District Court (Cal.) Says Threat to Sue and Threat of Garnishment Were Not False

In Bliese v. Credit Bureau of Ukiah, Inc., 2013 WL 1694952 (N.D.Cal. 2013), Judge Illston granted summary judgment to a debt collector against a claim that the debt collector falsely threatened to file suit against the debtor.

Plaintiff’s first claim is for “threatening to file a lawsuit against Plaintiff even though Defendant did not intend to do so,” in violation of FDCPA § 1692e(5). Section 1692e(5) prohibits a debt collector from using, in collecting a debt, “[t]he threat to take any action that cannot legally be taken or that is not intended to be taken.” Defendant argues that plaintiff has not presented any evidence or arguments to overcome the affirmative evidence it submitted, which shows that it had the authority to file a lawsuit against plaintiff and that it intended to do so before the June 7, 2011 phone call. Plaintiff argues that defendant’s delay in waiting until February 2013 to file suit creates a genuine dispute of material fact as to whether defendant intended to sue plaintiff. Plaintiff also argues that the fact she was deceived “into believing that legal proceedings were imminent, as she felt the need to hire an attorney soon after the threats were made,” creates a dispute as to whether “an unsophisticated consumer” would “falsely believ[e] that litigation was imminent.” Opp’n at 15.  ¶ First, the evidence submitted by defendant refutes any assertion of falsity as to defendant’s intent to undertake litigation. Plaintiff does not attack or rebut defendant’s evidence that prior to the communications at issue, it asked for and received approval to litigate against her, and that it planned to do so if the outcome of speaking with her was not satisfactory. Instead, plaintiff asks the Court to rely on Drennan v. Van Ru Credit Corp., 950 F.Supp. 858, 861 (N.D.Ill.1996), where the district court inferred a lack of intent to litigate from periods of inaction of nine months and one year. Drennan involved a motion to dismiss where the parties had not submitted other evidence. Id. Here, the parties have submitted evidence on the motion for summary judgment, and that evidence rebuts any inference that may come from defendant’s inaction here. Moreover, here defendant asserts—and plaintiff does not dispute—that during the supposed “more than 20 month” delay plaintiff alleges, the parties were actually negotiating a payment plan and defendant apparently gave plaintiff a break because of an ill family member. See Opp’n at 14. Thus, far from inaction as in Drennan, here the parties were actively working to resolve the dispute during the delay in pursuing litigation.  ¶  Plaintiff’s second argument-that, given her status as an unsophisticated consumer, her perception of defendant’s statements is a question of fact for a jury—is also unavailing. The Ninth Circuit has made clear that it is the court, not the jury, which determines whether statements give rise to debt collector liability. Gonzales v. Arrow Financial Services, LLC, 660 F.3d 1055, 1061 (9th Cir.2011). Thus, plaintiff’s subjective perception of CBU’s intent is of no moment. Moreover, as discussed, plaintiff’s subjective view that she was “misled” into believing litigation was imminent has been rebutted; defendant has offered evidence that litigation was in fact imminent.

Judge Illston further found discussions related to garnishment inactionable because garnishment – ultimately – could be a post-judgment remedy.

Plaintiff also claims that defendant violated FDCPA § 1692e(4) by threatening to garnish her wages when it did not have the legal authority to do so. FDCPA § 1692e(4) prohibits a debt collector from representing or implying that “nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.” Plaintiff argues that defendant cannot legally threaten garnishment until after it has obtained a judgment against plaintiff. The Court disagrees. As a logical matter, the threat to garnish wages would have little effect if it could only be made once the debt collector had already taken the legal action to begin garnishing a debtor’s wages. As long as garnishment is an available legal remedy, the threat of garnishment under the FDCPA is lawful regardless of whether judgment has already been obtained. ¶  Courts considering this question have consistently found it lawful for a debt collector to threaten garnishment or other remedies that it can legally pursue, even prior to obtaining a judgment. See Vasquez v. State Recovery Sys., Inc., No. 2:11–cv–1609–GEB–EFB, 2011 WL 6012326, at *1 (E.D.Cal. Dec.1, 2011) (dismissing claim that defendant could not threaten garnishment because it did not have a valid judgment as conclusory, suggesting that garnishment is a “lawful” step under § 1692e(4) even before defendant obtains a judgment); Gostony v. Diem Corp., 320 F.Supp.2d 932, 941 (D.Ariz.2003) (finding that threat of possible lawsuit or garnishment did not create impression that defendant could do so “without having first obtained a judgment”); Shuler v. Ingram & Assoc., 710 F.Supp.2d 1213, 1224–25 (N.D.Ala.2010) (finding statements that the defendant “may place a lien on plaintiff’s property, garnish [plaintiff’s] wages, that [defendant] prosecutes debts like his, and always wins” not in violation of § 1692e(4) because they “place[ ] plaintiffs on notice of options legally available to” the defendant); Sparks v. Phillips & Cohen Assoc., Ltd., 641 F.Supp.2d 1234, 1249 (S.D.Ala.2008) (“Merely advising the debtor of the agency’s options with which to pursue the debt is the sort of truism that is legally insufficient to violate 1692e.”). Moreover, the case offered by plaintiff, Skinner v. Green Tree Servicing, LLC, No. 3:12–cv–03834–JCS, 2012 WL 6554530, at *8 (N.D.Cal. Dec.14, 2012), does not support plaintiff’s proposition that threatening garnishment requires a debt collector to first have judgment. Instead, the court in Skinner barred the debt collector from threatening garnishment where garnishment was not a remedy lawfully available to a lender seeking to recover on a mortgage for a home that was already foreclosed upon. See id. Here there is no dispute that garnishment is a legal remedy available to recover on plaintiff’s debt.  ¶  *5 In the face of the evidence submitted and the available legal authority, the Court declines to adopt plaintiff’s contrary view of the law. Accordingly, the Court grants judgment to defendant on plaintiff’s § 1692e(4) cause of action.