Quinlan et al v. CitiMortgage, Inc. et al

Filing 24

MEMORANDUM AND ORDER signed by Judge Morrison C. England, Jr. on 11/2/2011 GRANTING 17 CMI's Motion to Dismiss, with leave to amend, as to the Second, Third, Fifth and Seventh Claims for Relief. CMI's Motion to Dismiss the Fourth Claim fo r Relief, for breach of contract, is DENIED as to Pltf Quinlan but GRANTED as to pltf Betzler, without leave to amend. Pltfs may file a Second Amended Complaint, should they choose to do so, not later than 10 days following the date this Memorandum and Order is filed. (Reader, L)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 12 KAREN QUINLAN aka KAREN BETZLER, an individual; BOB BETZLER, an individual, 13 14 15 16 17 18 No. 2:11-cv-00986-MCE-EFB Plaintiffs, v. MEMORANDUM AND ORDER CITIMORTGAGE, INC., a New York Corporation; GC SERVICES LIMITED PARTNERSHIP, a Delaware Partnership; ALLIED INTERNATIONAL CREDIT CORP., a Canadian Corporation; and NATIONWIDE CREDIT RECOVERY, a California Corporation, 19 Defendants. 20 21 22 ----oo0oo---Presently before the Court is a Motion to Dismiss filed on 23 behalf of behalf of Defendant Citimortgage, Inc. (“CMI”). 24 Motion is brought on grounds that the claims asserted against it 25 in Plaintiffs’ Second, Third, Fourth, Fifth and Seventh claims 26 for relief are uncertain and fail to state a claim upon which 27 relief can be granted under Rule 12(b)(6) of the Federal Rules of 28 Civil Procedure. 1 CMI’s 1 As set forth below, CMI’s Motion will be granted in part and 2 denied in part.1 3 BACKGROUND 4 5 According to Plaintiffs’ First Amended Complaint (“FAC”),2 6 7 Plaintiff Karen Quinlan obtained a home mortgage loan in the 8 amount of $7,152.15 on or about March 18, 1999. 9 of the operative promissory note, “[b]eginning on the tenth 10 anniversary from the date [of the note], all principal and 11 deferred interest repayment obligations shall be forgiven free 12 and clear.” 13 Under the terms FAC, ¶ 11. At some point before the loan’s tenth anniversary, the 14 instrument was transferred to CMI. Plaintiffs allege that in 15 contravention of the terms of the note, CMI contacted them 16 demanding repayment of the note after March 18, 2009. 17 threatened to accelerate the alleged amount due and report the 18 note as delinquent to national credit bureaus. 19 2009, however, Plaintiffs claim they spoke to a CMI 20 representative, Troy Goddard, who stated that no balance was due 21 and confirmed that the debt had been forgiven. 22 /// 23 /// 24 /// CMI On April 23, 25 1 26 27 Because oral argument will not be of material assistance, the Court ordered this matter submitted on the briefs. E.D. Cal. Local Rule 230(g). 2 28 All factual allegations contained within this section are taken from Plaintiffs’ FAC unless otherwise specified. 2 1 Although Plaintiffs accordingly believed the issue had been 2 resolved, only a few months later they began to receive contacts 3 from debt collection agencies demanding full repayment of the 4 $7,152.15 principal balance on the loan. 5 they were contacted by some three different agencies between 6 September 15, 2009 and July 19, 2010. 7 debt collection agencies acted on behalf of CMI, alleging that 8 “each of the Defendants were the agents, servants and employees 9 of each and every one of the other Defendants.” 10 Plaintiffs allege that Plaintiffs claim that the FAC, ¶ 7. Plaintiffs filed the instant action on April 13, 2011 and 11 allege a variety of state and federal claims against both CMI and 12 two of the involved debt collection agencies, Defendants Allied 13 International Credit Corp. and Nationwide Credit, Inc. 14 moves to dismiss certain of the claims Plaintiffs assert against 15 it. CMI now 16 STANDARD 17 18 19 On a motion to dismiss for failure to state a claim under 20 Federal Rule of Civil Procedure 12(b)(6),3 all allegations of 21 material fact must be accepted as true and construed in the light 22 most favorable to the nonmoving party. 