On July 3, 2018, Judge Birotte Jr. of the Central District of California denied a motion to dismiss filed by Ditech that argued our client was not removed from the home mortgage loan even though the lawsuit alleges that Ditech undertook the specific actions of removing her name as a customer and signatory to a modification agreement entered into by the ex-husband. Ditech argued that the modification agreement contains a clause that shows the underlying loan still applies in full force as against our client. However, California law specifically holds that any inconsistent terms between the modification agreement and the underlying agreement are replaced by the modification agreement. Our position was that the modification agreement only applies between Ditech and the ex-husband, because it is a basic principal of contract law that someone cannot be held liable to something they did not agree to, and therefore any term in the modification agreement that shows the original note still applies in full force only applies to Ditech and the ex-husband subject to the inconsistent terms in the modification agreement.
The Court agreed with our allegations, ruling that Ditech’s actions in removing our client’s name as a customer creates at least an inference worthy of discovery and litigation that Ditech intended to remove our client from the loan altogether, and that when Ditech continued reporting to the credit reporting agencies that our client remains obligated upon the loan in the full amount then Ditech furnished false/inaccurate/misleading information as against our client. Furthermore, Judge Birotte also agreed that when Ditech continued to call our client directly seeking payment after the ex-husband went into default, Ditech engaged in unlawful debt collection in violation of the Rosenthal Act.
Read the opinion by clicking HERE.
- Jared Hartman, Esq.
- Posted on September 27, 2017
On September 18, 2017, Judge Frazier entered judgment against La Jolla Neurosurgical Associates in the amount of $19,040.00 as a result of their unlawful debt collection efforts. A copy of the judgment can be found by clicking HERE.
The case arose out of unlawful attempts by the medical provider to attempt to collect upon a medical debt that is not owed by the patient. California state laws regarding worker’s compensation mandate that no medical debt can be collected from the patient directly if the medical services were a result of an injury that is under the exclusive jurisdiction of the worker’s compensation board.
Unfortunately, La Jolla Neurosurgical Associates began attempting to collect the medical debt from the patient directly, in direct contravention of California’s mandatory laws. The patient’s worker’s compensation attorney even delivered a letter to them instructing them to cease any attempts to collect from the patient directly, and provided them clear instructions on how they could collect the debt through the worker’s compensation process.
However, they refused to abide by the clear instructions and persisted in their efforts to collect from the patient directly. In their collection letters, they used ominous language that clearly misrepresented the legal status of the debt by sternly warning the patient that he personally owed the debt.
By not only misrepresenting the legal status of the debt, but also by persisting in their efforts to contact the patient directly despite having been put on written notice that the patient is represented by an attorney, La Jolla Neurosurgical therefore violated several provisions of the California Rosenthal Fair Debt Collection Practices Act. A copy of the Complaint can be found by clicking HERE.
If you or a loved one are being subjected to debt collection efforts that you feel are unfair or unlawful, please do not hesitate to contact us for a free and confidential consultation to discuss your rights and whether you may have a case for formal litigation.