Judge: Bradley S. Phillips, Case: 24STCV34726, Date: 2025-06-12 Tentative Ruling

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Case Number: 24STCV34726    Hearing Date: June 12, 2025    Dept: 26

Plaintiff Kyle Sigona (“Plainitff”) alleges two causes of action against Defendant I.Q. Data International, Inc. (“Defendant”): (1) violation of the Rosenthal Fair Debt Collection Practices Act (“RFDCPA”), Cal. Civ. Code § 1788, et seq., and (2) violation of the California Unfair Competition Law (“UCL”), Ca1. Bus. & Prof. Code § 17200, et seq.

Plaintiff alleges that Defendant sent him messages and letters in connection with collection on an alleged debt that Plaintiff claims he does not owe. (Complaint ¶ 8, 11.) Plaintiff sent Defendant a letter that disputed the purported debt and gave Defendant notice that Plaintiff was represented by Counsel. (Id. ¶ 12.) Plaintiff claims, “Given the lopsided balance of bargaining power between consumers such as Plaintiff and powerful and financially robust debt collectors such as Defendants, Defendants knew or should have known that its conduct as herein described was reasonably calculated and likely to result in Plaintiff being confused, harassed, anxious, and without a reasonable means of responding to Defendants’ debt collection efforts without the assistance of counsel.” (Id. ¶ 14.)

On February 27, 2025, Defendant filed the instant demurrer to both causes of action in Plaintiff’s Complaint (violations of RFDCPA and UCL). Plaintiff filed an opposition on March 6, 2025. Defendant filed a reply on June 4, 2025.

DISCUSSION

A.    First Cause of Action: Violation of the Rosenthal Fair Debt Collection Practices Act (RFDCPA), Cal. Civ. Code § 1788

Civil Code section 1788.1 provides that the purpose of the Rosenthal Fair Debt Collection Practices Act (“RFDCPA”) is to “prohibit debt collectors from engaging in unfair or deceptive acts or practices in the collection of consumer debts and to require debtors to act fairly in entering into and honoring such debts, as specified in this title.” (Civ. Code, § 1788.1.) A “debt collector” under the RFDCPA is “any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection.” (Id., § 1788.2(c).) A “debt collection” is “any act or practice in connection with the collection of consumer debts.” (Id., § 1788.2(b).) A “consumer debt” is “money, property or their equivalent, due or owing or alleged to be due or owing from a natural person by reason of a consumer credit transaction.” (Id., § 1788.2(f).) A “consumer credit transaction” is a “transaction between a natural person and another person in which property, services or money is acquired on credit by that natural person from such other person primarily for personal, family, or household purposes.” (Id., § 1788.2(e).) 

California’s Rosenthal Act explicitly incorporates the federal FDCPA’s standards. (CCP § 1788.17; Alborzian v. JPMorgan Chase Bank, N.A. (2015) 235 Cal.App.4th 29, 36.) The FDCPA prohibits a debt collector from “‘us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt’ (15  U.S.C. § 1692e), and . . . specifically prohibits ‘[t]he false representation of  . . . the character, amount or legal status of any debt’ (§ 1692e, subd. (2)(A)), ‘[t]he threat to take any action that cannot legally be taken or that is not intended to be taken’ (§ 1692e, subd. (5)), and ‘[t]he use of any . . . deceptive means to collect or attempt to collect any debt . . .’ (§ 1692e, subd. (10)).” (Alborzian, supra, 235 Cal.App.4th at 36.)  “ ‘[a] debt collection letter’ ”—a so-called “dunning letter”—“ ‘is deceptive where it can be reasonably read to have two or more different meanings, one of which is inaccurate.’ ” (Id. at p. 35.)

Here, Plaintiff alleges that IQ Data violated the FDCPA and therefore the RFDCPA by:

·         Exhibiting conduct “the natural consequence of which is to harass, oppress, or abuse any person.” (15 U.S.C. § 1692d, Compl., ¶ 16.)

·         Using “unfair or unconscionable means in connection with an attempt to collect an alleged debt.” (15 U.S.C. § 1692f, Compl., ¶ 16.)

·         Engaging in “collecting on a debt without a valid basis to do so.” (15 U.S.C. § 1692f1, Compl., ¶ 16.)

·         Using “false, deceptive or misleading representations in connection with the debt.” (15 U.S.C. § 1692e, (Compl., ¶ 16.)

·         Using “false or deceptive means to collect.” (15 U.S.C. 1692e(10), Compl., ¶ 16.)

