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Pfitzer v. Beneficial California


December 23, 2009


The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge


Plaintiff Pamela Pfitzer ("Plaintiff") seeks monetary relief from Defendant Beneficial California, Inc. ("Defendant") for violations of the federal Truth in Lending Act, 15 U.S.C. §§ 1601 et seq., and the federal Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq.

Presently before the Court is Beneficial's Motion to dismiss Plaintiff's Complaint pursuant to Federal Rule of Civil Procedure 12 (b)(6),*fn1 on grounds that Plaintiff fails to state a claim upon which relief may be granted.*fn2 For the reasons set forth below, Defendant's Motion is GRANTED.


This action is based on Defendant's alleged acts regarding a consumer credit transaction with Plaintiff. According to Plaintiff's Opposition, on or about August 21, 2006, Defendant Beneficial mailed to Plaintiff a "pre-screened credit line offer of $8,000.00 with an initial check of $7,000.00". Plaintiff entered into a contract with Defendant and by 2008, the balance due on the credit line including fees and interest was $9,551.53.

Plaintiff alleges that Defendant failed to provide required disclosures to Plaintiff prior to the consummation of the transaction, in violation of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1638(b) and 12 C.F.R. § 226.17(b). Plaintiff further alleges that Defendant failed to provide such disclosures in a language and/or verbiage that Plaintiff would in fact understand.

Plaintiff claims that Defendant failed to advise Plaintiff that in the event of a default, Defendant would record a judgment on any property owned by Plaintiff, and further alleges that Defendant failed to properly identify the property subject to a security interest as required under TILA, 15 U.S.C. § 1638(a)(9) and 12 C.F.R. § 226.18(m). Finally, Plaintiff alleges that Defendant violated the Fair Debt Collection Practices Act by attempting to collect the debt by calling Plaintiff on her personal cell phone, as many as 8 to 12 times per day, even though it was known that Plaintiff was represented by counsel.

Plaintiff filed the present action on August 7, 2009, in the Superior Court of California for the County of Placer, alleging violations of the Truth in Lending Act and Fair Debt Collection Practices Act. On September 18, 2009, Defendant Beneficial removed the action to this Court pursuant to 28 U.S.C. § 1441(b) on the basis of federal question jurisdiction under 28 U.S.C. § 1331. Defendant Beneficial now moves to dismiss all claims pursuant to Rule 12(b)(6) for failure to state a claim.


On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996).

Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the...claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed. 2d 80 (1957). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitlement to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545, 127 S.Ct. 1955, 167 L.Ed. 2d 929 (2007) (internal citations and quotations omitted). Factual allegations must be enough to raise a right to relief above the speculative level. Id. at 555 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004) ("The pleading must contain something more...than...a statement of facts that merely creates a suspicion [of] a legally cognizable right of action").

If the court grants a motion to dismiss a complaint, it must then decide whether to grant leave to amend. The court should "freely give[]" leave to amend when there is no "undue delay, bad faith[,] dilatory motive on the part of the movant,...undue prejudice to the opposing party by virtue of...the amendment, [or] futility of the amendment...." Fed. R. Civ. P. 15(a); Foman v. Davis, 371 U.S. 178, 182 (1962). Generally, leave to amend is only denied when it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992).


A. Truth in Lending Act ("TILA")

Plaintiff's first claim alleges violations of TILA, 15 U.S.C. § 1638. Section 1638 requires that certain disclosures be made by the creditor to the consumer for each "consumer credit transaction other than under an open end credit plan." 15 U.S.C. § 1638(a).

Plaintiff's Complaint merely alleges a contract between Plaintiff and Defendant Beneficial. Plaintiff does not allege any facts regarding the terms or substance of the contract.

Thus, the Court is not in a position to determine whether the contract at issue is even subject to TILA, much less that any violation has occurred. Plaintiff has not alleged that Plaintiff was a "consumer" under TILA. Plaintiff has not alleged that Defendant was a "creditor" within the meaning of TILA. Plaintiff has not alleged that the contract at issue was a transaction within the provisions of the statute. Plaintiff has not alleged whether such contract was for open-end credit or closed-end credit. Accordingly, Plaintiff has not alleged enough facts to show that Defendant Beneficial was even required to make such disclosures under TILA.

The complaint must contain "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action...." Twombly, 550 U.S. at 544.

Accordingly, Defendant's Motion to dismiss Plaintiff's TILA claim is granted with leave to amend.

B. Fair Debt Collection Practices Act ("FDCPA")

Plaintiff's second claim alleges violations of FDCPA. The FDCPA prohibits "debt collector[s]" from making false or misleading representations and from engaging in various abusive and unfair practices. 15 U.S.C. § 1692. Thus, to be held liable for violation of the FDCPA, a defendant must, as a threshold requirement, fall within the Act's definition of "debt collector." See Heintz v. Jenkins, 514 U.S. 291, 294 (1995).

As explained above, Plaintiff has failed to allege any facts describing the contract she supposedly entered, the type of credit she acquired, or any information about the Defendant as creditor. As such, the court cannot determine whether Defendant was a "debt collector" within the meaning of the FDCPA. Although the court is bound to accept all allegations of material fact as true, here Plaintiff has failed to plead the requisite material facts needed to establish a cognizable legal claim under the FDCPA.

Accordingly, Defendant's Motion to dismiss Plaintiff's FDCPA claim is granted with leave to amend.


Based on the foregoing, Defendant's Motion to Dismiss (Docket No. 8) is GRANTED with leave to amend.

Plaintiffs may file an amended complaint not later than twenty (20) days after the date this Memorandum and Order is filed electronically. If no amended complaint is filed within said twenty (20)-day period, without further notice, Plaintiffs' claims will be dismissed without leave to amend.


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