District Court (Cal.) Finds No NIED or Puni’s Claim Against Debt Collector; Allows Intrusion on Seclusion Claim to Proceed

In Varnado v. Midland Funding LLC, — F.Supp.2d —-, 2014 WL 1994622 (N.D.Cal. 2014), Judge Ryu found that the Plaintiff stated no claim for negligent infliction of emotional distress against a debt collector nor any claim for punitive damages.  Judge Ryu found, however, that a claim for intrustion on seclusion was stated.  Judge Ryu found that debt collectors do not have the kind of “special relationship” with debtors that would allow imposition of a duty to protect against negligently inflicted emotional distress.

Debt collectors and debtors do not generally have a special relationship, and where no threat of physical injury is alleged, allegations of unfair debt collection practices are insufficient to state “the type of duty that California courts would find sufficient to state a claim for negligent infliction of emotional distress.” Chaconas, 713 F.Supp.2d at 1187.  Id. See also Inzerillo v. Green Tree Servicing LLC, No. 13–CV–06010–MEJ, 2014 WL 1347175 at, *3, 6 (N.D.Cal. Apr. 3, 2014) (where “Plaintiffs’ allegations [that Defendant called one plaintiff at least six times a day and at all hours, called her parents and tenant, threatened to change the locks on her house and foreclose on property] show only that Defendant acted as a loan servicer seeking to collect on a debt …, Plaintiffs have failed to allege the type of duty that California courts would find sufficient to state a claim for negligence.”).

Judge Ryu found, however, that the Plaintiff stated a claim for intrusion on seclusion due to the telephone calls placed to the Plaintiff.

Taking Plaintiff’s allegations as true, Plaintiff states a claim for invasion of privacy by intrusion upon seclusion. According to Plaintiff, Defendants called her 3 to 5 times a day for two months totaling approximately 185 to 300 times, despite Plaintiff’s repeated requests for the calls to stop. Plaintiff also alleges that Defendants used autodial and spoofing technology to mask the identity of the caller. Repeated and continuous calls in an attempt to collect a debt give rise to a claim for intrusion upon seclusion. Inzerillo, 2014 WL 1347175, at *4 (plaintiffs stated intrusion upon seclusion claim where defendants called one plaintiff six times a day and at all hours, called her parents and tenant, threatened to change the locks on her house, threatened to disturb her tenants, and a representative threatened that she would personally see that plaintiffs’ property “gets foreclosed on”); Fausto v. Credigy, 598 F.Supp.2d 1049, 1056 (N.D.Cal.2009) (claim for invasion of privacy adequately stated where defendant made over 90 calls to the plaintiffs’ home, refused to identify itself, made harassing statements, and called back immediately after debtor ended call); Joseph v. J.J. Mac Intyre Companies, L.L.C., 281 F.Supp.2d 1156, 1169 (N.D.Cal.2003) (debt collector made 200 calls over a 19–month period); Rowland v. JPMorgan Chase Bank, N.A., No. 14–36–LB, 2014 WL 992005, at * 12 (N.D.Cal. Mar. 12, 2014) (finding plaintiffs stated an invasion of privacy where they alleged that bank representatives contacted them many times over a period of years, were harassing on at least one occasion, and repeatedly threatened plaintiffs with foreclosure).

Judge Ryu found, however, that neither the FDCPA nor the Rosenthal Act permit imposition of punitive damages.

