In Lombana v. Green Tree Servicing, LLC, 2016 WL 4967641, at *2 (C.D.Cal., 2016), Judge Gandhi granted summary judgment to a Loan Servicer on the grounds that the Account was not in default at the time of acquisition.
Here, Defendant contends that it does not fall within the definition of a “debt collector,” and therefore cannot be liable for any alleged FDCPA violations. (See Mot. at 1-8.) In response, Plaintiff stipulates that the Loan was not in default when Defendant acquired collection rights, but argues that this is “not the end of the story.” (Opp. at 1.) Specifically, Plaintiff claims that: (1) a senior lienholder’s subsequent foreclosure of the Property eliminated the underlying debt, pursuant to California Code of Civil Procedure Section 580b (“§ 580b” or “Section 580b”); and thus (2) Defendant falsely represented to Plaintiff that a loan still did exist, in violation of FDCPA. (Opp. at 1-2.) The Court agrees with Defendant. It is a stipulated fact that Defendant acquired the rights to collect on the Loan prior to any default. (Opp. at 1; DUF # 7-8.) Accordingly, Defendant does not fall within the definition of a “debt collector.” See 15 U.S.C. § 1692a(6)(F)(iii). Thus, Plaintiff is unable to meet a “threshold requirement” of a FDCPA cause of action. See Robinson, 654 F. Supp. 2d at 1057. Plaintiff’s efforts to save her FDCPA cause of action are unavailing for two reasons. First, and most obvious, her allegation about the non-existence of any debt does not change the fact that she cannot meet a threshold element of a FDCPA claim. See id. Second, her allegation is based on a misreading of § 580(b). Section 580(b) does not erase Plaintiff’s debt. See Herrera v. LCSFin. Servs. Corp., 2009 WL 2912517, at *8 (N.D. Cal. Sept. 9, 2009) (“Section 580b, by its own terms … does not eliminate the underlying debt.” (emphasis added)); [see also Dkt. No. 17 at 3]. As such, even if Plaintiff could somehow get past the threshold requirements, she would not be able to demonstrate that Defendant made “a false representation [regarding] the … status of [the] debt.” (See Opp. at 2).
Severson attorney Matt Esposito briefed and argued the case. email@example.com