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DEFENDANT’S NOTICE OF MOTION AND
MOTION TO DISMISS PLAINTIFF’S SECOND AMENDED COMPLAINT
Mathew M. Wrenshall (SBN 284466)
Email: mwrenshall@reedsmith.com
Perry A. Napolitano (admitted pro hac vice)
Email: pnapolitano@reedsmith.com
REED SMITH LLP
355 South Grand Avenue, Suite 2900
Los Angeles, CA 90071
Telephone: +1 213 457 8000
Facsimile: +1 213 457 8080
Counsel for Defendant
Ditech Financial LLC
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
KENDALL SCALLY, individually and
on behalf of all others similarly situated,
Plaintiff,
vs.
DITECH FINANCIAL LLC,
Defendant.
Case No.: 3:16-cv-01992-WQH-WVG
DEFENDANT DITECH FINANCIAL
LLC’S NOTICE OF MOTION AND
MOTION TO DISMISS PLAINTIFF’S
SECOND AMENDED COMPLAINT
PURSUANT TO FED. R. CIV. P.
12(B)(6)
[Filed concurrently with Memorandum of
Points and Authorities; [Proposed] Order
and Judgment; Request for Judicial Notice]
DATE: July 17, 2017
TIME: NO ORAL ARGUMENT
UNLESS REQUESTED BY THE
COURT
PLACE: Courtroom 14B, Suite 1480
333 West Broadway
San Diego, CA 92101
Compl. Filed: August 9, 2016
Am. Compl. Filed: September 30, 2016
Second Am. Compl. Filed: May 30, 2017
Hon. William Q. Hayes, District Judge
Hon. William V. Gallo, Magistrate Judge
Case 3:16-cv-01992-WQH-WVG Document 24 Filed 06/13/17 PageID.413 Page 1 of 2
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3:16-cv-01992-WQH-WVG – 2 –
DEFENDANT’S NOTICE OF MOTION AND
MOTION TO DISMISS PLAINTIFF’S SECOND AMENDED COMPLAINT
TO THE ABOVE-NAMED COURT AND TO THE PARTIES AND
THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that on July 17, 2017, in Courtroom 14B of the above-
entitled court located at 221 West Broadway, San Diego, CA 92101, Defendant
Ditech Financial LLC (“Ditech”) will and hereby does move this Court, pursuant to
the Federal Rules of Civil Procedure 12(b)(6), for an Order dismissing with prejudice
the Second Amended Complaint filed by Plaintiff Kendall Scally on the grounds that
the Second Amended Complaint fails to state any claim on which relief can be granted
as follows:
Plaintiff’s allegations under the Fair Debt Collection Practices Act
(“FDCPA”) and Rosenthal Fair Debt Collection Practices Act (“the
Rosenthal Act”) fail to state a claim because Plaintiff fails to allege a
“debt” under the FDCPA; and
Plaintiff’s FDCPA and Rosenthal Act claims are precluded by the
Bankruptcy Code because they arise from Ditech’s alleged violation
of the Bankruptcy Court’s discharge injunction.
Defendant’s Motion is based on this Notice of Motion, the Memorandum of
Points and Authorities and Request for Judicial Notice filed herewith, and the
pleadings and papers filed herein.
DATED: June 13, 2017 REED SMITH LLP
By:/s/ Mathew M. Wrenshall
Mathew M. Wrenshall (SBN 284466)
Perry A. Napolitano (admitted pro hac vice)
Counsel for Defendant
Ditech Financial LLC
Case 3:16-cv-01992-WQH-WVG Document 24 Filed 06/13/17 PageID.414 Page 2 of 2
EXHIBIT A
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.415 Page 1 of 21
03/17/2017 3:12 AM
Alex Asil Mashiri, Esq. (SBN 283798)
alexmashiri@yahoo.com
MASHIRI LAW FIRM
A Professional Corporation
11251 Rancho Carmel Drive #500694
San Diego, CaliforniaCA 92150
TelephonePhone: (858) 348-4938
Fax: (858) 348-4939Semnar & Hartman, LLP
Babak Semnar, Esq. (SBN 224890)
Jared M. Hartman (SBN 254860)
SEMNAR & HARTMAN, LLP
400 S. Melrose Drive, Suite 209
Vista, California 92081
Telephone: (951) 293-4187
Fax: (888) 819-8230
Attorneys for Plaintiff :
KENDALL SCALLY
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
KENDALL SCALLY, individually and ) Case No. 3:16-cv-01992-WQH-WVG
on behalf of all others similarly situated, )
) CLASS ACTION
PlaintiffsPlaintiff, )
v. ) FIRSTSECOND AMENDED CLASS
vs. ) ACTION )
COMPLAINTDITECH FINANCIAL, LLC, ) FOR
) VIOLATION OF:
Defendants. )
DITECH FINANCIAL LLC. ) 1. THE FAIR DEBT COLLECTION
) PRACTICES ACT; AND
Defendant. )
) 2. THE ROSENTHAL FAIR DEBT
) COLLECTION PRACTICES ACT
)
) [
) DEMAND FOR JURY TRIAL]
)
)
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.416 Page 2 of 21
03/17/2017 3:12 AM
Plaintiff KENDALL SCALLY alleges as follows:
INTRODUCTION
1. The United States Congress has found abundant evidence of the use of abusive, deceptive,
and unfair debt collection practices by many debt collectors, and has determined that abusive debt
collection practices contribute to the number of personal bankruptcies, to marital instability, to the
loss of jobs, and to invasions of individual privacy. Congress wrote thePlaintiff KENDALL
SCALLY (hereinafter referred to as “Plaintiff”), brings this lawsuit against DITECH
FINANCIAL LLC. (hereinafter “Defendant”) for violations of the Federal Fair Debt Collection
Practices Act, 15 U.S.C. § 1692 et seq. (hereinafter “FDCPA”), 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 (“FDCPA”), and Rosenthal Fair
Debt Collections Practice Act (“Rosenthal FDCPA”).
2. The California legislature has determined that the banking and credit system and grantors
of credit to consumers are dependent upon the collection of just and owing debts and that unfair or
deceptive collection practices undermine the public confidence that is essential to the continued
functioning of the banking and credit system and sound extensions of credit to consumers. The
Legislature has further determined that there is a need to ensure that debt collectors exercise this
responsibility with fairness, honesty and due regard for the debtor’s rights and that debt collectors
must be prohibited from engaging in unfair or deceptive acts or practicesPlaintiff brings this action
to seek actual damages, statutory damages, injunctive relief, attorneys’ fees and costs, and other
relief the Court deems appropriate.
3. KENDALL SCALLY, (“Plaintiff”), through his attorneys, brings this action to challenge
the actions of DITECH FINANCIAL, LLC (“DITECH” or “Defendant”), with regard to attempts
by Defendant to unlawfully and abusively collect a debt allegedly owed by Plaintiff, and this
conduct caused Plaintiff damagesPlaintiff alleges as follows, upon personal knowledge as to
himself and his own acts and experiences, and, as to all other matters, upon information and belief,
including investigation conducted by his attorneys.
4. Plaintiff makes these allegations on information and belief, with the exception of those
allegations that pertain to a plaintiffPlaintiff, or to a Plaintiff’s counsel, which Plaintiff alleges on
personal knowledge.
5. While many violations are described below with specificity, this Complaint alleges
violations of the statutes cited in their entirety.
6. Unless otherwise stated, all the conduct engaged inPlaintiff alleges that any violations by
Defendant took place in California.7. Any violations by Defendants were knowing, willful, and
intentional, and Defendantsthat Defendant did not maintain procedures reasonably adapted to
avoid any such specific violationviolations.
7. Unless otherwise indicated, the use of Defendant in this Complaint includes all agents,
employees, officers, members, directors, heirs, successors, assigns, principals, trustees, sureties,
subrogees, representatives, and insurers of Defendant.
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.417 Page 3 of 21
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PARTIES
8. Through this complaint, Plaintiff does not allege that any state court judgment was entered
against Plaintiff in error, and Plaintiff does not seek to reverse or modify any judgment of any state
courtPlaintiff is, and at all times mentioned herein was, an individual, residing in the County of
San Diego, State of California.
9. Through this complaint, Plaintiff does not allege that any state court judgment was entered
against Plaintiff in error, and Plaintiff does not seek to reverse or modify any judgment of any state
courtPlaintiff is a “consumer” as the term is defined by 15 U.S.C. section 1692a(3) and a “debtor”
as the term is defined by California Civil Code section 1788.2(h).
JURISDICTION AND VENUE
10. This action arises out of Defendant’s violations of the Fair Debt Collection Practices Act,
15 U.S.C. §§ 1692 et seq. (“FDCPA”) and the Rosenthal Fair Debt Collection Practices Act,
California Civil Code §§ 1788-1788.32 (“Rosenthal Act”)Plaintiff is informed and believes, and
thereupon alleges, that Defendant is, and at all times mentioned herein was, a limited liability
company who was conducting and engaging in business in the County of San Diego, State of
California.
11. Plaintiff resides in the City of San Diego, which is located in the County of San Diego,
Californiais informed and believes, and thereupon alleges, that Defendant uses an instrumentality
of interstate commerce or the mails in a business the principal purpose of which is the collection of
debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or
asserted to be owed or due another and is therefore a “debt collector” as the term is defined by 15
U.S.C. section 1692a(6).
12. DITECH is a business whose principal place of business is located in the City of Tempe,
State of ArizonaPlaintiff is informed and believes, and thereupon alleges that Defendant is a “debt
collector” as the term is defined by Civil Code section 1788.2(c).
13. DITECH regularly does business and has the capacity to sue within the County of San
Diego, California, and therefore personal jurisdiction is established and venue is proper pursuant
to 28 U.S.C. § 1391(b)(1) and § 1391(c)(2)Defendant attempted to collect a “consumer debt” as
the term is defined by the FDCPA and Rosenthal FDCPA.
14. Jurisdiction of thisPlaintiff is informed and believes and thereupon alleges that at all times
herein mentioned each of the Defendants was the agent, servant, employee, or partner of each of
the remaining defendants and, in committing the acts and omissions hereinafter alleged, was acting
within the course and scope of such agency, employment, partnership, or other business
relationship, and were each responsible for the acts and omissions alleged in this complaint.
JURISDICTION AND VENUE
15. This Court ariseshas jurisdiction under 2815 U.S.C. §section 1692k(d), 28 U.S.C. section
1331, and 28 U.S.C. section 1367 for supplemental state claims.
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15. DITECH sent collection letters to Plaintiff, among other actions, to collect this alleged
debt.
16. This action arises out of violations of the FDCPA and Rosenthal FDCPA. Because
Defendant actively does business within the county of San Diego in the State of California and the
action giving rise to the claim took place in the, County of San Diego, California, personal
jurisdiction is established.
17. Venue is proper pursuant to 28 U.S.C. § 1391b(1) and § 1391b(2). At all times relevant,
Defendant conducted business within the County of San Diego, State of California.section 1391.
PARTIES
RELEVANT FACTS
18. Sometime after March 25, 2016, Plaintiff is a natural person who resides in the City of San
Diego, State of Californiareceived a collection notice, dated, March 25, 2016, from Defendant.
The March 25, 2016 stated that Plaintiff owed a debt in the amount of $7,662.12 to Defendant. A
copy of Defendant’s March 25, 2016 collection notice is attached hereto as Exhibit 1, and is
incorporated herein by reference.
19. Defendant DITECH is located in the City of Tempe, State of Arizona.
20. Plaintiff is a natural person allegedly obligated to pay a debt, and is a consumer‚ as that
term is defined by 15 U.S.C. § 1692a(3).
21. Defendant is a person who uses an instrumentality of interstate commerce or the mails in a
business the principal purpose of which is the collection of debts, or who regularly collect or
attempt to collect, directly or indirectly, debts owed or due or asserted to be owed or due another
and are therefore debt collectors as that phrase is defined by 15 U.S.C. § 1692a(6).
22. Plaintiff is a natural person from whom a debt collector sought to collect a consumer debt
which was due and owing or alleged to be due and owing from Plaintiff, and is a debtor as that term
is defined by California Civil Code § 1788.2(h).
23. Defendant, in the ordinary course of business, regularly, and on behalf of themselves or
others, engage in debt collection as that term is defined by California Civil Code § 1788.2(b), are
therefore debt collectors as that term is defined by California Civil Code § 1788.2(c).
24. This case involves money, property or their equivalent, due or owing or alleged to be due
or owing from a natural person by reason of a consumer credit transaction. As such, this action
arises out of a consumer debt and “consumer credit” as those terms are defined by Cal. Civ. Code
§ 1788.2(f).
FACTUAL ALLEGATIONS
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25. Sometime in the year 1996, Plaintiff is alleged to have incurred certain financial
obligations with HFC Company, LLC, whereby he received a line of credit for his use within his
personal life for everyday purchases.
26. This financial obligation was primarily for personal, family or household purposes and are
therefore a “debt” as that term is defined by 15 U.S.C. §1692a(5).
27. These alleged obligations were money, property, or their equivalent, which is due or
owing, or alleged to be due or owing, from a natural person to another person and are therefore a
“debt” as that term is defined by California Civil Code §1788.2(d), and a “consumer debt” as that
term is defined by California Civil Code §1788.2(f).
28. Sometime thereafter, but before January 1, 2016, Plaintiff allegedly fell behind in the
payments allegedly owed on the alleged debt.
29. Plaintiff ultimately had the debt discharged by way of bankruptcy in the year 1998, while
the debt was still in the possession of the original creditor.
30. Plaintiff’s bankruptcy petition listed the original creditor as a creditor holding an interest in
the debt that is to be subject of Plaintiff’s petition for discharge.
31. Plaintiff did not include Defendant Ditech as a creditor to be included in the petition,
because Ditech did not become involved in the account until sometime years later in 2014.
32. Because Defendant Ditech was not named in the bankruptcy petition as a creditor, Ditech
was therefore never issued an injunction by the bankruptcy court to prohibit Ditech from collecting
thereupon.
33. Because Defendant Ditech was never issued an injunction by the bankruptcy court, the
bankruptcy court therefore has no jurisdiction over Ditech.
34. Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff’s claims against
Ditech are therefore not pre-empted by the bankruptcy court’s jurisdiction.
35. Accordingly, the Southern District of California has already reached the same conclusion
in Forsberg v. Fidelity National Credit Services, Ltd. (So. Dist. Calif. Feb. 26, 2004) 2004 U.S.
Dist. LEXIS 7622, at **17-21 wherein Judge Sabraw ruled that the defendant Fidelity National
Credit Services, Ltd. could not obtain a dismissal of the FDCPA claims alleged against it based
upon the bankruptcy court’s jurisdiction since defendant Fidelity National Credit Services, Ltd.
had never been included in the bankruptcy petition or bankruptcy discharge or bankruptcy court
injunction, as defendant Fidelity National Credit Services, Ltd. did not become involved in the
account at issue until after the plaintiff Forsberg had already filed his bankruptcy petition, much
like Ditech in this matter.
36. Therefore, just as the Southern District in Forsberg found that the Walls v. Wells Fargo
Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable since Walls involved the plaintiff
pursuing allegations against the creditor that had been specifically included in the bankruptcy
court injunction whereas Forsberg involved the plaintiff pursuing allegations against an entity
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.420 Page 6 of 21
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attempting to collect upon the discharged debt but the specifically named defendant had not been
included in the bankruptcy court injunction, the same applies to Ditech in the instant matter.
37. Defendant first attempted to contact Plaintiff in an attempt to collect upon the discharged
debt by way of letter dated March 25, 2016, wherein Defendant Ditech informed Plaintiff that the
rights to collect upon the account had been transferred to Ditched in June 2014.
38. This communication to Plaintiff was a “communication” as that term is defined by 15
U.S.C. § 1692a(2), and an “initial communication” consistent with 15 U.S.C. § 1692g(a).39.
The March 25, 2016 collection notices stated that “Because of interest, late charges, and
other charges that may vary from day to day, the amount due on the day you pay may be greater.”
20. However, no interest, late charges, or other charges were incurring. In fact, subsequent
communication on June 20, 2016, from the Defendant indicates that the debt remained the same
and was not increasing due to interest, late charges, or other charges. As such, this statement is
false, deceptive, and misleading. See Howell v. Eagle Accounts Group, Inc., 2015 WL 1097397
(S.D. Ind. 2015).
40. Upon information and belief, this was an attempt by Ditech to force Plaintiff into paying
the full amount claimed to be due in the March 2016 letter in order to avoid any further increase of
the amount.
41. This communication was a “debt collection” as Cal. Civ. Code 1788.2(b) defines that
phrase, and an “initial communication” consistent with Cal. Civ. Code § 1812.700(b).
42. This letter claimed Plaintiff owes $7,662.12 upon the debt.
43. Plaintiff promptly called Defendant to dispute the legitimacy of the alleged debt, as it was
discharged in bankruptcy and Plaintiff specifically disputes whether or not he owes any money
upon the alleged debt.