23 Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). 24 /// 25 /// 26 /// Cahill v. Liberty Mut. 27 3 28 All further references to “Rule” or “Rules” are to the Federal Rules of Civil Procedure unless otherwise noted. 3 1 Rule 8(a)(2) requires only “a short and plain statement of the 2 claim showing that the pleader is entitled to relief” in order to 3 “give the defendant fair notice of what the [...] claim is and 4 the grounds upon which it rests.” 5 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 6 47 (1957)). 7 dismiss does not require detailed factual allegations. 8 “a plaintiff’s obligation to provide the grounds of his 9 entitlement to relief requires more than labels and conclusions, 10 and a formulaic recitation of the elements of a cause of action 11 will not do.” 12 A court is not required to accept as true a “legal conclusion 13 couched as a factual allegation.” 14 1937, 1950 (2009) (quoting Twombly, 550 U.S. at 555). 15 allegations must be enough to raise a right to relief above the 16 speculative level.” 17 Alan Wright & Arthur R. Miller, Federal Practice and Procedure 18 § 1216 (3d ed. 2004) (stating that the pleading must contain 19 something more than “a statement of facts that merely creates a 20 suspicion [of] a legally cognizable right of action.”)). 21 Bell Atl. Corp. v. Twombly, A complaint attacked by a Rule 12(b)(6) motion to However, Id. (internal citations and quotations omitted). Ashcroft v. Iqbal, 129 S. Ct. “Factual Twombly, 550 U.S. at 555 (citing 5 Charles Furthermore, “Rule 8(a)(2)...requires a showing, rather than 22 a blanket assertion, of entitlement to relief.” 23 550 U.S. at 556 n.3 (internal citations and quotations omitted). 24 Thus, “[w]ithout some factual allegation in the complaint, it is 25 hard to see how a claimant could satisfy the requirements of 26 providing not only ‘fair notice’ of the nature of the claim, but 27 also ‘grounds’ on which the claim rests.” 28 Alan Wright & Arthur R. Miller, supra, at § 1202). 4 Twombly, Id. (citing 5 Charles 1 A pleading must contain “only enough facts to state a claim to 2 relief that is plausible on its face.” 3 “plaintiffs...have not nudged their claims across the line from 4 conceivable to plausible, their complaint must be dismissed.” 5 Id. 6 strikes a savvy judge that actual proof of those facts is 7 improbable, and ‘that a recovery is very remote and unlikely.’” 8 Id. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)). 9 Id. at 570. If the However, “[a] well-pleaded complaint may proceed even if it A court granting a motion to dismiss a complaint must then 10 decide whether to grant leave to amend. Leave to amend should be 11 “freely given” where there is no “undue delay, bad faith or 12 dilatory motive on the part of the movant,...undue prejudice to 13 the opposing party by virtue of allowance of the amendment, [or] 14 futility of the amendment....” 15 (1962); Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 16 1052 (9th Cir. 2003) (listing the Foman factors as those to be 17 considered when deciding whether to grant leave to amend). 18 all of these factors merit equal weight. 19 consideration of prejudice to the opposing party...carries the 20 greatest weight.” 21 833 F.2d 183, 185 (9th Cir. 1987). 22 amend is proper only if it is clear that “the complaint could not 23 be saved by any amendment.” 24 Inc., 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou 25 Sys., Inc., 411 F.3d 1006, 1013 (9th Cir. 2005); Ascon Props., 26 Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989) 27 (“Leave need not be granted where the amendment of the 28 complaint...constitutes an exercise in futility....”)). Foman v. Davis, 371 U.S. 178, 182 Not Rather, “the Id. (citing DCD Programs, Ltd. v. Leighton, Dismissal without leave to Intri-Plex Techs. v. Crest Group, 5 ANALYSIS 1 2 A. Violation Of Rosenthal Act 3 4 California’s Rosenthal Act regulates the collection of 5 “consumer debts”, which are defined as transaction pursuant to 6 which “property, services or money is acquired on credit... 