Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_09-cv-01321/USCOURTS-casd-3_09-cv-01321-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SHADRACK S. GOAD ,

Plaintiff,

CASE NO. 09cv1321 BTM(POR)

ORDER GRANTING MOTION FOR

v. JUDGMENT ON THE PLEADINGS

MCT GROUP, LAW OFFICES OF

ROBERT L. SUSNOW, AND MISSION

FEDERAL CREDIT UNION,

Defendants.

Defendants MCT Group (“MCT”) and Law Offices of Robert L. Susnow (“Susnow”)

(collectively “Defendants”) have filed a motion for judgment on the pleadings. Defendant

Mission Federal Credit Union (“Mission Federal”) was dismissed pursuant to a joint motion

by the parties on September 15, 2009. For the reasons discussed below, Defendants’

motion is GRANTED. 

I. FACTUAL BACKGROUND

Plaintiff alleges that sometime before November 16, 2004, Plaintiff allegedly incurred

certain financial obligations. (Compl. ¶ 19.) Subsequently, Plaintiff allegedly fell behind in

the payments. (Compl. ¶ 22.) Sometime thereafter, but before August 9, 2006, the alleged

debt was assigned, placed, or otherwise transferred to Defendants for collection. (Compl.

¶ 23.) 

Plaintiff filed for bankruptcy protection on October 20, 2006. (Compl. ¶ 25.) Plaintiff’s

debts were discharged under the Bankruptcy Code on January 25, 2007, rendering the

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alleged debts no longer collectable. (Compl. ¶ 25.) Defendants all received notice that

Plaintiff had filed for bankruptcy and that Plaintiff’s debts were subsequently discharged.

(Compl. ¶ 26.) 

On or about March 6, 2009, Defendants applied for garnishment of Plaintiff’s wages.

(Compl. ¶ 24.) Defendant Mission Federal continued to attempt to collect on the debt and

failed to notify and stop MCT and Susnow from collecting on the debt on Mission Federal’s

behalf. (Comp. ¶ 27.)

Plaintiff alleges that through their attempts to collect on a discharged debt, Defendants

violated various provisions of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C.

§§ 1692 et seq. and California’s Rosenthal Fair Debt Collection Practices Act (“RFDCPA”),

Cal. Civ. Code §§ 1788-1788.32.

II. STANDARD

“After the pleadings are closed – but early enough not to delay trial – a party may

move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). Judgment on the pleadings is

proper “when the moving party clearly establishes on the face of the pleadings that no

material issue of fact remains to be resolved and that it is entitled to judgment as a matter

of law.” Hal Roach Studios, Inc. v. Richard Feiner & Co, Inc., 896 F.2d 1542, 1550 (9th Cir.

1989). All allegations of fact by the party opposing the motion are accepted as true, and

construed in the light most favorable to that party. General Conference Corp. of SeventhDay Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir.

1989). 

Courts have discretion to grant Rule 12(c) motions with leave to amend. In re

Dynamic Random Access Memory Antitrust Litigation, 516 F. Supp. 2d 1072, 1084 (N.D. Cal.

2007). Courts also have discretion to grant dismissal on a 12(c) motion, in lieu of judgment,

on any given claim. Id.; see also Amersbach v. City of Cleveland, 598 F.2d 1033, 1038 (6th

Cir. 1979). 

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III. DISCUSSION

 Defendants move for judgment on the pleadings on the ground that Plaintiff’s FDCPA

and RFDCPA claims are precluded by the Bankruptcy Code because they are premised on

Defendants’ attempts to collect a debt that was discharged by the Bankruptcy Court. The

Court agrees with Defendants that Plaintiff’s claims, as currently pled, are precluded by the

Bankruptcy Code.

In Walls v. Wells Fargo Bank, N.A., 276 F.3d 502 (9th Cir. 2002), a Chapter 7 debtor

brought an action against Wells Fargo in district court, alleging that Wells Fargo violated the

Bankruptcy Code’s discharge injunction and the FDCPA by attempting to collect her debt

after it had been discharged. The Ninth Circuit held that the debtor’s remedy for Wells

Fargo’s alleged violation of the discharge injunction (11 U.S.C. § 524) remained under the

Bankruptcy Code and that the debtor could not use the FDCPA to bypass the Code’s

remedial scheme:

To permit a simultaneous claim under the FDCPA would allow through the

back door what Walls cannot accomplish through the front door-a private right

of action. This would circumvent the remedial scheme of the Code under

which Congress struck a balance between the interests of debtors and

creditors by permitting (and limiting) debtors' remedies for violating the

discharge injunction to contempt. “[A] mere browse through the complex,

detailed, and comprehensive provisions of the lengthy Bankruptcy Code ...

demonstrates Congress's intent to create a whole system under federal control

which is designed to bring together and adjust all of the rights and duties of

creditors and embarrassed debtors alike.” MSR Exploration, 74 F.3d at 914

(state law malicious prosecution claim based on bankruptcy filings preempted).

