Winn v. Unifund CCR Partners

Full title: Martin W. Winn, Plaintiff, v. Unifund CCR Partners, et al., Defendants

Court: United States District Court, D. Arizona

Date published: Mar 30, 2007

No. CV 06-447-TUC-FRZ (D. Ariz. Mar. 30, 2007)

Opinion

No. CV 06-447-TUC-FRZ.

March 30, 2007

ORDER

FRANK ZAPATA, District Judge

I. Procedural Background

Pending before the Court is Defendants' motion for judgment on the pleadings. United States Magistrate Judge Glenda E. Edmonds issued a Report and Recommendation recommending that the motion be granted by the Court. The Report and Recommendation indicated that any party could file written objections after being served with a copy of the Report and Recommendation. Plaintiff filed objections to the Report and Recommendation, Defendants filed a response to those objections, and Plaintiff filed a reply. Defendant did not file any objections to the Report and Recommendation.

II. Standard for Reviewing a Report and Recommendation

The Court reviews de novo the objected-to portions of the Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). The Court reviews for clear error the unobjected-to portions of the Report and Recommendation. Johnson v. Zema Systems Corp., 170 F.3d 734, 739 (7th Cir. 1999); see also Conley v. Crabtree, 14 F. Supp. 2d 1203, 1204 (D. Or. 1998).

III. Plaintiff's Objections ¹

1 As the Report and Recommendation throughly discussed the relevant facts and law, the Court will not repeat that entire discussion; rather, the Court will only discuss these issues as necessary to resolve the objections filed by Plaintiff.

a. Incorrect Legal Standard

Plaintiff argues that the Report and Recommendation applied the incorrect legal standard in evaluating the motion for judgment on the pleadings, and that the Report and Recommendation improperly relied on facts outside the Complaint thereby converting the motion for judgment on the pleadings into a motion for summary judgment. The Court disagrees. The Report and Recommendation applied the proper legal standard and explicitly stated the proper standard as follows:

Hameroff moves for judgment on the pleadings pursuant to FED.R.CIV.P. 12(c). If, as here, the defendant argues the plaintiff failed to state a claim in his complaint, the motion is analyzed as though it were brought pursuant to FED.R.CIV.P. 12(b)(6). McGlinchy v. Shell Chemical Co., 845 F.2d 802, 810 (9th Cir. 1988).

A complaint may be dismissed for failure to state a claim upon which relief can be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief." Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002), cert. denied, 538 U.S. 921 (2003). "[I]t may appear on the face of the pleadings that a recovery is very remote and unlikely but that is not the test." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), overruled on other grounds by, Harlow v. Fitzgerald, 457 U.S. 800 (1982). "The issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Id.

In considering the motion, "[a]ll allegations of material fact are taken as true and construed in the light most favorable to the plaintiff." In re Stac Electronics SecuritiesLitigation, 89 F.3d 1399, 1403 (9th Cir. 1996) (internal citations omitted), cert. denied, 520 U.S. 1103 (1997). "Nonetheless, conclusory allegations without more are insufficient to defeat [the motion]." McGlinchy v. Shell Chemical Co., 845 F.2d 802, 810 (9th Cir. 1988).

See Report and Recommendation at 3-4. After correctly stating the standard of review, the Report and Recommendation properly evaluated the facts by taking all of Plaintiff's alleged facts (as opposed to legal conclusions) in the Complaint as true, which included reference to the underlying state court complaint at issue which Plaintiff specifically attached to the Complaint filed in federal court. See generally U.S. v. Ritchie, 342 F.3d 903, 908 (9^th Cir. 2003) ("A court may . . . consider certain materials — documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice — without converting the motion to dismiss into a motion for summary judgment."); Headwaters Inc. v. U.S. Forest Service, 399 F.3d 1047, 1051 n. 3 (9^th Cir. 2005) (courts may take judicial notice of the docket in related cases as materials from a proceeding in another tribunal are appropriate for judicial notice); Emrich v. Touche Ross Company, 846 F.2d 1190, 1198 (9^th Cir. 1988) (a motion to dismiss for failure to state a claim is not treated as a summary judgment motion where the Court considers matters subject to judicial notice such as proceedings and determinations in related litigation); Mullis v. U.S. Bankruptcy Court for the District of Nevada, 828 F.2d 1385, 1388 (9^th Cir. 1987) (facts subject to judicial notice may be considered in relation to a motion to dismiss; further holding that on a motion to dismiss, the court need not accept as true allegations that contradict facts which may be judicially noticed by the court). Nonetheless, after taking all of Plaintiff's facts as true, the Report and Recommendation correctly found that these facts did not state a legally cognizable claim which therefore entitled Defendants to judgment on the pleadings. Plaintiff's objection is rejected.²

2 The Court notes that Plaintiff makes another curious argument in relation to his first objection. He seems to argue that the Report and Recommendation also considered improper facts, thereby converting the motion into a motion for summary judgment, by simply citing and discussing case law that Plaintiff did not discuss in his responsive brief. The Magistrate Judge, like this Court, obviously is not bound to only discuss and consider cases that Plaintiff chooses to discuss in his briefs, and this does not constitute consideration of facts outside the pleadings.

b. The Remaining Objections

A review of Plaintiff's remaining objections show that they are a rehash of the arguments made before the Magistrate Judge which were adequately addressed and properly rejected. Plaintiff's remaining objections simply argue that given the standards governing claims under the Fair Debt Collection Practices Act ("FDCPA"), Defendants' request for a reasonable amount of attorney's fees (with a corresponding statement of fees Defendants' believed reasonable) in a state court collection case somehow rises to the level of a FDCPA violation. The Report and Recommendation appropriately discussed and resolved Plaintiff's substantive claims as follows:

The Fair Debt Collection Practices Act (FDCPA) was designed "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. The FDCPA, inter alia, "broadly prohibits a debt collector from using any false, deceptive, or misleading representation or means in connection with the collection of any debt." Dunlap v. Credit Protection Ass'n, 419 F.3d 1011, 1012 (9th Cir. 2005) (citing 15 U.S.C. § 1692e) (internal punctuation removed). Specifically, subsection 1692e(2)(A) prohibits the false representation of the "character, amount, or legal status of any debt." Id.

