Collins v. Wells Fargo Bank et al

Filing 25

ORDER - IT IS ORDERED that Defendant Wells Fargo's Motion to Dismiss, doc. 14 , is GRANTED. Defendant Wells Fargo is dismissed with prejudice from this action. The Clerk is kindly directed to enter judgment in favor of Defendant Wells Fargo against Plaintiff without Rule 54(b) language. See AGA Shareholders, LLC v. CSK Auto, Inc., 2009 WL 297704 (D. Ariz. Feb. 6, 2009). (See document for full details). Signed by Magistrate Judge Lawrence O Anderson on 3/15/13. (LAD)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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)
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Plaintiff,
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vs.
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Wells Fargo Bank; Velocity Investments )
LLC; Gurstel Chargo PA, a Minnesota )
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corporation,
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Defendants.
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John Collins,
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No. CV-12-2284-PHX-LOA
ORDER

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This case arises on Defendant Wells Fargo Bank, N.A.’s (“Wells Fargo”) Motion
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to Dismiss, pursuant to Rules 8, 12(b)(1) and (6), Federal Rules of Civil Procedure,
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requesting dismissal of pro se Plaintiff’s Amended Complaint for failure to state a claim
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upon which relief may be granted. (Doc. 14)
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Wells Fargo contends it is not a “debt collector” for liability purposes under the
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Fair Debt Collection Practices Act (“FDCPA”); the Rooker-Feldman doctrine bars
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Plaintiff’s challenges to a State of Arizona judgment; and Plaintiff has not pled sufficient
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facts to support a plausible conspiracy-based claim of liability against Wells Fargo. (Id. at
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1) In response, Plaintiff claims Wells Fargo is liable as a co-conspirator with the co24
defendants because Wells Fargo knew Defendant Velocity Investments LLC (“Velocity”)
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“would use unlawful means to obtain payment of [Plaintiff’s] debts, thus making Wells
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Fargo an integral actor in this conspiracy[;]” Wells Fargo “probably entered an agreement
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to target a class or classes of people for debt collection[;]” and Wells Fargo “[w]as
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probably party to the conspiracy to deprive Collins of his constitutional and civil rights.”

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(Doc. 21 at 2, 4, 13) (emphasis added).

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After considering the parties’ arguments and briefing, the Court finds Plaintiff’s

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Amended Complaint fails to state a plausible claim against Wells Fargo. Wells Fargo’s

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Motion to Dismiss will be granted and the claims against Wells Fargo will be dismissed

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with prejudice.

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I. Background

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A. The State Action

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This lawsuit arises out of a collections action brought against Plaintiff, resulting in

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a judgment in the Arizona courts. According to undisputed, publicly-filed State court

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documents, Velocity filed suit against Plaintiff on May 9, 2011, in the Oracle Justice

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Court, Case No. J11005CV20110088 (“the State action”), seeking to collect a credit card

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debt of $7,240.08. (Docs. 14-1, Exhibit (“Exh.”) A at 2-5; 22, ¶ 3 at 11) Velocity

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acquired Plaintiff’s unpaid revolving credit card account from Chase Bank USA, N.A.

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(Id.; Exh. A, ¶¶ 3, 10) The State action complaint alleged claims for breach of contract

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and account stated due to Plaintiff’s unpaid credit card debt. (Id., ¶¶ 9, 15) Velocity was

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the only plaintiff; Plaintiff and “J Doe Spouse” were the only defendants. (Id.) Wells

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Fargo was never a party in the State action.

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In the State action, Plaintiff filed a Third Amended Answer in October 2011,

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which asserted twelve counterclaims against Velocity, its owners, and attorneys, alleging

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violations of the FDCPA, 15 U.S.C. § 1692 et seq., and claims under 42 U.S.C. § 1985.

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(Docs. 14-1, Exh. C at 9-30; 22, ¶ 16 at 2) In this State Answer, Plaintiff entered general

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denials; admitted he “had a Washington Mutual (WAMU) open account credit card

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during the period in question[;]” and wrote that because WAMU raised the interest rate

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on this credit card, Plaintiff would “make no more payments until the interest rate is

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returned to 10% with no late fees or over limit fees due.” (Id., at 9-11) Because Plaintiff’s

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Plaintiff’s exhibit list, doc. 22 at 1-2, adopted some of the exhibits provided by Wells
Fargo, but did not attach duplicative copies.
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counterclaims sought more than $10,000 in relief, the Oracle Justice Court transferred the

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case to the Pinal County Superior Court in Florence, Arizona on October 18, 2011. On

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December 22, 2011, the Superior Court dismissed Plaintiff’s counterclaims, and

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remanded the State action back to the Oracle Justice Court. (Docs. 14-1, Exh. D at 32-33;

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22, ¶ 19 at 2) Plaintiff failed to appear for the March 5, 2012 trial. (Docs. 14-1, Exh. E at

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35-36; 22, ¶ 24 at 2) Having failed to appear for trial, judgment was entered against

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Plaintiff on March 5, 2012, in favor of Velocity in the principal sum of $7,240.08, plus

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pre-judgment interest, Velocity’s attorney fees, “for a total judgment in the amount of

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$11,445.08[,] plus post judgment interest to bear interest at the rate of 4.25% per annum,

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until paid.” (Id.) Wells Fargo advises the Court Plaintiff did not appeal the judgment

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entered in the State action and Plaintiff does not dispute there was no appeal.

