Huffman v. JP Morgan Chase Bank
| Decision Date | 29 March 2023 |
| Docket Number | CV-22-00903-PHX-JJT |
| Parties | Bruce E. Huffman, Plaintiff, v. JP Morgan Chase Bank, NA, et al., Defendants. |
| Court | U.S. District Court — District of Arizona |
At issue is Defendant Goodman Holmgren Law Group, LLP's (“Goodman Law”) Motion to Dismiss (Doc. 16 GLMTD), to which Plaintiff Bruce E. Huffman filed a Response (Doc. 24), and Goodman Law filed a Reply (Doc. 28). Also at issue is Defendant JPMorgan Chase Bank, N.A.'s (“Chase Bank”) Motion to Dismiss (Doc. 15 CBMTD), to which Plaintiff filed a Response (Doc 27),[1] and Chase Bank filed a Reply (Doc. 36). Finally, the Court considers Defendant Magic Ranch Estates Homeowners' Association's (“Magic Ranch”) Motion for Summary Judgment (Doc. 29, MSJ), supported by a Statement of Facts (Doc. 30, DSOF), to which Plaintiff filed a Response (Doc. 42), supported by a Response in Opposition to Magic Ranch's Statement of Facts (Doc. 43, PRSOF) and a Responsive Statement of Facts (Doc. 43, PSSOF), and Magic Ranch filed a Reply (Doc. 44.) The Court finds these matters suitable for resolution without oral argument. See LRCiv 7.2(f).
Plaintiff resides in Arizona in Magic Ranch Estates, which has a Homeowners' Association that can collect fines from residents. Magic Ranch hired Goodman Law to collect $1,200.00 in fines from Plaintiff. (Compl. ¶ 17; PSSOF ¶¶ 3-4.) On May 26, 2021, Goodman Law served a writ of garnishment on Chase Bank for $60,597.25 for the fines and over $57,000.00 in attorneys' fees. (Compl. ¶ 18; PSSOF ¶ 5.)
On July 12, 2021, the Superior Court of Pinal County held a hearing, and the parties stipulated that all funds deposited in the bank account were Social Security benefits, but Goodman Law insisted that the funds were not exempt from garnishment. (Compl. ¶¶ 22-24; PSSOF ¶¶ 6-7.) The Superior Court then granted a writ of garnishment for $60,597.25. (Compl. ¶ 25; PSSOF ¶ 8.) Plaintiff alleges that after the hearing, he asked Goodman Law multiple times to release the funds, but Goodman Law declined to do so. (Compl. ¶¶ 26-27.)
Plaintiff then obtained counsel, who filed a Motion for Reconsideration, which the Superior Court granted on January 11, 2022. (Compl. ¶¶ 28-29; PSOF ¶¶ 9-10.) The Superior Court found that the account was not subject to garnishment because it contained exclusively Social Security benefits. (Compl. ¶ 29; PSSOF ¶ 10.)
Plaintiff alleges that on that same day, the Superior Court sent copies of the ruling to Chase Bank. (Compl. ¶ 30.) Plaintiff further alleges that on January 20, 2022, he visited a branch and was told that Chase Bank had no record of the ruling. (Compl. ¶ 31.) Plaintiff alleges that he then emailed a copy of the ruling directly to a branch employee that day. (Compl. ¶ 32.) After receipt of the ruling, Chase Bank told Plaintiff his funds would be released in five business days, but the funds were not released until March 21, 2022. (Compl. ¶¶ 33, 35; PSSOF ¶ 17.) Plaintiff alleges that while Chase Bank refused to release the funds, he followed up with them five times. (Compl. ¶ 34.)
Rule 12(b)(6) is designed to “test[] the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A dismissal under Rule 12(b)(6) for failure to state a claim can be based on either: (1) the lack of a cognizable legal theory; or (2) the absence of sufficient factual allegations to support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). When analyzing a complaint for failure to state a claim, the well-pled factual allegations are taken as true and construed in the light most favorable to the nonmoving party. Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009). A plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.
“While a complaint attacked by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (). Legal conclusions couched as factual allegations are not entitled to the assumption of truth and therefore are insufficient to defeat a motion to dismiss for failure to state a claim. Iqbal, 556 U.S. at 679-80. However, “a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that ‘recovery is very remote and unlikely.'” Twombly, 550 U.S. at 556 (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
Under Federal Rule of Civil Procedure 56(a), summary judgment is appropriate when the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to prevail as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). “A fact is ‘material' only if it might affect the outcome of the case, and a dispute is ‘genuine' only if a reasonable trier of fact could resolve the issue in the non-movant's favor.” Fresno Motors, LLC v. Mercedes Benz USA, LLC, 771 F.3d 1119, 1125 (9th Cir. 2014) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in the nonmoving party's favor. Torres v. City of Madera, 648 F.3d 1119, 1123 (9th Cir. 2011).
The moving party “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] . . . which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 232. When the moving party does not bear the ultimate burden of proof, it “must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). If the moving party carries this initial burden of production, the nonmoving party must produce evidence to support its claim or defense. Id. at 1103. Summary judgment is appropriate against a party that “fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322.
In considering a motion for summary judgment, the court must regard as true the non-moving party's evidence, as long as it is supported by affidavits or other evidentiary material. Anderson, 477 U.S. at 255. However, the non-moving party may not merely rest on its pleadings; it must produce some significant probative evidence tending to contradict the moving party's allegations, thereby creating a material question of fact. Id. at 256-57 ( that the plaintiff must present affirmative evidence in order to defeat a properly supported motion for summary judgment); see also Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989) .
Goodman Law moves to dismiss Plaintiff's claims against it for conversion and intentional infliction of emotional distress (“IIED”), arguing that they are barred under Arizona's common law litigation privilege. However, Plaintiff contends that his claims are based on Goodman Law's improper litigation-related conduct, which is not covered by the litigation privilege.
Arizona's litigation privilege protects the speech of “judges, parties, lawyers, witnesses and jurors.” Green Acres Tr. v. London, 688 P.2d 617, 621 (Ariz. 1984). Communications related to judicial proceedings are protected to promote “the fearless prosecution and defense of claims which leads to complete exposure of pertinent information for a tribunal's disposition.” Id. (citing Prosser, Law of Torts (4th ed. 1971) § 114 p. 777-81). Though traditionally the litigation privilege has been used to shield those involved in judicial proceedings from defamation actions, Arizona has extended the privilege to other claims. See, e.g., Linder v. Brown & Herrick, 943 P.2d 758, 766 (Ariz.Ct.App. 1997) (fraud and IIED claims). The existence of the privilege is a question of law for courts to decide. Green Acres, 688 P.2d at 621 (citing Restatement (Second) of Torts, § 619).
While some jurisdictions have expressly extended litigation privilege to conduct, see, e.g., Mantia v. Hanson, 79 P.3d 404, 411 (Or. Ct. App. 2003), Arizona has not done so. Consequently, under current Arizona law, if a party's claim is supported by factual allegations that qualify as conduct-not communication-then Arizona's litigation privilege does not apply.
First Plaintiff alleges that Goodman Law served a writ of garnishment upon Chase Bank. (Compl. ¶ 18.) This is communication; the content...
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