Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_05-cv-02005/USCOURTS-azd-2_05-cv-02005-0/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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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

William Thweatt, 

Plaintiff, 

vs.

Law Firm of Koglmeier, Dobbins, Smith

& Delgado, P.L.C., et al., 

Defendants. 

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No. CIV 05-2005-PHX-MHM

ORDER

Plaintiff commenced this action by filing a verified class action complaint asserting

a claim for relief under the Fair Debt Collection Practices Act, ("FDCPA"), 15 U.S.C. §§

1692, et seq. (Doc. 1). The complaint and summons have been served on Defendants. (Doc.

2-5). Plaintiff filed an amended complaint on July 28, 2005 (Doc. 9). On the same date as

Plaintiff filed the amended complaint, Defendants filed a motion to dismiss the case. (Doc.

10). Plaintiff has filed a response in opposition to Defendants' motion to dismiss (Doc. 13)

and Defendants have filed a reply. (Doc. 14). Plaintiff also has filed a motion for entry of

document preservation order. (Doc. 6). Defendants have not filed a response to this motion.

Defendants appear to be contending that the complaint should be dismissed based on

Fed.R.Civ.P. 12(b)(6) for failure to state a claim for relief. When reviewing a motion to

dismiss under Rule 12(b)(6), the Court accepts the allegations in the complaint as true and

construes them in the light most favorable to the plaintiff. Sosa v. Hiraoka, 920 F.2d 1451,

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1455 (9th Cir. 1990). The Court must draw all reasonable inferences in favor of the nonmoving party. Salim v. Lee, 202 F. Supp. 2d 1122, 1125 (C.D. Cal. 2002). Dismissal is

proper “only if it appears beyond doubt that the plaintiff can prove no set of facts in support

of his claim which would entitle him to relief.” Gibson v. United States, 781 F.2d 1334,

1337 (9th Cir. 1986). “Dismissal can be based on the lack of a cognizable legal theory or the

absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica

Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). "The issue is not whether a plaintiff's success

on the merits is likely but rather whether the claimant is entitled to proceed beyond the

threshold in attempting to establish his claims." De La Cruz v. Tormey, 582 F.2d 45, 48 (9th

Cir. 1978). The Court must determine whether or not it appears to a certainty under existing

law that no relief can be granted under any set of facts that might be proved in support of

plaintiff's claims. Id. 

Generally, a complaint that has been amended pursuant to Fed.R.Civ.P. 15(a)

"supersedes the pleading it modifies, rendering the original pleading void." Datastorm

Technologies, Inc. v. Excalibur Communications, Inc., 888 F. Supp. 112, 114 (N.D. Cal.

1995). Plaintiff's amended complaint has added community property allegations. A date left

blank in the original complaint was filled in on the amended complaint. These amendments

do not affect the defects addressed in Defendants' motion to dismiss. The Court therefore

will consider the motion to dismiss as directed at the first amended complaint. Id., at 114

(noting that "to do otherwise" in such circumstances "would exalt form over substance"). 

 Plaintiff alleges in the first amended complaint that on or about May 10, 2005,

Defendants "caused to be delivered upon Plaintiff a Summons for Forcible/Special Detainer

and Complaint Forcible/Special Detainer..." and that "[t]he amount sought to be recovered

... was rent incurred by Plaintiff for personal, family, or household purposes." (first amended

complaint at ¶¶ 19-20). Plaintiff further alleges that "[w]ithin five days of having" these

papers "delivered to Plaintiff, Defendants did not send Plaintiff a written notice containing

the verification language required by 15 U.S.C. § 1692g(a)." (id., at ¶ 25). Plaintiff contends

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that Defendants' conduct violated the FDCPA, 15 U.S.C. §§ 1692 et seq., in the following

manner:

failure to include in the initial communication or by sending

written notice within five days of the initial communication the

verification language required by 15 U.S.C. § 1692g(a), in

violation of 15 U.S.C. § 1692g(a);

failure to properly inform the consumer as to the consumer's

rights for debt verification in a manner that was not reasonably

calculated to confuse or frustrate the least sophisticated

consumer, in violation of 15 U.S.C. § 1692e; and

utilizing a collection communication in an attempt to collect a

consumer debt that was unfair and represented a deceptive debt

collection practice in violation of 15 U.S.C. § 1692e.

