Palmer v. Stassinos
| Decision Date | 14 December 2004 |
| Docket Number | No. C-04-03237 RMW.,No. C-04-03027 RMW.,No. C-04-03026 RMW.,C-04-03026 RMW.,C-04-03027 RMW.,C-04-03237 RMW. |
| Citation | 348 F.Supp.2d 1070 |
| Parties | Susanne M. PALMER and Sharon Hammer, On Behalf of Themselves and Others Similarly Situated, Plaintiff, v. Paul R. STASSINOS, Defendant. Susanne M. Palmer, On Behalf of Herself and Others Similarly Situated, Plaintiff, v. Far West Collection Services, Inc., Defendant. Susanne M. Palmer, On Behalf of Herself and Others Similarly Situated, Plaintiff, v. I.C. System, Inc.; and B. Brown., Defendant. |
| Court | U.S. District Court — Northern District of California |
Mark Ellis, June Coleman, Sacramento, CA, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS
GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS
Defendants have moved to dismiss claims in the following three related cases: Palmer v. Stassinos, C 04-03026 RMW; Palmer v. Far West Collection Services, Inc., C 04-03027 RMW; and Palmer v. I.C. System, C 04-03237 RMW. The motions are not identical, however, they present nearly identical, overlapping issues. The court addresses the parties' arguments in this consolidated order, which will be issued in each of the three cases.
Defendants' motions to dismiss plaintiffs' complaints were heard on November 19, 2004. For the reasons set forth below, the court grants in part and denies in part the defendants' motions.
Plaintiff Susanne Palmer ("Palmer") sued three different defendants on behalf of herself and others similarly situated alleging violations of (1) the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and (2) the California Unfair Competition law ("UCL"), Cal. Bus. & Prof.Code §§ 17200 et seq. In one of the three actions, Palmer v. Stassinos, Palmer is joined by a co-plaintiff, Sharon Hammer ("Harnmer"). Plaintiffs are represented by the same counsel in all three actions; likewise all three defendants are represented by the same counsel. It is unsurprising, therefore, that the issues raised in defendants' motions to dismiss are argued identically to the extent they overlap.
In Palmer v. Stassinos, Palmer and Hammer set forth two causes of action against defendant Paul Stassinos ("Stassinos"), an attorney licensed to practice in California. At issue are three bad checks written by plaintiffs and Stassinos's letters attempting to collect the debt.
In August 2002, Palmer wrote a personal check for $277.14 to San Jose Collectibles. Stassinos Complaint ¶ 8. The check was not honored. Id. On December 11, 2003, Stassinos sent Palmer a certified letter stating that she owed the amount of the dishonored check, $277.14; treble damages, $831.42; and interest totaling $118.09. Id. ¶ 9, Ex 1.
In September 2003, Palmer wrote a check for $44.00 to Lifetouch, which was likewise dishonored. Id. ¶ 11. On November 27, 2003, Palmer was sent a letter purporting to be from Lifetouch but was actually from Stassinos that allegedly omitted disclosures required under the FDCPA. Id. ¶ 12, 14, Ex. 2. Palmer received a second letter dated December 25, 2004 regarding the amount due on her bad check, this time from the Law Offices of Paul Stassinos. The second letter sought to collect the check amount of $44.00, a $25 service fee, and interest in the amount of $0.68. Id. ¶ 15, Ex. 3.
In February 2004, Hammer wrote a check for $22.55 to Pizza My Heart which was later dishonored. Id. ¶ 17. A letter dated March 10, 2004 from Stassinos stated that Hammer owed the amount of the dishonored check, $22.50 and a $25.00 service charge. Id. ¶ 18, Ex. 4.
On July 27, 2004, Palmer and Hammer filed a complaint on behalf of themselves and others similarly situated, alleging that Stassinos violated the FDCPA by: (1) seeking to collect interest and other charges not permitted by law, 15 U.S.C. § 1692f(1); (2) sending collection letters that falsely represent that the letters are a communication from an attorney, id. § 1692e(3); (3) failing to include required disclosures required in collection letters, id. § 1692g; (4) using a name other than his true business name in communications to debtors, id. § 1692e(14); and (5) falsely representing the character, amount, or legal status of the debt, id. § 1692e(2)(A). Stassinos Compl. ¶¶ 28, 34-35. The complaint further alleges that Stassinos violated the UCL, because his conduct constituted unlawful, unfair, or fraudulent business practices likely to deceive consumers as to their legal rights and obligations concerning how their alleged debts are collected. Id. ¶ 40.