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B. The Federal Action

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On October 25, 2012, pro se Plaintiff filed a federal Complaint, alleging 22 counts

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for relief alleging claims of conspiracy, violations of Plaintiff’s right to due process and

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equal protection, violations of the FDCPA, and abuse of power by two State judges.

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(Doc. 1) Plaintiff also requested to proceed in forma pauperis. (Doc. 2) After screening

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the Complaint per 28 U.S.C. § 1915(e)(2) and finding the Complaint did not comply with

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Rule 8(a)(2), Fed.R.Civ.P., on November 16, 2012, the Court ordered Plaintiff to file an

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Amended Complaint, containing short and plain factual allegations and plausible claims

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for relief against each defendant. (Doc. 6 at 6)

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Plaintiff filed a timely Amended Complaint on December 5, 2012, containing 19

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counts for relief and again alleging claims of conspiracy, violations of Plaintiff’s right to

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due process and equal protection, and violations of the FDCPA. Plaintiff brings this suit

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against Velocity,2 Gurstel Chargo, PA (“Gurstel”), and Wells Fargo. (Doc. 8) The 22-

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page, 19 count Amended Complaint is not brief or concise and the allegations are not

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While the Amended Complaint’s caption only identifies Wells Fargo as a defendant,
the body refers to Velocity Investments LLC as a “Defendant.” (Doc. 8 at 2)
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short and plain. Outside of Count 19, which was dismissed upon screening, Wells Fargo

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or “ Fargo” is mentioned only three times and there is no independent allegation of

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specific wrongdoing against Wells Fargo.

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Plaintiff alleges the Amended Complaint “[a]rises under fraud whereas Velocity

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and Gurstel with malice and forethought, recklessly and intentionally, presented false,

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misleading or deceptive documents, Complaint, pleadings, or responses Gurstel knew

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was (sic) false before the Court(s) misrepresenting, or omitting, material facts, with the

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expectation the Court(s) would and did rely upon the false documents, Complaint,

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pleadings, or responses as the Court(s) were entitled.” (Id. at 3-4) These allegations

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throughout the Amended Complaint are exemplary of the “fraud upon the court” Plaintiff

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describes in his Response to Wells Fargo’s Motion to Dismiss.

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The Amended Complaint alleges several documents presented in the State action

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were false or fraudulent. For example, in Count 7, Plaintiff alleges Velocity and Gurstel

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“[p]resented an Affidavit of Amount Owed [in the State action], wherein the author

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falsely testified Velocity owned the debt. . . knowing no valid assignment existed . . . .”

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(Id. at 9-10) The Amended Complaint does not allege in what manner the affidavit was

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false or the basis of Plaintiff’s assertion there was no valid assignment. In Count 8,

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Plaintiff alleges Velocity and Gurstel provided the State court with “a WAMU statement”

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and “a generic Billing Rights with no signatures at trial[]”3 which were “documents

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falsely represent[ing] the existence of a contract[.]” (Id. at 10) He alleges he “lost [the

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State action] because Velocity provided and Gurstel presented and the [State] Court

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accepted the false documents at trial falsely representing the material fact as to the

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existence of a contract.” (Id. at 11) Because of the vague reference to a “contract,” the

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Court must speculate Plaintiff is referring to the credit card contract which was the basis

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of the State action. Again, Plaintiff fails to allege in what manner the documents were

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The undisputed facts are that there was no trial in the State action and Judgment was
entered against Plaintiff because he “failed to appear at the date and time set for the [March
5, 2012 trial].” (Doc. 14-1, Exh. E at 35)
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false.
Plaintiff does not directly request the District Court vacate the judgment in the

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State action; rather, he seeks relief in the form of “injunctive damages”; compensatory,

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statutory, and punitive damages; and requests an award of attorney’s fees even though he

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is pro se. (Id. at 21-22) For a second time, the Court screened Plaintiff’s Amended

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Complaint per 28 U.S.C. § 1915(e)(2) and dismissed Count 19 which failed to state a

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claim for a violation of Plaintiff’s rights under the Equal Protection Clause under the

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Federal Constitution as no state action was alleged and none of the defendants are state

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actors.4 (Doc. 13 at 8) (citing, inter alia, United Brotherhood of Carpenters & Joiners v.

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Scott, 463 U.S. 825, 831 (1983)) Noting “[t]he Rooker-Feldman doctrine may apply to

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many, if not all, of Plaintiff’s claims[,]” the Court allowed the other counts to go forward

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at this stage of the litigation, pending briefing by the parties after one or more defendants

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appeared.5 (Id.)

