United States District Court, D. Arizona
ORDER
Honorable John J. Tuchi United States District Judge
At
issue is Plaintiff Dung Thi Ta's Motion for Default
Judgment (Doc. 15) against Defendant Sean Cannon and
Defendant Cannon Law Firm, PLLC (collectively,
“Defendants”), which is supported by the
Declaration of Daniel Huynh (Doc. 15-1, at 7).
I.
Background
In her
First Amended Complaint (Doc. 9, FAC), Plaintiff alleges that
Defendants, on behalf of the Cambridge Estates Homeowners
Association (the “Association”), filed a
foreclosure action against her in the Superior Court of
Maricopa County (the “state court action”)
seeking to recover $10, 996.00 that Plaintiff purportedly
owed to the Association. (FAC ¶¶ 11, 13-14.) In the
state court action, Defendants filed a motion for entry of
judgment and a ledger in support, which purportedly itemized
the amounts Plaintiff owed. (FAC ¶¶ 15-16.) The
state court granted default judgment against Plaintiff in the
amount of $12, 707.33, plus interest (the “State Court
Judgment”).[1] (FAC, Ex. 3.) Defendants then obtained
a Writ of Special Execution (the “Writ”) that
included $2, 920.00 in costs in addition to the $12, 707.33
awarded in the State Court Judgment. (FAC ¶ 46.)
In the
current action, Plaintiff alleges that Defendants
“falsely inflated the amount of the alleged debt owed
to the Association” in the state court action. (FAC
¶ 45.) Plaintiff contends that Defendant Cannon authored
the ledger he submitted to the state court, the ledger failed
to include a $3, 335.00 payment made on Plaintiff's
account, and the ledger included two fictitious entries for
“special assessments” totaling $4, 275.00 (FAC
¶¶ 16, 18, 26, 32.) Plaintiff further argues that
$2, 720.00 of the costs included in the Writ were
unauthorized. (FAC ¶¶ 46-48.)
Plaintiff
filed this action alleging violations of the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§§ 1692e and 1692f; tortious interference with
contractual relations; and conversion. (FAC ¶¶ 57,
63, 69, 73.) Plaintiff properly served Defendants, (Docs. 10,
11), and Defendants have failed to appear or defend in this
action. Pursuant to Plaintiff's Application, the Clerk of
the Court entered default as to Defendants (Doc. 13) on July
10, 2019. Plaintiff then filed the present Motion for Default
Judgment (Doc. 15).
II.
State Court Judgment
Although
the Court is sympathetic to Plaintiff's position, the
Court lacks the authority to review or modify the State Court
Judgment under the Rooker-Feldman doctrine. See
D.C. Ct. App. v. Feldman, 460 U.S. 462 (1983);
Rooker v. Fid. Tr. Co., 263 U.S. 413 (1923). In this
action, Plaintiff seeks to recover $10, 530.00 in actual
damages and $1, 000.00 in statutory damages. (Mot. at 9.) The
actual damages are comprised of $4, 275.00 for fictitious
special assessments and $3, 335.00 for payments that were
made on Plaintiff's account but not reflected on the
ledger Defendant filed in the state court action, as well as
$2, 920.00 for the additional costs that Defendants included
in the Writ. (Mot. At 4.) If the Court were to consider the
allegedly fictitious special assessments or the payments
Plaintiff allegedly made in the state court action, the Court
would modify portions of the State Court Judgment-an action
barred by the Rooker-Feldman doctrine. The Court
therefore will only evaluate Plaintiff's claims as they
relate to the $2, 920.00 in costs included in the Writ that
are in excess of the State Court Judgment.
The
Court notes that a plaintiff seeking to reverse or nullify a
state court judgment is not without remedy. For example, in
instances when a party aims to challenge an Arizona state
court judgment, Rules 59 and 60(b) of the Rules of Civil
Procedure for the Superior Courts of Arizona provide a
procedure to challenge a final judgment.
III.
Remaining Claims
The
Court now considers Plaintiff's claims to the extent they
do not disrupt the State Court Judgment. Before a district
court enters a judgment of default, it must consider seven
factors: (1) the merits of the plaintiff's substantive
claim; (2) the sufficiency of the complaint; (3) the sum of
money at stake in the action; (4) the possibility of
prejudice to the plaintiff; (5) the possibility of a dispute
concerning material facts; (6) whether the default was due to
excusable neglect; and (7) the strong policy underlying the
Federal Rules of Civil Procedure that favors a decision on
the merits. See Eitel v. McCool, 782 F.2d 1470,
1471-72 (9th Cir. 1986). Upon consideration and balancing of
these factors, the Court finds that they weigh in favor of
entering judgment of default in part against Defendants.
Factors
One and Two-the merits of the claim and the sufficiency of
the complaint-favor entry of judgment with respect to
Plaintiff's claim under 15 U.S.C. § 1692e. Under
§ 1692e, “[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. A debt collector violates this section if it
falsely represents “the character, amount, or legal
status of any debt.” 15 U.S.C. § 1692e(2)(A).
Plaintiff alleges that Defendant Cannon falsely represented
the amount Plaintiff owed to the Association by demanding
payment of unauthorized costs. (FAC ¶ 57.) Plaintiff
contends that $2, 720.00[2] of the costs included in the Writ
would be paid directly to Cannon because no amount
approaching $2, 720.00 was owed to the Association by
Plaintiff post-judgment. (FAC ¶ 46.) Plaintiff further
alleges that the state court never authorized the $2, 720.00
in costs that Defendant Cannon included in the Writ. (FAC
¶¶ 46-48.) The Court takes these well-pleaded
factual allegations of the First Amended Complaint as true,
as it must. Geddes v. United Fin. Grp., 559 F.2d
557, 560 (9th Cir. 1977).
Factors
Four and Six-the possibility of prejudice and whether default
was due to excusable neglect-also favor entry of judgment.
Plaintiff has diligently prosecuted this matter, and
Defendant Cannon, who received proper service and is trained
in the law yet failed to participate in any way, is unlikely
to be able to demonstrate excusable neglect. Factor Three-the
amount of money at stake-further favors entry of judgment.
In
addition to the $2, 720.00 in actual damages addressed above,
Plaintiff also requests $1, 000.00 in statutory damages
pursuant to 15 U.S.C. § 1692k. (FAC ¶ 76; Mot. at
9.) Section 1692k provides that a debt collector who violates
the FDCPA is liable for actual damages and “in the case
of any action by an individual, such additional damages as
the court may allow, but not exceeding $1, 000.” 15
U.S.C. § 1692k(a)(2)(A). In determining whether to award
statutory damages, the Court considers “the frequency
and persistence of noncompliance by the debt collector, the
nature of such noncompliance, and the extent to which such
noncompliance was intentional.” 15 U.S.C. §
1692k(b)(1). Plaintiff has set forth sufficient facts
demonstrating Defendants' repeated violations of the
FDCPA, and thus the Court awards $1, ...