OTIS D. WRIGHT, II, District Judge.
Pending before the Court are Defendants Bag Fund, LLC, Leo Fasen, and Vincent Quigg's Motion to Strike Plaintiff's First Amended Complaint ("FAC") (ECF No. 77), Motion to Dismiss the FAC (ECF No. 84), and Motion to Strike the FAC pursuant to California Code of Civil Procedure § 425.16. (ECF No. 85.) The Court also considers Plaintiff Anthony Stissi's Motion to File a Second Amended Complaint.
Lake Valley Retrievals filed a lawsuit against Plaintiff on January 21, 2005, in the Superior Court of San Bernardino, Civil Case Number VCIVS036695, on behalf of Wells Fargo Bank. (FAC ¶ 19, ECF No. 68.) Plaintiff alleges that although the state-court complaint "seems to state a cause of action between Wells Fargo Bank and Plaintiff, there is no assignment of the debt from Wells Fargo Bank to Lake Valley Retrievals and Lake Valley Retrievals did not plead such in their Complaint." (Id. ¶ 20.) Even so, judgment was entered against Plaintiff on May 11, 2005, by way of clerk's default, in the amount of $7,907.07 (the "Judgment"). (Id. ¶ 21.) At the time of entry of default, the attorney for Lake Valley Retrievals, Raymond Marrero, calculated $734.69 in attorney fees. (Id. ¶ 22.) The Judgment was assigned to Defendant Bag Fund for collection on or about January 17, 2007. (Id. ¶ 21.)
At the time the Judgment was entered, Plaintiff owned property located at 17591 El Cajon Drive, Hesperia, California (the "Property"). (Id. ¶ 23.) Lake Valley recorded an abstract of judgment on August 5, 2005, which attached to the Property. (See id. ¶ 21.) Plaintiff later defaulted on his mortgage, and Bank of America foreclosed on the Property. (Id. ¶ 23.) U.S. Bank purchased the Property and then sold it to the current owners on March 20, 2012. (Id.) Defendant Stewart Title Guaranty Company, which was the title company during the sale to the current owners, failed to pay the lien on the Property before the close of escrow to the new buyers. (Id.)
Defendant Bag Fund renewed the Judgment on May 22, 2014. (Id. ¶ 24.) Defendant Fasen, on behalf of Bag Fund, requested an Abstract of Judgment, which he recorded in San Bernardino County on October 29, 2014. (Id.) On May 22, 2014, Fasen also filed a Memorandum of Costs for $1,900.00; $1,500.00 for attorney's fees and $400 for "Title Search." (Id. ¶ 26.) Fasen also declared that the interest on the Judgment was $7,132.18. (Id.) Bag Fund then began contacting Plaintiff to collect on the Judgment. (Id. ¶ 27.)
Fasen filed three more Memoranda of Costs in November 2014, April 2015, and May 2015, for $4,022.00, $4,181.00, and $5,771.00, respectively. (Id. ¶¶ 28-30.) Defendant Quigg, an attorney for Bang Fund, later submitted a Memorandum of Cost in June 2015 for $11,466.00. (Id. ¶ 31.)
In 2015, Plaintiff entered escrow on a home, using Defendant EBS Escrow. (Id. ¶ 33.) During the process, the Bag Fund lien appeared on Plaintiff's title report. (Id.) EBS Escrow requested a pay-off demand from Bag Fund, and Bag Fund responded with a demand of $13,021.68. (Id.) The pay-off demand also indicated that Stewart Title would pay $20,000.00. (Id. ¶ 34.) EBS Escrow paid Bag Fund on Plaintiff's behalf, but Stewart Title never did. (Id.) In October 2016, Plaintiff was declined refinancing on his home as a result of the outstanding Judgment on his credit report. (Id. ¶ 36.)
