Amelina et al v. Manufacturers and Traders Trust Company et al
Filing
76
ORDER Granting in Part and Denying in Part 68 Defendant M&T's Motion to Dismiss; Granting in Part and Denying in Part 67 Defendant Safeguard's Motion to Dismiss; and Granting 66 Defendant Wolf Law Firm's Motion to Dismiss. The Third Amended Complaint is dismissed with prejudice as to Defendant Wolf Law Firm. Signed by Judge William Q. Hayes on 7/21/16. (dlg)
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JUL 2 1 2016
CLERK US DiS-I fllC'TCOURT
SOUTHERN DISTRICT OF CALIFORNIA
BY
~AJ . \
DEPUTY
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UNITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF CALIFORNIA
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VICTORIA A. AMELINA, and
individual; and A.A.,D.S., and B.S.
each individuals and minors by and
through their Guardian Ad Litem,
Victoria A. Ame1ina, .
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CASE NO. 14cv1906-WQH-NLS
ORDER
Plaintiffs,
V.
MANUFACTURERS AND
TRADERS TRUST COMPANY aka
M&T BANK: SAFEGUARD
PROPERTIES, LLC; and THE WOLF
LAW FIRM, A Law Corporation,
17
Defendants.
18 HAYES, Judge:
19
The matters before the Court are (1) the Motion to Dismiss Plaintiffs Third
20
Amended Complaint (ECF No. 66) filed by Defendant The Wolf Law Firm ("Wolf'),
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(2) the Motion to Dismiss Plaintiff s Third Amended Complaint (ECF No. 67) filed by
22
Defendant Safeguard Properties, LLC ("Safeguard"), and (3) the Motion to Dismiss
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Plaintiff s Third Amended Complaint (ECF No. 68) filed byDefendant Manufacturers
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and Traders Trust Company aka M&T Bank ("M&T").
25
I. Background
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On August 13, 2014, Plaintiff Victoria Ame1ina and Plaintiffs A.A., D.S., and
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B.S., each minors by and through their Guardian Ad Litem, Victoria Amelina, initiated
28
this action by filing a Complaint in this Court. (ECF No.1). On October 30, 2014, the
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14cv1906·WQH-NLS
1- Court issued an Order granting the joint motion. for leave to file a First Amended
2 Complaint, and the proposed First Amended Complaint ("F AC")(ECFNo. 12) became
3 the operative pleading. (ECF No. 13).
-4
Ori March 12,2015, the Court granted Defendants' motions to dismiss (ECF
5 Nos. 18,20, 28). (ECF No. 35). The Court concluded thai Plaintiff's FAC failed to
6 allege sufficient facts to state a claim under the Fair Debt Collection Practices Act
7 ("FDCPA") against any of the Defendants.
8
On June 30, 2015, the Court issued an Order granting Plaintiffs' Motion for
9 Leave to File a Second Amended Complaint. (ECF No. 46). On June 30, 2015,
·10 Plaintiffs filed a Second Amended Complaint ("SAC"). (ECF No. 47).
11
On November 17, 2015, the Court granted Defendants' motions to dismiss (ECF
12 Nos. 48, 49, 50). (ECF No. 57). The Court concluded that Plaintiffs failed toallege
13 facts to show that the activities of Defendant Wolfor Defendant Safeguard constituted
14 debt collection under the FDCP A and therefore failed to state a federal claim against
15 Defendant Wolf or Defendant Safeguard. The Court concluded that the SAC did not
16 allege sufficient facts to establish that Defendant M&T's principal business purpose
17 was debt collection or that M&T regularly collects debts owed to another entity and
18 therefore failed to state a federal claim against M&T. The Court declined to exercise
19 supplemental jurisdiction over Plaintiffs' state law claims.
20
On February 3,2016, the Court issued an Order granting Plaintiffs' Motion for
21
Leave to File a Third Amended Complaint. (ECF No. 64). On February 3, 2016,
22 Plaintiffs filed the Third Amended Complaint ("TAC"), which is the operative pleading
23
24
in this case. (ECF No. 65).
On February 17, 20 16,Defendant Wolf filed amotion to dismiss the TAC. (ECF
25 No. 66). On February 22,2016, DefendantSafeguard filed a motion to dismiss the
26 TAC. (ECF No. 67). On February 22, 2016, Defendant M&T filed a motion to dismiss
27 the TAC (ECFNo. 68). On March 7, 2016, Plaintiffs filed an opposition to Defendant
28 Wolf's motion. (ECF No. 70). On March 14, 2016, Plaintiffs filed an oPPQsitionto
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14cv1906-WQH-NLS
1 Defendant Safeguard's motion. (ECF No. 72). On March 14, 2016, Plaintiffs also filed
2 an opposition to Defendant M&T's motion. (ECF No. 73). On March 14, 2016,
3 Defendant Wolf filed a reply. (ECF No. 71).
On March 18, 2016, Defendant
4 Safeguard filed a reply. (ECF no. 74). On March 21,2016, Defendant M&T filed a
5 reply. (ECF No. 75).
6 II. Allegations of the Complaint
7
"Plaintiff Victoria Amelina entered into an Adjustable Rate Note ("Note") and
8 Deed of Trust to purchase a home on April 23 , 2010 with RPM Mortgage Company for
9 Bank of America." Id.
~
66. "[O]n or about February 1,2013, Victoria defaulted on
10 the Note by failing to make payments ... and continued to remain in default ...." Id.
11
~
71. On April 19,2013 (77 days after the loan went into default), Bank of America
12 sent a Notice ofIntentto Accelerate and Foreclose to Plaintiff Victoria .... " Id.
13
~
73.
[O]n July 5, 2013 ... Bank of America informed Plaintiff Victoria that her loan was
14 in default, stating, 'The loan is in serious default because the required payments have
15
not been made.'" Id.
75.
On July 31, 2013 ... the alleged debt was assigned Placed, or otherwise
sequently assigned,
transferred, to Lakeview Loan Servicing wlio sub
placed, or otherwise transferred the debt to M&T Barik for collection.
Victona's Note was transferred ... along with apfroximately 24,000
other defaulted loans in the last few days of July 20 3.
16
17
18
19 Id.
~
76.
On or aboutJuly 25,2013, M&T Bank mailed a letter to Victoria .... The
letter eXfressed that "Bank of America will stop accepting payments on
August 2013'; and '[M&T Bank] will begin acceptmg payments from
rPlaintifij effectIve August 2, 2013. Please send all payments on or after
that date to [M&T Bank]."
20
21
22
23 Id.
24
~
~~
78-79. "On August 2, 2013, Defendant M&T Bank acquired Plaintiff Victoria's
defaulted loan ...." Id.
~
77.
25
"M&T Bank took on this defaulted residential mortgage in order to make a profit
26
.... This loan was one of the thousands ofloans that M&T Bank has acquired over the
27 years." Id.
28
~
22. "In the recent past, Defendant M&T Bank has collected thousands,
and perhaps hundreds ofthousands , ofthese defaulted consumer loans." Id. ~ 25. "The
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1 volume of consumer loans collected by M&T Bank is enormous, with more than
2 24,000 defaulted consumer loans originating in late July of20 13 alone from such banks
3 as Bank of America." Id.
~ 26.
"Defendant M&T Bank maintains an active collections
4 department that routinely collects on defaulted mortgage accounts." Id.
5
6
7
8
~
27.
Once defaulted loans are acquired ... M&T Bank begins its efforts to
collect on the defaulted loan by sending letters and imtiating telephone
calls on a monthly basis, if not daily. In nearly all corresponaence from
M&T Bank to Plaintiff Victoria, M&T BanK refers to Itself as a debt
collector and/or its efforts as an effort to collect on a debt ....
Id.~28.
"Defendant M&T Bank accepted for service Plaintiffs defaulted loan after
9 it was 182 days in default as defined by the mortgage note .... " Id.
~29.
