Goldberg v. Northwest Trustee Services, Inc. et al
ORDER re 1 APPLICATION for Leave to Proceed in forma pauperis filed by Charles D. Goldberg - the Clerk is directed to reassign this matter to a District Judge for review and consideration of an order dismissing Plaintiff's complaint, and determining whether Plaintiff should be granted leave to amend. Signed by Judge Candy W. Dale. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (klw) on 6/29/2015).
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
CHARLES D. GOLDBERG,
Case No. 1:15-cv-00216-CWD
NORTHWEST TRUSTEE SERVICES,
INC. and WELLS FARGO HOME
The Clerk of Court conditionally filed pro se Plaintiff Charles Goldberg’s
complaint as a result of his in forma pauperis request. Pursuant to 28 U.S.C. §1915, this
Court must review Plaintiff’s in forma pauperis complaint to determine whether it may be
summarily dismissed. Plaintiff’s complaint is subject to dismissal because his complaint
fails to state a claim upon which relief can be granted. But because Plaintiff, the only
party appearing in this case, has not consented to the jurisdiction of a United States
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Magistrate Judge to enter final orders in this case, 1 the Court enters the following order
directing the Clerk of the Court to reassign this matter to a District Judge for
consideration of an order dismissing the Complaint, or alternatively requiring Plaintiff to
pay the filing fee to proceed.
Plaintiff is suing Northwest Trustee Services, Inc., and Wells Fargo Home
Mortgage for alleged violations of the Fair Debt Collection Practices Act and for
“Identity Theft.” From what the Court can glean from the complaint, it appears
Northwest and Wells Fargo have initiated foreclosure proceedings against Plaintiff’s
personal residence. The complaint has attached to it a Deed of Trust, executed by
borrower Charles Goldberg, “a married man as his sole and separate property,” and
noting the Lender as Wells Fargo Financial Idaho, Inc. Wells Fargo loaned $118,560.66
on December 5, 2007, which debt was secured by Plaintiff’s residence located at 480 B
Avenue East, in Wendell, Idaho. The Deed of Trust indicated Lender could accelerate
payment of the indebtedness upon Borrower’s default, or invoke the power of sale as a
remedy for default.
The complaint indicates that, “at some time after the mortgage was recorded,”
Defendants began attempting to foreclose under the terms of the mortgage. Written
communications began in July of 2013, between Plaintiff and Defendants. Plaintiff
alleges that Defendants falsely represented they held the note, had the right to foreclose,
See United States v. Real Property, 135 F.3d 1312, 1316 (9th Cir. 1998) (holding that in an in rem civil forfeiture
action wherein the plaintiff consented, the magistrate judge had jurisdiction to enter a final judgment over a
defaulted person who was technically not a “party” to the litigation); Neals v. Norwood, 59 F.3d 530, 532 (5th Cir.
1995) (reasoning that unserved defendants are not parties).
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would sell Plaintiff’s property at public auction, and that they each issued false
documents to him. Plaintiff alleges also that Defendants, beginning on July of 2013 and
continuing through May of 2015, obtained records through the public domain that pertain
to Plaintiff’s property and used the records to “participate in a public auction of the
plaintiff’s home.” Plaintiff contends that Defendants induced him to divulge his tax
records and other private information, and “falsely presented” themselves to obtain his
Based upon these allegations, Plaintiff asserts one count against each Defendant
for violation of the FDCPA, and one count for identity theft against each Defendant.
Plaintiff seeks money damages and reimbursement of costs and attorney fees associated
with defending against the foreclosure process.
Pro se complaints, “however inartfully pleaded,” are held to “less stringent
standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519,
520 (1972). Therefore, because Plaintiff proceeds pro se, the Court will construe his
pleadings liberally and afford him the benefit of any doubt. Bretz v. Kelman, 773 F.2d
1026, 1027 n.1 (9th Cir. 1985) (en banc). The Court must dismiss a complaint or any
portion thereof which states a claim that is frivolous or malicious, that fails to state a
claim upon which relief may be granted, or that seeks monetary relief from a defendant
who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B).
If a complaint fails to state a claim, the court must grant the plaintiff leave to
amend, “even if no request to amend the pleading was made, unless [the court]
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determines that the pleading could not possibly be cured by the allegation of other facts.”
Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 247 (9th Cir.
