Valendo v. Stuart-Lippman and Associates, Inc.

Filing 15

ORDER signed by District Judge John A. Mendez on 6/8/16 ORDERING for the reasons set forth above, the Court DENIES Defendant's Motion to Dismiss. Defendant shall file its Answer to the Complaint within twenty days of the date of this Order. (Becknal, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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ESTRELLA VALENDO,

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2:16-cv-00221-JAM-CKD

Plaintiff,

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No.

v.

ORDER DENYING DEFENDANT’S MOTION
TO DISMISS

STUART-LIPPMAN AND
ASSOCIATES, INC., an Arizona
Corporation; DOES 1-99,
inclusive,

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Defendants.
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After removing this case from state court based on federal

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question jurisdiction, Defendant Stuart-Lippman and Associates

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(“Defendant”) now argues that Plaintiff Estrella Valendo

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(“Plaintiff”) has failed to state a federal claim and that the

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Court lacks jurisdiction over the remaining state law claims.

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Motion to Dismiss (MTD) (Doc. #10) at 2.

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Defendant’s motion to dismiss (Doc. #12).

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below, the Court denies Defendant’s motion to dismiss. 1

Plaintiff opposes
For the reasons stated

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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was
scheduled for May 17, 2016.
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I.

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FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

The Court takes the facts alleged by Plaintiff as true for

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purposes of this motion.

Plaintiff is a seventy-one year old

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woman who lives in Rio Vista, California.

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Complaint (“FAC”) (Doc. #8) ¶ 1.

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Vista from Nick and Susan Calvan (“the Calvans.”)

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The rental agreement stated: “Except as provided by law, or as

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authorized by the prior written consent of Landlord, Tenant will

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not make any repairs or alterations to the premises.”

First Amended

Plaintiff rented a house in Rio
Id. ¶¶ 6, 30.

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Residential Lease, Clause 12, attached to FAC as Exh. E.

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renting the Calvan’s house, Plaintiff made “substantial

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improvements” to the property.

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a claim to their insurance company, Farmers Insurance/Fire

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Exchange (“Farmers”), alleging that the “improvements” Plaintiff

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made to the Calvan’s property amounted to ameliorative waste.

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Id. ¶¶ 26, 30.

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to Farmers.

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Defendant, a third party debt collector, to collect the debt in

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issue.”

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Id. ¶ 25.

While

The Calvans submitted

The Calvans subrogated their rights and interests

Id. ¶ 26.

Farmers “retained the services of

Id.

On December 2, 2015, Defendant sent Plaintiff a letter

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seeking to recover a nearly $8,000.00 debt from Plaintiff.

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¶ 21.

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January 13, 2016 even though Defendant knew Plaintiff was

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represented by counsel.

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Id.

Defendant also attempted to call Plaintiff directly on

Id. ¶ 27.

Plaintiff sued Defendant in February 2016, alleging three

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causes of action: (1) violation of the Rosenthal Fair Debt

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Collection Practices Act, (2) violation of the federal Fair Debt

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Collection Practices Act, (3) unfair trade and deceptive
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practices in violation of California Business and Professions

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Code § 17200.

Id. at 6-12.

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II.

OPINION

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Plaintiff brings one federal claim (her second cause of

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action): violation of the Fair Debt Collection Practices Act

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(“FDCPA”), codified at Title 15 U.S.C. § 1692.

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Plaintiff’s first and third causes of action are California state

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law claims.

See id. at 6, 11.

Id. at 8.

Defendant substantively attacks

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only Plaintiff’s FDCPA claim, arguing that Plaintiff fails to

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state a claim under the FDCPA.

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argues that if the Court dismisses Plaintiff’s FDCPA claim, the

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Court should dismiss the remaining two claims for lack of

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independent jurisdiction.

MTD at 2.

Defendant further

Id. at 4.

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A.

Plaintiff’s FDCPA Claim

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The FDCPA is a federal law which was enacted to “protect

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consumers against debt collection abuses.”

15 U.S.C. § 1692(e).

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“Not all obligations to pay are considered debts under the

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FDCPA.”

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Thus, a ”threshold issue in a suit brought under the [FDCPA] is

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whether or not the dispute involves a ‘debt’ within the meaning

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of the statute.”

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obligation or alleged obligation of a consumer to pay money

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arising out of a transaction in which the money, property,

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insurance, or services which are the subject of the transaction

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are primarily for personal, family, or household purposes.”

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U.S.C. § 1692a(5).