44. Furthermore, on June 20, 2016, Defendant sent another dunning letter to Plaintiff that
contained the bold and capitalized words at the top “SETTLEMENT OPPORTUNITY”, and
claimed that Plaintiff has a “contractual obligation” to fulfill the debt, and claimed that they are
giving him the “opportunity to settle [his] account in full by paying less than the entire amount
due”, and giving him a due date of August 19, 2016, and if Plaintiff does not respond by that date
then “we will assume you are not interested in this offer and Ditech may consider exercising its
available remedies”.
45. However, because Plaintiff’s liability upon the debt was discharged by way of bankruptcy
in the year 1998, Ditech has no remedies upon the debt, Ditech cannot pursue any legal action
upon the debt, and therefore any implied threat to sue Plaintiff and exercise available remedies are
all false statements that amount to misrepresentations about the legal status of the debt.
46. Upon information and belief, Defendant uttered such false statements and
misrepresentations with the intention of scaring Plaintiff into fearing that he may be sued by
Defendant, and to in turn trick him into paying the debt even though he has no obligation to do so
and his liability upon the debt has been discharged.
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.421 Page 7 of 21
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21. Sometime after June 20, 2016, Plaintiff received a second collection notice, dated June 20,
2016, from Defendant. A copy of Defendant’s June 20, 2016 collection notice is attached hereto as
Exhibit 2, and is incorporated herein by reference
47. Furthermore, Defendant’s June 20th letter claims,22. The June 20, 2016 collection
stated in part that “We are required to report any debt forgiveness to the Internal Revenue
Service.”, which is a false statement because there are many exceptions to IRS reporting
requirements and not every debt forgiveness is required to be so reported. See, Foster v.
AllianceOne Receivables Mgmt., 2016 U.S. Dist. LEXIS 56958, at *4-6 (N. Dist. Ill. April 28,
2016).
48. Because Defendant’s letters above violated certain portions of the federal Fair Debt
Collection Practices Act as these portions are incorporated by reference in the Rosenthal Fair Debt
Collection Practices Act, through California Civil Code § 1788.17, this conduct or omission
violated Cal. Civ. Code § 1788.17.
23. As a direct result of these statements, Plaintiff suffered bewilderment and confusion over
whether he owed any amount to Defendant, what amount in particular was owed, and what his tax
consequences may or may not be upon any amount claimed to be owed.
24. Because Congress has determined that this type of conduct amounts to abusive, deceptive,
and unfair debt collection practices that contribute to the number of personal bankruptcies, to
marital instability, to the loss of jobs, and to invasions of individual privacy, Plaintiff was exposed
to these dangers, which actually exist to Plaintiff in a personal and individual way, and he did, in
fact, suffer from such individual harm and exposure.
CLASS ACTION ALLEGATIONS
49.25. Plaintiff brings this action on his own behalf, and on behalf of all others similarly situated.
FDCPA CLASS A
50. This action defines “Class A” as follows:
“Class A” is comprised of all persons with addresses within the state of California who were sent,
within one year prior to the filing date of this action a “communication” as defined by 15 U.S.C. §
1692a(2) to recover a consumer debt which was substantially similar to Plaintiff’s Exhibit 1 (June
20, 2016 collection notice), which were not returned undelivered by the United States Postal
Service, to collect a debt from a consumer whose debt had already been discharged in bankruptcy.
CLASS B
51. This action defines “Class B” as follows:
“Class B” is comprised of all persons with addresses within the state of California who were sent,
within one year prior to the filing date of this action a “communication” as defined by 15 U.S.C. §
1692a(2) to recover a consumer debt which was substantially similar to Plaintiff’s Exhibit 2
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.422 Page 8 of 21
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26. Plaintiff defines the FDCPA CLASS A as follows:
All persons with addresses within the State of California who were sent a written communication
by Defendant that was substantially similar or identical to Plaintiff’s Exhibit 1 (March 25, 2016
collection notice), in which the communication included the language “Because of interest, late
charges, and other charges that may vary from day to day, the amount due on the day you pay may
be greater.”, when no interest was, late charges, or other charges were in fact being incurred.
CLASS C
52. This action defines “Class C” as follows:
“Class C” is comprised of all persons with addresses within the state of California who were sent,
within one year prior to the filing date of this action a “communication” as defined by 15 U.S.C. §
1692a(2) to recover a consumer debt which was substantially similar to Plaintiff’s Exhibit 1
FDCPA CLASS B
27. Plaintiff defines the FDCPA CLASS B as follows:
All persons with addresses within the State of California who were sent a written communication
by Defendant that was substantially similar or identical to Plaintiff’s Exhibit 2 (June 20, 2016
collection notice), which were not returned undelivered by the United States Postal Service, in
which the communication included the language “We are required to report any debt forgiveness
to the Internal Revenue Service.”
53. For purposes of this Claim for Relief the class period is one year prior to the filing of this
Complaint
ROSENTHAL FDCPA CLASS A
28. Plaintiff defines the Rosenthal FDCPA CLASS A as follows:
All persons with addresses within the State of California who were sent a written communication
by Defendant that was substantially similar or identical to Plaintiff’s Exhibit 1 (March 25, 2016
collection notice), in which the communication included the language “Because of interest, late
charges, and other charges that may vary from day to day, the amount due on the day you pay may
be greater.”, when no interest, late charges, or other charges were in fact being incurred.
Rosenthal FDCPA CLASS B
29. Plaintiff defines the Rosenthal FDCPA CLASS B as follows:
All persons with addresses within the State of California who were sent a written communication
by Defendant that was substantially similar or identical to Plaintiff’s Exhibit 2 (June 20, 2016
collection notice), which were not returned undelivered by the United States Postal Service, in
which the communication included the language “We are required to report any debt forgiveness
to the Internal Revenue Service.”
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30. The FDCPA Class and the Rosenthal FDCPA Class shall be referred to jointly as “The
Classes.”
31. Defendant and its employees or agents are excluded from the Classes.
54. The Classes are composed of hundreds of persons, the joinder of which would be
impractical. The individual identities32. Plaintiff does not know the exact number of persons
in the Classes, but believes them to be in the several hundreds, if not thousands, making joinder of
all these actions impracticable.
33. The identity of the individual members areis ascertainable through Defendant’s and/or
Defendant’s agents’ records or by public notice.
55.34. There is a well-defined community of interest in the questions of law and fact involved
affecting the members of the Classes. The questions of law and fact common to the Classes
predominate over questions affecting only individual class members, and include, but are not
limited to, the following:
Aa) Whether Defendant violated the FDCPA; by sending a written
B
communication substantially in the form of Exhibit 1 to the members of the Classes;
b) Whether Defendant violated the Rosenthal ActFDCPA by sending a written
communication substantially in the form of Exhibit 2 to the members of the Classes;
c) Whether Defendant violated the Rosenthal FDCPA by sending using a
written communication substantially in the form of Exhibit 1 to the members of the Classes;
d) Whether Defendant violated the Rosenthal FDCPA by sending using a written
communication substantially in the form of Exhibit 2 to the members of the Classes;
Ce) Whether members of the ClassClasses are entitled to the remedies under the FDCPA;
D
f) Whether members of the ClassClasses are entitled to the remedies California’sunder the
Rosenthal ActFDCPA;
Eg) Whether members of the Classes are entitled to declaratory relief;
F) Whether members of the Classes are entitled to injunctive relief;
Gh) Whether members of the Classes are entitled to an award of reasonable attorneys’ fees and
costs of suit pursuant to the FDCPA;
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Hi) Whether members of the Classes are entitled to an award of reasonable attorneys’ fees and
costs of suit pursuant to the California’s Rosenthal Act; andI) Whether members of Classes
are entitled to any other remedies.FDCPA.
47.35. Plaintiff will fairly and adequately protect the interestsinterest of the Classes.
48.36. Plaintiff has retained counsel experienced in consumer class action litigation and in
handling class claims as well as claims involving unlawful debt collection practices.
49.37. Plaintiff’s claims are typical of the claims of the Classes, which arisesall arise from the
same operative facts involving unlawful collection practices.
50.38. A class action is a superior method for the fair and efficient adjudication of this
controversy.
51.39. Class-wide damages are essential to induce Defendant to comply with the Federal and
State Lawlaws alleged in the Complaint.
52.40. The interestinterests of class members in individually controlling the prosecution of
separate claims against Defendant is small because the maximum statutory damages in an
individual FDCPA action is $1,000.00, and an additional $1,000.00 under the FDCPA or
Rosenthal Act.FDCPA is $1,000. Management of these claims areis likely to present significantly
fewer difficulties than those presented in many class claims, e.g. securities fraud.
53.41. Defendant has acted on grounds generally applicable to the classClasses, thereby making
appropriate final declaratory relief with respect to the class as a whole.
42. Plaintiff contemplates providing notice to the putative class members by direct mail in the
form of a postcard and via Internet website
54.43. Plaintiff requests certification of a hybrid class combining the elements of RuleFed. R. Civ.
P. 23(b)(3) for monetary damages and RuleFed. R. Civ. P. 23(b)(2) for equitable relief.
FIRST CAUSE OF ACTION
(Violation of the FDCPA)
15 U.S.C. 1692, et seq.
55.44. Plaintiff repeats, re-alleges, and incorporates by reference, all other paragraphs. above, as
if fully set forth herein.
56. Plaintiff’s bankruptcy petition listed the original creditor as a creditor holding an interest in
the debt that is to be subject of Plaintiff’s petition for discharge.
COUNT 1
45. The language “Because of interest, late charges, and other charges that may vary from day
to day, the amount due on the day you pay may be greater” in Defendant’s March 25, 2016
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collection notice is false, confusing, and misleading in violation of 15 U.S.C. section1 1692e and
1692e(10).
57. Plaintiff did not include Defendant Ditech as a creditor to be included in the petition,
because Ditech did not become involved in the account until sometime years later in 2014.46.
The March 25, 2016 collection notice was false, confusing, and misleading, because it
informs the least sophisticated debtor that interest is accruing on the debt when in fact there was no
interest accruing. In fact, subsequent communication on June 20, 2016, from the Defendant
indicates that the debt remained the same and was not increasing due to interest, late charges, or
other charges. Furthermore, Defendant’s statement attempted to trick Plaintiff into believing that
interest, late charges or other charges are accruing which would force Plaintiff to pay the debt
immediately in order to avoid any further increase of the debt. Clearly, Defendant’s statement is
false, deceptive, and misleading. See Howell v. Eagle Accounts Group, Inc., 2015 WL 1097397
(S.D. Ind. Mar. 10, 2015).
58. Because Defendant Ditech was not named in the bankruptcy petition as a creditor, Ditech
was therefore never issued an injunction by the bankruptcy court to prohibit Ditech from collecting
thereupon.
59. Because Defendant Ditech was never issued an injunction by the bankruptcy court, the
bankruptcy court therefore has no jurisdiction over Ditech.
60. Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff’s claims against
Ditech are therefore not pre-empted by the bankruptcy court’s jurisdiction.
61. Accordingly, the Southern District of California has already reached the same conclusion
in Forsberg v. Fidelity National Credit Services, Ltd. (So. Dist. Calif. Feb. 26, 2004) 2004 U.S.
Dist. LEXIS 7622, at **17-21 wherein Judge Sabraw ruled that the defendant Fidelity National
Credit Services, Ltd. could not obtain a dismissal of the FDCPA claims alleged against it based
upon the bankruptcy court’s jurisdiction since defendant Fidelity National Credit Services, Ltd.
had never been included in the bankruptcy petition or bankruptcy discharge or bankruptcy court
injunction, as defendant Fidelity National Credit Services, Ltd. did not become involved in the
account at issue until after the plaintiff Forsberg had already filed his bankruptcy petition, much
like Ditech in this matter.
62. Therefore, just as the Southern District in Forsberg found that the Walls v. Wells Fargo
Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable since Walls involved the plaintiff
pursuing allegations against the creditor that had been specifically included in the bankruptcy
court injunction whereas Forsberg involved the plaintiff pursuing allegations against an entity
attempting to collect upon the discharged debt but the specifically named defendant had not been
included in the bankruptcy court injunction, the same applies to Ditech in the instant matter.
63. The foregoing acts and omissions constitute numerous and multiple violations of the
FDCPA
COUNT 2
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47. The language “We are required to report any debt forgiveness to the Internal Revenue
Service” in Defendant’s June 20, 2016 collection notice is false, confusing, and misleading. This
statement is false and misleading in violation of 15 U.S.C. sections 1692e and 1692e(10) because
there are many exceptions to IRS reporting requirements and not every debt forgiveness is
required to be so reported. See Kaff v. Nationwide Credit, Inc., 2015 WL 12660327, at *6
(E.D.N.Y. Mar. 31, 2015); Good v. Nationwide Credit, Inc., 55 F. Supp. 3d 742, 747 (E.D. Pa.
2014).
48. By way of example, this statement is false and misleading to the least sophisticated debtor,
because “belief that tax consequences would stem from debt forgiveness could potentially impact
whether the Plaintiff decides to pay the lesser amount offered, as opposed to the entire debt owed
or even some other option.” Bautz v. ARS National Services, Inc., 2016 WL 7422301 at * 3
(E.D.N.Y Dec. 23, 2016); see also Yalez v. Enhanced Recovery Co., LLC, 2016 WL 1730721, at
*3 (E.D. Pa. May 2, 2016); Foster v. AllianceOne Receivables Mgmt., 2016 WL 1719824 (N.D.
Ill. Apr. 28, 2016).
49. As a result of each and every violation of the FDCPA, Plaintiff has suffered actual damages
and harm resulting from Defendant’s actions as heretofore alleged, including but not limited to
each and every one of the above cited provisions of the FDCPA, 15 U.S.C. § 1692 et seq.
64. In particular, Defendant violated 15 U.S.C. 1692e of the FDCPA by using false, deceptive,
and misleading representations in connection with the collection of the purported debt by the
following conduct:
A) Falsely stating, “Because of interest, late charges, and other charges that may vary from
day to day, the amount due on the day you pay may be greater”, when in reality no interest, late
charges, or other charges were being added, which appeared to be an attempt to trick Plaintiff into
paying the amount alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and enforceable by claiming that
it was Plaintiff’s contractual obligation to still pay the purported debt even though any obligation
by Plaintiff had been discharged;
C) Falsely implying to Plaintiff that the debt remained viable and enforceable by using the
word “settlement” with the intention of implying to Plaintiff that he could be sued upon the
purported debt even though any obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and enforceable by threatening
that if Plaintiff did not pay the debt then Defendant would exercise its available remedies, with the
intention of implying to Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to be reported to the IRS
when in reality there are certain exceptions to mandatory reporting.
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65. Additionally, Defendant violated 15 U.S.C. 1692e(2)(A) of the FDCPA by falsely
representing the character, amount, and legal status of the purported debt by the following
conduct:
A) Falsely stating, “Because of interest, late charges, and other charges that may vary from
day to day, the amount due on the day you pay may be greater”, when in reality no interest, late
charges, or other charges were being added, which appeared to be an attempt to trick Plaintiff into
paying the amount alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and enforceable by claiming that
it was Plaintiff’s contractual obligation to still pay the purported debt even though any obligation
by Plaintiff had been discharged;
C) Falsely implying to Plaintiff that the debt remained viable and enforceable by using the
word “settlement” with the intention of implying to Plaintiff that he could be sued upon the
purported debt even though any obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and enforceable by threatening
that if Plaintiff did not pay the debt then Defendant would exercise its available remedies, with the
intention of implying to Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to be reported to the IRS
when in reality there are certain exceptions to mandatory reporting.
66. Additionally, Defendant violated 15 U.S.C. 1692e(4) of the FDCPA by falsely
representing that nonpayment of the purported debt would result in the seizure, garnishment,
attachment, or sale of Plaintiff’s property, and such action was not lawful, by the following
conduct:
A) Falsely threatening that if Plaintiff did not pay the debt then Defendant would exercise its
available remedies, with the intention of implying to Plaintiff that he could be sued upon the
purported debt even though any obligation by Plaintiff had been discharged
67. Additionally, Defendant violated 15 U.S.C. 1692e(5) of the FDCPA by falsely threatening
to take action that cannot legally be taken, by the following conduct:
A) Threatening a lawsuit against Plaintiff by claiming that it was Plaintiff’s contractual
obligation to still pay the purported debt even though any obligation by Plaintiff had been
discharged;
B) Threatening a lawsuit against Plaintiff by using the word “settlement” with the intention of
implying to Plaintiff that he could be sued upon the purported debt even though any obligation by
Plaintiff had been discharged;
C) Threatening a lawsuit against Plaintiff by threatening that if Plaintiff did not pay the debt
then Defendant would exercise its available remedies, with the intention of implying to Plaintiff
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that he could be sued upon the purported debt even though any obligation by Plaintiff had been
discharged;
68. Additionally, Defendant violated 15 U.S.C. 1692e(10) of the FDCPA by using false
representations and deceptive means in connection with the collection of the purported debt by the
following conduct:
A) Falsely stating, “Because of interest, late charges, and other charges that may vary from
day to day, the amount due on the day you pay may be greater”, when in reality no interest, late
charges, or other charges were being added, which appeared to be an attempt to trick Plaintiff into
paying the amount alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and enforceable by claiming that
it was Plaintiff’s contractual obligation to still pay the purported debt even though any obligation
by Plaintiff had been discharged;
C) Falsely implying to Plaintiff that the debt remained viable and enforceable by using the
word “settlement” with the intention of implying to Plaintiff that he could be sued upon the
purported debt even though any obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and enforceable by threatening
that if Plaintiff did not pay the debt then Defendant would exercise its available remedies, with the
intention of implying to Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to be reported to the IRS
when in reality there are certain exceptions to mandatory reporting.
