Allgood v. W. Asset Mgmt., Inc.
| Decision Date | 27 November 2013 |
| Docket Number | Case No. 2:12-cv-02094-APG-NJK |
| Parties | KATHLEEN ALLGOOD and ESTATE OF ANNE MARIE ALLGOOD, Plaintiffs, v. WEST ASSET MANAGEMENT, INC.; USAA FEDERAL SAVINGS BANK a/a/k/a USAA SECURED HOME EQUITY; NATIONAL BANKRUPTCY SERVICES.COM, LLC; NATIONAL DEFAULT SERVICING CORP.; NATIONAL BANKRUPTCY SERVICES, LLC, Defendants. |
| Court | U.S. District Court — District of Nevada |
ORDER ON MOTIONS TO DISMISS
In early 2011, the late Anne Marie Allgood ("Anne Marie") took out a home equity line of credit ("HELOC" or "Loan") from USAA Federal Savings Bank ("USAA FSB") in the approximate amount of $30,000. The HELOC was secured by Anne Marie's home in Las Vegas, Nevada. Before Anne Marie died in April 2011, she transferred—or attempted to transfer— ownership of the home to the Anne Marie Allgood Living Trust (the "Living Trust"). (Dkt. No. 6, First Amended Complaint ("FAC") ¶ 15.) Plaintiff Kathleen Allgood ("Allgood") is Anne Marie's only child, the trustee of Anne Marie's estate,1 and the trustee of the Living Trust.
Allgood continued to make payments on the Loan out of the Living Trust's assets until the summer of 2011, when she became embroiled in a probate dispute with her half-sister (the daughter of Allgood's father and stepdaughter of Anne Marie) concerning Anne Marie's estate. According to Allgood, the expenses incurred in the probate dispute precluded her from making payments on the Loan.
On November 20, 2011, USAA FSB sent Allgood a letter stating that the Loan account was changed into the name of "Estate of Anne-Marie Allgood" and that the current balance was $27,054.57. (Dkt. No. 21-1 at 1.) The letter did not state that the account was in default.
In early December, 2011, defendant National Default Servicing Corporation ("NDSC") sent a series of letters to Allgood. (Dkt. No. 21-1 at 2-9.) All of the letters were all dated December 7, 2011, but Allgood pleads that the precise dates when she received them, and the order in which she received them, are uncertain. NDSC issued two types of letter. The first type is a dunning letter, which, in relevant part, stated that (i) National Bankruptcy Services.Com, LLC ("NBS") is the creditor and servicer of the Loan; (ii) NBS retained NDSC to contact Allgood on NBS's behalf regarding collection; (iii) the Loan is "in serious default[;]" (iv) the date of default was July 4, 2011; (v) the total amount due to reinstate the loan, as of December 7, 2011, was $1,390.50; (vi) Allgood had the right to cure the default within 30 days; (vi) if Allgood did not cure, NBS would accelerate the loan and (vii) Allgood may have the right to cure the default after acceleration of the Loan and prior to the foreclosure sale; (viii) all payments must be sent to NBS; and (ix) in somewhat smaller print, a boilerplate warning that NDSC was attempting to collect a debt and that Allgood had certain rights under federal law to contest the validity of the debt. (Dkt. No. 21-1 at 2-3.) One letter of this type was addressed to "Anne Marie Joseph Allgood" and another to "Anne-Marie Josephe2 Allgood, Individually and as Trustee of the Anne-Marie Allgood Living Trust."
The other type of letter from NDSC was a foreclosure notice of sorts (although not a formal notice of default). It stated, in pertinent part, that (i) NDSC was retained to enforce the Loan by non-judicial foreclosure; (ii) the good-faith estimate of the debt owed was $28,036.28; and (iii) the loan servicer was NBS. (Dkt. No. 21-1 at 5.) One letter of this type was addressed to "Anne Marie Josephe Allgood" and another to "Anne-Marie Josephe Allgood, Individually and as Trustee of the Anne-Marie Allgood Living Trust."