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C. Wells Fargo’s Arguments for Dismissal

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In its dismissal motion, Wells Fargo argues its “only connection” to this case or

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Plaintiff is that it had provided apparently an unrelated business loan to a co-defendant

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who obtained a judgment in the State collection action.6 (Doc. 14 at 1) “The mere making

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of a loan does not amount to an agreement to commit any unlawful act.” (Id.) Wells

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Fargo notes the Court dismissed Plaintiff’s allegations of a conspiracy to deprive him of

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Count 19 alleged Defendants Gurstel, Wells Fargo, and Velocity conspired to
discriminate against Plaintiff in the collection of a debt in violation of the FDCPA in
violation of 42 U.S.C. § 1985(3), Plaintiff alleged the motive behind Defendants’ joint action
was “a class based invidiously discriminatory animus against Native Americans and or
Veterans and or Elderly and or Disabled and or Consumers . . . .” (Doc. 8 at 20)
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Defendants Velocity and Gurstel have neither appeared in this action nor consented
to full jurisdiction by a magistrate judge.
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It is undisputed from the State court complaint that Velocity acquired the debt upon
which the State Court action was based from Chase Bank USA, N.A., not Wells Fargo.
(Doc. 14-1, Exh. A, ¶¶ 10-11 at 3)
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Equal Protection rights in Count 19, which “is the only specific claim that expressly

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names Wells Fargo.” (Id. at 3) Wells Fargo points out that the Amended Complaint

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makes “general allegations of conspiracy between Wells Fargo and the other defendants,

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. . . [but] Collins fails to plead sufficient facts to support any such claims.” (Id. at 4)

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Wells Fargo argues that, as a matter of law, it cannot be held vicariously liable under the

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FDCPA because it is not a debt collector. Lastly, Wells Fargo contends “the

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Rooker-Feldman doctrine deprives this Court of jurisdiction over Collins’s Due Process

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claims[]” and bars Plaintiff’s challenges to a state court judgment.(Id. at 4)

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D. Plaintiff’s Arguments against Dismissal
Conceding there are no allegations in the Amended Complaint that Wells Fargo is

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a debt collector under the FDCPA, Plaintiff argues in his response that “[e]very count

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under FDCPA establish [Plaintiff ] was deprived of rights and privileges to which he is

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entitled under FDCPA.” (Doc. 21 at 2)

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Regarding his conspiracy claim, Plaintiff contends Wells Fargo loaned money to

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Velocity so that Velocity could purchase debt under certain “eligibility criteria” which

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amounted to class-based discrimination. (Id.) According to Plaintiff, his “allegations

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against Wells Fargo stem from Wells Fargo loaning money to Velocity by way of a

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contract with Velocity’s parent company Velocity Asset Management Inc. for the purpose

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of buying debt with the agreement that Velocity would use Wells Fargo’s ‘[s]pecific

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eligibility criteria,’ that targeted a class or classes of people, and Wells Fargo knew

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Velocity would use unlawful means to obtain payment of those debts, thus making Wells

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Fargo an integral actor in the conspiracy.” (Id.) Specifically, Plaintiff alleges, “[W]ells

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Fargo committed an act in furtherance of the conspiracy by providing the funding for

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what Wells Fargo knew would culminate in unlawful acts . . . and Velocity and Gurstel

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committed the concerted acts pursuing the alleged debt as alleged in the Amended

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Complaint.” (Id. at 9)

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Lastly, Plaintiff argues the State court action involved “fraud upon the court.” (Id.
at 6) He claims “[t]he Oracle Justice Action is not final due to Velocity and Gurstel
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perpetrating a fraud upon the court with every pleading, document, or response presented

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to the courts.” (Id. at 7) He denies the Rooker-Feldman doctrine applies because of the

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fraud upon the court, and Plaintiff “removed” the Oracle Justice Court action “to this

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court for adjudication of federal issues and under supplemental jurisdiction for state

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issues not addressed by the state courts.” (Id.)

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II. Jurisdiction

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The Amended Complaint alleges the defendants violated the FDCPA, 15 U.S.C. §

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1692 et seq. Because the FDCPA is a federal statute, Plaintiff’s claims arise under federal

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law. Mangum v. Action Collection Serv., Inc., 575 F.3d 935, 938 (9th Cir. 2009); Aniel v.

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TD Service Co., 2011 WL 109550, at *3 (N.D. Cal. Jan. 13, 2011). Accordingly, the

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District Court of Arizona has subject-matter jurisdiction pursuant to 28 U.S.C. § 1331,

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and supplemental jurisdiction over Plaintiff’s state-law claim pursuant to 28 U.S.C. §

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1367(a). Plaintiff and Wells Fargo have consented to magistrate-judge jurisdiction

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pursuant to 28 U.S.C. § 636(c). (Doc. 5, 17)

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III. Standard of Review

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Federal Rule of Civil Procedure 8(a)(2) requires that each claim in a pleading is

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supported by “a short and plain statement of the claim showing that the pleader is entitled

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to relief.” Fed.R.Civ.P. 8(a). A motion to dismiss under Rule 12(b)(6) for failure to state a

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claim upon which relief can be granted “tests the legal sufficiency of a claim.”

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Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro

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v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). Dismissal is proper when a complaint or

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amended complaint does not make out a cognizable legal theory or does not allege

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sufficient facts to support a cognizable legal theory. Mendiondo v. Centinela Hosp. Med.

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Ctr., 521 F.3d 1097, 1102 (9th Cir. 2008); Balistreri v. Pacifica Police Dep’t, 901 F.2d

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696, 699 (9th Cir. 1990).

