Gilliam v. Porter McGuire Kiakona & Chow, LLP
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS AND/OR FOR JUDGMENT ON THE PLEADINGS, ECF NO. 17 - Signed by CHIEF JUDGE J. MICHAEL SEABRIGHT on 4/27/2021. For the foregoing reasons, Defendant's Mot ion to Dismiss and/or Motion for Judgment on the Pleadings, ECF No. 17 , is GRANTED. Plaintiff's claims under the FDCPA are DISMISSED. Plaintiff, however, is granted leave to file a supplemental memorandum (not exceeding five pages) to explain how he could file a Second Amended Complaint that would state an FDCPA claim against Defendant. A supplemental memorandum is due by May 11, 2021. If he files a supplemental memorandum by that date, the court will determine whether to allow a Second Amended Complaint. If not, the court will decline to exercise supplemental jurisdiction over his remaining state claims by dismissing them without prejudice to re-filing in a state court action, and will close the case file. (jo)COURT'S CERTIFICATE OF SERVICE - Non-Registered CM/ECF Participants have been served by First Class Mail to the addresses of record listed on the Notice of Electronic Filing (NEF)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
Civ. No. 20-00372 JMS-KJM
WILLIAM H. GILLIAM,
PORTER MCGUIRE KIAKONA &
DEFENDANT’S MOTION TO
DISMISS AND/OR FOR
JUDGMENT ON THE PLEADINGS,
ECF NO. 17
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS AND/OR
FOR JUDGMENT ON THE PLEADINGS, ECF NO. 17
The court considers Defendant Porter McGuire Kiakona & Chow,
LLP’s (“Defendant” or “PMKC”) Motion to Dismiss and/or for Judgment on the
Pleadings (“Motion”), ECF No. 17, directed at pro se Plaintiff William H.
Gilliam’s (“Plaintiff” or “Gilliam”) Amended Complaint, which alleges various
state law claims, as well as violations of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692 et seq. The Motion challenges only the FDCPA
claims, and otherwise asks the court under 28 U.S.C. § 1367(c) to decline to
exercise supplemental jurisdiction over the state law claims.
PMKC is a law firm that represented the Association of Apartment
Owners of Kuhio Shores at Poipu (“AOAO”), a condominium association on
Kauai, regarding unpaid association dues and costs now exceeding $245,000 on a
condominium property (“the Property”). Over the past few years, Plaintiff has
attempted to challenge collection efforts and foreclosure proceedings on the
Property in several other pro se actions in Hawaii State Court, this federal District
Court, the U.S. Bankruptcy Court for the District of Hawaii, and the Ninth Circuit
Bankruptcy Appellate Panel (“BAP”).1 Moreover, related actions are still pending
in the Hawaii Intermediate Court of Appeals and in the Ninth Circuit Court of
Appeals.2 The present action against PMKC is but a limited aspect of this
continuing legal saga.
See AOAO of Kuhio Shores v. Pacific Rim Prop. et al., Civ. No. 5CC161000063 (Haw.
5th Cir. Ct. 2016); In re Gilliam, No. 19-01366 (Bankr. D. Haw. 2019); In re Pac. Rim Prop.
Serv. Corp., No. 19-01051 (Bankr. D. Haw. 2019); In re Pac. Rim Prop. Serv. Corp., BAP No.
HI-20-1071-BTL (B.A.P. 9th Cir. 2020); In Re Gilliam, Civ. No. 20-00194 JMS-WRP (D. Haw.
2020); and Gilliam v. Watanabe, et al., Civ. No. 20-00201 JMS-RT (D. Haw. 2020).
Where necessary, the court takes judicial notice of these court proceedings. See, e.g.,
Trigueros v. Adams, 658 F.3d 983, 987 (9th Cir. 2011) (reiterating that a court “may take
[judicial] notice of proceedings in other courts, both within and without the federal judicial
system, if those proceedings have a direct relation to matters at issue”) (citation omitted); see
also Kohja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018) (allowing a court
to take judicial notice of documents that “necessarily form the basis of the complaint,” and to
consider them at a motion-to-dismiss stage).
See AOAO of Kuhio Shores at Poipu v. Pac. Rim Prop. Serv. Corp., CAAP 19-0000778
(Haw. Ct. App. 2019); Gilliam v. Watanabe, No. 20-16939 (9th Cir. 2020); In re Gilliam, No.
20-17165 (9th Cir. 2020). The court also takes judicial notice of these proceedings where
Plaintiff’s Amended Complaint claims that PMKC violated the
FDCPA while representing the AOAO in a Hawaii State Court foreclosure action.
PMKC’s Motion argues that the Amended Complaint fails because Plaintiff lacks
standing or otherwise fails to state a viable FDCPA claim—arguments that center
on whether Plaintiff himself is an owner of the Property and was the object of any
consumer debt collection activity. But the Bankruptcy Court (twice) and this court
have already determined that Plaintiff has no ownership interest in the Property or
in the entity that holds title to it. As explained to follow, the court gives preclusive
effect to those prior factual determinations, and thus GRANTS Defendant’s
The court assumes the well-pleaded factual (but not legal) allegations
of the Amended Complaint are true for purposes of analyzing the Motion. See,
e.g., Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). And, where necessary to
understand the context, the court draws upon judicially-noticed prior orders in the
related cases noted above—most notably, an “Order Affirming Orders of
Bankruptcy Court” from In Re Gilliam, Civ. No. 20-00194 JMS-WRP (D. Haw.
