District Court (Cal.) Holds Plaintiff Stated Vicarious Liability Claim against Creditor for Collection Counsel’s Actions; Finds Law Firm Not Exempt from Rosenthal Act; Finds No Such Thing as “Tort-in-Se”

In McNichols v. Moore Law Group, 2012 WL 667760 (S.D.Cal. 2012), Judge Hayes held (without analysis) that a Plaintiff stated vicarious FDCPA liability against a Bank for the collection actions of its counsel. 

Plaintiff alleges in the Complaint that Defendant Dis-cover Bank “uses an instrumentality of interstate commerce or the mails in a business the principal purpose of which is the collection of debts, or … regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another” and is therefore a “debt collector” as defined by FDCPA. (ECF No. 3 ¶ 16, citing 15 U.S.C. § 1692a(6)). Plaintiff further alleges that De-fendant Discover Bank “made repeated telephone calls to Plaintiff’s place of employment” after being advised to stop and without validating the alleged debt. Id . ¶¶ 32, 33. Plaintiff alleges vicarious liability of Defendant Discovery Bank “because the actions undertaken by Defendant Moore [Law Group] were an attempt to collect the alleged debt by an attorney’s office on behalf of its client, Defendant Discover [Bank].” Id. ¶ 8. The Court concludes that the Complaint contains plausible factual allegations that Defendant Discover Bank is a debt collector who may be liable for violations under FDCPA. Accordingly, the motion to dismiss Plaintiff’s first cause of action for violations of FDCPA on the ground that Discover Bank is not a “debt collector” and not vicariously liable for the conduct of Moore Law Group is denied.

The District Court held that the law firm was not exempt from the Rosenthal Act, explaining:

RFDCPA excludes “an attorney or counselor at law” from the definition of “debt collector,” which is otherwise defined as “any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection” including “any person who composes and sells, or offers to compose and sell, forms, letters, and other collection media used or intended to be used for debt collection….” Cal. Civ.Code § 1788.2(c). Federal district courts in California have found that a law firm is a debt collector within the meaning of RFDCPA. See Abels v. JBC Legal Group, P.C., 227 F.R.D. 541, 548 (N.D.Cal.2005) (“Since the legislature specifically excluded attorneys from the statute but was silent on law firms, this Court presumes that the legislature did not intend to exclude law firms.”);   Robinson v. Managed Accounts Receivables Corp., 654 F.Supp.2d 1051, 1061 (C.D.Cal.2009) (“The Court finds persuasive the authority holding that a law firm may be a ‘debt collector’ under the California FDCPA .”); Moriarity v. Henriques, 2011 WL 3568435 at * 6 (E.D.Cal. Aug.15, 2011) (“[D]istrict courts throughout the Ninth Circuit have found that a law firm is a ‘debt collector’ within the meaning of the RFDCPA.”).FN2 The Court concludes that law firms are included in the definition of “debt collector” for the purposes of establishing liability under RFDCPA.  [FN2. But see Owings v. Hunt & Henriques, 2010 WL 3489342 at *2 (S.D.Cal. Sept.3, 2010) (interpreting Carney v. Rotkin, Schmerin & McIntyre, 206 Cal.App.3d 1513, 1522, 254 Cal.Rptr. 478 (1988), to reject the argument that RFDCPA excludes attorneys but not law firms).]  Defendants do not dispute Plaintiff’s factual allegation that Defendant Moore Law Group engages in debt collection “in the ordinary course of business, regularly, on behalf of himself or herself or others” as defined in California Civil Code § 1788.2(c). (ECF No. 3 ¶ 18). As a law firm adequately alleged to engage in debt collection, Defendant Moore Law Group is not exempt from liability under RFDCPA. Accordingly, the motions to dismiss Plaintiff’s second cause of action on the grounds that law firms are not debt collectors under RFDCPA are denied.

The District Court found that there is no such thing as “tort-in-se” in the context of a Rosenthal Act claim.

A “tort in se” is “the breach of a nonconsensual duty owed another.” Laczko v. Jules Meyers, Inc., 276 Cal.App.2d 293, 295, 80 Cal.Rptr. 798 (1969). “Violation of a statutory duty to another may therefore be a tort and violation of a statute embodying a public policy is generally actionable [as a ‘tort in se’] even though no specific civil remedy is provided in the statute itself.” Id. “Any injured member of the public for whose benefit the statute was enacted may bring the action.” Id. California courts have applied the “tort in se” doctrine only where a specific civil remedy is unavailable for the violations of statutory duty. See, e.g., South Bay Building Enterprises, Inc. v. Riviera Lend–Lease, Inc., 72 Cal.App.4th 1111, 1123, 85 Cal.Rptr.2d 647 (1999) (allowing a tort in se claim for violations of Cal. Civ.Code § 2924h where no statutory remedy was available); Tovar v. S. Cal. Edison Co., 201 Cal.App.3d 606, 610, 247 Cal.Rptr. 281 (1988) (allowing a tort in se claim for violations of Cal. Pub. Util.Code § 777 where no statutory remedy was available); Munchow v. Kraszewski, 56 Cal.App.3d 831, 835, 128 Cal.Rptr. 762 (1976) (allowing a tort in se claim for violations of Cal. Veh.Code § 28051 where no statutory remedy was available). A tort in se claim is “superfluous when the law already provides for a tort in substance.” Esteem v. City of Pasadena, No. CV 04–00662, 2007 WL 4270360 at *23 (C.D.Cal. Sept.11, 2007); Hisamatsu v. Niroula, No. 07–CV–04371, 2009 WL 4456392 at *5–6 (N.D.Cal. Oct. 22, 2009).  ¶  The RFDCPA already provides a specific private civil remedy and ‘there is nothing to indicate that California intended to allow separate negligence tort claims based upon the duties created by the Rosenthal Act.’ “ Chaconas v. JP Morgan Chase Bank, 713 F.Supp .2d 1180, 1189 (S.D.Cal.2010) (quoting Castellanos v. JPMorgan Chase & Co., No. 09–CV–00969, 2009 WL 1833981 at *11 (S.D.Cal. June 23, 2009)). “[T]his Court cannot apply the tort in se doctrine based on alleged violations of the RFDCPA in absence of California state authority.” Chaconas, 713 F.Supp.2d at 1189. ¶  Plaintiff has adequately alleged a violation of RFDCPA in the second cause of action, and a substantive tort remedy is available under that statute. There is no authority indicating that a separate tort claim for the same violation, such as tort in se, is appropriate. Accordingly, the motions to dismiss Plaintiffs’ third cause of action for tort in se are granted.