MARCIA S. KRIEGER, Chief Judge.
When a magistrate judge issues a recommendation on a dispositive motion, the parties may file specific, written objections within fourteen days after being served with a copy of the recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). The district court shall make a de novo determination of those portions of the recommendation to which timely and specific objection is made. U.S. v. One Parcel of Real Prop. Known as 2121 E. 30th St., 73 F.3d 1057, 1060 (10th Cir. 1996).
In her Amended Complaint
By way of additional background, the Court notes that on July 1, 2011, Ms. Hernandez initiated Civil Action No. 11-cv-01729 (Hernandez I).
As relevant here, the Defendant moved to dismiss
Ms. Hernandez objects to the Magistrate Judge's factual conclusion that her claims in this case arise out of the same transaction as those asserted in Hernandez I. Specifically, she argues that her claims here can be proven with evidence of new facts that occurred after Hernandez I. She alleges that here, she can rely on pleadings filed in Hernandez I to establish that she disputed the account, rather than rely on evidence of the May 5, 2011 phone call. She argues that because Hernandez I occurred after the conduct she alleged in that action, her claims in this case rely on independent facts.
"Under res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in the prior action." Wilkes v. Wyoming Dep't of Emp't, 314 F.3d 501, 504-05 (10th Cir. 2002) (citing Satsky v. Paramount Commc'ns, Inc., 7 F.3d 1464 (10th Cir. 1993)) (emphasis in original). Claim preclusion requires a judgment on the merits in an earlier action, identity of the parties in the two suits, and identity of the cause of action in both suits. Yapp v. Excel Corp., 186 F.3d 1222, 1226 (10th Cir.1999). To determine whether the claims in two suits are identical, it must be determined whether the claims arise out of the same
Upon de novo review of the Recommendation, the Court reaches the same conclusions articulated in the Recommendation for substantially the same reasons. Contrary to Ms. Hernandez's view, her claims in this action are not independent simply because they allege conduct that occurred after Hernandez I. Even if she were to rely on pleadings in that case to establish that she disputed the account, the pleadings depend on the fact of the May 5, 2011 phone call to establish the dispute. The claims here relate to the same disputed account, and they involve separate instances of the same course of conduct by the Defendant — that is, the Defendant's failure to report the account as disputed after the May 5, 2011 phone call. Thus, although the Defendant's conduct in August, October, and November 2011 could have amounted to additional violations of the FDCPA, those violations are not independent from the claims at issue in Hernandez I.
Finally, the Court sees no reason why Ms. Hernandez could not have moved to amend her complaint in Hernandez I to include allegations of the conduct that occurred in August, October, and November 2011. The trial in Hernandez I occurred over a year after she filed her complaint in that case. Had she amended her complaint in Hernandez I, the jury could have been called upon to determine whether the Defendant's additional communications with Experian constituted violations of the FDCPA. A plaintiff cannot "avoid supplementing his complaint with facts that are part of the same transaction asserted in the complaint, in the hope of bringing a new action arising out of the same transaction on some later occasion." Hatch, 471 F.3d at 1150 (emphasis in original).
For the forgoing reasons, the Plaintiff's Objections
KATHLEEN M. TAFOYA, United States Magistrate Judge.
This matter comes before the court on "Defendant Asset Acceptance, LLC's Motion to Dismiss." (Doc. No. 13, filed Oct. 4, 2012 ["Mot."].) Additionally, the court considers "Plaintiff's Motion to Compel the Defendant's Responses to the Plaintiffs Written Discovery Requests Pursuant to Fed.R.Civ.P. 33, 34, and 37." (Doc. No. 33, filed March 8, 2013.)
The following facts are taken from Plaintiffs Amended Complaint (Doc. No. 11 ["Am. Compl."]) and documents attached to or incorporated by reference therein.