7 primarily for personal, family, or household purposes. 8 Code § 1788.2(e)-(f). 9 claim premised on the Rosenthal Act is one year from the date of 10 11 an alleged violation. Cal. Civ. The limitations period for pursuing a Id. at § 1788.30(f). CMI argues that Plaintiffs’ Second Claim for Relief, for 12 violation of the Rosenthal Act, is time-barred because the FAC, 13 as currently constituted, does not specifically allege conduct by 14 CMI occurring within one year before the filing of Plaintiffs’ 15 complaint on April 13, 2011. 16 been collection attempts by the collection agency defendants 17 within the requisite one year period, the Court agrees that the 18 FAC is less than clear about whether that conduct is properly 19 attributable to CMI. 20 Second Claim for Relief as time-barred is granted, with leave to 21 amend. Although there does appear to have Consequently, CMI’s Motion to Dismiss the 22 In addition to CMI’s limitation argument as discussed above, 23 CMI argues that Plaintiff Bob Betzler is an improper party in any 24 event because he was not a borrower on the promissory note and 25 consequently lacks standing to pursue a Rosenthal Act claim. 26 Inasmuch as Plaintiffs concede that point, the Motion to Dismiss 27 the Second Claim as to Betzler is granted without further leave 28 to amend. 6 B. 1 Violation Of Consumer Credit Reporting Agencies Act 2 3 The California Consumer Credit Reporting Agencies Act, as 4 codified at California Civil Code section 1785.25(a), et seq. 5 (“CCRAA”), provides in pertinent part that “[a] person shall not 6 furnish information on a specific transaction or experience to 7 any consumer credit reporting agency if the person knows or 8 should have known the information is incomplete or inaccurate.” 9 In attempting to state a claim for relief under the CCRAA, 10 Plaintiffs simply allege that CMI “should have known that the 11 information it furnished to consumer credit reporting agencies 12 regarding the Plaintiffs was inaccurate.” 13 do not provide any further specificity as to what information was 14 inaccurate or to which agency or agencies the allegedly improper 15 information was provided. FAC, ¶ 43. Plaintiffs 16 While the FAC is replete with allegations concerning 17 collection agencies retained to collect the amount of the 18 purportedly unpaid mortgage from Plaintiffs, it is silent with 19 respect to the details of any information provided to credit 20 reporting agencies for purposes of establishing liability under 21 the CCRAA. 22 suffered by Plaintiffs as a result of the alleged CCRAA 23 violations. 24 claim. 25 In addition, FAC is similarly devoid of any damages Such damages are an essential element of a CCRAA See Cal. Civ. Code section 1785.31. Given the above-described deficiencies in the FAC, 26 Plaintiffs’ Third Claim for Relief, for violation of the CCRAA, 27 is dismissed, with leave to amend. 28 /// 7 C. 1 Breach Of Contract Claim 2 3 In challenging Plaintiffs’ Fourth Claim for Relief, CMI 4 alleges that Plaintiffs have not adequately identified the 5 contract, CMI’s alleged breach, and damages to Plaintiffs flowing 6 from such breach. 7 CMI’s promissory note and quotes verbatim from that note in 8 identifying the parties’ agreement to forgive free and clear any 9 remaining principal and deferred interest still owed on the Plaintiffs’ complaint, however, identified 10 loan’s tenth anniversary. FAC, ¶ 11. Plaintiffs further allege 11 that Quinlan performed all duties and obligations on her part for 12 the ten years following execution of the promissory note on or 13 about March 18, 2009. Id. at ¶ 12. 14 These allegations are sufficient to establish a breach of 15 contract claim against Plaintiff Quinlan, and the FAC makes it 16 clear that it was Quinlan who obtained the home mortgage loan 17 obtained by CMI. 18 to how Bob Betzler has standing to assert a breach of contract 19 claim. 