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McCoy v. U.S. Collections West, Inc.

United States District Court, D. Arizona

August 11, 2014

Donald and Patricia McCoy, Plaintiffs,
v.
U.S. Collections West, Inc.; Donald Darnell, Defendants.

ORDER

LAWRENCE O. ANDERSON, Magistrate Judge.

This action arises on Defendant Donald Darnell's ("Darnell") Motion to Dismiss Pursuant to Rule 12(b)(6) on the ground that the Complaint fails to state a claim against Darnell upon which relief may be granted. (Doc. 10) In their Complaint, Plaintiffs Donald and Patricia McCoy ("Plaintiffs") allege violations of the Fair Debit Collection Practices Act. (Doc. 1) Darnell contends that 1) the Complaint does not allege sufficient facts to state a plausible claim for relief against him, and 2) he has no personal liability under any legal theory for the alleged acts of a representative, employee or agent of Defendant U.S. Collections West, Inc. ("Collections West"), an Arizona corporation. Plaintiffs oppose the motion.

After considering the parties' briefings and relevant case law, the Court will grant the motion and dismiss Darnell from this action without prejudice.

I. Background

On January 10, 2014, Plaintiffs, through counsel, filed this action, alleging Defendants are debt collectors and violated various provisions of the Fair Debit Collection Practices Act ("FDCPA") in attempting to collect debt from Plaintiffs. Specifically, the Complaint alleges that, inter alia, Darnell "controls U.S. Collections West, Inc[;]" "the Defendants, acting through representatives, employees and/or agents attempted to collect the debt from Plaintiffs[;]" "Defendant's agent falsely advised Plaintiffs that if they contested the garnishment that the amount of the garnishment would go up to $4, 288.17[;]" and "[a]s a consequence of the Defendant's collection activities and communication(s), the Plaintiff (sic) seeks damages pursuant to FDCPA 1692k(a)." (Docs. 1, ¶¶ 15, 27, 34, 44) The Complaint requests the Court grant judgment in favor of "the Plaintiff (sic) and against the Defendant[, ]" and award damages and reasonable attorney's fees and costs pursuant to 15 U.S.C. § 1692k(a)(3). ( Id. at 5-6)

On February 11, 2014, Defendants' common counsel filed Collections West's Answer and the pending dismissal motion. (Docs. 8, 10) All parties have expressly consented in writing to magistrate-judge jurisdiction pursuant to 28 U.S.C. § 636(c). (Docs. 7, 11)

In his Motion to Dismiss, Darnell contends that the Complaint fails to identify the specific representative, employee, or agent of Collections West, who allegedly spoke to one or both Plaintiffs, giving rise to claims alleged herein. Darnell points out that "[n]owhere in Plaintiffs' complaint are there any allegations that Defendant Donald Darnell discussed, talked to or had any contact or involvement with Plaintiffs regarding the collection of the debt on behalf of Defendant U.S. Collections West, Inc." ( Id. ) In other words, there is no allegation that Darnell himself violated the FDCPA. According to Darnell, the only reason Darnell was named personally as a defendant is because Darnell allegedly "controls U.S. Collections, West, Inc." (Doc. 10 at 1) (citing paragraph 15 of the Complaint). Citing Rule 8(a)(2), Fed.R.Civ.P., Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662 (2009), Darnell argues that because the Complaint is "devoid of any facts" against him individually to raise a plausible claim under federal law that Darnell is liable for the misconduct alleged, it fails to state a claim for relief against Darnell personally. ( Id. at 1-2)

Additionally, Darnell contends that the Complaint also fails to allege sufficient facts to show that Darnell could be personally liable for the allegedly wrongful acts of a representative, employee or agent of Collections West under any cognizable legal theory. Even assuming as true, as the Court must, that Collections West is an Arizona corporation controlled by Darnell, he claims that the Complaint does not allege sufficient facts to support a cognizable legal theory against him for the conduct of others employed by Collections West. ( Id. at 3) (citing Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).

In their Response to Defendant Darnell's Motion to Dismiss, Plaintiffs initially noted that "[i]f discovery shows that Darnell was not personally involved in the conversations or did not personally direct his agent resulting in the alleged violations, Plaintiff (sic) agrees that the suit against Darnell personally should be dismissed." (Doc. 17, ¶ 5 at 2) Later, Plaintiffs argue that "[t]aking all of the allegations of Plaintiffs' Complaint as true, Plaintiff (sic) has stated plausible claims against Defendant Darnell for violation of the FDCPA." ( Id. at 4) Specifically, Plaintiffs write that the Complaint "alleges that Defendant Darnell or his agent falsely stated that if Plaintiffs contested the garnishment, that the amount of the garnishment would go up to $4, 288.17... [and] that Defendants had no legal authority to raise the garnishment from $1, 362.88 to $4, 288.17 and that Defendants' false statements were in violation of 15 U.S.C. § 1692e[.]" ( Id. )

Plaintiffs' Response does not address Darnell's asserted argument that the Complaint does not allege sufficient facts to support a cognizable legal theory against him for the conduct of others employed by Collections West.

II. Standard of Review

Federal Rule of Civil Procedure 8(a)(2) requires that each claim in a pleading be supported by "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a). To meet this requirement, the Supreme Court has held that an "entitlement to relief" requires "more than labels and conclusions... Factual allegations must be enough to raise a right to relief above a speculative level." Twombly, 550 U.S. at 555. A complaint or counterclaim must contain "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570); see also Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). Even where a complaint has the factual elements of a cause of action present, but is factually scattered throughout the complaint and not organized into a "short and plain statement of the claim, " it may be dismissed for failure to satisfy Rule 8(a). Sparling v. Hoffman Constr. Co., 864 F.2d 635, 640 (9th Cir. 1988). A motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted "tests the legal sufficiency of a claim." Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)).

Establishing the plausibility of a complaint's allegations is a two-step process that is "context-specific" and "requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679; see also Eclectic Properties East, LLC v. Marcus & Millichap Co., 751 F.3d 990, 995-96 (9th Cir. 2014). First, a district court should "identif[y] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. Then, a court should "assume the[ ] veracity" of "well pleaded factual allegations" and "determine whether they plausibly give rise to an entitlement to relief." Id. "Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief." Id. at 678 (citation omitted). When considering plausibility, courts must also consider an "obvious alternative explanation" for defendant's behavior. Id. at 682 (quoting Twombly, 550 U.S. at 567).

Dismissal is also proper where a complaint does not make out a cognizable legal theory or fails to allege sufficient facts to support a cognizable legal theory. Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d ...


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