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“To survive a motion to dismiss, a complaint [or amended complaint] must contain

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sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its

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face.’” Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009) (quoting Bell Atl. Corp. v. Twombly,
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550 U.S. 544, 570 (2007) (abrogating Conley v. Gibson, 355 U.S. 41 (1957)). An

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amended complaint states sufficient facts when

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[t]he plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.
The plausibility standard is not akin to a “probability requirement,” but it
asks for more than a sheer possibility that a defendant has acted unlawfully.
Where a complaint pleads facts that are “merely consistent with” a
defendant’s liability, it “stops short of the line between possibility and
plausibility of ‘entitlement to relief.’ ”

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Id. at 678 (citations omitted) (quoting Twombly, 550 U.S. at 556–57). “As the text of Rule
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8(a)(2) itself makes clear, even a ‘short and plain’ statement can state a claim for relief.”
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See Sheppard v. David Evans and Assoc., 694 F.3d 1045, 1049 (9th Cir. 2012) (reversing
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district court’s Rule 12(b)(6) dismissal of plaintiff’s two-and-one-half page complaint,
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stating “while brief, [it] nonetheless satisfies Rule 8(a)(2)’s pleading standard.”).
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Following the Supreme Court’s decision in Iqbal, district courts follow a two-step
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approach when considering a Rule 12(b)(6) motion to dismiss. See e.g. Worthen v.
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Aftermath, Inc., 2012 WL 398703, at *1 (D. Nev. Feb. 6, 2012). First, a court must accept
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all factual allegations in the complaint as true, discounting legal conclusions clothed as
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factual allegations. Iqbal, 556 U.S. at 678-79; Papasan v. Allain, 478 U.S. 265, 286
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(1986); Moss v. U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (“Such allegations
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are not to be discounted because they are ‘unrealistic or nonsensical,’ but rather because
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they do nothing more than state a legal conclusion - even if that conclusion is cast in the
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form of a factual allegation.”). Second, the court must determine if these well-pleaded
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factual allegations state “a plausible claim for relief.” Iqbal, 556 U.S. at 679.
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Courts do not make plausibility determinations in a vacuum; it is a “context23
specific task that requires the reviewing court to draw on its judicial experience and
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common sense.” Id. A claim is plausible when the factual allegations permit “the court to
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draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
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at 678. “[C]onclusory allegations of law and unwarranted inferences are insufficient to
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defeat a motion to dismiss for failure to state a claim.” Caviness v. Horizon Cmty.
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Learning Ctr., Inc., 590 F.3d 806, 812 (9th Cir. 2010) (citation omitted).

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IV. Motions to Dismiss

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“When ruling on a Rule 12(b)(6) motion to dismiss, if a district court considers

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evidence outside the pleadings, it must normally convert the 12(b)(6) motion into a Rule

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56 motion for summary judgment, and it must give the nonmoving party an opportunity to

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respond.” United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003) (citing Fed.R.Civ.P.

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12(b)). There are, however, several exceptions to this general rule.

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A. Incorporation by Reference

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In deciding a motion to dismiss, a district court may consider documents that are

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integral to the complaint. Parrino v. FHP, Inc., 146 F.3d 699, 706 n. 4 (9th Cir. 1988)

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(noting that where an attached document is integral to the plaintiff’s claims and its

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authenticity is not disputed, the plaintiff “obviously is on notice of the contents of the

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document and the need for a chance to refute evidence is greatly diminished.”) (citation

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omitted), superseded by statute on other grounds, Abrego v. Dow Chem. Co., 443 F.3d

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676 (9th Cir. 2006); see also Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007). When

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documents contain statements that contradict allegations in an amended complaint, the

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documents control and a district court need not “[a]ccept as true allegations that

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contradict matters properly subject to judicial notice or by exhibit.” Sprewell v. Golden

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State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); as amended by 275 F.3d 1187 (9th Cir.

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2001); Makua v. Gates, 2009 WL 3923327, at *3 (D. Haw. Nov. 18, 2009). Where a

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plaintiff’s own allegations are contradicted by other documents and matters asserted,

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relied upon, or incorporated by reference by plaintiff in the complaint, the district court is

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not obligated to accept the complaint’s allegation as true in deciding a motion to dismiss.

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Ritchie, 342 F.3d at 908; Van Buskirk v. CNN, 284 F.3d 977, 980 (9th Cir. 2002).

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Under the doctrine of “incorporation by reference,” a district court may consider

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documents that are referenced extensively in an amended complaint and are accepted by

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all parties as authentic. Van Buskirk, 284 F.3d at 980 (9th Cir. 2002); Lee v. City of Los

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Angeles, 250 F.3d 668, 688 (9th Cir. 2001). “Even if a document is not attached to a
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complaint, it may be incorporated by reference into a complaint if the plaintiff refers

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extensively to the document or the document forms the basis of the plaintiff’s claim.”

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Ritchie, 342 F.3d at 908. The Ninth Circuit has “[e]xtended the ‘incorporation by

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reference’ doctrine to situations in which the plaintiff’s claim depends on the contents of

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a document, the defendant attaches the document to its motion to dismiss, and the parties

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do not dispute the authenticity of the document, even though the plaintiff does not

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explicitly allege the contents of that document in the complaint.” Knievel v. ESPN, 393

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F.3d 1068, 1076 (9th Cir. 2005) Thus, under the incorporation-by-reference doctrine, a

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district court may look beyond the pleadings without converting a Rule 12(b)(6) motion

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into one for summary judgment.

