Kinney v. Erikson et al

Filing 29

MEMORANDUM DECISION AND ORDER granting in part and denying in part 5 Motion to Dismiss; granting in part and denying in part 6 Motion to Dismiss; granting in part and denying in part 7 Motion to Dismiss; granting in part and denying in part 8 Motion to Dismiss for Lack of Jurisdiction; granting in part and denying in part 9 Motion to Dismiss; finding as moot 19 Motion to Amend Service. If Plaintiff decides to file an amended complaint, she must file it within 30 days of the date of this order. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
JASMINE KINNEY,
Case No. 4:11-cv-00471-BLW
Plaintiff,
MEMORANDUM DECISION AND
ORDER

v.
TODD R. ERIKSON, TODD R.
ERIKSON, P.A., BONNEVILLE
BILLING & COLLECTION, BINGHAM
MEMORIAL HOSPITAL, DJ MARC
CARDINAL, M.D., MEDICAL
IMAGING ASSOCIATION OF IDAHO
FALLS,
Defendants.

INTRODUCTION
The Court has before it Plaintiff Jasmine Kinney’s “Motion to Amend[] Service of
Summons and Amended Complaint” (Dkt. 19) and one Motion to Dismiss filed by each
of the five named Defendants: Bonneville Billing & Collection (Dkt. 5), Todd Erikson
(Dkt. 6), Medical Imaging Association of Idaho Falls (Dkt. 7), Bingham Memorial
Hospital (Dkt. 8), and DJ Marc Cardinal (Dkt. 9). The Court, having considered the
briefing and related materials in the record, and having determined that oral argument
would not significantly aid its decision, now issues the following Memorandum Decision
and Order.
MEMORANDUM DECISION AND ORDER — 1

BACKGROUND
Plaintiff Kinney brings this action against Defendants for alleged violations of the
Fair Debt Collection Practices Act (FDCPA), stemming from Defendants’ attempt to
collect what she refers to as a “nonexistent debt”. Amd. Compl. at 2-7, Dkt. 2. The
record contains little in the way of factual background. However it appears that in June
of 2011 Plaintiff was sued in Idaho state court by Defendant Bonneville Billing &
Collections, through its attorney Todd Erikson (also named as a Defendant in this action).
The suit was brought to recover sums allegedly owed to Defendants Bingham memorial
Hospital, DJ Marc Cardinal, M.D., and Medical Imaging Associate of Idaho Falls, for
“medical services” allegedly received by Plaintiff in 2009. The Amended Complaint
alleges that on the 12th and 30th of August, 2011, “Defendants used false representation to
collect or attempt to collect a debt” and “[falsely] asserted a right which [they] lack[] . . .
the right to enforce a debt.” Amd. Compl. at 4-7, Dkt. 2.
Plaintiff asserts that she has no contractual obligation to pay any Defendant. Id.
Defendants seek dismissal under Rule 12(b)(6) for failure to state a claim for which relief
may be granted, but also challenge the sufficiency of the process served upon them. The
Court will address each argument below.
ANALYSIS
1.

Legal Standard for Rule 12(b)(6) Motions
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
MEMORANDUM DECISION AND ORDER — 2

Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964 (2007). While a complaint
attacked by a Rule 12(b)(6) motion to dismiss “does not need detailed factual
allegations,” it must set forth “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Id. at 555. 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.” Id. at 570. 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. at 556.
The plausibility standard is not akin to a “probability requirement,” but it asks for more
than a sheer possibility that a defendant has acted unlawfully. Id. Where a complaint
pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the
line between possibility and plausibility of ‘entitlement to relief.’ ” Id. at 557.
In a more recent case, the Supreme Court identified two “working principles” that
underlie Twombly. See Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). First, the tenet
that a court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions. Id. “Rule 8 marks a notable and generous departure
from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the
doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at
1950. Second, only a complaint that states a plausible claim for relief survives a motion
to dismiss. Id. “Determining whether a complaint states a plausible claim for relief will .
. . be a context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.” Id.
MEMORANDUM DECISION AND ORDER — 3

Providing too much in the complaint may also be fatal to a plaintiff. Dismissal may
be appropriate when the plaintiff has included sufficient allegations disclosing some
absolute defense or bar to recovery. See Weisbuch v. County of L.A., 119 F.3d 778, 783,
n. 1 (9th Cir. 1997) (stating that “[i]f the pleadings establish facts compelling a decision
one way, that is as good as if depositions and other . . . evidence on summary judgment
establishes the identical facts”).
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)(issued 2 months after Iqbal).1 The Ninth Circuit has held that “in
dismissals for failure to state a claim, a district court should grant leave to amend even if
no request to amend the pleading was made, unless it determines that the pleading could
not possibly be cured by the allegation of other facts.” Cook, Perkiss and Liehe, Inc. v.
Northern California Collection Service, Inc., 911 F.2d 242, 247 (9th Cir. 1990). The
issue is not whether plaintiff will prevail but whether he “is entitled to offer evidence to
support the claims.” Diaz v. Int’l Longshore and Warehouse Union, Local 13, 474 F.3d
1202, 1205 (9th Cir. 2007)(citations omitted).

