LAWRENCE O. ANDERSON, Magistrate Judge.
This action comes before the Court on Defendants' Motion to Dismiss the Complaint, pursuant to Rules 12(b)(1), 12(b)(5), and 12(b)(6), Federal Rules of Civil Procedure. (Doc. 22) Defendants move for dismissal of the First Amended Complaint ("FAC") on numerous grounds, including: 1) the District Court of Arizona lacks subject matter jurisdiction over this action due to the Rooker-Feldman doctrine; 2) and Plaintiff's claims are barred by the relevant statute of limitations; and 3) the FAC fails to state a plausible claim upon which relief can be granted. (Id.) Though Plaintiff has not asked for leave to amend the FAC, Defendants request dismissal with prejudice without leave to amend as any amendment would be futile.
After review of the parties' briefings and relevant authorities, the Court will grant Defendants' motion. The Court will dismiss this action with prejudice as a third amendment would be futile to state a plausible claim. The Court finds it unnecessary to address Defendants' other grounds for dismissal.
This 2013 federal lawsuit arises out of a 2001 debt-collection action brought against Plaintiff in an Arizona justice court, resulting in a default judgment. Years later and twelve months after ESI garnished money in Plaintiff's bank accounts with Bank of America, Plaintiff commenced this federal action, on October 28, 2013, alleging multiple violations of the Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq., and the Arizona torts of Conversion and Intentional Infliction of Emotional Distress. (Doc. 1) Because the original Complaint failed to comply with several of the District Court of Arizona's Local Rules, the Court struck the Complaint without prejudice with leave to re-file by November 8, 2013. (Doc. 6) Plaintiff timely re-filed a nearly identical Complaint, and, on February 24, 2014, filed the verified FAC, adding five new defendants — TRS Financial Corporation; Victor Gilgan and Jane Doe Gilgan, husband and wife; Robert Conti and Nikal Conti, husband and wife. (Docs. 8; 18-2 at 1-20)
According to Arizona court documents
Plaintiff admits in the verified FAC that she "does not recall ever being served with a summons and complaint or any other notice from either Defendant." (Docs. 18-2, ¶ 14 at 4) The process server's certified Affidavit of Service, however, confirms Plaintiff was personally served with the State-court's summons and complaint at 8:18 p.m. on August 13, 2001, at 4140 N. 78th St., #1149, Scottsdale, AZ 85251. (Doc. 22-3, Exh. 2) When Plaintiff failed to timely answer ESI's complaint, default was entered by the clerk and, more than 10 days later, a default judgment was entered on October 31, 2001, in favor of ESI and against Plaintiff. (Doc. 22-1, Exh. 1) The October 31, 2001 judgment was in the amount of "1,943.99 plus interest on principal at 18% from October 26, 2001 until Judgment is entered. Interest on the Judgment [shall accrue] at the contract rate at 18% until paid." (Id.) Defendants note that "Plaintiff failed to challenge the final judgment in the justice court, or on appeal in the state courts of Arizona" and Plaintiff does not dispute this representation. (Doc. 22 at 3)
Plaintiff's FAC acknowledges that "[o]n or about October 12, 2006, the McDowell Mountain Justice Court renewed Defendants' judgment in the amount of $3,326.08." (Doc. 18-2, ¶ 18 at 5) On August 4, 2011, ESI again renewed the judgment for an additional five years in accordance with A.R.S. 12-1613. (Id. at 5-6; doc. 18-5, Exh. 5 at 1)
According to court records from McDowell Mountain Justice Court, ESI served a writ of garnishment on October 15, 2012, in case number CV 01-05236, on Bank of America, garnishing $1,596.48 from Plaintiff's bank accounts. (Docs. 22-4, Exh. 4 at 1; 22-5, Exh. 5 at 1-4) On November 19, 2012 and February 6, 2013, ESI subpoenaed documents from Bank of America, seeking information, such as, Plaintiff's bank statements, applications for credit; checking, savings, money market, and brokerage accounts; safe deposit boxes, and guaranteed investment certificates. (Docs. 22-6, Exh. 6 at 1-4; 22-7, Exh. 7 at 1-6) The November 19, 2012 subpoena certifies that ESI mailed a copy to Plaintiff's last known address, which was provided to ESI in Bank of America's October 25, 2012 Answer to Writ of Garnishment. (Doc. 22-6, Exh. 6 at 4) The February 6, 2013 subpoena reflects ESI's counsel mailed a copy to Plaintiff's California counsel, Mark W. Straface. (Doc. 22-7, Exh. 7 at 6) Eight months later, Plaintiff filed this federal lawsuit.