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B. Judicial Notice

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Judicial notice is another exception to the conversion rule. A district court may

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take judicial notice of material which is either submitted as part of the complaint or

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necessarily relied upon by the complaint or it may take judicial notice of matters of public

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record. Lee, 250 F.3d at 688-89; Coto Settlement v. Eisenberg, 593 F.3d 1031, 1038 (9th

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Cir. 2010). A district court may take judicial notice of “a fact that is not subject to

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reasonable dispute because it . . . can be accurately and readily determined from sources

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whose accuracy cannot reasonably be questioned . . . at any stage of the proceeding” Rule

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201(b)(2), (d), Fed.R.Evid. A court “must take judicial notice if a party requests it and the

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court is supplied with the necessary information.” Snyder v. HSBC Bank, USA, N.A., 2012

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WL 6698088, at *10 (D. Ariz. Dec 26, 2012) (quoting Fed.R.Evid. 201(c)(2)). Taking

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judicial notice, however, does not convert a motion to dismiss into one for summary

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judgment. United States v. 14.02 Acres of Land More or Less in Fresno Cnty., 547 F.3d

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943, 955 (9th Cir. 2008); MGIC Idem. Corp. v. Weisan, 803 F.2d 500, 504 (9th Cir.

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1986). A district court may properly take judicial notice of publicly-filed documents.

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Williamson v. Tews, 2012 WL 6965765, at *1 n. 1 (D. Ariz. Nov. 20, 2012) (citing In re

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Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 2002) (superseded by statute

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on other grounds) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994)); Passa v.
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City of Columbus, 123 Fed.Appx. 694, 697 (6th Cir. 2005) (“[A]ll circuits to consider the

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issue have noted that a court may take judicial notice of at least some documents of public

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record when ruling on a Rule 12(b)(6) motion.”) (citations omitted).

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Plaintiff attached to his Response to Wells Fargo’s Motion to Dismiss 29 exhibits,

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containing the pleadings and filings in the State action, which establish the relevant and

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undisputed facts material to Wells Fargo’s dismissal motion. He requests the Court to

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take judicial notice of all 29 exhibits. (Doc. 21 at 3) The Court will consider the exhibits

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provided by Plaintiff and Wells Fargo without converting Wells Fargo’s 12(b)(6) motion

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into a Rule 56 motion for summary judgment because copies of the exhibits have been

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provided to the Court, they are not disputed by the parties, they are integral to Plaintiff’s

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Amended Complaint, and are clearly subject to judicial notice.

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V. Governing Law

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A. Conspiracy

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Under Arizona law, there is no such thing as a civil action for “conspiracy.” Barba

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v. Seung Heun Lee, 2009 WL 8747368, at *8 (D. Ariz. Nov. 4, 2009) (citing Tovrea Land

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& Cattle Co. v. Linsenmeyer, 100 Ariz. 107, 131, 412 P.2d 47, 63 (Ariz. 1966)). “The

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action is one for damages arising out of acts committed pursuant to the conspiracy.” Id.;

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Estate of Hernandez v. Flavio, 187 Ariz. 506, 510, 930 P.2d 1309, 1313 (1997). “In

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Arizona, ‘[t]o establish liability on the basis of conspiracy, a plaintiff must show by clear

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and convincing evidence that the defendant and at least one other person agreed to

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accomplish an unlawful purpose or lawful purpose by unlawful means, and accomplish

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the underlying tort, which in turn caused damages.’” Id. (quoting Dawson v. Withycombe,

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216 Ariz. 84, 103, 163 P.3d 1034, 1053 (Az. Ct. App. 2007)). “Assistance to the tort-

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feasor by itself . . . , which courts often use to infer a conspiratorial agreement, may be

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insufficient to prove an actual agreement to participate in the conspiracy. This is because

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there is a qualitative difference between showing an agreement to participate in a tort

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(conspiracy) and a knowing action which might substantially aid the tortfeasor to commit

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a tort.” Dawson, 216 Ariz. at 103, 163 P.3d at 1053 (quoting Wells Fargo Bank v. Ariz.
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Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz.

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474, 499, 38 P.3d 12, 37 (Ariz. 2002)).

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In pleading conspiracy liability, a plaintiff must, at minimum, allege some facts

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showing the elements of a conspiracy, including the requisite agreement between

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defendants. Hillis v. Heineman, 2009 WL 2222709, at *4 (D. Ariz. July 23, 2009).

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Furthermore, “Rule 9(b) imposes heightened pleading requirements where the object of

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the conspiracy is fraudulent.” Barba, 2009 WL 8747368, at *8 (citing Swartz v. KPMG

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LLP, 476 F.3d 756, 765 (9th Cir. 2007) (per curiam) (internal quotation omitted).

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B. The Fair Debt Collection Practices Act
It is well settled that FDCPA liability is limited to individuals or entities who meet

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the FDCPA’s definition of “debt collector.” See, e.g., Pollice v. Nat’l Tax Funding LP,

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225 F.3d 379, 403 (3d Cir. 2000) (“The FDCPA’s provisions generally apply only to

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‘debt collectors.’ . . . Creditors - as opposed to ‘debt collectors’ - generally are not subject

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to the FDCPA.”); Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 108 (6th Cir.

