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Gonzalez v. Allied Collection Services, Inc.

United States District Court, D. Nevada

October 30, 2017




         Before the Court is Defendant Allied Collection Services, Inc.'s (“Allied”) Motion to Stay Discovery. (ECF No. 33). For the reasons discussed below, Allied's motion is denied.


         Allied obtained a signed confession of judgment from Jaime Retiguin (a non-party in this case) in Las Vegas Justice Court case 16C011433. (ECF No. 10 at 3). Allied attempted to garnish funds from Retiguin's bank account, but the money was actually taken from the account of Jaime Retiguin Barba, Sr., Retiguin's father. (Id. at 6). Once notified of the mistake, Allied returned most of the money “but refused to fully reimburse Barba.” (Id. at 7).

         On September 1, 2016, Allied issued a Writ of Execution against Karla Gonzalez, Retiguin's wife. (Id. at 4). On October 3, 2016, Gonzalez filed a motion in the Justice Court case arguing that she was not responsible for the debt and the debt was already paid. (Id.). Gonzalez retained counsel that appeared at a hearing on November 7, 2016, where Allied agreed to cease garnishing Gonzalez's wages. (Id.).

         Gonzalez and Barba subsequently filed this action claiming Allied violated the Fair Debt Collection Practices Act (“FDCPA”). (ECF No. 10 at 7-8). Allied filed a motion to dismiss Plaintiff's amended complaint, arguing “the complaint should be dismissed because: (1) Mr. Barba is not a ‘consumer, ' (2) Allied did not violate the FDCPA, and (3) many of Ms. Gonzalez's allegations are barred by principals of Judicial Admission; and Issue Preclusion.” (ECF No. 15 at 2). As part of the motion to dismiss, Allied “requested that the Court take Judicial Notice of 19 Exhibits that demonstrate that the Plaintiff's claims are without merit.” (Id.).

         Allied file a motion to stay discovery pending the resolution of its motion to dismiss. (ECF No. 33). Allied argues it is likely to succeed in its motion to dismiss because the statutes cited in the complaint do not apply to Barba and Allied was not threatening to Barba. (Id. at 5). In addition, Allied asserts Gonzalez's “claims in the current matter are clearly inconsistent [with the claims she made in the Justice Court case] and thus, should be barred by Judicial Estoppel.” (Id. at 7). While it is difficult to understand what claims Allied is referring to in its motion for stay, Allied appears to reference allegations regarding when Allied became aware that at least a portion of Retiguin's debt had been repaid.[1] (ECF No. 15 at 14-25).


         I. Legal Standard

         When evaluating a motion to stay discovery while a dispositive motion is pending, the court initially considers the goal of Federal Rule of Civil Procedure 1: the Rules “should be construed and administered to secure the just, speedy, and inexpensive determination of every action.” The Rules do not provide for automatic or blanket stays of discovery when a potentially dispositive motion is pending. Ministerio Roca Solida v. U.S. Dep't of Fish & Wildlife, 288 F.R.D. 500, 502 (D. Nev. 2013). Pursuant to Federal Rule of Civil Procedure 26(c)(1), “[t]he court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” “[A] party seeking a stay of discovery carries the heavy burden of making a strong showing why discovery should be denied.” Ministerio Roca Solida, 288 F.R.D. at 503. Generally, imposing a stay of discovery pending a motion to dismiss is permissible if there are no factual issues raised by the motion to dismiss, discovery is not required to address the issues raised by the motion to dismiss, and the court is “convinced” that the plaintiff is unable to state a claim for relief. Wood v. McEwen, 644 F.2d 797, 801-02 (9th Cir. 1981); Rae v. Union Bank, 725 F.2d 478, 481 (9th Cir. 1984).

         Courts in the District of Nevada apply a two-part test when evaluating whether a discovery stay should be imposed. See TradeBay, LLC v. Ebay, Inc., 278 F.R.D. 597, 600 (D. Nev. 2011). First, the pending motion must be potentially dispositive of the entire case or at least the issue on which discovery is sought. Id. Second, the court must determine whether the pending motion to dismiss can be decided without additional discovery. Id. When applying this test, the court must take a “preliminary peek” at the merits of the pending dispositive motion to assess whether a stay is warranted. Id. The purpose of the “preliminary peek” is not to prejudge the outcome of the motion to dismiss. Rather, the court's role is to evaluate the propriety of an order staying or limiting discovery with the goal of accomplishing the objectives of Rule 1.


         Allied's motion to dismiss is potentially dispositive and needs no further discovery to resolve, as it has been fully briefed.[2] However, without prejudging the outcome of the motion, the Court is not convinced that Plaintiffs are unable to state a claim for relief against Allied.

         A. Barba's ...

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