"M&TBank
10
... regularly and directly collect[s] or attempt[s] to collect debts asserted to be owed
11
or due to another by purchasing and or accepting for collection defaulted residential
12 loans in bulk and subsequently collecting on those loans in their effort to collect from
13 their collection practices." Id.
~
31. "[I]n its effort to collect from Plaintiff this
14 . defaulted personal loan for this California residential property, M&T Bank hired ...
15 Defendant Wolf Law Firm, because it specializes in such defaulted debts." Id.
~
36.
16 "Subsequently ... Wolf hired another Company that specializes in assisting debt
17 collection law firms like Wolf in the collection of these types of defaulted residential
18 loans. This company is Defendant Safeguard Properties, LLC." Id.
19
~
46.
"Plaintiff began receiving collection letters from M&T Bank." Id.
~
80. An
20
"August 14, 2013 letter, stated, in part: 1) M&T Bank was now servicing Victoria's
21
mortgage; 2) The amount of debt in connection with the mortgage was '$236,704.14';
22 3) Pursuant to the FDCP A, Victoria had thirty days to dispute the amount of debt and
23
request a verification ofthe alleged debt; and 4) The name of the creditor to whom the
24
debt was owed to was a company called 'Lakeview Loan Servicing.' ...." Id.
25
~
82.
"Twenty-three days later, on September 9, 2013, Victoria disputed the debt, in
26 writing, with M&T Bank ...." Id.
~
88. "M&T Bank was now required to cease
27 collection of the debt until it obtained verification of the debt and produced that
28
verification to Victoria, in writing." Id.
~
89. "Notwithstanding this fact, M&T Bank
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1 thereafter continued to collect on the alleged debt without verification_" Id
~
90.
2 "[F]rom September 17, 2013 through February 5, 2014, M&T Bank: sent multiple
3 collection letters to Victoria, each time demanding payment ...." Id.
~
91. "Some of
4 these letters were dated the same date as each other and were delivered to Victoria all
5 at once, the natural consequence of which was to harass, oppress, or abuse ...." Id.
6
~
93. "M&T Bank never provided Victoria with the notice required by Cal. Civ. Code
7 § 1812.700 .... " Id.
~
94. "[E]ach ofthese collection letters demanded an amount in
8 excess of what Plaintiff owed; set conflicting deadlines for payment; and threatened
9 imminent foreclosure." Id.
~
95. "M&T Bank initiated this onslaught ofletters as to
10 Plaintiff Victoria in an effort to abusively mislead and coerce her into paying more than
11
was actually owed to M&T Bank." Id.
~
97. "M&T refused to provide validation or
12 fully explain who 'Lakeview Loan Servicing' was ...." Id.
13
~
98.
"Subsequently, at the instruction ofM&T Bank, Safeguard Properties, LLC sent
14 Victoria a pink: postcard ...." Id.
~
99. "The purpose of this communication with
15 Victoria was to convey information regarding a debt directly or indirectly to Victoria,
16 specifically, the name and telephone number ofM&T Bank to encourage Victoria to
17 contact M&T Bank: so that M&T Bank: could collect the debt alleged to be owed ...
18
." Id.
19
~
~
103. "Victoria was startled, confused, and embarrassed by this postcard." Id.
111. "[I]nviting a mortgager to contact M&T Bank: has nothing to do with securing
20 the property. This is Safeguard's attempt to facilitate communication between Victoria
21
22
and M&T Bank: to aid M&T Bank: in collection of an alleged debt." Id.
~
114.
"Safeguard advertises field services that it provides to its clients, and among
23 these services are communicating with delinquent borrowers on behalf of mortgage
24 companies, contacting mortgagors to request they call mortgage companies, and
25 reporting back to mortgage companies whether it has made contact with mortgagers
26 and regarding the condition of the mortgaged properties." Id.
~
54. "Defendant
27
Safeguard offers such services to its mortgage companies clients for the purpose of
28
facilitating debt collection, directly and indirectly." Id.
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~
55. "Defendant Safeguard
14cv1906-WQH-NLS
1 ... advertises to its customers that it has been involved in lobbying efforts in Congress
2 to exempt companies like Safeguard from being regulated by the FDCPA, thereby
3 acknowledging that it is a debt collector under the FDCPA." Id.
'If 56. "Defendant
4 Safeguard, on its website, also offers its services to assist creditor and collectors such
5 as M&T Bank to make personal visits in an attempt to facilitate the consumer to
6 contact the creditor in an effort to get the consumer to pay on the alleged debt." Id.
'If
7 57. "Defendant Safeguard instructs its employees to not use language such as 'debt'
8 and 'collection,' in order to evade being characterized as a debt collector, despite
9 facilitating and aiding its client with debt collection being the main objection of its
10 operation." Id.
'If 58. "Defendant Safeguard routinely takes the actions alleged herein
11 to collect alleged debt and enforce security interest from consumers across the United
12 States." Id.
'If 62. "Defendant Safeguard, in its regular practice, intimidated and
13 invaded Plaintiffs' privacy in an attempt to secure property from Plaintiffs or in the
14 alternative aid M&T Bank to collect money and property from Plaintiffs by facilitating
15 communications between Plaintiffs and M&T Bank." Id.
16
'If 63.
"On January 4, 2014, Safeguard, at the instruction ofM&T Bank, sent an agent
17 to Plaintiffs' home (hereinafter, 'the intruder')." Id.
'If 115. "At the instruction of
18 Safeguard and M&T Bank, the intruder attempted to physically enter the home of
19 Victoria and her minor children." Id.
'If 116. "Victoria was not home ... however, her
20 children, A.A.; D.S.; and B.S., who were nine, twelve, and seventeen years of age,
21 respectively, were at home." Id.
'If 117. "Because the intruder attempted to enter the
22 home ... without the authorization or permission of any occupants ... attempting to
23 forcibly enter the home through a locked door, A.A., Victoria's nine year-old daughter
24 became terrified." Id.
25 agent." Id.
'If 119. "A.A., a child, refused to open the door to M&T Bank's
'If 121. "The intruder then continued to batter on the door with more force
26 and eventually told A.A. that if she did not open the door immediately, her parents
27 would 'be in big trouble.'" Id.
'If 122. "B.S., who has a deep voice that people expect
28 a very large imposing adult to possess, inquired as to the identity ofthe intruder." Id.
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14cv1906-WQH-NLS
1
~
125_ "Ifnotfor B.S ____ the intruder would not have been deterred from his objective
2 of entering the property and frightening the family_" Id
~
126_ "Victoria returned
3 home shortly thereafter and found that the children were in shock due to the intruder's
4 actions_" Id
5 speak" Id
~
~
127 _ "A_A was particularly traumatized by this incident, and unable to
128_ "AA was also having difficulty breathing due to the anxiety and
6 stress caused by the intruder_" Id
~
129_ "AA_ stated to Victoria that she feared for
7 her safety, and the safety of her parents ____ " Id
8
~
130_
"Defendant Safeguard routinely takes actions above and beyond what would be
9 reasonable behavior to secure property, by abusing and harassing alleged debtors like
10 Plaintiffs in an effort to intimidate them into paying their debts_" Id
11
~
134_ "Through
these actions, Defendant Safeguard at the instruction and assistance of M&T Bank,
12 intended and took efforts to effect dispossession and disablement of Plaintiffs ' property
13 ____ " Id ~ 135_
14
"[O]n January 28,2014, M&TBank sent another letter to Victoria, in an attempt
15 to collect a debt, still without verifying the alleged debt" Id
~
136_ "Through this
16 conduct, M&T Bank engaged in conduct the natural consequence of which was to
17 harass, oppress, or abuse ____ " Id
18
~
137_ "This letter stated, in part, that Victoria's
'mortgage documents have been forwarded to our attorney's office for foreclosure
19 proceedings' and that '[a]ll communications concerning the mortgage must now be
20 directed to:' Wolf Law Firm ____ " Id
21
~
138_
"Wolf identifies itself as a debt collector in correspondence to consumers_" Id
22
~
23
maintains a separate contact fax and email address for the Collections Department"
41. "Defendant Wolf advertises itself on its website as a collection firm and even
24 Id ~ 42_ "Wolf advertises itself as being a law firm that has, for over twenty-five years,
25 regularly 'provided _ _ _ cradle-to-grave services' that include 'Collection,
26 Replevin/Claim and Delivery,' all regulated debt collection practices under the FDCPA
27 and California's Rosenthal Act" Id
~
43_ "Defendant Wolfis a law firm who sought
28 the collection of money and property from Plaintiffs ____ " Id 45_
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14cv1906-WQH-NLS
1
"[O]n January 30, 2014, M&T Bank sent two more letters to Victoria, stating
2 that the foreclosure process has begun but Victoria still had alternatives if she
3 contacted M&T Bank, even though Victoria had previously been told not to contact
4 M&T Bank but contact only Wolf Law Firm." ld. , 142. "In reality, M&T Bank had
5 not begun foreclosure proceedings, and was using this false, deceptive, or misleading
6 representations or means in connection with the collection of a debt to coerce payment
7 from Victoria ...." ld. , 143.
