Paredes v. Credit Consulting Servs., Inc.

CourtCalifornia Court of Appeals
Citation82 Cal.App.5th 410,297 Cal.Rptr.3d 862
Docket NumberH048092
Parties Maritza PAREDES, Cross-complainant and Respondent, v. CREDIT CONSULTING SERVICES, INC., Cross-defendant and Appellant.
Decision Date08 August 2022

82 Cal.App.5th 410
297 Cal.Rptr.3d 862

Maritza PAREDES, Cross-complainant and Respondent,
CREDIT CONSULTING SERVICES, INC., Cross-defendant and Appellant.


Court of Appeal, Sixth District, California.

Filed August 8, 2022

Counsel for Cross-defendant and Appellant: Ellis Law Group, LLP, Mark E. Ellis, Sacramento

Counsel for Cross-complainant and Respondent: Consumer Law Center, Inc., Fred W. Schwinn, Raeon R. Roulston, Matthew C. Salmonsen, San Jose

Danner, J.

82 Cal.App.5th 417

In this civil action, cross-defendant and appellant Credit Consulting Services, Inc. (Credit Consulting) filed suit against cross-complainant and respondent Maritza Paredes (Paredes) seeking to recover approximately $9,613 in allegedly unpaid dental bills, plus interest and attorney fees. More than one year later, Paredes filed a cross-complaint asserting Credit Consulting had made false representations in its complaint concerning the debt owed, in violation of the federal Fair Debt Collection Practices Act ( 15 U.S.C. § 1692 et seq. ) (FDCPA) and Rosenthal Fair Debt Collection Practices Act ( Civ. Code § 1788 et seq. ) (Rosenthal Act). Credit Consulting responded by filing an anti-SLAPP motion1 to strike the cross-complaint under Code of Civil Procedure section 425.16.2 The trial court denied the anti-SLAPP motion after deciding under the second prong of the statutory analysis that Paredes had demonstrated a likelihood of prevailing on the merits of her causes of action.

On appeal from the denial of its anti-SLAPP motion, Credit Consulting challenges the trial court's ruling on the grounds that (1) the cross-complaint is time-barred under the one-year statute of limitations applicable to both statutory claims; (2) Paredes lacks standing to sue

297 Cal.Rptr.3d 867

because the debt does not arise from a "consumer credit transaction" within the meaning of the Rosenthal Act; and (3) Credit Consulting cannot be held liable for pursuing a collections claim where it relied upon the information provided by its client that Paredes indeed owed a debt.

We conclude the trial court did not err in denying Credit Consulting's anti-SLAPP motion and therefore affirm the order.


A. Dental Services Give Rise to Alleged Debt

Paredes and her family obtained dental services from Tiffany N. Mai, D.D.S., Inc., d/b/a Mai Dental Specialists (Mai Dental) on

82 Cal.App.5th 418

various dates between May 2015 and March 2016. Before receiving dental treatment, Paredes understood from speaking with a Mai Dental employee that Mai Dental would accept payment from Delta Dental as payment in full for any dental services provided to Paredes and her family, would waive any copayment not covered by Delta Dental, and would complete and file any required insurance claim forms. Based on these terms, with the understanding that payments made by Delta Dental would ultimately satisfy in full any debt that Paredes owed (but that she would owe Mai Dental for their services if, for some reason, Delta Dental denied her claim altogether), Paredes went forward with treatment for her family.

Paredes inquired on several occasions when visiting Mai Dental if she had any payment due, but she was told she did not. More than two years later, in June 2018, Paredes received a claim summary and check from Delta Dental for $2,195. Paredes tried to deliver the check to Mai Dental, but a different employee told her Mai Dental would not accept the check as full payment for the services provided. Paredes retained the uncashed check and claim summary from Delta Dental in her possession but did not make any payment to Mai Dental.

