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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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 KAREN QUINLAN nee BETZLER and BOB BETZLER, No. 2:11-cv-00986-MCE-EFB 12 Plaintiffs, 13 MEMORANDUM & ORDER v. 14 CITIMORTGAGE, INC. et al., 15 Defendants. 16 17 ----oo0oo---- 18 Plaintiffs Karen and Bob Betzler (“Plaintiffs”) seek redress 19 20 from Defendants Citimortgage, Inc., GC Services Limited Partnership 21 (“GC Services”), Allied International Credit Corp., and Nationwide 22 Credit Recovery (collectively, “Defendants”) regarding a debt 23 collection originating from a mortgage loan in Plaintiff Karen 24 Betzler’s name. 25 connection with the loan, Defendants violated various state laws 26 and the Fair Debt Collection Practices Act (“FDCPA”). 27 /// 28 /// Specifically, Plaintiffs allege that, in 1 1 Defendant GC Services filed a Motion to Dismiss Plaintiffs’ 2 Complaint pursuant to Federal Rule of Civil Procedure1 3 Rule 12(b)(6) (ECF No. 5). 4 Defendant’s motion, and a hearing on the matter was conducted 5 before this Court on June 9, 2011. 6 Defendant GC Services’ Motion to Dismiss is granted. Plaintiff filed a timely opposition to For the reasons stated below, 7 BACKGROUND2 8 9 10 Plaintiffs are husband and wife. As stated above, Plaintiff 11 Karen Betzler executed a home mortgage loan for approximately 12 $7,000 in March 1999. 13 financed by the California Rural Home Mortgage Finance Authority 14 (not a party to the instant suit), specifically stated that any 15 balance left on the loan after ten years was to be “forgiven free 16 and clear.” 17 Citimortgage, Inc. 18 from Plaintiffs, even though the loan was fully discharged and no 19 monies were due. 20 Services contacted Defendants in January 2010 and “continued to 21 contact” them to demand payment on the loan. 22 /// 23 /// 24 /// 25 /// 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 26 1 27 28 All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless otherwise noted. 2 The factual assertions in this section are based on the allegations in Plaintiffs’ Complaint unless otherwise specified. 2 1 STANDARD 2 3 On a motion to dismiss for failure to state a claim under 4 Rule 12(b)(6), all allegations of material fact must be accepted as 5 true and construed in the light most favorable to the nonmoving 6 party. 7 Cir. 1996). 8 statement of the claim showing that the pleader is entitled to 9 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 10 and the grounds upon which it rests.” 11 550 U.S. 544, 555 (2007) (internal citations and quotations 12 omitted). 13 Bell Atl. Corp. v. Twombly, Though “a complaint attacked by a Rule 12(b)(6) motion” need 14 not contain “detailed factual allegations, a plaintiff’s obligation 15 to provide the ‘grounds’ of his ‘entitlement to relief’ requires 16 more than labels and conclusions, and a formulaic recitation of the 17 elements of a cause of action will not do.” 18 Papasan v. Allain, 478 U.S. 265, 2869 (1986)). 19 “factual allegations must be enough to raise a right to relief 20 above the speculative level.” 21 Federal Practice and Procedure § 1216 (3d ed. 2004) (“[T]he 22 pleading must contain something more...than...a statement of facts 23 that merely creates a suspicion [of] a legally cognizable right of 24 action.”)). 25 /// 26 /// 27 /// 28 /// Id. at 555 (quoting A plaintiff’s Id. (citing 5 C. Wright & A. Miller, 3 1 Further, “Rule 8(a)(2)...requires a ‘showing,’ rather than a 2 blanket assertion, of entitlement to relief. 3 allegation in the complaint, it is hard to see how a claimant could 4 satisfy the requirements of providing...grounds on which the claim 5 rests.” 6 A pleading must then contain “only enough facts to state a claim to 7 relief that is plausible on its face.” 8 “plaintiffs...have not nudged their claims across the line from 9 conceivable to plausible, their complaint must be dismissed.” 10 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 11 decide whether to grant a plaintiff leave to amend. Rule 15(a) 12 authorizes the court to freely grant leave to amend when there is 13 no “undue delay, bad faith, or dilatory motive on the part of the 14 movant.” Foman v. Davis, 371 U.S. 178, 182 (1962). 15 to amend is generally only denied when it is clear that the 16 deficiencies of the complaint cannot possibly be cured by an 17 amended version. 18 655, 658 (9th Cir. 1992); Balistieri v. Pacifica Police Dept., 19 901 F. 2d 696, 699 (9th Cir. 1990) (“A complaint should not be 20 dismissed under Rule 12(b)(6) unless it appears beyond doubt that 21 the plaintiff can prove no set of facts in support of his claim 22 which would entitle him to relief.”) (internal citations omitted). 