Huy Thanh Vo v. Nelson & Kennard

• Citation: 931 F.Supp.2d 1080
• Decision Date: 15 March 2013
• Docket Number: No. CIV. S–12–2537 LKK/CKD.,CIV. S–12–2537 LKK/CKD.
• Court: U.S. District Court — Eastern District of California
• Parties: HUY THANH VO, Plaintiff, v. NELSON & KENNARD, U.S. Bancorp and Does 1–10, inclusive, Defendants.

931 F.Supp.2d 1080

HUY THANH VO, Plaintiff,

v.NELSON & KENNARD, U.S. Bancorp and Does 1–10, inclusive, Defendants.

No. CIV. S–12–2537 LKK/CKD.

United States District Court,

E.D. California.

March 15, 2013.

Jeremy Winter, Attorney Debt Reset, Inc., Sacramento, CA, for Plaintiff.

Robert Scott Kennard, Nelson & Kennard, Sacramento, CA, for Defendants.

ORDER

LAWRENCE K. KARLTON, Senior District Judge.

Plaintiff Huy Thanh Vo sues defendants U.S. Bank National Association, N.D. and the law firm of Nelson & Kennard for unfair debt collection practices. U.S. Bank now moves to dismiss plaintiff's Second Amended Complaint under Federal Rule of Civil Procedure 12.¹

The motion came on for hearing on March 11, 2013. Having considered the matter, for the reasons set forth below, the court will grant U.S. Bank's motion in part and deny it in part.

I. PLAINTIFF'S ALLEGATIONS²

Prior to 2009, plaintiff's brother, Khoa T. Vo, allegedly incurred a debt to defendant U.S. Bank. (Second Amended Complaint (“SAC”) ¶ 11, ECF No. 21.) Upon asserted failure to pay the debt, U.S. Bank retained defendant Nelson & Kennard to take legal action to collect the alleged debt. (SAC ¶ 13.)

Nelson & Kennard represented U.S. Bank in the case of U.S. Bank National Association ND v. Huy Thanh Vo aka Khoa T Vo, No. 34–2009–00041262, filed in the Sacramento County Superior Court (“Collection Action”). (SAC ¶ 13.) Even though plaintiff was named as a defendant in the Collection Action, he bore no responsibility for the alleged debt. (SAC ¶ 15.)

On August 17, 2009, U.S. Bank took plaintiff's default judgment in the Collection Action, although he had never been served. (SAC ¶ 13.) The default judgment was subsequently recorded in Sacramento County, causing a judgment lien to attach to plaintiff's real property in the county. (SAC ¶ 14.)

The judgment negatively affected plaintiff's credit rating. In April 2012, when plaintiff attempted to refinance a loan on his property, he was offered an interest rate of 5.5%, though interest rates as low as 4% were available to borrowers with good credit. (SAC ¶ 36.)

Plaintiff was not served with the complaint in the Collection Action, the default judgment, or a lien notice, and was therefore unaware of the lawsuit for several years. (SAC ¶ 19.)

The first time plaintiff learned of the Collection Action was in April 2012, when he was served with a notice of levy. (SAC ¶ 22.) He was confused because he had never incurred a debt to U.S. Bank. (SAC ¶ 25.)

Plaintiff retained his present counsel, Jeremy Winter, to investigate. (SAC ¶ 25.) Winter contacted Nelson & Kennard, which, after researching the issue, agreed that only Khoa T. Vo was liable for the alleged debt, and that plaintiff had been incorrectly named as a defendant in the Collection Action. (SAC ¶¶ 25–26.)

On May 24, 2012, attorney Winter corresponded with Nelson & Kennard, and demanded that defendants do whatever was necessary to vacate the judgment entered against plaintiff, and thereby clear up his credit report. (SAC ¶ 40.) Winter followed up with Nelson & Kennard twice thereafter. Nevertheless, nearly 90 days passed with no corrective action by defendants. (SAC ¶ 41.)

On August 20, 2012, plaintiff moved to vacate the default judgment. U.S. Bank opposed the motion, requesting that the court instead substitute Khoa T. Vo's name for plaintiff's in the pleadings and default judgment. Plaintiff incurred additional attorney fees in having to reply to this opposition. (SAC ¶¶ 47–48, 51.) The Sacramento County Superior Court ultimately granted plaintiff's motion. (SAC ¶ 52.)

These events, and a consequent, ongoing deterioration in his relationship with his brother Khoa T. Vo, caused plaintiff emotional distress. Plaintiff also incurred attorney fees and costs in moving to vacate the default judgment. (SAC ¶¶ 44–46, 53, 61.)

