Norton v. LVNV Funding, LLC, Case No. 18-cv-05051-DMR

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
Writing for the CourtDonna M. Ryu, United States Magistrate Judge
Citation396 F.Supp.3d 901
Decision Date28 August 2019
Docket NumberCase No. 18-cv-05051-DMR
Parties Sonya NORTON, Plaintiff, v. LVNV FUNDING, LLC, et al., Defendants.

396 F.Supp.3d 901

Sonya NORTON, Plaintiff,
v.
LVNV FUNDING, LLC, et al., Defendants.

Case No. 18-cv-05051-DMR

United States District Court, N.D. California.

August 28, 2019


396 F.Supp.3d 906

Gina C. Di Giusto, Natalie Ann Lyons, Housing and Economic Rights Advocates, Noah Zinner Housing & Economic Rights Advocates, Oakland, CA, William Eric Kennedy, Law Offices of William E. Kennedy, Santa Clara, CA, for Plaintiff.

Tomio Buck Narita, Margaret T. Cardasis, Robert Travis Campbell, Simmonds & Narita LLP, San Francisco, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

Re: Dkt. No. 37

Donna M. Ryu, United States Magistrate Judge

Plaintiff Sonya Norton filed this putative class action against Defendants LVNV

396 F.Supp.3d 907

Funding, LLC ("LVNV") and Law Office of Harris & Zide ("H&Z") alleging violations of the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. , and California's Fair Debt Collection Practices Act ("Rosenthal Act"), California Civil Code § 1788 et seq. Norton also seeks injunctive relief under California's Unfair Competition Law ("UCL"), California Business and Professions Code § 17200 et seq. Defendants now move to dismiss Norton's second amended complaint (Docket No. 33, "SAC") under Federal Rule of Civil Procedure 12(b)(6). [Docket Nos. 37 ("Mot."), 43 ("Reply") ]. Norton timely opposed. [Docket No. 38 ("Opp.").] Having considered the parties' submissions and oral argument, and for the reasons detailed below, the court grants Defendants' motion in part and denies it in part.

I. BACKGROUND

A. Factual Background

On October 21, 2008, non-party Arrow Financial Services, LLC ("Arrow") filed a collections action against Norton in San Mateo County Superior Court, alleging that Norton failed to tender owed amounts to Arrow. See SAC ¶ 14. On December 26, 2008, the state court entered a default judgment against Norton in the amount of $3,986.60. Id. ¶ 15.

On February 24, 2012, H&Z filed a substitution of counsel to appear on behalf of Arrow in the state court action. SAC ¶ 16; Id. , Ex. 2. On May 17, 2012, H&Z caused a writ of execution to issue from a state court in the amount of $5,853.07. SAC ¶ 17. Norton's wages were garnished in the amount of $323.55 in August and September 2012. Id. Thereafter, Defendants sought and obtained a total of six writs of execution between December 27, 2013 and September 1, 2017. Id. ¶¶ 17-25. On November 29, 2017, Norton filed a claim of exemption in response to the garnishment of her wages. Id. at ¶ 26. Through December 2017, Defendants allegedly garnished over $1,000 from Norton's paycheck. Id. at ¶¶ 27-28. On December 15, 2017, an attorney at Housing and Economic Rights Advocates ("HERA") wrote a letter to H&Z on Norton's behalf stating that the wage garnishment appeared to be improper because, unbeknownst to Norton, Arrow had filed a Certificate of Cancellation with the California Secretary of State back in October 10, 2012. Id. ¶ 18; Id. , Ex. 3. No other party had established itself as Arrow's assignee of record. Id. ¶ 33. H&Z subsequently filed a notice terminating the garnishment of Norton's wages. Id. at ¶ 31. Norton was "reimbursed some, but not all" of her garnished wages. Id. at ¶ 35.

