Schaired v. Monterey Fin. Servs.

• Decision Date: 24 January 2023
• Docket Number: 22-cv-0736-BAS-MDD
• Parties: ROBERT SCHAIRED, Plaintiff, v. MONTEREY FINANCIAL SERVICES, INC., Defendant.
• Court: U.S. District Court — Southern District of California

ROBERT SCHAIRED, Plaintiff,
v.
MONTEREY FINANCIAL SERVICES, INC., Defendant.

No. 22-cv-0736-BAS-MDD

United States District Court, S.D. California

January 24, 2023

ORDER: (1) GRANTING IN PART AND DENYING PART, PLAINTIFF'S MOTION FOR LEAVE TO FILE AN AMENDED COMPLAINT (ECF NO. 15); AND (2) TERMINATING AS MOOT MOTION TO DISMISS INITIAL COMPLAINT (ECF NO. 4)

Hon. Cynthia Bashant United States District Judge

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Plaintiff Robert Schaired (“Schaired”) commenced this putative-class action against Defendant Monterey Financial Services, Inc. (“MFSI”) on May 23, 2022. (Compl., ECF No. 1.) The initial Complaint asserts three claims: one under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq., and two under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. MFSI moved pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(6) to dismiss one of Schaired's FDCPA claims-that

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MFSI violated 15 U.S.C. § 1692e(11)-and to strike pursuant to Rule 12(f) Schaired's class allegations. (MFSI's Mot. to Dismiss (“MTD”), ECF No. 4.)

Now before this Court is Schaired's Motion for Leave to File his proposed Amended Complaint (“Motion”), which Schaired filed in response to MFSI's motions to dismiss and strike. (Mot., ECF No. 15; Proposed Am. Compl. (“Am. Compl.”), Ex. 2 to Mot., ECF No. 15-2.) Schaired explicitly brings his Motion pursuant to Rule 15(a)(2). (Mot. at p. 1.) The proposed Amended Complaint alters only Schaired's class allegations; it leaves untouched the initial Complaint's factual allegations and claims. (Id.) MFSI concedes Schaired's proposed amendments cure the deficiencies it identified in its motion to strike. (Opp'n, ECF No. 16.) However, MFSI contends Schaired still fails to state a Section 1692e(11) claim upon which relief can be granted. Accordingly, MFSI argues the Motion should be denied as futile as to that claim. (Id.) In response, Schaired does not address the merits of MFSI's contention but rather argues MFSI is required as a matter of procedure to file a new motion to dismiss if it seeks to challenge the sufficiency of his Section 1692e(11) claim. (Reply, ECF No. 17.)

The Court finds the Motion suitable for determination based upon the papers submitted and without oral argument. See Fed.R.Civ.P. 78(b); Civ. L.R. 7.1(d)(1). For the reasons stated below, the Court concludes: (1) MFSI's challenge that Schaired fails to state a claim under Section 1692e(11) is properly before this Court and (2) the proposed Amended Complaint fails to allege MFSI violated Section 1692e(11) and, thus, that claim is futile. Accordingly, the Court DISMISSES WITHOUT PREJUDICE Count II and, therefore, GRANTS IN PART and DENIES IN PART Schaired's Motion. (ECF No. 15.)

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I. BACKGROUND

A. Factual History^[1]

In approximately 2016, Schaired, a Georgia resident, bought a timeshare property at the Westgate Resort (“Westgate”) in Florida. (Compl. ¶ 15.) At some point, which Schaired does not specify, he defaulted on his obligations set forth in the timeshare purchase agreement, leaving an unpaid balance of $8,969. (Id. ¶ 17.) Westgate placed that debt for collection with MFSI, a collection agency located in Oceanside, California. (Id. ¶¶ 9-10, 18.) MFSI somehow obtained Schaired's cellular phone number and began to call him to collect the subject debt in approximately June 2021. (Id. ¶¶ 19, 21.) Schaired ignored these calls for approximately nine months.^[2](Id. ¶¶ 20.) Then, in approximately March 2022, Schaired answered a call, marking the first communication between the parties that is identified in the Complaint. (Id. ¶ 22.) During that call, Schaired alleges he “advised [MFSI] he wanted to address the subject debt with Westgate directly” and “requested that [MFSI] cease its collection calls.” (Id. ¶ 23.)

Nevertheless, MFSI continued its collection calls, which Schaired continued to ignore. (Compl. ¶¶ 24-25.) MFSI also allegedly began leaving Schaired voicemails using “an artificial and/or prerecorded voice.” (Id. ¶ 25.) According to Schaired, “[s]ome of the robocalls placed by [MFSI] failed to disclose . . . [MFSI] was a debt collector attempting to collect a debt.” (Id. ¶ 28.)