Both the state and federal fair debt collection practices acts incorporate statutory schemes that set forth specific limits on the type and amount of damages. See 15 U.S.C. § 1692k (identifying remedies available under FDCPA); Cal. Civ.Code §§ 1788.30 (listing remedies available for violations of the Rosenthal Act) and 1788.17 (expressly adopting remedies set forth in FDCPA). Remedies for claims made under the FDCPA are limited to damages, attorney’s fees and costs. See Wyatt v. Creditcare, Inc., No. 04–3681–JF, 2005 WL 2780684, at *3 (N.D.Cal. Oct. 25, 2005); see also 15 U.S.C. § 1692k. “The FDCPA contains no express provision for injunctive or declaratory relief in private actions….” Sparkman v. Zwicker & Assocs., 374 F.Supp.2d 293, 298 (E.D.N.Y.2005). “Injunctive and declaratory relief are not available to litigants acting in an individual capacity under the FDCPA.” Weiss v. Regal Collections, 385 F.3d 337, 342 (3rd Cir.2004); Sparkman, 374 F.Supp.2d at 298 (holding that “neither injunctive nor declaratory relief is available to a private litigant under the FDPCA”); Wyatt, 2005 WL 2780684, at *3 (injunctive and declaratory relief are not available to private litigants under the FDCPA). Similar limitations apply to claims brought under the Rosenthal Act. See Cal. Civ.Code §§ 1788.30 and 1788.17; Wyatt, 2005 WL 2780684, at *3 (injunctive and declaratory relief are not available under Rosenthal Act); Ohlendorf v. Am. Home Mortgage Servicing, 279 F.R.D. 575, 584–85 (E.D.Cal.2010) (the only relief provided by the Rosenthal Act is damages, so even a successful claim does not entitle plaintiff to injunctive relief). Accordingly, Plaintiff’s requests for declaratory and injunctive relief under the FDCPA and Rosenthal Act are dismissed. ¶  In addition, neither statute explicitly authorizes punitive damages. See 15 U.S.C. § 1692k; Cal. Civ.Code §§ 1788.30, 1788.17; Sanchez v. Client Servs., Inc., 520 F.Supp.2d 1149, 1163–64 (N.D.Cal.2007) (statutory schemes for both FDCPA and Rosenthal Act do not authorize punitive damages). While the Ninth Circuit has not yet determined whether punitive damages are available under the FDCPA, it appears that the majority of courts considering the issue have determined that “punitive damages are not available under the FDCPA.” Wood v. Midland Credit Mgmt., Inc., No. CV–05–3881–FMC–MANX, 2005 WL 3159639, at *5 (C.D.Cal. July 29, 2005) (“The legislature has already provided a statutory damage remedy that is punitive in nature. Allowing an additional separate award of punitive damages would be contrary to legislative intent and would render the limited statutory remedy of ‘additional damages’ unnecessary.”) (citing Gervais v. O’Connell, Harris & Associates, Inc., 297 F.Supp.2d 435, 440 (D.Conn.2003); Boyce v. Attorney’s Dispatch Service, No. C–39–94–397, 1999 WL 33495605, at *2 (S.D. Ohio April 27, 1999); Aronson v. Creditrust Corp., 7 F.Supp.2d 589, 594 (W.D.Pa.1998) (“Based upon the plain language of the statute, and in the absence of any legislative history to the contrary, I find that punitive damages are not recoverable under the FDCPA….”)). The court is persuaded by the reasoning of the Wood court and dismisses Plaintiff’s request for punitive damages under the FDCPA.  ¶  Neither side presented binding authority on the subject on whether the Rosenthal Act authorizes punitive damages. Based on the court’s own research, it appears that California courts do not find that the Rosenthal Act authorizes punitive damages. See Komarova v. Nat’l Credit Acceptance, Inc., 175 Cal.App.4th 324, 341, 95 Cal.Rptr.3d 880, 893 n. 3 (2009) (“It is not disputed that punitive damages are unavailable under the [ Rosenthal] Act”); First N. Am. Nat. Bank v. Superior Court, No. B 176618, 2005 WL 67123, at *13 (Cal.Ct.App. Jan. 13, 2005) (“The Rosenthal Act only provides for statutory penalties…. Thus, the trial court erred to the extent it allowed plaintiffs to maintain a prayer for relief based upon a claim for punitive damages”).  Accordingly, Plaintiff’s request for punitive damages under the Rosenthal Act is dismissed.