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but the consensus judicial interpretation is . . . that the

Turner v. Cook, 362 F.3d 1219, 1226-27 (9th Cir. 2004).

Id.

A “debt” under the FDCPA is “any

The FDCPA “does not define ‘transaction,’

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statute is limited in its reach ‘to those obligations to pay

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arising from consensual transactions, where parties negotiate or

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contract for consumer-related goods or services.’”

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F.3d at 1227 (quoting Bass v. Stolper, Koritzinsky, Brewster &

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Neider, S.C., 111 F.3d 1322, 1326 (7th Cir.1997)).

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Turner, 362

Defendant argues that Plaintiff’s obligation to pay

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Defendant is not covered by the FDCPA for two reasons.

First,

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Defendant argues that Plaintiff’s debt is not a “consumer debt”

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because it arises from Plaintiff’s tort of waste, rather than

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from a first party contractual claim.

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Defendant argues that “Defendant is not a ‘debt collector’ under

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the FDCPA because the subrogation claim was not in default when

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the Defendant obtained it.”

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1.

MTD at 2.

Second,

Id. at 12.

Whether the Debt At Issue Is A “Consumer Debt”

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California Code of Civil Procedure § 372 allows “any person

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aggrieved by the waste” to bring a civil cause of action against

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a tenant who commits waste on real property.

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Code. § 372.

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tort judgment [is] not a debt within the meaning of the FDCPA.”

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Van Zandt v. Stanaland, 520 Fed. App’x 493, 493 (9th Cir. 2013).

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Cal. Civ. Proc.

This statute makes committing waste a tort.

“[A]

Defendant argues that Plaintiff’s debt is not a debt

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covered by the FDCPA because the debt “arose out of the tortious

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act of the Plaintiff which caused damage to [the Calvans’]

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property.”

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of a contractual agreement and not a tort judgment, and that

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therefore her debt is not excluded from FDCPA coverage.

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6.

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///

MTD at 4.

Plaintiff argues that her debt arises out

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Opp. at

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Plaintiff’s reasoning is correct.

While the Calvans could

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have sued Plaintiff under section 372 to recover the cost of

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Plaintiff’s ameliorative waste, they also could have sued

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Plaintiff for breach of the Residential Lease, which states that

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Plaintiff could not make changes to the property without the

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Calvans’ consent.

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tort, as Defendant argues.

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Plaintiff’s FDCPA claim must be dismissed because it arises only

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under tort law is without merit.

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2.

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Plaintiff’s debt does not sound solely in
Thus, Defendant’s argument that

Whether Defendant Is A “Debt Collector”

The FDCPA states that the term “debt collector” does not

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include “any person collecting or attempting to collect any debt

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owed or due . . . to the extent such activity . . . concerns a

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debt which was not in default at the time it was obtained by such

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person.”

15 U.S.C. § 1692a(6)(F).

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Defendant argues that Plaintiff’s claim is not in default,

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and therefore Defendant cannot be considered a “debt collector”

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under the FDCPA.

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sent from Defendant to Plaintiff in December 2015 “unequivocally

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establishes that Defendant is a debt collector . . . and that the

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debt was in default.”

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states that “[t]his is an attempt to collect a claim . . . [t]his

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communication is from a professional debt collector.”

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FAC.

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the letter explicitly indicates that Defendant is a debt

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collector.

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attached to the FAC) as true, Defendant is a debt collector to

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which the FDCPA applies.

MTD at 13.

Plaintiff responds that a letter

Opp. at 9.

The letter Plaintiff refers to

Exh. C to

Defendant does not address the Plaintiff’s argument that

Accepting the contents of the letter (which is

Because Plaintiff has sufficiently
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alleged that her debt is a “consumer debt” and that Defendant is

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a “debt collector,” Defendant’s motion to dismiss Plaintiff’s

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FDCPA claim is denied.

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B.

Plaintiff’s First and Third Causes of Action

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Defendant’s only argument that the first and third causes

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of action should be dismissed is that they are state law claims

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that the Court does not have jurisdiction over once the FDCPA

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claim is dismissed.

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dismiss the FDCPA claim is denied, the Court also declines to

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MTD at 2.

Since Defendant’s motion to

dismiss Plaintiff’s first and third causes of action.

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III.

ORDER

For the reasons set forth above, the Court DENIES

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Defendant’s Motion to Dismiss. Defendant shall file its Answer to

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the Complaint within twenty days of the date of this Order.

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IT IS SO ORDERED.
Dated: June 8, 2016

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