District Court (Cal.) Finds Rosenthal Act Violation while Collecting Debt from National Guardsman

In Owings v. Hunt & Henriques, 2010 WL 3489342 (S.D.Cal. 2010), Judge Lorenz found that a debt collector violated the Rosenthal Act in the collection of a debt from a National Guardsman called into military service. 

The definition of “debt collector” under California Civil Code Section 1788.2(c) expressly excludes “an attorney or counselor at law.” FN2 A creditor’s counsel retained for the purpose of collecting a debt is not a “debt collector” within the meaning of the Rosenthal Act. Carney v. Rotkin, Schmerin & McIntyre, 206 Cal.App.3d 1513, 1518, 1526, 254 Cal.Rptr. 478 (1988). In Carney, the action, which included violations of the Rosenthal Act, was filed against the creditor, the law firm retained by the creditor, an attorney and a secretary of the law firm for actions taken by the law firm in collecting the debt. 206 Cal.App.3d at 1518, 254 Cal.Rptr. 478. The court held that dismissal of the claim was proper as to all defendants because attorneys are not subject to the Rosenthal Act. Id. at 1526, 254 Cal.Rptr. 478. Plaintiff’s argument that the Rosenthal Act excludes attorneys but not law firms is therefore rejected. Hunt cannot be held liable under the Rosenthal Act. ¶  The parties also disagree whether Arrow can be held vicariously liable for Hunt’s FDCPA violations. Defendants argue that Arrow cannot be held vicariously liable because Plaintiff presented no evidence that Arrow exercised any control over Hunt in collecting the debt. This argument is rejected. In the FDCPA context, “Congress intended the actions of an attorney to be imputed to the client on whose behalf they were taken.” Fox v. Citicorp Credit Serv., Inc., 15 F.3d 1507, 1516 (9th Cir.1994). It is undisputed that Hunt’s actions in attempting to collect were on Arrow’s behalf. (Joint Statement at 2 & Ex. U (Dep. of Tonia Easterling at 79); see also Ex. T.) Accordingly, to the extent Hunt is held liable for any FDCPA violations in collecting the debt, Arrow is vicariously liable.

The debt collector’s attorney also had checked the box in the state court collection action stating that the debtor was not in military service.  Judge Lorenz held that the National Guard call-up to the United States/Mexico border in Operation Jump Start triggered the SSCRA, rendering the attorney’s affidavit false within the meaning of the Rosenthal Act.