The FAC alleges, or purports to allege, nine causes of action or claims for relief: 1) Declaratory Relief to set aside judgment for lack of standing (Count One
Specifically, Count Three alleges that Defendants are "debt collectors" by 15 U.S.C. § 1692a(6) and violated the FDCPA, 15 U.S.C. § 1692d, "by engaging in conduct the natural consequence of which was to harass, oppress, or abuse Plaintiff by" the following:
(Id. at 10-11)
Count Four alleges that Defendants violated the FDCPA, 15 U.S.C. § 1692e(1), by using "false, deceptive and misleading representations" and/or "deceptive means to collect or attempt to collect a debt or to obtain information concerning a consumer by" the following:
(Id. at 11-12)
Count Five alleges that Defendants violated the FDCPA, 15 U.S.C. § 1692f, "[b]y engaging in conduct to collect or attempt to collect a debt that was unfair or unconscionable by" the following:
(Id. at 13-14)
Count Six, the Conversion count, alleges that by garnishing the $1,546.48 from Plaintiff's bank accounts on or about November 9, 2012, "Defendants converted the monies to their own use when Plaintiff's monies were deposited into Defendant Vaughan's attorney/client trust account." (Id., ¶¶ 55-57 at 15-16) "Defendants lacked standing to file an action against Plaintiff, lacked standing to obtain a default judgment and as such lacked standing to garnish Plaintiff's bank accounts." (Id., ¶ 58 at 16) "The aforementioned acts of Defendants were wilful, wanton, malicious, and oppressive, Defendants' acts were undertaken with the intent to defraud, and justify the awarding of exemplary and punitive damages." (Id., ¶ 58 at 16)
Count Seven alleges that "[u]nder 15 U.S.C. § 1692l[,] a violation of the FDCPA shall be deemed an unfair or deceptive act or practice in violation of the Federal Trade Commission Act[`FTCA',]" and requests "a permanent injunction to ensure that Defendants will not continue to violate the FTCA and the FDCPA." (Id., ¶¶ 62-63 at 16-17)
Count Eight, titled "EQUITABLE RELIEF FOR VIOLATIONS OF THE FTCA AND THE FDCPA," alleges "this Court is authorized to issue all equitable and ancillary relief as it may deem appropriate in the enforcement of the FDCPA and the FTCA, including the ability to order the disgorgement of ill-gotten monies[,]" citing §§ 13(b) and 19 of the FTCA, and 15 U.S.C. §§ 53(b) and 57b. (Id., ¶ 65 at 17)
The last count, Count Nine, alleges the intentional tort of Intentional Inflection of Emotional Distress. Plaintiff avers "Defendants intended to file a collection lawsuit against Plaintiff with the knowledge they lacked standing and with the knowledge [ESI] was not a licensed debt collector in the State of Arizona[;] misrepresented to the court that the interest rate was, by contract, eighteen percent (18%) when even the contract on file with the court didn't allow for eighteen percent (18%)[;] obtained a default judgment against Plaintiff and thereafter waited twelve years for the original debt amount of $739.47 to increase to $5080.89[; and] without notice to Plaintiff, garnished Plaintiff's bank accounts at a time when monthly bills would be due the following week." (Id., ¶¶ 67-68 at 17-18) "Defendants at no time had the legal authority to initiate a lawsuit, not to mention the seizure of Plaintiff's money and Defendants continuing collection efforts." (Id., ¶ 68 at 18) "Defendants' conduct, tantamount to an ambush, is so extreme it shocks the conscience and caused and continues to cause plaintiff severe emotional distress in that she feels intimidated, anxious, violated and conducting her day to day life without a bank account because of the two aforementioned subpoenas' served on Plaintiff's bank." (Id., ¶ 68 at 18) Plaintiff further claims that she does not currently have a bank account because she is "fearful that her account will be wiped out again[,]" and "is seeking counseling from her church in the hope that her anxiety would dissipate and not cause additional health problems." (Id., ¶ 69 at 18)
Defendants move for dismissal of the FAC on numerous grounds: 1) the District Court of Arizona lacks subject matter jurisdiction over Plaintiff's action pursuant to the Rooker-Feldman doctrine; 2) Plaintiff's claims for relief fail to state a plausible claim upon which relief can be granted; 3) Plaintiff's causes of action are barred by the applicable statute of limitations; 4) Defendants Vaughan, TRS Financial Corporation, and ESI were not properly served with process, and the action against them should be dismissed because more than 120 days has passed without service since the original Complaint and FAC were filed; 5) though denying any violation of Arizona law regarding the regulation of collection agencies,
Except for Counts One and Two, Plaintiff opposes Defendants' dispositive motion. In her Response to Defendants' Motion to Dismiss, she indicates her "[c]laims arise from Defendants' `Application for Entry of Judgment Against Garnishee' filed on November 7, 2012." (Doc. 38 at 2) "As Defendants never validated the debt, the Application for Entry of Judgment as a collection action is a violation of the FDCPA and the Court has subject matter jurisdiction." (Id.) According to her Response, which is unsupported by an affidavit or additional copies of public or undisputed documents, "Defendants sat on a judgment for 11 years and then garnished Plaintiff's bank account and then subpoenaed the same bank account records twice in a little over two months' time when Defendants discovered Plaintiff retained legal counsel." (Id.) Later in her Response, Plaintiff explains that the basis of one of her FDCPA claims is the use of a valid State subpoena which she claims violated federal law. Plaintiff argues that "[t]he very nature of a Subpoena, a summons or any other communication is just that — a communication of information, of facts, of legal principal [sic] and orders." (Id., ¶ 10 at 5) (citing Simon v. FIA Card Services, NA, 732 F.3d 259 (3rd Cir. 2013)). Piecing her disjointed arguments together, Plaintiff claims that "[t]he subpoenas issued on November 19, 2012, and February 5, 2013 [are] collection actions [that] violate 15 U.S.C. § 1692g, and 15 U.S.C. § 1692d as intentional acts of harassment and intimidation." (Id. at 2)
Citing Twombly and Seventh Circuit authority, Plaintiff writes that the FAC "specifically set[s] forth in detail Defendants violations of the FDCPA, equitable and injunctive relief, conversion and intentional infliction of emotional distress." (Id. at 4) Plaintiff, however, fails to spell out for the Court the facts alleged to support her conclusory statements that she has alleged sufficient facts in the FAC to establish that a plausible claim on any of Plaintiff's nine causes of action.