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1996) (finding that the liability for a debt collector should not be vicariously imposed on

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the assignee who was not a debt collector under the FDCPA); Miranda v. Field Asset

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Services, 2013 WL 124047, at *4 (S.D. Cal. Jan. 9, 2013); Plumb v. Barclays Bank

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Delaware, 2012 WL 2046506, at *4 (E.D. Wash. June 5, 2012) (“[E]ven vicarious

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liability under the FDCPA has been restricted to principals who themselves are statutory

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‘debt collectors.’”); Oei v. N. Star Capital Acquisitions, LLC, 486 F. Supp. 2d 1089, 1097

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(C.D. Cal. 2006). The FDCPA defines “debt collector” as “any person who . . . in any

22

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

23

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

24

owed or due another. . . .” 15 U.S.C. § 1692a(6) (emphasis added). The FDCPA was

25

designed to protect consumers who have been victimized by unscrupulous debt collectors,

26

regardless of whether a valid debt actually exists. Baker v. G.C. Servs. Corp., 677 F.2d

27

775, 777 (9th Cir. 1982).

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Generally speaking, crediting institutions, such as banks, are not debt collectors
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under [the FDCPA] because they collect their own debts and are in the business of

2

lending money to consumers. Davis v. Dillard Nat'l Bank, 2003 WL 21297331, at * 4

3

(M.D.N.C. June 4, 2003). A bank that is “a creditor is not a debt collector for the

4

purposes of the FDCPA and creditors are not subject to the FDCPA when collecting their

5

accounts.” Montgomery v. Huntington Bank, 346 F.3d 693, 697-99 (6th Cir. 2003)

6

(collecting cases discussing banks’ liability exemption under FDCPA).

7

The Ninth Circuit has recognized there may be vicarious liability under the

8

FDCPA. See Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507, 1516 (9th Cir. 1994).

9

“Under general principles of agency - which form the basis of vicarious liability under the

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FDCPA, - to be liable for the actions of another, the principal must exercise control over

11

the conduct or activities of the agent.” Clark v. Capital Credit & Collection Servs., Inc.,

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460 F.3d 1162, 1173 (9th Cir. 2006) (citing Newman v. Checkrite California, 912

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F.Supp. 1354, 1370 (E.D. Cal. 1995); Restatement (Second) of Agency § 1 (1958))

14

(internal quotation marks omitted). In Clark, summary judgment was affirmed because

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the plaintiffs offered no evidence upon which a reasonable trier of fact could conclude

16

that Hasson, the collection agency’s attorney, exercised control over Capital, the

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collection agency, or Brumley, the Capital employee responsible for collection activities

18

on the Clark account.

19

C. The Rooker-Feldman Doctrine

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The Rooker-Feldman doctrine is a well-established jurisdictional rule prohibiting

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federal courts from exercising appellate review over final state court judgments. See

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Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir. 2007). The Rooker-Feldman

23

doctrine7 prohibits federal courts from exercising subject matter jurisdiction over suits

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“[b]rought by state-court losers complaining of injuries caused by state-court judgments

25

rendered before the district court proceedings commenced and inviting district court

26

review and rejection of those judgments.” Lance v. Dennis, 546 U.S. 459, 464 (2006)

27
7

28

The doctrine takes its name from Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923)
and D.C. Ct. App. v. Feldman, 460 U.S. 462 (1983).
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1

(quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005)), aff’d

2

in part, vac’d in part on different grounds by Lance v. Coffman, 549 U.S. 437 (2007).

3

“The basic premise of Rooker-Feldman is that ‘a federal district court does not have

4

subject matter jurisdiction to hear a direct appeal from the final judgment of a state

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court.’” Maldonado v. Harris, 370 F.3d 945, 949 (9th Cir. 2004) (quoting Noel v. Hall,

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341 F.3d 1148, 1154 (9th Cir. 2003)). “Rooker-Feldman recognizes the implicit statutory

7

structure established by Congress, which has determined that the United States Supreme

8

Court is the only federal court with jurisdiction to hear appeals from state courts.” Id.

9

“If a federal plaintiff has brought a de facto appeal from a state court decision -

10

alleging legal error by the state court and seeking relief from the state court’s judgment -

11

he or she is barred by Rooker-Feldman.” Kougasian v. TMSL, Inc., 359 F.3d 1136, 1142

12

(9th Cir. 2004) (citation omitted). “The federal plaintiff is also barred from litigating, in a

13

suit that contains a forbidden de facto appeal, any issues that are ‘inextricably

14

intertwined’ with issues in that de facto appeal.” Id. (citing Noel, 341 F.3d at 1155)

15

(internal quotation marks omitted); see also Cooper v. Ramos, 704 F.3d 772, 777 (9th Cir.

16

2012). “The inextricably intertwined test thus allows courts to dismiss claims closely

17

related to claims that are themselves barred under Rooker-Feldman.” Id. An affirmative

18

independent legal wrong, however, asserted against a party involved in the state court

19

action in a subsequent federal action is not barred under Rooker–Feldman. Noel, 341 F.3d

20

at 1164; see also Johnson v. DeGrandy, 512 U.S. 997, 1005–06 (1994) (Rooker–Feldman

21

doctrine applies only when the federal plaintiff was a party to the state case and is

22

challenging an adverse decision by the state court).

23

“In assessing whether the Rooker-Feldman doctrine applies, ‘the fundamental and

24

appropriate question to ask is whether the injury alleged by the federal plaintiff resulted

25

from the state court judgment itself or is distinct from that judgment.’” Normandeau v.