8
"On April 28, 2014, the Wolf Law Firm sent Victoria ten (10) identical packets,
9 five (5) by certified mail, and five (5) by regular mail, each addressed to Plaintiff
10 Victoria at her residential address. Victoria received all of these packets at once a few
11 days later." ld. , 145. "Each of these packets included the following enclosures: 1)
12 'NOTICE UNDER THE FAIR DEBT COLLECTION PRACTICES ACT,' 2) a letter
13 explaining that the non-judicial foreclosure process had begun, and 3) recorded Notice
14 of Default and election to sell under deed of trust." ld. , 146. "The Notice under the
15 FDCPA provided all of the required notices under the FDCPA for an initial
16 communication and explained that a foreclosure could be stopped ifthe default has
17 been cured." ld. , 147. "While the recorded documents were required to be sent as the
18 trustee under California Foreclosure laws, the other two letters included in each ofthe
19 ten (10) packets, were solely for the purpose of encouraging Plaintiff Victoria to pay
20 the defaulted debt and outside the scope of a protected foreclosure trustee activities."
21 ld., 148. "In response, Victoria sent the Wolf Law Firm a request for validation
22 within 30 days of receiving Wolf s April 28, 2014 letters, just as she had previously
23 done with M&T Bank." ld. ,152.
24
"[O]n or aboutJuly of2014 Wolf. .. sent ten (10) more copies ofanotherletter
25 dated July 22, 2014 .... " ld. , 153. "These letters failed to provide Victoria with
26 validation of the debt in violation of the FDCPA and California's Rosenthal Act." ld.
27 , 156. "[O]nce Wolf recorded a Notice of Trustee Sale, Wolf mailed an additional
28 twenty-two (22) copies to Plaintiff of the Notice ... each addressed to Plaintiff Victoria
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1 at her residential address." Id.
~
158. Each of the letters sent by Defendant Wolf
2 "urged Plaintiff Victoria Amelina to pay the alleged debt or suffer the consequences
3 offoreclosure." Id.
~
161. "The purpose of sending all of these letters from a law firm
4 was to intimidate and embarrass Victoria and her family and to alert third parties that
5 Victoria had legal problems." Id.
6
~
157.
"On at least two other occasions, Plaintiffs and Plaintiffs' family noticed
7 strangers conducting surveillance on Plaintiffs home, which included again trying to
8 open Plaintiffs entrance door, looking through windows, and taking pictures of the
9 outside and inside of Plaintiffs home (through the windows)." Id.
~
164. "[T]hese
10 visits by Safeguard, at the instruction ofM&T Bank, were intimidation attempts which
11
Safeguard and M&T Bank try to justify by stating that the intrusions are simply efforts
12 to secure the property." Id.
13
~
166.
"Shortly thereafter, Victoria began noticing that M&T Bank was charging her
14 for 'Home Inspections' on her monthly mortgage statements. The dates referenced for
15 the 'Home Inspection' entries ... were consistent with the dates when Plaintiffs and
16 Plaintiffs' family noticed strangers conducting surveillance ...." Id.
~
167. "By
17 demanding payment for 'Home Inspections,' M&T Bank was collecting an amount.
18 .. when such amount was not expressly authorized by the agreement creating the debt
19 or permitted by law." Id.
~
170.
20
"As a result of M&T Bank and Safeguard's illegal behavior, Plaintiffs and
21
Plaintiffs' family have not felt safe in their home for months, and are in constant fear
22 for their physical safety as well as having to endure the mental anguish that such
23
conduct brings." Id.
~
171. "Victoria is experiencing intense anxiety, and has
24 difficulty sleeping at night, causing her to be drowsy and lethargic." Id.
~
174. "As a
25 result ofM&T Bank and Safeguard's relentless collection tactics Victoria has been
26 diagnosed with severe depression an anxiety and has been prescribed anti-depressant
27 medication." Id.
~
176. "Moreover, Defendants have continued sending collection
28 letters to Victoria, which aggravates Victoria's stress, anxiety, and depression. To
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1 mitigate these feelings, Victoria only checks her mail once a week, so as not to deal
2 with Defendants' harassing letters on a daily basis." Id.
3
~
178.
Plaintiffs assert five claims, including (1) violation ofthe Fair Debt Collection
4 Practices Act ("FDCPA"), 15 US.C. §§ 1692 et seq. against all Defendants; (2)
5 violation ofthe Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code § § 17886 1788.32 against all Defendants; (3) negligent infliction of emotional distress against
7 Defendants M&T and Safeguard; (4) intentional infliction of emotional distress against
8 Defendants M&T and Safeguard; and (5) invasion of privacy against Defendants M&T
9 and Safeguard.
10 III. Legal Standard
11
Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state
12 a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Federal Rule of
13 Civil Procedure 8(a) provides that "[a] pleading that states a claim for relief must
14 contain ... a short and plain statement ofthe claim showing that the pleader is entitled
15 to relief." Fed. R. Civ. P. 8(a)(2). Dismissal under Rule 12(b)(6) is appropriate where
16 the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable
17 legal theory. SeeBalistreriv. PacificaPoliceDep 't, 901 F.2d 696,699 (9thCir. 1990).
18
"[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief'
19 requires more than labels and conclusions, and a formulaic recitation of the elements
20 of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 US. 544, 555 (2007)
21
(quoting Fed. R. Civ. P. 8(a)). When considering a motion to dismiss, a court must
22 accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, 556 US. 662,
23
679 (2009). However, a court is not "required to accept as true allegations that are
24 merely conclusory, unwarranted deductions of fact, or unreasonable inferences."
25 Sprewell v. Golden State Warriors, 266 F.3d 979,988 (9th Cir. 2001). "In sum, for a
26 complaint to survive a motion to dismiss, the non-conclusory factual content, and
27 reasonable inferences from that content, must be plausibly suggestive of a claim
28 entitling the plaintiffto relief." Moss v. Us. Secret Service, 572 F.3d 962, 969 (9th
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14cv1906-WQH-NLS
1 Cir. 2009) (internal quotation marks omitted).
2 IV. Judicial Notice
3
"As a general rule, a district court may not consider any material beyond the
4 pleadings in ruling on a Rule 12(b)(6) motion." Lee v. City afLos Angeles, 250 F.3d
5 668, 688 (9th Cir. 2001). However, there are "two exceptions to the requirement that
6 consideration of extrinsic evidence converts a 12(b)(6) motion to a summary judgment
7 motion." !d. First, Federal Rule of Evidence 201 provides that "[t]he court may
8 judicially notice a fact that is not subject to reasonable dispute because it . .. is
9 generally known within the trial court's territorial jurisdiction; or ... can be accurately
10 and readily determined from sources whose accuracy cannot reasonably be
11
questioned." Fed R. Evid. 201(b). Second, under the doctrine of incorporation by
12 reference, "[a] district court ruling on a motion to dismiss may consider documents
13
whose contents are alleged in a complaint and whose authenticity no party questions,
14 but which are not physically attached to the plaintiff's pleadings." Parrino v. FHP,
15 Inc., 146 F.3d 699,705 (9th Cir. 1998) (internal quotation marks omitted).
16
Defendant M&T and Defendant Wolf Law Firm request judicial notice of
17 various documents related to the ownership and transfer of PlaintiffVictoria Amelina's
18 mortgage loan. Many of these documents have been attached to the TAC by Plaintiffs.
