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