Opinion
6:22-cv-001165-MK
02-02-2023
BARRY L. TAUB, Plaintiff, v. GEORGE S. PITCHER; and LEWIS BRISBOIS BISGAARD & SMITH, LLP, Defendants.
FINDINGS AND RECOMMENDATION
MUSTAFA T. KASUBHAI UNITED STATES MAGISTRATE JUDGE
Plaintiff Barry L. Taub (“Plaintiff”) filed this Fair Debt Collection Practices Act (“FDCPA”) lawsuit against Defendants George Pitcher and Lewis Brisbois Bisgaard & Smith LLP (“Defendants”) for violations under 15 U.S.C. 1692 et seq. Defendants move to dismiss Plaintiff's Amended Complaint, ECF No. 6 (“Am. Compl.”) under Federal Rule of Civil Procedure 12(b)(6) and (c), which Plaintiff opposes. Def.'s Mot. to Dismiss, ECF No. 9 (“Def.'s Mot.”); Pl.'s Resp. to Def.'s Mot. to Dismiss, ECF No. 13 (“Pl.'s Resp.”). For the reasons that follow, Defendants' Motion to Dismiss should be GRANTED and this case should be DISMISSED with prejudice.
BACKGROUND
This case involves Defendants' attempt to collect $691.00 in court fees and costs relating to Lane County Circuit Court Case No. 22CV03569 (“the underlying case”). Am. Compl. ¶ V, ECF No. 6. The underlying case is a medical malpractice action brought against Drs. Colby Carlson and Scott W. Robertson and Eugene Podiatry Associates, P.C. ECF No. 6-1 at 2-4. On May 8, 2022, Lane County Circuit Judge McIntyre granted summary judgment in favor of Dr. Robertson. Pitcher Decl. Ex. 4, ECF No. 10.
Defendants submitted this ruling, as well as several other documents related to Defendants' attempt to collect statutory fees and costs associated with the underlying case, Pitcher Decl. Exs. 1-4, ECF No. 10, requesting that the Court incorporate the documents by reference. Def. Mot. 2. Plaintiff did not object to Defendants' request. See Pl.'s Resp. Although a court ruling on a Rule 12(b) motion ordinarily may not look outside the pleadings, it may consider documents not attached to the complaint if “the plaintiff refers extensively to the document or the document forms the basis of the plaintiff's claim.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). The Court accepts the documents proffered by Defendants as incorporated by reference because Plaintiff's complaint and its attachments extensively reference and rely on the court fees and costs sought by Defendants, the proposed limited judgment, and the underlying case. See ECF Nos. 6, 6-1.
Following Judge McIntyre's order, on July 1, 2022, Defendant Pitcher's legal secretary sent an email attaching a proposed “Limited Judgment of Dismissal and Money Award in Favor of Defendant Scott W. Robertson,” noting that Defendants would submit the judgment to the court by July 12, 2022, if no objections were received. Pitcher Decl. Ex. 2, ECF No 10. The proposed judgment includes a $235 first appearance fee, $111 motion fee, and a prevailing party fee of $345 for a total of $691. Id., Ex. 3. Defendants sought these fees on behalf of their client Dr. Robertson as the “prevailing party” under Oregon Rules of Civil Procedure (“ORCP”) 68A(2), ORCP 68B, and ORS 20.190(2). Def.'s Mot. 3.
Defendant Pitcher then sent Plaintiff an email stating: “If you would like to avoid having this judgment entered against you, send a check for $691 payable to “Lewis Brisbois Trust Account” to the attention of David Campbell before the end of next week. Otherwise we will enter the judgment and then collect it.” Pitcher Decl., Ex. 1, ECF No. 10.
Plaintiff attached what appears to be an incomplete version of this email to his Amended Complaint, as it reads: “If you would like to avoid having this judgment entered against you, send a check for $691 payable to ‘Lewis Brisbois Trust Account' to the attention of [missing text] Otherwise we will enter the judgment and then collect it.” ECF No. 6-1 at 1.