19 Defendant Safeguard requests judicial notice of two court cases otherwise available to
20 the Court. The Court denies the requests for judicial notice because the documents
21
requested to be noticed are unnecessary for the resolution ofthe motions to dismiss.
22 See, e.g., Asvesta v. Petrautsas, 580 F.3d 1000, 1010 n. 12 (9th Cir. 2009) (denying
23 request for judicial notice where judicial notice would be "unnecessary").
24 V. Analysis
25
A.FDCPA
26
The FDCPA prohibits debt collectors from engaging in abusive, deceptive, and
27 unfair practices in the collection of consumer debts. See 15 U.S.c. § 1692. To state
28 a claim under the FDCPA, a plaintiff must allege facts that establish that
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1
2
3
(1) the plaintiff has been the object of collection activity arising from a
consumer debt; ~2) the defendant attempting to collect a aebt qualifies as
a 'debt collector under the FDCPA; and (3) the defendant has engaged
in a Jlrohibited act or has failed to perform a requirement imposed 5y the
FDCPA.
4 Pratap v. Wells Fargo Bank, NA., 63 F. Supp. 3d 1101, 1113 (N.D. Cal. 2014)
5 (quoting Gomez v. Wells Fargo Home Mortg., 2011 WL 5834949, at *5 (N.D. Cal.
6 Nov. 21, 2011».
7
"The term 'debt collector' means any person who uses any instrumentality of
8 interstate commerce or the mails in any business the principal purpose of which is the
9 collection of any debts, or who regularly collects, or attempts to collect, directly or
10 indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. §
11
1692a(6). The complaint must plead "factual content that allows the court to draw the
12 reasonable inference" that Defendants are "debt collectors." Schlegel v. Wells Fargo
13 Bank, NA., 720 F.3d 1204, 1208 (9th Cir. 2013) (finding that the complaint "fails to
14 provide any factual basis from which we could possibly infer that the principal purpose
15 of Wells Fargo's business is the collection of debt. Rather, the complaint's factual
16 matter, viewed in a light most favorable to the Schlegels, establishes only that debt
17 collection is some part of Wells Fargo's business, which is insufficient to state a claim
18 under the FDCP A.").
19
1. M&T
20
Defendant M&T contends that the Court should dismiss Plaintiffs' claims
21
against M&T because the TAC continues to fail to make sufficient allegations that
22 M&T qualifies as a "debt collector" under the FDCPA. M&T contends that it is not
23
a "debt collector" because it is the servicer of the loan and its principal purpose of
24 business is not debt collection. M&T contends that its actions did not constitute "debt
25 collection" activities under the FDCP A. M&T contends that the minor Plaintiffs do not
26 have standing to bring a claim under the FDCPA.
27
Plaintiffs contend that they have sufficiently alleged facts to show that M&T is
28 a "debt collector" who regularly collects on defaulted debts after acquiring them in
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1 default status. Plaintiffs contend that M&T Bank does not qualifY as a loan servicer,
2 exempted from the FDCPA definition of "debt collector," because Plaintiff Victoria
3 Amelina's debt was in default for at least six months before it was acquired by
4 Lakeview Loan Servicing or M&T Bank. Plaintiffs contend that the letters M&T Bank
5 sent to Plaintiff Victoria Amelina constitute debt collection activity under the FDCP A
6 because each letter notified Plaintiff that M&T Bank was a debt collector and because
7 letters sent during the foreclosure process but not necessary to the foreclosure qualifY
8 as debt collection. Plaintiffs contend that all Plaintiffs have standing to bring FDCP A
9 claims because M&T engaged in efforts to collect property from the family and in
10 doing so, it engaged in conduct that harassed, oppressed, and/or abused all Plaintiffs.
11
12
a. "Debt Collector" Under the FDCPA
In order to fall within the definition of "debt collector," Plaintiff's TAC must
13 provide a factual basis from which the Court could plausibly infer that (1) the principal
14 purpose of Defendant M&T's business is the collection of debt, or (2) that defendant
15 M&T regularly collects debts owed or due another. See Schlegel, 720 F.3d at 1208.
16 The "FDCPA's definition of debt collector 'does not include the consumer's creditors,
17 a mortgage servicing company, or any assignee ofthe debt, so long as the debt was not
18 in default at the time it was assigned.'" Nool v. HomeQ Servicing, 653 F. Supp. 2d
19
1047,1052 (ED. Cal. 2009) (quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208
20 (5th Cir. 1985)). "In applying the FDCPA, courts have repeatedly distinguished
21
between a debt that is in default and debt that is merely outstanding, emphasizing that
22 only after some period of time does an outstanding debt go into default." Alibrandi v.
23 Financial Outsourcing Services, Inc., 333 F.3d 82,86 (2d Cir. 2003) (internal citations
24 and quotations omitted).
25
In the Order dismissing the SAC, the Court stated,
26
Whether Defendant M&T is outside the definition of debt collector under
the FDCPA because ofM&T's status as a mortgage servicer depends on
whether Plaintiff Victoria Amelina's loan was III default at the time
Lakeview Loan Servicing acquired the loan and hired M&T Bank to
service it. ... Plaintiffs provide no facts to support the allegation that
Plaintiff's mortgage was III "default" under the meaning of the FDCPA .
27
28
·13·
14cv1906·WQH·NLS
1
... Because the facts alleged in the SAC cannot support an inference that
the debt was in default at the time M&T began servicing it, M&T
gualifies as a mortgage servicer under the FDCPA. A mortgage servicer
is not a debt collector under the FDCPA.
2
3
4
5
6
7
8
9
10
(ECF No. 57 at 12-13).
The TAC alleges that Plaintiff Victoria Amelina's loan had been in default for
at least 180 days at the time it was acquired by Lakeview Loan Servicing and M&T
Bank was hired to collect on the loan. Under the facts alleged in the TAC, Defendant
M&T Bank does not qualify as a mortgage servicer under the FDCPA.
The TAC alleges that "Lakeview Loan Servicing purchased [Plaintiff Victoria
Amelina' s] defaulted home loan and quickly retained M&T Bank ... for the purposes
of collection ...." (TAC
~
21). The TAC alleges that "M&T Bank took on this
11
defaulted residential mortgage in order to make a profit by collecting on this now
12
13
14
15
16
defaulted loan. This loan was one ofthousands ofloans that M&T Bank has acquired
over the years." Id.
~
23. The TAC alleges that,
In the recent past, Defendant M&T Bank has collected thousands, and
perhaps hundieds ofthousands of these defaulted consumer loans. The
volume of consumer loans coliected by M&T Bank is enormous, with
more than 24,000 defaulted consumer loans originating in late July of
2013 alone from such banks as Bank of America.
18
20
21
22
23
24
25
26
27
28
22. The TAC alleges that "M&T Bank is in the business of
regularly collecting on, among other things, defaulted residential loans, for profit." Id.
17
19
~
Id.
~~
25-26. The TAC alleges that "Defendant M&T Bank maintains an active
collections department that routinely collects on defaulted mortgage accounts." Id.
~
27. The TAC alleges that once M&T acquires the defaulted loans, it "begins its efforts
to collect on the defaulted loan by sending letters and initiating telephone calls on a
monthly basis" in which "M&T refers to itself as a debt collector and/or its efforts as
an effort to collect on a debt." Id.
~ 28.
The TAC alleges that "M&T Bank is a creditor
who demanded money and property from Plaintiffs ...." Id.
~
30. Plaintiffs have
alleged sufficient allegations to support an inference that the principal business purpose
ofM&T Bank is the collection of debt. Plaintiffs have sufficiently alleged that M&T
Bank is a debt collector under the FDCPA.