1

The Court has some concern about the continued vitality of the liberal amendment policy adopted in
Harris v. Amgen, based as it is on language in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), suggesting
that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that
the plaintiff can prove no set of facts in support of his claim. . ..” Given Twombly and Iqbal’s rejection
of the liberal pleading standards adopted by Conley, a question arises whether the liberal amendment
policy of Harris v Amgen still exists. Nevertheless, the Circuit has continued to apply the liberal
amendment policy even after dismissing claims for violating Iqbal and Twombly. See Market Trading,
Inc. v. AT&T Mobility, LLC, 2010 WL 2836092 (9th Cir. July 20, 2010) (not for publication).
Accordingly, the Court will continue to employ the liberal amendment policy.
MEMORANDUM DECISION AND ORDER — 4

Under Rule 12(b)(6), the Court may consider matters that are subject to judicial
notice. Mullis v. United States Bank, 828 F.2d 1385, 1388 (9th Cir. 1987). The Court
may take judicial notice “of the records of state agencies and other undisputed matters of
public record” without transforming the motions to dismiss into motions for summary
judgment. Disabled Rights Action Comm. v. Las Vegas Events, Inc., 375 F.3d 861, 866
(9th Cir. 2004). The Court may also examine documents referred to in the complaint,
although not attached thereto, without transforming the motion to dismiss into a motion
for summary judgment. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005).
2.

Sufficiency of the Amended Complaint under FRCP 8
Plaintiff’s Amended Complaint alleges violations of 15 U.S.C. § 1692(e), (f), and

(g), respectively, but it does not contain sufficient factual matter so as to “give the
defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964 (2007). The only
facts recited in the Complaint are the identification of two dates on which some action
was taken by one or more of the Defendants which allegedly violated the Plaintiff’s rights
in some unidentified way. The remainder of the Complaint consists of bare legal
conclusions drawn from the language of § 1692. This does not satisfy the requirements
of Rule 8 or Twombly and its progeny.
Accordingly, the Court will dismiss Plaintiffs’ claims pursuant to Rule 12(b)(6).
However, in accordance with the foregoing authorities, Plaintiff may amend her
Complaint to supply the required additional facts. If she chooses to file an amended

MEMORANDUM DECISION AND ORDER — 5

complaint, the Court cautions plaintiff that she must assert more than bare conclusions to
state her claims.
For example, the Ninth Circuit makes clear that in order to state a claim for
violation of § 1692(e) or (f), a Plaintiff must demonstrate that an unsophisticated debtor
would “likely be misled” by a communication from a debt collector. Guerrero v. RJM
Acquisitions LLC, 499 F.3d 926, 934 (2007). “Debt collector” is a defined term under the
FDCPA, and 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. § 1692(a)(6). Because the Act’s civil
liability provision, § 1692(k), premises liability upon the Defendant’s status as a “debt
collector,” Plaintiffs seeking relief directly against their creditors must look elsewhere
unless the creditor is also a “debt collector” under the above definition.
Based on the scant record before the Court, it appears that at least some of the
defendants are not debt collectors. Therefore, because status as a debt collector is critical
to her action, Plaintiff is cautioned that she should explain, in any forthcoming amended
complaint, the grounds upon which she concludes that each defendant is a “debt
collector” under the statutory definition. Moreover, if she chooses to amend her
complaint and continue to assert § 1692(e) and (f) claims, she should describe the
communications she believes were misleading , which Defendants were responsible for
making the communications, and why they were misleading.

