Sanchez v. Client Services, Inc.

• Decision Date: 29 October 2007
• Docket Number: No. C-06-6280 PVT.,C-06-6280 PVT.
• Citation: 520 F.Supp.2d 1149
• Court: U.S. District Court — Northern District of California
• Parties: Irma SANCHEZ, Jorge Sanchez and Sophia Sanchez, Plaintiffs, v. CLIENT SERVICES, INC. and Karla Davis, Defendants.

520 F.Supp.2d 1149

Irma SANCHEZ, Jorge Sanchez and Sophia Sanchez, Plaintiffs, v. CLIENT SERVICES, INC. and Karla Davis, Defendants.

No. C-06-6280 PVT.

United States District Court, N.D. California, San Jose Division.

October 29, 2007.

COPYRIGHT MATERIAL OMITTED

Ronald Wilcox, Attorney at Law, San Jose, CA, Peter Francis Barry, The Barry & Slade LLC, Minneapolis, MN, for Plaintiffs.

Stephen Alter Scott, Brian R. Davis, Phuong Hong Nguyen, Hayes, Davis, Bonino, Ellingson, McLay & Scott, Redwood Shores, CA, for Defendants.

ORDER (1) GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT; AND (2) DENYING DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT

PATRICIA V. TRUMBULL, United States Magistrate Judge.

INTRODUCTION

Plaintiffs Irma Sanchez, Jorge Sanchez and Sophia Sanchez and defendants Client Services, Inc. and Karla Davis all move for partial summary judgment. Plaintiffs move for partial summary judgment on the claims alleging violations of Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. and Rosenthal Fair Debt Collection Practices Act, California Civil Code §§ 1788-1788.33. Plaintiffs allege that defendants engaged in harassing, abusive and oppressive efforts to collect consumer debt. Defendants move for partial summary judgment on the claims of punitive damages. Defendants allege that plaintiffs have not shown any conduct by them evidencing malice, fraud or oppression. Plaintiffs and defendants oppose each others' respective motions for partial summary judgment. Having reviewed the papers and considered the arguments of counsel, including defendants' accompanying objections to plaintiffs' evidence, and for the reasons set forth below, plaintiffs' motion for partial summary judgment is granted in part and denied in part and defendants' motion for partial summary judgment is denied.¹

BACKGROUND

Plaintiff Irma Sanchez owed $4,069.11 on a Discover credit card. The debt related to her purchases of food, clothing and shelter. Because of delays in payment on the account, Discover transferred the credit card debt to defendant Client Services for collection.

Defendant Client Services is a debt collection services company located in St. Louis, Missouri. The company employs approximately 500 people and trains them regarding applicable state and federal laws governing debt collection practices. Telephone calls made by collectors to debtors are monitored on a daily basis by company managers. Collectors may also call a debtor's workplace and other third parties, including neighbors and relatives, to determine the specific whereabouts of a debtor. Systematic correspondence may also be generated by the company in an effort to make further contact with a debtor. In addition, collectors record their various attempts to reach the debtor and other pertinent information on computerized call logs maintained by the company.

In or about and between June 9, 2005 and December 19, 2005, defendant Client Services undertook a myriad of efforts to locate and contact plaintiff Irma Sanchez about her credit card debt. Defendant Karla Davis was employed by defendant Client Services from May 2005 until July 2006 and was among the various collectors assigned by the company to plaintiff Irma Sanchez's account.

Because plaintiff Irma Sanchez's home telephone was disconnected (or otherwise unpublished) at various times, defendant Client Services made numerous attempts to reach her at work. Plaintiff Irma Sanchez was a food service worker in the cafeteria at the Milpitas School District and was generally unreachable by telephone while she worked there. Anyone who sought to contact her or wanted to leave a message for her reached a general telephone line for the central kitchen which was monitored and checked by the kitchen supervisor, Jean Heraldsen. According to company call logs, defendant Client Services attempted to reach plaintiff Irma Sanchez at work approximately 54 times and left messages for her approximately 25 times on the answering machine. Jean Heraldsen testified that defendant Client Services never identified itself as a debt collection services company and never stated that the matter related to an outstanding debt. Instead, collectors from defendant Client Services left messages for plaintiff Irma Sanchez to return their calls because the matter was identified as "urgent" or "serious." Jean Heraldsen personally transcribed the messages left on the answering machine for plaintiff Irma Sanchez or allowed her to listen to the messages on the answering machine itself in her office. Transcribed messages from the answering machine were personally (and only) delivered by Jean Heraldsen. Jean Heraldsen further testified that it was plaintiff Irma Sanchez herself, who informed her that she was struggling with marital and financial problems.

