In Gutierrez v. State Farm Mut. Ins. Co., 2012 WL 4902888 (N.D.Cal. 2012), Judge Davila found that an automobile finance company was not a ‘debt collector” within the meaning of the FDCPA. The facts were as follows:
Plaintiffs are husband and wife. See FAC, Docket Item No. 38, at ¶ 2. At some point prior to July, 31, 2010, Plaintiffs purchased a limited edition 2007 Pontiac Solstice (the “vehicle”), for which Ally Bank was the lienholder. Id. Ally Financial is the collection subsidiary for Ally Bank. Id. at ¶ 3. As to the vehicle, Plaintiffs contracted with Defendant State Farm Insurance Company (“State Farm”) for a first-party automobile insurance policy, and also purchased a Guaranteed Auto Protection policy (the “GAP contract”). Id. at ¶ 2. According to Plaintiffs, the GAP contract would protect Plaintiffs from any deficiencies or inadequacies in the State Farm coverage and pay Ally Bank any money needed to repay the loan. Id. at ¶ 3. ¶ The vehicle was stolen at some point between July 31, 2010, and August 5, 2010. Id. at ¶ 4. At that time, the fair market value of the vehicle was ap-proximately $30,000.00, and Plaintiffs owed a balance of approximately $18,000.00 to Ally Bank on the original Retail Installment Sales Contract (the “RISC”). Id. Plaintiffs immediately reported the theft to State Farm, but State Farm refused to pay on the theft claim. Id. Plaintiffs also reported the theft to the police and to Ally Financial. Id. at ¶ 6. Plaintiffs allege that two female representatives from Ally Financial informed them they should cease making monthly payments on the RISC because Ally Bank would be paid in full from State Farm or through the GAP con-tract coverage. Id. Plaintiffs relied on these representations and stopped paying. ¶ The vehicle was recovered in or about November, 2010. Id. at ¶ 10. Although it had been destroyed, State Farm refused to pay for damages to the vehicle despite the prompt filing of a notarized claim by Plaintiffs and also refused to advise Ally Bank that it should seek payment from State Farm. Id., at ¶ 9. Instead, State Farm commenced a fraud investigation. Id. The vehicle was ultimately repossessed. Id., at ¶ 11.
The District Court found that these facts did not confer ‘debt collector’ status on the finance company under the FDCPA.
[T]he FAC still invokes one of the statutory exceptions to the definition of “debt collector.” Indeed, excluded are “entities collecting or attempting to collect any debt owed or due or asserted to be owed or due another … to the extent such activity concerns a debt which was not in default at the time it was obtained by such person.” 15 U.S.C. § 1692a(6)(F). Here, Plaintiffs allege that the vehicle was stolen at some time in late July or early August, 2010, and that Joel contacted Ally Financial on or about August 5, 2010, at which time he was advised to cease making monthly payments on the loan. See FAC, at ¶¶ 4, 6. One fact that must be reasonably inferred from these allegations is that Joel was current on his payments until at least August, 2010. Another reasonably inferred fact is that Ally Financial was either servicing Joel’s loan or had acquired the loan before the default since Joel knew to call Ally Financial when the vehicle was stolen. These inferred facts as well as those actually alleged establish that Ally Financial falls within the exception described in § 1692a(6)(F) because it was already a party involved in the loan prior to default. See Suellen v. Mercantile Adjustment Bureau, LLC, Case No. 12–cv–00916 NC, 2012 U.S. Dist. LEXIS 98640, at *7, 2012 WL 2849651, (N.D.Cal. June 12, 2012) (“The primary inquiry in determining whether the FDCPA applies is whether an entity is servicing the debt or collecting the debt.”). It therefore cannot be a “debt collector” under the FDCPA as a matter of law.