Hanson v. Pro Solutions

Filing 18

ORDER by Judge Richard Seeborg granting 12 motion to dismiss in part with leave to amend. (cl, COURT STAFF) (Filed on 2/19/2014)

Download PDF
1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 SAN FRANCISCO DIVISION 9 GENA HANSON, individually and on behalf of all others similarly situated, 11 For the Northern District of California United States District Court 10 12 No. 13-05377 RS ORDER GRANTING MOTION TO DISMISS IN PART WITH LEAVE TO AMEND Plaintiffs, v. 13 14 15 16 JQD, LLC, d/b/a PRO SOLUTIONS, a California corporation, Defendant. ____________________________________/ 17 I. INTRODUCTION 18 In this putative class action, Plaintiff Gena Hanson challenges the business practices of 19 defendant JQD LLC (“Pro Solutions”), a California-based debt collection company. Hanson’s class 20 action complaint alleges violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et 21 seq., and California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200. Pro Solutions 22 moves to dismiss the complaint in its entirety, contending Hanson has failed to state a claim upon 23 which relief can be granted. Although it appears that Hanson is not necessarily foreclosed from 24 seeking relief under the FDCPA and the UCL, it is unclear which specific aspects of Pro Solutions’ 25 conduct are being targeted by her complaint. In particular, it is unclear which allegations hinge on 26 the averment that Pro Solutions operates on a “no cost” basis when providing services to 27 homeowners associations. This lack of clarity obfuscates the legal theories underlying her claims. 28 Accordingly, the motion is granted in part with leave to amend. NO. CV 12-05377 RS ORDER II. BACKGROUND1 1 2 Gena Hanson owns a condominium in Livermore, California. As required by her home 3 purchase agreement, Hanson became a member of her local homeowners association (“HOA”), 4 Vineyard Terrace Homeowners’ Association, to which she is obligated to pay a monthly 5 “assessment.” In early 2013, after receiving a cancer diagnosis, Hanson was hospitalized for three 6 months while she underwent radiation and chemotherapy treatments. During her absence, Hanson 7 fell behind on her HOA assessments, which at that time were approximately $255 per month. While Hanson was hospitalized, her HOA hired defendant Pro Solutions to collect Hanson’s 8 “No Cost Non-Judicial Collections” to HOAs throughout California. (Compl. § 23). Under Pro 11 For the Northern District of California outstanding debt. Pro Solutions is a debt collection company that, according to its website, offers 10 United States District Court 9 Solutions’ “no cost” business model, the company obtains effective control of delinquent HOA 12 member accounts and charges homeowners directly for “costs” associated with its collection 13 services. Meanwhile, the HOA assumes no liability for Pro Solutions’ fees.2 This arrangement is 14 allegedly conditioned on the HOA’s promise to cease communicating with the homeowner and 15 “cede control and oversight” of the account to Pro Solutions. (Compl. ¶ 3). Prior to completing her treatment, Hanson attempted to catch up on her overdue HOA 16 17 assessments. After attempting to pay her balance online and finding that she had apparently been 18 “locked out” of her HOA payment account, Hanson called her HOA, which informed her that her 19 debt had been assigned to Pro Solutions for collection. Upon returning home in April 2013, she 20 found a letter from Pro Solutions dated March 19, 2013. The letter, titled “Notice of Intent to Lien,” 21 informed Hanson that she owed Pro Solutions $1,996.74 in delinquent assessments and outstanding 22 fees. The letter itemized various additional costs levied by Pro Solutions, including “collection 23 fees” of $300, “vesting costs” of $185, “management collection costs” of $275, “late charges” of 24 $123.70, “interest” charges of $41.40, and “other costs” totaling $95. The letter stated that Hanson 25 26 27 28 1 The factual background is based on the averments in the FAC, which must be taken as true for purposes of a motion to dismiss. 2 According to the complaint, the agreements between Pro Solutions and its HOA customers provide that a HOA will only be liable for Pro Solutions’ fees “if the HOA agrees to reduce or waive Pro Solutions’ claims to its fees on a homeowner account.” (Compl. ¶ 24). NO. CV 13-05377 RS ORDER 2 1 owed “regular assessments” in the amount of $977. 2 Later that month, Hanson received another letter from Pro Solutions titled “Notice to Offer 3 Payment Plan.” This letter stated that Hanson’s total outstanding debt had increased to $2,296.74. 4 Hanson then attempted to pay down a portion of her account by mailing her HOA two checks 5 totaling $848. The HOA forwarded the checks to Pro Solutions, which refused to accept payment. 