Defendant argues that there is nothing alleged in the Complaint to demonstrate that Defendant ever harassed, oppressed, or abused Plaintiff or used unfair or unconscionable means in connection with an attempt to collect a debt. In opposition, Plaintiff references the following allegations in the Complaint:

Plaintiff alleges that (a) he received multiple messages and letters for payments of amounts not due (Complaint at 9) (b) Defendant failed to investigate Plaintiff’s complaints and willfully, knowingly, and negligently failed to implement corrective actions (Complaint at 10); (c) the alleged debt was not owed and was a fabrication created by Defendants without any lawful basis (Complaint at 11); (d) Defendant has never done business with Plaintiff and has no valid basis for collection of any sums, yet attempted to do so anyway (Complaint at 11); (e) after Plaintiff sent a letter to Defendant disputing the debt Defendant never indicated that they ceased collecting (Complaint at 12-13); (f) given the lopsided balance of bargaining power between consumers such as Plaintiff and powerful and financially robust debt collectors such as Defendants, Defendants knew or should have known that its conduct as herein described was reasonably calculated and likely to result in Plaintiff being confused, harassed, anxious, and without a reasonable means of responding to Defendants’ debt collection efforts without the assistance of counsel (Complaint at 14); and Defendant violated 15 U.S.C. § 1692d, f, and e (Complaint at 16.).

The Court agrees with Defendant that the Complaint consists of conclusory allegations that are insufficient. For example, Plaintiff alleges that Defendant’s conduct was harassing but provides no factual details to support the claim, such as the content of the messages or the number/frequency of the messages. Also, Plaintiff states that Defendant knew or should have known that its conduct was likely to result in Plaintiff’s being confused, harassed, anxious because of the lopsided balance of bargaining power between consumers and financially robust debt collectors; but the Plaintiff’s Complaint is devoid of any specific facts to support its conclusory allegations, and the opposition does not adequately address these deficiencies.

Accordingly, the Court SUSTAINS the demurrer to the first cause of action WITH LEAVE TO AMEND.

B.     Second Cause of Action: Violation of the California Unfair Competition Law (UCL), Ca1. Bus. & Prof. Code § 17200

The UCL prohibits, and provides civil remedies for, unfair competition, which it defines as “any unlawful, unfair or fraudulent business act or practice.” (§ 17200.) The UCL prohibits anything that can properly be called a business practice and that at the same time is forbidden by law.” (Albillo v. Intermodal Container Services, Inc. (2003) 114 Cal.App.4th 190, 206 (internal citation quotations omitted).) “‘To bring a UCL claim, a plaintiff must show either an (1) unlawful, unfair, or fraudulent business practice, or (2) unfair, deceptive, untrue or misleading advertising.’” (Adhav v. Midway Rent A Car, Inc. (2019) 37 Cal.App.5th 954, 970 (quoting Lippitt v. Raymond James Financial Services Inc. (9th Cir. 2003) 340 F.3d 1033, 1043).)

Actions under the UCL can be brought by private individuals who have suffered injury in fact and lost money or property as a result of the unfair competition. (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 323.) To state a claim under the UCL, a plaintiff must “establish that the practice is either unlawful (i.e., is forbidden by law), unfair (i.e., harm to victim outweighs any benefit) or fraudulent (i.e., is likely to deceive members of the public).” (Albillo, supra, 114 Cal.App.4th at 206; see Searle v. Wyndham Internat., Inc. (2002) 102 Cal.App.4th 1327, 1333 [To establish a UCL claim, “[a]llegations of actual deception, reasonable reliance, and damage are unnecessary.”].)

Here, Plaintiff alleges that Defendant engaged in “unfair, unlawful, and fraudulent conduct [] by misrepresenting their services to Plaintiff when reasonable alternatives were available, and Plaintiff was economically harmed by foregoing alternative, reasonably comparable services.” (Complaint ¶ 28.) Plaintiff further alleges “As a result of Defendants conduct as described herein, Plaintiff has suffered economic and emotional harm.” (Complaint ¶ 22.)

Defendant again argues that Plaintiff relies on conclusory statements without providing factual allegations in support. In opposition, Plaintiff does not adequately address this argument and merely states that Plaintiff experienced economic harm because he was required to hire an attorney. Defendant’s reply points out that Plaintiff does not attempt to support his allegations by providing any specific facts supporting his alleged economic loss or deprivation of money or property beyond the vague and conclusory allegation of general economic and emotional harm.

The Court agrees with Defendant that the allegations in the Complaint are insufficient and do not explain how Defendant’s conduct resulted in Plaintiff’s feeling confused or harassed.or suffering economic harm. The conclusory allegations alone are not enough to adequately plead a claim under the UCL.

Accordingly, the Court SUSTAINS the demurrer to the second cause of action WITH LEAVE TO AMEND.

ORDER

Defendant’s demurrer to the first and second causes of action of Plaintiff’s complaint is sustained with leave to amend within thirty (30) days.