Plaintiff's Response concludes that "[w]ith respect to Plaintiff's first and second causes of action, Plaintiff defers to the Court." (Doc. 38 at 8) According to Plaintiff, Count One of the FAC alleges a cause of action for declaratory relief to set aside the State default judgment on Plaintiff's allegation that ESI lacked standing to engage in post-judgment remedies. Count Two is Plaintiff's request for injunctive relief for Defendants' alleged criminal violation of A.R.S. § 32-1055. These are not causes of action, but rather, forms of relief. Because Plaintiff has failed to address Defendants' arguments for dismissal of these so-called causes of action and Plaintiff has not supported these claims with relevant case law or statutory authority, Counts One and Two will be summarily dismissed.
In their Reply, Defendants contend that Plaintiff, for the first time in her Response, raises the claim that Defendants failed to provide her with the FDCPA's "the initial notice of rights," as required by 15 U.S.C. § 1692g,
Referring to Counts One and Two, Defendants contend that "[b]y failing to defend those claims, Plaintiff has implicitly acquiesced in their dismissal." (Id. at 5) Defendants also reiterate that "[t]he Court lacks the `authority to review the final determinations of a state court in judicial proceedings.'" (Id.) (quoting In re Gruntz, 202 F.3d 1074, 1078 (9th Cir. 2000) (quotation and citation omitted)). "If Plaintiff wanted the Judgment Against Garnishee set aside, she should have asked the Justice Court for relief. If she could not convince the Justice Court to grant relief, she could have appealed to the Arizona Superior Court." (Id.) Thus, this Court should not grant her any relief pursuant to the Rooker-Feldman doctrine.
Next, Defendants argue that Plaintiff's contention that the two discovery subpoenas issued by the State court to Bank of America in November 2012 and February 2013 are FDCPA "communications" is without merit, distinguishing Simon v. FIA Card Servs., N.A., 732 F.3d 259 (3d Cir. 2013), the authority cited by Plaintiff. (Id. at 6) Defendants also point out that Plaintiff's argument in her Response "that Defendants' actions as a `collection agency' violated 15 U.S.C. § 1692e(5)" was a claim also not alleged in the FAC. "Plaintiff cannot amend its Complaint by simply arguing a new legal theory in response to a motion to dismiss. In any event, Plaintiff has misread Arizona law while concluding that Defendants are collection agencies—as defined by Arizona law—when they are not." (Id. at 6-7)
Finally, Defendants argue that "[t]o have the power to hear the state-law claims, this Court must determine that the federal claim has `substance sufficient to confer subject matter jurisdiction on the court,' that the state and federal claims `derive from a common nucleus of operative fact,' and that these claims would `ordinarily be expected to try them all in one judicial proceeding.'" (Id. at 8) (quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966) (citation omitted)). According to Defendants, "[w]ithout the barred FDCPA claims, this Court lacks the required federal basis to exercise pendent claim jurisdiction and should dismiss the state-law claims." (Id.)
The FAC alleges the Defendants violated the FDCPA, 15 U.S.C. §§ 1692 et seq. Because the FDCPA is a federal statute, Plaintiff's FDCPA claims arise under federal law. See Mangum v. Action Collection Serv., Inc., 575 F.3d 935, 938 (9th Cir. 2009); Aniel v. TD Service Co., 2011 WL 109550, at *3 (N.D. Cal. Jan. 13, 2011). Accordingly, unless an abstention doctrine
Federal Rule of Civil Procedure 8(a)(2) requires that each claim in a pleading be supported by "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). To meet this requirement, the Supreme Court has held that an "entitlement to relief" requires "more than labels and conclusions . . . Factual allegations must be enough to raise a right to relief above a speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint must contain "sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 570 (2009) (quoting Twombly, 550 U.S. at 570); see also Moss v. United States Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) ("[F]or a complaint to survive a motion to dismiss, the non-conclusory `factual content,' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.") (citing Twombly and Iqbal). Even where a complaint has the factual elements of a cause of action present, but is factually scattered throughout the complaint and not organized into a "short and plain statement of the claim," it may be dismissed for failure to satisfy Rule 8(a). Sparling v. Hoffman Constr. Co., 864 F.2d 635, 640 (9th Cir. 1988). A motion to dismiss under Rule 12(b)(6) "tests the legal sufficiency of a claim." Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)).