- 14 -
14cvI906-WQH-NLS
1
b. Debt Collection Activity and FDCPA Violation
2
The TAC alleges that the August 14, 2013 letter M&T mailed to Plaintiff
3 Victoria Arnelina informed her that M&T was servicing her loan, stated the amount of
4 debt owed, gave her thirty days to dispute the debt or request verification, and informed
5 her that the debt was owed to Lakeview Loan Servicing. (TAC
~
82). The TAC
6 alleges that within thirty days of receiving the letter, Plaintiff Victoria Arne1ina
7 disputed the debt in writing. Id.
~
88. Plaintiffs assert that M&T violated the FDCPA
8 by continuing to send letters to Plaintiff Victoria Arnelina to collect the debt without
9 providing verification of the debt to Plaintiff Victoria Amelina.
10
Under 15 U.S.C. 1692g(b),
11
Ifthe consumer notifies the debt collector in writing within the thirty-day
period described in subsection (a) ofthis section that the debt, or any
portion thereof, is disputed or that the consumer requests the name ana
address of the original creditor, the debt collector sliall cease collection
of the debt, or any disputed portion thereof, until the debt collector
obtains verification of tlie debt or a copy of a judlS.ment or the name and
address of the original creditor, and a copy' 01' sucn verification or
judgment, or mime and address of the original creditor is mailed to the
consumer by the debt collector.
12
13
14
15
16
17
15 U.S.C. § 1692g(b).
The TAC alleges that M&T conducted non-foreclosure related debt collection
18 activities that are subject to regulation under the FDCPA. See ECF No. 65-1. The
19 TAC alleges sufficient facts to support an inference that Defendant M&T was engaged
20 in debt collection activities and is subject to liability for failing to comply with the
21
22
23
requirements of the FDCPA pursuant to 15 U.S.C. 1692g(b).
c. Standing of Minor Plaintiffs
Defendant M&T contends that the minor Plaintiffs do not have standing to bring
24 a claim under the FDCPA because the FDCP A provides a private right of action only
25 to those obligated to pay a debt, and here, only Plaintiff Victoria Amelina was
26 obligated to pay the debt. Plaintiffs contend that all Plaintiffs have standing to bring
27 claims under the FDCPA because each of the Plaintiffs were subjected to M&T Bank's
28
efforts to collect money from Plaintiff Victoria Arnelina and property from the family.
- 15 -
14cv1906-WQH-NLS
1 Plaintiffs contend that Defendant M&T sent agents to Plaintiffs' home to harass and
2 induce Plaintiffs to payor vacate the property.
3
The FDCPA provides that "[ a] debt collector may not engage in any conduct the
4 natural consequence of which is to harass, oppress, or abuse any person in connection
5 with the collection of a debt." 15 U.S.C. § 1692d (emphasis added). The FDCPA also
6 provides that "any debt collector who fails to comply with any provision of this
7 subchapter with respect to any person is liable to such person." 15 U.S.C. § 1692k
8 (emphasis added). Persons subjected to abusive debt collection by a debt collector who
9 was attempting to collect a debt from another person may bring an action against the
10 debt collector under sections ofthe FDCP A not specifically limited to consumers. See
11
Wright v. Finance Service of Norwalk, Inc., 22 F.3d 647,649-50 (6th Cir. 1994)
12 ("[A]bsent a limitation in the substantive provisions, the ordinary and common
13 understanding of § 1692k is that any aggrieved party may bring an action under
14 § 1692e .... [T]he purpose of the FDCPA and the legislative history of the act also
15 support this conclusion."); Eleyv. Evans, 476 F. Supp. 2d 531,532-33 (E.D. Va. 2007)
16 (finding that "any aggrieved party may bring an action under the FDCPA" and
17 therefore the plaintiff who was not the consumer-debtor had standing to sue under 15
18 U.S.C. §§ 1692d, 1692e, and 1692f). Many courts have found that "any person who
19 comes in contact with the proscribed debt collection practices may bring a claim under
20 certain sections ofthe FDCPA." Sibereskyv. Borah, Goldstein, Altschuler & Schwartz,
21
P.C., No. 99 ClV. 3227 (JGK), 2000 WL 1448635, at *4 (S.D.N.Y. Sept. 28, 2000).
22 However, in order for a non-consumer to have standing under the FDCPA, the alleged
23
debt collection activities must have been directed at the plaintiff. See Mathis
V.
24 Omnium Worldwide, No. Civ. 04-1614-AA, 2005 WL 3159663, at *3 (D. Or. Nov. 27,
25
2005) (the FDCPA "does not limit causes of actions to those brought by a 'consumer,'
26
so long as the alleged conduct was directed at the plaintiff'); Dewey
V.
Assoc.
27 Collectors,Inc., 927 F. Supp. 1172, 1174 (W.D. Wis. 1996)(Congress "did not intend
28 to provide damages to those who did not experience any abusive behavior").
- 16 -
14cv1906·WQH-NLS
1
Taking the allegations as true that Defendant M&T instructed Safeguard to send
2 an agent to Plaintiffs' property and enter the Plaintiffs' home without knocking or
3 introducing himse1fwhile minor Plaintiffs were inside, the Court finds that the TAC
4 alleges sufficient facts to show that debt collection activities by Defendant M&T were
5 directed at Plaintiffs A.A., B.S., and D.S. The Court concludes that based on the
6 allegations of the TAC, all Plaintiffs have standing to bring an FDCPA claim against
7 Defendant M&T. M&T's motion to dismiss the FDCPA claim is denied.
8
9
2. Safeguard
Safeguard contends that the TAC adds no substantive allegations against
10 Safeguard and the Court has previously found the allegations to be insufficient to state
11
an FDCPA claim against Safeguard. Safeguard contends that Plaintiffs have not
12 alleged that the agent Safeguard sent to Plaintiffs' home made any mention of a debt.
13
Safeguard contends that Safeguard's business includes verifying residential occupancy,
14 not debt collection, and Plaintiffs have not added any factual allegations to support
15 their claims that Safeguard engages in debt collection activity.
16
Plaintiffs contend that generalized allegations about Safeguard entering
17 properties that are collateral for loans and physically intimidating the residents of the
18 properties are sufficient to infer that Safeguard is regularly involved in debt collection.
19 Plaintiffs contend that the only purpose of Safeguard mailing a postcard to Plaintiffs
20 or sending an agent to Plaintiffs' residence was to harass and abuse Plaintiffs in an
21
effort to coerce Plaintiff Victoria Amelina to payor vacate the property.
22
The TAC alleges that "Safeguard Properties, LLC sent Victoria a pink postcard
23
... for the purposes of conveying information regarding a debt directly or indirectly
24 to Victoria, and was also for the purpose of collecting this alleged debt." (TAC ~~ 99,
25
101). The TAC alleges that the postcard stated that "Safeguard Properties, LLC is
26 conducting a monthly audit on behalf ofM&T Bank in order to verify the occupancy
27 of your property. Please contact our Special Operator ... to confirm only that you are
28 presently residing at this property." Id.
~
102. The postcard also informed Plaintiff
- 17 -
14cv1906-WQH-NLS
1 Victoria Amelina that she was "entitled to contact M&T Bank regarding a face to face
2 interview at our Buffalo NY Office ...." Id. The TAC alleges that "The purpose of
3 this communication . . . was to convey information regarding a debt directly or
4 indirectly to Victoria, specifically, the name and telephone number ofM&T Bank: to
5 encourage Victoria to contact M&T Bank so that M&T Bank could collect the debt
6 alleged to be owed ...." Id.
~
103. The TAC alleges that "this postcard was intended
7 to intimidate Victoria into payment of money to M&T Bank: or vacate the property at
8 which point Safeguard would then possess the property." Id.
