Warner v. Midland Credit Mgmt., Inc.

Citation540 F.Supp.3d 946
Decision Date19 May 2021
Docket NumberCase No. EDCV 19-2378-KK
Parties David WARNER, Plaintiff, v. MIDLAND CREDIT MANAGEMENT, INC., et al., Defendant(s).
CourtU.S. District Court — Central District of California

Amir J. Goldstein, Law Offices Amir J Goldstein Esq., Los Angeles, CA, Justin M. Baxter, Pro Hac Vice, Baxter and Baxter LLP, Portland, OR, for Plaintiff.

Zachary C. Frampton, Holland and Knight LLP, Sevana Zadourian, Diamond McCarthy LLP, Los Angeles, CA, Megan E. Farrell, Reed Smith LLP, Pittsburg, PA, for Defendants Midland Credit Management, Inc., Midland Funding, LLC, Encore Capital Group, Inc.

Zachary C. Frampton, Holland and Knight LLP, Los Angeles, CA, for Defendant Does.


KENLY KIYA KATO, United States Magistrate Judge


Defendants Midland Credit Management, Inc. ("MCM"), Midland Funding, LLC ("Midland Funding"), and Encore Capital Group, Inc. ("Encore") (collectively, "Defendants")’s have filed a Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment ("Motion"). The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). For the reasons set forth below, Defendants’ Motion is GRANTED IN PART and DENIED IN PART.


On December 11, 2019, Plaintiff David Warner ("Plaintiff") filed a Complaint asserting claims against Defendants arising from a credit card debt and Defendants’ alleged unlawful debt collection efforts against Plaintiff. ECF Docket No. ("Dkt.") 1. Specifically, Plaintiff asserts four causes of action: (1) violation of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 - 1692p ("FDCPA"); (2) violation of California's Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code §§ 1788 - 1788.33 ("Rosenthal Act"); (3) violation of the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200 - 17210 ; and (4) intrusion upon seclusion. ECF Docket No. ("Dkt.") 1.

On February 18, 2020, Defendants filed an Answer, including an affirmative defense of bona fide error, claiming "[a]ny alleged acts or omissions of Defendants giving rise to the claims of Plaintiff, if any, are the result of innocent mistake and/or bona fide error despite reasonable procedures implemented by Defendants." Dkt. 8.

On January 14, 2021, Defendants filed the instant Motion seeking summary judgment on all of Plaintiff's claims arguing (a) Defendants did not violate the FDCPA; (b) Plaintiff's Rosenthal Act claims fail because Defendants did not violate the FDCPA; (c) even if Defendants’ conduct constituted a violation of the FDCPA or Rosenthal Act, Defendants would not be liable pursuant to the bona fide error defense; (d) Plaintiff's intrusion upon seclusion claim fails because Defendants did not intentionally invade Plaintiff's privacy or act in a highly offensive manner; and (e) Plaintiff's UCL claim fails because it is predicated on Plaintiff's other deficient claims. Dkts. 40, 40-1. Defendants filed the following documents in support of the Motion:

• Memorandum of Points and Authorities ("MSJ"), dkt. 40-1
• Statement of Uncontroverted Facts and Conclusions of Law, dkt. 40-2
• Declaration of Kimberly Larsen, defendant MCM's Process Excellence Manager ("Larsen Decl."), with Exhibits 1 to 15, dkts. 40-3, 42
• Declaration of Zachary C. Frampton, Defendantscounsel ("Frampton Decl."), with Exhibits 1 to 2, dkts. 40-4, 41

On February 25, 2021, Plaintiff filed an Opposition. Dkt. 49, Opp. Plaintiff filed the following in support of his Opposition:

• Statement of Genuine Disputes, dkt. 49-1
• Declaration of Plaintiff ("Plaintiff Decl.") with Exhibits A to J, dkt. 49-2
• Declaration of Laurie Warner, Plaintiff's spouse ("Warner Decl."), dkt. 49-3
• Declaration of Amir J. Goldstein, Plaintiff's counsel ("Goldstein Decl."), with Exhibits K to N, dkt. 49-4

On March 8, 2021, Defendants filed a Reply. Dkt. 50, Reply. Defendants filed the following in support of their Reply:

• Reply in Support of Statement of Uncontroverted Facts and Opposition to Plaintiff's Additional Material Facts, including evidentiary objections, dkt. 50-1
• Supplemental Declaration of Zachary C. Frampton ("Frampton Suppl. Decl.") with Exhibits 1 to 3, dkt. 50-2

The Motion thus stands submitted.