69. Additionally, Defendant violated 15 U.S.C. 1692f of the FDCPA by using unfair and
unconscionable means in connection with the collection of the purported debt by the following
conduct:
A) Falsely stating, “Because of interest, late charges, and other charges that may vary from
day to day, the amount due on the day you pay may be greater”, when in reality no interest, late
charges, or other charges were being added, which appeared to be an attempt to trick Plaintiff into
paying the amount alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and enforceable by claiming that
it was Plaintiff’s contractual obligation to still pay the purported debt even though any obligation
by Plaintiff had been discharged;
C) Falsely implying to Plaintiff that the debt remained viable and enforceable by using the
word “settlement” with the intention of implying to Plaintiff that he could be sued upon the
purported debt even though any obligation by Plaintiff had been discharged;
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.429 Page 15 of 21
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D) Falsely implying to Plaintiff that the debt remained viable and enforceable by threatening
that if Plaintiff did not pay the debt then Defendant would exercise its available remedies, with the
intention of implying to Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to be reported to the IRS
when in reality there are certain exceptions to mandatory reporting.
70. Additionally, Defendant violated 15 U.S.C. 1692f(1) of the FDCPA by attempting to
collect an amount that was not permitted by law, as any obligation by Plaintiff to owe anything
upon the account had been discharged by way of bankruptcy.
71. Additionally, Defendant violated 15 U.S.C. 1692f(6) of the FDCPA by threatening to take
non-judicial action to effect dispossession and disablement when there was no present right to
possession of the property claimed as collateral since any obligation of Plaintiff upon the account
had been dischargedworry, emotional distress, anxiety, and humiliation, the exact amount of
which is to be proven at trial.
50. As a result of each and every violation of the FDCPA, Plaintiff incurred additional actual
damages including, but not limited to, transportation and gasoline costs to the law firm, telephone
call charges, copies, postage, and other damages.
72.51. As a result of each and every violation of the FDCPA, Plaintiff is entitled to any actual
damages pursuant to 15 U.S.C. § 1692k(a)(1); statutory damages in an amountof up to $1,000.00
pursuant to 15 U.S.C. § §1692k(a)(2)(A); and, reasonable attorney’s fees and costs pursuant to 15
U.S.C. § §1692k(a)(3) from Defendant.
SECOND CAUSE OF ACTION
(Violation of the Rosenthal FDCPA)
Calif. Civ. Code 1788, et seq.
73.52. Plaintiff repeats, re-alleges, and incorporates by reference, all other paragraphs above, as if
fully set forth herein.
74. Plaintiff’s bankruptcy petition listed the original creditor as a creditor holding an interest in
the debt that is to be subject of Plaintiff’s petition for discharge.
75. Plaintiff did not include Defendant Ditech as a creditor to be included in the petition,
because Ditech did not become involved in the account until sometime years later in 2014.
76. Because Defendant Ditech was not named in the bankruptcy petition as a creditor, Ditech
was therefore never issued an injunction by the bankruptcy court to prohibit Ditech from collecting
thereupon.
77. Because Defendant Ditect was never issued an injunction by the bankruptcy court, the
bankruptcy court therefore has no jurisdiction over Ditech.
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.430 Page 16 of 21
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78. Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff’s claims against
Ditech are therefore not pre-empted by the bankruptcy court’s jurisdiction.
79. Accordingly, the Southern District of California has already reached the same conclusion
in Forsberg v. Fidelity National Credit Services, Ltd. (So. Dist. Calif. Feb. 26, 2004) 2004 U.S.
Dist. LEXIS 7622, at **17-21 wherein Judge Sabraw ruled that the defendant Fidelity National
Credit Services, Ltd. could not obtain a dismissal of the FDCPA claims alleged against it based
upon the bankruptcy court’s jurisdiction since defendant Fidelity National Credit Services, Ltd.
had never been included in the bankruptcy petition or bankruptcy discharge or bankruptcy court
injunction, as defendant Fidelity National Credit Services, Ltd. did not become involved in the
account at issue until after the plaintiff Forsberg had already filed his bankruptcy petition, much
like Ditech in this matter.
80. Therefore, just as the Southern District in Forsberg found that the Walls v. Wells Fargo
Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable since Walls involved the plaintiff
pursuing allegations against the creditor that had been specifically included in the bankruptcy
court injunction whereas Forsberg involved the plaintiff pursuing allegations against an entity
attempting to collect upon the discharged debt but the specifically named defendant had not been
included in the bankruptcy court injunction, the same applies to Ditech in the instant matter.
81. In Calif. Civ. Code53. Any violation of the FDCPA is a violation of California Civil Code
section 1788.17, also known as the Calif. Rosenthal ActFDCPA, because section 1788.17
incorporates all FDCPA prohibitions and applies them as violations of the Rosenthal Act in
addition to violations of the FDCPA.
82. In Calif. Civ. Code 1788.32, the Calif. Rosenthal Act specifically states that violations of
the Rosenthal Act are in addition to, and cumulative to, any other violations of any other provision
of law
83. Therefore, the foregoing acts and omissions constitute numerous and multiple violations of
Calif. Civ. Code 1788.17 of the Rosenthal Act, including but not limited to, each and every one of
the above-cited provisions of the Rosenthal Act, Cal. Civ. Code §§ 1788-1788.32.
54. Defendant violated Civil Code section 1788.17 because it violated 15 U.S.C. sections
1692e and 1692e(10) as discussed above.
84.55. The Ninth Circuit in Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1066 (9th Cir.
2011) has ruled that the Rosenthal Act, via California Civil Code section 1788.17,FDCPA
incorporates the Federal FDCPA’s class action damages provision in 15 U.S.C. section
1692k(a)(2)(B). Specifically, the Ninth Circuit stated that “in light of the clear statutory language,
unequivocal legislative history, and the unanimous agreement of the courts, we hold that the
Rosenthal Act permits class actions.” via California Civil Code section 1788.17.
85.
56. As a result of each and every violation of the Rosenthal Act, Plaintiff is entitled to any
actual damages pursuant to Cal. Civ. Code § 1788.30(a); statutory damages for a knowing or
willful violation in the amount up to $1,000.00 pursuant to Cal. Civ. Code § 1788.30(b); and
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.431 Page 17 of 21
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reasonable attorney’s fees and costs pursuant to Cal. Civ. Code § 1788.30(c) from
DefendantFDCPA, Plaintiff has suffered actual damages and harm resulting from Defendant’s
actions as heretofore alleged, including but not limited to worry, emotional distress, anxiety, and
humiliation, the exact amount of which is to be proven at trial.
57. As a result of each and every violation of the Rosenthal FDCPA, Plaintiff incurred
additional actual damages including, but not limited to, transportation and gasoline costs to the law
firm, telephone call charges, copies, postage, and other damages.
86.58. As a result of each and every violation of the Rosenthal FDCPA, Plaintiff is entitled to
actual damages pursuant to California Civil Code section§ 1788.30(a); statutory damages under 15
U.S.C. §1692k(a)(2)(A) which is incorporated by California Civil Code section §1788.17;
statutory damages for a knowing or willful violation in the amount of up to $1,000.00 pursuant to
California Civil Code section §1788.30(b); and reasonable attorney’s fees and costs pursuant to
California Civil Code section §1788.30(c).
PRAYER FOR DAMAGES AND OTHER REMEDIES
WHEREFORE, Plaintiff prays that judgment be entered against Defendant and Plaintiff be
awarded damages from Defendant as follows:
• An award of statutory damages of $1,000.00 pursuant to 15 U.S.C. § 1692k(a)(2)(A) for
Plaintiff and each member of the Class;
• An award of costs of litigation and reasonable attorney’s fees, pursuant to 15 U.S.C. §
1692k(a)(3);
• An award of statutory damages of $1,000.00 pursuant to Cal. Civ. Code § 1788.30(b);An
award of costs of litigation and reasonable attorney’s fees, pursuant to Cal. Civ. Code § 1788.30(c)
for Plaintiff and each member of the Class.
REQUEST FOR PRESERVATION OF EVIDENCE
1. Preserve all forms of electronic data, regardless of where the data exists, without
modification to or deletion of any potentially discoverable data;
2. Suspend all procedures that may alter or delete computer data;
3. Prevent deleting, overwriting, defragmenting, or compressing the data;
4. Preserve all archived back-up tapes and ensure that (a) if archive tapes are rotated, the
relevant tapes are removed from the rotation; (b) if backups are made to hard drives, preserve the
hard drive as well;
5. Preserve the contents of all hard drives, network drives, tape drives, optical drives, floppy
disks, CD and DVD drives, and all other types of drives or storage media that are within the
possession, custody or control of all people who have knowledge of relevant facts and those who
work with them, such as assistants;
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.432 Page 18 of 21
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6. Preserve the contents of all information on portable computers–such as laptops and
palmtops–used by those people as well as home computers, if these are used for work purposed;
7. Preserve the contents of all data on computers that were used since the limitations period
on the lawsuit began (for example; one year prior to filing) but that are no longer in use.
REQUEST FOR JURY TRIAL
Pursuant toAs declared by the seventh amendment to the Constitution of the United States of
America, Plaintiff is entitled to, and demands, a trial by jury.
PRAYER FOR DAMAGES AND OTHER REMEDIES
1. An order certifying the Class as requested herein;
2. An order appointing the Plaintiff as the representative of the Class;
3. An order certifying Plaintiff’s counsels as Class Counsel;
4. An order requiring Defendant, at its own cost, to notify all members of the Classes of the
unlawful acts discussed herein;
5. An award of statutory damages in the amount of $1,000.00, pursuant to 15 U.S.C.
§1692k(a)(2)(A), for each plaintiff and putative class member;
6. An award of statutory damages in the amount of $1,000.00, pursuant to California Civil
Code §1788.17, for each plaintiff and putative class member;
7. An award of statutory damages in the amount of $1,000.00, pursuant to California Civil
Code §1788.30(b), for each plaintiff and putative class member;
8. An award of costs of litigation and reasonable attorney’s fees, pursuant to 15 U.S.C.
§1692k(a)(3);
9. An award of costs of litigation and reasonable attorney’s fees, pursuant
to California Civil Code §1788.30(c); and
10. Any and all other relief that this Court deems just and proper.
Respectfully Submitted,
DATED: September 30, 2016February 24, 2017 MASHIRI LAW FIRM
A Professional Corporation
By: /s/Alex Asil Mashiri
Alex Asil Mashiri
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.433 Page 19 of 21
- 19 -
Attorney for Plaintiff
KENDALL SCALLY
DATED: September 30, 2016February 24, 2017 SEMNAR & HARTMAN, LLP
By: s/ Jared M. Hartman
Jared M. Hartman, Esq.
Semnar & Hartman, LLP
Attorneys for Plaintiff
KENDALL SCALLY
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.434 Page 20 of 21
Legend:
Insertion
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Statistics:
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Deletions 218
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Total changes 387
Case 3:16-cv-01992-WQH-WVG Document 24-1 Filed 06/13/17 PageID.435 Page 21 of 21
EXHIBIT B
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.436 Page 1 of 14
Case 3:16-cv-01992-WQH-WVG Document 111 Filed 08/09/30/16 Page 1 of 1820
Alex Asil Mashiri, Esq. (SBN 283798)
MASHIRI LAW FIRM A Professional Corporation
11251 Rancho Carmel Drive #500694
San Diego, California 92150 Telephone: (858) 348-4938 Fax: (858) 348-4939
Semnar & Hartman, LLP Babak Semnar, Esq. (SBN 224890) Jared M. Hartman (SBN
254860) 400 S. Melrose Drive, Suite 209 Vista, California 92081
Telephone: (951) 293-4187 Fax: (888) 819-8230
Attorneys for Plaintiff KENDALL SCALLY
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA
KENDALL SCALLY, individually and on behalf of all others similarly situated,
Plaintiffs,
v. )
)
DITECH FINANCIAL, LLC, )
Defendants. )
) ) ) ) ) )
)
Case No. '3:16-cv1992 WQHWVG-01992-WQH-WVG CLASS ACTION
FIRST AMENDED CLASS ACTION COMPLAINT
FOR VIOLATION OF:
1. THE FAIR DEBT COLLECTION PRACTICES ACT; AND
2. THE ROSENTHAL FAIR DEBT COLLECTION PRACTICES ACT
[DEMAND FOR JURY TRIAL]
- 1 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 111 Filed 08/09/30/16 Page 2 of 1820
1. The United States Congress has found abundant evidence of the use of
abusive, deceptive, and unfair debt collection practices by many debt
collectors, and has determined that abusive debt collection practices
contribute to the number of personal bankruptcies, to marital instability,
to the loss of jobs, and to invasions of individual privacy. Congress wrote
the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (hereinafter
"FDCPA"), 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.
2. The California legislature has determined that the banking and credit
system and grantors of credit to consumers are dependent upon the collection
of just and owing debts and that unfair or deceptive collection practices
undermine the public confidence that is essential to the continued functioning
of the banking and credit system and sound extensions of credit to consumers.
The Legislature has further determined that there is a need to ensure that
debt collectors exercise this responsibility with fairness, honesty and due
regard for the debtor's rights and that debt collectors must be prohibited
from engaging in unfair or deceptive acts or practices.
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.437 Page 2 of 14
3. KENDALL SCALLY, ("Plaintiff"), through his attorneys, brings this action
to challenge the actions of DITECH FINANCIAL, LLC ("DITECH" or "Defendant"),
with regard to attempts by Defendant to unlawfully and abusively collect a
debt allegedly owed by Plaintiff, and this conduct caused Plaintiff damages.
4. Plaintiff makes these allegations on information and belief, with the
exception of those allegations that pertain to a plaintiff, which Plaintiff
alleges on personal knowledge.- 2 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 111 Filed 08/09/30/16 Page 3 of 1820
5. While many violations are described below with specificity, this Complaint
alleges violations of the statutes cited in their entirety.
6. Unless otherwise stated, all the conduct engaged in by Defendant took place
in California.
7. Any violations by Defendants were knowing, willful, and intentional, and
Defendants did not maintain procedures reasonably adapted to avoid any such
specific violation.
8. Through this complaint, Plaintiff does not allege that any state court
judgment was entered against Plaintiff in error, and Plaintiff does not seek
to reverse or modify any judgment of any state court.
9. Through this complaint, Plaintiff does not allege that any state court
judgment was entered against Plaintiff in error, and Plaintiff does not seek
to reverse or modify any judgment of any state court.
JURISDICTION AND VENUE
10. This action arises out of Defendant's violations of the Fair Debt
Collection
Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA") and the Rosenthal Fair Debt
Collection Practices Act, California Civil Code §§ 1788-1788.32 ("Rosenthal
Act").
11. Plaintiff resides in the City of San Diego, which is located in the County
of San Diego, California.
12. DITECH is a business whose principal place of business is located in the
City of Tempe, State of Arizona.
13. DITECH regularly does business and has the capacity to sue within the
County of San Diego, California, and therefore personal jurisdiction is
established and venue is proper pursuant to 28 U.S.C. § 1391(b)(1) and §
1391(c)(2).
14. Jurisdiction of this Court arises under 28 U.S.C. § 1367 for supplemental
state claims.- 3 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 111 Filed 08/09/30/16 Page 4 of 1820
15. DITECH sent collection letters to Plaintiff, among other actions, to
collect this alleged debt.
16. Because Defendant actively does business within the county of San Diego
in the State of California and the action giving rise to the claim took place
in the County of San Diego, California, personal jurisdiction is established.
17. Venue is proper pursuant to 28 U.S.C. § 1391b(1) and § 1391b(2). At all
times relevant, Defendant conducted business within the County of San Diego,
State of California.
PARTIES
18. Plaintiff is a natural person who resides in the City of San Diego, State
of California.
19. Defendant DITECH is located in the City of Tempe, State of Arizona.
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.438 Page 3 of 14
20. Plaintiff is a natural person allegedly obligated to pay a debt, and is
a consumer‚ as that term is defined by 15 U.S.C. § 1692a(3).
21. Defendant is a person who uses an instrumentality of interstate commerce
or the mails in a business the principal purpose of which is the collection
of debts, or who regularly collect or attempt to collect, directly or
indirectly, debts owed or due or asserted to be owed or due another and are
therefore debt collectors as that phrase is defined by 15 U.S.C. § 1692a(6).
22. Plaintiff is a natural person from whom a debt collector sought to collect
a consumer debt which was due and owing or alleged to be due and owing from
Plaintiff, and is a debtor as that term is defined by California Civil Code
§ 1788.2(h).
