Lagrou v. Monterey Financial Services, LLC, No. 2:2018cv00313 - Document 16 (E.D. Wash. 2019)
Court Description: ORDER DENYING DEFENDANT'S MOTION TO DISMISS; denying ECF No. 14 Motion to Dismiss for Failure to State a Claim. Signed by Judge Stanley A Bastian. (TR, Case Administrator)
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Lagrou v. Monterey Financial Services, LLC Doc. 16 1 2 FI LED I N THE U.S. DI STRI CT COURT EASTERN DI STRI CT OF WASHI NGTON 3 4 Mar 06, 2019 5 SEAN F. MCAVOY, CLERK 6 UNITED STATES DISTRICT COURT 7 EASTERN DISTRICT OF WASHINGTON 8 9 CHRISTINA LAGROU, on behalf of No. 2:18-cv-0313-SAB 10 herself and others similarly situated, 11 Plaintiff, ORDER DENYING 12 v. DEFENDANT’S MOTION TO 13 MONTEREY FINANCIAL SERVICES, DISMISS 14 LLC, D/B/A/ MONTEREY 15 COLLECTIONS, Defendant. 16 17 Before the Court is Defendant’s 12(b)(6) Motion to Dismiss, ECF No. 14. 18 19 The motion was heard without oral argument. Defendant contends that Plaintiff’s Amended Complaint should be 20 21 dismissed under Rule 12(b)(1) for want of subject matter jurisdiction and under 22 Rule 12(b)(6) for failure to state a claim. The withdrawal of the bankruptcy 23 reference cured any disputes regarding subject matter jurisdiction, and this Court 24 is satisfied that it has jurisdiction to hear the case under both 28 U.S.C. § 1331 and 25 28 U.S.C. § 1332. For the reasons stated below, dismissal under Rule 12(b)(6) is 26 also improper. 27 // 28 // ORDER DENYING DEFENDANT’S MOTION TO DISMISS 1 Dockets.Justia.com STANDARD 1 Rule 12(b)(6) permits dismissal for failure to state a claim upon which relief 2 3 can be granted. Under ordinary liberal pleading standards, a plaintiff need only 4 plead sufficient facts which, if taken as true, allow the Court to draw reasonable 5 inferences that a plausible ground for relief exists. Harris v. Cnty. of Orange, 682 6 F.3d 1126, 1131 (9th Cir. 2012) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 7 (2009)). Rule 12(b)(6) dismissal is “appropriate only where the complaint lacks a 8 cognizable legal theory or sufficient facts to support a cognizable legal theory.” 9 Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To sufficiently state a claim for relief and survive a Rule 12(b)(6) motion, a 10 11 complaint does not need detailed factual allegations but it must provide more than 12 a “formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. 13 Twombly, 550 U.S. 544, 555 (2007). The factual allegations must be enough to 14 raise a right to relief above the speculative level. Id. When considering a motion to 15 dismiss, a court must accept as true all “well-pleaded factual allegations.” Iqbal, 16 556 U.S. at 678. AMENDED COMPLAINT 17 In considering the 12(b)(6) motion to dismiss, the Court takes the following 18 19 facts solely from the Amended Complaint. Defendant sent Plaintiff a collection attempt on April 29, 2016, seeking to 20 21 collect $2,709.36. Plaintiff sent a dispute letter that informed Defendant that she 22 disputed the debt, requested validation, and requested not to be contact by phone 23 regarding the debt. In response to the dispute letter, Defendant sent a follow-up 24 letter. 25 26 27 28 Defendant’s follow-up letter reads in its entirety: In response to the letter we received and pursuant to the debt validation requirements set forth in the Fair Debt Collection Practices Act, all calls from my office regarding the defaulted account with HDL, Inc. will cease. However, this defaulted account will report ORDER DENYING DEFENDANT’S MOTION TO DISMISS 2 1 3 accordingly, as a disputed collection account on your credit report. Call our office today to set up the necessary arrangements to satisfy your obligation to the contract. ECF No. 1 at 631. 4 This letter has three components: first, notice that all calls will cease, per 2 5 Plaintiff’s request; second, the reporting statement; and third, the contact 6 statement. 7 Plaintiff argues that this letter violated two provisions of the Fair Debt 8 Collection Practices Act, 15 U.S.C. § 1692 et al (FDCPA). First, she argues that 9 the reporting statement constituted a false, deceptive, or misleading statement in 10 violation of 17 U.S.C. § 1692e(5). Second, she argues that the letter in its entirety 11 constituted an attempt to collect a disputed debt without providing verification, in 12 violation of 15 U.S.C. §1692g(b). 13 14 ANALYSIS Defendant seeks to dismiss Plaintiff’s claims for relief on the grounds that 15 she has not adequately pled either claim. The Court disagrees. Plaintiff has 16 sufficiently alleged facts that, if taken as true, state a plausible ground for relief. 17 The FDCPA prohibits a collector from making any false, deceptive, or 18 misleading statements, including making a threat to take any action that cannot 19 legally be taken or that is not intended to be taken. 15 U.S.C. § 1692e(5). Plaintiff 20 alleges that the reporting statement (“However, this defaulted account will report 21 accordingly, as a disputed collection account on your credit report”) conveys a 22 definite intent to report the debt to credit agencies, but that Defendant never 23 actually intended to do so. Defendant does not allege in its motion to dismiss or 24 reply that it intended to report the debt. Rather, it disputes that this statement was 25 anything more than a disclosure that if it reported the debt, the report would reflect 26 that the debt is disputed. 