Plaintiff allegedly incurred a financial obligation ("the Debt") to Xcel Energy and defaulted on the Debt. (Am. Compl., ¶¶ 18, 20.) Defendant acquired the Debt for collection purposes. (Id., ¶ 21.)
On May 5, 2011, Plaintiff placed a phone call to Defendant and stated to one of its employees that she disputed the Debt. (Id., ¶¶ 34-43.) In June 2011, Defendant communicated information regarding the Debt to Experian, a credit reporting agency, but did not communicate the fact that Plaintiff disputed the Debt. (Ex. 4; see also Scheduling Order, Doc. No. 34 at 4-5, Hernandez v. Asset Acceptance, LLC, Case No. 11-cv-01729-PAB-MEH [hereinafter "Hernandez I"].)
On July 1, 2011, Plaintiff commenced a lawsuit, Hernandez I, against Defendant, alleging violations of 15 U.S.C. §§ 1692e(2)(A), e(8), e(10), and 1692f for Defendant's failure to report the Debt as disputed between May 5, 2011 and July 1, 2011. (See Ex. A; Compl.; Doc. No. 1, Hernandez I.)
Just over four weeks prior to trial in Hernandez I, Plaintiff commenced this lawsuit in order to challenge Defendant's August, October, and November 2011 communications with Experian. (See Compl., Doc. No. 1.) On August 10, 2012, Plaintiff filed a Notice of Case Association pursuant to Local Rule 7.5 to inform this court of Hernandez I. (Doc. No 4.)
Beginning on September 10, 2012, a jury trial was held in Hernandez I. (See Courtroom Minutes, Doc. No. 61, Hernandez I.) On September 11, 2012, the jury rendered a verdict in favor of Defendant. (See Courtroom Minutes, Doc. No. 62, Hernandez I.) Final judgment was entered in favor of Defendant on September 21, 2012. (Doc. No. 63, Hernandez I.)
On September 20, 2012, Plaintiff filed an Amended Complaint, which is now the operative pleading in this case. (Am. Compl.) Plaintiff's Amended Complaint asserts a claim for violations of 15 U.S.C. §§ 1692e(2)(A), e(8), e(10), and 1692f of the FDCPA for Defendant's failure to report the Debt as disputed during the months of August, October and November 2011. (Id., ¶ 114.) Plaintiff seeks monetary damages pursuant to 15 U.S.C. § 1692k(a), and attorney's fees and costs pursuant to 15 U.S.C. § 1692k(a)(3). (Id. at 17.)
Defendant filed its Motion to Dismiss on October 4, 2012. (Mot.) Plaintiff filed a Response on October 25, 2012. (Doc. No. 15 ["Resp."]). Defendant filed its Reply on November 8, 2012. (Doc. No. 20 ["Reply"]). Accordingly, this matter is ripe for review and recommendation.
Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6) (2007). "The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted." Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir.2003) (citations and quotation marks omitted).
"A court reviewing the sufficiency of a complaint presumes all of plaintiffs factual allegations are true and construes them in the light most favorable to the plaintiff." Hall v. Bellmon, 935 F.2d 1106, 1109 (10th Cir.1991). "To survive a motion to dismiss, 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pleaded facts which allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The Iqbal evaluation requires two prongs of analysis. First, the court identifies "the allegations in the complaint that are not entitled to the assumption of truth," that is, those allegations which are legal conclusion, bare assertions, or merely conclusory. Id. at 678-80, 129 S.Ct. 1937. Second, the Court considers the factual allegations "to determine if they plausibly suggest an entitlement to relief." Id. at 681, 129 S.Ct. 1937. If the allegations state a plausible claim for relief, such claim survives the motion to dismiss. Id. at 679, 129 S.Ct. 1937.
Notwithstanding, the court need not accept conclusory allegations without supporting factual averments. Southern Disposal, Inc. v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir.1998). "[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Moreover, "[a] pleading that offers `labels and conclusions' or `a formulaic recitation of the elements of a cause of action will not do.' Nor does the complaint suffice if it tenders `naked assertion[s]' devoid of `further factual enhancement.'" Id. (citation omitted). "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. (citation omitted).