1990). Indeed, a dismissal without leave to amend is improper unless it is beyond doubt
that the complaint “could not be saved by any amendment.” Harris v. Amgen, Inc., 573
F.3d 728, 737 (9th Cir. 2009). “In determining whether a complaint is frivolous, a court is
not bound, as it usually is when making a determination based solely on the pleadings, to
accept without question the truth of the plaintiff’s allegations.” See Denton v. Hernandez,
504 U.S. 25, 32 (1992) (emphasis in original). The Court may find a complaint factually
frivolous “when the facts alleged rise to the level of the irrational or the wholly
incredible, whether or not there are judicially noticeable facts available to contradict
them.” See id.; see also O’Loughlin v. Doe, 920 F.2d 614, 617 (9th Cir. 1990) (holding
complaint submitted in forma pauperis “is frivolous if it has no arguable basis in fact or
In Forma Pauperis Request
All parties instituting any civil action, suit, or proceeding in a district court of the
United States, except an application for a writ of habeas corpus, must pay a filing fee of
$400.00. See 28 U.S.C. § 1914(a). An action may proceed despite a plaintiff's failure to
prepay the entire fee only if the plaintiff is granted leave to proceed in forma pauperis
pursuant to 28 U.S.C. § 1915(a). See Rodriguez v. Cook, 169 F.3d 1176, 1177 (9th Cir.
2009). Motions to proceed in forma pauperis are addressed to the sound discretion of the
District Court. United States v. McQuade, 647 F.2d 938, 940 (9th Cir. 1981), cert.
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denied, 455 U.S. 958 (1982). Where the moving party fails to establish poverty, it is
within the discretion of the court to deny the motion to proceed in forma pauperis. Id.
Plaintiff filed a complaint against Northwest Trustee Services, Inc., and Wells
Fargo Home Mortgage Company, because of their “attempted foreclosure of plaintiff’s
property.” Compl. at 4, 7, 8. Plaintiff indicates he owns a home at 480 B Avenue E., in
Wendell, Idaho. In Forma Pauperis Application (Dkt. 1 at 3); Deed of Trust (Dkt. 2-1 at
2.) In his IFP request, he indicates he pays home-mortgage payments of $983 per month,
and his monthly expenses (including his home mortgage payment) are $1,713.00. His
income consists of social security and disability payments totaling $2,120 per month, and
he has $110.00 in cash and $53.00 in his checking account. The acknowledgement on the
Deed of Trust attached to his complaint indicates Plaintiff signed the deed before a notary
as “a married man,” yet he failed to list the average monthly income of his spouse on his
IFP application. Further, if Plaintiff is indeed facing foreclosure proceedings as his
complaint represents, the only way he can be in that predicament is for non-payment of
his mortgage payment of $983 per month.
Based upon the above, the Court therefore recommends that Plaintiff’s IFP request
be denied, and that he pay the full filing fee before he may be allowed to proceed.
Alternatively, because Plaintiff’s complaint does not state a claim under the FDCPA, his
IFP request should be denied and his complaint dismissed.
Fair Debt Collection Practices Act
Plaintiff alleges a violation of the Fair Debt Collection Practices Act (“FDCPA”).
It appears Plaintiff claims that Defendants Northwest Trustee Services and Wells Fargo
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Home Mortgage engaged in unfair and deceptive collection practices in violation of the
FDCPA, because they both began attempting to foreclose on the mortgage and asserted
rights to foreclosure.
Congress enacted the FDCPA “to eliminate abusive debt collection practices by
debt collectors, to insure that those debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged, and to promote consistent State
action to protect consumers against debt collection abuses.” 15 U.S.C.A. § 1692. But the
“activity of foreclosing on [a] property pursuant to a deed of trust is not the collection of
a debt within the meaning of the” FDCPA. Hulse v. Ocwen Fed. Bank, FSB, 195
F.Supp.2d 1188, 1204 (D. Or. 2002). And lenders and mortgage companies are not “debt
collectors” within the meaning of the FDCPA when participating in foreclosure
proceedings. Ines v. Countrywide Home Loans, Inc., Case No. 08cvl267 WQH (NLS),
2008 WL 2795875, *3 (S.D. Cal. July 18, 2008) (citing Williams v. Countrywide, 504
F.Supp.2d 176, 190 (S.D.Tex.2007) (“Mortgage companies collecting debts are not ‘debt
The term “debt collectors” refers to “any person who uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of which is the
collection of any debts, or who regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. §
1692a(6). The term does not include “any officer or employee of a creditor while, in the
name of the creditor, collecting debts for such creditor.” Id., § 1692a(6) (A). Mortgage
companies collecting debts are not “debt collectors.” Perry v. Stewart Title Co., 756 F.2d
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1197, 1208 (5th Cir. 1985) (noting that the legislative history of the act indicates that a
“debt collector” does not include the consumer's creditors, a mortgage servicing
company, or an assignee of a debt, as long as the debt was not in default at the time it was
In this case, Plaintiff does not allege any facts in support of his allegations that
either Defendant qualifies as a “debt collector,” or that either Defendant engaged in “debt
collection activity” as that has been defined by the above authorities. According to the
complaint, Defendants were attempting to foreclose under the terms of the mortgage and
deed of trust. But, the lender, and the servicer of the loan, do not qualify as debt
collectors under the FDCPA. Caballero v. Ocwen Loan Serv., Case No. C–09–01021
RMW, 2009 WL 1528128, at *1 (N.D.Cal. May 29, 2009); see also De Dios v. Internat'l
Realty & Investments, 641 F.3d 1071, 1074–75 and n. 3 (9th Cir. 2011) (explaining that a
debt collector does not include the creditor who originated the debt, or “mortgage service
companies and others who service outstanding debts for others,” if the debt was not in
default at the time they acquired the servicing rights).