~
105. The TAC alleges
9 that "Safeguard had no other purpose to leave such a postcard other than to facilitate
10 M&T's efforts to collect on the alleged debt." Id.
11
~
106. The TAC alleges that
Safeguard aids other debt collectors by entering properties of debtors in order to
12 intimidate the residents into paying their debts and that Safeguard did this to Plaintiffs
13 at the instruction ofM&T Bank. The TAC alleges that "Safeguard, at the instruction
14 ofM&T Bank, sent an agentto Plaintiffs' home" and "[ a]tthe instruction of Safeguard
15 and M&T bank:, the intruder attempted to physically enter the home of Victoria and her
16 minor children." Id.
~~
115-16. The TAC alleges that Safeguard's agent told Plaintiff
17 A.A. "that if she did not open the door to the intruder, her parents would be in 'big
18 trouble.' Id.
~
130. The TAC alleges that Safeguard conducted "surveillance on
19 Plaintiffs home, which included ... trying to open Plaintiffs' entrance door, looking
20 through windows, and taking pictures of the outside and inside of Plaintiffs' home
21
22
(through the windows)." Id.
~
164.
The Court has found that the allegations in the TAC are sufficient to show that
23 Defendant M&T was a debt collector attempting to collect a debt from Plaintiff
24 Victoria Amelina. The Court also finds that the TAC alleges sufficient facts to show
25 that Safeguard was hired by M&T and was acting as an agent of Defendant M&T in
26 furtherance of M&T's attempt to collect a debt. Because the TAC alleges that
27 Safeguard was acting as an agent ofa debt collector in furtherance ofM&T's attempt
28 to collect a debt from Plaintiff Victoria Amelina, Plaintiffs' allegations that Safeguard,
- 18 -
14cv1906·WQH·NLS
1 at the instruction ofM&T Bank, sent an intruder to Plaintiffs' property who attempted
2 to enter Plaintiffs' home and took photographs of Plaintiffs' home outside and through
3 the windows is sufficient to state a cause of action against Defendant Safeguard under
4 the FDCPA. The Court has concluded that the TAC alleges sufficient facts to show
5 that debt collection activities were directed at all Plaintiffs and all Plaintiffs have
6 standing to sue under the FDCPA. Safeguard's motion to dismiss the FDCPA claim
7 is denied.
3. The Wolf Law Firm
8
9
Defendant Wolf contends that the non-judicial foreclosure activities it engaged
10 in do not qualify as debt collection under 15 U.S.C. § 1692a(6). Wolf contends that
11
generic allegations that Wolf"is acting as a debt collector and attempting to collect a
12 debt" are not sufficient to survive a motion to dismiss. Wolf contends that Plaintiffs
13
fail to allege sufficient facts to support an inference that Wolfs principal business
14 purpose is to conduct itself as a debt collector or that Wolf acted as a debt collector
15
16
outside of its obligations as the foreclosure trustee.
Plaintiffs contend that Defendant Wolfs principal purpose is the collection of
17 debts due to another and that Wolf regularly collects on defaulted consumer debts.
18 Plaintiffs contend that the collection letters sent by Wolf during the foreclosure process
19 but not necessary to the foreclosure qualify as debt collection activities. Plaintiffs
20
contend that Wolf is liable for violating the FDCPA because it went beyond the
21
statutorily mandated communications related to foreclosure by sending collection
22
letters not related to foreclosure and by sending up to twenty-two copies of several
23
letters.
24
In the Order dismissing the SAC, the Court stated,
25
To the extent that the SAC alleges that Defendant Wolf Law Firm sent
copies of the Notice of Trustee Sale, activity related to notJ.judicial
foreclosure does not constitute debt collection under the FDCPA. See
Pratap, 63 F. SUpJl. 3d at 1114 ('[T]he overwhelming majority of courts
within the Ninth Circuit have concluded that nol!iudicial foreclosures do
not constitute debt collection under the FDCPA' ) ....
26
27
28
(ECF No. 57 at 19). Regarding the multiple copies of letters that Defendant Wolf
- 19 -
14cv1906-WQH-NLS
1 mailed to Plaintiffs, the Court stated,
2
Plaintiff ... does not provide the content ofthe letters or allege facts to
show that the letters outside the scope of nonjudicial foreclosure duties.
Plaintiff has not alleged facts sufficient to show that these letters
constituted debt collection under the FDCPA. See Natividad v. Wells
FarKoBank, NA. No. 3:12-cv-03646, 2013 WL 2299601, at *9 (N.D.
Cal.~ay 24) 2013) (''given the absence of any factual allegations beyond
the concluslOn that Defendants 'sought to collect' money and funds,
Plaintiffs have failed to allege facts that suggest [Defendants] were
collecting a debt or otherwise qualify: as 'debt collectors' under the Act").
PlaintiffIias not sufficiently alleged that sending multiple copies ofletters
and the Notice of Trustee Sale went beyond the statutorily required duties
of a foreclosure trustee. See id. . . . Because the Plaintiff did not
sufficiently allege facts to show that the activities of Defendant Wolf Law
Firm constitutea debt collection activity under the FDCPA, the Court
finds that Plaintiff failed to state a claim under the FDCPA against
Defendant Wolf Law Firm.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Id. at 20.
The TAC alleges that "M&T Bank retained ... Wolf Law Firm, because it
specializes in collecting on such defaulted debts." (TAC ~ 36). The TAC alleges that
"Defendant Wolf identifies itself as a debt collector in correspondence to consumers."
Id.
~
41. The TAC alleges that "Wolf advertises itself on its website as a collection
firm and even maintains a separate contact fax and email address for the Collections
Department." Id.
~
42. The TAC alleges that "Wolf is a law firm who sought the
collection of money and property from Plaintiffs and is therefore a debt collector under
the FDCPA .... " Id.
~
45. The TAC alleges that on April 28, 2014, Wolf sent
Plaintiff Victoria Amelina a packet offorms containing the following: "1) NOTICE
UNDER THE FAIR DEBT COLLECTION PRACTICES ACT", 2) a letter explaining
that the non-judicial foreclosure process had begun, and 3) recorded Notice of Default
and election to sell under deed of trust." Id.
~
146.
Attached to the TAC is the "Notice of Fair Debt Collection Practices Act" dated
April 28, 2014 and sent to Plaintiff Victoria Amelina by the Wolf Law Firm. The
Notice informed Plaintiff Victoria Amelina that "A foreclosure action has been
commenced" and advised her of her rights to dispute the validity of the debt. (ECF No.
65-7 at 2). The Notice includes the following statement: "The Wolf Firm, IS A DEBT
COLLECTOR ATTEMPTING TO COLLECT A DEBT, ANY INFORMATION
- 20-
14cv1906·WQH·NLS
1 OBTAINED WILL BE USED FOR THAT PURPOSE." Id. The "Notice of Default
2 and Election to Sell Under Deed of Trust" sent to Plaintiff Victoria Arnelina by Wolf
3 and attached to the TAC, includes the same disclaimer regarding Wolf s status as a debt
4 collector. Id. at 6.
5
The FDCP A does not apply to foreclosure activities. See Lobato v. Acqura Loan
6 Services, No. llcv2601-WQH-JMA, 2012 WL607624,at *5 (S.D. CaI.Feb.23,2012);
7
Walker v. Equity 1 Lenders Group, No. 09cv325-WQH-AJB, 2009 WL 1364430, at *7
8 (S.D. Cal. May 14,2009) ("The activity offoreclosing on a property pursuant to a deed
9 of trust is not the collection of a debt within the meaning of the FDCPA or the
10 RFDCPA.") (internal quotations omitted).
11
Many courts have held that including language on letters sent to consumers
12 indicating that the sender is "a debt collector attempting to collect a debt" does not
13
raise an inference that the sender is a debt collector attempting to collect a debt under
14 the FDCPA. See Hernandez v. Green Tree Servicing LLC, No. 2:14-cv-1438, 2014
15
WL2586932, at *3 (C.D. Cal. June 9, 2014) ("Plaintiff responds that he has received
16 a letter from Green Tree concerning his loan that included the disclaimer: "This
17 communication is from a debt collector. It is an attempt to collect a debt' .... This
18
argument fails: whether Green Tree is a debt collector under the FDCPA does not tum
19 on whether Green Tree holds itself out as a debt collector"); Golliday v. Chase Home
20 Finance, LLC, 761 F. Supp. 2d 629,636 (W.o. Mich. 2011) ("The fact that FDCPA
21
disclaimers were sent in connection with a non-judicial foreclosure proceeding does
22 not automatically transform the defendants into 'debt collectors.' ... [T]he use of the
23
disclaimer ... is insufficient to raise a triable issue offact on the question ofthe firm's
24
status as a debt collector."); Stamper v. Wilson & Assoc., P.L.L. c., No.3 :09-cv-270,
25
2010 WL 1408585, at *8-9 (E.D. Tenn. Mar. 312,201 O)("it is perfectly reasonablefor
26
[defendant law firm] to err on the side of caution by including FDCPA disclaimers ..