6 In a letter sent May 8, 2013, Pro Solutions informed Hanson that it rejected her payment because 7 she failed to submit the full amount of her outstanding debt. 8 On June 12, 2013, a Pro Solutions representative informed Hanson via telephone that it foreclosure, Hanson agreed to a payment plan, which required her immediately to submit $1,000. 11 For the Northern District of California would foreclose on her home unless she paid the full balance of her delinquent account. Fearing 10 United States District Court 9 Three days later, Hanson mailed Pro Solutions a check for $1,000, only $225 of which was then 12 applied to Hanson’s outstanding HOA assessments. The remaining $745 was retained by Pro 13 Solutions as payment for its services. 14 On June 20, after processing her payment, Pro Solutions sent Hanson a letter stating that she 15 was required to pay her outstanding balance, which had risen to $2,592.06, by August 3, 2013. 16 Hanson claims that over the next two months, she “attempted to get a straight answer from her HOA 17 and Pro Solutions.” (Compl. ¶ 7). During that time, Pro Solution’s fees continued to accrue, 18 resulting in an outstanding account of $3,988.99 as of October 11, 2013, at which point Pro 19 Solutions recorded a lien on Hanson’s home. 20 III. LEGAL STANDARD 21 A complaint must contain “a short and plain statement of the claim showing that the pleader 22 is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While “detailed factual allegations are not required,” a 23 complaint must have sufficient factual allegations to “state a claim to relief that is plausible on its 24 face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic v. Twombly, 550 U.S. 544, 25 570 (2007)). A claim is facially plausible “when the pleaded factual content allows the court to 26 draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. This 27 standard asks for “more than a sheer possibility that a defendant acted unlawfully.” Id. The 28 determination is a context-specific task requiring the court “to draw on its judicial experience and NO. CV 13-05377 RS ORDER 3 1 common sense.” Id. at 679. A motion to dismiss a complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure 2 Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal under Rule 12(b)(6) may be based on 5 either the “lack of a cognizable legal theory” or on “the absence of sufficient facts alleged under a 6 cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). 7 When evaluating such a motion, the court must accept all material allegations in the complaint as 8 true, even if doubtful, and construe them in the light most favorable to the non-moving party. 9 Twombly, 550 U.S. at 570. “[C]onclusory allegations of law and unwarranted inferences,” however, 10 “are insufficient to defeat a motion to dismiss for failure to state a claim.” Epstein v. Wash. Energy 11 For the Northern District of California tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of Bus., Inc. v. 4 United States District Court 3 Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also Twombly, 550 U.S. at 555 (“threadbare recitals of 12 the elements of the claim for relief, supported by mere conclusory statements,” are not taken as 13 true). IV. DISCUSSION 14 15 A. The Davis-Stirling Act 16 The bulk (if not the entirety) of Hanson’s complaint hinges on her assertion that Pro 17 Solutions’ debt collection practices are constrained, albeit indirectly, by the Davis-Stirling Common 18 Interest Development Act, a California statute governing ownership in common interest 19 developments. See Cal. Civ. Code § 4000, et seq.3 Among other things, the Davis-Stirling Act 20 regulates a HOA’s ability to collect debts owed by its members. Although Pro Solutions is not itself 21 a HOA, Hanson avers Pro Solutions was acting as an agent for Vineyard Terrace, and thus that its 22 rights against Hanson are no greater than the HOA’s rights against her, which are in turn limited by 23 the Davis-Stirling Act. In particular, Hanson contends Pro Solutions had no legal right to: - 24 25 26 27 28 Charge her excessive interest and late fees in violation of Civil Code §§ 3 The Davis-Stirling Act was amended on January 1, 2014. As a result, most provisions in the Act—including all sections discussed in this order—were assigned new locations in the California Civil Code. For the sake of consistency, this order refers to all provisions by their current citation. Similarly, quotations from prior court decisions have been altered to reflect the version of the code now in effect. Further filings, if any, should use current citations when referring to Davis-Stirling provisions. NO. CV 13-05377 RS ORDER 4 5650(b)(2) and (3), 1 - Charge her for fees the HOA never incurred, in violation of §§ 5650(b)(1) and 5600(b), - Threaten foreclosure when she owed less than $1,800, exclusive of penalties and fees, in violation of § 5720(b), and - Refuse to accept anything less than a full payment on her debt in violation of § 5655(a). 