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Geraldo v. Richland Holdings, Inc.

United States District Court, D. Nevada

July 26, 2017

RICHLAND HOLDINGS, INC., et al., Defendants.


         Presently before the court is defendant Richland Holdings, Inc., doing business as ACCTCORP of Southern Nevada's (“ASN”) motion to dismiss. (ECF No. 7). Defendant RC Willey Financial Services (“RC Willey”) joined in the motion. (ECF No. 9). Plaintiffs Dany Geraldo and Wendoly Guzman (“plaintiffs”) responded (ECF No. 11), to which ASN replied (ECF No. 13), and RC Willey joined in the reply (ECF No. 14).

         Also before the court is plaintiffs' motion for leave to amend complaint. (ECF No. 12). Defendants responded (ECF No. 15), and plaintiffs replied (ECF No. 16).

         I. Introduction

         The present case arises out of defendants' alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”). (ECF No. 1). Plaintiffs filed their complaint on January 3, 2017. (Id.). Plaintiffs allege that they entered a contract with RC Willey and failed to make payments pursuant to that contract, at which time the debt was assigned to ASN. (Id. at 2). ASN filed a lawsuit against plaintiffs in state court on June 11, 2014, for the balance of the debt ($8, 080.38) and a contractual collection fee ($4, 040.19). (Id. at 2-3); (ECF No. 7 at 4).

         Default judgment was entered against plaintiffs in the state court case in October 2014. (ECF Nos. 1 at 2-3, 7 at 4).

         Plaintiffs allege that the collection fee could not be greater than 40% of the principal balance per Utah law, which governed the contract. (Id.) However, the collection fee is allegedly 50% of the principal balance. (Id.). Plaintiffs further allege that defendants violated the FDCPA by using unfair means to collect the debt and by failing to notify them that the debt included the collection fee. (Id. at 3-4). Finally, plaintiffs allege that defendants unlawfully charged them 24% interest on the total amount, including the collection fee. (Id. at 3).

         In the present case, plaintiffs bring four causes of action: (1) violations of the FDCPA; (2) abuse of process; (3) deceptive trade practices; and (4) civil conspiracy. (ECF No. 1). Defendants move to dismiss, arguing (1) plaintiffs' claims are time-barred; (2) this court does not have subject matter jurisdiction over plaintiffs' claims; (3) plaintiffs are judicially estopped from asserting their claims; (4) plaintiffs' claims are barred by claim preclusion; and (5) plaintiffs' claims are barred by issue preclusion. (ECF No. 7). Alternatively, defendants move for a more definite statement. (Id.). The court will address each argument as it sees fit.

         II. Legal Standards

         A. Leave to amend

         “[A] party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). In order to decide whether to give leave to amend, “[a] district court determines the propriety of a motion to amend by ascertaining the presence of any of four factors: bad faith, undue delay, prejudice to the opposing party, and/or futility. Generally, this determination should be performed with all inferences in favor of granting the motion.” Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999) (citation omitted). Indeed, “where there is a lack of prejudice to the opposing party and the amended complaint is obviously not frivolous, or made as a dilatory maneuver in bad faith, it is an abuse of discretion to deny [a motion to amend.]” Howey v. United States, 481 F.2d 1187, 1190-91 (9th Cir. 1973).

         B. Motion to dismiss

         The court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pled complaint must provide “[a] short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Although rule 8 does not require detailed factual allegations, it does require more than labels and conclusions. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Furthermore, a formulaic recitation of the elements of a cause of action will not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009) (citation omitted). Rule 8 does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Id. at 678-79.

         To survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Id. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. When a complaint pleads facts that are merely consistent with a defendant's liability, and shows only a mere possibility of entitlement, the complaint does not meet the requirements to show plausibility of entitlement to relief. Id.

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering a motion to dismiss. Id. First, the court must accept as true all of the allegations contained in a complaint. However, this requirement is inapplicable to legal conclusions. Id. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id. at 678. Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged - but not shown - that the pleader is entitled to relief.” Id. ...

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