District Court (Cal.) Holds that Towing Charges Fail to Meet “Transaction” Requirement of FDCPA or “Credit” Requirement of Rosenthal Act

In Udo v. Kelkris Associates, Inc., 2012 WL 5985663 (S.D.Cal. 2012), Judge Gonzalez found that collection of towing charges did not meet the ‘transaction’ requirement of the FDCPA nor the “consumer credit” requirement of the Rosenthal Act.

“As a threshold matter, a suit brought under the FDCPA must involve a “debt” within the meaning of the statute.” Fleming v. Picard, 581 F.3d 922, 925 (9th Cir.2009) (quoting 15 U.S.C. § 1692(e)). The statute defines “debt” as:  any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. Id. (quoting 15 U.S.C. § 1692a(5)). “Thus, whether the undisputed facts alleged in the complaint establish the existence of debt … requires [the Court] to examine the alleged ‘transaction’ and determine whether it is covered by the FDCPA.” Id. ¶  To be so covered, “at a minimum, a ‘transaction’ under the FDCPA must involve some kind of business dealing or other consensual obligation.” Id.; see also Waters v. Howard Sommers Towing, Inc., 2011 WL 1375292, at *7 (C.D.Cal. April 11, 2011) (“the law in this circuit is that for purposes of the FDCPA debt is incurred when a consumer engages in a consensual transaction: the FDCPA limits its reach to those obligations to pay arising from consensual transactions, where parties negotiate or contract for consumer-related goods or services.”); Yazo v. Law Enforcement Systems, Inc., 2008 WL 4852965, at *2 (C.D.Cal. Nov.7, 2008) (“where the transaction is not a consensual one, the resulting obligation is not “debt” within the meaning of the FDCPA.”)  ¶   Here, the alleged debt consists of unpaid fees and storage costs arising from the nonconsensual towing and storage of Plaintiff’s vehicle. [Doc. No. 1 at 4 (“a debt based … in this case [on] a charge arising from the towing of Mr. [sic] Udo’s vehicle without her knowledge or consent.”).] Moreover, numerous courts have held such fees and cost non-actionable under the FDCPA. See Betts v. Equifax Credit information Services, Inc., 245 F.Supp.2d 1130, 1133–34 (W.D.Wash.2003) (“The impoundment of one’s vehi-cle and statutory liability that necessarily attaches are not akin to even a broad interpretation of a contractual, business, or otherwise consensual arrangement for services rendered. There is simply no “transaction” between the parties.”); Waters, 2011 WL 1375292, at *7 (holding that “plaintiff’s towing debts do not fall under the FDCPA because such debts cannot be considered consensual”); Hylton v. Anytime Towing, 2012 WL 5498887, at *7 (S.D.Cal. Nov.13, 2012) (“a motor vehicle impoundment and towing fees arising out of action authorized by state law enforcement agency do not constitute a ‘debt’ within the meaning of Fair Debt Collection Practices Act.”); Reid v. American Traffic Solutions, Inc., 2010 WL 5289108, at *4 (S.D.Ill.Dec.20, 2010) (“Transactions under the FDCPA do not include non-consensual obligations such as those resulting from … automobile impoundment and storage fees”); Corridean v. Restore Financial Services, 2007 WL 1114221, at *5–6 (D.Or. April 10, 2007) (same). Plaintiff’s opposition fails to even address this issue, much less cite authority to the contrary. [See Doc. No. 7] Because the towing fees at issue here do not constitute “debt” under the FDCPA, Plaintiff’s FDCPA claims are DISMISSED WITH PREJUDICE.  ¶  2. RFDCPA  “[T]he RFDCPA only applies to transactions ‘in which property, services or money is acquired on credit.’ ” Jachimiec v. Regent Asset Management Solutions, N.A., 2011 WL 2160661, at *2 (S.D.Cal. May 26, 2011) (quoting Cal. Civ.Code § 1788.2(e)). Thus, to state a claim, Plaintiff must allege that Defendant “attempt[ed] to collect a debt arising from a ‘consumer credit transaction.’ ” Abels v. JBC Legal Group, P.C., 428 F.Supp.2d 1023, 1026 (N.D.Cal.2005). Here, as noted supra, the alleged debt arose from unpaid fees and storage costs arising from the towing and storage of Plaintiff’s vehicle, none of which involved any credit transaction. [See Doc. No. 1 at 4.] Thus, Plaintiff’s RFDCPA claims are DISMISSED WITH PREJUDICE.