2 3 4 5 6 Hanson does not, however, advance claims for relief under the Davis-Stirling Act. Instead, her 7 complaint alleges that by attempting to collect debts to which it has no legal right, Pro Solutions 8 undertakes business practices that violate 15 U.S.C. § 1692e (proscribing the use by a debt collector 9 of “any false, deceptive, or misleading representation or means in connection with the collection of any debt”), 15 U.S.C § 1962f (prohibiting a debt collector from using “unfair or unconscionable 11 For the Northern District of California United States District Court 10 means to collect or attempt to collect any debt”), and California’s unfair competition law 12 (forbidding “unlawful,” “unfair,” or “fraudulent” business acts or practices).4 Pro Solutions, invoking several decisions by the California Court of Appeal, asserts its 13 14 actions as a third-party debt collector are in no way constrained by the Davis-Stirling Act. It first 15 relies on Brown v. Prof'l Cmty. Mgmt., Inc., 127 Cal. App. 4th 532 (Ct. App. 2005), wherein a 16 homeowner filed a cross-complaint against a property management company hired by her HOA, 17 alleging the company had charged fees prohibited by the Davis-Stirling Act. In particular, the 18 19 20 21 22 23 24 25 26 27 28 4 To elucidate the broadly-worded prohibitions of 15 U.S.C. §§ 1692e and 1692f, the FDCPA provides a non-exhaustive list of examples of proscribed conduct. See Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1061 (9th Cir. 2011). Invoking numerous examples set forth in the statute, Hanson avers Pro Solutions engaged in the following prohibited acts: - Falsely representing the character, amount, or legal status of a debt in violation of § 1692e(2)(A), - Falsely representing the services it rendered or compensation it could lawfully receive as debt collector in violation of § 1692e(2)(B), - Threatening to take an action that cannot legally be taken or that is not intended to be taken in violation of § 1692e(5), - Using a false representation or deceptive means to collect or attempt to collect any debt in violation of § 1692e(10), - Collecting an amount (including any interest, fee, charge, or expense incidental to the principal obligation) that is not permitted by law or expressly authorized by the agreement creating the debt in violation of § 1692f(1), and - Taking or threatening to take a nonjudicial action to effect dispossession or disablement of Hanson’s property where it has no present right to take possession and/or it has no present intention to take possession in violation of § 1692f(6)(A) and (B). NO. CV 13-05377 RS ORDER 5 1 homeowner challenged the company’s practice of levying fees for its preparation of “late letters” 2 and “lien letters” when attempting to collect debts from delinquent homeowners. She claimed these 3 charges violated § 5600(b), which prohibits “an association” from “impos[ing] or collect[ing] an 4 assessment or fee that exceeds the amount necessary to defray the costs for which it is levied.”5 The 5 court rejected the homeowner’s claim, reasoning the Davis-Stirling Act does not preclude HOAs 6 from hiring vendors that earn a profit by administering services on behalf of the HOA. Finding the 7 Davis-Stirling Act contemplates that HOAs will be operated by a volunteer board of homeowners, 8 the Brown court first emphasized the necessity of hiring for-profit vendors to fulfill some of the 9 HOAs’ responsibilities: Surely, the individual homeowners acting as volunteer officers and directors are not expected to perform all of the required services personally, and at no cost. Instead, the association must either hire employees or contract with others to provide the services. Landscape maintenance contractors are hired to mow the grass, painters are hired to paint the clubhouse, swimming pool contractors are hired to repair the pool deck, and managing agents, such as PCM, are hired to make these arrangements, and, importantly, to collect the fees and assessments levied against the homeowners. The costs incurred by the association, for which it levies an assessment or charges a fee, necessarily include the fees and profit the vendor charges for its services. 