Plaintiff contends that Mr. Pitcher's July 1, 2022 email violated the FDCPA by failing to comply with 15 U.S.C. § 1692g(a), which has certain written notice requirements for communications with “a consumer in connection with the collection of a debt.” The FDCPA claim is the sole claim in Plaintiff's Amended Complaint. Defendants seek dismissal of Plaintiff's Amended Complaint because the “debt” that was the subject of Mr. Pitcher's July 1, 2022 email is not one which is subject to the FDCPA.
Although Plaintiff's Amended Complaint refers to 15 U.S.C. 1692h(a), it is clear from the content of the allegation that is a scrivener's error, and Defendants appear to agree. Def.'s Mot. 2. The Court will therefore proceed as though the Complaint alleged a violation of 15 U.S.C. 1692g(a).
STANDARD OF REVIEW
I. Fed.R.Civ.P. 12(b)6)
A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).
“After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). The pleadings are closed for the purpose of Rule 12(c) once a complaint and answer have been filed. Doe v. United States, 419 F.3d 1058, 1061 (9th Cir. 2005). Because a motion for judgment on the pleadings is “functionally identical” to a motion to dismiss for failure to state a claim, the same standard of review applies to both motions. Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989).
DISCUSSION
To state a claim under the Fair Debt Collection Practices Act (“FDCPA”), “a plaintiff must allege facts sufficient to establish: (1) the plaintiff has been the object of collection activity arising from a consumer debt; (2) the defendant, who is attempting to collect the debt, qualifies as a ‘debt collector,' and; (3) the defendant committed some act or omission in violation of the FDCPA.” Scally v. Ditech Fin., LLC, 2018 WL 2059506, at *4 (S.D. Cal. May 3, 2018). As to the first element, which is the basis of Defendants' motion, the FDCPA defines a “debt” as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” 15 U.S.C. § 1692a(5). The parties dispute whether the nature of the debt is one which falls within this definition. Defendants rely on Turner v. Cook, 362 F.3d 1219, 122223 (9th Cir. 2004) to argue that an obligation to pay pursuant to a tort judgment is not a “debt” subject to the FDCPA as a matter of law. Plaintiff contends that the Court should look to the “consumer transaction for medical services” which formed the basis of the underlying case that resulted in Plaintiff's obligation to pay. Pl.'s Resp. 2.
In Turner, the alleged “debt” was an obligation to pay pursuant to a judgment against the plaintiffs in a state law business interference tort case. Turner, 362 F.3d at 1222-23). As part of the effort to collect on that debt, the defendants filed a complaint in state court against the plaintiffs asserting that one of the plaintiffs had fraudulently conveyed property in order to prevent collection on the debt. Id. The plaintiffs then filed a federal action alleging, among other things, that the defendants' collection efforts violated the FDCPA. Id. The district court dismissed the FDCPA claim, and the plaintiffs appealed. Id. at 1222.
In analyzing whether the district court properly dismissed the plaintiffs' FDCPA claim, the Ninth Circuit framed the question as “whether a tort judgment resulting from business-related conduct qualifies as a debt under the FDCPA.” Id. at 1227. The Court reasoned that it does not, because the obligation to pay a tort judgment does not arise out of a “consensual or business dealing.” Id. at 1227-28, quoting Hawthorne v. Mac Adjustment, Inc., 140 F.3d 1367, 1371 (11th Cir.1998). The plaintiffs in Turner argued that the FDCPA should apply because the defendants' fraudulent conveyance action to collect the debt was not based on the underlying business tort judgment but instead on plaintiff's allegedly fraudulent transfers of his personal residence to prevent collection on tort judgment, and thus involved a consumer rather than business transaction. Id. at 1228. The court rejected that argument, holding that the defendants' “efforts [were] not converted into an attempt to collect a consumer debt merely because the fraudulent conveyance action involved [the plaintiff's] home.” Id.
This case should be dismissed for the same reason as in Turner. The debt at issue here, as pled by Plaintiff, is one for “court costs and other fees, regarding Lane County Circuit Court Case No. 22CV03569.” Am. Compl. ¶ V. The pleadings and other documents incorporated by reference make clear that Plaintiff's alleged obligation to pay here arises out of his unsuccessful tort claim against Dr. Robertson. See Pitcher Decl, Exs. 1-4, ECF No. 10. Like in Turner, Plaintiff's obligation did not arise out of any consensual or business dealing, but instead arose when Plaintiff filed an unsuccessful claim against Dr. Robertson.
