In Hadsell v. CACH, LLC, 2014 WL 497433 (S.D.Cal. 2014), Judge Lorenz, within the context of a motion for reconsideration, granted partial summary judgment and denied partial summary judgment to an FDCPA defendant alleged to have violated a Cease-and-Desist letter from the debtor and to have violated the FDCPA by praying for 10% interest in the Prayer for Relief in a collection action when the credit card APR was only 8.9%. Plaintiff sued under the FDCPA, claiming that the Defendant violated a written Cease-and-Desist sent by the Plaintiff and sought sums in the state court collection action that were not permitted by the Contract or by law. As to the Cease-and-Desist, the Court found a triable issue of fact under the “mailbox” rule as to whether the Defendant received the letter, but, ultimately, found that the Defendant had no communications with the Plaintiff afterwards that would have violated the FDCPA.
To adequately support a cause of action for a violation of § 1692c(c), Plaintiff must provide evidence that Defendants received his cease and desist letter. Nichols v. GC Servs., LP, 423 Fed. Appx. 744, 745 (9th Cir.2011) (granting summary judgment for Defendant because Plaintiff failed to establish that Defendant had received the letter Plaintiff sent via certified mail). Plaintiff does not provide direct evidence of receipt, but instead relies on application of the mailbox rule. (Opp’n 4.) ¶ “[The mailbox rule] is a tool for determining, in the face of inconclusive evidence, whether or not receipt has actually been accomplished.” Schikore v. BankAmerica Supplemental Ret. Plan, 269 F.3d 956, 961 (9th Cir.2001). “The mailbox rule provides that the proper and timely mailing of a document raises a rebuttable presumption that the document has been received by the addressee in the usual time.” Id. (citing Hagner v. United States, 285 U.S. 427, 430, 52 S.Ct. 417, 76 L.Ed. 861 (1932); Rosenthal v. Walker, 111 U.S. 185, 193, 4 S.Ct. 382, 28 L.Ed. 395 (1884); Lewis v. United States, 144 F.3d 1220, 1222 (9th Cir.1998)). ¶ Plaintiff argues that the mailbox rule applies be-cause “inconclusive evidence is exactly what exists here; the plaintiff’s testimony claiming he mailed the letter versus the defendant’s testimony claiming it was never received.” (Opp’n 4.) Defendants argue that the mailbox rule is not applicable because “Plaintiff could not identify when this correspondence was sent [nor] the address to which the correspondence was sent.” (Defs.’ P.’s & A.’s 4.) In response, Plaintiff states that he “swears” he mailed the letter. (Opp’n. 4.) Although no reference is provided, Plaintiff appears to be referring to his Declaration in support of his Response to Defendants’ Motion for Summary Judgment. (Decl. Hadsell [Doc. 55–1].) Absent Plaintiff’s Declaration, the record contains no evidence to support Plaintiff’s claim that he sent the cease and desist letter to Mandarich. Defendants previously argued in their Reply to Plaintiff’s Response to Defendants’ Motion for Summary Judgment that Plaintiff’s declaration should be disregarded as it “contradicts [Plaintiff’s] prior deposition testimony.” (Defs.’ Reply. to Pl.’s Resp to Defs.’ Mot. Summ. J. [Doc. 59] 9.) That argument is not explicitly rehashed here; however, Defendants do refer to the lack of any evidence other than “Plaintiff’s own self-serving testimony.” (Defs.’ Reply. to Pl.’s Resp to Defs.’ Mot. Recons. [Doc 73] 4.) ¶ . . . In light of Plaintiff’s declaration, there remain disputes of material fact with respect to whether, and when, Plaintiff mailed the cease and desist letter. . . Finally, Defendants argue that even if the mailbox rule applied, they have presented sufficient evidence to overcome the presumption of receipt. (Defs.’ P.’s & A.’s 4–5.) . . .Such testimony does not establish that CACH never received the letter. It simply shows that Mr. Vos was unaware of any such receipt. Further, it does not adequately address whether Mandarich received the letter, or whether CACH and Mandarich have the same established practices for documenting receipt of mail. Therefore, there remains a dispute of material fact regarding Defendants’ receipt of the cease and desist letter. ¶ As such, the Court DENIES Defendants’ Motion for Reconsideration with respect to Defendants’ receipt of the cease and desist letter.
Nevertheless, the Court held that the Plaintiff had not presented any evidence to show subsequent communication, nor has Plaintiff provided any detail as to how the alleged subsequent communication was in violation of § 1692c(c). As such, the Court held that the Defendants were entitled to summary judgment on this matter. As to the charges sought in the state court complaint, the Court found that the prayer for 10% in the Complaint when the contract contained an 8% APR potentially violated the FDCPA.
Because Defendants do not dispute that the interest rate on the original underlying debt is 8.9%, or that they requested a 10% interest rate, they must establish that they were entitled to request an amount different from the rate on the original underlying debt. (JSUF ¶¶ 3, 7, 12.) Defendants argue that they were entitled to 10% interest by law pursuant to Cal. Civil Code § 3289(b) because a new contract was formed through an account stated, and that new contract had no stated interest rate. (Defs.’ P.’s & A.’s 2–4.) This argument is unpersuasive. ¶ An account stated is “a writing which exhibits the state of account between parties and the balance owing from one to the other, and when it is assented to … becomes a new contract.” Gardner v. Watson, 170 Cal. 570, 574, 150 P. 994 (1915). Cal. Civil Code § 3289(b) states, “If a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, the obligation shall bear interest at a rate of 10 percent per annum after a breach.” Cal. Civil Code § 3289(b). Therefore, in order for this statute to apply, there must be a contract with no stated interest rate that Plaintiff breached. ¶ Defendants claim that a new contract exists as a result of the account stated; however, as noted in the August 22, 2013 Order, “Defendant … confuses this Court’s previously issued order dismissing Plaintiff’s FDCPA claim, believing it to affirmatively hold that an account stated was created and can be used as a new contract.” (Order Den. Summ. J. 5.) Further, assuming, arguendo, that a new contract was created, Defendants’ argument that the new contract had no stated interest rate is unpersuasive. Defendants merely point to the last account statement sent to Plaintiff which “no longer reflects the 8.9% interest rate.” (Defs.’ Reply. to Pl.’s Resp to Defs.’ Mot. Summ. J. 7.; Charge–Off Statement (Doc. 50) 4.) However, the last statement actually shows that the interest rate is 0%, which is, at best, inconclusive as to whether there was a 0% interest rate, or whether there was no interest rate stated at all. (Charge–Off Statement 4.) ¶ Therefore, it is unclear that this hypothetical new contract would even trigger Cal. Civil Code § 3289(b). Therefore, the Court cannot conclude that Defendant was statutorily entitled to request 10% interest in its prayer for relief. ¶ Therefore, the Court DENIES Defendant’s Motion for Reconsideration with respect to the alleged violation of 15 U.S.C. § 1692f.