Baillie v. Account Receivable Management of Florida Inc et al, No. 4:2011cv00021 - Document 30 (N.D. Cal. 2011)
Court Description: ORDER GRANTING PLAINTIFFS 9 MOTION TO REMAND AND DENYING AS MOOT DEFENDANT THOMAS ASSENZIOS 8 MOTION TO DISMISS. Signed by Judge Claudia Wilken on 2/14/2011. (ndr, COURT STAFF) (Filed on 2/14/2011)
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Baillie v. Account Receivable Management of Florida Inc et al Doc. 30 1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 8 AMY LYNNE BAILLIE and KATHERINE ROSAS, United States District Court For the Northern District of California 11 12 13 14 15 16 ORDER GRANTING PLAINTIFFS’ MOTION TO REMAND AND DENYING AS MOOT DEFENDANT THOMAS ASSENZIO’S MOTION TO DISMISS (Docket Nos. 8 and 9) Plaintiffs, 9 10 No. C 11-00021 CW v. ACCOUNT RECEIVABLE MANAGEMENT OF FLORIDA, formerly known as UNITED LEGAL CORPORATION; MTE FINANCIAL SERVICES, INC.; INSTANTCASHLOANTILLPAYDAY.COM; PROCESSING SOLUTIONS, LLC; INSTANT CASH USA; FIRST EAST, INC.; FAST FUNDING THE COMPANY, INC.; RIO RESOURCES; THOMAS ASSENZIO; and JOLENE HART ASSENZIO, Defendants. / 17 18 19 Plaintiffs Amy Lynne Baillie and Katherine Rosas move to 20 remand their action to Alameda County Superior Court. Defendant 21 Thomas Assenzio opposes the motion. 22 Assenzio’s opposition or opposes Plaintiffs’ motion. 23 moves to dismiss Plaintiffs’ complaint for lack of personal 24 jurisdiction; briefing on his motion was suspended pending 25 resolution of Plaintiffs’ motion to remand. 26 remand was decided on the papers. 27 submitted by the parties, the Court GRANTS Plaintiffs’ motion to 28 remand and DENIES as moot Mr. Assenzio’s motion to dismiss. No other Defendant joins Mr. Mr. Assenzio Plaintiffs’ motion to Having considered the papers Dockets.Justia.com 1 2 3 BACKGROUND I. Factual Allegations The following allegations are contained in Plaintiffs’ Third 4 Amended Complaint (3AC), which was filed in state court prior to 5 removal. 6 Plaintiffs are California residents. Defendant Thomas 7 Assenzio, who has “principal places of business” located in 8 Colorado, “owned, controlled, managed and/or directed” Defendants 9 MTE Financial Services, Inc.; Instant Cash USA; Rio Resources; United States District Court For the Northern District of California 10 Processing Solutions, LLC; First East Inc.; and 11 Instantcashloantillpayday.com. 12 that Mr. Assenzio had the same or a similar relationship with 13 Defendant Fast Funding The Company, Inc., which was a “wholly owned 14 subsidiary, sister corporation or fictitious name of” MTE 15 Financial. 16 business as consumer lenders in California. 17 Defendant Jolene Hart Assenzio, who is Mr. Assenzio’s wife, held an 18 ownership interest in Processing Solutions and First East. 19 Plaintiffs refer to the Assenzios and all of these entity 20 Defendants as “Defendant Lenders.” 21 Id. ¶ 16. 3AC ¶ 4. Plaintiffs do not allege All of these entity Defendants conducted Id. ¶¶ 10-16. 3AC ¶ 18. On or about July 7, 2006, Baillie obtained a $300.00 “payday 22 loan,” from MTE Financial, doing business as Instant Cash USA. 23 ¶ 2 and Ex. A, at 1. 24 following payment terms: 25 26 27 28 A “Loan Note and Disclosure” provided the You must make one payment of $390 due on 7/14/2006, if you decline the option of renewing your loan. If renewing is accepted, you will pay the finance charge of $90 only, on 7/14/2006. You will accrue new finance charges with every renewal of your loan. On your fifth 2 3AC 1 2 3 renewal and every renewal thereafter, your loan will be paid down by $50 ($100 on balances over $500). This means your account will be debited the finance charge plus $50 ($100 on balances over $500) on the due date. This will continue until your loan is paid in full. 4 Between July 14, 2006 and December 1, 2006, Baillie’s checking 5 account was debited eleven times on nine different dates, for an 6 amount totaling $977.00. 7 United Legal Corporation, predecessor in interest to Defendant 8 Account Receivable Management of Florida (ARM), was assigned 9 Baillie’s loan. On or about October 15, 2006, Defendant On February 8, 2007, United Legal, notified United States District Court For the Northern District of California 10 Baillie that, notwithstanding her payments, $430.00 remained due on 11 her loan. 12 1,216.667 percent per annum, which is usurious and unconscionable 13 under California law. 14 For her loan, Baillie was charged interest at a rate of On or about June 19, 2006, Rosas obtained a $300.00 loan from 15 Rio Resources. 