Pfitzer v. Beneficial California, Inc.

Filing 17

MEMORANDUM and ORDER signed by Judge Morrison C. England, Jr. on 12/23/09 ORDERING that Dft's 8 Motion to Dismiss is GRANTED with leave to amend. Within 20 days, Pltfs may file an amended complaint. (Engbretson, K.)

1 2 3 4 5 6 7 8 9 10 11 12 Plaintiff, 13 v. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff Pamela Pfitzer ("Plaintiff") seeks monetary relief from Defendant Beneficial California, Inc. ("Defendant") for violations of the federal Truth in Lending Act, 15 U.S.C. §§ 1601 et seq., and the federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. /// /// /// /// 1 ----oo0oo---BENEFICIAL CALIFORNIA, INC.; and Does 1-10 inclusive, Defendants. MEMORANDUM AND ORDER PAMELA PFITZER also known as PAMELA EBERT, No. 2:09-cv-02634-MCE-GGH UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

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Presently before the Court is Beneficial's Motion to dismiss Plaintiff's Complaint pursuant to Federal Rule of Civil Procedure 12 (b)(6),1 on grounds that Plaintiff fails to state a claim upon which relief may be granted.2 Defendant's Motion is GRANTED. For the reasons set forth below,

BACKGROUND3

This action is based on Defendant's alleged acts regarding a consumer credit transaction with Plaintiff. According to

Plaintiff's Opposition, on or about August 21, 2006, Defendant Beneficial mailed to Plaintiff a "pre-screened credit line offer of $8,000.00 with an initial check of $7,000.00". Plaintiff

entered into a contract with Defendant and by 2008, the balance due on the credit line including fees and interest was $9,551.53. Plaintiff alleges that Defendant failed to provide required disclosures to Plaintiff prior to the consummation of the transaction, in violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1638(b) and 12 C.F.R. § 226.17(b). Plaintiff further

alleges that Defendant failed to provide such disclosures in a language and/or verbiage that Plaintiff would in fact understand. ///

1 Unless otherwise stated, all further references to a Rule are to the Federal Rules of Civil Procedure.

Because oral argument would not be of material assistance, the Court ordered this matter submitted on the briefs. E.D. Cal. Local Rule 230(h). The factual assertions in this section are based on the allegations in Plaintiffs' Complaint unless otherwise specified. 2
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Plaintiff claims that Defendant failed to advise Plaintiff that in the event of a default, Defendant would record a judgment on any property owned by Plaintiff, and further alleges that Defendant failed to properly identify the property subject to a security interest as required under TILA, 15 U.S.C. § 1638(a)(9) and 12 C.F.R. § 226.18(m). Finally, Plaintiff alleges that

Defendant violated the Fair Debt Collection Practices Act by attempting to collect the debt by calling Plaintiff on her personal cell phone, as many as 8 to 12 times per day, even though it was known that Plaintiff was represented by counsel. Plaintiff filed the present action on August 7, 2009, in the Superior Court of California for the County of Placer, alleging violations of the Truth in Lending Act and Fair Debt Collection Practices Act. On September 18, 2009, Defendant Beneficial

removed the action to this Court pursuant to 28 U.S.C. § 1441(b) on the basis of federal question jurisdiction under 28 U.S.C. § 1331. Defendant Beneficial now moves to dismiss all claims

pursuant to Rule 12(b)(6) for failure to state a claim.

STANDARD

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336,

337-38 (9th Cir. 1996). /// /// 3

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Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, While a complaint attacked

78 S. Ct. 99, 2 L. Ed. 2d 80 (1957).

by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 545, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (internal citations and quotations omitted). Factual

allegations must be enough to raise a right to relief above the speculative level. Id. at 555 (citing 5 C. Wright & A. Miller,

Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004) ("The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action"). If the court grants a motion to dismiss a complaint, it must then decide whether to grant leave to amend. The court should

"freely give[]" leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant,...undue prejudice to the opposing party by virtue of...the amendment, [or] futility of the amendment...." v. Davis, 371 U.S. 178, 182 (1962). Fed. R. Civ. P. 15(a); Foman Generally, leave to amend is

only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight

Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). 4

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A.

ANALYSIS Truth in Lending Act ("TILA")

Plaintiff's first claim alleges violations of TILA, 15 U.S.C. § 1638. Section 1638 requires that certain disclosures be

made by the creditor to the consumer for each "consumer credit transaction other than under an open end credit plan." § 1638(a). Plaintiff's Complaint merely alleges a contract between Plaintiff and Defendant Beneficial. Plaintiff does not allege 15 U.S.C.

any facts regarding the terms or substance of the contract. Thus, the Court is not in a position to determine whether the contract at issue is even subject to TILA, much less that any violation has occurred. Plaintiff has not alleged that Plaintiff Plaintiff has not alleged that Plaintiff

was a "consumer" under TILA.

Defendant was a "creditor" within the meaning of TILA.

has not alleged that the contract at issue was a transaction within the provisions of the statute. Plaintiff has not alleged

whether such contract was for open-end credit or closed-end credit. Accordingly, Plaintiff has not alleged enough facts to

show that Defendant Beneficial was even required to make such disclosures under TILA. The complaint must contain "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action...." Twombly, 550 U.S. at 544.

Accordingly, Defendant's Motion to dismiss Plaintiff's TILA claim is granted with leave to amend. /// 5

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B.

Fair Debt Collection Practices Act ("FDCPA")

Plaintiff's second claim alleges violations of FDCPA. FDCPA prohibits "debt collector[s]" from making false or

The

misleading representations and from engaging in various abusive and unfair practices. 15 U.S.C. § 1692. Thus, to be held liable

for violation of the FDCPA, a defendant must, as a threshold requirement, fall within the Act's definition of "debt collector." See Heintz v. Jenkins, 514 U.S. 291, 294 (1995).

As explained above, Plaintiff has failed to allege any facts describing the contract she supposedly entered, the type of credit she acquired, or any information about the Defendant as creditor. As such, the court cannot determine whether Defendant Although

was a "debt collector" within the meaning of the FDCPA.

the court is bound to accept all allegations of material fact as true, here Plaintiff has failed to plead the requisite material facts needed to establish a cognizable legal claim under the FDCPA. Accordingly, Defendant's Motion to dismiss Plaintiff's FDCPA claim is granted with leave to amend. /// /// /// /// /// /// /// /// 6

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CONCLUSION

Based on the foregoing, Defendant's Motion to Dismiss (Docket No. 8) is GRANTED with leave to amend. Plaintiffs may file an amended complaint not later than twenty (20) days after the date this Memorandum and Order is filed electronically. If no amended complaint is filed within

said twenty (20)-day period, without further notice, Plaintiffs' claims will be dismissed without leave to amend. IT IS SO ORDERED. Dated: December 23, 2009

_____________________________ MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE

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