Amelina et al v. Manufacturers and Traders Trust Company et al, No. 3:2014cv01906 - Document 76 (S.D. Cal. 2016)

Court Description: 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)

Download PDF

Amelina et al v. Manufacturers and Traders Trust Company et al 4 Doc. 76 <' 1 2 ! 3 I 4 JUL 2 1 2016 CLERK US DiS-I fllC'TCOURT SOUTHERN DISTRICT OF CALIFORNIA BY .\ DEPUTY 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 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, . 13 14 15 16 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'), 21 (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 23 Plaintiff s Third Amended Complaint (ECF No. 68) filed byDefendant Manufacturers 24 and Traders Trust Company aka M&T Bank ("M&T"). 25 I. Background 26 On August 13, 2014, Plaintiff Victoria Ame1ina and Plaintiffs A.A., D.S., and 27 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 - 1- 14cv1906·WQH-NLS Dockets.Justia.com 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 -2- 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 -3- 14cv1906-WQH-NLS 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. 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 .... 5 6 7 8 "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. "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 -4- 14cv 1906-WQH-NLS 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 19 ." Id. 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. -5- 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. -6- 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 22 23 138_ "Wolf identifies itself as a debt collector in correspondence to consumers_" Id 41. "Defendant Wolf advertises itself on its website as a collection firm and even maintains a separate contact fax and email address for the Collections Department" 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_ -7- 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 - 8- 14cv1906-WQH-NLS 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 -9- 14cv 1906-WQH-NLS 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 - 10 - 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 - 11 - 14cv 1906-WQH-NLS 1 2 3 (1) the plaintiff has been the object of collection activity arising from a consumer debt; 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 - 12 - 14cvI906-WQH-NLS 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 (ECF No. 57 at 12-13). The TAC alleges that Plaintiff Victoria Amelina's loan had been in default for 5 6 7 8 9 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 10 of collection ...." (TAC 11 21). The TAC alleges that "M&T Bank took on this defaulted residential mortgage in order to make a profit by collecting on this now 12 defaulted loan. This loan was one ofthousands ofloans that M&T Bank has acquired 13 over the years." Id. 14 15 16 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 25 99, 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. 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. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (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 - 26- 14cv1906·WQH-NLS 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. 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 - 27- 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 19 20 21 22 23 24 25 26 27 28 - 28- 14cv 1906-WQH-NLS

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.