Plaintiff's complaint asserts: (1) violations of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692–1692p (“FDCPA”); (2) violations of California's Rosenthal Fair Debt Collection Practices Act, Cal. Civ.Code §§ 1788–1788.33 (“Rosenthal Act”); (3) negligence; (4) libel, and (5) malicious prosecution.

Defendant moves to dismiss the SAC under Rule 12(b)(6), as well as for lack of subject matter jurisdiction under Rule 12(b)(1) and the Rooker–Feldman doctrine.

II. STANDARD ON MOTION TO DISMISS UNDER RULE 12(b)(6)

A dismissal motion under Rule 12(b)(6) challenges a complaint's compliance with federal pleading requirements. Under Rule 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The complaint must give the defendant “ ‘fair notice of what the ... claim is and the grounds upon which it rests.’ ” Bell Atlantic v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ( quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

To meet this requirement, the complaint must be supported by factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Moreover, this court “must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007).³

“While legal conclusions can provide the framework of a complaint,” neither legal conclusions nor conclusory statements are themselves sufficient, and such statements are not entitled to a presumption of truth. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.Iqbal and Twombly therefore prescribe a two-step process for evaluation of motions to dismiss. The court first identifies the non-conclusory factual allegations, and then determines whether these allegations, taken as true and construed in the light most favorable to the plaintiff, “plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 664, 129 S.Ct. 1937.

“Plausibility,” as it is used in Twombly and Iqbal, does not refer to the likelihood that a pleader will succeed in proving the allegations. Instead, it refers to whether the non-conclusory factual allegations, when assumed to be true, “allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 663, 129 S.Ct. 1937. “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. ( quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955).⁴ A complaint may fail to show a right to relief either by lacking a cognizable legal theory or by lacking sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1988).

III. ANALYSISA. Request for Judicial Notice

U.S. Bank requests that the court take judicial notice of seven documents filed in the Collection Action: (1) U.S. Bank's complaint, filed April 15, 2009 (Request for Judicial Notice (“RJN”) Ex. 6, ECF No. 22–3); (2) proof of service of summons & complaint, filed June 29, 2009 (RJN Ex. 1); (3) U.S. Bank's request for entry of default and default judgment, filed August 17, 2009 (RJN Ex. 8); (4) default judgment, entered August 17, 2009 (RJN Ex. 2); (5) plaintiff Huy Thanh Vo's motion for relief from default judgment, filed August 20, 2012 (RJN Ex. 3); (6) defendant U.S. Bank's ex parte application for order amending judgment, filed September 19, 2012 (RJN Ex. 4); and (7) a minute order of the Sacramento County Superior Court, dated September 21, 2012 (RJN Ex. 5).

U.S. Bank also requests that the court take judicial notice of an abstract of judgment, issued by the Sacramento County Superior Court on December 16, 2009 and recorded in the Sacramento County Recorder's Office on December 31, 2009. (RJN Ex. 7.)

“As a general rule, a district court may not consider any material beyond the pleadings in ruling on a Rule 12(b)(6) motion.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir.2001) (internal quotations and citation omitted). However, a court may consider matters properly subject to judicial notice. Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir.2007). A matter may be judicially noticed if it is either “generally known within the territorial jurisdiction of the trial court” or “capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). Courts may “take judicial notice of court filings and other matters of public record[, as they] are readily verifiable and, therefore, the proper subject of judicial notice.” Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n. 6 (9th Cir.2006) (internal citation omitted).

Accordingly, the court will take judicial notice of the eight documents specified by the bank.

B. Has the applicable statute of limitations expired?

The FDCPA's statute of limitations is “one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). Rosenthal Act claims must also be brought “within one year from the date of the occurrence of the violation.” Cal. Civ.Code § 1788.30(f).

U.S. Bank argues that, as the Collection Action was filed on April 15, 2009, and this action was commenced on October 10, 2012, plaintiff's causes of action under the FDCPA and the Rosenthal Act are time-barred. (Memorandum of Points and Authorities in Support of Motion to Dismiss (“Mot. to Dismiss”) 4–5, ECF No. 22–1.)

Plaintiff counters that the statute of limitations began to run only in April 2012, when he was served with a notice of levy and first learned of the Collection Action. (Opposition to U.S. Bank's Motion to Dismiss (“Opposition”) 4, ECF No. 26.)

Under Ninth Circuit precedent, the FDCPA limitations period “begins to run when the plaintiff knows or has reason to know of the injury which is the basis of the action.” Mangum v. Action Collection Serv., Inc., 575 F.3d 935, 940 (9th Cir.2009) (internal citation and quotation omitted). The Ninth Circuit has also held, however, that where the alleged...