United States District Court, D. Arizona
Martha A. McNair, Plaintiff,
Maxwell & Morgan PC, et al., Defendants.
DAVID G. CAMPBELL, District Judge.
Defendant W. William Nikolaus has filed a motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Doc. 12. For the reasons set forth below, the Court will deny the motion.
Defendant has also filed a motion to strike Phillip Ticktin's "friend of the court" brief. Doc. 16. The motion is fully briefed and no party has requested oral argument. The Court will deny the motion.
I. Defendant's Motion to Dismiss.
Plaintiff alleges that on August 3, 2004 she acquired real property located at 1144 East Temple Court in Gilbert, Arizona (the "Property"). Doc. 1, ¶ 9. The Property is part of the Neely Commons Phase 1 subdivision and is subject to a declaration of covenants, conditions, and restrictions, which includes an obligation on the Property owner to pay assessments to the Neely Commons HOA (the "HOA"), which total about $450.00 annually. Id., ¶ 10.
Defendants named in Plaintiff's complaint represented the HOA in its efforts to collect HOA fees from Plaintiff. Defendant Nikolaus is one of the lawyers who represented the HOA. On December 21, 2009, Defendants filed suit in Maricopa County Highland Justice Court on behalf of the HOA seeking to recover $697 in unpaid HOA fees (the "First Lawsuit"). Id., ¶ 12. Plaintiff was not represented by counsel. Id., ¶ 13. In November 2010, Defendants obtained a judgment in the First Lawsuit for $1, 466.80, which included costs, attorney's fees, and unpaid HOA fees. Id., ¶ 14.
On April 30, 2012, Defendants filed a second suit in Maricopa County Superior Court on behalf of the HOA seeking to foreclose Plaintiff's interest in the Property and to recover $4, 027.24 of allegedly unpaid HOA fees. Id., ¶ 15. On June 27, 2012, Plaintiff and Defendants signed a document entitled "Stipulation for Judgment on Foreclosure" (the "Stipulation") and lodged a proposed order approving the stipulation. Id., ¶ 17. The Stipulation provided that the HOA would not execute on any judgment if Plaintiff made an initial payment of $2, 500 by July 5, 2012 and if she made 12 monthly payments of $250 thereafter until the Judgment was paid in full. Id., ¶ 20. On July 12, 2012, the Superior Court accepted the Stipulation. Id., ¶ 18. Plaintiff alleges that the Stipulation included numerous provisions that are contrary to Arizona law, including a reduction of Plaintiff's statutory redemption period from six months to 30 days, a waiver of Plaintiff's personal property exemptions under A.R.S. § 33-1121 et seq., which is statutorily prohibited by A.R.S. § 33-1132, an authorization to evict Plaintiff without adherence to Arizona law, and an award of future assessments, attorneys' fees, and costs. Id., ¶ 32.
Plaintiff alleges that she made the first 11 payments totaling $5, 000. Id., ¶ 22. In May 2013, after making her eleventh payment, Plaintiff submitted a letter requesting a written statement of the balance owed under the Stipulation. Id., ¶ 23. Defendants did not respond to Plaintiff's letter until August 2013, and even then did not tell Plaintiff the balance that remained to be paid. Id., ¶ 26. Instead, they mailed her a copy of the Stipulation and asked her what she planned to do going forward. Id. In September 2013, Plaintiff again requested a statement of her account. Id., ¶ 27. Defendants again refused to provide a statement of the account. Id., ¶ 28. As a result, Plaintiff tendered payment of $275.74, which she believed was more than what was required under the Stipulation. Id. Notwithstanding Plaintiff's payment, Defendants treated the Stipulation as if it had been breached and sought to execute on Plaintiff's property. Id., ¶ 29.
On November 6, 2013, Defendants obtained a writ of special execution relating to the Stipulation to have the Property sold at a sheriff's sale. Id., ¶ 30. The writ of special execution was exclusively drafted by Defendants, included amounts not owed under the Stipulation, and did not credit all previous payments made by Plaintiff under the Stipulation. Id., ¶¶ 34-36. On January 9, 2014, the Maricopa County Sheriff conducted a sheriff's sale and sold the property. Id., ¶ 37.
Plaintiff instituted this action on April 24, 2014, alleging that Defendants' actions violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA").
B. Legal Standard.
1. Rule 12(b)(1): Subject Matter Jurisdiction.
The defense of lack of subject matter jurisdiction may be raised at any time by the parties or the Court. See Fed.R.Civ.P. 12(h)(3); Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983). "A Rule 12(b)(1) jurisdictional attack may be facial or factual." Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004); see Thornhill Publ'g Co. v. Gen. Tel. & Elecs., 594 F.2d 730, 733 (9th Cir. 1979). "In a facial attack, the challenger asserts that the allegations contained in the complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Safe Air for Everyone, 373 F.3d at 1039. In resolving a ...