(id., at ¶ 37). 

Defendants contend in their motion to dismiss that service of the complaint and

summons in the state court action and referenced in the first amended complaint's allegations

does not constitute an "initial communication" within the meaning of the FDCPA and

therefore Plaintiff has "no justiciable cause of action" under the FDCPA. Defendants cite

in support of their argument Vega v. McKay, 351 F.3d 1334, 1337 (11th Cir. 2003), in which

the Court of Appeals for the Eleventh Circuit held that a complaint and summons do not

constitute an "initial communication" within the meaning of the FDCPA. 

Plaintiff has responded in opposition by contending that Thomas v. Law Firm of

Simpson & Cybak, 392 F.3d 914 (7th Cir. 2004), should guide this Court's consideration of

the issue. In that case, plaintiff Thomas was notified by GMAC that the payment on his

vehicle was past due. Approximately two months later, GMAC, through its attorneys, sued

Thomas in state court to recover the vehicle. The complaint included a statement that, under

the FDCPA, the law firm was a debt collector attempting to collect a debt. Thomas

subsequently filed suit in federal court under the FDCPA, claiming that neither party in the

state court action had sent him a debt validation notice advising him of his rights as a debtor

under 15 U.S.C. § 1692g(a). The Court of Appeals for the Seventh Circuit reversed the

district court's ruling dismissing the case, holding that the service of a summons and

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complaint by a debt collector constitutes an "initial communication" under the FDCPA. Id.,

at 921. 

Under the FDCPA, "[w]ithin five days after the initial communication with a

consumer in connection with the collection of any debt," a debt collector must send the

debtor written validation notice containing certain information. 15 U.S.C. § 1692g(a). The

information must include the amount of the debt and name of the creditor and advise that the

debt will be assumed valid if the debtor does not dispute its validity within 30 days of the

receipt of the notice. § 1692g(a)(1)-(3). The notice must also include a statement that if the

debtor disputes the debt within the 30-day period, the debt collector will obtain and send the

debtor verification of the debt. The debt collector further is required to send to the debtor,

upon written request, the name and address of the current creditor if different from the

original creditor. § 1692g(a)(4)-(5). Under the FDCPA, "communication" is defined broadly

to mean "the conveying of information regarding a debt directly or indirectly to any person

through any medium." 15 U.S.C. § 1692a(2). 

The courts that have considered whether service of a summons and complaint

constitute an "initial communication" under the FDCPA are not in agreement on the issue.

Compare, Vega v. McKay, 351 F.3d at 1337 (a summons and complaint are not initial

communication triggering the debt validation notice of § 1692g(a)); and McKnight v.

Benitez, 176 F. Supp. 2d 1301, 1308 (M.D. Fla. 2001)(same), with Thomas, 392 F.3d at

921(summons and complaint served in a state court action constitute an "initial

communication" under the FDCPA); and Senftle v. Landau, 390 F. Supp. 2d 463, 472 (D.

Md. 2005)("a court summons and complaint may constitute an 'initial communication' under

§ 1692a(2), at least when service of those pleadings precedes all other communications to

a debtor relative to a given debt"). The parties have not cited a case decided by a court

within the geographic area of the Ninth Circuit that has addressed this issue.