On February 13, 2018, an H&Z attorney informed Norton's attorney at HERA that H&Z represented LVNV rather than Arrow. SAC at ¶ 36. According to Norton, LVNV had acquired the judgment against her from Arrow in 2012 but did not disclose this fact to the state court or to Norton until 2018. Id. at ¶¶ 37-39. On May 11, 2018, Norton, through her current counsel, filed a motion in the state court action to quash the prior writs of execution. Id. at ¶ 40. On June 29, 2018, the court granted the unopposed motion on the grounds that "no acknowledgment of assignment of judgment has been filed as required by Code of Civil Procedure § 673." Id. On September 7, 2018, H&Z filed an Acknowledgment of Assignment of Judgment in the state court action pursuant to California Code of Civil Procedure § 673 ; it acknowledges the assignment of the judgment against Norton from Arrow to LVNV. [Docket No. 37-1 ("Def. RJN"), Ex. B. ("Acknowledgement").]

In this lawsuit, Norton contends that Defendants were prohibited from taking judicial action to enforce the judgment

396 F.Supp.3d 908

without first complying with section 673. Based on this allegation, the SAC asserts individual and class claims under sections 1692e, 1692e(2)(A),1692e(5), 1692e(10), 1692f and 1692f(1) of the FDCPA, section 1788.13(e) and 1788.17 of the Rosenthal Act, and the UCL. See SAC ¶¶ 56-76. Norton seeks to represent a class that the SAC defines as all California residents against whom:

LVNV, represented by [H&Z], took judicial action (including obtaining Writs of Execution, wage garnishment, and bank levy) after October 10, 2012 and within four years [sic ] the filing date of this action, to collect a judgment based on a consumer debt obtained in a California court; Arrow was the plaintiff of record at the time the judgment was entered; and LVNV did not file an Assignment of Judgment in conformity with [ section 673 ].

Id. at ¶¶ 44-46. The proposed subclass "consists of all members of the Class, where the judicial action was taken within one year of [the] filing of this action." Id. ¶ 46.

The SAC alleges that Defendants' practices of enforcing judgments without complying with section 673 "present a continuing threat to [Norton], the Class and members of the public in that on information and belief Defendants persist and continue to engage in these practices, and will not cease doing so unless and until forced to do so by this Court." SAC at ¶ 70. The SAC seeks actual and statutory damages, and attorneys' fees and costs on behalf of Norton and the putative class. Id. at 14-15. The SAC also seeks restitution by Defendants for money obtained from the class and subclass as a result of the unlawful collection activities, and an order enjoining Defendants from future use of unfair or deceptive acts. Id. at 15.

B. Procedural Background

Defendants filed a motion to dismiss Norton's first amended complaint on October 12, 2018. [Docket No. 12.] The court held a hearing on February 14, 2019. Ruling from the bench, the court granted in part Defendants' motion to dismiss, specifically on the basis that Norton had failed to adequately allege that her debt constituted a "consumer debt" under the FDCPA and Rosenthal Act. See Docket No. 32, Transcript of hearing held February 14, 2019 ("Tr."). Norton was granted leave to amend in order to address the deficiencies identified on the record, and she filed the SAC on March 18, 2019. Defendants then filed this second motion to dismiss.

II. LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the claims alleged in the complaint. See Parks Sch. of Bus., Inc. v. Symington , 51 F.3d 1480, 1484 (9th Cir. 1995). When reviewing a motion to dismiss for failure to state a claim, the 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) (per curiam) (citation omitted), and may dismiss a claim "only where there is no cognizable legal theory" or there is an absence of "sufficient factual matter to state a facially plausible claim to relief." Shroyer v. New Cingular Wireless Servs., Inc. , 622 F.3d 1035, 1041 (9th Cir. 2010) (citing Ashcroft v. Iqbal , 556 U.S. 662, 677-78, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001) ) (quotation marks omitted). A claim has facial plausibility when a plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."

396 F.Supp.3d 909

Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (citation omitted). In other words, the facts alleged must demonstrate "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citing Papasan v. Allain , 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) ); see Lee v. City of L.A. , 250 F.3d 668, 679 (9th Cir. 2001), overruled on other grounds by Galbraith v. Cty. of Santa Clara , 307 F.3d 1119 (9th Cir. 2002).

III. REQUESTS FOR JUDICIAL NOTICE

Both parties filed a Request for Judicial Notice ("RJN"). As a general rule, a court may not consider "any material beyond the pleadings" when ruling on a Rule 12(b)(6) motion. Lee , 250 F.3d at 688 (citation and quotation marks omitted). However, "a court may take judicial notice of ‘matters of public record,’ " id. at 689 (citing Mack v. S. Bay Beer Distrib. , 798 F.2d 1279, 1282 (9th Cir. 1986) ), and may also consider "documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading,"...