23. Defendant, in the ordinary course of business, regularly, and on behalf
of themselves or others, engage in debt collection as that term is defined
by California Civil Code § 1788.2(b), are therefore debt collectors as that
term is defined by California Civil Code § 1788.2(c).- 4 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 111 Filed 08/09/30/16 Page 5 of 1820
24. This case involves money, property or their equivalent, due or owing or
alleged to be due or owing from a natural person by reason of a consumer credit
transaction. As such, this action arises out of a consumer debt and "consumer
credit" as those terms are defined by Cal. Civ. Code § 1788.2(f).
FACTUAL ALLEGATIONS
25. Sometime in the year 1996, Plaintiff is alleged to have incurred certain
financial obligations with HFC Company, LLC, whereby he received a line of
credit for his use within his personal life for everyday purchases.
26. This financial obligation was primarily for personal, family or household
purposes and are therefore a "debt" as that term is defined by 15 U.S.C.
§1692a(5).
27. These alleged obligations were money, property, or their equivalent, which
is due or owing, or alleged to be due or owing, from a natural person to another
person and are therefore a "debt" as that term is defined by California Civil
Code §1788.2(d), and a "consumer debt" as that term is defined by California
Civil Code §1788.2(f).
28. Sometime thereafter, but before January 1, 2016, Plaintiff allegedly fell
behind in the payments allegedly owed on the alleged debt.
29. Plaintiff ultimately had the debt discharged by way of bankruptcy in the
year 1998, while the debt was still in the possession of the original creditor.
30. At some point thereafter, Defendant took over collection of the debt by
way of either sale, transfer, or assignmentPlaintiff's bankruptcy petition
listed the original creditor as a creditor holding an interest in the debt
that is to be subject of Plaintiff's petition for discharge.
31. Plaintiff did not include Defendant Ditech as a creditor to be included
in the petition, because Ditech did not become involved in the account until
sometime years later in 2014.
32. Because Defendant Ditech was not named in the bankruptcy petition as a
creditor, Ditech was therefore never issued an injunction by the bankruptcy
court to prohibit Ditech from collecting thereupon.- 5 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 6 of 20
33.Because Defendant Ditech was never issued an injunction by the bankruptcy
court, the bankruptcy court therefore has no jurisdiction over Ditech.
34.Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff's
claims against Ditech are therefore not pre-empted by the bankruptcy court's
jurisdiction.
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.439 Page 4 of 14
35.Accordingly, the Southern District of California has already reached the
same conclusion in Forsberg v. Fidelity National Credit Services, Ltd. (So.
Dist. Calif. Feb. 26, 2004) 2004 U.S. Dist. LEXIS 7622, at **17-21 wherein
Judge Sabraw ruled that the defendant Fidelity National Credit Services, Ltd.
could not obtain a dismissal of the FDCPA claims alleged against it based upon
the bankruptcy court's jurisdiction since defendant Fidelity National Credit
Services, Ltd. had never been included in the bankruptcy petition or
bankruptcy discharge or bankruptcy court injunction, as defendant Fidelity
National Credit Services, Ltd. did not become involved in the account at issue
until after the plaintiff Forsberg had already filed his bankruptcy petition,
much like Ditech in this matter.
36.Therefore, just as the Southern District in Forsberg found that the Walls
v. Wells Fargo Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable
since Walls involved the plaintiff pursuing allegations against the creditor
that had been specifically included in the bankruptcy court injunction whereas
Forsberg involved the plaintiff pursuing allegations against an entity
attempting to collect upon the discharged debt but the specifically named
defendant had not been included in the bankruptcy court injunction, the same
applies to Ditech in the instant matter.
37.Defendant first attempted to contact Plaintiff in an attempt to collect
upon the discharged debt by way of letter dated March 25, 2016.2016, wherein
Defendant Ditech informed Plaintiff that the rights to collect upon the
account had been transferred to Ditched in June 2014.- 6 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 7 of 20
32. 38. This communication to Plaintiff was a "communication" as that term
is defined by 15 U.S.C. § 1692a(2), and an "initial communication" consistent
with 15 U.S.C. § 1692g(a).
33.39. The March 25, 2016 collection notices stated that "Because of interest,
late charges, and other charges that may vary from day to day, the amount due
on the- 5 -
CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 1 Filed 08/09/16 Page 6 of 18 day you pay
may be greater." However, no interest, late charges, or other charges were
incurring. In fact, subsequent communication on June 20, 2016, from the
Defendant indicates that the debt remained the same and was not increasing
due to interest, late charges, or other charges. As such, this statement is
false, deceptive, and misleading. See Howell v. Eagle Accounts Group, Inc.,
2015 WL 1097397 (S.D. Ind. 2015).
40. Upon information and belief, this was an attempt by Ditech to force
Plaintiff into paying the full amount claimed to be due in the March 2016 letter
in order to avoid any further increase of the amount.
34.41. This communication was a "debt collection" as Cal. Civ. Code 1788.2(b)
defines that phrase, and an "initial communication" consistent with Cal. Civ.
Code § 1812.700(b).
35.42. This letter claimed Plaintiff owes $7,662.12 upon the debt.
36.43. Plaintiff promptly called Defendant to dispute the legitimacy of the
alleged debt, as it was discharged in bankruptcy and Plaintiff specifically
disputes whether or not he owes any money upon the alleged debt.
37.44. Furthermore, on June 20, 2016, Defendant sent another dunning letter
to Plaintiff that contained the bold and capitalized words at the top
"SETTLEMENT OPPORTUNITY", and claimed that Plaintiff has a "contractual
obligation" to fulfill the debt, and claimed that they are giving him the
"opportunity to settle [his] account in full by paying less than the entire
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.440 Page 5 of 14
amount due", and giving him a due date of August 19, 2016, and if Plaintiff
does not respond by that date then "we - 7 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 8 of 20
will assume you are not interested in this offer and Ditech may consider
exercising its available remedies".
38.45. However, because Plaintiff's liability upon the debt was discharged
by way of bankruptcy in the year 1998, Ditech has no remedies upon the debt,
Ditech cannot pursue any legal action upon the debt, and therefore any implied
threat to sue Plaintiff and exercise available remedies are all false
statements that amount to misrepresentations about the legal status of the
debt.
39.46. Upon information and belief, Defendant uttered such false statements
and misrepresentations with the intention of scaring Plaintiff into fearing
that he may- 6 -
CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 1 Filed 08/09/16 Page 7 of 18 be sued by
Defendant, and to in turn trick him into paying the debt even though he has
no obligation to do so and his liability upon the debt has been discharged.
40.47. Furthermore, Defendant's June 20th letter claims, "We are required to
report any debt forgiveness to the Internal Revenue Service", which is a false
statement because there are many exceptions to IRS reporting requirements and
not every debt forgiveness is required to be so reported. See, Foster v.
AllianceOne Receivables Mgmt., 2016 U.S. Dist. LEXIS 56958, at *4-6 (N. Dist.
Ill. April 28, 2016).
41.48. Because Defendant's letters above violated certain portions of the
federal Fair Debt Collection Practices Act as these portions are incorporated
by reference in the Rosenthal Fair Debt Collection Practices Act, through
California Civil Code § 1788.17, this conduct or omission violated Cal. Civ.
Code § 1788.17.
CLASS ACTION ALLEGATIONS
42.49. Plaintiff brings this action on his own behalf, and on behalf of all
others similarly situated. CLASS A
43.50. This action defines "Class A" as follows:
"Class A" is comprised of all persons with addresses within the
state of California who were sent, within one year prior to the - 8 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 9 of 20
filing date of this action a "communication" as defined by 15 U.S.C. § 1692a(2)
to recover a consumer debt which was substantially similar to Plaintiff's
Exhibit 1 (June 20, 2016 collection notice), which were not returned
undelivered by the United States Postal Service, to collect a debt from a
consumer whose debt had already been discharged in bankruptcy.
/// /// /// /// ///
- 7 -
CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 1 Filed 08/09/16 Page 8 of 18
CLASS B
44.51. This action defines "Class B" as follows:
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.441 Page 6 of 14
"Class B" is comprised of all persons with addresses within the state of
California who were sent, within one year prior to the filing date of this
action a "communication" as defined by 15 U.S.C. § 1692a(2) to recover a
consumer debt which was substantially similar to Plaintiff's Exhibit 2 (March
25, 2016 collection notice), in which the communication included the language
"Because of interest, late charges, and other charges that may vary from day
to day, the amount due on the day you pay may be greater.", when no interest
was in fact being incurred.
CLASS C
45.52. This action defines "Class C" as follows:
"Class C" is comprised of all persons with addresses within the state of
California who were sent, within one year prior to the filing date of this
action a "communication" as defined by 15 U.S.C. § 1692a(2) to recover a
consumer debt which was substantially similar to Plaintiff's Exhibit 1 (June
20, 2016 collection notice), which were not returned undelivered by the United
States Postal Service, in which the communication included the language "We
are required to report any debt forgiveness to the Internal Revenue Service."
46.53. For purposes of this Claim for Relief the class period is one year prior
to the filing of this Complaint.
47.54. The Classes are composed of hundreds of persons, the joinder of which
would be impractical. The individual identities of the individual members are
ascertainable through Defendant's records or by public notice.- 9 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 10 of 20
48.55. There is a well-defined community of interest in the questions of law
and fact involved affecting the members of the Classes. The questions of law
and fact common to the Classes predominate over questions affecting only
individual class members, and include, but are not limited to, the following:
A) Whether Defendant violated the FDCPA;- 8 -
CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 1 Filed 08/09/16 Page 9 of 18
B) Whether Defendant violated the Rosenthal Act;
C) Whether members of the Class are entitled to the remedies under the FDCPA;
D) Whether members of the Class are entitled to the remedies California's
Rosenthal Act;
E) Whether members of the Classes are entitled to declaratory relief;
F) Whether members of the Classes are entitled to injunctive relief;
G) Whether members of the Classes are entitled to an award of reasonable
attorneys' fees and costs of suit pursuant to the FDCPA;
H) Whether members of the Classes are entitled to an award of reasonable
attorneys' fees and costs of suit pursuant to the California's Rosenthal Act;
and
I) Whether members of Classes are entitled to any other remedies.
47. Plaintiff will fairly and adequately protect the interests of the Classes.
48. Plaintiff has retained counsel experienced in handling class claims as
well as claims involving unlawful collection practices.
49. Plaintiff's claims are typical of the claims of the Classes, which arises
from the same operative facts involving unlawful collection practices.
50. A class action is a superior method for the fair and efficient adjudication
of this controversy.
51. Class-wide damages are essential to induce Defendant to comply with
Federal and State Law.- 10 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.442 Page 7 of 14
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 11 of 20
52. The interest of class members in individually controlling the prosecution
of separate claims against Defendant is small because the maximum statutory
damages in an individual FDCPA action is $1,000.00, and an additional
$1,000.00 under the Rosenthal Act. Management of these claims are likely to
present significantly fewer difficulties than those presented in many class
claims, e.g. securities fraud.- 9 -
CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 1 Filed 08/09/16 Page 10 of 18
53. Defendant has acted on grounds generally applicable to the class, thereby
making appropriate final declaratory relief with respect to the class as a
whole.
54. Plaintiff requests certification of a hybrid class combining the elements
of Rule 23(b)(3) for monetary damages and Rule 23(b)(2) for equitable relief.
FIRST CAUSE OF ACTION (Violation of the FDCPA) 15 U.S.C. 1692, et seq.
55. Plaintiff repeats, re-alleges, and incorporates by reference, all other
paragraphs.
56. Plaintiff's bankruptcy petition listed the original creditor as a creditor
holding an interest in the debt that is to be subject of Plaintiff's petition
for discharge.
57. Plaintiff did not include Defendant Ditech as a creditor to be included
in the petition, because Ditech did not become involved in the account until
sometime years later in 2014.
58. Because Defendant Ditech was not named in the bankruptcy petition as a
creditor, Ditech was therefore never issued an injunction by the bankruptcy
court to prohibit Ditech from collecting thereupon.
59. Because Defendant Ditech was never issued an injunction by the bankruptcy
court, the bankruptcy court therefore has no jurisdiction over Ditech.
60. Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff's
claims against Ditech are therefore not pre-empted by the bankruptcy court's
jurisdiction.- 11 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 12 of 20
61. Accordingly, the Southern District of California has already reached the
same conclusion in Forsberg v. Fidelity National Credit Services, Ltd. (So.
Dist. Calif. Feb. 26, 2004) 2004 U.S. Dist. LEXIS 7622, at **17-21 wherein
Judge Sabraw ruled that the defendant Fidelity National Credit Services, Ltd.
could not obtain a dismissal of the FDCPA claims alleged against it based upon
the bankruptcy court's jurisdiction since defendant Fidelity National Credit
Services, Ltd. had never been included in the bankruptcy petition or
bankruptcy discharge or bankruptcy court injunction, as defendant Fidelity
National Credit Services, Ltd. did not become involved in the account at issue
until after the plaintiff Forsberg had already filed his bankruptcy petition,
much like Ditech in this matter.
62. Therefore, just as the Southern District in Forsberg found that the Walls
v. Wells Fargo Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable
since Walls involved the plaintiff pursuing allegations against the creditor
that had been specifically included in the bankruptcy court injunction whereas
Forsberg involved the plaintiff pursuing allegations against an entity
attempting to collect upon the discharged debt but the specifically named
defendant had not been included in the bankruptcy court injunction, the same
applies to Ditech in the instant matter.
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.443 Page 8 of 14
63. The foregoing acts and omissions constitute numerous and multiple
violations of the FDCPA, including but not limited to each and every one of
the above cited provisions of the FDCPA, 15 U.S.C. § 1692 et seq.
64. In particular, Defendant violated 15 U.S.C. 1692e of the FDCPA by using
false, deceptive, and misleading representations in connection with the
collection of the purported debt by the following conduct:
A) Falsely stating, "Because of interest, late charges, and other charges
that may vary from day to day, the amount due on the day you pay may be greater",
when in reality no interest, late charges, or other charges were being added,-
12 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 13 of 20
which appeared to be an attempt to trick Plaintiff into paying the amount
alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff's contractual obligation to
still pay the purported debt even though any obligation by Plaintiff had been
discharged;
C) Falsely implying to Plaintiff that the debt remained viable and
enforceable by using the word "settlement" with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then
Defendant would exercise its available remedies, with the intention of
implying to Plaintiff that he could be sued upon the purported debt even though
any obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to
be reported to the IRS when in reality there are certain exceptions to
mandatory reporting.
65. Additionally, Defendant violated 15 U.S.C. 1692e(2)(A) of the FDCPA by
falsely representing the character, amount, and legal status of the purported
debt by the following conduct:
A) Falsely stating, "Because of interest, late charges, and other charges
that may vary from day to day, the amount due on the day you pay may be greater",
when in reality no interest, late charges, or other charges were being added,
which appeared to be an attempt to trick Plaintiff into paying the amount
alleged in the March 2016 letter promptly to avoid any further charges being
added;- 13 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 14 of 20
B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff's contractual obligation to
still pay the purported debt even though any obligation by Plaintiff had been
discharged;
C) Falsely implying to Plaintiff that the debt remained viable and
enforceable by using the word "settlement" with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then
Defendant would exercise its available remedies, with the intention of
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.444 Page 9 of 14
implying to Plaintiff that he could be sued upon the purported debt even though
any obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to
be reported to the IRS when in reality there are certain exceptions to
mandatory reporting.
66. Additionally, Defendant violated 15 U.S.C. 1692e(4) of the FDCPA by
falsely representing that nonpayment of the purported debt would result in
the seizure, garnishment, attachment, or sale of Plaintiff's property, and
such action was not lawful, by the following conduct:
A) Falsely threatening that if Plaintiff did not pay the debt then Defendant
would exercise its available remedies, with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged
67. Additionally, Defendant violated 15 U.S.C. 1692e(5) of the FDCPA by
falsely threatening to take action that cannot legally be taken, by the
following conduct: A) Threatening a lawsuit against Plaintiff by claiming that
it was Plaintiff's contractual obligation to still pay the purported debt even
though any obligation by Plaintiff had been discharged;- 14 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 15 of 20
B) Threatening a lawsuit against Plaintiff by using the word "settlement"
with the intention of implying to Plaintiff that he could be sued upon the
purported debt even though any obligation by Plaintiff had been discharged;
C) Threatening a lawsuit against Plaintiff by threatening that if Plaintiff
did not pay the debt then Defendant would exercise its available remedies,
with the intention of implying to Plaintiff that he could be sued upon the
purported debt even though any obligation by Plaintiff had been discharged;
68. Additionally, Defendant violated 15 U.S.C. 1692e(10) of the FDCPA by using
false representations and deceptive means in connection with the collection
of the purported debt by the following conduct:
A) Falsely stating, "Because of interest, late charges, and other charges
that may vary from day to day, the amount due on the day you pay may be greater",
when in reality no interest, late charges, or other charges were being added,
which appeared to be an attempt to trick Plaintiff into paying the amount
alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff's contractual obligation to
still pay the purported debt even though any obligation by Plaintiff had been
discharged;
C) Falsely implying to Plaintiff that the debt remained viable and
enforceable by using the word "settlement" with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then
Defendant would exercise its available remedies, with the intention of
implying to Plaintiff that he could be sued upon the purported debt even though
any obligation by Plaintiff had been discharged;- 15 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 16 of 20
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to
be reported to the IRS when in reality there are certain exceptions to
mandatory reporting.
