Appeal from the United States District Court for the Western District of Washington. John C. Coughenour, District Judge, Presiding. D.C. No. CV-07-00223-JCC.
The opinion of the court was delivered by: Paez, Circuit Judge
Submitted May 7, 2009*fn1 -- Seattle, Washington
Before: Kim McLane Wardlaw, Richard A. Paez and N. Randy Smith, Circuit Judges.
We must decide whether a cause of action for tortious conversion constitutes a debt within the meaning of the Fair Debt Collection Practices Act ("FDCPA"). We hold that it does not. We therefore affirm the district court's judgment on the pleadings under Federal Rule of Civil Procedure 12(c) dismissing Plaintiffs' FDCPA claim without prejudice to their related state law claims.
Between 2002 and 2005, Ryan and Joy Fleming, Brad and Tammie Haslam, Jeremy Goodin, Deenna Smith, and the estate of Michael Smith (collectively "Plaintiffs") purchased firearms, fishing gear, and general merchandise at a discount from Gary Barnes, an employee of Ace Hardware in Oak Harbor, Washington.*fn2 In 2005, Barnes was arrested for stealing items from Ace, including the goods that he sold to Plaintiffs. He was convicted of the offenses and imprisoned.
Ace sued Barnes that same year to recover the stolen merchandise or its value. Kenneth Pickard, a local attorney, represented Barnes in the lawsuit. Ace and Barnes reached a settlement, wherein Barnes's father, Robert, paid Ace $50,000.00 in exchange for an assignment of all Ace's claims against third parties. Robert in turn assigned his rights to Jim Martyn, who then assigned those rights to M3 Holdings, Inc. M3 Holdings and Martyn, represented by Pickard, filed a tort action against Plaintiffs in 2006 in Washington State Superior Court for wrongful conversion,*fn3 unjust enrichment, and violation of the Washington Criminal Profiteering Act. The complaint alleged that Plaintiffs had entered into illicit agreements with Barnes to acquire the stolen goods at discounted prices, and that they had not returned the goods to Ace.
In 2007, Plaintiffs filed suit in the United States District Court for the Western District of Washington, alleging that Pickard, M3 Holdings, and James Martyn and his wife, Catherine A. Martin, (collectively "Defendants") had violated the FDCPA and Washington statutes by filing the lawsuit against them and using other coercive methods, including displaying a pistol, to force Plaintiffs to pay for the stolen merchandise. Defendants' answer admitted the material allegations described above.
Defendants subsequently moved for dismissal under Rule 12(c), arguing that there was no consumer debt at issue to support a claim under the FDCPA, as actions constituting theft or conversion of goods do not create a "debt." The district court granted the motion, concluding that the Plaintiffs' obligation to pay had arisen in tort, not from a "debt" transaction as contemplated by the FDCPA. Having decided that there were no valid FDCPA claims, the district court dismissed the state law claims pursuant to 28 U.S.C. § 1367(c)(3). Plaintiffs timely appealed, seeking reversal of the district court's ruling on the grounds that the purchase of stolen goods constituted a transaction that created a debt under the FDCPA, or that, in the alternative, because there is a "conflict in the evidence," a jury should decide whether the obligation was a debt. We conclude that the district court properly granted Defendants judgment on the pleadings.*fn4
We have jurisdiction over the district court's final judgment under 28 U.S.C. § 1291.
We review de novo an order granting a Rule 12(c) motion for judgment on the pleadings. Heliotrope Gen., Inc. v. Ford Motor Co., 189 F.3d 971, 978 (9th Cir. 1999). We must accept all factual allegations in the complaint as true and construe them in the light most favorable to the non-moving party. Turner v. Cook, 362 F.3d 1219, 1225 (9th Cir. 2004). Judgment on the pleadings is properly granted when there is no issue of material ...