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5 practice notes
  • Faircloth v. AR Res., Inc., Case No. 19-cv-05830-JCS
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • February 19, 2020
    ...the FDCPA and the RFDCPA have addressed the issue of timeliness under both statutes simultaneously. See, e.g., Norton v. LVNV Funding, 396 F. Supp. 3d 901, 912 (N.D. Cal. 2019); Kottle v. Law Offices of Patenaude & Felix A.P.C, No. 13-CV-161-H-BGS, 2013 WL 12075974, at *2 (S.D. Cal. May......
  • Edakunni v. Mayorkas, 2:21-cv-00393-TL
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Western District of Washington)
    • July 5, 2022
    ...claims that are “transitory by virtue of the defendant's litigation strategy.” Id. at 1089-91; see also Norton v. LVNV Funding, LLC, 396 F.Supp.3d 901, 921-22 (N.D. Cal. 2019) (detailing the reasoning in Pitts); Al Otro Lado, Inc. v. Nielsen, 327 F.Supp.3d 1284, 1302-04 (S.D. Cal. 2018) (ap......
  • Epps v. Fair Collections & Outsourcing, Inc., Civil Action No. 7:20-cv-00176
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Western District of Virginia)
    • August 10, 2020
    ...two cases on which Epps relies are distinguishable and are not supportive of her proposed standard. In Norton v. LVNV Funding, LLC, 396 F. Supp. 3d 901 (N.D. Cal. 2019), the plaintiff failed to plead facts about the nature of her credit card debt. The plaintiff alleged, however, that every ......
  • Daligcon v. Bank of Am., N.A., CIVIL NO. 21-00020 JAO-RT
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Hawaii)
    • April 9, 2021
    ...Dismiss and Sever was not heard until January 2020 and the 4/14/20 Order was filed nearly four months later. 11. See In re Roundup, 396 F. Supp. 3d at 901 (recommending that defendants desiring to avoid the one-year time bar expeditiously request severance in state court even though it may ......
  • Request a trial to view additional results
5 cases
  • Faircloth v. AR Res., Inc., Case No. 19-cv-05830-JCS
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Northern District of California
    • February 19, 2020
    ...the FDCPA and the RFDCPA have addressed the issue of timeliness under both statutes simultaneously. See, e.g., Norton v. LVNV Funding, 396 F. Supp. 3d 901, 912 (N.D. Cal. 2019); Kottle v. Law Offices of Patenaude & Felix A.P.C, No. 13-CV-161-H-BGS, 2013 WL 12075974, at *2 (S.D. Cal. May......
  • Edakunni v. Mayorkas, 2:21-cv-00393-TL
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Western District of Washington)
    • July 5, 2022
    ...claims that are “transitory by virtue of the defendant's litigation strategy.” Id. at 1089-91; see also Norton v. LVNV Funding, LLC, 396 F.Supp.3d 901, 921-22 (N.D. Cal. 2019) (detailing the reasoning in Pitts); Al Otro Lado, Inc. v. Nielsen, 327 F.Supp.3d 1284, 1302-04 (S.D. Cal. 2018) (ap......
  • Epps v. Fair Collections & Outsourcing, Inc., Civil Action No. 7:20-cv-00176
    • United States
    • United States District Courts. 4th Circuit. United States District Court (Western District of Virginia)
    • August 10, 2020
    ...two cases on which Epps relies are distinguishable and are not supportive of her proposed standard. In Norton v. LVNV Funding, LLC, 396 F. Supp. 3d 901 (N.D. Cal. 2019), the plaintiff failed to plead facts about the nature of her credit card debt. The plaintiff alleged, however, that every ......
  • Daligcon v. Bank of Am., N.A., CIVIL NO. 21-00020 JAO-RT
    • United States
    • United States District Courts. 9th Circuit. United States District Court (Hawaii)
    • April 9, 2021
    ...Dismiss and Sever was not heard until January 2020 and the 4/14/20 Order was filed nearly four months later. 11. See In re Roundup, 396 F. Supp. 3d at 901 (recommending that defendants desiring to avoid the one-year time bar expeditiously request severance in state court even though it may ......
  • Request a trial to view additional results

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