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Gonzalez v. Allied Collection Services, Inc.

United States District Court, D. Nevada

February 5, 2018




         I. SUMMARY

         Before the Court is Defendant Allied Collections Services, Inc.'s (“Allied”) Motion to Dismiss (“Motion”). (ECF No. 15.) Plaintiffs Karla Gonzalez (“Gonzalez”) and Jaime Retiguin Barba, Sr. (“Barba”) responded. (ECF No. 18.) Allied replied (ECF No. 19) and filed additional materials as errata (ECF No. 20).[1] For the following reasons, the Court grants in part and denies in part Allied's Motion.


         The following allegations come from Plaintiffs' First Amended Complaint (“FAC”) (ECF No. 10) unless otherwise indicated.

         Plaintiffs Gonzalez and Barba allege that Allied violated certain provisions of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), by engaging in unfair practices to collect on a mutual family member's debt to various medical providers (“Debt”). The family member is Gonzalez's husband and Barba's son, Jaime Retiguin. Plaintiff Barba shares the name “Jaime Retiguin” with his son. The Court refers to Plaintiff Barba as “Barba” and to his son as “Retiguin.”

         Allied, apparently acting as a debt collection agent for the medical providers, obtained a judgment (“Judgment”) in a state-court proceeding (“Debt Action”) against Retiguin in the amount of $5, 101.24 plus costs and interest of $208.10 on June 2, 2016. Allied obtained a writ of execution naming “Jaime Retiguin” as the garnishee on June 22, 2016. Possibly due to Retiguin and Barba's shared names, Barba's bank account was garnished $4, 448.31 instead of Retiguin's. Barba notified Allied of the mistake, and Allied reimbursed the funds except for a bank fee and garnishment fee.

         Allied obtained a writ of execution naming Gonzalez as the garnishee on September 1, 2016. The writ of execution included the full amount of the Judgment and required Gonzalez to contribute 12.5% of her income-the amount of her income that constituted community property between her and Retiguin-to the Debt.[2]

         Plaintiffs allege that it was unlawful for Allied to seek a writ of execution against Gonzalez on September 1, 2016, because Allied had already received payment for the Debt at that point. According to Plaintiffs, Allied received payment for the Debt from Retiguin's health insurance and from the Victims of Crime program between July 21, 2016, and October 13, 2016.

         Allied disputes that it received payments prior to seeking a writ of execution against Gonzalez on two grounds. First, Allied contends that payments were issued to the medical providers directly, not Allied. (ECF No. 15 at 16 (citing ECF No. 15-5 at 12).) Second, Allied essentially contends no medical provider received payment until September 7, 2016. (See Id. at 17.) Gonzalez alleged in the Debt Action that one of the medical providers received a check on August 9, 2016, from the California Ironworkers Field Welfare Benefit Plan that was approved on July 21, 2016, but Allied contends that the payment was invalid because it was reversed on September 7, 2016, and replaced with a new check from Anthem BCBS. (Id. (citing ECF No. 15-5 at 12).)

         Gonzalez filed a motion requesting the court exclude her from Allied's garnishment on October 3, 2016. Gonzalez also allegedly notified the court that she was not responsible for the Debt and that the Debt was paid. Gonzalez was released from garnishment by court order in the Debt Action on November 23, 2016. The minutes from the hearing state the following:

Garnishee Defendant's Counsel asserts the Garnishee Defendant [Gonzalez] was unsure what the debt was in regards to this signed confession of judgment. Counsel states they believe it was from medical bills, which they believed was paid by insurance or will be paid by victim of crimes [sic].
Plaintiff's Counsel asserts in the supplement the Garnishee Defendant filed, they acknowledged it was community debt. Counsel states they are willing to release the garnishment as to the Garnishee Defendant.
Court ORDERS the Claim of Exemption from Execution is GRANTED as [to] the Garnishee Defendant ONLY.

         Plaintiffs filed their FAC in this Court alleging that Allied's conduct violated certain provisions of the FDCPA, specifically 15 U.S.C. §§ 1692e(5), 1692e(10), and 1692f.[3]


         A 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 pleaded 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); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). “Factual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. Thus, 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. at 570.

         In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, a district court must accept as true all well-pleaded factual allegations-but not legal conclusions-in the complaint. Id. at 678. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id. Second, a district court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id. at 679. A claim is facially plausible when the plaintiffs complaint alleges facts that allow a court to draw a reasonable inference that the defendant is liable for the alleged misconduct. 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 has not shown-that the pleader is entitled to relief. Id. at 679. When the claims in a complaint have not crossed the line from conceivable to plausible, the complaint must be dismissed. Twombly, 550 U.S. at 570.


         Allied argues (A) that several allegations in Plaintiffs' FAC are barred by the doctrines of judicial estoppel or issue preclusion, (B) that Plaintiff Barba is not a consumer within the meaning of 15 U.S.C. § 1692a(3), (C) that Allied did not violate 15 U.S.C. § 1692e(5), (D) that Allied did not violate 15 U.S.C. § 1692e(1 0), and (E) that Allied did not violate 15 U.S.C. § 1692f. (ECF No. 15 at 11-27.) The Court will address Allied's arguments in that order.

         A. Judicial Estoppel and Issue Preclusion

         “Judicial estoppel is an equitable doctrine that precludes a party from gaining an advantage by asserting one position, and then later seeking an advantage by taking a clearly inconsistent position.” Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001). “Judicial estoppel requires that a party took a ‘clearly inconsistent' position in a prior proceeding, that the party persuaded that prior court of that position, and that the party seeking to later assert an inconsistent position would ‘derive unfair advantage' over the opposing party.” Neeman v. Bank of N.Y. Mellon, No. 2:16-cv-02674-APG-PAL, 2017 WL 3484995, at *2 (D. Nev. Aug. 14, 2017) (citing Kobold v. Good Samaritan Reg'l Med. Ctr., 832 F.3d 1024, 1045 (9th Cir. 2016)). These factors are not ...

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