Judge Mark E. Windham, Case Number: 23STLC00031, Date: 2023-04-27 Tentative Ruling

Chappell v. Capital One, NA, et al.

MOTION FOR ATTORNEY’S FEES

(CCP §§ 1032, 1033.5; Civil Code § 1717)

Defendant LVNV Funding, LLC’s Motion for Costs as Prevailing Party and for Fees is GRANTED ONLY AS TO COSTS IN THE AMOUNT OF $604.100 AND DENIED AS TO ATTORNEY’S FEES.

Plaintiff Erica Chappell (“Plaintiff”) filed the instant action for violations of the Rosenthal Fair Debt Collection Practices Act (“the RFDCPA”), Cal. Civ. Code § 1788, et seq. and the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. against LVNV Funding, LLC (“Defendant LVNV”), The Law Offices of Harris and Zide, LLP, and Capital One, N.A (“Defendant Capital One”), on January 3, 2023. The Complaint mentions that Defendants’ conduct also violated the federal Fair Debt Collection Practices Act (“the FDCPA”) but does not bring a cause of action based on that statute. Defendant LVNV filed an Amended Answer on February 21, 2023.

On March 29, 2023, the Court overruled Plaintiff’s Demurrer to the Amended Answer. (Minute Order, 03/29/23.) The Court sustained Defendant Capital One’s Demurrer to the Complaint with leave to amend. (Minute Order, 04/27/23.) Plaintiff dismissed the action without prejudice on May 19, 2023.

Defendant LVNV filed the instant Motion for Attorney’s Fees on June 22, 2023. Plaintiff filed an opposition on September 6, 2023 and Defendant LVNV replied on October 4, 2023.

Defendant LVNV moves for attorney’s fees and costs as the prevailing party in this action under Code of Civil Procedure section 1032, the Fair Debt Collection Practices Act (“the FDCPA”), and the Rosenthal Fair Debt Collection Practices Act (“RFDCPA”). A prevailing party is defined to include “a defendant in whose favor a dismissal is entered.” (Code Civ. Proc., § 1032, subd. (a)(4).) A prevailing party is entitled to recover costs, including attorneys’ fees when authorized by contract, law or statute. (Code Civ. Proc., § 1032, subd. (b); § 1033.5, subd. (a)(10).) This right may arise out of contract, statute or law. (Code Civ. Proc., § 1033.5, subd. (a)(10).) Additionally, a party prevailing on an action on a contract is entitled to attorney fees if the contract contains an attorney’s fees provision. (Civ. Code, § 1717, subd. (a).)

Under the statutory definition, Defendant LVNV is a prevailing party. Plaintiff disputes this on the grounds that Defendant LVNV filed an earlier action against Plaintiff regarding the same debt that is the subject of this action and dismissed that case. (Opp., pp. 3:22-4:14.) The opposition, however, fails to provide sufficient evidence of this prior case, its relation to this action, and outcome to demonstrate that it should have any bearing on the Court’s prevailing party determination in this action. Instead, defense counsel’s declaration simply states that “December 2, 2022, Defendant LVNV filed suit against Plaintiff to attempt to collect on the debt at issue in the instant case.” (Opp., Robenzadeh Decl., ¶5.) No other information is provided for the Court to evaluate this contention. Therefore, the Court finds that Defendant LVNV is the prevailing party in this action and is entitled to an award of costs.[1]

Attorney’s fees under the RFDCPA can only be awarded if an action is prosecuted in bad faith; attorney’s fees can be awarded under the FDCPA if the action was brought in bad faith and for the purpose of harassment. (Civ. Code, § 1788.30, subd. (c); 15 U.S.C. § 1692k, subd. (a)(3).) Defendant LVNV contends that Plaintiff failed to produce any evidence of the agreement that allegedly settled the debt at issue in this case, despite its repeated requests to examine the document. (Motion, Flynn Decl., Exhs. B-C.) Plaintiff’s failure to produce the settlement agreement, according to Defendant LVNV, demonstrates that the settlement agreement does not exist and that this action was brought in bad faith. The opposition insists that the settlement agreement exists but that Plaintiff cannot produce it due to a confidentiality provision, which was Plaintiff’s position during the pendency of the action. (Ibid; Opp., Robenzadeh Decl., ¶11.)

The Motion does not cite any authority for what constitutes bad faith under the RFDCPA, or bad faith and harassment under the FDCPA. The cases to which the Motion cite hold that the FDCPA’s fees provision “should be construed narrowly so as not to discourage private litigation under the FDCPA” and that “[t]he limited purpose of this provision is to discourage malicious and harassing lawsuits by consumers.” (Weiss v. McElwee (D.N.J. 2016) 2016 WL 96144, at *5 [citing Kondratick v. Beneficial Consumer Discount Co. (E.D. Pa. 2006) 2006 WL 305399, at *10 n. 4 [citing Ayres v. Nat'l Credit Mgt. Corp. (E.D.Pa. 1991) 1991 WL 274695, at *1].) Nor does the Motion provide authority for what constitutes a malicious lawsuit. In fact, none of the cited cases found that attorney fees were warranted for bad faith, harassment, or malice, nor defined those terms. (Weiss, supra 2016 WL 96144, at *5; Kondratick, supra, at 2006 WL 305399 at *10 n. 4; Ayres, supra, 1991 WL 274695, at *1.) Defendant LVNV’s reply also mentions a malicious prosecution standard for an award of attorney’s fees under the RFDCPA but, again, cites no authority. (Reply, pp. 4:25-5:4.) The Court, therefore, has no legal basis for determining whether the fact pattern in this action—Plaintiff’s failure to produce the alleged settlement agreement on which her case was founded—demonstrates that the action was brought in bad faith or to harass Defendant LVNV.

Based on the foregoing, Defendant LVNV Funding, LLC’s Motion for Costs as Prevailing Party and for Fees is GRANTED ONLY AS TO COSTS IN THE AMOUNT OF $604.100 AND DENIED AS TO ATTORNEY’S FEES.

[1] Defendant LVNV’s reply purports to refer to this earlier action it brought against Plaintiff as LASC Case No. 22CHLC2697. That case number, however, belongs to LVNV Funding LLC v. Tobias E Murry, an action that does not involve Plaintiff.