27 The Ninth Circuit applies the “least sophisticated debtor” standard, under 28 which a communication violates the FDCPA if “the least sophisticated debtor ORDER DENYING DEFENDANT’S MOTION TO DISMISS 3 1 would ‘likely’ be misled.” Guerrero v. RJM Acquisitions LLC, 499 F.3d 926, 934 2 (9th Cir. 2007). Defendant’s assertion that Plaintiff’s interpretation is “bizarre, 3 idiosyncratic, or peculiar” is unfounded. Much of Defendant’s argument is based 4 upon the first sentence in the letter, which informed Plaintiff that it would cease all 5 calls. Defendant attempts to extend this to an assurance that all collection 6 attempts would cease, and thus that Plaintiff should have understood that 7 Defendant would not report the debt. See ECF No. 15, at 6. 8 The plain language of the follow-up letter demonstrates that Plaintiff’s 9 interpretation is reasonable. The appositional “However” indicates a tension 10 between the first and second sentence. The first sentence indicates that a limited 11 type of collection efforts (phone calls) would cease, while the second states that 12 Defendant “will” report the debt, using the definitive “will”, an “auxiliary verb 13 commonly having the mandatory sense of ‘shall’ or must,’”. . . “a word of 14 certainty, while the word ‘may’ is one of speculation and uncertainty.” BLACK’S 15 LAW DICTIONARY, 1598 (6th ed. 1990). Not only is Plaintiff’s interpretation a 16 reasonable one, Defendant’s is not. Thus, Plaintiff has adequately pled sufficient 17 facts to support her first claim. 18 Plaintiff’s second claim is also adequately pled. Plaintiff alleges that the 19 follow-up letter constituted an attempt to collect a disputed debt without providing 20 verification, in violation of 15 U.S.C. § 1692g(b). Defendant disputes that the 21 follow-up was an attempt to collect a disputed debt, and that it was instead a 22 confirmation that it received Plaintiff’s letter, and which further provided Plaintiff 23 with some information on FDCPA protections. Much of this claim hinges upon the 24 contact statement. 25 Defendant argues that this statement was an invitation to contact and not a 26 collection attempt, citing Ferrulli v. BCA Fin. Servs., Inc., No. 17-cv-13177 27 (KSH) (CLW), 2018 WL 4693968, at *3 (D.N.J. Sept. 28, 2018). However, this 28 case is distinguishable from Ferrulli and the cases cited therein. ORDER DENYING DEFENDANT’S MOTION TO DISMISS 4 1 The disputed language in Ferrulli was, “If you have any questions regarding 2 this debt you may speak to an account representative by calling our office.” Id. 3 Ferrulli cites a number of other examples of invitations to contact which have 4 been found not to be collection attempts: Borozan v. Financial Recovery Services, 5 Inc., No. 17-11542, 2018 WL 3085217 (D.N.J. June 22, 2018) (“Please feel free to 6 call us at the toll-free number listed below or use our online consumer help desk”); 7 Reizner v. Nat’l Recoveries, Inc., No. 17-2572, 2018 WL 2045992 (D.N.J. May 2, 8 2018) (“You may write to us at the address listed below or telephone us at the 9 number provided below”); Caprio v. Healthcare Revenue Recovery Grp., LLC, 10 709 F.3d 142, 148 (3d Cir. 2013) (“If we can answer any questions, or if you feel 11 you do not owe this amount, please call us toll free at 800-984-9115 or write us at 12 the above address”). 13 The disputed language in this case is: “Call our office today to set up the 14 necessary arrangements to satisfy your obligation to the contract.” This is distinct 15 from the permissive language found in the invitations above. It is in the imperative 16 tense and lacks any of the “if”, “may”, “please” language found in the cases 17 referenced above. When coupled with the reporting statement, it presents a clear 18 message: Defendant will report the debt and Plaintiff is instructed to contact 19 Defendant to arrange for paying the debt. 20 Neither party provides a Ninth Circuit case defining what constitutes a 21 collection attempt, but the Eleventh Circuit, citing Second and Fourth Circuit 22 cases, has provided a straightforward definition: a communication is a collection 23 attempt under the FDCPA if it “conveys information about a debt and its aim is at 24 least in part to induce the debtor to pay.” Caceres v. McCalla Raymer, LLC, 755 25 F.3d 1299, 1302 (11th Cir. 2014) citing Romea v. Heiberger & Assocs., 163 F.3d 26 111 (2d Cir. 1998) and Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030 (9th 27 Cir. 2010). Under that standard it is clear that the follow-up letter was an attempt 28 to collect the debt, despite Plaintiff’s message disputing the debt and requesting ORDER DENYING DEFENDANT’S MOTION TO DISMISS 5 1 validation. Because Defendant had not provided verification prior to sending the 2 follow-up letter, Plaintiff has adequately pled a plausible claim under 15 U.S.C. 3 § 1692g(b). 4 Because Plaintiff has sufficiently alleged facts that, if taken as true, state a 5 plausible ground for relief, Defendant’s Motion to Dismiss, ECF No. 15, must be 6 DENIED. 7 Accordingly, IT IS HEREBY ORDERED: 8 1. Defendant’s Motion to Dismiss, ECF No. 14, is DENIED. 9 IT IS SO ORDERED. The District Court Executive is hereby directed to 10 file this Order and provide copies to counsel. 11 DATED this 6th day of March 2019. 12 13 14 15 16 17 18 19 20 Stanley A. Bastian United States District Judge 21 22 23 24 25 26 27 28 ORDER DENYING DEFENDANT’S MOTION TO DISMISS 6
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