Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-01267/USCOURTS-casd-3_08-cv-01267-3/pdf.json

Nature of Suit Code: 220
Nature of Suit: Foreclosure
Cause of Action: 15:1692 Fair Debt Collection Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MERLINDA L. INES,

Plaintiff,

CASE NO. 08cv1267 WQH (NLS)

ORDER

vs.

COUNTRYWIDE HOME LOANS, INC., et

al.,

Defendants.

HAYES, Judge:

The matter before the Court is the Motion to Dismiss Plaintiff’s Verified Complaint (Doc. #

11). 

Background

On July 15, 2008, Plaintiff initiated this action by filing the Complaint (Doc. # 1). The 

Complaint alleges that Plaintiff “is being wrongfully ousted from her family home.” Complaint, ¶ 1.

The Complaint alleges that Defendants do “business in San Diego County California in the mortgage

industry.” Id., ¶ 8. The Complaint alleges that “defendant(s) operate a for profit foreclosure

business.” Id., ¶ 20. The Complaint alleges that “Defendants provided plaintiff with papers that

indicated that Defendants may be a debt collector attempting to collect a debt.” Id., ¶ 21. The

Complaint alleges that Plaintiff sent Defendants requests to validate and verify the alleged debt, but

that her requests went unanswered. The Complaint alleges that, as a result of “Defendants’ non

response to request for debt verification,” the “Notice of Trustee’s Deed Upon Sale” was invalid. Id.,

¶¶ 22, 23. The Complaint “objects to the non-judicial foreclosure or judicial foreclosure” of Plaintiff’s

Case 3:08-cv-01267-WQH-NLS Document 18 Filed 11/03/08 Page 1 of 4
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property. Id., ¶ 4. The Complaint alleges that the “basis for suit is failure to comply with [Plaintiff’s]

lawful demand to validate the alleged debt in good faith and fair dealing” in violation of the Rosenthal

Fair Debt Collection Practices Act under California law, Cal. Civ. Code § 1788, et seq. (“RFDCPA”),

and the Fair Debt Collection Practices Act under federal law, 15 U.S.C. § 1692 (“FDCPA”). Id., ¶

5. The Complaint seeks declaratory relief, injunctive relief, and statutory damages. Id., ¶ 1. 

On August 4, 2008, Defendants filed the Motion to Dismiss Plaintiff’s Verified Complaint.

Defendants contend that “Plaintiff’s Complaint fails to establish any interest that the named

Defendants have in the real property that Plaintiff identifies in her Complaint . . . or that any of the

named Defendants have any relation to or interest in the purported ‘wrongful’ foreclosure to which

she objects.” Mot. to Dismiss, p. 2. Defendants contend that although one can assume from the

Complaint that “Plaintiff is somehow disputing the foreclosure of a Deed of Trust . . . , Plaintiff’s

Complaint is completely silent to the existence of a Deed of Trust and is completely silent with respect

to the named Defendants’ relation to or interest in any Deed of Trust, let alone any interest in that

particular instrument upon which the purported ‘wrongful’ foreclosure is based.” Id. Defendants

contend that the Complaint “alleges only a single claim for what appears to be a violation of the

[RFDCPA and FDCPA],” and that the Complaint “consists of entirely unintelligible allegations of

wrongdoing, none of which state with specificity that the RFDCPA and the FDCPA apply to the

named defendants in this action.” Id. at 1-2. 

Plaintiff contends that the “action arises from” violations of the Truth in Lending Act, 15

U.S.C. § 1601, et seq. (“TILA”), “non disclosures and course of action that proceeded with a wrongful

foreclosure” on Plaintiff’s property. Opposition, p. 3. Plaintiff states:

Plaintiffs intend on amending their complaint to include the information that they are

now aware of and all the related causes of action to plead with particularity the lender

violations and willful non disclosures in violation of federal and state lending laws.

Accordingly, plaintiffs request leave of the court to amend their complaint with more

specificity to correct known errors and set forth in more complete detail the legitimate

claims of plaintiffs. Further the factual allegations may be pled with more clarity in

an amended complaint.

Id. at 5. “Plaintiff respectfully request[s] that the Court deny the motion to dismiss or to strike in its

entirety, and/or alternatively, allow grant them leave to amend the complaint to plead with specificity

to correct any defective pleading and protect their property rights.” Id. at 11. 

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Applicable Law

A motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the legal

sufficiency of the pleadings. See De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). A complaint

may be dismissed for failure to state a claim under Rule 12(b)(6) where the factual allegations do not

raise the right to relief above the speculative level. See Bell Atlantic v. Twombly, 127 S. Ct. 1955,

1965 (2007). Conversely, a complaint may not be dismissed for failure to state a claim where the

allegations plausibly show that the pleader is entitled to relief. See id. (citing Fed R. Civ. P. 8(a)(2)).