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.445 Page 10 of 14
69. Additionally, Defendant violated 15 U.S.C. 1692f of the FDCPA by using
unfair and unconscionable means in connection with the collection of the
purported debt by the following conduct:
A) Falsely stating, "Because of interest, late charges, and other charges
that may vary from day to day, the amount due on the day you pay may be greater",
when in reality no interest, late charges, or other charges were being added,
which appeared to be an attempt to trick Plaintiff into paying the amount
alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff's contractual obligation to
still pay the purported debt even though any obligation by Plaintiff had been
discharged;
C) Falsely implying to Plaintiff that the debt remained viable and
enforceable by using the word "settlement" with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then
Defendant would exercise its available remedies, with the intention of
implying to Plaintiff that he could be sued upon the purported debt even though
any obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to
be reported to the IRS when in reality there are certain exceptions to
mandatory reporting.- 16 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 17 of 20
70. Additionally, Defendant violated 15 U.S.C. 1692f(1) of the FDCPA by
attempting to collect an amount that was not permitted by law, as any
obligation by Plaintiff to owe anything upon the account had been discharged
by way of bankruptcy.
71. Additionally, Defendant violated 15 U.S.C. 1692f(6) of the FDCPA by
threatening to take non-judicial action to effect dispossession and
disablement when there was no present right to possession of the property
claimed as collateral since any obligation of Plaintiff upon the account had
been discharged.
57.72. As a result of each and every violation of the FDCPA, Plaintiff is
entitled to any actual damages pursuant to 15 U.S.C. § 1692k(a)(1); statutory
damages in an amount up to $1,000.00 pursuant to 15 U.S.C. § 1692k(a)(2)(A);
and, reasonable attorney's fees and costs pursuant to 15 U.S.C. § 1692k(a)(3)
from Defendant.
SECOND CAUSE OF ACTION
(Violation of the Rosenthal FDCPA)
Calif. Civ. Code 1788, et seq.
58.73. Plaintiff repeats, re-alleges, and incorporates by reference, all
other paragraphs.
74. Plaintiff's bankruptcy petition listed the original creditor as a creditor
holding an interest in the debt that is to be subject of Plaintiff's petition
for discharge.
75. Plaintiff did not include Defendant Ditech as a creditor to be included
in the petition, because Ditech did not become involved in the account until
sometime years later in 2014.
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.446 Page 11 of 14
76. Because Defendant Ditech was not named in the bankruptcy petition as a
creditor, Ditech was therefore never issued an injunction by the bankruptcy
court to prohibit Ditech from collecting thereupon.
77. Because Defendant Ditect was never issued an injunction by the bankruptcy
court, the bankruptcy court therefore has no jurisdiction over Ditech.- 17
-
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 18 of 20
78. Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff's
claims against Ditech are therefore not pre-empted by the bankruptcy court's
jurisdiction.
79. Accordingly, the Southern District of California has already reached the
same
conclusion in Forsberg v. Fidelity National Credit Services, Ltd. (So. Dist.
Calif. Feb. 26, 2004) 2004 U.S. Dist. LEXIS 7622, at **17-21 wherein Judge
Sabraw ruled that the defendant Fidelity National Credit Services, Ltd. could
not obtain a dismissal of the FDCPA claims alleged against it based upon the
bankruptcy court's jurisdiction since defendant Fidelity National Credit
Services, Ltd. had never been included in the bankruptcy petition or
bankruptcy discharge or bankruptcy court injunction, as defendant Fidelity
National Credit Services, Ltd. did not become involved in the account at issue
until after the plaintiff Forsberg had already filed his bankruptcy petition,
much like Ditech in this matter.
80. Therefore, just as the Southern District in Forsberg found that the Walls
v. Wells Fargo Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable
since Walls involved the plaintiff pursuing allegations against the creditor
that had been specifically included in the bankruptcy court injunction whereas
Forsberg involved the plaintiff pursuing allegations against an entity
attempting to collect upon the discharged debt but the specifically named
defendant had not been included in the bankruptcy court injunction, the same
applies to Ditech in the instant matter.
81. In Calif. Civ. Code 1788.17, the Calif. Rosenthal Act incorporates all
FDCPA prohibitions and applies them as violations of the Rosenthal Act in
addition to violations of the FDCPA.
82. In Calif. Civ. Code 1788.32, the Calif. Rosenthal Act specifically states
that violations of the Rosenthal Act are in addition to, and cumulative to,
any other violations of any other provision of law- 18 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 19 of 20
59.83. Therefore, the foregoing acts and omissions constitute numerous and
multiple violations of Calif. Civ. Code 1788.17 of the Rosenthal Act,
including but not limited to, each and every one of the above-cited provisions
of the Rosenthal Act, Cal. Civ. Code §§ 1788-1788.32.
60.84. The Ninth Circuit in Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055,
1066 (9th Cir. 2011) has ruled that the Rosenthal Act, via California Civil
Code section 1788.17, incorporates the Federal FDCPA's class action damages
provision in 15 U.S.C. section 1692k(a)(2)(B). Specifically, the Ninth
Circuit stated that "in light of the clear statutory language, unequivocal
legislative- 10 -
CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 1 Filed 08/09/16 Page 11 of 18 history,
and the unanimous agreement of the courts, we hold that the Rosenthal Act
permits class actions."
Case 3:16-cv-01992-WQH-WVG Document 24-2 Filed 06/13/17 PageID.447 Page 12 of 14
61.85. As a result of each and every violation of the Rosenthal Act, Plaintiff
is entitled to any actual damages pursuant to Cal. Civ. Code § 1788.30(a);
statutory damages for a knowing or willful violation in the amount up to
$1,000.00 pursuant to Cal. Civ. Code § 1788.30(b); and reasonable attorney's
fees and costs pursuant to Cal. Civ. Code § 1788.30(c) from Defendant.
62.86. As a result of each and every violation of the Rosenthal FDCPA,
Plaintiff is entitled to actual damages pursuant to California Civil Code
section 1788.30(a); statutory damages under 1692k(a)(2)(A) which is
incorporated by California Civil Code section 1788.17; statutory damages for
a knowing or willful violation in the amount of up to $1,000.00 pursuant to
California Civil Code section 1788.30(b); and reasonable attorney's fees and
costs pursuant to California Civil Code section 1788.30(c).
PRAYER FOR DAMAGES AND OTHER REMEDIES WHEREFORE, Plaintiff prays that
judgment be entered against Defendant and Plaintiff be awarded damages from
Defendant as follows:
* An award of statutory damages of $1,000.00 pursuant to 15 U.S.C. §
1692k(a)(2)(A) for Plaintiff and each member of the Class;- 19 -
FIRST AMENDED CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 11 Filed 09/30/16 Page 20 of 20
* An award of costs of litigation and reasonable attorney's fees, pursuant
to 15 U.S.C. § 1692k(a)(3);
* An award of statutory damages of $1,000.00 pursuant to Cal. Civ. Code §
1788.30(b);* An award of costs of litigation and reasonable attorney's fees,
pursuant to Cal. Civ. Code § 1788.30(c) for Plaintiff and each member of the
Class.
///
///
- 11 -
CLASS ACTION COMPLAINT
Case 3:16-cv-01992-WQH-WVG Document 1 Filed 08/09/16 Page 12 of 18
63. Pursuant to the seventh amendment to the Constitution of the United
States of America, Plaintiff is entitled to, and demands, a trial by jury.
DATED: August 9,September 30, 2016 MASHIRI LAW FIRM
A Professional Corporation
By: /s/Alex Asil Mashiri Alex Asil Mashiri Attorney for Plaintiff MATTHEW
STUPPIELLOKENDALL SCALLY
DATED: August 9,September 30, 2016 SEMNAR & HARTMAN, LLP
By: s/ Jared M. Hartman Jared M. Hartman, Esq. Semnar & Hartman, LLP Attorneys
for Plaintiff MATTHEW STUPPIELLO- 12KENDALL SCALLY- 20 -
FIRST AMENDED CLASS ACTION COMPLAINT
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3:16-cv-01992-WQH-WVG
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
Mathew M. Wrenshall (SBN 284466)
Email: mwrenshall@reedsmith.com
Perry A. Napolitano (admitted pro hac vice)
Email: pnapolitano@reedsmith.com
REED SMITH LLP
355 South Grand Avenue, Suite 2900
Los Angeles, CA 90071
Telephone: +1 213 457 8000
Facsimile: +1 213 457 8080
Counsel for Defendant
Ditech Financial LLC
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
KENDALL SCALLY, individually and
on behalf of all others similarly
situated,
Plaintiff,
vs.
DITECH FINANCIAL LLC,
Defendant.
Case No.: 3:16-cv-01992-WQH-WVG
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
DEFENDANT DITECH FINANCIAL
LLC’S MOTION TO DISMISS
PLAINTIFF’S SECOND AMENDED
COMPLAINT
[Filed concurrently with Notice of Motion
and Motion to Dismiss; [Proposed] Order
and Judgment; Request for Judicial
Notice]
DATE: July 17, 2017
TIME: NO ORAL ARGUMENT
UNLESS REQUESTED BY
THE COURT
PLACE: Courtroom 14B, Suite 1480
333 West Broadway
San Diego, CA 92101
Compl. Filed: August 9, 2016
Am. Compl. Filed: September 30, 2016
Second Am. Compl. Filed: May 30, 2017
Hon. William Q. Hayes, District Judge
Hon. William V. Gallo, Magistrate Judge
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3:16-cv-01992-WQH-WVG – 1 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
I. INTRODUCTION
Defendant Ditech Financial LLC (“Ditech”) submits the following
Memorandum of Points and Authorities in Support of its Motion to Dismiss Plaintiff’s
Second Amended Complaint (“SAC”) for failure to state a claim under Federal Rule
of Civil Procedure 12(b)(6). For the second time, Plaintiff unsuccessfully tries to
plead around the undisputable premise of his claims against Ditech: that Ditech
wrongfully attempted to collect debt not owed due to the Bankruptcy Court’s
discharge order.
This Court dismissed Plaintiff’s First Amended Complaint (“FAC”) because it
asserted claims that were based on alleged violations of the discharge injunction and
thus “precluded by the Bankruptcy Code.” Dismissal Order, ECF No. 17, at p. 9.
Despite Plaintiff’s zeal to excise his FAC’s express references to his bankruptcy
filing, subsequent discharge, the Forsberg decision,1 and the particular nature of the
debt at issue, Plaintiff’s SAC suffers from the same fatal flaw. Accordingly,
Plaintiff’s SAC should be dismissed for failure to state a claim, and this time with
prejudice.
II. PLAINTIFF’S DISMISSED AND REMAINING AVERMENTS2
In his FAC, Plaintiff claimed that Ditech violated the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. §§ 1692, et seq., and the Rosenthal Fair Debt
Collection Practices Act (“Rosenthal Act”), Cal. Civ. Code §§ 1788-1788.32, by
attempting to collect a debt that had been discharged in bankruptcy. Specifically,
Plaintiff alleged that (1) he obtained a loan in 1996; (2) he received a discharge of that
debt from the U.S. Bankruptcy Court in 1998; and (3) Ditech sent letters to him in
1 Forsberg v. Fidelity National Credit Services, Ltd., No. 03-cv-2193, 2004 WL
3510771 (S.D. Cal. Feb. 26, 2004).
2 For purposes of Ditech’s Motion to Dismiss under Rule 12(b)(6), Plaintiff’s
allegations are taken as true. See Prime Healthcare Servs., Inc. v. Servs. Employees
Int’l Union, 147 F. Supp. 3d 1094, 1099 (S.D. Cal. 2015). Ditech, however, in no
way admits to Plaintiff’s allegations of wrongdoing.
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3:16-cv-01992-WQH-WVG – 2 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
March and June of 2016, stating that he owed a debt (that he alleged he was not
actually obligated to pay), that Ditech was willing to settle the debt for less than the
total amount owed although it was required to report such debt forgiveness to the
Internal Revenue Service, and that Ditech would consider other means to collect the
discharged debt if Plaintiff was unwilling to settle. FAC ¶¶ 25, 28, 29, 37, 39, 43-45,
47.
On January 26, 2017, this Court dismissed the FAC. In its Dismissal Order, the
Court explained that Plaintiff’s allegations that Ditech sent letters to Plaintiff
“attempting to collect on a discharged debt which contain various statements ‘falsely
implying that the debt remained viable’” were “based on violations of the discharge
injunction and [thus] precluded by the Bankruptcy Code.” Dismissal Order, ECF No.
17, at p. 9. The Court ordered that Plaintiff seek leave of Court before filing any
amended complaint.
On February 23, 2017, Plaintiff moved for leave to file the SAC. ECF No. 18.
On May 26, 2017, the Court granted Plaintiff leave to amend while “defer[ing]
consideration of any challenge to the merits of the proposed second amended
complaint.” ECF No. 22 at p. 4. Plaintiff filed his SAC on May 30, 2017. ECF No.
23.
In his SAC, Plaintiff continues to claim that Ditech violated the FDCPA and the
Rosenthal Act by sending the aforementioned letters to him in March and June of
2016. SAC ¶¶ 18-22, 45-49, Exs. 1, 2. Plaintiff alleges that Ditech violated the
FDCPA and the Rosenthal Act by stating that Plaintiff owed a debt (including unpaid
principal, accrued interest and other fees) that he was not actually obligated to pay,
that Ditech was willing to settle the debt for less than the total amount owed, and that
Ditech would consider other means to collect the debt if Plaintiff was unwilling to
settle. Id.; compare also id., with FAC ¶¶ 63-71, 83. Plaintiff alleges that as a result
of these statements, Plaintiff “suffered bewilderment and confusion” as to whether
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3:16-cv-01992-WQH-WVG – 3 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
Plaintiff owed Ditech any money at all and what the consequences were of doing so.
Id. ¶¶ 23, 49.
Plaintiff’s counsel has deleted the FAC’s express references to the discharge
issued by the Bankruptcy Court (as well as the attendant references to the Forsberg
opinion), but the public record reveals that the substance of Plaintiff’s claims has not
changed. Plaintiff opaquely alleges that “no interest, late charges, or other charges
were incurring,” see SAC ¶¶ 20, 46, but this Court may take judicial notice of ¶ 43 of
Plaintiff’s FAC in which Plaintiff states the express reason why such charges were not
accruing and why he believes he was not obliged to pay the debt: “Plaintiff promptly
called Defendant to dispute the legitimacy of the alleged debt, as it was discharged in
bankruptcy and Plaintiff specifically disputes whether or not he owes any money upon
the alleged debt,” FAC ¶ 43 (attached as Exhibit 1 to Def.’s Req. for Judicial Notice);
Discharge Order, ECF No. 5, Case No. 98-3485-PCW7 (Bankr. E.D. Wash.) (attached
as Exhibit 2 to Def.’s Req. for Judicial Notice).
Consistent with this Court’s previous ruling, Plaintiff’s claim that Ditech made
various statements in an attempt to collect debt that he no longer owed is still “based
on violations of the discharge injunction and [thus] precluded by the Bankruptcy
Code.” Dismissal Order, ECF No. 17, at p. 9. 3
III. LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must allege “enough
facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007). While factual allegations are assumed true, this pleading
standard “demands more than an unadorned, the-defendant-unlawfully-harmed-me
accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at
555).
3 When assessing whether a plaintiff states a claim, the court may consider the
plaintiff’s complaint and any attached exhibits, as well as “any matter that is subject to
judicial notice, such as public records.” Silva v. M/V First Lady, 28 F. Supp. 2d 581,
583 (S.D. Cal. 1998).
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3:16-cv-01992-WQH-WVG – 4 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
Courts are “not bound to accept as true a legal conclusion couched as a factual
allegation” and “[t]hreadbare recitals of the elements of a cause of action, supported
by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. In addition,
where amendment of the complaint would be futile, the court should dismiss the
action with prejudice. See Dumas v. Kipp, 90 F.3d 386, 393 (9th Cir. 1996); Reddy v.
Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990).
IV. ARGUMENT
Plaintiff’s SAC fails to state an FDCPA or Rosenthal Act claim against Ditech
for two reasons. First, the SAC fails to allege a debt for “personal, family, or
household purposes” as required under the FDCPA.4 Second, the SAC continues to
allege claims that, however clothed, remain precluded by the Bankruptcy Code.
A. Plaintiff Fails To Allege A “Debt” Under The FDCPA.
Plaintiff’s SAC is devoid of any factual allegations regarding a fundamental
element of an FDCPA claim: a debt for personal, family, or household purposes.
Without factual allegations describing a debt within the ambit of the FDCPA, the SAC
fails to state a claim under the FDCPA.
In his SAC, Plaintiff alleges that Ditech violated § 1692e of the FDCPA, which
provides that “[a] debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any debt.” 15 U.S.C. §
1692e (emphasis added); SAC ¶¶ 45-58.