Establishing the plausibility of a complaint's allegations is a two-step process that is "context-specific" and "requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679; see also Eclectic Properties East, LLC v. Marcus & Millichap Co., 751 F.3d 990, 995-96 (9th Cir. 2014). First, a district court should "identif[y] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. Then, a court should "assume the[ ] veracity" of "well pleaded factual allegations" and "determine whether they plausibly give rise to an entitlement to relief." Id. "Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. at 678 (citation omitted). When considering plausibility, courts must also consider an "obvious alternative explanation" for the defendant's behavior. Id. at 682 (quoting Twombly, 550 U.S. at 567).
In Arizona, "[a] default judgment is treated as an admission, by the defaulting party, of the truth of all well pleaded facts in the case." Clugston v. Moore, 134 Ariz. 205, 206, 655 P.2d 29, 30 (Az. Ct. App. 1982) (citations omitted). Federal courts follow a similar legal principle. See TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 918 (9th Cir. 1987). In Arizona and federal courts, a default judgment has the same claim-preclusive effect as a judgment on the merits. See Rebuild America, Inc. v. Golden Raven, Inc., 2010 WL 1428701, at *3 (Az. Ct. App. April 9, 2010) ("In the context of claim preclusion, a `judgment on the merits' includes a default judgment.") (citation omitted); In re Garcia, 313 B.R. 307, 312 n. 10 (9th Cir. Cir. 2004) (quoting 18A Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4442) ("Valid default judgments establish claim and defense preclusion in the same way as litigated judgments, and are equally entitled to enforcement in other jurisdictions); Lundborg v. Phoenix Leasing, Inc., 91 F.3d 265, 270 (1st Cir. 1996). In fact, "[t]he Supreme Court has ruled that a federal court must give a state court judgment `the same preclusive effect as would be given that judgment under the law of the State in which the judgment is rendered.'" Dixon v. Falcon Heights Condominium Ass'n, 2013 WL 6189965, at *3 (D. Or. Nov. 26, 2013) (quoting Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 81 (1984) (citation omitted)). "Federal courts apply state preclusion law in determining whether claim preclusion applies." Id. (citing Marrese v. Am. Acad. of Orthopaedic Surgeons, 470 U.S. 373, 380 (1985)).
The Rooker-Feldman doctrine is a well-established jurisdictional rule, prohibiting federal courts from exercising appellate review over final state-court judgments. See Henrichs v. Valley View Dev., 474 F.3d 609, 613 (9th Cir. 2007). "At its core, the Rooker-Feldman doctrine stands for the unremarkable proposition that federal district courts are courts of original, not appellate, jurisdiction." In re Gruntz, 202 F.3d 1074, 1078 (9th Cir. 2000) (en banc) (citing 28 U.S.C. §§ 1331, 1332). "Thus, it follows that federal district courts have no authority to review the final determinations of a state court in judicial proceedings." (Id.) (citation and internal quotations omitted). The Rooker-Feldman doctrine
"If a federal plaintiff has brought a de facto appeal from a state court decision — alleging legal error by the state court and seeking relief from the state court's judgment — he or she is barred by Rooker-Feldman." Kougasian v. TMSL, Inc., 359 F.3d 1136, 1142 (9th Cir. 2004) (citation omitted). "The federal plaintiff is also barred from litigating, in a suit that contains a forbidden de facto appeal, any issues that are `inextricably intertwined' with issues in that de facto appeal." Id. (citing Noel, 341 F.3d at 1155) (internal quotation marks omitted); see also Cooper v. Ramos, 704 F.3d 772, 777 (9th Cir. 2012). "The inextricably intertwined test thus allows courts to dismiss claims closely related to claims that are themselves barred under Rooker-Feldman." Id.