Oct. 1, 2020) (available at 2020 WL 5848340 (D. Haw. Oct. 1, 2020)).
Because the Motion focuses on whether Plaintiff has “standing” to
assert an FDCPA claim—essentially, whether he was “the object of collection
activity arising from a consumer debt,” Pratap v. Wells Fargo Bank, N.A., 63 F.
Supp. 3d 1101, 1113 (N.D. Cal. 2014) (citation omitted)—and not on whether
Defendant’s alleged activities fit within the FDCPA’s prohibitions, this
background section focuses on the facts relevant to determining whether Plaintiff
has an ownership interest in the Property so as to be the object of consumer debt
collection activity by PMKC.
The Amended Complaint
On April 28, 2016, with PMKC as counsel, the AOAO filed a
Complaint for Foreclosure against Pacific Rim Property Service Corporation
(“PRPSC”)—a dissolved corporation that holds title to the Property—in the Circuit
Court of the Fifth Circuit, State of Hawaii (“State Court”), seeking to enforce a lien
on the Property for unpaid association assessments and fees (“the State Court
foreclosure action”).3 See ECF No. 10 at PageID ## 30-32; see also In re Gilliam,
In the State Court foreclosure action, the State Court issued orders on October 2, 2019
authorizing and instructing a court-appointed receiver, George Robinson, to sell the Property and
settle the debts of PRPSC. See In re Gilliam, 2020 WL 5848340, at *1-2. After having been
denied an opportunity to intervene, Gilliam filed an interlocutory appeal, and on May 29, 2020,
the Hawaii Intermediate Court of Appeals (“ICA”) issued an order staying the October 2, 2019
orders. See id. at *2 & n.3. That appeal remains pending in the ICA.
2020 WL 5848340, at *5 (D. Haw. Oct. 1, 2020) (“A title report plainly indicates
that PRPSC (not Gilliam) is the ‘fee owner’ of the [Property].”). Based upon
alleged actions taken by PMKC in the State Court foreclosure action, Plaintiff
brought the instant action against PMKC, alleging jurisdiction under 28 U.S.C.
§ 1331. ECF No. 1. His Amended Complaint alleges the following claims:
(1) wrongful taking of property; (2) fraud; (3) slander of title; (4) unfair and
deceptive trade practices; (5) tortious interference with business relationships;
(6) intentional infliction of emotional distress; (7) abuse of process; and
(8) harassment and misstatements in violation of 15 U.S.C. §§ 1692d and 1692e.4
See ECF No. 10 at PageID ## 4-14.
As he has asserted in related proceedings, Gilliam alleges in this
action that he owns an interest in the Property or PRPSC itself. ECF No. 10 at
PageID # 30. The precise source of Gilliam’s alleged ownership interest is unclear
from his pleadings but apparently stems from his late mother’s estate and her
ownership of PRPSC, “of which she [was] sole officer and director at her death in
2009, which holds legal title to [the Property].” Id. According to the Amended
Complaint, PRPSC is “an administratively dissolved corporation.” Id.
The Amended Complaint alleges that “[t]he Defendant[’s] actions and course of
conduct . . . constituted harassment within the meaning and the prohibitions of 15 USCS
§ 1692d; and . . . misstatements within the meaning and the prohibitions of 15 USCS § 1692e.”
ECF No. 10 at PageID # 42.
Prior Related Actions
As part of his efforts in response to the State Court foreclosure action,
Gilliam filed a Chapter 11 bankruptcy petition on behalf of PRPSC—purportedly
as a “trustee”—on August 19, 2019. See In re Pac. Rim Prop. Serv. Corp., No. 1901051 (Bankr. D. Haw. Aug. 19, 2019). The Bankruptcy Court for the District of
Hawaii dismissed that Chapter 11 Petition on September 5, 2019 for failure to pay
the filing fee and to file required documents. See In re Pac. Rim Prop. Serv. Corp.,
2020 WL 4371106, at *2 (B.A.P. 9th Cir. July 29, 2020) (summarizing procedural
history in the Bankruptcy Court). The Bankruptcy Court then issued an order
annulling the automatic stay that it had entered earlier, after finding that Gilliam
lacked standing because he was not a shareholder or trustee of PRPSC. Id.
Gilliam appealed that order to the Ninth Circuit’s BAP. Id.
On July 29, 2020, the BAP dismissed the appeal because it agreed that
Gilliam lacked standing. In so doing, the BAP confirmed the Bankruptcy Court’s
finding that “Gilliam is not the debtor [PRPSC], nor does he have any interest in or
control over [PRPSC] or its assets, including the Condominium.” Id. at *3. The
BAP specifically found on de novo review that “Gilliam is not a shareholder, much
less the sole shareholder, of [PRPSC].” Id. It concluded that
Gilliam has not shown how he is ‘directly and adversely
affected pecuniarily’ by the bankruptcy court’s decision
to annul the stay in Pacific Rim’s bankruptcy case. . . .
Gilliam is not the debtor, nor does he have any interest in
or control over the debtor or its assets. Simply put, the
order annulling the stay has not diminished Gilliam’s
property, increased his burdens, or otherwise
detrimentally affected his rights.
Id. at *4. No further appeal was taken of the BAP’s decision, and it is final.