27
.. if they did not include FDCPA disclaimers, they would be opening themselves up
28
to potentialliabiluty under 15 U.S.C. § 1692f(6)"); Chomilo v. Shapiro, Nrodmeyer
- 21 -
14cvI906-WQH-NLS
1 & Zielke, LLP, Civ. No. 06-3103, 2007 WL 2695795, at *6 (D. Min. Sept. 12,2007)
2 ("If SNZ [the defendant law firm] includes FDCPA disclaimers in its notices then it
3 may be seen as holdings itself out as a debt collector under the FDCPA, but if it does
4 not include such disclaimers then it subjects itself to potential liability for failing to
5 comply with the FDCPA if a court were to determine that SNZ is a debt collector ...
6 . The Court will not penalize SNZ for having to make a Hobson's choice .... SNZ was
7 conducting nonjudicial mortgage foreclosure ... It was reasonable for SNZ to err on
8 the side of caution and include the FDCPA disclaimers in its communications to [the
9 plaintiffJ."). The "Notice Under Fair Debt Collection Practices Act" sent by Wolfto
10 Plaintiff Victoria Ame1ina contains the FDCPA disclaimer that "The Wolf Firm is
11
acting as a debt collector and is attempting to collect a debt." However, the Notice, as
12 well as the other communications included in the packet offorms accompanying the
13 notice, discuss the commencement of a foreclosure action and therefore is considered
14 a communication connected to the non-judicial foreclosure.
Defendant Wolfs
15 inclusion of the disclaimer language does not transform it into a debt collector. The
16 Court finds that the communication with Plaintiff makes it clear that Defendant Wolf
17 was hired for the limited purpose of conducting the non-judicial foreclosure proceeding
18 and was acting within that role.
19
The Court finds that the TAC does not allege sufficient facts to support a finding
20 that Defendant Wolfs actions went outside the scope of the non-judicial foreclosure
21
proceeding. The TAC does not allege sufficient facts to show that Defendant Wolfwas
22 engaged in debt collection activities sufficient to support a cause of action under the
23
FDCP A. Because the Court finds that the alleged conduct of Defendant Wolf does not
24 constitute "debt collecting," the Court need not determine whether Defendant Wolf is
25 a "debt collector" under the FDCPA. See Santoro, 12 Fed. Appx at 480. Plaintiffs
26 have been given multiple opportunities to allege a claim against Defendant Wolf under
27 the FDCPA and has not done so. The Court dismisses Plaintiffs' FDCPA claim against
28 Defendant Wolf under the FDCPA with prejudice.
- 22-
14cv1906·WQH·NLS
1
B. State Claims Asserted Against Defendant Wolf
2
Plaintiffs assert four causes of action against Defendant Safeguard for violations
3 of California state law. Plaintiffs assert one cause of action against Defendant Wolf
4 for violations of California state law. Plaintiffs allege that this Court has supplemental
5 jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367.
6
The federal supplemental jurisdiction statute provides: "in any civil action of
7 which the district courts have original jurisdiction, the district courts shall have
8 supplemental jurisdiction over all other claims that are so related to claims in the action
9 within such original jurisdiction that they form part of the same case or controversy
10 under Article III of the United States Constitution." 28 U.S.C. § 1367(a). A district
11
court may decline to exercise supplemental jurisdiction over a state law claim if "the
12 district court has dismissed all claims over which it has original jurisdiction ...." 28
13
US.c. § 1367(c). Having dismissed the federal claims asserted by Plaintiffs against
14 the Defendants Safeguard and Wolf, the Court declines to exercise supplemental
15 jurisdiction over the state law claims against Defendants Safeguard and Wolf pursuant
16 to 28 U.S.C. § 1367(c). See San Pedro Hotel Co., Inc. v. City ofLos Angeles, 159 F.3d
17 470,478 (9th Cir. 1998).
18
C. Violation of the Rosenthal Act Against M&T and Safeguard
19
California incorporated the FDCPA into the Rosenthal Act under section
20
1788.17 ofthe California Civil Code. Cal. Civ. Code § 1788.17. Defendants M&T
21
and Safeguard recognize that the Rosenthal Act mirrors the FDCPA.
Because
22 Plaintiffs have sufficiently alleged a claim against Defendants M&T and Safeguard
23 under the FDCPA, the Court concludes that Plaintiffs have sufficiently alleged a claim
24 against Defendants M&T and Safeguard under the Rosenthal Act, Cal. Civ. Code §§
25
1788 et seq. M&T and Safeguard's motions to dismiss Plaintiffs' claims under the
26 Rosenthal Act are denied.
27
D. Negligent Infliction of Emotional Distress Against M&T
28
Defendants M&T and Safeguard contend that California does not recognize the
- 23 -
14cvI906·WQH·NLS
1 claim of negligent infliction of emotional distress as an independent tort, but
2 recognizes it as a claim for the tort of negligence. M&T and Safeguard contend that
3 Plaintiffs do not state a valid claim for negligence against it because no duty exists
4 between the Plaintiffs and M&T or Safeguard. M&T contends that it did not exceed
5 the scope of its role as an ordinary lender because Safeguard, not M&T, is alleged to
6 have sent someone to go to Plaintiffs' property.
7
Plaintiffs contend that California does recognize the claim of negligent infliction
8 of emotional distress. Plaintiffs contend that M&T and Safeguard did owe a duty to
9 Plaintiffs because Defendants M&T and Safeguard exceeded the scope of their
10 conventional roles as loan servicers.
11
In California, "negligent causing of emotional distress is not an independent tort
12 but the tort of negligence .... The traditional elements of duty, breach of duty,
13 causation, and damages apply." Marlene F. v. Affiliated Psychiatric Medical Clinic,
14 Inc., 770 P.2d 278,281 (Cal. 1989). "Whether a defendant owes a duty of care is a
15 question oflaw. Its existence depends upon the foreseeability of the risk and upon a
16 weighing of policy considerations for and against imposition ofliability." Id. "As a
17 general rule, a financial institution owes no duty of care to a borrower when the
18 institution's involvement in the loan transaction does not exceed the scope of its
19 conventional role as a mere lender of money." Nymark v. Heart Fed. Sav. & Loan
20 Assn., 283 Cal.Rptr. 53, 56 (Cal. App. 1991). "Liability to a borrower for negligence
21
arises only when the lender 'actively participates' in the financed enterprise 'beyond
22 the domain of the usual money lender.'" Id. at 57 (quoting Connor v. Great Western
23 Sav. & Loan Assn. , 447 P.2d 609, 616 (Cal. 1968)).
24
In this case, the TAC alleges that M&T instructed Safeguard to send an agent to
25 Plaintiffs' home and instructed "the intruder" to attempt to physically enter the
26 Plaintiffs' home. (TAC ~~ 115-16). The TAC alleges that M&T Bank and Safeguard
27 conducted home inspections "which included again trying to open Plaintiffs' entrance
28 door, looking through windows, and taking pictures of the outside and inside of
- 24-
14cvI906·WQH·NLS
1 Plaintiffs' home (through the windows) .... [T]hese visits ... were intimidation
2 attempts ...." Id.
