A California Appeals Court has reversed a lower court’s ruling in a Rosenthal Fair Debt Collection Practices Act class-action case, determining that as long as a debt is alleged to be due or owing — whether or not it, in fact, is due or owing — is sufficient to state a claim.
A copy of the ruling, in the case of Hagey v. Solar Service Experts can be accessed by clicking here.
The plaintiff purchased a home which had a solar energy system already installed. The prior homeowner and the plaintiff reached an agreement where the prior homeowner prepaid for the remaining monthly payments. Nonetheless, the plaintiff started receiving statements from the defendant. When the plaintiff contacted the defendant, a representative indicated he should not have received the bill and that the matter would be resolved. But more statements and a late payment notice were sent to the plaintiff, who tried to rectify the issue with the defendant, to no avail.
That led the plaintiff to file this suit, which a state court judge dismissed on the grounds that the plaintiff failed to state a claim because he didn’t actually owe the money that the defendant said he owed.
But that’s not what the RFDCPA says, the Appeals Court noted. The act defines a consumer debt as “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.”
Simply stated, the plaintiff received statements and notices indicating the plaintiff owed money to the defendant. “This satisfies the money ‘alleged to be due or owing’ component of the statutory scheme,” the Appeals Court wrote.
The defendant attempted to argue that regardless of what the notices said, the plaintiff did not owe the money to the defendant. But, as the Appeals Court noted, the RFDCPA, along with the Fair Debt Collection Practices Act, were “specifically designed to ‘eliminate the recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid,’ ” it wrote.