16 Resources debited Rosas’s checking account on seven different 17 dates, for an amount totaling $825.00. 18 2006, Rosas obtained a $300.00 loan from Instant Cash USA; 19 thereafter, Instant Cash USA debited her checking account for 20 principal and interest payments for an undisclosed amount. 21 interest rates associated with her loans were usurious and 22 unconscionable under California law. 23 2006 loan, Rosas was charged interest at a rate in excess of 700 24 percent per annum; unlike with her June, 2006 loan, Rosas does not 25 specify how much she paid with respect to this loan. 26 27 28 Between June 30, 2006 and September 22, 2006, Rio On or about November 3, The With respect to her November, Plaintiffs seek to bring claims on behalf of themselves and a class, defined as, “All persons . . . who are residents of the 3 1 State of California and entered into Instant Cash Agreements with 2 Defendant Lenders . . . and may have been a recipient of a 3 collection Notice from Defendant Account Receivable Management of 4 Florida, Inc., formerly known as United Legal Corporation . . . .” 5 Plaintiffs allege that this class includes “thousands of people in 6 California.” 7 3AC ¶ 65. Plaintiffs assert claims for: (1) “usury and/or unconscionable 8 lending,” against Defendant Lenders; (2) violation of California’s 9 Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200, et United States District Court For the Northern District of California 10 seq., against Defendant Lenders; (3) violation of the UCL, against 11 Defendant ARM; (4) unjust enrichment, against Defendant Lenders and 12 Defendant ARM; and (5) an accounting, against Defendant Lenders and 13 Defendant ARM. 14 With respect to their first claim, Plaintiffs seek “a penalty 15 equal to three times the interest paid during the year immediately 16 prior to the filing” of their complaint and “to cancel all future 17 interest that Defendants claim is due.” 18 also seek “to recover all interest paid to Defendants during the 19 two years immediately preceding the filing of” their action and to 20 recover all interest they or putative class members paid “that is 21 not otherwise allowed by law commencing with the date four years 22 immediately preceding the filing” of their action. 23 25. 24 sixty-five years or older. 25 3AC at 27:18-20. They Id. at 27:20- Plaintiffs seek trebling of damages suffered by class members As for their second and third claims, Plaintiffs seek to 26 enjoin Defendants from charging an interest rate in excess of the 27 legal maximum. 28 They also seek restitution for any unlawful, unfair 4 1 or fraudulent act committed by Defendants. 2 Finally, with regard to their fourth and fifth claims, 3 Plaintiffs seek recovery for “all interest payments and other 4 monies” Defendants received from them and the putative class, 5 “commencing with the date four years immediately preceding the 6 filing” of their action. 7 3AC at 28:15-21. Plaintiffs seek attorneys’ fees and costs, pursuant to 8 California Code of Civil Procedure § 1021.5. 9 II. United States District Court For the Northern District of California 10 Procedural History Baillie initiated this action in Alameda County Superior Court 11 on May 22, 2007. 12 East and Instant Cash filed a motion to stay the action pending 13 arbitration. 14 Defendants appealed. 15 affirmed the trial court’s decision on the motion to stay. 16 11, 2010, these Defendants filed a petition for re-hearing before 17 the state court of appeal, which was denied. 18 these Defendants filed a petition for review in the California 19 Supreme Court, which was also denied. 20 state trial court granted Baillie’s motion to recover $119,775.00 21 for attorneys’ fees incurred during the litigation of the motion to 22 stay and the ensuing appeal. 23 On March 9, 2009, Processing Solutions, First The trial court denied the motion, and these On May 27, 2010, the state court of appeal On June On July 6, 2010, On October 29, 2010, the On November 3, 2010, Baillie filed the 3AC, which named Rosas 24 as an additional Plaintiff and the Assenzios as additional 25 Defendants. 26 action to federal court pursuant to the Class Action Fairness Act 27 (CAFA), 28 U.S.C. § 1332(d). 