11 For the Northern District of California United States District Court 10 12 13 14 15 16 Id. at 538-39. The court explained that while § 5600(b) prohibits a HOA from “marking up” the 17 incurred charge to generate a profit for itself, the statute imposes no such restriction on the vendor: Plaintiff would have it that no vendor selling its services to an association could charge a fee, or, indeed, continue in business as a profit-making enterprise. That cannot be the law. 18 19 20 Id. at 539. The court further noted that other provisions of the Davis-Stirling Act explicitly 21 authorize HOAs to charge homeowners the very types of fees challenged by the homeowner in 22 Brown. In particular, § 5650(b) provides that if a homeowner owes a delinquent assessment, the 23 HOA is entitled to recover: 24 (1) Reasonable costs incurred in collecting the delinquent assessment, including reasonable attorney's fees. 25 (2) A late charge not exceeding 10 percent of the delinquent assessment or ten dollars ($10), whichever is greater . . . . 26 27 28 5 The Act defines “association” as “a nonprofit corporation or unincorporated association created for the purpose of managing a common interest development.” Cal. Civ. Code § 6528. NO. CV 13-05377 RS ORDER 6 2 (3) Interest on all sums imposed in accordance with this section, including the delinquent assessments, reasonable fees and costs of collection, and reasonable attorney’s fees, at an annual interest rate not to exceed 12 percent . . . . 3 Cal. Civ. Code § 5650(b). In light of the Act’s explicit authorization of reasonable debt collection 4 fees, the court held that the third-party vendor’s fees are not illegal “unless they exceed the 5 association’s costs, costs that necessarily include the fee charged for the service.” Id. at 539. The 6 court concluded: 1 [T]he duty to refrain from the conduct prohibited by section [5600(b)] is imposed solely on the “association,” the nonprofit entity designated by statute as having the responsibility to manage the affairs of the common interest development. Section [5600(b)] has no application to an association’s vendors. Competitive forces, not the statute, will constrain the vendors’ fees and charges. 7 8 9 Id. 11 For the Northern District of California United States District Court 10 A few years later, in Berryman v. Merit Prop. Mgmt., Inc., 152 Cal. App. 4th 1544 (Ct. App. 12 2007), the Court of Appeal applied Brown’s logic to another provision of the Davis-Stirling Act, 13 rejecting the plaintiff homeowners’ attempt to hold a third-party vendor liable for charging certain 14 fees relating to a home sale. In Berryman, the plaintiff trustees sold a home located in two HOAs 15 managed by the defendant, a property management company.6 The company charged the plaintiffs 16 certain document and transfer fees in connection with the home sale. The plaintiffs sued, alleging 17 the fees—which were retained by the defendant and not remitted to the HOAs—ran afoul of certain 18 Davis-Stirling Act provisions. The plaintiffs argued that defendant, while not a non-profit 19 “association” within the meaning of the statute, was prohibited by the Act from levying a charge 20 greater than its actual cost to reproduce documents or transfer title records.7 The court disagreed, 21 reasoning that the statute explicitly allows a HOA to impose a transfer title fee “not to exceed the 22 association’s actual costs to change its records[.]” See Cal. Civ. Code § 4575. Invoking Brown, 23 wherein the Court of Appeal held that “[t]he costs incurred by the association . . . necessarily 24 25 26 27 28 6 Some homeowners belong to more than one HOA for a single home. See Berryman, 152 Cal. App. 4th at 1548. 7 See Cal. Civ. Code § 4575 (“Except as provided in Section 4580, neither an association nor a community service organization or similar entity may impose or collect any assessment, penalty, or fee in connection with a transfer of title or any other interest except for the following: (a) An amount not to exceed the association's actual costs to change its records. (b) An amount authorized by Section 4530.”). NO. CV 13-05377 RS ORDER 7 1 include the fees and profit the vendor charges for its services,” see 127 Cal. App. 4th at 539, the 2 court in Berryman held that the same logic applies to the Davis-Stirling provisions governing title 3 transfer and document fees: 4 5 6 As the court noted in Brown, the statutory language prevents associations from charging inflated fees for documents and for transfer of title and using those fees for other purposes; it does not constrain the amount a managing agent may charge for these services. 7 152 Cal. App. 4th at 1552. Accordingly, the court held that plaintiffs could not proceed with their 8 Davis-Stirling claim against the property management company. 9 At first blush, Brown and Berryman might appear to indicate that the Davis-Stirling Act has no bearing on a third-party debt collector’s ability to levy fees against homeowners. Yet while the 11 For the Northern District of California United States District Court 10 Act does not impose direct restrictions on vendors hired by HOAs, both Brown and Berryman 12 demonstrate that a vendor’s ability to collect fees flows in the first instance from the HOA’s choice 13 to incur certain costs relating to the vendor’s services. In both cases, the HOA hired a third-party 14 vendor that, for a price, carried out certain tasks on behalf of the association. In finding that the 15 vendor’s fees were not proscribed by the Davis-Stirling Act, the court in Brown noted that “[t]he 16 costs incurred by the association, for which it levies an assessment or charges a fee, necessarily 17 include the fees and profit the vendor charges for its service.” 