On at least two occasions, defendant Client Services reached two co-workers of plaintiff Irma Sanchez: (1) on or about November 14, 2005, defendant Client Services left a message with a co-worker (named Ivalia) of plaintiff Irma Sanchez; and (2) on or about October 28, 2005, defendant Client Services also called Irma Sanchez's sister-in-law, Maria Isles, who coincidentally worked at the same place. Defendant Davis left a message with her for plaintiff Irma Sanchez. No mention was ever made of the outstanding debt.

In specific contradiction to her supervisor Jean Heraldsen, plaintiff Irma Sanchez alleges that telephone messages left for her at work stated that she had incurred a debt and that she had to pay. She further alleges that the telephone messages were relayed to her in a room where other co-workers were present.

Defendant Client Services also called the cell phone belonging to plaintiff Irma Sanchez. On at least one occasion, plaintiff Irma Sanchez's 17 year old daughter, Sophia Sanchez answered her mother's cell phone and incorrectly informed defendant Client Services (at her mother's behest) that her mother was unavailable. Sophia Sanchez answered her mother's cell phone because her mother had difficulty with English, and she was often able to translate for her mother. In two messages left by a male caller from defendant Client Services, he left his name and asked that plaintiff Irma Sanchez call back. Later, defendant Karla Davis called and in a demanding tone of voice asking that Sophia Sanchez inform her mother about the telephone calls. Sophia Sanchez was never threatened or made fearful by the numerous telephone calls. She did, however, fear the legal consequences of the debt incurred by her mother.

Upon reaching plaintiff Irma Sanchez's husband on his cell phone on or about October 31, 2005, Jorge Sanchez, pointedly stated to defendant Davis, "Don't call me" and hung up. In response to other calls by defendant Davis, Mr. Sanchez requested twice that defendant Client Services refrain from making further telephone calls to his wife's workplace. The telephone calls to plaintiff Irma Sanchez's workplace nonetheless continued. Mr. Sanchez also offered to make payments on the debt but was rebuffed. He claims that defendant Davis laughed at him and said that he should have thought of that before the debt was incurred. At times, defendant Davis threatened to take him to court. As a result, Mr. Sanchez suffered from significant stress that caused him to lose sleep and drink heavily.

As part of its efforts to locate plaintiff Irma Sanchez, defendant Client Services sent her a systems-automated generated letter on September 9, 2005, which stated in pertinent part:

You made a commitment to honor this obligation [of $4,069.11] when our client granted you credit. This commitment has not been kept. ... call our office today. Our toll free number is 1-800-521-3236.

This communication is from a professional debt collection agency. This is an attempt to collect a debt. Any information obtained will be used for that purpose.

On or about November 4, 2005, defendant Client Services also sent a letter to the Milpitas School District in an attempt to verify the employment of plaintiff Irma Sanchez and obtain any further location information (including a home address and telephone number). A response to the letter was never received by defendant Client Services.

Plaintiff Irma Sanchez has difficulty, speaking English and by her own admission, she never returned any of the telephone messages left by defendants Client Services and Karla Davis or otherwise tried to contact them. Indeed, plaintiffs never informed defendants that the telephone calls or other efforts to reach them were harassing or bothersome. Defendants claim they never knew that plaintiff Irma Sanchez was a predominantly Spanish-speaking person.

Plaintiff Irma Sanchez was embarrassed and humiliated by the barrage of telephone calls to her work, family and neighbors. She too, experienced significant stress which impacted her marriage and her health and caused her to later consult a physician.

Defendant Client Services undertook an internal investigation into the manner in which efforts to reach plaintiff Irma Sanchez were conducted. Based on the investigation, the company concluded that the account was handled properly. No employees were ever disciplined for the handling of the Sanchez account. Defendant Karla Davis later resigned from the company for her own personal reasons.²

On December 19, 2005, defendant Client Services closed the Sanchez account without any further action or payment from her whatsoever.

On October 5, 2006, plaintiffs filed a complaint alleging, inter alia, violations of state and federal Fair Debt Collection Practices Acts and sought statutory and punitive damages, costs and reasonable attorneys' fees. Plaintiffs allege that defendant and its employees, including Karla Davis, engaged in abusive, deceptive and harassing tactics to recover the credit card debt. On November 17, 2006, defendant Client Services filed an answer and on March 14, 2007, defend...