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Tourgeman v. Collins Fin. Servs., Inc.

United States Court of Appeals, Ninth Circuit

June 25, 2014

DAVID TOURGEMAN, Plaintiff-Appellant,
v.
COLLINS FINANCIAL SERVICES, INC., DBA Precision Recovery Analytics, Inc., a Texas corporation; NELSON & KENNARD, a partnership; PARAGON WAY, INC.; COLLINS FINANCIAL SERVICES USA, INC., Defendants-Appellees, and DELL FINANCIAL SERVICES, LP, Defendant

Argued and Submitted April 9, 2014, Pasadena, California

Page 1110

[Copyrighted Material Omitted]

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Appeal fro the United States District Court for the Southern District of California. D.C. No. 3:08-cv-01392-CAB-NLS. Cathy Ann Bencivengo, District Judge, Presiding.

SUMMARY[**]

Fair Debt Collection Practices Act

The panel reversed the district court's summary judgment in favor of the defendants in a class action under the Fair Debt Collection Practices Act.

The panel held that the plaintiff had Article III standing to assert claims based on collection letters that he did not receive because the alleged violation of his statutory right not to be the target of misleading debt collection communications constituted a cognizable injury. The panel also held that the plaintiff had a statutory cause of action under the FDCPA.

The panel reversed the district court's summary judgment on claims that the defendants violated § 1692e of the FDCPA by misidentifying the plaintiff's original creditor in a series of collection letters sent to him, as well as in a complaint filed against him in state court. The panel held that the letters and the complaint were materially misleading, and that the plaintiff was entitled to judgment under § 1692e(2) and (10).

Dissenting, Judge Farris wrote that he would affirm the district court's judgment.

Brett M. Weaver (argued), Johnson & Weaver, LLP, San Diego, California, and Daniel P. Murphy, Law Offices of Daniel Murphy, San Diego, California, for Plaintiff-Appellant.

Tomio B. Narita (argued) and Jeffrey A. Topor, Simmonds & Narita LLP, San Francisco, California, for Defendant-Appellee Nelson & Kennard.

No appearance for Defendants-Appellees Collins Financial Services, Inc., Collins Financial Services USA, Inc., or Paragon Way, Inc.

Before: Jerome Farris and Andrew D. Hurwitz, Circuit Judges, and Paul L. Friedman, District Judge.[*]

OPINION

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FRIEDMAN, District Judge:

This is a class action brought under the Fair Debt Collection Practices Act (" FDCPA" or " the Act" ), 15 U.S.C. § 1692 et seq. Plaintiff David Tourgeman contends that the defendants -- Collins Financial Services, Inc.; Paragon Way, Inc.; Nelson & Kennard; and Collins Financial Services USA, Inc. -- made false representations to him in connection with their efforts to collect a purported debt.[1] Specifically, Tourgeman argues that the defendants violated the Act by misidentifying his original creditor in a series of collection letters sent to him, as well as in a complaint filed against him in state court. He also maintains that one defendant, Nelson & Kennard, misleadingly represented that its collection letter was from an attorney when, on Tourgeman's account of the facts, no attorney had been " meaningfully involved" in evaluating his case. The district court granted summary judgment to the defendants. We have jurisdiction under 28 U.S.C. § 1291. We now reverse and hold that judgment should be entered for Tourgeman.

I. BACKGROUND

David Tourgeman bought a Dell computer. At the time of the purchase, Tourgeman

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resided in Mexico, and he ordered the computer to be shipped to his parents' home in California. He financed the purchase through Dell Financial Services, which arranged for a loan to be originated by CIT Online Bank. Dell Financial then serviced the loan. According to Tourgeman, he completed repayment within two years of buying the computer. But Dell Financial's records reflected otherwise. Tourgeman's allegedly outstanding debt therefore was charged off and then sold, along with more than 85,000 other Dell Financial debts, to Collins Financial Services.[2]

Collins transferred Tourgeman's file along with the other Dell Financial accounts to Collins's affiliated collection agency, Paragon Way, Inc., which mailed three letters to Tourgeman encouraging him to pay off the purported debt. Collins then referred the file to the law firm of Nelson & Kennard, which sent its own dunning letter to Tourgeman. All of these letters were mailed to addresses in California at which Paragon and Nelson & Kennard believed Tourgeman might reside. In fact, the addresses belonged to Tourgeman's parents, and Tourgeman himself remained resident in Mexico. After receiving no response to the letters, Nelson & Kennard filed a complaint on behalf of Collins in San Diego County Superior Court. Tourgeman retained counsel, and Nelson & Kennard eventually elected to dismiss the action. It was during this state court litigation that Tourgeman learned of the several letters that had been mailed to him at his parents' addresses. See Tourgeman v. Collins Fin. Servs., Inc., No. 08-cv-1392, 2011 WL 3176453, at *6 (S.D. Cal. July 26, 2011).

Tourgeman then went on the offensive. He filed this lawsuit in federal district court, alleging that Collins, Paragon Way, and Nelson & Kennard had violated the FDCPA, as well as California law, in their efforts to collect the purported debt from him.[3] Tourgeman's complaint survived motions to dismiss filed by the several defendants, see id., and the district court later certified a class of consumer plaintiffs, see Tourgeman v. Collins Fin. Servs., Inc., No. 08-cv-1392, 2012 WL 1327824, at *4-10 (S.D. Cal. Apr. 17, 2012). But upon the defendants' motions for summary judgment and Tourgeman's cross-motion, the court granted judgment to the defendants. See Tourgeman v. Collins Fin. Servs., Inc., No. 08-cv-1392, 2012 WL 3731807 (S.D. Cal. Aug. 29, 2012).

On appeal, Tourgeman makes two claims under the FDCPA. His main claim arises from the fact that the defendants -- both in their letters and in the state court complaint -- falsely identified his original creditor as " American Investment Bank, N.A.," when, in actuality, CIT Online Bank originated the loan. Tourgeman contends that this misidentification violated the Act's prohibition on the " use [of] any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Tourgeman's second claim relates to the letter sent to him by the law firm of Nelson & Kennard. He argues that the attorney who signed the letter had not been " meaningfully involved" in evaluating his case,

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and that the letter therefore runs afoul of 15 U.S.C. ยง 1692e(3), which proscribes " [t]he false representation or implication that any individual is an attorney or that any communication is from an attorney." Tourgeman seeks only statutory damages, conceding that he ...


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