Court of Appeal (Cal.) Declines to Award Reverse Attorneys’ Fees under Rosenthal Act

Plaintiff’s operative complaint alleged, in its third cause of action, that Chase engaged in unlawful debt collection practices in violation of the Rosenthal Act and an analogous federal statute. We affirmed the trial court’s ruling sustaining Chase’s demurrer to this cause of action, following California authority and other cases that hold giving notice of a foreclosure sale does not constitute debt collection activity under the Rosenthal Act. (Chacker I, supra, B272380.)  The Rosenthal Act includes a provision authorizing a court to award reasonable attorney fees to a “prevailing creditor upon a finding by the court that the debtor’s prosecution or defense of the action was not in good faith.” (Civ. Code, § 1788.30, subd. (c).) Chase invokes this provision as an independent ground justifying an attorney fee award payable by plaintiff, but the Rosenthal Act’s requirements for an award of attorney fees are not satisfied here. Putting aside the issue of whether Chase is a “creditor” under the statute, plaintiff’s prosecution of her Rosenthal Act cause of action was undertaken in good faith. We, of course, disagreed that liability could be had under the statute, but plaintiff responsibly advanced a colorable argument to the contrary. (See, e.g., Dowers v. Nationstar Mortg., LLC (9th Cir. 2017) 852 F.3d 964, 970; but see Pfeifer v. Countrywide Home Loans, Inc. (2012) 211 Cal.App.4th 1250, 1264, 150 Cal.Rptr.3d 673; Sipe v. Countrywide Bank (E.D.Cal. 2010) 690 F.Supp.2d 1141, 1151.) The Rosenthal Act does not authorize an award of attorney fees to a prevailing defendant under these circumstances.