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Baker v. Midland Funding LLC

United States District Court, Ninth Circuit

January 30, 2014

Christine Baker, Plaintiff,
v.
Midland Funding LLC, et al., Defendants.

ORDER

DAVID G. CAMPBELL, District Judge.

Defendants Midland Funding, LLC and Midland Credit Management, Inc. have filed a motion for judgment on the pleadings and Defendant Bursey & Associates P.C. has joined the motion. Doc. 23, 26. The motion has been fully briefed. Docs. 47, 52, 53. Plaintiff has also filed a motion for leave to amend her complaint and to join Equifax Information Services as a defendant. Doc. 27. That motion has also been fully briefed. Docs. 37, 38, 48. The Court will grant the motion for judgment on the pleadings and grant the motion to amend with respect to Plaintiff's FCRA claims.[1]

The briefs filed by all of the parties violate this Court's local rule on font size, including font size in footnotes. See LRCiv 7.1(b)(1). The parties shall comply with this local rule in all future filings.

I. Background.

On June 11, 2012, Defendant Midland Funding LLC ("Midland") filed suit against Plaintiff Christine Baker in Justice Court in Kingman, Arizona for failure to pay an HSBC credit card. Plaintiff was served with the summons and complaint on June 19, 2012. The parties participated in court-ordered mediation on October 16, 2012. Baker defended the action by asserting that the claim was barred by the statute of limitations. On February 25, 2013, the Justice Court granted Baker's motion for summary judgment because the statute of limitations had run before Midland had filed its claim. Midland did not appeal the ruling.

On June 18, 2013, pro se Plaintiff filed her complaint in this case in the Justice Court in Kingman, alleging violations of the Fair Debt Collection Practices Act ("FDCPA") by Defendants Midland, Midland Credit Management, Inc., and Bursey & Associates, P.C. Plaintiff alleged misconduct during the litigation of the debt collection action, including filing of an action that Defendants knew or should have known was time-barred, as well as provision of false and misleading information to credit bureaus and the failure of debt collectors to send written information about the alleged debt. The case was removed to federal court on July 3, 2013.

II. Motion for Judgment on the Pleadings.

Defendants move for judgment on pleadings pursuant to Rule 12(c), alleging that Plaintiff's FDCPA claims were not brought within one year as required by 15 U.S.C. § 1692k (d). Defendants cite the recent decision in Lyons v. Michael & Assocs., 2013 WL 4680179 (S.D. Cal. Aug. 28, 2013), for the premise that the statute of limitations begins to run on the date an offending lawsuit is filed. Doc. 23 at 4. Defendants argue that because Midland filed the underlying lawsuit on June 11, 2012, and Baker filed the complaint in this case on June 18, 2013, Baker's FDCPA claim is time-barred.

An FDCPA claim must be brought "within one year from the date on which the violation occurs." 15 U.S.C. § 1692k(d). Naas v. Stolman, 130 F.3d 892, 893 (9th Cir.1997) (one-year statute of limitations for FDCPA claims began to run on the date an offending lawsuit was filed). The only exception to this rule under Ninth Circuit case law arises when a party is not properly served, in which case the relevant date is the date the plaintiff discovered or could have discovered her cause of action. See Mangum v. Action Collection Serv., Inc., 575 F.3d 935, 940 (9th Cir. 2009). As the Eastern District of California has explained:

Naas only applies to cases where there is no question that the defendant was properly named and served in the underlying collection action. In such cases, the statute of limitations should ordinarily begin to run upon the action's filing. But where the defendant does not receive proper notice in the course of litigation, then, per Mangum, the statute of limitations begins to run when the plaintiff "knows or has reason to know" of the FDCPA violation.

Huy Thanh Vo v. Nelson & Kennard, 931 F.Supp.2d 1080, 1086 (E.D. Cal. 2013).

Plaintiff filed this complaint on June 18, 2013. Doc. 1-1. The underlying civil suit, brought by Midland Funding was filed on June 11, 2012. Although Plaintiff was not served with the summons and complaint until June 19, 2012, there is no allegation that Plaintiff was not properly served under the rules of civil procedure. Plaintiff's claim, therefore, accrued on June 11, 2012 and this case was not filed within one year.

Plaintiff argues that her complaint alleges various post-filing violations of the FDCPA in the manner in which Defendants handled the underlying litigation. Doc. 47 at 2-6. Many of these post-filing allegations are simply that Defendants pursued the lawsuit against Plaintiff despite her assertion that the lawsuit was without merit - an assertion that proved to be true when the Justice Court granted her motion for summary judgment. Id. Plaintiff also alleges misconduct by Bursey & Associates for failure to serve filings by email despite agreement to do so, and failure to respond to a dispositive motion. Id. at 5. Finally, Plaintiff alleges that Defendant filed a motion for summary judgment in the underlying lawsuit "knowing that the collection of the debt was NOT based on a written agreement and that the statute of limitations had expired." Id. Plaintiff's complaint alleges that these actions violate 15 U.S.C. §§ 1692e; 1692e(2A); 1692e(5); 1692e(10); 1692f(1).

The Court does not agree that these post-filing litigation actions by Defendants constitute separate violations of the FDCPA that extend the statute of limitations beyond the date of filing of the underlying lawsuit. Under Ninth Circuit law, "[f]iling a complaint is the debt collector's last opportunity to comply with the Act." Naas, 130 F.3d at 893. If the act of filing was Defendants' last opportunity to comply, it would be inequitable to simultaneously hold Defendants responsible under the ...


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