~
164, 166-67. The TAC sufficiently alleges that M&T and its
3 agent, Safeguard, acted outside of the role of a conventional money lender. The
4 allegations that M&T and its agent, Safeguard, acted outside the role of a usual money
5 lender towards Plaintiff Victoria Ame1ina are sufficient to infer that M&T and
6 Safeguard may owe a duty of care to Plaintiff Victoria Ame1ina which was breached
7 by the home visits and inspections conducted by Defendants. The T AC alleges
8 sufficient facts regarding duty, breach, causation, and damages to support Plaintiff
9 Victoria Amelina's claim against M&T and Safeguard for negligent infliction of
10 emotional distress.
11
Plaintiffs do not respond to M&T's contention that there is no relationship and
12 no duty of care between M&T and Plaintiff Victoria Ame1ina's minor children. The
13 Court finds that the TAC does not contain sufficient allegations to inferthat M&T or
14 Safeguard owe a duty of care to Plaintiffs A.A., D.S., and B.S. M&T and Safeguard's
15 motions to dismiss the claims for negligent infliction of emotional distress are denied
16 as to Plaintiff Victoria Ame1ina and granted as to Plaintiffs A.A., D.S., and B.S.
17
E. Intentional Infliction of Emotional Distress Against M&T and Safeguard
18
Defendants M&T and Safeguard contend that Plaintiffs' claims do not
19 sufficiently plead that Defendants' conduct was extreme and outrageous to support a
20 claim for intentional infliction of emotional distress. Plaintiffs contend that M&T and
21
Safeguard's actions, including sending agents to enter Plaintiffs' property, attempt to
22 force entry, lurk around the property, and peer into the windows of Plaintiffs' home,
23
constitute extreme and outrageous behavior.
Plaintiffs contend that whether
24 Defendants' exact behavior was extreme or outrageous is an issue of fact.
25
"The elements of a cause of action for intentional infliction of emotional distress
26 are (1) outrageous conduct by the defendant, (2) intention to cause or reckless disregard
27 of the probability of causing emotional distress, (3) severe emotional suffering, and (4)
28 actual and proximate causation of the emotional distress." MaIko v. Holy Spirit Assn.,
- 25 -
14cv1906-WQH-NLS
1 762 P.2d 46,61 (Cal. 1988), superceded by statute on other grounds. "To make out
2 a claim for intentional infliction of emotional distress, a plaintiff must prove, among
3 other things, that the defendant's alleged conduct was 'outrageous,' which means
4 conduct 'so extreme and outrageous to go beyond all possible bounds of decency, and
5 to be regarded as atrocious, and utterly intolerable in a civilized community. '" Wong
6 v. Tai Jing, 189 Cal.App.4th 1354,1379 n. 7 (2010) (citations and internal quotations
7 omitted).
8
The TAC alleges that M&T and its agents, at M&T's instruction,
9
attempted to enter Plaintiffs' home, demanded that Victoria's nine year
old daughter open the front door, ... posted a misleading notice on
Plaintiffs' front door in an effort to scare and harass Victoria and her
family .... conducted 'surveillance' on Plaintiffs' home, which included
taking pictures ofthe outside and inside of Plaintiffs , home (through the
windows), without Plaintiffs' consent.
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15
16
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(TAC
~~
202-203). The TAC alleges that M&T "communicated with Plaintiffs in a
vicious and harassing manner" and "continued their behavior of abuse even after
Plaintiffs were clearly emotionally distressed." Id.
~~
204-205. The TAC alleges that
an agent of Defendants M&T and Safeguard attempted to gain entry into Plaintiffs'
home through a locked door without knocking or introducing himself, instructing
Plaintiff A.A. to open the door immediately or her parents would be in "big trouble."
TAC
~~
119-20.
The TAC alleges that Safeguard, at the instruction of M&T,
"conduct[ed] surveillance on Plaintiffs' home, which included again trying to open
Plaintiffs' entrance door, looking through windows, and taking pictures of the outside
and inside of Plaintiffs' home (through the windows)." TAC
~~
164-66. Plaintiffs
allege that M&T's actions caused the Plaintiffs severe emotional suffering.
The TAC alleges sufficient facts regarding M&T and Safeguard's visits to
Plaintiffs' home to support an inference that M&T and Safeguard acted in an extreme
and outrageous manner with the intention required to state a claim for intentional
infliction of emotional distress. Whether Defendants' conduct was extreme and
outrageous is a question offact that will not be decided at this stage ofthe proceedings.
The Court concludes that Plaintiffs have sufficiently alleged a claim against Defendants
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1 M&T and Safeguard for intentional infliction of emotional distress.
M&T and
2 Safeguard's motions to dismiss Plaintiffs' claims for intentional infliction of emotional
3 distress are denied.
4
F. Invasion of Privacy Against M&T and Safeguard
5
Defendant M&T contends that Plaintiffs do not state a cause of action for
6 invasion of privacy against it because M&T's actions were related to servicing the
7 unpaid loan in default. Defendant M&T asserts that the allegations that an agent went
8 to Plaintiffs' residence are made against another Defendant, not M&T. Defendant
9 Safeguard contends that Plaintiffs do not allege any conduct by Safeguard that rises to
10 the level of seriousness or offensiveness required to support an invasion of privacy
11 .claim. Plaintiffs assert that M&T and Safeguard ignore the allegations that M&T and
12 Safeguard hired and instructed an agent to attempt to enter Plaintiffs' property and
13 conduct surveillance. Plaintiffs contend that Defendants M&T and Safeguard violated
14 their privacy prior by instructing an agent to attempt to force entry into Plaintiffs'
15 residence and peer in the windows.
16
"[T]hree threshold elements ... must be satisfied to advance a privacy claim: (1)
17 identification of a specific, legally protected privacy interest; (2) a reasonable
18 expectation of privacy; and (3) conduct by a defendant constituting a serious invasion
19 of privacy." Dept. ofFair EmploymenfandHousingv. Superior Court, 99 Cal.Rptr.2d
20 615,619 (Cal. App. 2002). The TAC alleges that "M&T and Safeguard intentionally
21
intruded into [Plaintiffs'] expectation of privacy by coming onto, around, and
22 attempting to come into Plaintiffs' private residence, without Plaintiffs' consent, in
23 their efforts to harass and stalk Plaintiffs and their family." (TAC ~ 218). The TAC
24 alleges that M&T and Safeguard "attempt[ ed to] conduct[] 'surveillance' on Plaintiffs'
25 home, which included trying to open Plaintiffs' entrance door and taking pictures of
26 the outside and inside of Plaintiffs , home (through the windows). Id.
~220.
The TAC
27 alleges that Plaintiffs have a reasonable expectation of privacy in their home. Id. ~ 219.
28 The Court concludes that Plaintiffs have alleged sufficient facts to state a claim for
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14cv1906·WQH·NLS
1 invasion of privacy against Defendants M&T and Safeguard. M&T and Safeguard's
2 motions to dismiss Plaintiffs' claims for invasion of privacy are denied.
3 VI. Conclusion
4
IT IS HEREBY ORDERED that the motion to dismiss filed by Defendant M&T
5 (ECF No. 68) is granted in part and denied in part. The motion to dismiss is granted
6 as to the claims of Plaintiffs A.A., D.S., and B.S. for negligent infliction of emotional
7 distress. The motion to dismiss is denied as to all other claims.
8
IT IS FURTHER ORDERED that the motion to dismiss filed by Defendant
9 Safeguard (ECF No. 67) is granted in part and denied in part. The motion to dismiss
10 is granted as to the claims of Plaintiffs A.A., D.S., and B.S. for negligent infliction of
11
12
emotional distress. The motion to dismiss is denied as to all other claims.
IT IS FURTHER ORDERED that the motion to dismiss filed by Defendant Wolf
13 Law Finn (ECF No. 66) is granted. The Third Amended Complaint is dismissed with
14 prejudice as to Defendant Wolf Law Finn.
15
16 DATED:
17
18
7(J-r(fb
WILLIAM Q. HA
United States Disk
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14cv 1906-WQH-NLS
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