Meanwhile, on October 25, 2019, Gilliam filed a Chapter 13
bankruptcy petition on behalf of himself, asserting—contrary to the position
Gilliam took in the then-ongoing Chapter 11 proceedings on behalf of PRPSC—
that the Property was an asset in his estate. See In re Gilliam, No. 19-01366
(Bankr. D. Haw. filed Oct. 25, 2019). In that Petition, Gilliam filed a motion
asserting that he owned the Property, claiming that it had been conveyed to him
from his mother’s estate or from PRPSC. See In re Gilliam, 2020 WL 5848340, at
*3. In response, Robinson, the PRPSC receiver, filed a motion seeking to lift the
automatic Chapter 13 bankruptcy stay, contending that PRPSC—not Gilliam—
owned the Property and that Gilliam had no interest in PRPSC. See id. at *4.
Ruling on these and other related motions, the Bankruptcy Court
considered an evidentiary record and specifically found that:
A. [Robinson] is the receiver of [PRPSC], and has sole
control of PRPSC’s assets, including the property located
at 5050 Lawai Road, Apt. 209, Koloa, Hawaii (the
B. [Gilliam] did not have the power to cause PRPSC to
transfer the Property to himself, and therefore the
Property is not property of his bankruptcy estate.
Id. at *3 (quoting a March 13, 2020 Order of the Bankruptcy Court). The
Bankruptcy Court concluded that “[t]he Property is not property of [Gilliam’s]
bankruptcy estate” and “[t]he automatic stay pursuant to 11 U.S.C. § 362 does not
apply to the Property.” Id. Gilliam filed a Motion to Reconsider with the
Bankruptcy Court, but the Bankruptcy Court denied that Motion, reasoning in part:
Debtor’s motion to reconsider renews several arguments
made in his initial motion for turnover. Debtor argues
that a number of transfers gave him control over
the Poipu property, including a quitclaim deed issued
from his mother’s probate estate in December 2018 and a
warranty deed issued from Pacific Rim in December
However, Debtor’s mother’s probate had no effect on the
Poipu property. After the Debtor’s mother formed
Pacific Rim, the corporation, not the Debtor’s mother,
owned the Poipu property. The most that the Debtor
could inherit was his mother’s stock in the corporation.
By the time the Debtor attempted to make the corporation
transfer the Poipu property to him, the state court had
already given the receiver exclusive control of the
corporation’s assets. Any disagreement that the Debtor
has with the state court’s appointment of a receiver is
properly the subject of a state court appeal, not a
Id. Gilliam appealed those Bankruptcy Court orders to this court. See In re
Gilliam, Civ. No. 20-00194 JMS-WRP (filed Apr. 29, 2020).
On October 1, 2020, this court issued its Order Affirming Orders of
Bankruptcy Court. See In re Gilliam, 2020 WL 5848340, at *1. Reviewing and
analyzing the same evidence that was before the Bankruptcy Court, this court
affirmed its findings, determining that the Property is not part of Gilliam’s
bankruptcy estate. Id. at *4-6. This court concluded that:
The Bankruptcy Court’s factual finding—that the
condominium was not property of Gilliam’s estate—was
not clearly erroneous, and is well-supported by ample
evidence in the record. A title report plainly indicates
that PRPSC (not Gilliam) is the “fee owner” of the
condominium. There is no evidence that the
condominium was ever transferred from PRPSC to the
“new corporation” and then to Gilliam, much less that it
was transferred from PRPSC directly to Gilliam.
Id. at *5 (internal citation omitted). This court continued:
even if Gilliam inherited the stock of PRPSC from his
mother’s estate, this would not mean he inherited the
condominium. PRPSC was dissolved in 2012 and as
such, under Hawaii law, it “may not carry on any
business except that appropriate to wind up and liquidate
its business and affairs, including . . . [d]ischarging or
making provisions for discharging its liabilities.” [Haw.
Rev. Stat.] § 414-385(a). PRPSC’s liabilities included
the unpaid fees and assessments of over $245,000 owed
to the foreclosing AOAO. Those affairs would need to
have been settled before any of PRPSC’s property could
be distributed to its shareholders. That foreclosure
proceeding, begun in 2016, was ongoing in December
2018 (and still is), and thus Gilliam could not have
obtained the condominium based on any inheritance of
shares of PRPSC before Gilliam filed his Chapter 13
Id. (internal citation and footnote omitted).
Gilliam appealed this court’s decision affirming the Bankruptcy
Court’s orders to the Ninth Circuit, where it remains pending. See In re Gilliam,
No. 20-17165 (9th Cir. filed Nov. 3, 2020).
Procedural Background in this Court
Plaintiff filed his initial Complaint on August 8, 2020. ECF No. 1.
He filed his Amended Complaint on November 7, 2020. ECF No. 10. Defendant
filed its Answer on November 23, 2020, ECF No. 11, and its Motion to Dismiss
and/or for Judgment on the Pleadings on December 31, 2020, ECF No. 17.
Plaintiff filed a “Resistance to Motion to Dismiss or for Judgment on the
Pleadings” (“Opposition”) on March 1, 2021. ECF No. 25. Defendants filed a
Reply to the Opposition on March 8, 2021. ECF No. 27. Plaintiff moved the court
to file a Sur-Reply on March 16, 2021. ECF No. 28. Plaintiff filed a Sur-Reply on
March 21, 2021. ECF No. 30. The court decides the matter without a hearing
under Local Rule 7.1(c).
