In Montegna v. Ocwen Loan Servicing, LLC, 2017 WL 4680168, at *8–9 (S.D.Cal., 2017), the District Court found that a Rosenthal Act claim survived a statute of limitations challenge based on the plaintiff’s allegation of a “continuing violation”.
Second, as for Plaintiff’s claim under the Rosenthal Act, the applicable statute of limitations provides a plaintiff a year from an alleged violation to bring suit against a defendant. See CAL. CIV. PROC. § 1788.30(f). Thus, similar to the foregoing analysis, any alleged Rosenthal Act violations before May 8, 2016, would then fall outside the statute of limitations. However, in efforts to save these claims, Plaintiff urges the Court to adopt the “continuing violation doctrine.” (Doc. No. 28 at 9.) Under this doctrine, violations falling outside the statute of limitations should be treated as indivisible from the violations within the limitations period because the Defendant’s violation allegedly constituted a “continuing pattern.” (Id.) The Court finds the application of the doctrine suitable to this case. Both California and federal courts have recognized the use of the “continuing violation doctrine” in the context of Rosenthal Act claims. See Komarova v. Nat. Credit Acceptance, Inc., 175 Cal. App. 4th 324, 343 (2009) (holding violations that occurred during the continuing course of conduct of making harassing phone calls were not barred by the statute of limitations). For example, in Joseph v. J.J. Mac Intyre Companies, L.L.C., the court applied the continuing violation doctrine to Rosenthal Act violations outside the statute of limitations period to conduct such as “repeated harassing phone calls” and “a phone call at midnight” to collect a consumer debt. Joseph v. J.J. Mac Intyre Companies, L.L.C., 281 F. Supp. 2d 1156, 1161 (N.D. Cal. 2003). The court stated that to determine whether actions form a continuing violation, the key is to ascertain whether the conduct complained of constituted a “continuing pattern and course of conduct as opposed to unrelated discrete acts. If there is a pattern, then the suit is timely if ‘the action is filed within one year of the most recent [violation]’…and the entire course of conduct is at issue.” Id. Here, because the calls made to Plaintiff allegedly spanned from the years 2013 to 2016, and Defendant’s conduct in placing each separate call to Plaintiff was related to the same objective of debt collection, Defendant’s behavior was sufficiently continuous to invoke the continuing violation doctrine. See id. at 1161–62 (finding a pattern of over 200 calls made to Plaintiff over a nineteen-month period to collect a debt as sufficiently continuous to apply the continuing violation doctrine). Therefore, because Plaintiff’s claim was filed within a year of June 18, 2016, the most recent Rosenthal violation, the entire course of Defendant’s conduct at issue is properly within the limitations period.
The District Court also found that the Plaintiff’s negligence claim could not survive due to the absence of any duty owed by the debt collector to the debtor.
Further, in the context of negligence suits, debt collectors do not owe a duty of care to debtors in the collection of consumer debts. In Inzerillo v. Green Tree Servicing, LLC, the defendant debt collector called plaintiff debtor at least six times a day and at all hours, called her parents numerous times, and threatened to change the locks on her house and foreclose on her property. See Inzerillo v. Green Tree Servicing, LLC, No. 13-cv-6010-MEJ, 2014 WL 1347175, at *1 (N.D. Cal. Apr. 3, 2014). The court held that the defendant owed no legal duty of care in the collection of consumer debts. See id. at *6. The court reasoned the facts merely showed that the defendant “acted as a loan servicer seeking to collect on a debt.” Id. Therefore, the court concluded the plaintiffs “failed to allege the type of duty California courts would find sufficient to state a claim for negligence.” Id. Here, Plaintiff’s claim for negligence fails because Defendant does not owe Plaintiff a duty of care in collecting from Plaintiff financial obligations related to a mortgage for Plaintiff’s primary residence. The crux of Plaintiff’s negligence cause of action is Defendant “had a duty to use care to not infringe on consumers’ privacy rights when collecting on alleged debts and not calling Plaintiffs hundreds and/or thousands of times to harass and/or abuse Plaintiffs.” (Doc. No. 18 ¶ 65.) However, Defendant simply does not owe such a duty as a loan servicer engaged in the routine collection of debts. See McCarty v. GCP Mgmt., LLC, Civ. No. 10–00133-JMS–KSC, 2010 WL 4812763, *6 (D. Haw. Nov. 17, 2010) (“[L]enders generally owe no duty of care sounding in negligence to their borrowers.”).