In Ruiz v. Hunt & Henriques, No. D075286, 2020 Cal. App. Unpub. LEXIS 4847 (July 29, 2020), in the context of an anti-SLAPP motion brought by the debt collection law firm, the Court of Appeal found that a debtor need not dispute the debt to challenge the amount of the debt stated.
Hunt alternatively argues that Ruiz cannot recover under section 1692e(2)(A) or 1692f(1) for a claimed overstatement of the debt amount because Ruiz “did not bring any specific disputes to [Hunt’s] attention” and Capital One did reverse some of the disputed charges. It argues that “where it is undisputed that a debtor does not contest the debt, she cannot assert an FDCPA cause of action based upon an attempt to collect a debt later asserted to be invalid.” In support, Hunt cites Palmer v. I.C. Systems, Inc. (N.D.Cal., Nov. 8, 2005, No. C-04-03237 RMW) 2005 WL 3001877 (Palmer). 28 In Palmer, the debt collector sent the plaintiff two collection letters seeking an amount for returned checks; the debt amount had been provided by the creditor. (Palmer, supra, 2005 WL 3001877.) The plaintiff did not respond to the letters or otherwise dispute the charges, and instead filed an FDCPA action against the debt collector, alleging violations of 1692e(2)(A) and 1692f(1) because the amount allegedly included unauthorized charges. (Palmer, at p. *2.) The federal district court found she could not recover on her cause of action because section 1692g entitles the creditor to assume the debt is valid absent a dispute. (Palmer, at pp. *3-*5.) The court additionally found relevant that the defendant debt collector had “successfully established the bona fide error [affirmative] defense as to plaintiff’s allegations under [sections 1692e and 1692f].” (Palmer, at p. *8.) Considering both grounds together, the court dismissed the plaintiff’s claim. (Ibid.) This case is distinguishable because Ruiz did dispute the debt in response to Hunt’s initial section 1692g letter (in her November 9 letter), and Hunt did not rely on the bona fide defense in bringing its anti-SLAPP motion. Additionally, the majority of federal and state courts have explicitly rejected the notion that a plaintiff is barred from recovering on a FDCPA claim under sections 1692e(2)(A) and/or 1692f(1) if the plaintiff does not dispute the debt before filing suit, including after receiving the 1692g validation letter. (See McLaughlin, supra, 756 F.3d at pp. 247-248 & fn. 11 [disagreeing with Palmer, and stating “there is no statutory support for th[e] view” that the FDCPA “require[s] a consumer to dispute a debt” before filing the claim challenging the collection of an invalid debt]); Russell v. Absolute Collection Servs., Inc. (4th Cir. 2014) 29 763 F.3d 385, 392-394 [debtor not required to dispute debt as a condition to filing suit under section 1692e]; Malone, supra, 408 F.Supp.3d at p. 1345 [“The Court agrees with the Second Circuit finding that neither the statutory text nor the legislative intent of the FDCPA support a waiver of legal rights for failing to comply with a debt validation procedure. Therefore, [plaintiff] did not waive any right to bring legal action . . . when he failed to dispute the referred debt.”]; see also Vangorden v. Second Round, L.P. (2d Cir. 2018) 897 F.3d 433, 440-441.)
However, the Court of Appeal appeared to adopt the ipso facto rule that a debt collector can be liable under the FDCPA for ‘misstating’ the amount in a Complaint if the debt collector does not recover everything sought in the Complaint.