Schaired identifies a single exemplar voicemail out of the estimated 15 he purportedly received. (Id. ¶¶ 26, 29.) In it, MFSI stated:

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This is Monterey Financial Services with an important message. This is an attempt to collect a debt. Please do not erase this message until you call us at 877-444-9967. Again, that number is 877-444-9967. Thank you.^[3]

(Id. ¶ 26.)

B. Procedural History

Approximately two months after the initial communication, Schaired commenced the instant putative-class action against MFSI on May 23, 2022, asserting a claim under the TCPA and two claims under the FDCPA. Specifically, Schaired alleges:

• MFSI violated the TCPA “by placing no less than fifteen (15) telephone calls to [his] cellular phone utilizing an artificial or prerecorded voice without [his] consent” (“Count I”). (Compl. ¶ 52).

• MFSI violated provision Section 1692e(11) of the FDCPA “by failing to disclose to [him] that it was a debt collector attempting to collect a debt in some of the voicemails it left on [his] cellular phone” (referred to above as “Count II”). (Id. ¶ 62).

• MFSI violated the FDCPA's proscriptions delineated at 15 U.S.C. § 1692c and 1692d “by placing collection calls to [his] cellular phone at a time [MFSI] knew to be inconvenient” and by placing those calls “with the specific intent of annoying, harassing, and abusing [him]” (“Count III”). (Id. ¶ 77.)

Schaired brings Count I on behalf of himself and all members of the alleged “TCPA Class” and Count II on behalf of himself and all members of the alleged “FDCPA Class.”^[4](Compl. ¶ 34.) He brings Count III on behalf of himself only. (Id. ¶ 34.)

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On July 25, 2022, MFSI moved to dismiss Count II of the initial Complaint and to strike all the Complaint's class allegations. (MTD.) The Rule 12(b)(6) portion of MFSI's motion asserted that MFSI's voicemail adequately disclosed MFSI's identity as a debt collector by stating the call was (1) from MFSI and (2) “an attempt to collect a debt.” (Id. at 7.) The Rule 12(f) component of MSFI's motion sought to strike the class allegations on the ground the TCPA Class and FDCPA Class definitions “are fail-safe,” i.e., defined in such a way “that precludes membership unless the liability of the defendant is established.” (Id. at 7-8 (quoting Kamar v. RadioShack Corp., 375 Fed.Appx. 734, 736 (9th Cir. 2010)).)

Schaired did not oppose MFSI's motion. Instead, he moved under Rule 15(a)(2) for leave to file his proposed Amended Complaint. (Mot. for Leave at p. 1 (“[Schaired], by and through his undersigned counsel, and pursuant to Fed.R.Civ.P. 15(a)(2), bring[s] this Motion for Leave to File his First Amended Complaint.”).) That Motion marks Schaired's first proposed amendment. The proposed Amended Complaint differs from the initial Complaint in one way only: it contains new class definitions designed to cure the abovementioned class-definition deficiency identified by MFSI. The pleadings are otherwise identical. Crucially, the proposed Amended Complaint leaves untouched Count II as initially alleged and the factual allegations underlying that claim. (See Redline Comparison of Compl. with Am. Compl. (“Redline”) ¶¶ 13-29, 60-64, Ex. 3 to Mot., ECF No. 15-3.)

MFSI partially opposes Schaired's Motion. (Opp'n.) MFSI acknowledges the “proposed change[s] to [the] TCPA [C]lass definition cures the fail-safe issue.”^[5](Opp'n

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at 8, 10.) And although it avers Schaired's amendments do not eliminate other “inevitable issue[s]” Schaired will face during the class-certification process, MFSI concedes it “would be inappropriate at the initial pleadings stage” to address those issues. (Id. at 10.) However, MFSI asserts Schaired should not be permitted to proceed with Count II for the same reasons MFSI set out in its motion to dismiss. (Id. at 3.) That is, MFSI contends Schaired still fails to identify a single communication of MFSI's that plausibly violates Section 1692e(11), thus, leave to amend as to Count II is futile. (Id.)

In his reply, Schaired does not address the merits of MFSI's contention the proposed Amended Complaint is futile with respect to Count II. (Reply at 2-3.) Rather, Schaired argues that despite his express invocation of Rule 15(a)(2) in the Motion, the amendments delineated in the proposed Amended Complaint are “as of right.”...