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THIES v. LAW OFFICES OF WILLIAM A. WYMAN & CHAMPS

July 23, 1997

JARRETT E. THIES AND JACQUELYN D. THIES, Plaintiffs,
v.
THE LAW OFFICES OF WILLIAM A. WYMAN AND CHAMPS/THE KELLY GROUP, Defendants.



The opinion of the court was delivered by: BREWSTER

 On May 16, 1997, Defendants filed a motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6). Plaintiffs are represented by Michael Ernest Doukas and Harold M. Hewell. Defendants are represented by Eric D. Morton. After careful consideration of the moving and opposing papers and for the reasons discussed in detail below, the Court hereby DENIES Defendants' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6).

 I. Case Type and Jurisdiction

 Plaintiffs Jarrett E. Thies and Jacquelyn D. Thies bring this action under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA") seeking damages and other relief. Plaintiffs allege that Defendants, The Law Offices of William A. Wyman ("Wyman") and Champs/The Kelly Group ("Kelly"), violated the FDCPA while attempting to collect past-due homeowners association fees plus costs and attorney fees from Plaintiffs. Defendants move for a Rule 12(b)(6) dismissal on grounds that Plaintiffs fail to state a claim upon which relief may be granted. More specifically, Defendants claim that Plaintiffs do not owe a "debt" as statutorily defined by FDCPA and cannot seek relief pursuant to this statute. Jurisdiction is proper under 28 U.S.C. § 1331 and 15 U.S.C. § 1692k(d).

 II. Background

 Plaintiffs own a house within the View Terrace Development in Escondido and are members of a homeowners association, the View Terrace Association ("Association"). The Association improves and maintains common areas within the development. In or about June 1996, Plaintiffs noticed that a common area adjacent to their home was in disrepair. Plaintiffs were unsuccessful in their attempts to have the Association maintain or repair the area. Based on the Association's failure to respond to their requests, Plaintiffs withheld their homeowner association fees for two months.

 In August 1996, Plaintiffs resumed payment to the Association in care of Defendant Kelly and mailed a check for the past-due fees including late fees ($ 176.00) in mid-September. Soon after, Plaintiffs received a letter from Defendant Wyman which notified Plaintiffs that they owed $ 186.00 plus $ 30.00 in attorney fees. The letter also threatened recordation of a lien against Plaintiffs' property for the amount owed. In October 1996, Plaintiffs sent a check for their monthly dues plus late charges ($ 88.00); Defendant Wyman returned their September check of $ 176.00 because it did not represent the entire amount due. Plaintiffs continued to send checks for payments and late fees non-inclusive of attorney fees, and Defendant Wyman continued to return the checks through March 1997. Defendants filed a claim against Plaintiffs, and on March 11, 1997, a Municipal Court of the County of San Diego entered default judgment against the Plaintiffs in the amount of $ 1314.88.

 III. Discussion

 A. Standard of Law

 Under Rule 12(b)(6), a defendant may seek to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In making this determination, the Court must assume that the plaintiff's allegations are true and must draw all reasonable inferences in the plaintiff's favor. See Usher v. Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987).

 B. Plaintiffs' Cause of Action

 The issue contained within this motion is whether or not homeowners association fees fall within the statutory definition of "debt" for the purposes of the FDCPA. A "debt" as defined by the FDCPA is (1) an obligation or alleged obligation of a consumer to pay money (2) arising out of a transaction in which (3) the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes. See 15 U.S.C. § 1692a(5). Such an obligation does not need to be reduced to a judgment in order to fall under the protection of the FDCPA. See id.

 A consumer for the purposes of this statute is "any natural person obligated or allegedly obligated to pay any debt." 15 U.S.C. § 1692a(3). Plaintiffs are consumers within the purview of the statute as they are natural people and are obligated to pay their homeowners ...


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