Summary judgment is appropriate under Rule 56 of the Federal Rules of Civil Procedure if the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; see also FED. R. CIV. P. 56. A genuine issue of material fact will exist "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation omitted). Summary judgment is therefore not appropriate "where contradictory inferences may reasonably be drawn from undisputed evidentiary facts[.]" Hollingsworth Solderless Terminal Co. v. Turley, 622 F.2d 1324, 1335 (9th Cir. 1980). Furthermore, the Court must not make credibility determinations with respect to the evidence offered. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987) (citing Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 ).

An affidavit or declaration may be used to support or oppose a motion for summary judgment, provided it is "made on personal knowledge, set[s] out facts that would be admissible in evidence, and show[s] that the affiant or declarant is competent to testify on the matters stated." FED. R. CIV. P. 56(c)(4). In addition, pursuant to Local Civil Rule 56-3, the Court assumes the material facts as claimed and adequately supported by the moving party are admitted to exist without controversy except to the extent that such material facts are (a) included in the "Statement of Genuine Disputes" and (b) controverted by declaration or other written evidence filed in opposition to the motion. L.R. 56-3.


The Court finds the following material facts are undisputed and are admitted to exist without controversy for the purposes of this Order, except as otherwise noted. See FED. R. CIV. P. 56(e)(2) (stating where a party fails to address another party's assertion of fact properly, the court may "consider the fact undisputed for purposes of the motion"); L.R. 56-3 (stating facts not "controverted by declaration or other written evidence" are assumed to exist without controversy).


In November 2001, a credit card account in the name of "David Rojo" was opened with HSBC Bank ("the Rojo account"). Larsen Decl., ¶ 7. "David Rojo" used Plaintiff's social security number to open the Rojo account. Id. Defendants were not involved in the opening of the Rojo account. Id., ¶ 8.

According to the Rojo account's May 11, 2007 billing statement, a debt of $5,863.11 was charged on the account. Id., Ex. 2. The billing statement listed an Irvine, California address for "David Rojo." Id.

On June 29, 2007, HSBC Bank sold certain credit card accounts, including the Rojo account, to Atlantic Credit & Finance Special Finance Unit, LLC ("ACF"). Id., ¶¶ 6, 7, Ex. 1.

On June 24, 2009, pursuant to an Account Purchasing Agreement, defendant Midland Funding purchased the Rojo account from ACF. Id., ¶¶ 8, 9, Exs. 3, 15. Defendant Midland Funding, along with corporate affiliate and defendant MCM, is a wholly owned subsidiary of defendant Encore. Id., ¶ 5. In the Account Purchasing Agreement, ACF made representations and warranties to defendant Midland Funding that "[a]ll due diligence information and information related to the Accounts in [ACF's] possession and given to [defendant Midland Funding] is materially true and accurate to the best of [ACF's] knowledge." Id., ¶ 9, Ex. 15. ACF further made representations and warranties that the "[c]urrent [b]alance on each [a]ccount is the legal, valid and binding obligation of each [c]ustomer except as enforcement may be limited by bankruptcy, insolvency, receivership and other similar laws relating to or affecting creditors’ rights generally." Id. Additionally, to assist in detecting fraudulent accounts and ensure no required information was missing erroneous, or incomplete, defendant MCM ran multiple "scrubs," including but not limited to, bankruptcy and Servicemembers Civil Relief Act checks, on the Rojo account. Id.


On or about August 2, 2009, defendant MCM, which was servicing the Rojo account on behalf of defendant Midland Funding, sent "David Rojo" a debt validation letter to the address of record on the Rojo account, informing "David Rojo" of his right to contest the debt.2 Id., ¶ 11.

On July 21, 2010, defendant Midland Funding filed a collection lawsuit against "David Rojo" in case no. 30-2010-00391607 in Orange County Superior Court to collect the balanced owed on the Rojo account. Id., ¶ 12, Ex. 4. On November 23, 2010, the lawsuit resulted in a default judgment against "David Rojo." Id., ¶ 13, Ex. 5.

On or about May 9, 2018, defendant Midland Funding mailed the "Memorandum of Costs after Judgment, Acknowledgment of Credit and Declaration of Accrued Interest" to "David Rojo" at the address in Chino Hills, California where Plaintiff resided at the time. Id., ¶ 14, Ex. 6. The memorandum indicated a judgment principal amount of $8,714.32 and an accrued interest of $3,416.47 remained due on the Rojo account. Id.

Pursuant to a Writ of Execution (Money Judgment) dated July 15, 2019, defendant MCM directed the Sacramento Sheriff's...

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