"In assessing whether the Rooker-Feldman doctrine applies, `the fundamental and appropriate question to ask is whether the injury alleged by the federal plaintiff resulted from the state court judgment itself or is distinct from that judgment.'" Normandeau v. City of Phoenix, 516 F.Supp.2d 1054, 1063 (D. Ariz. 2005) (quoting Garry v. Geils, 82 F.3d 1362, 1365 (7th Cir. 1996)). "If the injury alleged resulted from the state court judgment itself, the Rooker-Feldman doctrine dictates that the federal courts lack subject matter jurisdiction, even if the state court judgment was erroneous or unconstitutional." Id. (citation omitted). "By contrast, if the alleged injury is distinct from the state court judgment and not inextricably intertwined with it, the Rooker-Feldman doctrine does not apply[.]" (Id.) Federal courts have held that a federal "suit seeking damages for the execution of a judicial order is just a way to contest the order itself, [therefore] the Rooker-Feldman doctrine is in play." See, e.g., Busch v. Torres, 905 F.Supp. 766, 770 (C.D. Cal. 1995) (quoting Homola v. McNamara, 59 F.3d 647, 651 (7th Cir. 1995)); Pinzon v. Jensen, 2009 WL 4134809, at *5 (E.D. Cal. Nov. 23, 2009) ("[P]laintiff appears to be asserting that the small claims judgment caused Plaintiff injury. These are the kinds of claims the court lacks jurisdiction to hear under the Rooker-Feldman doctrine.").
"Determining what constitutes a forbidden de facto appeal, however, has sometimes proven difficult for the lower courts." Kougasian, 359 F.3d at 1142 (citing Noel, 341 F.3d at 1161-62 (collecting cases)). In analyzing the applicability of the Rooker-Feldman doctrine, a federal court "pay[s] close attention to the relief sought by the federal court plaintiff," as the doctrine precludes the adjudication of a federal claim that seeks to undo a prior state court judgment. Bianchi v. Rylaarsdam, 334 F.3d 895, 900 (9th Cir. 2003) (citation omitted). Numerous district courts in the Ninth Circuit have rejected FDCPA claims in a federal action on the basis of the Rooker-Feldman doctrine. See, e.g., Fleming v. Gordon & Wong Law Group, P.C., 723 F.Supp.2d 1219 (N.D. Cal. 2010); Brooks v. Vinci, 2010 WL 3607778, at *3 (D. Or. July 29, 2010) ("Brooks's `wrong venue' and improper service claims cannot be separated from the question of the validity of the Colorado court's judgment. In other words, his FDCPA claims are a collateral attack on the judgment itself, forbidden by Rooker-Feldman."), report and recommendation adopted by, Brooks v. Vinci, 2010 WL 3606616 (D.Or. Sept. 9, 2010).
The FDCPA was enacted to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e); see also Randall v. Nelson & Kennard, 2010 WL 3636258, at *1 (D. Ariz. Sept. 20, 2010). The FDCPA does not protect every imaginable debt; instead, it is limited to consumer debts, specifically, "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 FDCPA was designed to protect consumers who have been victimized by unscrupulous debt collectors, regardless of whether a valid debt actually exists. Baker v. G.C. Servs. Corp., 677 F.2d 775, 777 (9th Cir. 1982). It is a strict liability statute, meaning that a consumer need not show that the debt collector intentionally, fraudulently, or knowingly violated the Act. See Reichert v. National Credit Systems, Inc. 531 F.3d 1002, 1004 (9th Cir. 2008) ("[O]ur court decided [Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162 (9th Cir. 2006)], which made clear that the FDCPA is a strict liability statute in that a plaintiff need not prove an error was intentional.").
It is well settled that FDCPA liability is limited to individuals or entities who meet the FDCPA's definition of "debt collector." See, e.g., Pollice v. Nat'l Tax Funding LP, 225 F.3d 379, 403 (3d Cir. 2000) ("The FDCPA's provisions generally apply only to `debt collectors.'. . . Creditors — as opposed to `debt collectors' — generally are not subject to the FDCPA."); Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 108 (6th Cir. 1996) (finding that the liability for a debt collector should not be vicariously imposed on the assignee who was not a debt collector under the FDCPA); see also Miranda v. Field Asset Services, 2013 WL 124047, at *4 (S.D. Cal. Jan. 9, 2013); Plumb v. Barclays Bank Delaware, 2012 WL 2046506, at *4 (E.D. Wash. June 5, 2012) ("[E]ven vicarious liability under the FDCPA has been restricted to principals who themselves are statutory `debt collectors.'"); Oei v. N. Star Capital Acquisitions, LLC, 486 F.Supp.2d 1089, 1097 (C.D. Cal. 2006). The FDCPA defines "debt collector" as "any person who . . . in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. . . ." 15 U.S.C. § 1692a(6) (emphasis added). For purposes of Defendants' motion, Plaintiff has alleged sufficient facts in the FAC that ESI and Vaughn are debt collectors within the meaning of the FDCPA.
Under the FDCPA, a debt collector's "initial communication" with a consumer must provide the disclosures set forth in 15 U.S.C. § 1692g(a). See Hernandez v. Williams, Zinman & Parham, P.C., 2014 WL 977649, at *3 (D. Ariz. March 13, 2014) (citing Voris v. Resurgent Capital Servs., L.P., 494 F.Supp.2d 1156, 1169, 2007 (S.D. Cal. 2007)). These disclosures are otherwise known as a "debt validation notice." Id. "The purpose of the debt validation notice is to inform a debtor of her rights and obligations to the creditor." Id. Congress amended 15 U.S.C. § 1692g in 2006, adding the provision that "[a] communication in the form of a formal pleading in a civil action shall not be treated as an initial communication for purposes of subsection (a)." Tourgeman v. Collins Financial Services, Inc., 2009 WL 6527757, at *3 (S.D. Cal. Aug. 6, 2009) (citing 15 U.S.C. § 1692g(d) (dismissing plaintiff's claim that the state court collection action violated the FDCPA as an initial communication).