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// In fact, leave See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 4 1 ANALYSIS 2 3 Both in the pleadings and during oral argument, the parties 4 addressed two material issues: (1) whether Plaintiff Bob Beltzer 5 has standing under the Fair Debt Collection Practices Act to sue as 6 the spouse of Plaintiff Karen Beltzer, who was the sole individual 7 named on the loan; and (2) whether Plaintiffs’ allegations of 8 violations of the FDCPA satisfied the statute of limitations under 9 the statute. 10 The FDCPA was enacted to prevent abusive, “deceptive and 11 unfair debt collection practices.” 12 “debt collector” is defined as “any person who uses any 13 instrumentality...in any business the principal purpose of which is 14 the collection of any debts.” 15 excludes any person who collects debt “to the extent such 16 activity...(i)concerns a debt which was originated by such person; 17 or (ii) concerns a debt which was not in default at the time it was 18 obtained by such person.” 19 FDCPA does not extend to cover the “consumer’s creditors, a 20 mortgage servicing company, or any assignee of the debt, so long as 21 the debt was not in default at the time it was assigned.” 22 HomeQ Servicing, 653 F. Supp. 2d 1047, 1053 (E.D. Cal. 2009) 23 (quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 24 1985)). 25 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 26 allegedly obligated to pay any debt.” 15 U.S.C. § 1692a(3). 27 “debt collector who fails to comply with any provision” of the 28 statute is liable for damages. Id. § 1692k(a). 5 Any 1 An action to enforce liability requires that a plaintiff bring suit 2 within “one year from the date on which the violation occurs.” 3 § 1692k(d). Id. 4 5 A. Plaintiff Bob Beltzer’s Standing. 6 7 Section 1692c of the FDCPA particularly requires that a debt 8 collector not “communicate with a consumer in connection with the 9 collection of any debt” in a myriad of forbidden circumstances, 10 including phoning a debtor/consumer’s place of business or phoning 11 during an “unusual time or place.” 12 of section 1692c only, the term “consumer” includes the 13 debtor/consumer’s spouse, parent, or other authorized party. 14 § 1692c(d). 15 Id. § 1692c(a). For purposes Id. Defendant GC Services contends that Plaintiff Bob Beltzer 16 lacks standing because he was not a borrower on the loan, nor had 17 he assumed any obligation of the note. 18 with Plaintiffs’ analysis of section 1692c, and interprets the 19 statute as incorporating a debt collector’s liability on a 20 debtor/consumer’s spouse. 21 However, the Court concurs Since the FDCPA clearly enumerates that civil liability may 22 attach to any collector who fails to comply with any provision of 23 the statute, it stands to follow that Plaintiff Bob Beltzer has a 24 right of action against Defendants for violation of the FDCPA as it 25 directly applies to him. 26 claims regarding the violation of section 1692c only. 27 /// 28 /// Therefore, Plaintiff has standing as to 6 1 The Court declines to extend his standing further, since the 2 statute’s applicability otherwise only applies to Plaintiff Karen 3 Beltzer since she alone was obligated to pay the mortgage loan. 4 5 B. Statute of Limitations 6 7 However, even if both Plaintiffs have sufficient standing to 8 sue Defendants, there is no indication from the Complaint that 9 Defendant GC Services contacted or otherwise violated the FDCPA 10 within the allotted statutory period. Plaintiffs filed their 11 complaint on April 13, 2011.3 12 violation of the FDCPA, and by extension demonstrate proper 13 standing for the case to commence in federal court, Plaintiffs must 14 demonstrate on the face of the Complaint that Defendant GC Services 15 contacted Plaintiffs or otherwise engaged in conduct prohibited by 16 the statute on or before April 13, 2010. 17 any specific facts from the Complaint to determine the above, and 18 as such the Complaint fails to meet the pleading standards under 19 Rule 8 and Twombly. 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// Therefore, to allege a proper The Court cannot elicit See supra. 27 3 28 The case was filed under original federal jurisdiction based upon violations of the FDCPA. 7 1 CONCLUSION 2 3 For the reasons stated above, Defendant GC Services’ Motion to 4 Dismiss (ECF No. 5) is granted with leave to amend. 5 file an amended complaint not later than twenty (20) days after the 6 date this Memorandum and Order is filed electronically. 7 amended complaint is filed within said twenty (20)-day period, 8 without further notice, Plaintiffs’ claims against GC Services will 9 be dismissed without leave to amend. 10 11 Plaintiffs may If no IT IS SO ORDERED. Date: June 20, 2011 12 13 __________________________________ MORRISON C. ENGLAND, JR UNITED STATES DISTRICT JUDGE 14 15 16 17 DEAC_Signature-END: 18 19 c4d6b0d3 20 21 22 23 24 25 26 27 28 8

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