20 it is granted with respect to Plaintiff Betzler. 21 opposition papers make no attempt to defend Betzler’s breach of 22 contract claim. 23 unlikely event that Betzler can state a viable claim in that 24 regard, Betzler will be afforded leave to amend to rectify the 25 current shortcomings of the FAC with respect to his own breach of 26 contract claim. 27 /// 28 /// There is no indication, however, with respect Consequently, while CMI’s Motion is denied as to Quinlan, Plaintiffs’ Nonetheless, in what would appear to be the 8 1 D. Violation Of California Business And Professions Code 2 3 For a Fifth Claim for Relief, Plaintiffs allege that CMI 4 violated the provisions of California Business and Professions 5 Code section 17200 by, inter alia, attempting to collect debts 6 not owed, selling or assigning a debts not owed to debt 7 collection agencies, and reporting the non-payment of debts not 8 owed to credit reporting agencies. 9 conduct constitutes unlawful, unfair or fraudulent business acts 10 Plaintiffs claim that such or practices proscribed by Section 17200. FAC, ¶¶ 55-56. 11 CMI argues that Plaintiffs have not pled their Fifth Claim 12 with enough particularity, and claim that Plaintiffs in essence 13 have alleged no more than legal conclusions unsupported by any 14 facts. 15 claim also hinges on injury in fact as a result of the alleged 16 unfair competition. 17 654 F. Supp. 2d 1104, 1117 (E.D. Cal. 2009), citing Cal. Bus. & 18 Prof. Code § 17204. 19 In addition, CMI points out that standing to bring a See Vega v. JPMorgan Chase Bank, N.A., Because the Court finds that there are no allegations 20 detailing the requisite injury, the Fifth Claim fails on that 21 ground alone. 22 amend. Plaintiffs will, however, be accorded leave to 23 24 E. Invasion Of Privacy 25 26 CMI attacks Plaintiffs’ Seventh and Final Claim for Relief, 27 for Invasion of Privacy, largely on grounds that the basis for 28 Plaintiffs’ alleged privacy claim is fatally elusive. 9 1 CMI also points out that under California Civil Code section 2 1785.32, “no consumer shall bring any action or proceeding in the 3 nature of... invasion of privacy with respect to.... any person 4 who furnishes information to a consumer reporting agency.... 5 except as to false information furnished with malice or willful 6 intent to injure such consumer.” 7 not specifically state, that the requisite malice or willful 8 intent is missing in this case even if Plaintiffs could otherwise 9 state a viable invasion of privacy claim. CMI appears to allege, but does Plaintiffs, on the 10 other hand, point to CMI’s repeated attempts to intrude into the 11 “solitude and seclusion” of Plaintiff’s home, both by written 12 communication and by repeated phone calls, for a period over one 13 year. 14 Pls.’ Opp’n; 4:11-13,. The Court agrees that Plaintiffs’ invasion of privacy claim 15 is impermissibly vague at this juncture. Because the Court 16 cannot altogether rule out Plaintiffs’ ability to state a viable 17 claim, however, and even a showing of malice under the 18 circumstances, leave to amend the invasion of privacy claim will 19 be permitted. 20 CONCLUSION 21 22 23 As set forth above, CMI’s Motion to Dismiss is GRANTED, with 24 leave to amend, as to the Second, Third, Fifth and Seventh Claims 25 for Relief. 26 for breach of contract, is denied as to Plaintiff Quinlan but 27 granted as to Plaintiff Betzler, without leave to amend. 28 /// CMI’s Motion to Dismiss the Fourth Claim for Relief, 10 1 Plaintiffs may file a Second Amended Complaint, should they 2 choose to do so, not later than ten (10) days following the date 3 this Memorandum and Order is filed. 4 5 IT IS SO ORDERED. Dated: November 2, 2011 6 7 8 _____________________________ MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11

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