Hunt argues that sections 1692e and 1692f should not be interpreted as permitting liability against an attorney merely for filing a lawsuit where the attorney recovers only a part of the claimed debt. However, Heintz itself involved liability based on an inaccurate statement of a portion of the amount owed (although in a settlement letter, not the complaint). Moreover, federal courts have interpreted Heintz to mean that a complaint overstating the debt amount or other factual misstatement can fall 31 within the scope of FDCPA liability. (See Marquez v. Weinstein, Pinson & Riley, P.S. (7th Cir. 2016) 836 F.3d 808, 810-812 (Marquez); Eichman v. Mann Bracken, LLC (W.D.Wis. 2010) 689 F.Supp.2d 1094, 1100 (Eichman); Reyes v. Kenosian & Miele, LLP (N.D.Cal. 2008) 619 F.Supp.2d 796, 801-804 (Reyes); Guevara v. Midland FundingNCC-2 Corp. (N.D.Ill., June 20, 2008, No. 07C5858) 2008 WL 4865550, at p. *5; see also Murphy v. Stupar, Schuster & Bartell, SC (W.D.Wis. 2018) 337 F.Supp.3d 837, 840-844.)4 On the other hand, we agree with those federal courts that have recognized Heintz should not be stretched to absurd lengths. (See Eichman, supra, 689 F.Supp.2d at pp. 1100-1101; Wehrheim v. Secrest (S.D.Ind., Aug. 16, 2002, No. IP 00-1328-C-T/K) 2002 WL 31242783, at pp. *3-*4.) “Heintz assumes that the FDCPA applies to the filing of a state court complaint, but encourages a reading of the statute that does not inhibitordinary, lawful litigation.” (Reyes, supra, 619 F.Supp.2d at p. 804, italics added.) Under this principle, the Eichman court held that where the consumer bases his or her action solely on a court pleading, the consumer “must allege that [the debt collector’s claims] are frivolous, based on blatant lies or misrepresent a key fact.” (Eichman, at pp. 1100-1101.) We agree that, without more, an attorney does not violate the FDCPA merely by representing a client who sues for an overstated debt amount. But we need not decide the After Heintz, Congress amended the FDCPA to exempt “formal pleadings” from coverage of certain portions of the act, but these amendments did not apply to sections 1692e(2) or 1692f. (See 1692e(11); Marquez, supra, 836 F.3d at p. 811.) 32 outer limits of attorney FDCPA liability because Ruiz did not rely on Hunt’s filing of the complaint to support her FDCPA claim. Instead, she grounded her claim principally on Hunt’s actions, as a debt collector, in sending the October 19 and January 8 letters that sought to collect an overstated amount of debt, particularly after she allegedly repeatedly communicated her challenges to this amount to the creditor, to the second debt collector, and to Hunt (in her November 9 letter).
After rejecting the debt collector’s Noerr-Pennington and litigation privilege challenges, the Court of Appeal turned to the TCPA, finding the evidence insufficient.
In her declaration, Ruiz said: “I received collection calls related to [my Capital One] account on my cell phone through October 2017 even though I had previously revoked my consent to receive those calls on multiple occasions, including on January 27, 2017, March 1, 2017, and in May 2017. [¶] I answered some of the calls and some ofthem had pre-recorded messages that appeared to be collection calls. The messages said that they were attempts to collect a debt. [¶] I believe these calls were from [Hunt] but I hung up before I had the chance to speak to anyone.” (Italics added.) This evidence is insufficient to support that Hunt violated the TCPA by making calls to Ruiz using an automatic dialer. Although Ruiz said she received calls on her cell phone from January 2017 through October 2017 and that “some of them had pre-recorded messages” (italics added), she did not state or suggest the calls she received from the end of September through October 2017 (when Hunt was the debt collector on the account) were those that had prerecorded messages. Her statement that she “believed these calls were from Hunt . . .” is conclusory and without factual support, and therefore is insufficient to sustain her burden to oppose the anti-SLAPP motion. Likewise, Ruiz’s counsel’s attachment of a page from Hunt’s website stating that the firm “utilize[s] several auto-dial systems with high volume capabilities . . . in accordance with client-specific needs and instructions” is insufficient to show Hunt in fact used this system when it called Ruiz. Although we must liberally construe a plaintiff’s evidence, reading Ruiz’s declaration in a fair and reasonable manner does not support a logical inference that the alleged calls with prerecorded messages were initiated during the time Hunt had collection responsibilities on the account. Based on this conclusion, we do not reach the issue whether the court properly overruled Hunt’s objections to the declarations of Ruiz and her attorney on this subject, and/or whether the court properly found inadmissible Sherrill’s declaration stating that Hunt terminated its use of autodialing equipment on January 28, 2017. Because Ruiz did not meet her burden to show Hunt made automatic-dialed calls to her cell phone while it was the debt collector on the account (beginning on September 29, 2017), Hunt had no obligation to present evidence that it did not make these calls.