This Court has decided several similar claims alleging violations of the FDCPA
asserted against mortgage companies, mortgage servicers, trustees, and beneficiaries of a
deed of trust exercising their right to foreclose on real property for nonpayment of an
underlying mortgage debt. All such claims have been dismissed. See, e.g., Purdy v. Aegis
Wholesale Corp., No. 1:11–cv–00640–EJL–REB, 2012 WL 4470945 *8 (D. Idaho Aug.
17, 2012) (“the FDCPA does not apply to actions taken by lenders or their agents in
foreclosing on a lenders' security interest,” and citing cases); (Homeyer v. Bank of
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America, N.A., No. 1:12–cv–00021–EJL–CWD, 2012 WL 4105132 (D. Idaho Aug. 27,
2012) (dismissing claims brought under the FDCPA against loan servicer); Armacost v.
HSBC Bank USA, No. 10–CV–274–EJL–LMB, 2011 WL 825151 (D. Idaho Feb. 9, 2011)
(non-judicial foreclosure action generally does not constitute a debt collection activity
under the FDCPA).
As currently drafted, Plaintiff’s complaint fails to state a claim under the FDCPA.
Accordingly, Plaintiff should not be allowed to proceed on any claim against these
Defendants based upon the FDCPA. Further, based upon the above authorities, the Court
recommends that no leave to amend be granted to Plaintiff.
Claims for Identity Theft
Plaintiff’s two remaining claims against Defendants allege “identity theft,” and
appear to arise under state law because Plaintiff cursorily invokes diversity jurisdiction as
the basis for this Court’s jurisdiction. Plaintiff fails to state any state or federal statute,
however, Defendants may have violated. The basis for Plaintiff’s claims are that
Defendants “willfully, falsely presented itself and impersonated itself to the plaintiff as
another person to obtain the plaintiff’s property for purposes not permitted by law or
agreement.” However, the property taken appears to include records from the public
domain, and requests for Plaintiff’s tax records and a credit report inquiry, which
apparently led Defendants to initiate foreclosure proceedings.
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement
of the claim showing that the pleader is entitled to relief,” in order to “give the defendant
fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atlantic
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Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). It is both
a federal and state crime to assume a false identity and commit theft. See 15 U.S.C.
§ 1681c-1; 18 U.S.C. §§ 1028(a)(7) and 1028A; Idaho Code § 18-2403; 18-3126.
Although there is no civil cause of action for “identity theft,” courts confronting
such a claim often construe it as a claim for conversion of intangible personal property.
See CTC Real Estate Servs. v. Lepe, 140 Cal.App.4th 856, 860–61, 44 Cal.Rptr.3d 823
(2006) (“One's personal identifying information can be the object of theft.”) (quotation
marks and citations omitted). The elements of a claim for conversion of personal
property2 in Idaho are: (1) that the charged party wrongfully gained dominion of
property; (2) that property is owned or possessed by plaintiff at the time of possession;
(3) the property in question is personal property; and (4) resulting damages. Medical
Recovery Servs., LLC v. Bonneville Billing and Collections, Inc., 336 P.3d 802, 807
However, Plaintiff fails to state a claim sufficient under Rule 8. The complaint
indicates the information Defendants “took” came from public records. Defendants
obtained also a credit report and requested Plaintiff to voluntarily release information
such as tax records. Further, it appears that the only damages Plaintiff suffered, or will
suffer, is foreclosure of his home. See Pineda v. GMAC Mortg., LLC, No. CV 08-5341
AHM (PJWx), 2008 WL 5432281 at *9 (C.D. Cal. Dec. 29, 2008) (Plaintiff failed to state
a cause of action for identity theft based upon an allegation that defendants took his
Idaho Courts have not yet determined whether the conversion of intangible property other than a negotiable
instrument (such as a check) constitutes a claim under Idaho law. Medical Recover Servs., LLC, 336 P.3d at 807.
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personal information without his consent and used it for profit and have caused damage
to the plaintiff’s financial reputation). The facts as stated do not rise to the level of
conversion, and do not state a claim that survives Rule 8. 3
Because the undersigned Magistrate Judge lacks the authority to enter final orders
in this case, the Clerk is directed to reassign this matter to a District Judge for review and
consideration of an order dismissing Plaintiff’s complaint, and determining whether
Plaintiff should be granted leave to amend.
June 29, 2015
Based upon the facts, it does not appear Plaintiff would be able to amend his claim to assert conversion given
Defendants obtained the personal information from public records, which presumes public access by anyone, and
asked for Plaintiff to voluntarily give them his tax and other information.
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