Quinlan et al v. CitiMortgage, Inc. et al

Filing 13

MEMORANDUM and ORDER signed by Judge Morrison C. England, Jr on 6/20/11: Defendant GC Services' Motion to Dismiss 5 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. (Kaminski, H)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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KAREN QUINLAN nee BETZLER and
BOB BETZLER,

No. 2:11-cv-00986-MCE-EFB

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Plaintiffs,
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MEMORANDUM & ORDER
v.

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CITIMORTGAGE, INC. et al.,
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Defendants.
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----oo0oo----

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Plaintiffs Karen and Bob Betzler (“Plaintiffs”) seek redress

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from Defendants Citimortgage, Inc., GC Services Limited Partnership

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(“GC Services”), Allied International Credit Corp., and Nationwide

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Credit Recovery (collectively, “Defendants”) regarding a debt

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collection originating from a mortgage loan in Plaintiff Karen

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Betzler’s name.

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connection with the loan, Defendants violated various state laws

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and the Fair Debt Collection Practices Act (“FDCPA”).

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Specifically, Plaintiffs allege that, in

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Defendant GC Services filed a Motion to Dismiss Plaintiffs’

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Complaint pursuant to Federal Rule of Civil Procedure1

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Rule 12(b)(6) (ECF No. 5).

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Defendant’s motion, and a hearing on the matter was conducted

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before this Court on June 9, 2011.

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Defendant GC Services’ Motion to Dismiss is granted.

Plaintiff filed a timely opposition to

For the reasons stated below,

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BACKGROUND2

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Plaintiffs are husband and wife.

As stated above, Plaintiff

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Karen Betzler executed a home mortgage loan for approximately

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$7,000 in March 1999.

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financed by the California Rural Home Mortgage Finance Authority

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(not a party to the instant suit), specifically stated that any

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balance left on the loan after ten years was to be “forgiven free

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and clear.”

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Citimortgage, Inc.

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from Plaintiffs, even though the loan was fully discharged and no

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monies were due.

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Services contacted Defendants in January 2010 and “continued to

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contact” them to demand payment on the loan.

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The language of the mortgage, originally

At some point the loan was transferred to Defendant
After 2009, Defendants began demanding payment

Plaintiffs specifically allege that Defendant GC

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All further references to “Rule” or “Rules” are to the Federal
Rules of Civil Procedure unless otherwise noted.
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The factual assertions in this section are based on the
allegations in Plaintiffs’ Complaint unless otherwise specified.
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STANDARD

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On a motion to dismiss for failure to state a claim under

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Rule 12(b)(6), all allegations of material fact must be accepted as

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true and construed in the light most favorable to the nonmoving

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party.

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Cir. 1996).

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statement of the claim showing that the pleader is entitled to

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relief,” to “give the defendant fair notice of what the...claim is

Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th
Rule 8(a)(2) requires only “a short and plain

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and the grounds upon which it rests.”

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550 U.S. 544, 555 (2007) (internal citations and quotations

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omitted).

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Bell Atl. Corp. v. Twombly,

Though “a complaint attacked by a Rule 12(b)(6) motion” need

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not contain “detailed factual allegations, a plaintiff’s obligation

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to provide the ‘grounds’ of his ‘entitlement to relief’ requires

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more than labels and conclusions, and a formulaic recitation of the

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elements of a cause of action will not do.”

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Papasan v. Allain, 478 U.S. 265, 2869 (1986)).

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“factual allegations must be enough to raise a right to relief

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above the speculative level.”

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Federal Practice and Procedure § 1216 (3d ed. 2004) (“[T]he

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pleading must contain something more...than...a statement of facts

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that merely creates a suspicion [of] a legally cognizable right of

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action.”)).

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Id. at 555 (quoting
A plaintiff’s

Id. (citing 5 C. Wright & A. Miller,

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Further, “Rule 8(a)(2)...requires a ‘showing,’ rather than a

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blanket assertion, of entitlement to relief.

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allegation in the complaint, it is hard to see how a claimant could

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satisfy the requirements of providing...grounds on which the claim

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rests.”

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A pleading must then contain “only enough facts to state a claim to

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relief that is plausible on its face.”

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“plaintiffs...have not nudged their claims across the line from

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conceivable to plausible, their complaint must be dismissed.”

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Without some factual

Twombly, 550 U.S. at 555 n.3 (internal citations omitted).

Id. at 570.

If the

Id.

Once the court grants a motion to dismiss, they must then

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decide whether to grant a plaintiff leave to amend.

Rule 15(a)

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authorizes the court to freely grant leave to amend when there is

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no “undue delay, bad faith, or dilatory motive on the part of the

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movant.” Foman v. Davis, 371 U.S. 178, 182 (1962).

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to amend is generally only denied when it is clear that the

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deficiencies of the complaint cannot possibly be cured by an

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amended version.