The FDCPA authorizes "[a]n action to enforce any liability created" by the FDCPA in "any appropriate United States District Court . . . within one year from the date on which the violation occurs." 15 U.S.C. § 1692k(d); see also Naas v. Stolman, 130 F.3d 892 (9th Cir. 1997) (statute of limitations on FDCPA action arising from state-court debt collection suit began to run on date suit was filed). "The only exception to this rule under Ninth Circuit case law arises when a party is not properly served, in which case the relevant date is the date the plaintiff discovered or could have discovered her cause of action." Baker v. Midland Funding LLC, 2014 WL 345686, at *1 (D. Ariz. Jan. 30, 2014) (citing Mangum v. Action Collection Serv., Inc., 575 F.3d 935, 940 (9th Cir. 2009); but see Lyons v. Michael & Assocs., 2013 WL 4680179, at *2 (S.D. Cal. Aug. 28, 2013) (citing Mangum and indicating that "in 2009, the Ninth Circuit, without citing Naas, held that the relevant date in FDCPA actions is the date the plaintiff discovered or could have discovered her cause of action."). The District Judge in Baker found the Eastern District of California's explanation persuasive:
Baker, 2014 WL 345686, at *1-2 (quoting Huy Thanh Vo v. Nelson & Kennard, 931 F.Supp.2d 1080, 1086 (E.D. Cal. 2013)).
Under Arizona law, conversion is "an act of wrongful dominion or control over personal property in denial of or inconsistent with the rights of another." Case Corp. v. Gehrke, 208 Ariz. 140, 91 P.3d 362, 365 (Az. Ct. App. 2004) (citation omitted); see also Focal Point, Inc. v. U-Haul Co. of Ariz., Inc., 155 Ariz. 318, 319, 746 P.2d 488, 489 (Az. Ct. App. 1986) (conversion is defined as "any act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein.") (citation and internal quotation marks omitted)); Autoville, Inc. v. Friedman, 20 Ariz.App. 89, 510 P.2d 400, 402 (Az. Ct. App. 1973) ("The gravamen of [conversion] is . . . the wrongful interference with another's ownership or right of possession.") (citations omitted). "To maintain an action for conversion, a plaintiff must have had the right to immediate possession of the personal property at the time of the alleged conversion." Case Corp., 91 P.3d at 365; Empire Fire & Marine Ins. Co. v. First Nat. Bank, 26 Ariz.App. 157, 159, 546 P.2d 1166, 1168 (Az. Ct. App. 1976) ("In order to maintain an action for conversion the plaintiff must show that at the time of the conversion he was in possession of the property or was entitled to the immediate possession thereof."). "While a conversion claim cannot be maintained to collect on a debt that could be satisfied by money generally, Autoville, money can be the subject of a conversion claim if the money can be described, identified or segregated, and an obligation to treat it in a specific manner is established." Id., 91 P.3d at 365. "The proper plaintiff in a conversion action is one `who had the right to immediate possession of the chattel at the time of the alleged conversion.'" Universal Mktg. & Entm't, Inc. v. Bank One of Arizona, 203 Ariz. 266, 53 P.3d 191 (Az. Ct. App. 2002) (quoting Sears Consumer Fin. Corp. v. Thunderbird Prods., 166 Ariz. 333, 335, 802 P.2d 1032, 1034 (Az. Ct. App. 1990) (citations omitted)).
An IIED claim, known as the "tort of outrage," requires proof of three elements: "first, the conduct of the defendant must be extreme and outrageous; second, the defendant must either intend to cause emotional distress or recklessly disregard the near certainty that such distress will result from his conduct; and third, severe emotional distress must indeed occur as a result of defendant's conduct." Citizen Publishing Co. v. Miller, 210 Ariz. 513, 516, 115 P.3d 107, 110 (Ariz. 2005) (citing Ford v. Revlon, 153 Ariz. 38, 43, 734 P.2d 580, 585 (Ariz. 1987) (upholding jury verdict for the plaintiff where defendant employer's failure to address plaintiff's repeated complaints of physical assault and sexual harassment led plaintiff to attempt suicide) (citing Restatement (Second) of Torts § 46 (1965)).