The FDCPA defines the term “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
4 The Rosenthal Act requires compliance with the federal Fair Debt Collection
Practices Act (“FDCPA”), and a debt collector that violates the FDCPA also violates
the Rosenthal Act. See Cal. Civ Code § 1788.17; Gates v. MCT Grp., Inc., 93 F.
Supp. 3d 1182, 1192 (S.D. Cal. 2015); Hosseinzadeh v. M.R.S. Assocs., 387 F. Supp.
2d 1104, 1118 (C.D. Cal. 2005). Plaintiff alleges causes of action under both the
Rosenthal Act and FDCPA through violations of § 1692e of the FDCPA.
Accordingly, Plaintiff’s FDCPA and Rosenthal Act claims fail on precisely the same
grounds.
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3:16-cv-01992-WQH-WVG – 5 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
personal, family, or household purposes, whether or not such obligation has been
reduced to judgment.” 15 U.S.C. § 1692a(5) (emphasis added).
In his zeal to excise past references to his bankruptcy discharge, Plaintiff’s
counsel has failed to allege any facts to support the fundamental assertion that the
“debt” that Ditech allegedly attempted to collect from Plaintiff was “primarily for
personal, family, or household purposes.” See generally SAC; see also Exhibit A to
Def.’s Mot. to Dismiss (redline compare of FAC and SAC) at pp. 4-5. What remains
is the bald legal conclusion that Ditech “attempted to collect a consumer debt as the
term is defined by the FDCPA and Rosenthal FDCPA.” SAC ¶ 13. Plaintiff’s SAC
fails to meet the threshold pleading requirements under Twombly-Iqbal.5
Accordingly, Plaintiff’s SAC should dismissed at the outset.
B. Plaintiff’s Claims Are Foreclosed By The Bankruptcy Code.
Even if Plaintiff had pled facts to support his legal conclusion about a consumer
debt (which he did not), Plaintiff’s SAC should be dismissed because Plaintiff’s latest
pleading continues to state claims grounded in the theory that Ditech “falsely
impl[ied] that the debt remained viable.” Dismissal Order (ECF No. 17) at p. 9.
Plaintiff unsuccessfully attempts to plead around the Court’s Dismissal Order and
controlling case law without changing the fundamental premise of his claims.6
5 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556
U.S. 662, 677–78 (2009). While Plaintiff may argue that this Court can just take
judicial notice of his past pleadings in which he alleged more facts relating to the
nature of the debt at issue, this argument misses the mark. Under Twombly-Iqbal,
Plaintiff must affirmatively plead facts to support his claims in the first instance—not
use artful pleading to obscure the factual bases of his claims. See id.
6 Because Plaintiff’s Rosenthal Act claim summarily incorporates by reference
Ditech’s alleged FDCPA violations, Plaintiff’s Rosenthal Act claim is also foreclosed
by the Bankruptcy Code’s discharge injunction enforcement mechanism. Indeed,
courts applying the Ninth Circuit’s ruling in Walls have dismissed Rosenthal Act
claims based on its reasoning. See, e.g., Goad v. MCT Group, 576 F. App’x 707, 707
(9th Cir. 2014); In re McCarther-Morgan, 373 F. App’x 778, 779 (9th Cir. 2010); see
also Cal. Civ. Code § 1788.17 (incorporating substantive and remedial provisions of
FDCPA into the Rosenthal Act).
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3:16-cv-01992-WQH-WVG – 6 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
Section 524 of the Bankruptcy Code governs the effect of a bankruptcy
discharge and provides, “[a] discharge in a case under this title . . . (2) operates as an
injunction against the commencement or continuation of an action, the employment of
process, or an act, to collect, recover or offset any such debt as a personal liability of
the debtor, whether or not discharge of such debt is waived.” 11 U.S.C. § 524(a)(2).
The Bankruptcy Code itself provides a remedy in bankruptcy court for a
violation of § 524 through civil contempt under § 105. Section 105 of the Bankruptcy
Code provides,
The court may issue any order, process, or judgment that is necessary
or appropriate to carry out the provisions of this title. No provision of
this title providing for the raising of an issue by a party in interest
shall be construed to preclude the court from, sua sponte, taking any
action or making any determination necessary or appropriate to
enforce or implement court orders or rules, or to prevent an abuse of
process.
11 U.S.C. § 105(a).
As this Court explained, in Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th
Cir. 2002), the United States Court of Appeals for the Ninth Circuit “held that the
Bankruptcy Code provides a debtor’s exclusive remedy for violations of § 524.”
Dismissal Order, ECF No. 17, at p. 8; Walls, 276 F.3d at 510. Because the
Bankruptcy Code provides the debtor with a remedy whenever any party allegedly has
attempted to collect a debt not owed due to a discharge, the Code also precludes a
debtor from bringing an action in federal district court under the FDCPA for the same
conduct. Dismissal Order, ECF No. 17, at p. 9.
Indeed, to permit a claim under the FDCPA for attempts to collect on a
discharged debt would “circumvent the Bankruptcy Code’s remedial scheme.” Walls,
276 F.3d at 504; see also Goad v. MTC Group, 2010 WL 1407257, at *3 (S.D. Cal.
April 6, 2010), aff’d, 576 F. App’x 707 (9th Cir. 2014) (“Plaintiff’s FDCPA and
RFDCPA claims clearly depend on the legal status of Plaintiff’s debt and would
require the Court to determine whether the debt was discharged or not. Therefore,
Plaintiff’s claims are precluded.”).
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3:16-cv-01992-WQH-WVG – 7 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
In its Dismissal Order, this Court recognized that Walls is squarely on point and
compelled the dismissal of Plaintiff’s FAC. Plaintiff’s SAC brings the very same
claims, again dependent on the legal effect of the Bankruptcy Court’s discharge order,
despite Plaintiff’s counsel’s sham attempts to excise express references to Plaintiff’s
bankruptcy.
In Plaintiff’s dismissed FAC, Plaintiff’s allegations under the FDCPA—only
some of which explicitly mentioned the discharge—were correctly dismissed in their
entirety by this Court because the Bankruptcy Code’s discharge injunction
enforcement mechanism precluded their assertion in this Court.
Plaintiff claimed that the alleged misrepresentations in Ditech’s March and June
2016 collection letters violated, inter alia, §§ 1692e, 1692e(2)(A), 1692e(10) and
1692(f) of the FDCPA by:
A) Falsely stating, “Because of the interest, late charges, and other
charges that may vary from day to day, the amount due on the day you
pay may be greater”, when in reality no interest, late charges, or other
charges were being added, which appeared to be an attempt to trick
Plaintiff into paying the amount alleged in the March 2016 letter
promptly to avoid any further charges being added;
B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff’s contractual obligation
to still pay the purported debt even though any obligation had been
discharged;
C) Falsely implying that the debt remained viable and enforceable by
using the word “settlement” with the intention of implying to Plaintiff
that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then
Defendant would exercise its available remedies, with the intention of
implying to Plaintiff that he could be sued upon the purported debt
even though any obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to
be reported to the IRS when in reality there are certain exceptions to
mandatory reporting.
FAC ¶¶ 64-65, 68, 69; see also id. ¶¶ 66, 67, 70, 71.
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3:16-cv-01992-WQH-WVG – 8 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
Here, as in his FAC, Plaintiff alleges that Ditech violated § 1692e of the
FDCPA by sending letters attempting to collect a debt that Plaintiff no longer owed.
Compare FAC ¶¶ 64-65, 68, 69, with SAC ¶¶ 18-23, 45-48, 54. Here, as in his FAC,
“no interest, late charges, or other charges were incurring” because—as a matter of
public record—Plaintiff’s debt had been discharged in bankruptcy. Compare SAC
¶¶ 20, 46, with FAC ¶ 43. Here, as in his FAC, Plaintiff alleges that “as a direct
result” of Ditech’s attempts to collect the debt that Plaintiff no longer owed, Plaintiff
was confused about whether Plaintiff owed Ditech any money at all and any related
consequences of doing so. Compare FAC ¶¶ 43, 46, 64-71, with SAC ¶¶ 18-23.
And accordingly, here, as in Plaintiff’s FAC, the merits of the SAC will require
“a determination … regarding the underlying § 524 discharge of Plaintiff’s alleged
debt.” Dismissal Order, ECF No. 17, at p. 9. This is true as a matter of law
regardless of whether the SAC uses the word “discharge.” See supra at pp. 6-7; FAC
¶¶ 64-68, 50-52. Indeed, the Court’s Dismissal Order previously dismissed claims
based on the Bankruptcy Code, regardless of whether the FAC used the buzz word
“discharge” when alleging violations of the FDCPA or defining putative Classes B
and C. See FAC ¶¶ 64-68; Dismissal Order, ECF No. 17, at p. 9 (“The Court finds
that the claims alleged by Plaintiff, including those alleged in Class B and Class C,
hinge on the allegation that the debt had been discharged.”).
To be clear: In his SAC, Plaintiffs alleges liability to a putative “Class A” and
“Class B” that are identical to the (dismissed) “Class B” and “Class C” alleged in
Plaintiff’s FAC. Compare SAC ¶¶ 26-29, with FAC ¶¶ 51, 52.
The Walls preclusion doctrine cannot be avoided by simply deleting express
references to a “discharge” and “bankruptcy” from a pleading, while continuing to
attack the same alleged conduct. Such a result would condone artful pleading, in
which plaintiffs obscure the factual bases of their claims, and circumvent the
Bankruptcy Court’s discharge injunction mechanism.
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3:16-cv-01992-WQH-WVG – 9 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
By alleging that he “suffered bewilderment and confusion” as to whether
Plaintiff owed Ditech any money at all and any attendant consequences of such debt,
Plaintiff cannot avoid the only grounds he had for contending that the debt was not
owed—his 1998 Discharge Order. Plaintiff’s amended allegations remain foreclosed
by the Bankruptcy Code.
C. Plaintiff’s SAC Should Be Dismissed With Prejudice.
Plaintiff’s SAC is Strike Three in his at-bat to recover against Ditech for alleged
attempts to collect debt discharged in bankruptcy. Strike One was Plaintiff’s initial
Complaint in which he alleged that Ditech attempted to circumvent the governing
bankruptcy discharge order by making various representations about Plaintiff’s
discharged debt to make him pay back debt he no longer owed. Compl., ECF No. 1,
¶¶ 31, 33, 36-39. Ditech filed a Motion to Dismiss on the grounds that Plaintiff’s
claims failed the notice-pleading standard of Rule 12(b)(6) and were foreclosed by the
Bankruptcy Code’s discharge injunction enforcement mechanism. See ECF No. 9. In
response, Plaintiff filed a FAC.
Strike Two was Plaintiff’s FAC, in which he added a litany of legal conclusions
and Forsberg citations, seemingly in response to Ditech’s notice-pleading argument,
to emphatically confirm that his dispute with Ditech is that Ditech wrongfully
attempted to collect debt he no longer owed due to the discharge order. FAC ¶¶ 29,
37, 39, 43-47; see also Def.’s Mot. to Dismiss at Exhibit B (redline compare of
Plaintiff’s initial Complaint with Plaintiff’s FAC). Plaintiff alleged that Ditech
engaged in various misrepresentations in its March and June 2016 letters “to trick
Plaintiff” into paying “the purported debt even though any obligation by Plaintiff had
been discharged.” Id. ¶¶ 64-71. Plaintiff also attempted to skirt the jurisdictional bar
with the nonsensical theory that despite Plaintiff’s alleged telephone call to Ditech
informing Ditech that it was improperly attempting to collect discharged debt, the
Bankruptcy Court’s discharge order could never bind Ditech as the successor-in-
interest to the original creditor. Id. ¶¶ 31-33. The Court properly dismissed the FAC.
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3:16-cv-01992-WQH-WVG – 10 –
DEFENDANT DITECH FINANCIAL, LLC’S MEM. OF LAW IN SUPP. OF MOTION TO DISMISS
Now, Plaintiff has again swung and missed and it is Strike Three. Plaintiff’s
SAC asserts the very same claims but takes back the many references to the discharge.
Even if Plaintiff had pled facts to support his legal conclusion about a consumer debt
(which he did not), Plaintiff’s pleading does nothing to resuscitate his claims against
Ditech because, however clothed, Plaintiff’s claims continue to depend on the legal
effect of the discharge of his debt in bankruptcy. Accordingly, Plaintiff’s SAC should
be dismissed with prejudice. See Reddy, 912 F.2d at 296; Sabherwal v. Bank of N.Y.
Mellon, No. 11-cv-2874 WQH-BGS, 2013 WL 4833940, at *11 (S.D. Cal. Sept. 10,
2013) (dismissing claims with prejudice where plaintiffs failed to cure deficiencies of
prior pleadings).
V. CONCLUSION
For the foregoing reasons, Ditech respectfully requests that the Court dismiss
Plaintiff’s SAC for failure to state a claim upon which relief can be granted, and with
prejudice. Further litigation of a fourth complaint would be futile and prejudicial.
DATED: June 13, 2017 REED SMITH LLP
By:/s/ Mathew M. Wrenshall
Mathew M. Wrenshall (SBN 284466)
Perry A. Napolitano (admitted pro hac vice)
Counsel for Defendant
Ditech Financial LLC
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3:16-cv-01992-WQH-WVG
DEFENDANT’S REQUEST FOR JUDICIAL NOTICE
Mathew M. Wrenshall (SBN 284466)
Email: mwrenshall@reedsmith.com
Perry A. Napolitano (admitted pro hac vice)
Email: pnapolitano@reedsmith.com
REED SMITH LLP
355 South Grand Avenue, Suite 2900
Los Angeles, CA 90071
Telephone: +1 213 457 8000
Facsimile: +1 213 457 8080
Counsel for Defendant
Ditech Financial LLC
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
KENDALL SCALLY, individually and
on behalf of all others similarly
situated,
Plaintiff,
vs.
DITECH FINANCIAL LLC,
Defendant.
Case No.: 3:16-cv-01992-WQH-WVG
REQUEST FOR JUDICIAL NOTICE
IN SUPPORT OF DEFENDANT’S
MOTION TO DISMISS PLAINTIFF’S
SECOND AMENDED COMPLAINT
DATE: July 17, 2017
TIME: NO ORAL ARGUMENT
UNLESS REQUESTED BY
THE COURT
PLACE: Courtroom 14B, Suite 1480
333 West Broadway
San Diego, CA 92101
Hon. William Q. Hayes, District Judge
Hon. William V. Gallo, Magistrate Judge
[Filed concurrently with Defendant’s
Notice of Motion and Motion to Dismiss
Plaintiff’s Second Amended Complaint;
[Proposed] Order and Judgment;
Memorandum of Points and Authorities in
Support thereof]
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3:16-cv-01992-WQH-WVG – 1 –
DEFENDANT’S REQUEST FOR JUDICIAL NOTICE
TO THIS HONORABLE COURT AND TO ALL PARTIES AND THEIR
ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that Defendant DITECH FINANCIAL LLC
(“Ditech”) hereby requests, pursuant to Federal Rule of Evidence 201 and in further
support of Ditech’s Motion to Dismiss Plaintiff’s Second Amended Complaint, that
the Court take judicial notice of the following publicly recorded documents:
1. Plaintiff’s First Amended Complaint filed in the above-captioned matter
at ECF No. 11 on September 30, 2016, and attached hereto as Exhibit 1.
2. Bankruptcy Discharge Order entered on September 1, 1998, at ECF No.
5, by the United States Bankruptcy Court for the Eastern District of Washington in In
re Kendall John Scally, Case No. 98-3485-PCW7 (Bankr. E.D. Wash.), and attached
hereto as Exhibit 2.
DATED: June 13, 2017 REED SMITH LLP
By:/s/ Mathew M. Wrenshall
Mathew M. Wrenshall (SBN 284466)
Perry A. Napolitano (admitted pro hac vice)
Counsel for Defendant
Ditech Financial LLC
Case 3:16-cv-01992-WQH-WVG Document 24-4 Filed 06/13/17 PageID.462 Page 2 of 27
EXHIBIT 1
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FIRST AMENDED CLASS ACTION COMPLAINT
Alex Asil Mashiri, Esq. (SBN 283798)
MASHIRI LAW FIRM
A Professional Corporation
11251 Rancho Carmel Drive #500694
San Diego, California 92150
Telephone: (858) 348-4938
Fax: (858) 348-4939
Semnar & Hartman, LLP
Babak Semnar, Esq. (SBN 224890)
Jared M. Hartman (SBN 254860)
400 S. Melrose Drive, Suite 209
Vista, California 92081
Telephone: (951) 293-4187
Fax: (888) 819-8230
Attorneys for Plaintiff KENDALL SCALLY
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
KENDALL SCALLY, individually and
on behalf of all others similarly situated,
Plaintiffs,
v.
DITECH FINANCIAL, LLC,
Defendants.