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655, 658 (9th Cir. 1992); Balistieri v. Pacifica Police Dept.,

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901 F. 2d 696, 699 (9th Cir. 1990) (“A complaint should not be

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dismissed under Rule 12(b)(6) unless it appears beyond doubt that

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the plaintiff can prove no set of facts in support of his claim

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which would entitle him to relief.”) (internal citations omitted).

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In fact, leave

See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d

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ANALYSIS

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Both in the pleadings and during oral argument, the parties

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addressed two material issues: (1) whether Plaintiff Bob Beltzer

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has standing under the Fair Debt Collection Practices Act to sue as

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the spouse of Plaintiff Karen Beltzer, who was the sole individual

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named on the loan; and (2) whether Plaintiffs’ allegations of

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violations of the FDCPA satisfied the statute of limitations under

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the statute.

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The FDCPA was enacted to prevent abusive, “deceptive and

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unfair debt collection practices.”

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“debt collector” is defined as “any person who uses any

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instrumentality...in any business the principal purpose of which is

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the collection of any debts.”

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excludes any person who collects debt “to the extent such

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activity...(i)concerns a debt which was originated by such person;

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or (ii) concerns a debt which was not in default at the time it was

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obtained by such person.”

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FDCPA does not extend to cover the “consumer’s creditors, a

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mortgage servicing company, or any assignee of the debt, so long as

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the debt was not in default at the time it was assigned.”

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HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009)

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(quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir.

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1985)).

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Id.

15 U.S.C. § 1692(a).

Id. § 1692(a)(6)(a).

§ 1692(a)(6)(f).

The term

The definition

As a result, the

Nool v.

A “consumer” is defined as “any natural person obligated or

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allegedly obligated to pay any debt.”

15 U.S.C. § 1692a(3).

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“debt collector who fails to comply with any provision” of the

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statute is liable for damages.

Id. § 1692k(a).
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Any

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An action to enforce liability requires that a plaintiff bring suit

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within “one year from the date on which the violation occurs.”

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§ 1692k(d).

Id.

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A.

Plaintiff Bob Beltzer’s Standing.

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Section 1692c of the FDCPA particularly requires that a debt

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collector not “communicate with a consumer in connection with the

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collection of any debt” in a myriad of forbidden circumstances,

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including phoning a debtor/consumer’s place of business or phoning

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during an “unusual time or place.”

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of section 1692c only, the term “consumer” includes the

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debtor/consumer’s spouse, parent, or other authorized party.

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§ 1692c(d).

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Id. § 1692c(a).

For purposes

Id.

Defendant GC Services contends that Plaintiff Bob Beltzer

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lacks standing because he was not a borrower on the loan, nor had

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he assumed any obligation of the note.

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with Plaintiffs’ analysis of section 1692c, and interprets the

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statute as incorporating a debt collector’s liability on a

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debtor/consumer’s spouse.

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However, the Court concurs

Since the FDCPA clearly enumerates that civil liability may

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attach to any collector who fails to comply with any provision of

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the statute, it stands to follow that Plaintiff Bob Beltzer has a

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right of action against Defendants for violation of the FDCPA as it

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directly applies to him.

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claims regarding the violation of section 1692c only.

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Therefore, Plaintiff has standing as to

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The Court declines to extend his standing further, since the

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statute’s applicability otherwise only applies to Plaintiff Karen

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Beltzer since she alone was obligated to pay the mortgage loan.

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B.

Statute of Limitations

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However, even if both Plaintiffs have sufficient standing to

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sue Defendants, there is no indication from the Complaint that

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Defendant GC Services contacted or otherwise violated the FDCPA

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within the allotted statutory period.

Plaintiffs filed their

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complaint on April 13, 2011.3

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violation of the FDCPA, and by extension demonstrate proper

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standing for the case to commence in federal court, Plaintiffs must

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demonstrate on the face of the Complaint that Defendant GC Services

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contacted Plaintiffs or otherwise engaged in conduct prohibited by

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the statute on or before April 13, 2010.

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any specific facts from the Complaint to determine the above, and

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as such the Complaint fails to meet the pleading standards under

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Rule 8 and Twombly.

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Therefore, to allege a proper

The Court cannot elicit

See supra.

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The case was filed under original federal jurisdiction based
upon violations of the FDCPA.
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CONCLUSION

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For the reasons stated above, Defendant GC Services’ Motion to

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Dismiss (ECF No. 5) is granted with leave to amend.

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file an amended complaint not later than twenty (20) days after the

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date this Memorandum and Order is filed electronically.

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amended complaint is filed within said twenty (20)-day period,

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without further notice, Plaintiffs’ claims against GC Services will

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be dismissed without leave to amend.

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Plaintiffs may

If no

IT IS SO ORDERED.
Date: June 20, 2011

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__________________________________
MORRISON C. ENGLAND, JR
UNITED STATES DISTRICT JUDGE

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DEAC_Signature-END:

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