127 Cal. App. 4th at 539 (emphasis 18 added). The court emphasized that vendor fees are permissible to the extent they are commensurate 19 with the HOA’s actual costs: 20 21 22 The fees are not “illegal” unless they exceed the association’s costs, costs that necessarily include the fee charged for the service. And section [5650(b)] contemplates that the association will incur reasonable costs in connection with its collection efforts. Id. (emphasis added). Likewise in Berryman, the court affirmed Brown’s holding that the Davis- 23 Stirling Act does not limit a third-party vendor’s ability to charge homeowners for costs incurred by 24 the HOA. See 152 Cal. App. 4th at 1552 (“As in Brown, an association’s ‘costs’ for purposes of the 25 statute include ‘the fees and profit the vendor charges for its services.’”) (emphasis added); see also 26 Brown, 127 Cal. App. 4th at 539 (rejecting plaintiff’s argument that “no vendor selling its services 27 to an association could charge a fee, or, indeed, continue in business as a profit-making enterprise”) 28 NO. CV 13-05377 RS ORDER 8 1 (emphasis added). Here, unlike in Brown and Berryman, the HOA incurs no costs by hiring Pro Solutions to 2 3 collect from delinquent homeowners like Hanson. Indeed, Pro Solutions offers its collection 4 services free of charge. Accordingly, because the HOA incurs no cost, neither Brown nor Berryman 5 resolve the novel question posed by Hanson’s complaint: can a third-party vendor, collecting from 6 delinquent homeowners on behalf of a HOA, directly charge a homeowner fees never incurred by 7 the HOA?8 In In re Cisneros, 2012 WL 4627833 (Bankr. N.D. Cal. 2012), the court addressed this same 8 after falling behind on assessments owed to his HOA. The HOA contracted with Pro Solutions to 11 For the Northern District of California question, albeit in a different procedural posture.9 In Cisneros, a homeowner filed for bankruptcy 10 United States District Court 9 recover the debtor’s delinquent payments.10 Pro Solutions, acting on behalf of the HOA, filed two 12 claims in the bankruptcy court to recover unpaid HOA dues and collection fees. The debtor 13 objected. While conceding that he owed the unpaid HOA dues plus expenses “actually paid” by the 14 HOA, the debtor disputed the validity of the additional collection fees imposed by Pro Solutions. 15 Id. at *1. The court sustained the objection, reasoning that the debtor was not liable to Pro Solutions 16 “in any way.” Id. at *2. After acknowledging Pro Solution’s argument that the Davis-Stirling Act 17 only applies to HOAs, the court emphasized that Pro Solutions’ rights nonetheless cannot exceed 18 those of the HOA: 19 20 21 22 23 24 25 26 27 28 8 Pro Solutions incorrectly contends that the Court of Appeal addressed this same issue in Fowler v. M & C Ass'n Mgmt. Servs., Inc., 220 Cal. App. 4th 1152 (2013). In Fowler, the third-party vendor imposed fees directly on the homeowner instead of billing the HOA for its services and having the HOA assess the buyer for the cost. Yet, as was apparently the case in Brown and Berryman, the vendor in Fowler entered into an agreement whereby the HOA was ultimately responsible for the vendor’s fees. Accordingly, like in Brown and Berryman, the fees imposed by the vendor constituted “actual costs” to the HOA. Id. at 1158. The court found that it “makes no difference” whether the vendor billed the HOA or the homeowner directly, reasoning that “[i]n either event, the fees are charged by M&C for the cost of its services and include no override for the benefit of the HOA.” Id. at 1157-58. (emphasis added). Here, by contrast, Pro Solutions rendered its services at no cost to the HOA. 9 While the opinion of the Bankruptcy Court is not binding upon this order’s interpretation of California law, its reasoning in Cisneros is persuasive. 10 The contract provided that the delinquent homeowners, and not the HOA, would pay all fees and costs incurred by Pro Solutions. It further assured that in the event Pro Solutions was unable to collect the fees or costs, the HOA would nonetheless bear no responsibility. NO. CV 13-05377 RS ORDER 9 1 2 Pro Solutions seems to forget that it has no independent rights against Cisneros. It is not in privity with Cisneros. Any rights it has against Cisneros stem from the HOA, so it cannot have more rights than the HOA has against Cisneros. 