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Case No. 3:16-cv-01992-WQH-WVG
CLASS ACTION
FIRST AMENDED CLASS ACTION
COMPLAINT
FOR VIOLATION OF:
1. THE FAIR DEBT COLLECTION
PRACTICES ACT; AND
2. THE ROSENTHAL FAIR DEBT
COLLECTION PRACTICES ACT
[DEMAND FOR JURY TRIAL]
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FIRST AMENDED CLASS ACTION COMPLAINT
1. The United States Congress has found abundant evidence of the use of abusive,
deceptive, and unfair debt collection practices by many debt collectors, and has
determined that abusive debt collection practices contribute to the number of
personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of
individual privacy. Congress wrote the Fair Debt Collection Practices Act, 15
U.S.C. § 1692 et seq. (hereinafter “FDCPA”), 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.
2. The California legislature has determined that the banking and credit system and
grantors of credit to consumers are dependent upon the collection of just and
owing debts and that unfair or deceptive collection practices undermine the public
confidence that is essential to the continued functioning of the banking and credit
system and sound extensions of credit to consumers. The Legislature has further
determined that there is a need to ensure that debt collectors exercise this
responsibility with fairness, honesty and due regard for the debtor’s rights and that
debt collectors must be prohibited from engaging in unfair or deceptive acts or
practices.
3. KENDALL SCALLY, (“Plaintiff”), through his attorneys, brings this action to
challenge the actions of DITECH FINANCIAL, LLC (“DITECH” or
“Defendant”), with regard to attempts by Defendant to unlawfully and abusively
collect a debt allegedly owed by Plaintiff, and this conduct caused Plaintiff
damages.
4. Plaintiff makes these allegations on information and belief, with the exception of
those allegations that pertain to a plaintiff, which Plaintiff alleges on personal
knowledge.
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FIRST AMENDED CLASS ACTION COMPLAINT
5. While many violations are described below with specificity, this Complaint alleges
violations of the statutes cited in their entirety.
6. Unless otherwise stated, all the conduct engaged in by Defendant took place in
California.
7. Any violations by Defendants were knowing, willful, and intentional, and
Defendants did not maintain procedures reasonably adapted to avoid any such
specific violation.
8. Through this complaint, Plaintiff does not allege that any state court judgment was
entered against Plaintiff in error, and Plaintiff does not seek to reverse or modify
any judgment of any state court.
9. Through this complaint, Plaintiff does not allege that any state court judgment was
entered against Plaintiff in error, and Plaintiff does not seek to reverse or modify
any judgment of any state court.
JURISDICTION AND VENUE
10. This action arises out of Defendant's violations of the Fair Debt Collection
Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”) and the Rosenthal Fair Debt
Collection Practices Act, California Civil Code §§ 1788-1788.32 (“Rosenthal
Act”).
11. Plaintiff resides in the City of San Diego, which is located in the County of San
Diego, California.
12. DITECH is a business whose principal place of business is located in the City of
Tempe, State of Arizona.
13. DITECH regularly does business and has the capacity to sue within the County of
San Diego, California, and therefore personal jurisdiction is established and venue
is proper pursuant to 28 U.S.C. § 1391(b)(1) and § 1391(c)(2).
14. Jurisdiction of this Court arises under 28 U.S.C. § 1367 for supplemental state
claims.
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FIRST AMENDED CLASS ACTION COMPLAINT
15. DITECH sent collection letters to Plaintiff, among other actions, to collect this
alleged debt.
16. Because Defendant actively does business within the county of San Diego in the
State of California and the action giving rise to the claim took place in the County
of San Diego, California, personal jurisdiction is established.
17. Venue is proper pursuant to 28 U.S.C. § 1391b(1) and § 1391b(2). At all times
relevant, Defendant conducted business within the County of San Diego, State of
California.
PARTIES
18. Plaintiff is a natural person who resides in the City of San Diego, State of
California.
19. Defendant DITECH is located in the City of Tempe, State of Arizona.
20. Plaintiff is a natural person allegedly obligated to pay a debt, and is a consumer‚ as
that term is defined by 15 U.S.C. § 1692a(3).
21. Defendant is a person who uses an instrumentality of interstate commerce or the
mails in a business the principal purpose of which is the collection of debts, or
who regularly collect or attempt to collect, directly or indirectly, debts owed or
due or asserted to be owed or due another and are therefore debt collectors as that
phrase is defined by 15 U.S.C. § 1692a(6).
22. Plaintiff is a natural person from whom a debt collector sought to collect a
consumer debt which was due and owing or alleged to be due and owing from
Plaintiff, and is a debtor as that term is defined by California Civil Code §
1788.2(h).
23. Defendant, in the ordinary course of business, regularly, and on behalf of
themselves or others, engage in debt collection as that term is defined by
California Civil Code § 1788.2(b), are therefore debt collectors as that term is
defined by California Civil Code § 1788.2(c).
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FIRST AMENDED CLASS ACTION COMPLAINT
24. This case involves money, property or their equivalent, due or owing or alleged to
be due or owing from a natural person by reason of a consumer credit transaction.
As such, this action arises out of a consumer debt and “consumer credit” as those
terms are defined by Cal. Civ. Code § 1788.2(f).
FACTUAL ALLEGATIONS
25. Sometime in the year 1996, Plaintiff is alleged to have incurred certain financial
obligations with HFC Company, LLC, whereby he received a line of credit for his
use within his personal life for everyday purchases.
26. This financial obligation was primarily for personal, family or household purposes
and are therefore a “debt” as that term is defined by 15 U.S.C. §1692a(5).
27. These alleged obligations were money, property, or their equivalent, which is due
or owing, or alleged to be due or owing, from a natural person to another person
and are therefore a “debt” as that term is defined by California Civil Code
§1788.2(d), and a “consumer debt” as that term is defined by California Civil
Code §1788.2(f).
28. Sometime thereafter, but before January 1, 2016, Plaintiff allegedly fell behind in
the payments allegedly owed on the alleged debt.
29. Plaintiff ultimately had the debt discharged by way of bankruptcy in the year 1998,
while the debt was still in the possession of the original creditor.
30. Plaintiff’s bankruptcy petition listed the original creditor as a creditor holding an
interest in the debt that is to be subject of Plaintiff’s petition for discharge.
31. Plaintiff did not include Defendant Ditech as a creditor to be included in the
petition, because Ditech did not become involved in the account until sometime
years later in 2014.
32. Because Defendant Ditech was not named in the bankruptcy petition as a creditor,
Ditech was therefore never issued an injunction by the bankruptcy court to prohibit
Ditech from collecting thereupon.
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FIRST AMENDED CLASS ACTION COMPLAINT
33. Because Defendant Ditech was never issued an injunction by the bankruptcy court,
the bankruptcy court therefore has no jurisdiction over Ditech.
34. Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff’s claims
against Ditech are therefore not pre-empted by the bankruptcy court’s jurisdiction.
35. Accordingly, the Southern District of California has already reached the same
conclusion in Forsberg v. Fidelity National Credit Services, Ltd. (So. Dist. Calif.
Feb. 26, 2004) 2004 U.S. Dist. LEXIS 7622, at **17-21 wherein Judge Sabraw
ruled that the defendant Fidelity National Credit Services, Ltd. could not obtain a
dismissal of the FDCPA claims alleged against it based upon the bankruptcy
court’s jurisdiction since defendant Fidelity National Credit Services, Ltd. had
never been included in the bankruptcy petition or bankruptcy discharge or
bankruptcy court injunction, as defendant Fidelity National Credit Services, Ltd.
did not become involved in the account at issue until after the plaintiff Forsberg
had already filed his bankruptcy petition, much like Ditech in this matter.
36. Therefore, just as the Southern District in Forsberg found that the Walls v. Wells
Fargo Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable since Walls
involved the plaintiff pursuing allegations against the creditor that had been
specifically included in the bankruptcy court injunction whereas Forsberg
involved the plaintiff pursuing allegations against an entity attempting to collect
upon the discharged debt but the specifically named defendant had not been
included in the bankruptcy court injunction, the same applies to Ditech in the
instant matter.
37. Defendant first attempted to contact Plaintiff in an attempt to collect upon the
discharged debt by way of letter dated March 25, 2016, wherein Defendant Ditech
informed Plaintiff that the rights to collect upon the account had been transferred
to Ditched in June 2014.
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FIRST AMENDED CLASS ACTION COMPLAINT
38. This communication to Plaintiff was a “communication” as that term is defined by
15 U.S.C. § 1692a(2), and an “initial communication” consistent with 15 U.S.C. §
1692g(a).
39. The March 25, 2016 collection notices stated that “Because of interest, late
charges, and other charges that may vary from day to day, the amount due on the
day you pay may be greater.” However, no interest, late charges, or other charges
were incurring. In fact, subsequent communication on June 20, 2016, from the
Defendant indicates that the debt remained the same and was not increasing due to
interest, late charges, or other charges. As such, this statement is false, deceptive,
and misleading. See Howell v. Eagle Accounts Group, Inc., 2015 WL 1097397
(S.D. Ind. 2015).
40. Upon information and belief, this was an attempt by Ditech to force Plaintiff into
paying the full amount claimed to be due in the March 2016 letter in order to avoid
any further increase of the amount.
41. This communication was a “debt collection” as Cal. Civ. Code 1788.2(b) defines
that phrase, and an “initial communication” consistent with Cal. Civ. Code §
1812.700(b).
42. This letter claimed Plaintiff owes $7,662.12 upon the debt.
43. Plaintiff promptly called Defendant to dispute the legitimacy of the alleged debt,
as it was discharged in bankruptcy and Plaintiff specifically disputes whether or
not he owes any money upon the alleged debt.
44. Furthermore, on June 20, 2016, Defendant sent another dunning letter to Plaintiff
that contained the bold and capitalized words at the top “SETTLEMENT
OPPORTUNITY”, and claimed that Plaintiff has a “contractual obligation” to
fulfill the debt, and claimed that they are giving him the “opportunity to settle [his]
account in full by paying less than the entire amount due”, and giving him a due
date of August 19, 2016, and if Plaintiff does not respond by that date then “we
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FIRST AMENDED CLASS ACTION COMPLAINT
will assume you are not interested in this offer and Ditech may consider exercising
its available remedies”.
45. However, because Plaintiff’s liability upon the debt was discharged by way of
bankruptcy in the year 1998, Ditech has no remedies upon the debt, Ditech cannot
pursue any legal action upon the debt, and therefore any implied threat to sue
Plaintiff and exercise available remedies are all false statements that amount to
misrepresentations about the legal status of the debt.
46. Upon information and belief, Defendant uttered such false statements and
misrepresentations with the intention of scaring Plaintiff into fearing that he may
be sued by Defendant, and to in turn trick him into paying the debt even though he
has no obligation to do so and his liability upon the debt has been discharged.
47. Furthermore, Defendant’s June 20th letter claims, “We are required to report any
debt forgiveness to the Internal Revenue Service”, which is a false statement
because there are many exceptions to IRS reporting requirements and not every
debt forgiveness is required to be so reported. See, Foster v. AllianceOne
Receivables Mgmt., 2016 U.S. Dist. LEXIS 56958, at *4-6 (N. Dist. Ill. April 28,
2016).
48. Because Defendant’s letters above violated certain portions of the federal Fair
Debt Collection Practices Act as these portions are incorporated by reference in
the Rosenthal Fair Debt Collection Practices Act, through California Civil Code §
1788.17, this conduct or omission violated Cal. Civ. Code § 1788.17.
CLASS ACTION ALLEGATIONS
49. Plaintiff brings this action on his own behalf, and on behalf of all others similarly
situated.
CLASS A
50. This action defines “Class A” as follows:
“Class A” is comprised of all persons with addresses within the
state of California who were sent, within one year prior to the
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filing date of this action a “communication” as defined by 15
U.S.C. § 1692a(2) to recover a consumer debt which was
substantially similar to Plaintiff’s Exhibit 1 (June 20, 2016
collection notice), which were not returned undelivered by the
United States Postal Service, to collect a debt from a consumer
whose debt had already been discharged in bankruptcy.
CLASS B
51. This action defines “Class B” as follows:
“Class B” is comprised of all persons with addresses within the
state of California who were sent, within one year prior to the
filing date of this action a “communication” as defined by 15
U.S.C. § 1692a(2) to recover a consumer debt which was
substantially similar to Plaintiff’s Exhibit 2 (March 25, 2016
collection notice), in which the communication included the
language “Because of interest, late charges, and other charges that
may vary from day to day, the amount due on the day you pay
may be greater.”, when no interest was in fact being incurred.
CLASS C
52. This action defines “Class C” as follows:
“Class C” is comprised of all persons with addresses within the
state of California who were sent, within one year prior to the
filing date of this action a “communication” as defined by 15
U.S.C. § 1692a(2) to recover a consumer debt which was
substantially similar to Plaintiff’s Exhibit 1 (June 20, 2016
collection notice), which were not returned undelivered by the
United States Postal Service, in which the communication
included the language “We are required to report any debt
forgiveness to the Internal Revenue Service.”
53. For purposes of this Claim for Relief the class period is one year prior to the filing
of this Complaint.
54. The Classes are composed of hundreds of persons, the joinder of which would be
impractical. The individual identities of the individual members are ascertainable
through Defendant’s records or by public notice.
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55. There is a well-defined community of interest in the questions of law and fact
involved affecting the members of the Classes. The questions of law and fact
common to the Classes predominate over questions affecting only individual class
members, and include, but are not limited to, the following:
A) Whether Defendant violated the FDCPA;
B) Whether Defendant violated the Rosenthal Act;
C) Whether members of the Class are entitled to the remedies under the
FDCPA;
D) Whether members of the Class are entitled to the remedies California’s
Rosenthal Act;
E) Whether members of the Classes are entitled to declaratory relief;
F) Whether members of the Classes are entitled to injunctive relief;
G) Whether members of the Classes are entitled to an award of reasonable
attorneys’ fees and costs of suit pursuant to the FDCPA;
H) Whether members of the Classes are entitled to an award of reasonable
attorneys’ fees and costs of suit pursuant to the California’s Rosenthal
Act; and
I) Whether members of Classes are entitled to any other remedies.
47. Plaintiff will fairly and adequately protect the interests of the Classes.
48. Plaintiff has retained counsel experienced in handling class claims as well as
claims involving unlawful collection practices.
49. Plaintiff’s claims are typical of the claims of the Classes, which arises from the
same operative facts involving unlawful collection practices.
50. A class action is a superior method for the fair and efficient adjudication of this
controversy.
51. Class-wide damages are essential to induce Defendant to comply with Federal
and State Law.
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52. The interest of class members in individually controlling the prosecution of
separate claims against Defendant is small because the maximum statutory
damages in an individual FDCPA action is $1,000.00, and an additional
$1,000.00 under the Rosenthal Act. Management of these claims are likely to
present significantly fewer difficulties than those presented in many class
claims, e.g. securities fraud.
53. Defendant has acted on grounds generally applicable to the class, thereby
making appropriate final declaratory relief with respect to the class as a whole.
54. Plaintiff requests certification of a hybrid class combining the elements of Rule
23(b)(3) for monetary damages and Rule 23(b)(2) for equitable relief.
FIRST CAUSE OF ACTION
(Violation of the FDCPA)
15 U.S.C. 1692, et seq.
55. Plaintiff repeats, re-alleges, and incorporates by reference, all other paragraphs.
56. Plaintiff’s bankruptcy petition listed the original creditor as a creditor holding
an interest in the debt that is to be subject of Plaintiff’s petition for discharge.
57. Plaintiff did not include Defendant Ditech as a creditor to be included in the
petition, because Ditech did not become involved in the account until sometime
years later in 2014.
58. Because Defendant Ditech was not named in the bankruptcy petition as a
creditor, Ditech was therefore never issued an injunction by the bankruptcy
court to prohibit Ditech from collecting thereupon.
59. Because Defendant Ditech was never issued an injunction by the bankruptcy
court, the bankruptcy court therefore has no jurisdiction over Ditech.
60. Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff’s claims
against Ditech are therefore not pre-empted by the bankruptcy court’s
jurisdiction.
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61. Accordingly, the Southern District of California has already reached the same
conclusion in Forsberg v. Fidelity National Credit Services, Ltd. (So. Dist.
Calif. Feb. 26, 2004) 2004 U.S. Dist. LEXIS 7622, at **17-21 wherein Judge
Sabraw ruled that the defendant Fidelity National Credit Services, Ltd. could
not obtain a dismissal of the FDCPA claims alleged against it based upon the
bankruptcy court’s jurisdiction since defendant Fidelity National Credit
Services, Ltd. had never been included in the bankruptcy petition or bankruptcy
discharge or bankruptcy court injunction, as defendant Fidelity National Credit
Services, Ltd. did not become involved in the account at issue until after the
plaintiff Forsberg had already filed his bankruptcy petition, much like Ditech in
this matter.
62. Therefore, just as the Southern District in Forsberg found that the Walls v.
Wells Fargo Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable
since Walls involved the plaintiff pursuing allegations against the creditor that
had been specifically included in the bankruptcy court injunction whereas
Forsberg involved the plaintiff pursuing allegations against an entity attempting
to collect upon the discharged debt but the specifically named defendant had not
been included in the bankruptcy court injunction, the same applies to Ditech in
the instant matter.