III. STANDARDS OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss
for “failure to state a claim upon which relief can be granted.” A Rule 12(b)(6)
dismissal is proper when there is either a “‘lack of a cognizable legal theory or the
absence of sufficient facts alleged.’” UMG Recordings, Inc. v. Shelter Capital
Partners, LLC, 718 F.3d 1006, 1014 (9th Cir. 2013) (quoting Balistreri v. Pacifica
Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990)).
“To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007)); see also Weber v. Dep’t of Veterans Affs., 521 F.3d 1061, 1065 (9th
Cir. 2008). This tenet—that the court must accept as true all of the allegations
contained in the complaint—“is inapplicable to legal conclusions,” and
“[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (citing Twombly,
550 U.S. at 555). Rather, “[a] claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S.
at 556). The “mere possibility of misconduct,” or an “unadorned, thedefendant-unlawfully-harmed-me accusation” falls short of meeting this
plausibility standard. Id. at 678-79 (citations omitted); see also Moss v. U.S. Secret
Serv., 572 F.3d 962, 969 (9th Cir. 2009).
Federal Rule of Civil Procedure 12(c) permits judgment on the
pleadings “[a]fter the pleadings are closed—but early enough not to delay trial.”
Because the issue presented by a Rule 12(c) motion is substantially the same as
that posed in a 12(b)(6) motion—whether the factual allegations of the complaint,
together with all reasonable inferences, state a plausible claim for relief—the same
standard applies to both. Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047,
1054 n.4 (9th Cir. 2011) (citing Dworkin v. Hustler Mag. Inc., 867 F.2d 1188,
1192 (9th Cir. 1989) (holding that Rule 12(c) and Rule 12(b)(6) motions differ in
time of filing but are otherwise “functionally identical,” and applying the same
standard of review)).
A motion for judgment on the pleadings is properly granted when
there are no disputed issues of material fact, and the moving party is entitled to
judgment as a matter of law. See Ventress v. Japan Airlines, 603 F.3d 676, 681
(9th Cir. 2010). Judgment on the pleadings is not appropriate if the court considers
matters outside of the pleadings; in such cases, the motion must be converted to a
Rule 56 motion for summary judgment, and the non-moving party must be granted
an opportunity to respond. See Hal Roach Studios, Inc. v. Richard Feiner & Co.,
896 F.2d 1542, 1550 (9th Cir. 1989). The court may, however, “consider certain
materials—documents attached to the complaint, documents incorporated by
reference in the complaint, or matters of judicial notice—without converting the
motion . . . into a motion for summary judgment.” United States v. Ritchie, 342
F.3d 903, 908 (9th Cir. 2003).
In its Motion, Defendant argues that (1) Gilliam lacks standing
necessary for subject-matter jurisdiction because he (a) is not a “consumer” under
the FDCPA and (b) does not own the Property; and (2) the Amended Complaint
fails to state a claim upon which relief can be granted because he has no qualifying
consumer debt under the FDCPA.5 The court addresses each argument to follow.
Plaintiff Lacks “Statutory Standing” to Bring an FDCPA Claim
The FDCPA was enacted “as a broad remedial statute designed to
‘eliminate abusive debt collection practices by debt collectors[.]’” Gonzales v.
Arrow Fin. Servs., LLC, 660 F.3d 1055, 1060 (9th Cir. 2011) (quoting 15 U.S.C.
§ 1692(e)). “The FDCPA comprehensively regulates the conduct of debt
collectors, imposing affirmative obligations and broadly prohibiting abusive
practices.” Id. at 1060-61. The FDCPA provides an action for damages to “any
person” who suffers “actual damage” at the hands of a “debt collector”:
Except as otherwise provided by this section, any debt
collector who fails to comply with any provision of this
subchapter with respect to any person is liable to such
person in an amount equal to the sum of—
(1) any actual damage sustained by such person as a
result of such failure; [or]
It also argues that, even if Gilliam could bring suit on behalf of PRPSC, the FDCPA
claims fail because PRPSC, as a condominium association and not a “natural person,” is not a
“consumer” under the FDCPA. But because the FDCPA claims otherwise fail, the court need
not reach this question.
(2)(A) in the case of any action by an individual, such
additional damages as the court may allow, but not
15 U.S.C. § 1692k(a) (emphasis added).
Generally, “[t]o state a claim under the FDCPA, a plaintiff must
allege facts that establish that (1) the plaintiff has been the object of collection
activity arising from a consumer debt; (2) the defendant attempting to collect a
debt qualifies as a ‘debt collector’ under the FDCPA; and (3) the defendant has
engaged in a prohibited act or has failed to perform a requirement imposed by the
FDCPA.” Amelina v. Mfrs. & Traders Tr. Co., 2016 WL 3982483, at *6 (S.D. Cal.
July 21, 2016) (quoting Pratap, 63 F. Supp. 3d at 1113). See also Calogero v.
Shows, Cali & Walsh, L.L.P., 970 F.3d 576, 581 (5th Cir. 2020) (“To state an
FDCPA claim, Plaintiffs must first allege that they have been the object of
collection activity arising from ‘debt.’”) (citation omitted). For the reasons set
forth to follow, because Plaintiff does not establish the first requirement for a valid
FDCPA claim, his FDCPA claims fails.6 Put simply, Gilliam was not the object of
collection activity arising from consumer debt.
Defendant also suggests that Gilliam’s FDCPA claim is time-barred because it was filed
more than four years after the State Court foreclosure action was initiated and more than one
year after Gilliam sought to intervene in that action. See 15 U.S.C. § 1692k(d) (requiring an
FDCPA action “within one year from the date on which the violation occurs.”). But because
Gilliam’s action otherwise fails, and because it is unclear when any specific alleged violation
occurred in the (still ongoing) State Court foreclosure action, the court does not reach whether
Gilliam’s FDCPA claims are also time-barred.
