Zinni et al v. Jackson White PC et al

Filing 36

ORDER denying 31 plaintiffs' Motion to Amend; granting 28 defendants' Motion to Dismiss. Signed by Judge Frederick J Martone on 3/14/12.(TLJ)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Renee M. Zinni and Marco S. D'Alonzo, )
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Plaintiffs,
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vs.
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Jackson White, P.C.; James L. Tanner;)
Scott L. Potter; Aaron M. Finter; Anthony)
H. Misseldine; John Does 1-10; ABC)
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Entities 1-10,
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Defendants.
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No. CV 11-02143-PHX-FJM
ORDER

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We have before us defendants' motion to dismiss (doc. 28), plaintiffs' response and
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notice of plaintiffs' motion for leave to amend complaint (doc. 29), plaintiffs' supplement to
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opposition to motion (doc. 30), plaintiffs' motion for leave to amend (doc. 31), defendants'
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reply in support of motion to dismiss (doc. 32), defendants' response to motion for leave to
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amend (doc. 33), and plaintiffs' reply (doc. 35).
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Plaintiffs failed to comply with LRCiv 15.1, which requires a party who moves for
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leave to amend a pleading to "attach a copy of the proposed amended pleading as an exhibit
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to the motion [and] indicate in what respect it differs from the pleading which it amends, by
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bracketing or striking through the text to be deleted and underlining the text to be added."
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Plaintiffs' proposed amended complaint contains no indication of how it differs from their
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original complaint. Their reply completely fails to address this problem or the arguments

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against amendment in defendants' response.

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The court should freely grant leave to amend under Rule 15, Fed. R. Civ. P. Leave

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to amend may be denied, though, if the proposed amendment is futile or the amended

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complaint would be subject to dismissal. Saul v. United States, 928 F.2d 829, 843 (9th Cir.

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1991). Granting or denying leave to amend is within the discretion of the trial court.

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Swanson v. U.S. Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996).

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As far as the court can tell, the amended complaint adds a claim for aiding and

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abetting and adds facts about the recent trustee's sale. The predicate of an aiding and abetting

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claim is "harm resulting to a third person from the tortious conduct of another." Restatement

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(Second) of Torts § 876 (1979); see also Wells Fargo Bank v. Ariz. Laborers, Teamsters &

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Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 485, 38 P.3d 12, 23

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(recognizing § 876(b) as the standard in Arizona).

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Plaintiffs claim that defendants are liable for aiding and abetting M&I Marshall &

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Ilsley Bank in the wrongful foreclosure of their home and making misrepresentations. But

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in Zinni v. M&I Marshall & Ilsley Bank, No. CV-09-2035-PHX-FJM, 2011 WL 1792552

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(D. Ariz. May 11, 2011), we granted summary judgment in favor of M&I Marshall & Ilsley

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Bank and against plaintiffs on all claims. Because no principal tortfeasor exists, defendants

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cannot be liable for aiding and abetting. Accordingly, an amendment to the complaint to add

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this cause of action would be futile and subject to dismissal.

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II

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Defendants move for dismissal pursuant to Rule 12(b)(6), Fed. R. Civ. P. If a

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complaint does not state a plausible claim for relief on its face, it cannot survive a Rule

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12(b)(6) motion to dismiss. Ashcroft v. Iqbal, 556 U.S. ___, 129 S. Ct. 1937, 1950 (2009).

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"A claim has facial plausibility when the plaintiff pleads factual content that allows the court

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to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

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at 1949. "[A] forumulaic recitation of the elements of a cause of action will not do." Bell

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Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1965 (2007). When ruling on
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a motion to dismiss, this court must accept a plaintiff's factual allegations and reasonable

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inferences as true, but is "not bound to accept as true a legal conclusion couched as a factual

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allegation." Id. (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 2944

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(1986)). Dismissal under Rule 12(b)(6) may be "based on the lack of a cognizable legal

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theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri

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v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

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III

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Count one of plaintiffs' complaint alleges a violation of the Fair Debt Collection

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Practices Act ("FDCPA"). The FDCPA prevents abusive practices by a "debt collector,"

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defined as "any person who uses any instrumentality of interstate commerce or the mails in

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any business the principal purpose of which is the collection of any debts, or who regularly

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collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed

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or due another." 15 U.S.C. § 1692a(6). A "debt" is "any obligation or alleged obligation of

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a consumer to pay money arising out of a transaction . . . primarily for personal, family, or

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household purposes." 15 U.S.C. § 1692a(5).

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"[A] non-judicial foreclosure proceeding is not the collection of a 'debt' for purposes

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of the FDCPA." Mansour v. Cal-Western Reconveyance Corp., 618 F. Supp. 2d 1178, 1182

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(D. Ariz. 2009). Moreover, "mortgagees and their assignees, servicing companies, and

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trustee fiduciaries are not included in the definition of 'debt collector.'" Id.; see also

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Narramore v. HSBC Bank USA, N.A., 2010 WL 2732815, at *10-12 (D. Ariz. July 7, 2010)

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(same); Earl v. Wachovia Mortgage FSB, 2010 WL 2336191, at *5 (D. Ariz. June 10, 2010)

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(same). Because a foreclosure trustee is not a debt collector and a non-judicial foreclosure

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is not the collection of a debt, plaintiffs' FDCPA claim must be dismissed.