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City of Phoenix, 516 F.Supp.2d 1054, 1063 (D. Ariz. 2005) (quoting Garry v. Geils, 82

27

F.3d 1362, 1365 (7th Cir. 1996)). “If the injury alleged resulted from the state court

28

judgment itself, the Rooker-Feldman doctrine dictates that the federal courts lack subject
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matter jurisdiction, even if the state court judgment was erroneous or unconstitutional.”

2

Id. (quoting Centres, Inc. v. Town of Brookfield, 148 F.3d 699, 702 (7th Cir. 1998)). “By

3

contrast, if the alleged injury is distinct from the state court judgment and not inextricably

4

intertwined with it, the Rooker-Feldman doctrine does not apply[.]” (Id.) Courts have

5

held that a federal “suit seeking damages for the execution of a judicial order is just a way

6

to contest the order itself, [therefore] the Rooker-Feldman doctrine is in play.” See, e.g.,

7

Busch v. Torres, 905 F.Supp. 766, 770 (C.D. Cal. 1995) (quoting Homola v. McNamara,

8

59 F.3d 647, 651 (7th Cir. 1995)); Pinzon v. Jensen, 2009 WL 4134809, *5 (E.D. Cal.

9

Nov 23, 2009) (“[P]laintiff appears to be asserting that the small claims judgment caused

10

Plaintiff injury. These are the kinds of claims the court lacks jurisdiction to hear under the

11

Rooker–Feldman doctrine.”). “Determining what constitutes a forbidden de facto appeal,

12

however, has sometimes proven difficult for the lower courts.” Kougasian, 359 F.3d at

13

1142 (citing Noel, 341 F.3d at 1161-62 (collecting cases)).

14

The Rooker-Feldman doctrine, however, does not apply to federal suits alleging

15

fraud in relation to state court proceedings. “A plaintiff alleging extrinsic fraud on a state

16

court is not alleging a legal error by the state court; rather, he or she is alleging a

17

wrongful act by the adverse party.” Kougasian, 359 F.3d at 1140-41 (citing Noel, 341

18

F.3d at 1164)f (“If, on the other hand, a federal plaintiff asserts as a legal wrong an

19

allegedly illegal act or omission by an adverse party, Rooker-Feldman does not bar

20

jurisdiction.”). “Extrinsic fraud on a court is, by definition, not an error by that court. It is,

21

rather, a wrongful act committed by the party or parties who engaged in the fraud.” Id. at

22

1141; see also Reusser v. Wachovia Bank, N.A., 525 F.3d 855 (9th Cir. 2008).

23

“Rooker-Feldman therefore does not bar subject matter jurisdiction when a federal

24

plaintiff alleges a cause of action for extrinsic fraud on a state court and seeks to set aside

25

a state court judgment obtained by that fraud.” Id. “In order to be considered extrinsic

26

fraud, the alleged fraud must be such that it prevents a party from having an opportunity

27

to present his claim or defense in court . . . or deprives a party of his right to a day in

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court.” Green v. Ancora-Citronelle Corp., 577 F.2d 1380, 1384 (9th Cir. 1978). A
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“judgment may be set aside only where the fraud is extrinsic or collateral to the matters

2

involved in the action.” Id. As the Ninth Circuit has explained, alleged extrinsic fraud that

3

goes to the “very heart of the issues contested in the state court action” is not extrinsic or

4

collateral to the action. Id.; see also Sanders v. Del Fierro, 2012 WL 2390754, at *4 (S.D.

5

Cal. June 22, 2012).

6

VI. Discussion

7

The Amended Complaint fails to allege sufficient facts upon which to base a

8

plausible claim for extrinsic fraud to preclude the application of the Rooker-Feldman

9

doctrine. It offers no specific facts or particularized details in support of Plaintiff’s

10

allegation that Wells Fargo “presented false, misleading or deceptive documents” in the

11

State court action. No explanation is provided in the Amended Complaint how, in what

12

manner, or why the State action’s pleadings and other documents were “false, misleading

13

or deceptive.” The Amended Complaint does not meet Rule 9(b)’s heightened pleading

14

requirements where the object of the conspiracy was fraudulent. Barba, 2009 WL

15

8747368, at *8; Swartz v. KPMG LLP, 476 F.3d at 765; Davis v. Chase Bank U.S.A.,

16

N.A., 650 F.Supp.2d 1073, 1089-90 (C.D. Cal. 2009). Because Plaintiff fails to state a

17

plausible claim for extrinsic fraud on his claims against Wells Fargo, his federal claims

18

are barred by the Rooker-Feldman doctrine, and this District Court is without jurisdiction

19

to consider his lawsuit against Wells Fargo.

20

Even if this District Court had subject-matter jurisdiction over Plaintiff’s action

21

against Wells Fargo, Plaintiff’s Amended Complaint fails to state a plausible conspiracy-

22

based claim of liability or violation of the FDCPA. To avoid a dismissal for failure to

23

state a claim against Wells Fargo, Plaintiff’s Amended Complaint need not contain

24

detailed factual allegations; rather, it must plead “enough facts to state a claim to relief

25

that is plausible on its face.” Twombly, 550 U.S. at 570. The Amended Complaint alleges

26

vague conclusions that “Defendants came to an agreement, explicit or otherwise, to

27

commit concerted overt acts tacit or otherwise, that were unlawful or unconstitutional[.]”

