Lembeck

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

VALERIE LEMBECK, Case No. 20-cv-03277-VC

Plaintiff,

ORDER DENYING IN PART AND

v. GRANTING IN PART MOTION TO

DISMISS

ARVEST CENTRAL MORTGAGE CO.,

Re: Dkt. No. 24 Defendant.

Valerie Lembeck alleges that her mortgage servicer, Arvest Central Mortgage Company, violates California law when it charges her and other borrowers a $5 fee to make their monthly mortgage payments over the phone (the IVR fee) rather than by mail or in person. Arvest moved to dismiss the suit on the grounds that the IVR fee does not violate the California Rosenthal Act, either directly or by violating the provisions of the federal Fair Debt Collection Practices Act that the state statute explicitly incorporates. The motion to dismiss is denied as to all but one of Lembeck’s claims. The core of Lembeck’s complaint is that the IVR fee violates a provision of the FDCPA that, among other things, prevents debt collectors from collecting fees that are “incidental to the principal obligation” unless those fees are authorized either by the loan agreement or some independent source of law. The provision reads in…