Also on or about December 7, 2011, Allgood received a letter from defendant West Asset Management, Inc. ("WAM"). (Dkt. No. 21-1 at 10-16.) Enclosed was an apparent copy of a "creditor's claim" filed in probate court against Anne Marie's estate. The claim is by "West Asset Management, Inc. for USAA Secured Home Equity Loan" in the amount of $27,054.57 (Dkt. No. 21-1 at 10.) Allgood asserts that this claim was filed solely to intimidate and coerce her into paying the outstanding balance on the Loan. She alleges that WAM filed this claim in the probate case concerning the dispute between she and her stepsister, and that WAM's claim cannot be resolved in that probate case as a matter of law. She also asserts various facial deficiencies with the "creditor's claim" under Nevada law such that it cannot form the basis of any relief in probate court.
During this time period, Allgood alleges that she received various phone calls from NDSC attempting to collect on the Loan.
On December 26, 2012, Allgood filed a complaint in this Court, claiming violations of the federal Fair Debt Collection Practices Act ("FDCPA")3 and the Nevada corollary.4 In particular, she claims that all Defendants violated 15 U.S.C. §§ 1692e and 1692g by making false representations of the character, amount, or legal status of the debt in question, by using false or deceptive means to collect a debt, and by issuing a deficient "initial letter" that overshadowed the statutory notice requirements. She next claims that NDSC violated 15 U.S.C. §§ 1692c and1692d by contacting her after she requested that all communication cease, and by repeatedly telephoning her with the intent to annoy, abuse, or harass her. She further claims that "one or more of the Defendants" has attempted to collect on the Loan without the proper collector's license required under Nevada statute. She seeks declaratory relief, injunctive relief, actual damages, statutory damages, punitive damages, attorney's fees, and costs.
By stipulation, defendant WAM was dismissed from the case with prejudice. (Dkt. No. 39.) Defendants NBS, NDSC, and USAA have separately filed motions to dismiss. (Dkt. Nos. 9, 53, 55.) This Order resolves the three pending motions to dismiss.
A properly pled complaint must provide a "short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands more than "labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Factual allegations must be enough to rise above the speculative level." Twombly, 550 U.S. at 555. To survive a motion to dismiss, a complaint must "contain[] enough facts to state a claim to relief that is plausible on its face." Iqbal, 556 U.S. at 696 (internal quotation marks and citation omitted).
District courts must apply a two-step approach when considering motions to dismiss. Id. at 679. First, the court must accept as true all well-pleaded factual allegations and draw all reasonable inferences from the complaint in the plaintiff's favor. Id.; Brown v. Elec. Arts, Inc., 724 F.3d 1235, 1247-48 (9th Cir. 2013). Legal conclusions, however, are not entitled to the same assumption of truth even if cast in the form of factual allegations. Iqbal, 556 U.S. at 679; Brown, 724 F.3d at 1248. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Iqbal, 556 U.S. at 678. Second, the court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the complaint alleges facts that allow the court to draw areasonable inference that the defendant is liable for the alleged misconduct. Id. at 663. Where the complaint does not permit the court to infer more than the mere possibility of misconduct; the complaint has "alleged—but it has not shown—that the pleader is entitled to relief." Id. at 679 (internal quotation marks and citation omitted). When the claims have not crossed the line from conceivable to plausible, the complaint must be dismissed. Twombly, 550 U.S. at 570. "Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the [district] court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.5
NBS moves to dismiss on the basis that Allgood has not alleged that it directly engaged in any wrongdoing under the FDCPA or Nevada statute. Allgood responds that she "alleged that NBS acquiesced in allowing its name to be used by defendant [NDSC], also a 'debt collector,' or was itself responsible for a series of misleading and deceptive letters[.]" (Dkt No. 20 at 3 (emphasis added).)
"Under general principles of agency—which form the basis of vicarious liability under the FDCPA, see Newman v. Checkrite California, 912 F. Supp. 1354, 1370 (E.D.Cal.1995)—to be liable for the actions of another, the 'principal' must exercise control over the conduct or activities of the 'agent.'" Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162, 1173 (9th Cir. 2006) (citing RESTATEMENT (SECOND) OF AGENCY § 1 (1958)). NDSC's letters state that the creditor and current beneficiary are NBS, that the debt is owed to NBS, that NBS is the Loan's servicer, and that payments should be directed to NBS. Although there are no precise, direct allegations in the Complaint to establish an agency relationship between NDSC and NBS,Allgood's allegations are sufficient to render it plausible at this stage that NBS exercised control over NDSC's conduct or activities. Therefore, NBS's motion to dismiss is denied. See Iqbal, 556 U.S. at 679.
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