As a threshold matter, Defendant maintains, in the alternative to the claim preclusion argument discussed infra, that this suit is properly dismissed because Plaintiff has engaged in improper claim-splitting. (Mot. at 9-11.) The Tenth Circuit has recognized that claim-splitting is an aspect of res judicata, or claim preclusion.
The primary distinction between claim splitting and claim preclusion is whether a final judgment has entered in the purportedly duplicative prior action. Id. In other words, a dismissal on claim-splitting grounds is appropriate where the two duplicative cases are both ongoing, whereas claim preclusion provides the appropriate basis for dismissal when a final judgment has been entered on the first suit. Id. ("[I]n the claim-splitting context, the appropriate inquiry is whether, assuming that the first suit were already final, the second suit could be precluded pursuant to claim preclusion." Id. (quoting Hartsel, 296 F.3d at 987 n. 1) (emphasis in original)).
Here, final judgment has been entered in Hernandez I. Thus, at this juncture, Defendant's claim-splitting argument is inapposite. Instead, the appropriate inquiry is whether this suit is barred on claim preclusion grounds by the final judgment entered in Hernandez I.
Defendant argues this suit is barred by the doctrine of claim preclusion based on the final judgment entered in Hernandez I. (Mot. at 4-11.) The court agrees.
"Under res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in the prior action." Wilkes v. Wyoming Dep't of Emp't, 314 F.3d 501, 504-05 (10th Cir.2002) (citing Satsky v. Paramount Commc'ns, Inc., 7 F.3d 1464 (10th Cir.1993)) (emphasis in original). "Claim preclusion requires (1) a judgment on the merits in the earlier action; (2) identity of the parties or privies in the two suits; and (3) identity of the cause of action in both suits."
The parties do not dispute that the first two elements of the claim preclusion inquiry are satisfied in this case. They dispute whether the "cause of action" in this case is identical to that in Hernandez I.
The Tenth Circuit employs the transactional approach of the Restatement (Second) of Judgments to determine what claims constitute identity of the causes of action. Yapp, 186 F.3d at 1227 (citing Petromanagement Corp. v. Acme-Thomas Joint Venture, 835 F.2d 1329, 1335-36 (10th Cir.1988)). Under this test, claims "arising out of the same `transaction, or series of connected transactions' as a previous suit" are precluded. Id. (quoting
Id. (quoting Restatement (Second) of Judgments § 24).
Plaintiff maintains that this suit is not precluded the final judgment entered in Hernandez I because it is based on facts that arose after Plaintiff filed suit in Hernandez I — namely the August, October, and November 2011 communications with Experian. (Resp. at 3.) Defendant acknowledges that those communications occurred after Plaintiff filed suit in Hernandez I, but argues that this action is nevertheless barred because it relates to the same course of conduct as Hernandez I. (See Reply at 4.)
"Under the transactional test, a claim should not be precluded merely because it is based on facts that arose prior to the entry of judgment in the previous action." Hatch v. Boulder Town Council, 471 F.3d 1142, 1149 (10th Cir.2006); see also Mitchell v. City of Moore, 218 F.3d 1190, 1202 (10th Cir.2000) (stating in dicta "we agree with those courts holding the doctrine of claim preclusion does not necessarily bar plaintiffs from litigating claims based on conduct that occurred after the initial complaint was filed" in the previous suit). As the Tenth Circuit stated in Hatch,
471 F.3d at 1150 (quoting Computer Assocs. Int'l, Inc. v. Altai, Inc., 126 F.3d 365, 369-70 (2d Cir.1997)). See also Mitchell, 218 F.3d at 1202-03 (suggesting, in dicta, that the Tenth Circuit would follow the Second Circuit's approach; and collecting cases). See also, e.g., Rawe v. Liberty Mut. Fire Ins. Co., 462 F.3d 521, 530 (6th Cir.2006) (following majority rule that "the opportunity to file a supplemental complaint [to allege ongoing wrongdoing] is not an obligation."); 18 CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & EDWARD H. COOPER, FEDERAL PRACTICE & PROCEDURE § 4409, at 213 (2d ed.2002) (same).
