District Court (Cal.) Says Challenge to On-Line Payment Structure Not Subject to Rosenthal Act Because Payments Not Delinquent

In Elbert v. Roundpoint Mortg. Servicing Corp., No. 20-cv-00250-MMC, 2020 U.S. Dist. LEXIS 150341 (N.D. Cal. Aug. 19, 2020), Judge Chesney dismissed a Rosenthal Act claim because the account was not in delinquent.

In Count II, Elbert asserts RoundPoint has violated the Rosenthal Act, which Act provides that “[n]o debt collector shall collect or attempt to collect a consumer debt by means of [various specified] practices.” See Cal. Civ. Code § 1788.13; see also Cal. Civ. Code § 1788.14 (same). Elbert alleges RoundPoint, by assessing a Pay-to-Pay fee when she makes a mortgage payment by phone, engages in two practices prohibited under the Act: (1) making a “false representation that the consumer debt may be increased by . . . service fees . . . or other charges if, in fact, such fees or charges may not legally be added to the existing obligation,” see Cal. Civ. Code § 1788.13(e); and (2) “charg[ing] for services rendered, or other expense incurred by the debt collector in the collection of the consumer debt,” where such charge is not “permitted by law,” see Cal. Civ. Code § 1788.14(b).6 For purposes of the Rosenthal Act, a “consumer debt,” which includes a “mortgage debt,” is “money . . . due or owing or alleged to be due or owing.” See Cal. Civ. Code § 1788.2(f).7 RoundPoint argues Elbert’s claim is subject to dismissal because, RoundPoint asserts, Elbert has not alleged any mortgage payment she made by telephone was, at the time of such payment, due or owing. See Burris v. HSBC Bank, USA, Nat’l Ass’n, 2014 WL 12772260, at *5-6 (C.D. Cal. December 19, 2014) (dismissing Rosenthal Act claim where payment on which claim based was made before “due date listed on the statement”). In her opposition, Elbert cites to Sanders v. LoanCare LLC, 2019 WL 441964 (C.D. Cal. February 1, 2019), in which the plaintiff alleged she made a payment within a “grace period,” which payment, the district court held, was made when it was, for purposes of the Rosenthal Act, “due and owing.” See id. at *3. Even assuming a payment within a grace period can be considered “due and owing,” however, Elbert has not identified any relevant document providing for a grace period, let alone that she made any telephonic payment within any such period. Accordingly, Count II is subject to dismissal.