28 On January 4, 2011, Mr. Assenzio removed Plaintiffs’ 5 1 2 LEGAL STANDARD A defendant may remove a civil action filed in state court to 3 federal district court so long as the district court could have 4 exercised original jurisdiction over the matter. 5 § 1441(a). 6 before judgment, it appears that the district court lacks subject 7 matter jurisdiction over a case previously removed from state 8 court, the case must be remanded. 9 of the removal statute must be strictly construed. 28 U.S.C. Title 28 U.S.C. § 1447(c) provides that if, at any time On a motion to remand, the scope Gaus v. Miles, United States District Court For the Northern District of California 10 Inc., 980 F.2d 564, 566 (9th Cir. 1992). 11 against removal jurisdiction means that the defendant always has 12 the burden of establishing that removal is proper.” 13 should resolve doubts as to removability in favor of remanding the 14 case to state court. 15 16 “The ‘strong presumption’ Id. Courts Id. DISCUSSION Under CAFA, district courts have original jurisdiction over 17 actions “in which the matter in controversy exceeds the sum or 18 value of $5,000,000, exclusive of interest and costs, and is a 19 class action in which . . . any member of a class of plaintiffs is 20 a citizen of a State different from any defendant.” 21 § 1332(d)(2)(A). 22 aggregated to determine whether the jurisdictional amount is 23 satisfied. 24 28 U.S.C. CAFA also requires that class members’ claims be Id. § 1332(d)(6). To ascertain the amount in controversy, courts look first to 25 the complaint. 26 (9th Cir. 2010). 27 specific amount of damages sought, the party seeking removal under 28 Lewis v. Verizon Commc’ns, Inc., 627 F.3d 395, 399 However, “when the complaint does not contain any 6 1 diversity bears the burden of showing, by a preponderance of the 2 evidence, that the amount in controversy exceeds the statutory 3 amount.” 4 F.3d 676, 686 (9th Cir. 2006). 5 may proffer “‘summary-judgment-type evidence relevant to the amount 6 in controversy at the time of removal.’” 7 at 690 (quoting Singer v. State Farm Mut. Auto. Ins. Co., 116 F.3d 8 373, 377 (9th Cir. 1997)); see also Ruby v. State Farm Gen. Ins. 9 Co., 2010 WL 3069333, at *2 (N.D. Cal.). Id. at 397; see also Abrego Abrego v. Dow Chem. Co., 443 To do so, the removing defendant Abrego Abrego, 443 F.3d Satisfying the United States District Court For the Northern District of California 10 jurisdictional amount requirement cannot be achieved through 11 “speculation and conjecture.” 12 479 F.3d 994, 1002 (9th Cir. 2007). 13 Lowdermilk v. U.S. Bank Nat’l Ass’n, Plaintiffs assert that Mr. Assenzio, as the proponent of 14 federal jurisdiction, has not established that the amount in 15 controversy in their case exceeds $5,000,000. 16 not proffer any evidence in support of jurisdiction, but instead 17 extrapolates from Plaintiffs’ limited allegations that the amount 18 in controversy is at least $5,610,000. 19 and calculations are flawed. 20 Mr. Assenzio does However, his assumptions Mr. Assenzio asserts that there are at least 2,000 putative 21 class members, based on Plaintiffs’ allegation that the class 22 consists of “thousands” of California residents. 23 however, contains no evidence regarding how many California 24 residents obtained loans through Defendant Lenders.1 The record, 25 1 26 27 28 Defendants assert that Plaintiffs represented that “ARM has contacted over 1,700 California residents who were delinquent in their loans.” Notice of Removal ¶ 34. Although there is no evidence of this purported admission, Plaintiffs do not dispute 7 1 Even if the class consisted of 2,000 individuals, Mr. Assenzio 2 fails to show that, more likely than not, aggregating their claims 3 would satisfy the jurisdictional amount. 4 based on amounts paid for interest allegedly charged at usurious 5 and unconscionable rates; as noted above, they seek restitution for 6 interest paid, “a penalty equal to three times the interest paid 7 during the year immediately prior to the filing of Plaintiffs’ 8 complaint” and an award of treble damages with respect to all 9 interest paid by those class members aged sixty-five years or Plaintiffs allege injury United States District Court For the Northern District of California 10 older. 11 interest Baillie and Rosas paid, let alone how much interest each 12 class member paid. 13 Plaintiffs’ loans and those obtained by putative class members were 14 the same. 15 interest rate, whereas Rosas’s second loan allegedly had an annual 16 interest rate “in excess of 700%,” 3AC ¶ 41. 