"This does not mean, however, that a plaintiff can avoid supplementing his complaint with facts that are part of the same transaction asserted in the complaint, in the hope of bringing a new action arising out of the same transaction on some later
Hatch thus makes clear that, even when the claims asserted in a second lawsuit arose after the filing date of the first lawsuit, the transactional approach still governs whether those claims are precluded. In other words, such claims may still be barred where they are part of the same transaction or series of transactions as the first lawsuit.
Under this view, the court has no doubt that Plaintiffs claim in this action is precluded. To be sure, the August, October, and November 2011 communications with Experian underlying Plaintiffs present claim may amount to separate and distinct alleged violations of the FDCPA. See, e.g., 15 U.S.C. §§ 1692e(2)(A) (prohibiting the false representation of the character, amount or legal status of any debt); 1692e(8) (a "failure to communicate that a disputed debt is disputed" constitutes a violation of the FDCPA), 1692e(10) (prohibiting the "use of any false representation or deceptive means to collect or attempt to collect any debt"). See also Goins v. JBC & Assocs., P.C., 352 F.Supp.2d 262, 266-67 (D.Conn.2005) (Even if a letter that allegedly violated the FDCPA were part of the same debt collection as a prior suit, that letter constitutes a separate event which may violate the FDCPA independently of prior communications from the defendants). Thus, in that sense, Plaintiffs present claim is arguably a "new" claim. Hatch, 471 F.3d at 1150.
However, the court finds that this "new" claim is not "independent" from the claims at issue in Hernandez I. Id. (emphasis added). The claims in both this action and Hernandez I challenge separate instances of the very same course of conduct — Defendant's failure to report the Debt to Experian as disputed after Plaintiffs May 5, 2011 telephone call. But see Goins, 352 F.Supp.2d at 266-67. Indeed, because Plaintiff must necessarily utilize the May 5, 2011 telephone call as evidence that she disputed the Debt, "the facts that have accumulated after the first action are [not] enough on their own" to sustain this action. Storey, 347 F.3d at 384 (cited with approval in Hatch, 471 F.3d at 1150) (emphasis added).
A straightforward application of the transactional approach of the Restatement (Second) of Judgment further demonstrates why Plaintiffs present claim is precluded. First, Plaintiffs claim is closely related in time to the claims asserted in Hernandez. The August 2011 communication with Experian occurred only two months after the May 2011 communication at issue in Hernandez I and the October and November 2011 communications followed shortly thereafter. Second, Plaintiffs claim here and those asserted in Hernandez I all have a common origin — Plaintiffs May 5, 2011 telephone call disputing the Debt. Third, Plaintiffs motivation for filing both Hernandez I and this suit clearly are the same — to recover damages for Defendant's failure to report the Debt as disputed and prevent Defendant from doing the same in the future.
Fourth, Plaintiff's claim here also would have formed a convenient trial unit with
Ultimately, the court finds that, even though the alleged violations of the FDCPA at issue in this case occurred after Plaintiff filed suit in Hernandez I, those violations were part of the same transaction or series of transactions as the conduct challenged in Hernandez I. As such, pursuant to Hatch, the court finds that Plaintiffs claim in this action is precluded by the final judgment entered in Hernandez I.