Nothing in either Act persuades us that Congress intended to allow debtors to

bypass the Code's remedial scheme when it enacted the FDCPA. While the

FDCPA's purpose is to avoid bankruptcy, if bankruptcy nevertheless occurs,

the debtor's protection and remedy remain under the Bankruptcy Code. See

Kokoszka v. Belford, 417 U.S. 642, 651, 94 S.Ct. 2431, 41 L.Ed.2d 374 (1974).

Id. at 510. The reasoning of Walls applies equally to state claims that seek to redress

violations of the Bankruptcy Code. In re Chaussee, 399 B.R. 225, 236-37 (9th Cir. BAP

2008) (“[W]here the Codes and Rules provide a remedy for acts taken in violation of their

terms, debtors may not resort to other state and federal remedies to redress their claims lest

the congressional scheme behind the bankruptcy laws and their enforcement be frustrated.”)

The Seventh Circuit has held that a debtor may pursue FDCPA claims based on

attempts to collect a debt in violation of an automatic stay or discharge injunction. See

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Randolph v. IMBS, Inc., 368 F.3d 726 (7th Cir. 2004). However, Walls, as a decision of the

Ninth Circuit, is the governing law here. See In re Chaussee, 399 B.R. at 237 (refusing to

follow Randolph).

Here, as in Walls, Plaintiff’s FDCPA and RFDCPA claims seek a remedy for

Defendants’ alleged violation of the discharge injunction. Therefore, Plaintiff’s claims are

precluded.

In his opposition, Plaintiff argues that his FDCPA and RFDCPA claims are

independent of the violation of the discharge injunction. However, the Complaint indicates

otherwise. In the Complaint, Plaintiff alleges that Defendants attempted to collect on a debt

that was discharged under the Bankruptcy Code. (Compl. ¶ 27.) Plaintiff next alleges that

“[t]hrough this conduct” – i.e., attempting to collect on a discharged debt – Defendants (1)

engaged in conduct, the natural consequence of which was to harass, oppress, or abuse a

person in connection with a debt (in violation of 15 U.S.C. § 1692d; Cal. Civ. Code §

1788.17); (2) threatened to take action that cannot legally be taken or that is not intended to

be taken (in violation of 15 U.S.C. § 1692e(5); Cal. Civ. Code § 1788.17); (3) communicated

or threatened to communicate to a person credit information which was known or which

should have been known to be false (in violation of 15 U.S.C. § 1692e(8); Cal. Civ. Code §

1788.17); and (4) used unfair or unconscionable means to collect or attempt to collect a debt

(in violation of 15 U.S.C. § 1692f; Cal. Civ. Code § 1788.17). (Compl. ¶¶ 28-33.) 

Although it is possible for a debtor whose debts have been discharged in bankruptcy

to allege FDCPA claims that are factually independent of a creditor’s violation of the

Bankruptcy Code, see, e.g., Burchalewski v. Wolpoff & Abramson, LLP, 2008 WL 4238933

(W.D.N.Y. Sept. 8, 2008) (granting motion to dismiss as to FDCPA claims predicated on

violations of the Bankruptcy Code but denying motion to dismiss as to claim that creditor

violated the FDCPA by misrepresenting the creditor’s name), Plaintiff has not done so here.

Plaintiff has not alleged any facts establishing that Defendants violated the FDCPA or

RFDCPA in a way that does not implicate the discharge injunction. Plaintiff argues that

Susnow threatened to garnish wages although he could not legally do so. (Pl.’s Mem. of P.

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& A. in Support of Opp’n at 2.) However, this claim depends on a determination that the debt

was in fact discharged. See Wehrheim v. Secrest, 2002 WL 31242783, * 8 (S.D. Ind. Aug.

16, 2002) (“If Plaintiff were allowed to pursue her FDCPA claim based on a violation of § 524,

then the court would have to decide whether the debt on the mortgage note had been

discharged in bankruptcy. This would interject the court into bankruptcy laden questions and

require reference to the Bankruptcy Code.”) Plaintiff also argues that Susnow threatened to

communicate to a person credit information which was known or which should have been

known to be false. (Pl.’s Mem. of P. & A. in Support of Opp’n at 3.) Again, it appears that

the claim depends on whether the debt was discharged because the alleged false

information presumably was that the debt was still owed and was collectable.

Because Plaintiffs’ FDCPA and RFDCPA claims, as currently pled, are premised on

Defendants’ violation of the discharge injunction, Plaintiffs claims are precluded by the

Bankruptcy Code.

IV. CONCLUSION

For the reasons discussed above, Defendants’ motion for judgment on the pleadings

is GRANTED. In its discretion, the Court DISMISSES Plaintiff’s Complaint for failure to state

a claim in lieu of entering judgment. The Court also grants Plaintiff leave to file an amended

complaint to the extent that Plaintiff can plead violations of the FDCPA and RFDCPA that are

independent of any violation of the discharge injunction. If Plaintiff chooses to file an

amended complaint, Plaintiff must file such complaint within 20 days of the filing of this order.

If Plaintiff does not file an amended complaint within the prescribed time, the Court shall

order the Clerk to enter judgment dismissing the case.

IT IS SO ORDERED.

DATED: December 4, 2009

Honorable Barry Ted Moskowitz

United States District Judge

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