63. The foregoing acts and omissions constitute numerous and multiple violations
of the FDCPA, including but not limited to each and every one of the above
cited provisions of the FDCPA, 15 U.S.C. § 1692 et seq.
64. In particular, Defendant violated 15 U.S.C. 1692e of the FDCPA by using false,
deceptive, and misleading representations in connection with the collection of
the purported debt by the following conduct:
A) Falsely stating, “Because of interest, late charges, and other charges that
may vary from day to day, the amount due on the day you pay may be greater”,
when in reality no interest, late charges, or other charges were being added,
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which appeared to be an attempt to trick Plaintiff into paying the amount
alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff’s contractual obligation to still pay
the purported debt even though any obligation by Plaintiff had been discharged;
C) Falsely implying to Plaintiff that the debt remained viable and
enforceable by using the word “settlement” with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then Defendant
would exercise its available remedies, with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to be
reported to the IRS when in reality there are certain exceptions to mandatory
reporting.
65. Additionally, Defendant violated 15 U.S.C. 1692e(2)(A) of the FDCPA by
falsely representing the character, amount, and legal status of the purported debt
by the following conduct:
A) Falsely stating, “Because of interest, late charges, and other charges that
may vary from day to day, the amount due on the day you pay may be greater”,
when in reality no interest, late charges, or other charges were being added,
which appeared to be an attempt to trick Plaintiff into paying the amount
alleged in the March 2016 letter promptly to avoid any further charges being
added;
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B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff’s contractual obligation to still pay
the purported debt even though any obligation by Plaintiff had been discharged;
C) Falsely implying to Plaintiff that the debt remained viable and
enforceable by using the word “settlement” with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then Defendant
would exercise its available remedies, with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to be
reported to the IRS when in reality there are certain exceptions to mandatory
reporting.
66. Additionally, Defendant violated 15 U.S.C. 1692e(4) of the FDCPA by falsely
representing that nonpayment of the purported debt would result in the seizure,
garnishment, attachment, or sale of Plaintiff’s property, and such action was not
lawful, by the following conduct:
A) Falsely threatening that if Plaintiff did not pay the debt then Defendant
would exercise its available remedies, with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged
67. Additionally, Defendant violated 15 U.S.C. 1692e(5) of the FDCPA by falsely
threatening to take action that cannot legally be taken, by the following conduct:
A) Threatening a lawsuit against Plaintiff by claiming that it was Plaintiff’s
contractual obligation to still pay the purported debt even though any obligation
by Plaintiff had been discharged;
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B) Threatening a lawsuit against Plaintiff by using the word “settlement”
with the intention of implying to Plaintiff that he could be sued upon the
purported debt even though any obligation by Plaintiff had been discharged;
C) Threatening a lawsuit against Plaintiff by threatening that if Plaintiff did
not pay the debt then Defendant would exercise its available remedies, with the
intention of implying to Plaintiff that he could be sued upon the purported debt
even though any obligation by Plaintiff had been discharged;
68. Additionally, Defendant violated 15 U.S.C. 1692e(10) of the FDCPA by using
false representations and deceptive means in connection with the collection of
the purported debt by the following conduct:
A) Falsely stating, “Because of interest, late charges, and other charges that
may vary from day to day, the amount due on the day you pay may be greater”,
when in reality no interest, late charges, or other charges were being added,
which appeared to be an attempt to trick Plaintiff into paying the amount
alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff’s contractual obligation to still pay
the purported debt even though any obligation by Plaintiff had been discharged;
C) Falsely implying to Plaintiff that the debt remained viable and
enforceable by using the word “settlement” with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then Defendant
would exercise its available remedies, with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
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E) Falsely claiming to Plaintiff that any and all debt forgiveness has to be
reported to the IRS when in reality there are certain exceptions to mandatory
reporting.
69. Additionally, Defendant violated 15 U.S.C. 1692f of the FDCPA by using
unfair and unconscionable means in connection with the collection of the
purported debt by the following conduct:
A) Falsely stating, “Because of interest, late charges, and other charges that
may vary from day to day, the amount due on the day you pay may be greater”,
when in reality no interest, late charges, or other charges were being added,
which appeared to be an attempt to trick Plaintiff into paying the amount
alleged in the March 2016 letter promptly to avoid any further charges being
added;
B) Falsely implying to Plaintiff that the debt remained viable and
enforceable by claiming that it was Plaintiff’s contractual obligation to still pay
the purported debt even though any obligation by Plaintiff had been discharged;
C) Falsely implying to Plaintiff that the debt remained viable and
enforceable by using the word “settlement” with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
D) Falsely implying to Plaintiff that the debt remained viable and
enforceable by threatening that if Plaintiff did not pay the debt then Defendant
would exercise its available remedies, with the intention of implying to
Plaintiff that he could be sued upon the purported debt even though any
obligation by Plaintiff had been discharged;
E) Falsely claiming to Plaintiff that any and all debt forgiveness has to be
reported to the IRS when in reality there are certain exceptions to mandatory
reporting.
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70. Additionally, Defendant violated 15 U.S.C. 1692f(1) of the FDCPA by
attempting to collect an amount that was not permitted by law, as any obligation
by Plaintiff to owe anything upon the account had been discharged by way of
bankruptcy.
71. Additionally, Defendant violated 15 U.S.C. 1692f(6) of the FDCPA by
threatening to take non-judicial action to effect dispossession and disablement
when there was no present right to possession of the property claimed as
collateral since any obligation of Plaintiff upon the account had been
discharged.
72. As a result of each and every violation of the FDCPA, Plaintiff is entitled to any
actual damages pursuant to 15 U.S.C. § 1692k(a)(1); statutory damages in an
amount up to $1,000.00 pursuant to 15 U.S.C. § 1692k(a)(2)(A); and,
reasonable attorney’s fees and costs pursuant to 15 U.S.C. § 1692k(a)(3) from
Defendant.
SECOND CAUSE OF ACTION
(Violation of the Rosenthal FDCPA)
Calif. Civ. Code 1788, et seq.
73. Plaintiff repeats, re-alleges, and incorporates by reference, all other paragraphs.
74. Plaintiff’s bankruptcy petition listed the original creditor as a creditor holding
an interest in the debt that is to be subject of Plaintiff’s petition for discharge.
75. Plaintiff did not include Defendant Ditech as a creditor to be included in the
petition, because Ditech did not become involved in the account until sometime
years later in 2014.
76. Because Defendant Ditech was not named in the bankruptcy petition as a
creditor, Ditech was therefore never issued an injunction by the bankruptcy
court to prohibit Ditech from collecting thereupon.
77. Because Defendant Ditect was never issued an injunction by the bankruptcy
court, the bankruptcy court therefore has no jurisdiction over Ditech.
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78. Because the bankruptcy court has no jurisdiction over Ditech, Plaintiff’s claims
against Ditech are therefore not pre-empted by the bankruptcy court’s
jurisdiction.
79. Accordingly, the Southern District of California has already reached the same
conclusion in Forsberg v. Fidelity National Credit Services, Ltd. (So. Dist.
Calif. Feb. 26, 2004) 2004 U.S. Dist. LEXIS 7622, at **17-21 wherein Judge
Sabraw ruled that the defendant Fidelity National Credit Services, Ltd. could
not obtain a dismissal of the FDCPA claims alleged against it based upon the
bankruptcy court’s jurisdiction since defendant Fidelity National Credit
Services, Ltd. had never been included in the bankruptcy petition or bankruptcy
discharge or bankruptcy court injunction, as defendant Fidelity National Credit
Services, Ltd. did not become involved in the account at issue until after the
plaintiff Forsberg had already filed his bankruptcy petition, much like Ditech in
this matter.
80. Therefore, just as the Southern District in Forsberg found that the Walls v.
Wells Fargo Bank, 276 F. 3d 502 (9th Cir. 2002) opinion was distinguishable
since Walls involved the plaintiff pursuing allegations against the creditor that
had been specifically included in the bankruptcy court injunction whereas
Forsberg involved the plaintiff pursuing allegations against an entity attempting
to collect upon the discharged debt but the specifically named defendant had not
been included in the bankruptcy court injunction, the same applies to Ditech in
the instant matter.
81. In Calif. Civ. Code 1788.17, the Calif. Rosenthal Act incorporates all FDCPA
prohibitions and applies them as violations of the Rosenthal Act in addition to
violations of the FDCPA.
82. In Calif. Civ. Code 1788.32, the Calif. Rosenthal Act specifically states that
violations of the Rosenthal Act are in addition to, and cumulative to, any other
violations of any other provision of law
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83. Therefore, the foregoing acts and omissions constitute numerous and multiple
violations of Calif. Civ. Code 1788.17 of the Rosenthal Act, including but not
limited to, each and every one of the above-cited provisions of the Rosenthal
Act, Cal. Civ. Code §§ 1788-1788.32.
84. The Ninth Circuit in Gonzales v. Arrow Fin. Servs., LLC, 660 F.3d 1055, 1066
(9th Cir. 2011) has ruled that the Rosenthal Act, via California Civil Code
section 1788.17, incorporates the Federal FDCPA’s class action damages
provision in 15 U.S.C. section 1692k(a)(2)(B). Specifically, the Ninth Circuit
stated that “in light of the clear statutory language, unequivocal legislative
history, and the unanimous agreement of the courts, we hold that the Rosenthal
Act permits class actions.”
85. As a result of each and every violation of the Rosenthal Act, Plaintiff is entitled
to any actual damages pursuant to Cal. Civ. Code § 1788.30(a); statutory
damages for a knowing or willful violation in the amount up to $1,000.00
pursuant to Cal. Civ. Code § 1788.30(b); and reasonable attorney’s fees and
costs pursuant to Cal. Civ. Code § 1788.30(c) from Defendant.
86. As a result of each and every violation of the Rosenthal FDCPA, Plaintiff is
entitled to actual damages pursuant to California Civil Code section 1788.30(a);
statutory damages under 1692k(a)(2)(A) which is incorporated by California
Civil Code section 1788.17; statutory damages for a knowing or willful
violation in the amount of up to $1,000.00 pursuant to California Civil Code
section 1788.30(b); and reasonable attorney’s fees and costs pursuant to
California Civil Code section 1788.30(c).
PRAYER FOR DAMAGES AND OTHER REMEDIES
WHEREFORE, Plaintiff prays that judgment be entered against Defendant and
Plaintiff be awarded damages from Defendant as follows:
• An award of statutory damages of $1,000.00 pursuant to 15 U.S.C. §
1692k(a)(2)(A) for Plaintiff and each member of the Class;
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• An award of costs of litigation and reasonable attorney’s fees, pursuant
to 15 U.S.C. § 1692k(a)(3);
• An award of statutory damages of $1,000.00 pursuant to Cal. Civ. Code
§ 1788.30(b);An award of costs of litigation and reasonable attorney’s
fees, pursuant to Cal. Civ. Code § 1788.30(c) for Plaintiff and each
member of the Class.
Pursuant to the seventh amendment to the Constitution of the United States of
America, Plaintiff is entitled to, and demands, a trial by jury.
DATED: September 30, 2016 MASHIRI LAW FIRM
A Professional Corporation
By: /s/Alex Asil Mashiri
Alex Asil Mashiri
Attorney for Plaintiff
KENDALL SCALLY
DATED: September 30, 2016 SEMNAR & HARTMAN, LLP
By: s/ Jared M. Hartman
Jared M. Hartman, Esq.
Semnar & Hartman, LLP
Attorneys for Plaintiff
KENDALL SCALLY
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PROOF OF SERVICE
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PROOF OF SERVICE
Scally v. Ditech Financial, LLC Case No.: 3:16-cv-01992-WQH-
WVG
I am employed in the County of San Diego, State of California. I am over the age of 18 and
am not a party to the within action; my business address is 400 South Melrose Drive, Suite 209,
Vista, California 92081. On the date provided below, I served the foregoing document described
below on the interested parties in this action by placing same in a sealed envelope.
PLAINTIFF’S FIRST AMENDED COMPLAINT was served on:
Mathew M. Wrenshall
Perry A. Napolitano
REED SMITH LLP
355 South Grand Avenue, Suite 2900
Los Angeles, CA 90071
Attorneys for Defendant
(BY MAIL) – I caused such envelope(s) with postage thereon fully prepaid to be placed in
the United States mail in Vista, California.
I am “readily familiar” with the firm’s practice of collection and processing correspondence
for mailing. Under that practice, it would be deposited with the U.S. Postal Service on the
same day with postage thereon fully prepaid at Vista, California, in the ordinary course of
business. I am fully aware that on motion of the party served, service is presumed invalid if
the postal cancellation date or postage meter date is more than one day after the date of
deposit for mailing an affidavit.
(BY FACSIMILE) – I caused the above described document(s) to be transmitted to the
offices of the interested parties at the facsimile number(s) indicated above and the activity
report(s) generated by facsimile number (888) 819-8230 indicating on all pages that they were
transmitted.
(BY PERSONAL SERVICE) – I caused such envelope(s) to be delivered by hand to the
office(s) of the addressee(s).
(STATE) – I declare under penalty of perjury under the laws of the State of California that
the above is true and correct.
(FEDERAL) – I declare that I am employed in the office of a member of the bar of this court
at whose direction the service was made. Via Electronic Service: The above-described
documents will be delivered electronically through the court’s ECF/PACER electronic filing
system, as stipulated by all parties to constitute personal service.
Dated: 9-30-16 /s/ Jared M. Hartman
Jared M. Hartman, Esq.
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EXHIBIT 2
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3:16-cv-01992-WQH-WVG – 1 – US_ACTIVE-128367551.1
PROOF OF SERVICE
Mathew M. Wrenshall (SBN 284466)
Email: mwrenshall@reedsmith.com
REED SMITH LLP
355 South Grand Avenue, Suite 2900
Los Angeles, CA 90071
Telephone: +1 213 457 8000
Facsimile: +1 213 457 8080
Counsel for Defendant
Ditech Financial LLC
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
KENDALL SCALLY, individually
and on behalf of all others similarly
situated,
Plaintiff,
vs.
DITECH FINANCIAL LLC,
Defendant.
Case No.: 3:16-cv-01992-WQH-WVG
PROOF OF SERVICE
Compl. Filed: August 9, 2016
Am. Compl. Filed: September 30, 2016
Am. Compl. Dismissed: January 26, 2017
Sec. Am Compl. Filed: May 30, 2017
Hon. William Q. Hayes, District Judge
Hon. William V. Gallo, Magistrate Judge
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3:16-cv-01992-WQH-WVG – 2 –
PROOF OF SERVICE
PROOF OF SERVICE
Kendall Scally v. Ditech Financial, LLC
Case No.: 3:16-cv-01992-WQH-WVG
I am a resident of the State of California, over the age of eighteen years, and not
a party to the within action. My business address is REED SMITH LLP, 355 South
Grand Avenue, Suite 2900, Los Angeles, CA 90071. On June 13, 2017, I served the
following document(s) by the method indicated below:
1. DEFENDANT DITECH FINANCIAL LLC’S NOTICE OF MOTION
AND MOTION TO DISMISS PLAINTIFF’S SECOND AMENDED
COMPLAINT PURSUANT TO FED. R. CIV. P. 12(B)(6)
2. MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
DEFENDANT DITECH FINANCIAL LLC’S MOTION TO DISMISS
PLAINTIFF’S SECOND AMENDED COMPLAINT
3. REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF DEFENDANT’S
MOTION TO DISMISS PLAINTIFF’S SECOND AMENDED
COMPLAINT
4. PROOF OF SERVICE
BY CM/ECF ELECTRONIC DELIVERY: In accordance with the
registered case participants and in accordance with the procedures set forth
at the Court’s website http://www.casd.uscourts.gov/
SEE ATTACHED SERVICE LIST
I declare under penalty of perjury under the laws of the United States that the
above is true and correct. Executed on June 13, 2017, at Los Angeles, California.
/s/ Mathew M. Wrenshall
Mathew M. Wrenshall
Case 3:16-cv-01992-WQH-WVG Document 24-5 Filed 06/13/17 PageID.489 Page 2 of 3
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3:16-cv-01992-WQH-WVG – 3 –
PROOF OF SERVICE
SERVICE LIST
Kendall Scally v. Ditech Financial, LLC
Case No.: 3:16-cv-01992-WQH-WVG
Babak Semnar
Jared M. Hartman
SEMNAR & HARTMAN, LLP
400 S. Melrose Drive, Suite 209
Vista, CA 92081
Telephone: 619.500.0881
Facsimile: 888.819.8230
Attorneys for Plaintiff,
Kendall Scally
Email:
bob@sandiegoconsumerattorneys.com
jodi@sandiegoconsumerattorneys.com
jared@sandiegoconsumerattorneys.com
Alex Asil Mashiri
MASHIRI LAW FIRM
11251 Rancho Carmel Drive, #500694
San Diego, CA 92160
Telephone: 858.348.4938
Facsimile: 858.348.4939
Attorneys for Plaintiff,
Kendall Scally
Email: alexmashiri@yahoo.com
Case 3:16-cv-01992-WQH-WVG Document 24-5 Filed 06/13/17 PageID.490 Page 3 of 3