Whether Gilliam is a “Consumer” is Not Dispositive
Before analyzing whether the Amended Complaint states an FDCPA
claim, the court must clarify exactly what is at issue.
First, Defendant argues in part that the court lacks subject-matter
jurisdiction because Plaintiff lacks standing as he does not qualify as a “consumer”
under 15 U.S.C. § 1692a(3) (“The term ‘consumer’ means any natural person
obligated or allegedly obligated to pay any debt.”). See ECF Nos. 17 at PageID
# 85 and 17-1 at PageID ## 102-03. But what Defendant is really arguing is that
Gilliam lacks “statutory standing.” See, e.g., Peters v. Roberts Markel, PC, 2012
WL 2190563, at *6 (D. Haw. June 13, 2012) (“A statute may place additional
restrictions on who can sue, creating ‘statutory standing’ requirements that are
separate from the standing requirements relating to a court’s subject-matter
jurisdiction.”) (citing Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 90-92
(1998)). “The Ninth Circuit has noted that, when a court determines whether a
plaintiff is an aggrieved person under a statute, that determination ‘is a merits
determination, not a threshold jurisdictional standing question.’” Id. (quoting
Jewel v. Nat’l Sec. Agency, 673 F.3d 902, 907 n.4 (9th Cir. 2011) (brackets
omitted)); see also Nw. Requirements Utils. v. F.E.R.C., 798 F.3d 796, 807 n.9 (9th
Cir. 2015) (“Unlike Article III standing . . . “statutory standing” does not implicate
our subject-matter jurisdiction.” (citation omitted)). “For purposes of subject
matter jurisdiction, whether the claims are valid or not is irrelevant. . . . Instead,
[defendant is] arguing that [plaintiff] does not meet the statutory requirements for
asserting an FDCPA claim.” Peters, 2012 WL 2190563, at *6.
Second—when arguing that Plaintiff lacks standing to allege
violations of the FDCPA under §§ 1692d and 1692e because he “does not qualify
as a ‘consumer’ under the FDCPA,” ECF No. 17-1 at PageID # 103—Defendant
implies that only “consumers” may bring an FDCPA action. And, indeed, some
cases indicate that a plaintiff must be a “consumer” to state a valid FDCPA claim.
See, e.g., Chavez v. Deutsche Bank Nat’l Tr. Co., 2020 WL 7038589, at *17 (D.
Haw. Nov. 30, 2020) (citation omitted). But this condition is true only for certain
FDCPA claims. See, e.g., 15 U.S.C. §§ 1692c (referring to communications “with
a consumer”) & 1692g (same). Not all FDCPA claims—including those brought
under §§ 1692d and 1692e, which are at issue here—have the same “consumer”
requirement. See, e.g., 15 U.S.C. § 1692d (“A debt collector may not engage in
any conduct the natural consequence of which is to harass, oppress, or abuse any
person in connection with the collection of a debt”) (emphasis added); 15 U.S.C.
§ 1692e (prohibiting debt collectors from using “false, deceptive, or misleading
representation or means in connection with the collection of any debt”).
“On its face, § 1692d is not a protection for consumers alone; it
ostensibly protects any person from being harassed, oppressed, or abused by a debt
collector in connection with the collection of a debt. . . . The same holds true for
§ 1692e.’” Miljkovic v. Shafritz and Dinkin, P.A., 791 F.3d 1291, 1300-01 (11th
Cir. 2015); see also, e.g., Amelina, 2016 WL 3982483, at *8 (“Persons subjected to
abusive debt collection by a debt collector who was attempting to collect a debt
from another person may bring an action against the debt collector under sections
of the FDCPA not specifically limited to consumers.”) (citing cases).
“However, in order for a non-consumer to have standing under the
FDCPA, the alleged debt collection activities must have been directed at the
plaintiff.” Amelina, 2016 WL 3982483, at *8 (citations omitted); see also Peters,
2012 WL 2190563, at *10 (“No matter what, relief under the FDCPA is available
only to a person who sustains damage through a debt collector’s violation of the
FDCPA ‘with respect to’ that very person. When a debt collector violates the
FDCPA with respect to someone else, the FDCPA does not provide for claims by
others.”) (citing 15 U.S.C. § 1692k(a)); Zuniga v. Jacobs, 2020 WL 168106, at *14
(S.D. Fla. Jan. 13, 2020) (“Zuniga has no standing to maintain this [FDCPA] claim
because the underlying collection activity, the state court lawsuit, is not directed
towards him but solely at Castillo.”).
The question here, therefore, is not whether Gilliam was a “consumer”
under the FDCPA. Rather, it is whether he was the “object of debt collection
activities,” i.e., whether activities were directed at him (as opposed to PRPSC or
the Property itself). Amelina, 2016 WL 3982483, at *6.