Section 1692f broadly prohibits a debt collector from using "unfair or unconscionable means to collect or attempt to collect any debt." 15 U.S.C. § 1692f. Specifically, subsection 1692f(1) prohibits "[t]he collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law." Id. "The impact of language alleged to violate the FDCPA is judged under the `least sophisticated debtor' standard." Dunlap, 419 F.3d at 1012.

In this case, Winn concedes his credit card agreement provides for reasonable attorney's fees if litigation is required by the debtor's breach. He further asserts the agreement is governed by the laws of the State of Delaware which allows an award of reasonable attorney's fees. See 10 Del. C. § 3912. Nevertheless, he claims Hameroff's complaint violates the FDCPA because it cites a specific amount of attorney's fees in the prayer for relief. He observes that neither the credit card agreement nor Delaware law authorizes this, or any, specific amount. This specific amount, he argues, is "liquidated damages" which "attempt[s] to collect monies not expressly authorized by the contract creating the debt, or expressly authorized by law" and "misrepresents the nature, character and amount of the debt." (Complaint, pp. 6, 7.) The court does not agree.

Hameroff's complaint contains a prayer for relief. It is what it purports to be — a "prayer" or request for a certain amount of attorney's fees. It is a request that the court find an amount not less that $2,486.42 to be reasonable. It is not an assertion that this specific amount is explicitly authorized by the credit agreement. The prayer for relief does not violate the FDCPA. See Argentieri v. Fisher Landscapes, Inc., 15 F.Supp.2d 55, 61 (D.Mass., 1998) (holding that a request for attorney's fees in a collection complaint is just that — a request.).

The court's reasoning is reinforced by the structure of the complaint. In the body of the state court complaint, Hameroff explicitly alleges what Winn owes his creditor: principal in the amount of $11,301.91; interest in the amount of $1,432.27; and interest on the principal at the rate of 10.000% from 03/01/2006. (Complaint, Exhibit A.) Further, the complaint asserts the creditor is entitled to "recover court costs and reasonable attorney's fees." Id. No specific amount is quoted in this section.

Then, in the prayer for relief, Hameroff asks for judgment in the following amounts: principal in the amount of $11,301.91; interest in the amount of $1,432.27; and interest on the principal at the rate of 10.000% from 03/01/2006. (Complaint, Exhibit A.) Hameroff then asks for "reasonable attorney's fees in the amount of not less than $2,486.42." Id. This amount does not appear in the body of the complaint where Winn's specific obligations under the credit card agreement are listed. Id. Even the "least sophisticated debtor" would understand that this amount, $2,486.42, is not an explicit part of his agreement. Instead, it is what his creditor would like the court to conclude is reasonable. He might have to pay it; he might not. The prayer for relief is not false, deceptive, misleading or unfair. See 15 U.S.C. §§ 1692e, 1692f. It does not violate the FDCPA. See Fields v. Wilber Law Firm, P.C., 383 F.3d 562, 564-65 (7th Cir. 2004) (Where the contract provided for payment of attorney's fees, asking for a specific amount of attorney's fees in a dunning letter did not misstate the amount of the debt in violation of § 1692g(a) of the FDCPA.); Bull v. Asset Acceptance, LLC, 444 F.Supp.2d 946, 949-51 (N.D.Ind., 2006) (Where the credit agreement provided for payment of reasonable attorney's fees, asking for a specific amount of attorney's fees in a collection complaint did not violate the FDCPA.); Argentieri v. Fisher Landscapes, Inc., 15 F.Supp.2d 55, 61 (D.Mass., 1998) (General prayer for attorney's fees in collection complaint did not violate § 1692f even where the credit agreement did not specifically authorize attorney's fees.).

See Report and Recommendation at 4-6. Plaintiff's remaining objections are rejected.

c. The Remaining Issues

As to the remaining issues that were not objected to by the parties, the Court has reviewed the entire record and concludes that Magistrate Judge Edmonds' recommendations are not clearly erroneous. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72; Johnson v. Zema Systems Corp., 170 F.3d 734, 739 (7th Cir. 1999); Conley v. Crabtree, 14 F. Supp. 2d 1203, 1204 (D. Or. 1998).

IV. Conclusion

Accordingly, IT IS HEREBY ORDERED as follows:

(1) United States Magistrate Judge Edmonds' Report and Recommendation (Doc. #34) is accepted and adopted.

(2) Defendants' motion for judgment on the pleadings is granted; as such, all other pending motions are denied and this case is dismissed with prejudice. ³

3 As any amendments would be futile, Plaintiff's request to amend the Complaint is denied. See Pink v. Modoc Indian Health Project, Inc., 157 F.3d 1185, 1189 (9^th Cir. 1998).

(3) The Clerk of the Court shall enter judgment accordingly and close the file in this matter.