Plaintiff alleges a number of deficiencies with the state court proceedings and subsequent Judgment, including that (1) the Judgment is void on its face, (2) the attorney's fees listed in the Memoranda of Costs were included without judicial determination, and (3) the Memorandum of Costs filed by Quigg is improper because, at the time of filing, he was not an attorney of record. (Id. ¶ 55.) Plaintiff alleges that Bag Fund, Fasen, and Quigg violated the Fair Debt Collection Practices Act ("FDCPA") by attempting to collect on the Judgment, in light of these deficiencies. (Id. ¶¶ 51-55.) Plaintiff further alleges that Bag Fund and Fasen violated the Fair Credit Reporting Act ("FCRA") by failing to notify all consumer reporting agencies that the "derogatory remark on Plaintiff's credit report was inaccurate, false, and misleading." (Id. ¶ 74.) Plaintiff also asserts a number of state-law causes of action against Defendants.
On March 21, 2017, Plaintiff filed his Complaint, seeking damages for Defendants' abusive debt collection practices, which occurred when they attempted to collect on the Judgment. (Compl., ECF No. 1.) He claims breach of contract, intentional misrepresentations, intentional infliction of emotional distress, violations of consumer protection statutes, and violations of the FDCPA and FCRA. (See generally FAC.)
On August 24, 2017, Plaintiff moved to amend his Complaint under Rule 15(a)(2), citing the need to include "newly discovered facts." (ECF No. 57). The Court granted Plaintiff's unopposed Motion. (ECF No. 66.)
On October 11, 2017, Bag Fund, Fasen, and Quigg moved to strike the FAC, citing various violations of the Local Rules and Federal Rules of Civil Procedure. (ECF No. 77.) Plaintiff moved for leave to file a second amended complaint on November 1, 2017, once again citing the need to include "new facts." (ECF No. 81.) On November 3, 2017, Defendants moved to both strike the FAC pursuant to California's anti-SLAPP statute, Cal. Code of Civil Proc. § 425.16, and to dismiss the FAC for failure to state a claim and lack of subject matter jurisdiction.
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, 678 (2009). The determination whether a complaint satisfies the plausibility standard is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. A court is generally limited to the pleadings and must construe all "factual allegations set forth in the complaint . . . as true and . . . in the light most favorable" to the plaintiff. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). But a court need not blindly accept conclusory allegations, unwarranted deductions of fact, and unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
Federal Rule of Civil Procedure 12(b)(1) provides for a motion to dismiss for lack of subject-matter jurisdiction. A Rule 12(b)(1) motion may be either facial, where the inquiry is confined to the allegations in the complaint, or factual, where the court is permitted to look beyond the complaint to extrinsic evidence. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). On a facial challenge, all material allegations in the complaint are assumed true, and the question for the court is whether the lack of federal jurisdiction appears from the face of the pleading itself. See id.; Thornhill Publ'g Co. v. Gen. Tel. Elec., 594 F.2d 730, 733 (9th Cir. 1979). When a defendant makes a factual challenge "by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject-matter jurisdiction." Safe Air For Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). The Court need not presume the truthfulness of the plaintiff's allegations under a factual attack. White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000); Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983). However, in the absence of a full-fledged evidentiary hearing, disputes in the facts pertinent to subject-matter are viewed in the light most favorable to the opposing party. Dreier v. United States, 106 F.3d 844, 847 (9th Cir. 1996). The disputed facts related to subject-matter jurisdiction should be treated in the same way as one would adjudicate a motion for summary judgment. Id.
Rule 15(a)(2) provides that "a party may amend its pleading only with the opposing party's written consent or with the court's leave." That rule further provides that "[t]he court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2). This Court analyzes the following factors to assess whether to grant leave to amend: (1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether plaintiff has previously amended his complaint. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1990).