Plaintiff Was Not the Object of the Foreclosure Action Because He
Has No Ownership Interest in the Property
To determine whether Gilliam was “the object of collection activity
arising from a consumer debt,” the court focuses on whether the State Court
foreclosure action was directed at him. In that action, the AOAO (through PMKC)
sought to enforce its lien against the title holder of the Property. It named and
directed its actions against PRPSC—not against Gilliam. Put differently, it
directed its efforts at the owner of the debt. See 15 U.S.C. § 1692a(5) (defining
“debt” as “any obligation or alleged obligation of a consumer to pay money
arising out of a transaction in which the money, property, insurance, or services
which are the subject of the transaction are primarily for personal, family, or
household purposes, whether or not such obligation has been reduced to
judgment.”). The question thus turns on whether Gilliam has an ownership interest
in the Property, PRPSC, or the debt obligation that was the subject of the lien being
But this very issue—whether Gilliam owns the Property or has an
ownership interest in PRPSC—has already been determined two times by the
Bankruptcy Court, and each of those factual findings were affirmed through at
least one level of appeal. See In re Pac. Rim Prop. Serv. Corp., 2020 WL
4371106, at *3 (“Gilliam is not the debtor [PRPSC], nor does he have any interest
in or control over [PRPSC] or its assets, including the Condominium.”) (BAP
opinion affirming Bankruptcy Court order); In re Gilliam, 2020 WL 5848340, at
*5 (“The Bankruptcy Court’s factual finding—that the condominium was not
property of Gilliam’s [bankruptcy] estate—was not clearly erroneous, and is wellsupported by ample evidence in the record.”) (decision of this court, affirming
Bankruptcy Court orders).
And so, the ultimate question is whether to give preclusive effect to
those prior orders under federal res judicata principles. See McClain v. Apodaca,
793 F.2d 1031, 1033 (9th Cir. 1986) (“The preclusive effect of the prior decision of
the bankruptcy court is determined under federal res judicata standards.”) (citations
omitted); Taylor v. Sturgell, 553 U.S. 880, 891 (2008) (“The preclusive effect of a
federal-court judgment is determined by federal common law.”) (citation omitted).7
In contrast, “[f]or judgments in diversity cases, federal law incorporates the rules of
preclusion applied by the State in which the rendering court sits.” Taylor, 553 U.S. at 891 n.4
(citing Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 508 (2001)); see also Migra v.
Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984) (“It is now settled that a federal
court must give to a state-court judgment the same preclusive effect as would be given that
judgment under the law of the State in which the judgment was rendered.”).
Federal Res Judicata Principles
The terms “claim preclusion” and “issue preclusion”8 are collectively
referred to as “res judicata.” Taylor, 553 U.S. at 892. The court need only
consider whether issue preclusion applies. See Semtek, 531 U.S. at 502 (explaining
that claim preclusion bars courts from deciding claims that have already been
adjudicated on the merits in a prior suit). “Issue preclusion . . . bars ‘successive
litigation of an issue of fact or law actually litigated and resolved in a valid court
determination essential to the prior judgment,’ even if the issue recurs in the
context of a different claim.” Id. (quoting New Hampshire v. Maine, 532 U.S. 742,
For issue preclusion to apply, “(1) the issue must be identical to one
alleged in prior litigation; (2) the issue must have been ‘actually litigated’ in the
prior litigation; and (3) the determination of the issue in the prior litigation must
have been ‘critical and necessary’ to the judgment.” Beauchamp v. Anaheim
Union High Sch. Dist., 816 F.3d 1216, 1225 (9th Cir. 2016) (quoting Clark v. Bear
Stearns & Co., Inc., 966 F.2d 1318, 1320 (9th Cir. 1992)). “[A] final judgment
retains its collateral estoppel effect, if any, while pending appeal.” Collins v. D.R.
Horton, Inc., 505 F.3d 874, 882 (9th Cir. 2007) (citing Tripati v. Henman, 857
“[I]ssue preclusion encompasses the doctrines once known as ‘collateral estoppel’ and
‘direct estoppel.’” Taylor, 553 U.S. at 892 n.5.
F.2d 1366, 1367 (9th Cir. 1988) (stating that a pending appeal does not affect a
judgment’s finality for preclusion purposes)); see also Hawkins v. Risley, 984 F.2d
321, 324 (9th Cir. 1993) (“[I]n federal courts . . . the preclusive effects of a lower
court judgment cannot be suspended simply by taking an appeal that remains
undecided.”) (quoting Robi v. Five Platters, Inc., 838 F.2d 318, 327 (9th Cir.
Application of Federal Res Judicata Principles
Applying issue preclusion principles, the court easily concludes that it
must give preclusive effect to the Bankruptcy Court’s prior findings that Gilliam
has no ownership interest in the Property or in PRPSC.
First, the issues of ownership are identical. The same Property at
issue here was examined in both Bankruptcy Court proceedings. And the
questions were identical: whether Gilliam owned the property as part of his
bankruptcy estate or had an interest in PRPSC at the time of the State Court
foreclosure action when bankruptcy proceedings were instituted.
Second, the ownership questions were “actually litigated” in both
prior proceedings. For these purposes, “an issue is actually litigated when an issue
is raised, contested, and submitted for determination” in a prior proceeding.
Janjua v. Neufeld, 933 F.3d 1061, 1066 (9th Cir. 2019) (citations omitted). In the
Chapter 13 proceeding, Gilliam claimed that the Property was part of his
bankruptcy estate; indeed he filed a “Turnover Motion” specifically “seeking a
ruling from the Bankruptcy Court that he owned the [Property] and that it should
be turned over to him.” In re Gilliam, 2020 WL 5848340, at *3. In response, the
receiver for PRPSC filed a motion seeking to lift the automatic bankruptcy stay,
asserting that “contrary to the Turnover Motion’s assertion, PRPSC (not Gilliam)
owns the [Property] and therefore it is not part of Gilliam’s bankruptcy estate[.]”