B. Credit Consulting's Collection Action

Meanwhile, in October 2017, Mai Dental assigned Paredes's debt for collection to Credit Consulting and later authorized Credit Consulting to file a collection action. On May 18, 2018, Credit Consulting filed the complaint in this action. According to the proof of service and Credit Consulting's collection notes, Paredes was served with the complaint on June 6, 2018. Paredes disclaims any recollection or knowledge of having been served with the summons and complaint.4 Paredes states that

297 Cal.Rptr.3d 868

she first learned about the lawsuit against her on August 8, 2019, when she received a memorandum of costs after judgment (based on Credit Consulting having filed entry of default and obtained a default judgment in June 2019) and related documents in the

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mail. The parties stipulated to set aside the entry of default and vacate the default judgment, and the trial court entered a set-aside order based on the stipulation.

C. Paredes's Cross-Complaint

On October 21, 2019, more than one year after Credit Consulting's complaint was reportedly served on her in June 2018, Paredes filed the cross-complaint at issue here. She named Mai Dental and Credit Consulting (together, cross-defendants) as cross-defendants. The cross-complaint asserted that cross-defendants had engaged in unfair, deceptive, and abusive debt collection practices, in violation of the FDCPA and Rosenthal Act.

Paredes alleged, in support of the first cause of action under the FDCPA, that cross-defendants made and used false statements or representations in their attempt to collect the alleged debt, misrepresented the character, amount, and legal status of the alleged debt, as well as their entitlement to fees and compensation for collecting the alleged debt, and violated provisions of 15 United States Code sections 1692a, 1692e, and 1692f. Paredes similarly alleged, in support of the second cause of action under the Rosenthal Act, that cross-defendants attempted to collect the alleged " ‘consumer debt’ " within the meaning of Civil Code section 1788.2, subdivision (f), by misrepresenting the alleged debt, the compensation available, and the fees and interest allowable under the law. Paredes alleged that cross-defendants engaged in the statutory violations "willfully and knowingly" to coerce payment of the alleged debt.

D. Credit Consulting's Anti-SLAPP Motion

Credit Consulting filed an anti-SLAPP motion to strike Paredes's cross-complaint in its entirety. Credit Consulting argued the cross-complaint should be stricken because the cross-complaint's causes of action arose from protected litigation activity and Paredes had no probability of prevailing on the merits. On this second prong, Credit Consulting cited statute of limitations and other defects fatal to the viability of Paredes's cross-complaint.

Credit Consulting's special motion to strike was accompanied by declarations and exhibits. Rodney Meeks, Credit Consulting's president and chief executive officer, submitted a declaration in which he described his extensive experience in the collection industry, the collection methods utilized by Credit Consulting, and the procedures used to document Credit Consulting's efforts to establish contact with Paredes before filing suit. Meeks attested that Credit Consulting's contemporaneous collection notes and proof of service from the third-party process server established that Paredes was served with

82 Cal.App.5th 420

the complaint in this action on June 6, 2018. According to the collection notes, Paredes called Credit Consulting that same day and confirmed she was served with the summons and complaint that morning.

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Regarding Paredes's probability of prevailing on the merits of her cross-complaint, Credit Consulting argued that, based on the June 6, 2018, date of service of the complaint, Paredes's filing of the cross-complaint more than one year later (in October 2019) was untimely and time-barred under the relevant statutes of limitation for the FDCPA and Rosenthal Act. Credit Consulting further maintained that Paredes's claims were "jurisdictionally barred" by 15 United States Code section 1692k(d), which provides that an action under the FDCPA may be brought in a court of competent jurisdiction "within one year from the date on which the violation occurs," ( 15 U.S.C. § 1692k(d) ) and by Civil Code section 1788.2, subdivision (e), because the underlying debt for dental services did not arise from a " ‘consumer credit transaction’ " ( Civ. Code, § 1788.2, subd. (e) )—a necessary element of a claim under the Rosenthal Act.

Paredes filed a written opposition to the anti-SLAPP motion and submitted a declaration that asserted facts related to the service of the complaint and notice of the action against her. In addition, Paredes addressed the nature of her consumer transaction and financial arrangement with Mai Dental. Paredes did not challenge Credit Consulting's ability to meet its burden under the first prong of the anti-SLAPP statute and conceded that her FDCPA and Rosenthal Act claims arose from litigation conduct protected by section 425.16....

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