Defendants argue that the Court must dismiss the FAC because the Court lacks subject-matter jurisdiction over Plaintiff's claims under the Rooker-Feldman doctrine,
Application of the Rooker-Feldman doctrine is limited to situations where a plaintiff alleges a de-facto appeal by both asserting errors by the state court and seeking relief from the state-court judgment as a remedy. Id. However, the Ninth Circuit has held that Rooker-Feldman may be applicable even where a plaintiff does not directly contest the merits of a state-court decision, but where the federal causes of action are "inextricably intertwined with the state court's decision such that adjudication of the federal claims would undercut the state ruling or require the district court to interpret the application of state laws or procedural rules." Reusser v. Wachovia Bank, N.A., 525 F.3d 855, 859 (9th Cir. 2008). In determining the applicability of the Rooker-Feldman doctrine, a district court must first decide whether the plaintiff is attempting a de-facto appeal of a state court judgment. Bell, 709 F.3d at 897. A de-facto appeal exists when "a federal plaintiff asserts as a legal wrong an allegedly erroneous decision by a state court, and seeks relief from a state court judgment based on that decision." Id.
With this case, Plaintiff does just that. He is not attacking Defendants' manner in collecting the debt—i.e. harassing phone calls or improper communications, a claim that could be actionable in federal court; rather, he is attacking the amount of the debt Defendants are attempting to collect, which is based on the Judgment and subsequent state-court filings. Plaintiff alleges that Defendants violated the FDCPA when they "took legal action against [] Plaintiff on a Judgment that was void on its face; added attorney fees without judicial determination; and filed a Memorandum of Costs by Vincent Quigg when he [was] not the attorney of record." (FAC ¶¶ 51-55.) Accordingly, were this Court to adjudicate the merits of this allegation, it would be forced to determine the validity of the underlying Judgment. This second-guessing of a state court's prior determination is the exact type of situation the Rooker-Feldman doctrine prohibits.
Plaintiff contends that the Rooker-Feldman doctrine does not apply, because he is not attacking the state court's Judgment but, rather, the Defendants' actions in seeking attorney's fees—namely, those included in the various Memoranda of Cost filed in the state court—to which they are not entitled. (Opp'n 47, ECF No. 89.) This argument lacks merit because, as explained above, Plaintiff explicitly alleges that the underlying Judgment is void. Even if the various filings of Memoranda of Costs were independently actionable, Plaintiff has not pleaded those acts independently of his attack on the underlying Judgment, nor as he alleged separate damages related to the Memoranda of Costs. (See FAC ¶¶ 51-55.) As Plaintiff has repeatedly pleaded his case, including in his recently submitted proposed second amended complaint, Plaintiff lumps all of the FDCPA allegations together, which would require the Court to question the validity of the underlying Judgment. Ultimately, these issues fall squarely within the realm of the state court, which is still in the process of hearing the parties' disputes.
Plaintiff's FCRA claim fails for the same reason. Plaintiff alleges that Defendants violated the FCRA by "failing to notify all consumer reporting agencies that the derogatory remark on Plaintiff's credit report was inaccurate, false, and misleading." (FAC ¶ 74.) Adjudicating the merits of this claim, however, would require a determination of whether the "derogatory remark," i.e. the Judgment, was actually inaccurate, false, or misleading. Such an inquiry is "inextricably intertwined" with the state court's decision. See Reusser, 525 F.3d at 859.
Therefore, the Court finds that it lacks subject matter jurisdiction to hear Plaintiff's FDCPA and FCRA claims. As explained below, this finding is dispositive of the entire case. For that reason, the Court declines to address Defendants' other arguments contained in their Motion to Dismiss and Motions to Strike.
Plaintiff moves for leave to file a second amended complaint, once again citing "new facts" that he would like to include in his pleading. (ECF No. 81.) The Court
As discussed above, the Court finds that it lacks subject-matter jurisdiction over Plaintiff's two federal causes of action for violations of the FDPCA and the FCRA. Pursuant to 28 U.S.C. § 1367(c)(3), the Court declines to exercise supplemental jurisdiction over the remaining state-law claims.
For the foregoing reasons, the Court