Stassinos's motion seeks dismissal of plaintiffs' claims that he violated the FDCPA by attempting to collect interest on plaintiffs' uncollected debt. He argues that California law permits the collection of interest on a dishonored check. Plaintiffs' claim that Stassinos impermissibly sought to collect interest is but one of plaintiffs' bases for their first cause of action for violations of the FDCPA. Thus, granting dismissal of the claim would not result in the dismissal of the plaintiffs' complaint or any of cause of action in its entirety. Rather, defendant seeks to prevent plaintiffs from continuing to assert this particular theory under the FDCPA and the UCL.
Stassinos also seeks to dismiss Palmer's second cause of action under the UCL to the extent it is brought on behalf of the general public and to strike her claim for relief in the form of disgorgement. Defendant asserts that she lacks standing to pursue her UCL claim on behalf of the general public in federal court and that neither restitution nor disgorgement is an available remedy in this case.
In Palmer v. Far West Collection Services, Inc., Palmer alone sets forth three causes of action against defendant Far West Collection Services, Inc. ("Far West"). At issue are two collection letters sent by Far West to Palmer.
Far West was retained by Food Maxx — Parkmoor to collect on a dishonored check debt from Palmer. Far West Complaint ¶ 5. On November 10, 2003, Far West sent Palmer debt collection letter setting forth that she owed principal in the amount of $147.36, a "return check charge" in the amount of $25.00, and an interest charge of $4.34. Id. ¶¶ 6, 9-11, Ex. A. This letter stated that it was a "FORMAL DEMAND FOR PAYMENT", set forth that Palmer had thirty days to dispute the validity of the debt, and notified her that Far West would provide her with verification of the debt if she contacted its office in writing within thirty days. Id., Ex. A. On November 25, 2003, Far West sent Palmer a second letter setting forth the same amount of principal and $25.00 charge, but increasing the interest charge to $5.05. Id. ¶¶ 7, 9, 10, 12, Ex. A. The text of the second letter read:
To date you have not responded to our request for payment on your dishonored check made payable to the above named client.
It is imperative that you remit payment in full to Far West Collection Services, Inc. Failure to do so may necessitate our using other remedies to collect your dishonored check.
Id. ¶ 13, Ex. B.
On July 27, 2004, Palmer filed a complaint on behalf of herself and others similarly situated, alleging that Far West violated the FDCPA by: (1) seeking to collect interest and other charges not permitted by law, 15 U.S.C. §§ 1692e(2)(A), 1692e(5), 1692f(1); (2) mailing or causing to be mailed notices using false and deceptive means to collect debts, id. § 1692e; and (3) sending a second notice that contradicts or overshadows the validation notice, id. §§ 1692f, 1692e, 1692e(10). Far West Compl. ¶¶ 24-26, 34-35. The complaint further seeks injunctive relief for alleged violations of the UCL and statutory damages for violations of the California Fair Debt Collection Practices Act, Cal. Civ.Code § 1788 et seq. Far West Compl. ¶¶ 30-33, 35.
Far West seeks to dismiss Palmer's entire complaint. First, like Stassinos, Far West argues that California law permits collecting interest on a dishonored check in addition to the statutory remedies of a service charge and treble damages, therefore, it is not in violation of the FDCPA. Second, it contests plaintiff's claim of overshadowing, arguing that the contents of its debt collection letters fully comply with the requirements of the FDCPA as viewed by the Ninth Circuit. Furthermore, to the extent that Palmer's UCL claims survive the dismissal of her FDCPA cause of action, Far West contends that Palmer lacks standing to bring her second cause of action under the UCL against it in federal court.
Finally, in Palmer v. I.C. System, Palmer sets forth two causes of action against defendants I.C. System, Inc. ("IC System"), a debt collector, and B. Brown, an employee of IC System. At issue are two collection letters sent to Palmer by IC System, both signed by Brown.
In 2002, Palmer wrote checks to Child Development Center which were dishonored upon presentment. IC System Compl. ¶ 8. The amount of these bad checks was reported to IC System, a debt collector. Id. IC System sent two letters, the first dated April 24, 2003 and the second dated November 26, 2003, stating that Palmer owed $575.00 in principal and $865.00 in "additional client" charges, for a total of $1,440.00. Id. ¶¶ 9-10, Exs. 1, 2. IC System reported this amount owed to Trans Union and Experian credit reporting agencies. Id. ¶¶ 12-13.
In her complaint filed August 10, 2004, Palmer asserts that defendants violated the FDCPA by sending letters that (1) seek to collect charges not expressly agreed upon or...
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