b), 

which does not impose an independent duty actually to obtain or send verification if the 

debt collector ceases collection efforts. Although the federal appellate courts have 

unanimously interpreted the statute so that a debt collector need not obtain and mail 

verification if collection efforts cease, no California court has ruled on the matter, and we 

cannot agree that the claim “utterly lacks merit” or that pursuing it indicates bad faith. 

(See Corbett, supra, 119 Cal.App.4th at p. 928.)7

 

 Likewise, it does not appear to us that there was no good faith basis for plaintiff’s 

claim that Holguin’s telephone calls were collection efforts. Although the record on 

summary judgment persuades us that no reasonable trier of fact could conclude the calls 

constituted collection efforts, we are not persuaded that pursuing such a claim would 

indicate lack of good faith—and indeed, in its attorney fee order, the trial court did not 

discuss that claim. 

 We shall therefore reverse the attorney fee order. 

 7

 Indeed, as we have noted, some federal District Court cases before Guerrero, 

supra, 499 F.3d 926, concluded a debt collector did have an independent duty to verify a 

debt upon request. (See fn. 3, ante, and cases cited therein.) 
19

III. DISPOSITION 

 The attorney fee order is reversed. In all other respects, the judgment is affirmed. 

 

 _________________________ 

 Rivera, J. 

We concur: 

_________________________ 

Reardon, Acting P.J. 

_________________________ 

Humes, J.