The fact that the underlying case here related to a consumer transaction for medical services is immaterial. Plaintiff relies on Turner to argue that the Court should look to the “primary underlying consumer transaction for medical services” to determine that the debt at issue falls within the purview of the FDCPA. Pl.'s Resp. 2. But Plaintiff misreads Turner's holding on this issue. Turner, unlike this case, involved two layers of “underlying” cases: (1) the business interference tort action that resulted in a judgment forming the basis of the obligation to pay, and (2) the fraudulent conveyance action which was part of the effort to collect on the plaintiff's obligation to pay. Turner, 362 F.3d at 1223. There, the court accepted defendants' argument at the first layer that a tort judgment does not constitute a debt under the FDCPA, and rejected the plaintiff's argument that the fraudulent conveyance action (the second layer) “converted” the attempt to collect a tort case-related debt into a consumer debt. The former is the question before this Court, and Turner is dispositive.
Although the business interference tort action in that case arose out of a business transaction, not a consumer transaction, the nature of the transaction at issue in the underlying case was not the reason the court found the tort judgment was not a consumer debt. Instead, as explained above, it was the notion that an obligation to pay pursuant to a tort judgment does not arise out of a consensual transaction. Turner, 362 F.3d at 1227; see also Fleming v. Pickard, 581 F.3d 922 (9th Cir. 2009) (“The FDCPA. . . does not apply where a defendant attempts to collect a state court judgment for damages as a result of tortious conduct”). In any event, as Defendant notes, ECF No. 14 at 1-2, at least one court applying Turner has held that even judgments arising out of tort actions involving consumer transactions are not “debts” subject to the FDCPA. See, e.g., Lynaugh v. Vincent, No. CV-19-04643-PHX-DJH, 2020 WL 673483, *2 (D. Ariz. Feb. 11, 2020) (tort judgment arising out of lawsuit related to consumer loan agreement was not a “debt” subject to the FDCPA), aff'd, 840 Fed.Appx. 286 (9th Cir. 2021); see also Bartlett v. Blaser, Sorensen & Oleson, Chartered, 27 F.Supp.3d 1092, 1103 (D. Idaho 2014) (“even if indirectly related to a contracted transaction for plumbing services between [the plaintiff and the defendants]-the debt at issue is a separate obligation as determined under tort law” and therefore not subject to the FDCPA).
In sum, Plaintiff's obligation to pay arises by operation of an Oregon statute and court rules as a result of a summary judgment ruling against him. That is not a consensual or business dealing, and the obligation is therefore not a “debt” within the meaning of the FDCPA. Because this defect in Plaintiff's Amended Complaint turns on an issue of law that cannot be cured by amendment, the dismissal should be with prejudice. SeeDoe v. United States, 58 F.3d 494, 497 (9th Cir. 1995) (if the complaint is dismissed, leave to amend should be granted unless the court “determines that the pleading could not possibly be cured by the allegation of other facts”).
Defendants attach to their reply and ask the Court to take judicial notice of Dr. Robertson's declaration in support of the motion for summary judgment in the underlying case to establish that “there was no transaction of any kind” between Plaintiff and Dr. Robertson. ECF No. 14. Because the Court finds that the obligation arose by virtue of the summary judgment ruling and applicable statute and court rule, it finds the nature of the underlying transaction irrelevant for the reasons addressed in footnote 4. It therefore declines to consider this additional evidence as it is irrelevant to the Court's analysis.
RECOMMENDATION
For the reasons above, Defendants' Motion to Dismiss (ECF No. 9) should be GRANTED and Plaintiff's Amended Complaint DISMISSED with prejudice.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Federal Rule of Appellate Procedure 4(a)(1) should not be filed until entry of the district court's judgment or appealable order. The Findings and Recommendation will be referred to a district judge. Objections to this Findings and Recommendation, if any, are due fourteen (14) days from today's date. See Fed.R.Civ.P. 72. Failure to file objections within the specified time may waive the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153, 1157 (9th Cir. 1991).