In Thomas, the Seventh Circuit discussed several reasons why a summons and

complaint should be considered an "initial communication" under the FDCPA. For example,

service of a summons and complaint as an "initial communication" was consistent with the

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intent of the drafters of the statute, noting that the statute was intended to "protect consumers

from a host of unfair, harassing, and deceptive debt collection practices." Id., at 917. The

Seventh Circuit also reasoned that, "to except the service of pleadings from the definition of

'communication' would erode the § 1692g requirement to inform debtors of their validation

rights; debt collectors could avoid their obligations to advise debtors of their validation rights

altogether by initiating litigation." Id., at 918. The appellate court considered the defendants'

argument that such an interpretation would interfere with litigation by making debt collection

lawsuits more cumbersome for attorneys but determined that such concerns were insufficient

based on various reasons and practical considerations discussed in the opinion. The Seventh

Circuit distinguished the holding in Vega because it relied in part on non-binding

commentary issued by the Federal Trade Commission ("FTC"). The Seventh Circuit noted

that the FTC in an Advisory Opinion letter issued in 2000 had indicated that "[i]n light of

Heintz, the Commission concludes that, if an attorney debt collector serves on a consumer

a court document 'conveying information regarding a debt,' that court document is a

'communication' for purposes of the FDCPA." Id., at 920 (citing Federal Trade Commission

- Staff Opinion Letter of March 31, 2000, at 3). This Advisory Opinion letter had issued in

light of Heintz v. Jenkins, 514 U.S. 291 (1995), which held that the FDCPA applies to

lawyers who regularly attempt to collect debts through litigation and which rejected concerns

that such an interpretation would interfere with debt collection lawsuits. 

Defendants attempt to distinguish Thomas by arguing that the attorney defendants in

that case were "debt collectors" as defined under the FDCPA. Defendants additionally

contend that the landlord/debtor's initial communication was ignored by the tenant/consumer

and the landlord, through its attorney, the Defendants in the instant case, filed a summons

and complaint to regain possession of the property. Defendants argue that they had a

fiduciary obligation to represent the landlord's interest and that 15 U.S.C. § 1692a(6)(F)(i)

excludes as a debt collector "any person collecting or attempting to collect a debt owed or

due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona

fide fiduciary obligation. ..." 

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Defendants' argument based on § 1692a(6)(F)(i) was raised for the first time in their

reply. The Court in its discretion has declined to consider it since Plaintiff has not had an

opportunity to present argument in response. See, Sanchez v. City of Santa Ana, 915 F.2d

424, 430 (9th Cir. 1990)(issues raised for the first time in reply brief generally are not

addressed). Moreover, Plaintiff has alleged in the first amended complaint that "Defendants

are 'debt collectors' as defined by the FDCPA, 15 U.S.C. § 1692a(6)." (first amended

complaint at ¶ 17). The parties can proceed with discovery on this issue as the case

progresses. 

The present issue before the Court is whether the summons and complaint served in

the state court action may be considered an "initial communication" under the FDCPA. The

Court finds persuasive the rationale discussed in Thomas and related cases. Defendants'

motion to dismiss the first amended complaint is denied. 

Plaintiff has filed a motion for entry of an order preserving documents in the

possession of Defendants. (Doc. 6). Defendants have not filed a response to this motion.

Counsel for the parties are directed to meet and confer no later than April 14, 2006 in an

effort to agree on the terms of a protective order and submit a proposed protective order to

the Court for approval. If the parties are unable to agree on any of the terms of a proposed

protective order, counsel shall promptly notify the Court and a hearing will be set to resolve

the dispute.

Accordingly, 

IT IS ORDERED that Defendants' motion to dismiss the first amended complaint

(Doc. 10) is denied.

IT IS FURTHER ORDERED that Plaintiff's motion for document preservation order

(Doc. 6) is denied without prejudice. 

IT IS FURTHER ORDERED that counsel for the parties shall meet and confer no

later than April 14, 2006 in an effort to agree on the terms of a protective order and submit

a proposed protective order to the Court for approval. If the parties are unable to agree on

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any of the terms of a proposed protective order, counsel shall promptly notify the Court and

a hearing will be set to resolve the dispute.

IT IS FURTHER ORDERED that Defendants shall file and serve a responsive

pleading to the first amended complaint within fifteen (15) days of the filing date of this

Order.

DATED this 21st day of March, 2006.

Case 2:05-cv-02005-MHM Document 19 Filed 03/30/06 Page 7 of 7