Under the first element, a plaintiff "may recover for [IIED] only where the defendant's acts are `so outrageous in character and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized community.'" Patton v. First Fed. Sav. & Loan Ass'n of Phoenix, 578 P.2d 152, 155 (Ariz. 1978) (quoting Cluff v. Farmers Ins. Exch., 10 Ariz.App. 560, 460 P.2d 666, 668 (Az. Ct. App. 1969), overruled on other grounds, Godbehere v. Phoenix Newspapers, Inc., 162 Ariz. 335, 783 P.2d 781, 784 (Ariz. 1989)); see also Ford, 153 Ariz. at 43, 734 P.2d at 585 (Ariz. 1987). When a claim of IIED is made, "[t]he court in the first instance must determine whether the acts complained of can be considered extreme and outrageous so as to state a claim for relief." Gilbert v. Board of Medical Examiners, 155 Ariz. 169, 177, 745 P.2d 617, 625 (Az. Ct. App. 1987)).
In Arizona, "conduct necessary to sustain an [IIED] claim falls at the very extreme edge of possible conduct." Watts v. Golden Age Nursing Home, 127 Ariz. 255, 258, 619 P.2d 1032, 1035 (Ariz. 1980) (upholding directed verdict where the defendant nursing home failed to notify the plaintiff that her husband was terminally ill). An IIED "claim cannot arise out of conduct which merely hurts one's feelings." Cluff, 10 Ariz.App. at 562, 460 P.2d at 668. "Even if a defendant's conduct is unjustifiable, it does not necessarily rise to the level of `atrocious' and `beyond all possible bounds of decency' that would cause an average member of the community to believe it is `outrageous.'" Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 199, 888 P.2d 1375, 1386 (Az. Ct. App. 1994); Lucchesi v. Frederic N. Stimmel, M.D., 149 Ariz. 76, 716 P.2d 1013 (Ariz. 1986). "Generally, [an IIED claim] is one in which the recitation of facts to an average member of the community would arouse his [or her] resentment against the actor, and lead him [or her] to exclaim `Outrageous!" Cluff, 10 Ariz. App. at 562, 460 P.2d at 668 (citing Restatement (Second) Torts Section 46, comment (d) (1965) (internal quotation marks omitted).
A plaintiff bears the burden of proving that a defendant's conduct was extreme and outrageous and caused plaintiff severe emotional distress; however, in Arizona, a physical injury need not occur. Pankratz v. Willis, 155 Ariz. 8, 744 P.2d 1182 (Az. Ct. App. 1987); Nelson, 181 Ariz. at 199, 888 P.2d at 1386.
Here, this 2013 federal lawsuit and the 2001 State-court judgment are "inextricably intertwined" because Defendants use of post-judgment proceedings were, and are, authorized by Arizona law after judgment was entered against Plaintiff. For example, the FAC seeks judgment against Defendants ESI and Vaughan because they purportedly were not proper parties in the State-court action, which allegedly rendered the State-court judgment against Plaintiff void ab initio; and that damages be awarded Plaintiff for Defendants' violations of multiple parts of the FDCPA and commission of the torts of Conversion and the IIED. To disregard the validity of the State-court judgment solely on Plaintiff's allegations would constitute a collateral attack on the validity of the Arizona judgment. See Clugston, 134 Ariz. at 206, 655 P.2d at 30 ("[a] default judgment is treated as an admission, by the defaulting party, of the truth of all well pleaded facts in the case."). Plaintiff has not attempted to distinguish her FDCPA claims as independent of the State-court judgment, but rather, her FDCPA allegations challenge the merits of the State-court judgment itself. Plaintiff's allegations invite the Court to find that Defendants did not have standing to bring and prosecute the State-court action. This District Court declines Plaintiff's invitation. See Dixon, 2013 WL 6189965, at *3 ("[t]he Supreme Court has ruled that a federal court must give a state court judgment `the same preclusive effect as would be given that judgment under the law of the State in which the judgment is rendered.'") (citation omitted).
The Court finds that because Plaintiff's FDCPA claims constitute a de facto appeal challenging the validity of the State-court judgment are inextricably intertwined with the State-court judgment, and Defendants' use of procedurally and statutorily authorized post-judgment remedies under Arizona law, the claims are barred by the Rooker-Feldman doctrine. Absent sufficient factual allegations to support Defendants' misconduct independent of the State-court judgment, merely alleging the elements of a FDCPA claim does not satisfy Plaintiff's minimum pleading requirements under federal law. See Twombly, 550 U.S. at 555 ("a formulistic recitation of the elements of a claim will not do" to state a claim).
Even if the Rooker-Feldman doctrine did not apply to some of Plaintiff's causes of action, they are nevertheless time-barred by the relevant statute of limitations. Plaintiff fails to even address Defendants' arguments that Plaintiff's FDCPA claims are barred by FDCPA's statute of limitation, much less argue the statute was tolled until she "discovered" the alleged violations or were otherwise equitably tolled. Regardless whether the FDCPA limitations period began to run upon filing the State-court complaint or upon its subsequent service on Plaintiff on August 13, 2001, under either date, the statute of limitations began to run in 2001. Plaintiff's FDCPA claims predicated on conduct before October 28, 2012, are clearly untimely and time-barred by FDCPA's one-year statute of limitation.