In ruling on a motion pursuant to Rule 12(b)(6), a court must construe the pleadings in the light most

favorable to the plaintiff, and must accept as true all material allegations in the complaint, as well as

any reasonable inferences to be drawn therefrom. See Broam v. Bogan, 320 F.3d 1023, 1028 (9th Cir.

2003); see also Chang v. Chen, 80 F.3d 1293 (9th Cir. 1996). “Courts have a duty to construe pro se

pleadings liberally, including pro se motions as well as complaints.” Bernhardt v. Los Angeles

County, 339 F.3d 920, 925 (9th Cir. 2003). 

Rule 15 of the Federal Rules of Civil Procedure mandates that leave to amend “be freely given

when justice so requires.” Fed. R. Civ. P. 15(a). This policy is applied with “extraordinary liberality.”

Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). Once an answer to

the complaint has been filed, as is the case here, courts may deny leave to amend where the proposed

amendment would be futile, where it is sought in bad faith, where it will create undue delay, or where

“undue prejudice to the opposing party will result.” Howey v. United States, 481 F.2d 1187, 1190 (9th

Cir. 1973); see also Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992). 

The FDCPA and the RFDCPA prohibit debt collectors from engaging in abusive, deceptive

and unfair practices in the collection of consumer debts. 15 U.S.C. § 1692, et. seq.; Cal. Civ. Code

§ 1788, et. seq. To state a claim for violation of the FDCPA, a plaintiff must allege that the defendant

is a “debt collector” collecting a “debt.” Yueda v. J.A. Cambece Law Office, 2005 U.S. Dist. LEXIS

9271 (N.D. Cal. 2005). Furthermore, the “activity of foreclosing on [a] property pursuant to a deed

of trust is not the collection of a debt within the meaning of the FDCPA.” Hulse v. Ocwen Fed. Bank,

FSB, 195 F. Supp. 2d 1188, 1204 (D. Or. 2002); see also Williams v. Countrywide Home Loans, Inc.,

504 F. Supp. 2d 176, 190 (S.D. Tex. 2007) (“Mortgage companies collecting debts are not ‘debt

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collectors’). California incorporated the FDCPA into the RFDCPA under section 1788.17 of the

California Civil Code. 

Ruling of the Court

The Complaint alleges that “[t]he basis for suit is failure to comply with [Plaintiff’s] lawful

demand to validate the alleged debt in good faith and fair dealing,” in violation of the RFDCPA and

the FDCPA. Complaint, ¶ 5. The Complaint alleges that Defendants “are doing business in San

Diego County California in the mortgage industry;” that Defendants “operate a for profit foreclosure

business;” and that “Defendants may be a debt collector attempting to collect a debt.” Id.,¶¶ 20- 21.

The Complaint “objects to the non-judicial foreclosure or judicial foreclosure” on Plaintiff’s home.

Id., ¶ 4. The Court finds that the Complaint arises out of the allegedly unlawful foreclosure on

Plaintiff’s property pursuant to a deed of trust, which does not fall within the meaning of the RFDCPA

or the FDCPA. Aside from the conclusory allegation that “Defendants may be a debt collector,” the

Court finds that the Complaint does not allege facts to support the allegation that Defendants are debt

collectors within the meaning of the RFDCPA or the FDCPA. The Court further notes that the

Opposition asserts that “Plaintiff’s action arises from TILA violations, non disclosures and course of

action that proceeded with a wrongful foreclosure,” and does not assert violations of RFDCPA or

FDCPA. Opposition, p. 3. Plaintiff seeks leave to amend in order to “plead with specificity to correct

any defective pleading,” “to correct known errors,” and to “set forth in more complete detail the

legitimate claims of plaintiffs.” Id. at 1, 5. The Court concludes that amendment is not sought in bad

faith, will not create undue delay, and will not prejudice Defendants. In light of the foregoing, the

Court grants the Motion to Dismiss, and grants Plaintiff’s request to amend the Complaint. 

IT IS HEREBY ORDERED that the Motion to Dismiss (Doc. # 11) is GRANTED. The

Complaint (Doc. # 1) is DISMISSED with leave to amend. Plaintiff shall file a First Amended

Complaint no later than Monday, November 24, 2008. 

DATED: November 3, 2008

WILLIAM Q. HAYES

United States District Judge

Case 3:08-cv-01267-WQH-NLS Document 18 Filed 11/03/08 Page 4 of 4