Plaintiff has now propounded in this new case significantly burdensome discovery requests both including information she received in Hernandez I and additional far reaching requests. Fed.R.Civ.P. 26(b)(2)(C) provides:
Id. This court finds that the discovery sought in this matter is cumulative and duplicative of that received and deemed sufficient for a trial on the merits in Hernandez I. Further to allow such expansive extra discovery as sought by Plaintiff far exceeds the amount reasonable given the limited amounts which are at stake in the action and the importance of the discovery in resolving the issues. In fact, it is clear
In addition, the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the cases on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance. Kansas City Southern Ry. Co. v. United States, 282 U.S. 760, 763, 51 S.Ct. 304, 75 L.Ed. 684 (1931).
The Federal Rules of Civil Procedure do not expressly provide for a stay of proceedings. See String Cheese Incident, LLC v. Stylus Shows, Inc., 02-cv-01934-LTB-PAC, 2006 WL 894955, *2 (D.Colo.2006) (unpublished). Fed.R.Civ.P. 26(c) does, however, provide
Id. This court, when considering a stay of discovery, may consider and weigh: "(1) plaintiffs interests in proceeding expeditiously with the civil action and the potential prejudice to plaintiff of a delay; (2) the burden on the defendants; (3) the convenience to the court; (4) the interests of persons not parties to the civil litigation; and (5) the public interest." Id.; See also FDIC v. Renda, No. 85-2216-0, 1987 WL 348635, *2 (D.Kan. Aug. 6, 1987) (unpublished). Indeed, "a court may decide that in a particular case it would be wise to stay discovery on the merits until [certain challenges] have been resolved." 8 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 2040, at 521-22 (2d ed. 1994) ("[W]hen one issue may be determinative of a case, the court has discretion to stay discovery on other issues until the critical issue has been decided."); see also Vivid Techs., Inc. v. Am. Sci. & Eng'g, Inc., 200 F.3d 795, 804 (Fed.Cir.1999) ("When a particular issue may be dispositive, the court may stay discovery concerning other issues until the critical issue is resolved.").
In weighing the factors for determination of the propriety of a stay, the court finds that a stay is appropriate here.
Therefore it is
1. "Plaintiff's Motion to Compel the Defendant's Responses to the Plaintiff's Written Discovery Requests Pursuant to Fed.R.Civ.P. 33, 34, and 37" (Doc. No. 33) is DENIED and the Motion Hearing set for April 8, 2013 is
2. Discovery in this case is
Further, the court respectfully
Within fourteen days after service of a copy of the Recommendation, any party may serve and file written objections to the Magistrate Judge's proposed findings and recommendations with the Clerk of the United States District Court for the District of Colorado. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); In re Griego, 64 F.3d 580, 583 (10th Cir.1995). A general objection that does not put the district court on notice of the basis for the objection will not preserve the objection for de novo review. "[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review." United States v. One Parcel of Real Prop. Known As 2121 East 30th Street, Tulsa, Okla., 73 F.3d 1057, 1060 (10th Cir.1996). Failure to make timely objections may bar de novo review by the district judge of the magistrate judge's proposed findings and recommendations and will result in a waiver of the right to appeal from a judgment of the district court based on the proposed findings and recommendations of the magistrate judge. See Vega v. Suthers, 195 F.3d 573, 579-80 (10th Cir.1999) (a district court's decision to review a magistrate judge's recommendation de novo despite the lack of an objection does not preclude application of the "firm waiver rule"); One Parcel of Real Prop., 73 F.3d at 1059-60 (a party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review); Int'l Surplus Lines Ins. Co. v. Wyo. Coal Ref. Sys., Inc., 52 F.3d 901, 904 (10th Cir.1995) (by failing to object to certain portions of the magistrate judge's order, cross-claimant had waived its right to appeal those portions of the ruling); Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir.1992) (by their failure to file objections, plaintiffs waived their right to appeal the magistrate judge's ruling); but see, Morales-Fernandez v. INS, 418 F.3d 1116, 1122 (10th Cir.2005) (firm waiver rule does not apply when the interests of justice require review).
Dated this 8th day of April, 2013.
Yapp, 186 F.3d at 1227 n. 4.