Assuming arguendo Defendants violated the FDCPA initial-communications requirement mandated by § 1692g, the FAC did not allege a cause of action for such a violation. Moreover, Plaintiff has not requested leave to amend the FAC to allege a § 1692g violation, nor has she provided the Court with any evidence that Defendants did not comply with § 1692g. No doubt, such an amendment now, over 12 years since the State-court action was filed and served, would be futile to state a plausible claim because it would be barred by the FDCPA's one-year statute of limitations. See 15 U.S.C. § 1692k(d).
Plaintiff submits no declaration contesting the factual record; nevertheless, she argues Defendants violated the FDCPA because subsequent debt collectors must comply with the FDCPA's initial communication requirements. As a matter of law, even assuming a subpoena does constitutes a "pleading" within the meaning of § 1692g(a), an issue not addressed herein, the Court finds that 15 U.S.C. § 1692g(a)'s statutory requirements do not apply to Defendants' November 2012 and February 2013 subpoenas served upon Bank of America because neither was an "initial" communication on Plaintiff's debt. Under the FDCPA, it is "the" initial communication with the consumer that triggers the mandatory debt validation notice requirements. See 15 U.S.C. § 1692g(a) ("Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing [certain listed requirements] . . . .") (emphasis added). See Hernandez, 2014 WL 977649, at * 3; Paris v. Steinberg & Steinberg, 828 F.Supp.2d 1212, 1222 (W.D. Wash. 2011) (in drafting § 1692g, "Congress contemplated only one initial communication with a debtor on a given debt"). Having failed to plead facts moving this claim from the conceivable to the plausible, Plaintiff's FDCPA claim for violation of § 1692g(a)(4) fails to state a claim upon which relief can be granted, and will dismissed pursuant to Rule 12(b)(6).
Similarly, the FAC also fails to state a plausible claim for Conversion and IIED. Treating the State-court judgment as a valid judgment, as the Court must, Arizona law authorizes a plaintiff to obtain a default judgment after valid service of process and the failure to answer, garnish a defaulted party's bank accounts, and obtain post-judgment discovery of a defaulted party's assets via the power of subpoena as Defendants did in the State-court action. See Rule 55, Ariz.R.Civ.P; A.R.S. §§ 12-1570.01, -1572, -1574; Frazer, Ryan, Goldberg, Keyt & Lawless v. Smith, 184 Ariz. 181, 186, 907 P.2d 1384, 1389 (Az. Ct. App. 1995) ("In summary, the earnings protection of §§ 33-1131 and 12-1598.10 does not extend to monies disbursed to the debtor's bank account."); National Union Fire Ins. Co. of Pittsburgh, PA v. Excel Staffing, 2011 WL 31192, at *2 (D. Ariz. Jan. 5, 2011) ("[The judgment creditor] may use the discovery devices provided in Civil Rules 26 to 37 or may obtain discovery in the manner provided by the practice of the state in which the district is held.") (quoting 12 Wright, Miller & Marcus, Federal Practice and Procedure, § 3014 (2d ed. 1997)).
Plaintiff's FAC also fails to state a plausible Conversion claim under Arizona law on another ground. The FAC fails to allege that Garnishee Bank of America, possessor of the money at the time the garnishment writ was served, had an obligation to treat the funds in Plaintiff's accounts in a specific manner, or even that the Bank had an contractual obligation to pay Plaintiff, as required to state a Conversion claim under Arizona law. See Cellco P'ship v. Hope, 2012 WL 260032, at *18 (D. Ariz. Jan. 30, 2012) (citing Universal Mktg., 203 Ariz. at 268, 53 P.3d at 193; Case Corp., 208 Ariz. 140, 91 P.3d 362, 366-68. At the time of the alleged conversion in this case, the entity with the immediate right to possession of the money was not Plaintiff, but Bank of America. In making her deposits, Plaintiff made the funds the property of Bank of America, giving rise to a debt Bank of America owed to Plaintiff. See Universal Mktg., 203 Ariz. at 268, 53 P.3d at 193.
The FAC also fails to state a plausible claim for Intentional infliction of Emotional Distress, which requires a showing of extreme and outrageous conduct. See Ford, 153 Ariz. at 42, 734 P.2d at 580. The facts alleged in the FAC are insufficient to meet this burden. Assuming a valid State-court judgment, as the Court must, it is not extreme and outrageous conduct for a judgment-creditor to file a collection lawsuit against Plaintiff, a debtor, on an unpaid debt, garnish this judgment-debtor's bank account, twice renewing the judgment as authorized by Arizona law, or subpoenaing this judgment-debtor's bank records as authorized by Arizona's discovery rules.
The Court finds that consideration of Plaintiff's causes of action is barred by the Rooker-Feldman doctrine; the First Amended Complaint fails to state a plausible claim upon which relief can be granted; and, because it is clear to the Court that the First Amended Complaint cannot possibly be cured by the allegation of other facts, this action will be dismissed with prejudice.
Based on the foregoing,