Id. And this court affirmed those findings after reviewing the same evidence in the
record. Id. at *6.9
Moreover, the question was also “actually litigated” separately in the
Chapter 11 proceeding that Gilliam improperly brought on behalf of PRPSC. In
annulling the automatic stay for that proceeding, the Bankruptcy Court found that
Gilliam lacked standing because he was not a shareholder or trustee of PRPSC.
See In re Pac. Rim Prop. Serv. Corp., 2020 WL 4371106, at *2. And the BAP
agreed upon de novo review of the same evidence. Id. at *3-4. That is, the BAP
reviewed and analyzed the evidence regarding Gilliam’s mother’s estate, PRPSC’s
acquisition of the Property, PRPSC’s dissolution, Gilliam’s creation of a “New
Corporation” and his purported attempt to convey the Property to it. Id. at *1. No
further appeal was taken of that BAP decision. In short, the ownership question
It makes no difference, for collateral estoppel purposes, the Gilliam has filed a further
appeal to the Ninth Circuit. See, e.g., Collins, 505 F.3d at 882.
was certainly “raised, contested, and submitted for determination,” Janjua, 933
F.3d at 1066, in both the Chapter 11 and 13 proceedings.10
And finally, the ownership questions were “‘critical and necessary’ to
the judgment” in both the Chapter 11 and Chapter 13 actions. Beauchamp, 816
F.3d at 1225. Whether Gilliam owned the Property (or, concomitantly, whether he
had any interest in PRPSC) was necessary—indeed it was determinative—to
decide whether Gilliam or PRPSC was entitled to a bankruptcy stay in either of
those proceedings. See 11 U.S.C. § 362(a)(2) (providing, among other matters, a
bankruptcy stay of enforcement as to “the debtor or against property of the
estate”). It was also critical and necessary to determine whether Gilliam had
standing to represent PRPSC in the Chapter 11 proceeding. See In re Pac. Rim
Prop. Serv. Corp., 2020 WL 4371106, at *3.
Thus, res judicata precludes Gilliam from attempting to establish in
this action that had an ownership interest in the Property. He did not. The lien
being enforced was not based on Gilliam’s debt. It follows that Defendant,
Gilliam appears to argue that the Bankruptcy Court findings should not be given
preclusive effect because they were issued in non-core proceedings. ECF No. 30 at PageID
# 251. This argument fails. First, proceedings to determine an automatic stay are core
bankruptcy matters. See 28 U.S.C. § 157(b)(2)(G); In re Mosher, 578 B.R. 765, 770 (Bankr.
S.D. Tex. 2017) (“[A] request to lift the automatic stay . . . is expressly defined as a ‘core
proceeding.’”). Second, the Ninth Circuit has rejected any distinction between core and non-core
proceedings in considering whether to give res judicata effect to bankruptcy court orders. See In
re Int’l Nutronics, Inc., 28 F.3d 965, 969-70 (9th Cir. 1994).
through its representation of the AOAO in the State Court foreclosure action
(directed at PRPSC and the Property), did not direct its efforts at Gilliam.
What’s more, there are no other plausible allegations in the Amended
Complaint that would constitute consumer-debt collection efforts by Defendant
directed specifically at Gilliam. Although the Amended Complaint refers to “the
mandate to eject the plaintiff [from the Property],” ECF No. 10 at PageID # 33,
any such proceedings were directed or filed by the receiver for PRPSC (not by the
AOAO or Defendant).11 See id. (“The appointment of the so-called receiver . . .
caused the plaintiff to suffer loss of the peaceful and quiet use of the subject
property as a home; and (with the evolution of the short-term rental market with
the likes of Airbnb), as a valuable economic periodic vacation rental[.]”). And the
Amended Complaint does not allege any other conduct by Defendant beyond
judicial foreclosure activities, even if it alleges that those foreclosure activities
A court-appointed receiver acts under Hawaii law as “an officer of the court,” Haw.
Ventures, LLC v. Otaka, Inc., 114 Haw. 438, 486, 164 P.3d 696, 744 (2007) (citation omitted),
and not as an agent of the AOAO. The receiver had his own counsel, see In re Gilliam, 2020
WL 5848340 (listing Alika L. Piper and Simon Klevansky as counsel for receiver Robinson),
and nothing indicates he acted on behalf of Defendant.
Actions that constitute enforcement of a security interest (such as a judicial foreclosure
action), without more, do not constitute an attempt to collect a debt for purposes of the FDCPA.
See Barnes v. Routh Crabtree Olsen PC, 963 F.3d 993, 998 (9th Cir. 2020) (“In contrast to an
action on the note, the enforcement of a security interest does not entail an attempt to collect
(continued . . .)
For the foregoing reasons, the FDCPA claims in the Amended
Complaint are DISMISSED.13
Normally, “[u]nless it is absolutely clear that no amendment can cure
the defect . . . a pro se litigant is entitled to notice of the complaint’s deficiencies
and an opportunity to amend prior to dismissal of the action.” Lucas v. Dep’t of
Corr., 66 F.3d 245, 248 (9th Cir. 1995); see also Lopez v. Smith, 203 F.3d 1122,
1126 (9th Cir. 2000). Here, the court seriously doubts whether an amendment to
an FDCPA claim could cure the defects identified in this Order. Nevertheless,
given Plaintiff’s pro se status, the court will give Plaintiff leave to file a
money from the debtor.”); id. at 1001 (“A judicial foreclosure proceeding is not a form of debt
collection when the proceeding does not include a request for a deficiency judgment or some
other effort to recover the remaining debt.”). Defendant’s Motion, however, does not raise
Barnes as a ground for dismissal, and the court has not analyzed whether the Amended
Complaint alleges enough to withstand a such a challenge.