MEMORANDUM DECISION AND ORDER — 6

Additionally, 15 U.S.C. § 1692(g) requires debt collectors to include certain
notices in their initial communications with debtors, and to cease collection of debts
which are subsequently “disputed” by the debtor until the debt collector obtains
verification of the debt. Disputed status attaches to a debt when the consumer “notifies
the debt collector in writing within the thirty-day period described in [§ 1692(g)(a)] that
the debt, or any portion thereof, is disputed” or when the consumer “requests the name
and address of the original creditor.” Id. Thus, in order to claim a violation of § 1692(g),
a consumer must show that a debt collector either failed to timely supply the notices
required by subsection (a), or continued its attempts to collect a disputed debt prior to
obtaining verification of the debt and supplying such verification to the consumer, as
required by subsection (b).
If Plaintiff chooses to continue to assert her § 1692(g) claim, she should indicate
the approximate date upon which she disputed the debt, whether such dispute took place
by mail, phone, fax, or some other method of communication, and to whom she
communicated her dispute. She should state specifically which Defendant unlawfully
resumed collections activities against her prior to providing the required validation, and
state the approximate dates of such activities.
3.

Sufficiency of Plaintiff’s Service of Process
All Defendants also move for dismissal under Rule 4 and Rule 12(b)(5) of the

Federal Rules of Civil Procedure, based upon insufficient service of process. “A federal
court does not have jurisdiction over a defendant unless the defendant has been served
properly under Fed.R.Civ.P. 4.” Direct Mail Specialists, Inc. v. Eclat Computerized
MEMORANDUM DECISION AND ORDER — 7

Technologies, Inc., 840 F.2d 685, 688 (9th Cir. 1988). However, Rule 4 is “liberally
construed so long as a party receives sufficient notice of the complaint.” Id. (internal
quotation marks omitted). Actual notice of the suit by Defendants, while not sufficient
by itself to cure defects in service, “may be a factor in finding process valid when there
are other factors that make process fair.” Id. Moreover, when serving a corporate
defendant, “[d]espite the language of the Rule, service of process is not limited solely to
officially designated officers, managing agents, or agents appointed by law for the receipt
of process . . . . [S]ervice can be made upon a representative so integrated with the
organization that he will know what to do with the papers.” Id. “Generally, service is
sufficient when made upon an individual who stands in such a position as to render it fair,
reasonable and just to imply the authority on his part to receive service.” Id.
Here, Plaintiff’s service was technically defective because she failed to personally
serve the individual defendants in accordance with Rule 4(e), and she failed to deliver
process to the appropriate agent of the corporate defendants in accordance with Rule 4(h).
However, it is undisputed that all Defendants received actual notice of the suit. Therefore,
the Court will consider whether there are other factors which would make the process
valid and fair.
Significantly, there appears to be no prejudice to any Defendant. Each received
notice of the lawsuit, and each filed a motion to dismiss. Additionally, Plaintiff indicates
that, based upon representations by counsel for three of the five defendants, she was
under a belief that serving counsel was sufficient. This misunderstanding, coupled with
Plaintiff’s pro se status, suggests service upon counsel was fair. See, e.g., Borzeka v.
MEMORANDUM DECISION AND ORDER — 8

Heckler, 739 F.2d 444, 447 n. 2 (9th Cir. 1984) (directing the district court on remand to
consider, among other factors, appellant’s pro se status at the time defective service was
made when determining whether the defects in service were excusable.) Finally, given
the Court’s decision to dismiss Plaintiff’s Complaint under Rule 12(b)(6) with leave to
amend, the Court finds that the earlier service of process is fair, reasonable and just.
There is no just reason to subject Plaintiff to the added expense of re-serving a Complaint
which will be summarily dismissed. Rule 4 is a notice-giving device, not a means of
delaying litigation on the merits. Direct Mail Specialists, Inc., 840 F.2d at 688 (stating
that “[t]he rules are to be applied in a manner that will best effectuate their purpose of
giving the defendant adequate notice.”). Accordingly, the Court will deny the motions
with respect to the service of process argument.
ORDER
IT IS ORDERED:
1. The individual motions to dismiss filed by each defendant – Bonneville Billing
& Collection (Dkt. 5), Todd Erikson (Dkt. 6), Medical Imaging Association of
Idaho Falls (Dkt. 7), Bingham Memorial Hospital (Dkt. 8), and DJ Marc
Cardinal (Dkt. 9) – are GRANTED IN PART AND DENIED IN PART.
They are granted to the extent they seek dismissal under Rule 12(b)(6) without
prejudice. They are denied to the extent they seek dismissal under Rules
12(b)(2) and 12(b)(5) based on improper service of process. If Plaintiff decides
to file an amended complaint, she must file it within 30 days of the date of this
order.
MEMORANDUM DECISION AND ORDER — 9

2. Plaintiff’s Motion to Amend Service (Dkt. 19) is DEEMED MOOT.

DATED: April 16, 2012

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

MEMORANDUM DECISION AND ORDER — 10