28

(Doc. 8 at 2)
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Plaintiff has not alleged facts that demonstrate a plausible agency claim against

2

Wells Fargo, as a principal, that exercised control over the conduct or activities of one of

3

the other defendants, as Wells Fargo’s purported agent, for purposes of vicarious liability.

4

In fact, the undisputed facts from the State action’s court documents show Wells Fargo

5

had no role in the State action, was not a party, and had no prior involvement with

6

Velocity or Gurstel vis a vis Plaintiff. Plaintiff has not pointed to any allegation in the

7

Amended Complaint, demonstrating Wells Fargo exercised control over either Velocity

8

or Gurstel. The evidence shows Velocity acquired the debt upon which the State Court

9

action was based from either Chase Bank USA, N.A. or Washington Mutual, not Wells

10

Fargo. The Amended Complaint provides only conclusory statements, which are

11

insufficient to state a plausible claim under Rule 8(a), Fed.R.Civ.P.; Hillis, 2009 WL

12

2222709, at *4 (dismissing civil conspiracy claim because it alleged no facts showing

13

agreement between defendants). Assuming the underlying tort was the commission of a

14

fraudulent or tortious act, Plaintiff fails to allege specific facts regarding the role Wells

15

Fargo played in the act; thus, the Amended Complaint does not meet the requirements of

16

Rule 9(b) in pleading a conspiracy to commit fraudulent acts or Rule 8(a). See Swartz,

17

476 F.3d at 765; S. Union Co. v. Sw. Gas Corp., 165 F.Supp.2d 1010, 1019-22 (D. Ariz.

18

2001). The mere existence of a borrower-creditor relationship between Wells Fargo and

19

Velocity on a loan unrelated to Plaintiff does not state a plausible claim for either

20

conspiracy or vicarious liability. See Wells Fargo Bank, 201 Ariz. at 498-99, 38 P.3d at

21

36-37 (lending agreement not clear and convincing evidence of conspiracy); Stern v.

22

Charles Schwab & Co., 2009 WL 3352408, at *7-8 (D. Ariz. Oct. 15, 2009) (vicarious

23

liability on the part of a bank does not arise from “typical banking transactions,”

24

including the extension of credit).

25

Lastly, assuming arguendo a bank may be liable under the FDCPA, Plaintiff has

26

conceded there are no allegations in the Amended Complaint that Wells Fargo is a debt

27

collector within the meaning of the FDCPA. (Doc. 21 at 2) Additionally, because the

28

Amended Complaint has not alleged sufficient facts to support a plausible agency
- 17 -

1

relationship between Wells Fargo and either Velocity or Gurstel, Wells Fargo has no

2

vicarious liability under the FDCPA. See Clark, 460 F.3d at 1173 (to be liable under the

3

FDCPA for the actions of another, the principal must exercise control over the conduct or

4

activities of the agent.) (internal quotation marks omitted). Therefore, no plausible

5

FDCPA claim has been alleged against Wells Fargo.

6

VII. Conclusion

7

Pro se Plaintiff was forewarned that even though his pleadings are held to a less

8

stringent standard than those prepared by attorneys, Rand v. Rowland, 154 F.3d 952, 957

9

(9th Cir. 1998) (citing Haines v. Kerner, 404 U.S. 519, 520-21 (1972)), pro se litigants

10

must “abide by the rules of the court in which he litigates.” Carter v. Commissioner of

11

Internal Revenue, 784 F.2d 1006, 1008 (9th Cir. 1986). (See doc. 6 at 2) Pro se litigants

12

“must meet certain minimal standards of pleading.” Ticktin v. C.I.A., 2009 WL 976517,

13

at *4 (D. Ariz. April 9, 2009) (citation omitted). “A pro se complaint that . . . fails to

14

plainly and concisely state the claims asserted . . . falls short of the liberal and minimal

15

standards set out in Rule 8(a).” Id. (citation and internal quotation marks omitted); see

16

also Vega v. JPMorgan Chase Bank, N.A., 654 F.Supp.2d 1104, 1111 (E.D. Cal. 2009)

17

(holding that the Rule 8 requirement “applies to good claims as well as bad, and is the

18

basis for dismissal independent of Rule 12(b)(6)”) (citation omitted).

19

Because the minimal facts alleged in an Amended Complaint against Wells Fargo

20

“do not permit the court to infer more than the mere possibility of misconduct, the

21

[Amended] [C]omplaint has alleged - but it has not shown - that [Plaintiff] is entitled to

22

relief.” Iqbal, 556 U.S. at 679 (quoting Fed.R.Civ.P. 8(a)(2)) (brackets and internal

23

quotation marks omitted). The Court finds the Amended Complaint fails to adequately

24

plead a plausible claim against Wells Fargo.

25

Based on the foregoing,

26

IT IS ORDERED that Defendant Wells Fargo’s Motion to Dismiss, doc. 14, is

27

GRANTED. Defendant Wells Fargo is dismissed with prejudice from this action. The

28

Clerk is kindly directed to enter judgment in favor of Defendant Wells Fargo against
- 18 -

1

Plaintiff without Rule 54(b) language. See AGA Shareholders, LLC v. CSK Auto, Inc.,

2

2009 WL 297704 (D. Ariz. Feb. 6, 2009).

3

Dated this 15th day of March, 2013.

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