Defendant also argues that the FDCPA claims fail because the debt was not “primarily
for personal, family, or household purposes.” See 15 U.S.C. § 1692a(5) (defining “debt” as an
“obligation of a consumer to pay money arising out of a transaction in which the money,
property, insurance, or services which are the subject of the transaction are primarily for
personal, family, or household purposes[.]”) (emphasis added). Defendant points out that the
Amended Complaint appears to allege (at times) that the Property was being used as a vacation
rental to generate income, and refers to interference with Plaintiff’s business relationship with
prospective renters, ECF No. 10 at PageID #33-34, 40-41—contrary to the Property’s use for
“personal, family, or household purposes.” And, indeed, courts have indicated that a loan on
rental property is not a “consumer debt” covered by the FDCPA. See, e.g., Kitamura v. AOAO of
Lihue Townhouse, 2013 WL 1398058, at *5 (D. Haw. Mar. 29, 2013). The Amended Complaint,
however, does not clearly indicate—one way or the other—the nature of the “debt,” as it also
alleges that “Plaintiff and [P]laintiff’s late Mother used and occupied the [Property] for over
twenty-five years,” ECF No. 10 at PageID # 30. Cf. Heejoon Chung v. U.S. Bank, N.A., 250 F.
Supp. 3d 658, 681 (D. Haw. 2017) (“The relevant time period for determining the nature of the
loan under the FDCPA is when the loan first arises, not when collection efforts begin.”) (citation
omitted). And so, at this point, where the Amended Complaint otherwise fails, the court need
not base its dismissal on the lack of a “consumer debt.”
supplemental memorandum, consisting of no more than five pages, describing any
further amended FDCPA claims that he believes he could bring that would not be
barred by this Order. That supplemental memorandum must be filed by May 11,
2021. Thereafter, the court will review the memorandum to determine whether to
allow a Second Amended Complaint. Failure to file a supplemental memorandum
by May 11, 2021 will result in dismissal of the FDCPA claims.
Plaintiff’s Remaining State Claims
Having dismissed the federal claims, the only remaining claims are
state law claims over which the court has only supplemental jurisdiction (there is
no basis in the Amended Complaint for diversity jurisdiction). See 28 U.S.C.
§ 1367(c)(3). And under § 1367(c)(3), “district courts may decline to exercise
supplemental jurisdiction . . . if . . . the district court has dismissed all claims over
which it has original jurisdiction[.]” See City of Chicago v. Int’l Coll. of Surgeons,
522 U.S. 156, 173 (1997) (“[W]hen deciding whether to exercise supplemental
jurisdiction, ‘a federal court should consider and weigh in each case, and at every
stage of the litigation, the values of judicial economy, convenience, fairness, and
comity.’” (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 (1988))).
“[I]n the usual case in which all federal-law claims are eliminated before trial, the
balance of factors . . . will point towards declining to exercise jurisdiction over the
remaining state-law claims.” Acri v. Varian Assocs., Inc., 114 F.3d 999, 1001 (9th
Cir. 1997) (en banc) (citation omitted).
Accordingly, because the dismissed FDCPA claims provide the only
basis for federal jurisdiction, the court does not address the state law claims. If
Plaintiff does not file a supplemental memorandum, the court will decline
supplemental jurisdiction over the state law claims pursuant to § 1367(c) and will
DISMISS them without prejudice to refiling in state court.14 If Plaintiff files a
supplemental memorandum and if the court allows him to file a Second Amended
Complaint, however, the court will retain jurisdiction over related state law claims
and address them again if challenged at that time.
For the foregoing reasons, Defendant’s Motion to Dismiss and/or
Motion for Judgment on the Pleadings, ECF No. 17, is GRANTED. Plaintiff’s
claims under the FDCPA are DISMISSED. Plaintiff, however, is granted leave to
file a supplemental memorandum (not exceeding five pages) to explain how he
could file a Second Amended Complaint that would state an FDCPA claim against
The statute of limitations on state law claims would be tolled for the period that this
federal case was pending. See 28 U.S.C. § 1367(d) (“The period of limitations for any claim
asserted under subsection (a), and for any other claim in the same action that is voluntarily
dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be
tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law
provides for a longer tolling period.”); Artis v. Dist. of Columbia, 138 S. Ct. 594, 598 (2018
(holding that “§ 1367(d)’s instruction to ‘toll’ a state limitations period means to hold it in
abeyance, i.e., to stop the clock”).
Defendant. A supplemental memorandum is due by May 11, 2021. If he files a
supplemental memorandum by that date, the court will determine whether to allow
a Second Amended Complaint. If not, the court will decline to exercise
supplemental jurisdiction over his remaining state claims by dismissing them
without prejudice to re-filing in a state court action, and will close the case file.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, April 27, 2021.
/s/ J. Michael Seabright
J. Michael Seabright
Chief United States District Judge
Gilliam v. Porter McGuire Kiakona & Chow LLP, Civ. No. 20-00372 JMS-KJM
Order Granting Defendant’s Motion to Dismiss and/or for Judgment on the Pleadings, ECF No.
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