3 Id. The court disallowed Pro Solutions’ claims for unpaid collection fees, concluding the alleged 4 debts were not allowable under state law: 5 6 7 8 9 Id. (emphasis in original). Although no California appellate court has directly addressed whether, as here, a third-party 11 For the Northern District of California United States District Court 10 It is clear that the fees of Pro Solutions are not allowable claims of the HOA under [§ 5650(b)] because they were not costs incurred by the HOA in collecting the delinquent assessment. They are also not allowable under [§ 5600(b)] because they exceed the amount necessary to defray the HOA’s costs; they are not costs of the HOA at all. To find otherwise opens the door to all sorts of mischief, as an HOA has no incentive whatsoever to question costs for which it is not liable and no incentive to search for services charging more reasonable costs. vendor acting on behalf of a HOA can lawfully charge a delinquent homeowner fees not incurred by 12 the HOA, the aforementioned authorities prompt a conclusion that Pro Solutions’ right to impose 13 debt collection fees against Hanson extends no further than the Vineyard Terrace HOA’s right to do 14 the same. Unlike the vendor fees challenged in Brown, Berryman, and Fowler, Pro Solutions’ fees 15 apparently are neither incurred nor paid by the HOAs that contract for the company’s “no cost” 16 services. If California law nonetheless entitled Pro Solutions to impose the fees of its choosing 17 against homeowners like Hanson, the company would wield unchecked power to extract a cascade 18 of fees and costs from a HOA’s delinquent members. 19 B. Clarity of the Complaint 20 While Hanson persuasively argues that the Davis-Stirling Act may, in theory, constrain Pro 21 Solutions’ ability to collect homeowner debt, it is difficult to ascertain which specific aspects of 22 defendant’s actions are being targeted by Hanson’s complaint. In particular, it is unclear which 23 allegations depend on the “no cost” aspect of Pro Solutions’ business practices. As described above, 24 California law indicates that that the distinction between “no cost” and “cost incurred” debt 25 collection models is consequential to a third-party vendor’s right to profit from collecting 26 homeowner debt. At oral argument, however, Hanson claimed that even if Pro Solutions did charge 27 HOAs for its collection fees, its actions would nonetheless violate the FDCPA (and, presumably, the 28 NO. CV 13-05377 RS ORDER 10 business practices that allegedly run afoul of federal and state law, it is unclear which allegations 3 hinge on the averment that Pro Solutions operates on a “no cost” basis. For example, in averring 4 that Pro Solutions “overcharges” homeowners for interest and late fees on delinquent accounts, does 5 Hanson contend that the Davis-Stirling Act would restrict even a “for cost” collector from levying 6 fees of the sort described in her complaint? (Compl. ¶ 31). Similarly, by claiming that Pro 7 Solutions “exacerbates” homeowners’ injuries by refusing to accept partial payments, levying 8 additional fees upon refusal, and using payments to defray vendor costs prior to satisfying the 9 overdue assessment in full, is it her position that these acts are unlawful regardless of Pro Solutions’ 10 “no cost” practices? To the extent Hanson contends that Pro Solutions’ acts would be impermissible 11 For the Northern District of California California UCL).11 Although Hanson’s complaint points to numerous aspects of Pro Solutions’ 2 United States District Court 1 even under a “cost incurred” model of the sort seen in Brown or Berryman, her underlying legal 12 theory is difficult to discern. 13 Because the complaint is insufficiently clear as to the distinct bases for Pro Solutions’ 14 alleged liability under the FDCPA and the California UCL (vis-à-vis the constraints imposed on the 15 HOA by the Davis-Stirling Act), it fails to put Pro Solutions on notice of the claims against it. See 16 Fed. R. Civ. P. 8. Accordingly, Pro Solutions’ motion to dismiss is granted in part with leave to 17 amend. If Hanson maintains that Pro Solutions’ conduct violates the law regardless of whether the 18 HOA incurs the vendor’s costs, she can attempt to enunciate each distinct theory of liability more 19 clearly in her amended complaint. V. CONCLUSION 20 For the aforementioned reasons, Pro Solutions’ motion to dismiss is GRANTED IN PART 21 22 with leave to amend. If Hanson wishes to lodge an amended complaint, she must do so within thirty 23 days. IT IS SO ORDERED. 24 25 Dated: 2/19/14 RICHARD SEEBORG 26 27 28 UNITED STATES DISTRICT JUDGE 11 Similarly, the proposed class definition apparently indicates that only some of Hanson’s claims are predicated upon Pro Solutions’ “no cost” collection practices. (Compl. ¶ 51). NO. CV 13-05377 RS ORDER 11

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?