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VI

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Plaintiffs' second claim is for violation of A.R.S. §§ 33-420 and 33-801 et seq. They

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contend that the notice of trustee's sale recorded on August 17, 2009 was invalid. Plaintiffs'

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complaint requested a preliminary injunction and temporary restraining order cancelling the

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trustee's sale. They later filed a motion for preliminary injunction (doc. 14) which we denied
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(doc. 22). We also denied a motion to set aside/cancel trustee's sale (doc. 24), disagreeing

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with some of the same arguments here about fraudulent and improper recording and improper

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substitution of trustee. (Doc. 27). There is no showing that the notice of trustee's sale

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recorded August 17, 2009 was false. Plaintiffs' claim regarding a false notice of sale is

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groundless.

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V

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The third claim alleges tortious interference. To state a claim for relief, plaintiffs must

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show intentional interference inducing or causing a breach of a contract between plaintiffs

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and a third party. Snow v. Western Sav. & Loan Ass'n, 152 Ariz. 27, 33, 730 P.2d 204, 211

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(1986). The purported facts to support this element consist of the recording of a false notice

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of sale and evicting plaintiffs. As discussed above, there is no evidence that the notice of

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sale was false. There is also no evidence that defendants wrongfully evicted plaintiffs or sent

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workers to change locks and drain the pool. The police report from the incident says the

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workers were sent by the bank. (Doc. 1, ex. P). Plaintiffs' contention that the workers were

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sent by defendants is contradicted by the evidence submitted here as well as the allegations

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made in their prior action against the bank. Complaint ¶ 61, Zinni v. M&I Marshall & Ilsley

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Bank, No. CV-09-2035-PHX-FJM.
VI

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Count four, abuse of process, is similarly unavailing. "The essential elements of the

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tort of abuse of process are an ulterior purpose and a wilful act in the use of judicial process

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not proper in the regular conduct of the proceeding." Bird v. Rothman, 128 Ariz. 599, 602,

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627 P.2d 1097, 1100 (Ct. App. 1981). Filing a counterclaim to judicially foreclose a lien that

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is in default is not abuse of process.

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VII

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Count five alleges negligent and intentional infliction of emotional distress. To

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prevail on a claim for intentional infliction of emotional distress, the conduct complained of

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must be "extreme and outrageous." Watts v. Golden Age Nursing Home, 127 Ariz. 255, 258,

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619 P.2d 1032, 1035 (1980). Liability only attaches to conduct "so outrageous in character,
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and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded

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as atrocious, and utterly intolerable in a civilized community." Id. (quoting Restatement

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(Second) of Torts § 46 cmt. d (1965)). On a motion to dismiss, we may determine whether

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the alleged actions rise to this level. Cervantes, 656 F.3d at 1046. Once again, plaintiffs

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were in default on their loan and the foreclosure was not wrongful or false. Defendants did

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not act in such an extreme and outrageous manner as to warrant a finding of liability here.

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A claim for negligent infliction of emotional distress requires the plaintiff to witness

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an injury to a closely related person, suffer mental anguish manifested as physical injury, and

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be within the zone of danger so as to be subject to an unreasonable risk of bodily harm.

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Pierce v. Casas Adobes Baptist Church, 162 Ariz. 269, 272, 782 P.2d 1162, 1165 (Ariz.

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1989). Plaintiffs do not allege any injury to a closely related person has resulted from

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defendants' conduct, therefore they fail to state a claim.
VIII

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In count six, plaintiffs contend that defendants are liable for libel for making written

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statements that plaintiffs failed to pay. But plaintiffs did fail to make all payments.

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Therefore, any statement that they failed to pay their loan is not false. Without a false

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statement, there can be no claim for libel. See Godbehere v. Phoenix Newspapers, Inc., 162

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Ariz. 335, 341, 783 P.2d 781, 787 (1989) ("To be defamatory, a publication must be false .

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. . .").
IX

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Plaintiffs' last claim is for violation of the Arizona Consumer Fraud Act, A.R.S. § 44-

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1521 et seq. This claim rests on the same allegations as the claims above and is unsuccessful

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for the reasons already discussed. There is no evidence that defendants were responsible for

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the presence of workers at plaintiffs' house, the notice of sale was not false, and the plaintiffs

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were in default.

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X

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Defendants request attorneys' fees pursuant to A.R.S. §§ 12-349, 12-341.01, or 33-

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807(E). Any request for fees should be made pursuant to a separate motion which complies
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with LRCiv 54.2.
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IT IS ORDERED DENYING plaintiffs' motion for leave to amend (doc. 31).

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IT IS ORDERED GRANTING defendants' motion to dismiss (doc. 28).

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DATED this 14th day of March, 2012.

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