17 obtained loans for the same amount, the size and frequency of the 18 debits from their checking accounts differed. 19 evidence concerning how many class members were aged sixty-five 20 years or older. 21 and putative class members’ payments applied only to interest and 22 the average total payment was $901.00, which is an average of the 23 $977.00 and $825.00 debited from Baillie’s and Rosas’s checking 24 accounts respectively. 25 However, there is no direct evidence regarding how much Nor is there evidence that the terms of Notably, Baillie’s loan had a 1,216.667 percent annual 28 Finally, there is no Nevertheless, Mr. Assenzio posits that Plaintiffs’ These contentions lack support. Under the terms of Baillie’s loan, debits made at the time of 26 27 And even though they this figure. 8 1 the loan’s “fifth renewal and every renewal thereafter” would be 2 the sum of a finance charge and $50.00, which would be applied 3 toward the loan’s principal. 4 apparently renewed nine times, based on the nine dates her account 5 was debited. 6 $250.00 was presumably applied toward her loan’s principal, whereas 7 $651.00 went toward interest. 8 subjected to the same payment terms. 9 loan was apparently renewed seven times, based on the seven dates 3AC, Ex. A. Baillie’s loan was Thus, out of the $901.00 Baillie allegedly paid, There is no evidence that Rosas was Assuming that she was, her United States District Court For the Northern District of California 10 her account was debited. 11 paid, $150.00 presumably applied toward her loan’s principal, 12 whereas $675.00 went toward interest. 13 Thus, out of the $825.00 Rosas allegedly Mr. Assenzio then assumes that the average of the interest 14 allegedly paid by Baillie and Rosas reflects the average paid by 15 the putative class members. 16 support. 17 class member paid $663.00 in interest or that it is appropriate to 18 extrapolate the average total payment of 2,000 putative class 19 members from the payments of two individuals. 20 explained, there is no evidence that putative class members’ loans 21 were subject to the same interest rate or that payments were 22 allocated between interest and principal in the same way as 23 Baillie’s. 24 amount or the average duration putative class members held their 25 loans, both of which would impact the amount of interest a class 26 member would have paid. 27 28 However, this assumption also lacks There is no evidence to suggest that, on average, each As already Nor is there any evidence concerning the average loan Even if an award of attorneys’ fees may be considered in 9 1 determining the amount in controversy, Mr. Assenzio cannot meet his 2 burden because there is “no basis for estimating the claims of the 3 individual class members.” 4 Lowdermilk, 479 F.3d at 1002. Mr. Assenzio relies on Lewis for the proposition that, once 5 “‘the proponent of federal jurisdiction has explained plausibly how 6 the stakes exceed $5 million, . . . then the case belongs in 7 federal court unless it is legally impossible for the plaintiff to 8 recover that much.’” 9 Inc., 528 F.3d 982, 986 (7th Cir. 2008)). 627 F.3d at 401 (quoting Spivey v. Vertrue, However, because his United States District Court For the Northern District of California 10 assumptions are not well-founded, he has not plausibly explained 11 how the stakes in this case exceed $5 million. 12 the removing defendant established the jurisdictional amount by 13 offering a declaration showing the amounts for the allegedly 14 unlawful charges billed to the putative class. 15 397-98. 16 Indeed, in Lewis, Lewis, 627 F.3d at Here, Mr. Assenzio does proffer any evidence. Plaintiffs’ complaint does not specify the amount in 17 controversy, and Mr. Assenzio fails to establish that it is more 18 likely than not that the amount in controversy in this action 19 exceeds $5 million. 20 jurisdiction over this action. Accordingly, the Court lacks subject matter 21 22 CONCLUSION For the foregoing reasons, the Court GRANTS Plaintiffs’ motion 23 to remand (Docket No. 9) and DENIES as moot Mr. Assenzio’s motion 24 to dismiss (Docket No. 8). 25 Alameda County Superior Court and, thereafter, close the file. 26 Dated: 2/14/2011 The Clerk shall remand this action to CLAUDIA WILKEN United States District Judge 27 28 10
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