District Court (Cal.) Finds Loan Servicer Exempt from FDCPA for Accounts Not-in-Default at the Time of Assignment; Finds TCPA Claim Inadequately Pleaded

In Daniels v. Comunity Lending, Inc., 2014 WL 51275 (S.D.Cal. 2014), Judge Hayes found Plaintiff’s FDCPA and TCPA claims not adequately pleaded.

The FDCPA applies to debt collectors, but not to creditors. See Mansour v. Cal–Western Reconveyance Corp., 618 F.Supp.2d 1178, 1182 (D.Ariz.2009). Under the FDCPA, a “debt collector” is “any person who uses any instrumentality of inter-state commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or directly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). Excluded from the definition of debt collector is “any person collecting or attempting to collect any debt owed or asserted to be owed or due another to the extent such activity … (iii) concerns a debt which was not in default at the time it was obtained.” See 15 U.S.C. § 1692a(6)(F).  “It is … well-established that a loan servicer is not a debt collector for those purposes if it acquired the loan before the borrower was in default.”   Shkolnikov v. JPMorgan Chase Bank, No. 12–03996, 2012 WL 6553988, at *19 (N.D.Cal. Dec. 14, 2012) (citing Schlegel v. Wells Fargo Bank, N.A., 799 F.Supp.2d 1100, 1103 (N.D.Cal.2011), affirmed in relevant part, 720 F.3d 1204 (9th Cir.2013); Lal v. Am. Home Servicing, Inc., 680 F.Supp.2d 1218, 1224 (E.D.Cal.2010)); see also Satre v. Wells Fargo Bank, N.A., No. C 10–01405, 2013 WL 5913752, at *3–*4 (N.D.Cal. Nov. 1, 2013) (collecting cases). The First Amended Complaint fails to allege that any Defendant acquired Plaintiffs’ loan after Plaintiffs were in default. The First Amended Complaint fails to adequately allege that any Defendant is a “debt collector” subject to the FDCPA. The Motion to Dismiss the first cause of action for violation of the FDCPA is granted.

Judge Hayes then addressed Plaintiff’s TCPA claim, noting the TCPA’s distinction between calls to land-lines and calls to cellular telephones.    Judge Hayes found the Plaintiff’s claims not adequately pleaded.

The TCPA contains separate provisions for calls made to residential telephone lines and calls made to wireless telephone lines. See 47 U.S.C. § 227(b)(1)(B); 47 U.S.C. § 227(b)(1) (A)(iii).     a. Residential Telephone Lines  The prohibition relating to residential telephone lines contains express exceptions for certain calls. See 47 U.S.C. § 227(b) (2)(B). “The FCC, which has the authority to formulate regulations under the TCPA, has articulated the exemptions for debt col-lection calls made to residential lines as follows: (1) calls made between parties that have an established business relationship, and (2) calls made for commercial purposes other than unsolicited advertisements and telephone solicitations.” Mashiri v. Ocwen Loan Servicing, LLC, No. 12–cv–02838–L–MDD, 2013 WL 5797584, at *3 (S.D.Cal. Oct. 28, 2013) (citing 47 C.F.R. 64.1200(a)(2) (iii-iv); In the Matter of Rules & Regulations Implementing the Tel. Consumer Prot. Act of 1991, 7 F.C.C.R. 8752, 8773 ¶ 39 (1992)). To the extent the First Amended Complaint alleges that Defendants violated the TCPA by placing calls to Plaintiffs’ residential telephone num-ber(s), the First Amended Complaint fails to adequately allege facts to support the conclusion that that these calls are not exempted from the TCPA.  b. Cellular Telephone Service  “There is no exception for debt collectors in the statute, nor does the statute permit any regulatory agency to make exceptions to the sections applicable to cellular numbers.” Iniguez v. The CBE Group, No. 2:13cv843, 2013 WL 4780785, at *5 (E.D.Cal. Sept. 5, 2013). “Accordingly, the TCPA applies to debt collectors and they may be liable for offending calls made to wireless numbers.” Mashiri, 2013 WL 5797584, at *4 (quotation omitted).  The elements of a claim under the TCPA for calls made to a cellular phone are that (a) defendant made the call (b) to any telephone number assigned to a cellular telephone service, and (c) the call was made using any automatic telephone dialing system or an artificial or prerecorded voice. See 47 U.S.C. § 227(b)(1)(A) (iii).  i. Automatic Telephone Dialing System  The TCPA defines an automatic telephone dialing system as “equipment which has the capacity … to store or produce telephone numbers to be called, using a random or sequential number generator [and] to dial such numbers.” 47 U.S.C. § 227(a)(1). Based upon the allegations of the First Amended Complaint, Bank of America, N.A.’s alleged calls to Plaintiffs do not appear to have been “random,” 47 U.S.C. § 227(a)(1); instead, the calls are alleged to be directed specifically toward Plaintiffs. Accordingly, the First Amended Complaint fails to plausibly allege facts to support the conclusion that any Defendant made a call to Plaintiffs’ cellular telephone number using an automatic telephone dialing system. See Ibey v. Taco Bell Corp., 12cv583–H–WVG, 2012 WL 2401972, at *3 (S.D. Cal. June 18, 2012) (“To constitute an ATDS under the statute, the equipment must have the capacity to store or produce telephone numbers to be sent text messages and use a random or sequential number generator to text the numbers. In a conclusory manner, Plaintiff alleges that Defendant used an ATDS…. According to Plaintiff’s allegations, the text message did not appear to be random but in direct response to Plaintiff’s message…. [T]he Court concludes that Plaintiff’s complaint fails to sufficiently plead the use of an ATDS within the meaning of the TCPA.”); see also Freidman v. Massage Envy Franchising, LLC, 12cv2962–L–RBB, 2013 WL 3026641, at *2 (S.D. Cal. June 13, 2013) (“Plaintiffs allege that the texts that they received ‘were placed via an automatic telephone dialing system, as defined by 47 U .S.C. § 227(a)(1) as prohibited by 47 U.S.C. § 227(b)(1)(A).’ However, Plaintiffs allegations are nothing more than a ‘formulaic recitation of the elements of a cause of action,’ and do nothing more than assert a speculation. The text messages are generic and impersonal, as Plaintiffs assert, but that is not enough to make the claims plausible. It is just as conceivable that the text messages were done by hand, or not using an ATDS. The text messages that the Plaintiffs present are similar in content, but differ enough to make it appear as if an ATDS was not utilized…. The Court … finds that Plaintiffs have not stated with a level of factual specificity a claim under the TCPA.”) (citing Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555). ii. Artificial Or Prerecorded Voice  The First Amended Complaint fails to distin-guish between alleged calls using an artificial or pre-recorded voice to Plaintiffs’ residential telephone number(s) and Plaintiffs’ cellular telephone number(s). The First Amended Complaint fails to adequately allege that any Defendant made a call to Plaintiffs’ cellular telephone number using an artificial or prerecorded voice. The Court finds that the First Amended Complaint fails to adequately state a claim under the TCPA. See Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555. The Motion to Dismiss the third cause of action for violation of the TCPA is granted.