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Pfitzer v. Beneficial California

March 18, 2010

PAMELA PFITZER ALSO KNOWN AS PAMELA EBERT, PLAINTIFF,
v.
BENEFICIAL CALIFORNIA, INC.; AND DOES 1-10 INCLUSIVE, AND MANN BRACKEN, LLP, DEFENDANTS.



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

MEMORANDUM AND ORDER

Plaintiff Pamela Pfitzer ("Plaintiff") seeks monetary relief from Defendants for alleged 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 a Motion by Beneficial California, Inc. ("Defendant") to Dismiss Plaintiff's First Amended Complaint for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, Defendant's Motion is granted.*fn1

BACKGROUND*fn2

On 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.

On October 8, 2008, Defendant, through its debt collector Mann Bracken, LLP, ("Mann Bracken") began attempting to collect the debt from Plaintiff via mail and phone calls. According to Plaintiff's Opposition to Defendant's Motion to Dismiss, Plaintiff learned from employees of Mann Bracken that in the event of default, it was possible for Defendant to record any judgment obtained against Plaintiff against her property.

Plaintiff now alleges that Defendant failed to provide required disclosures to Plaintiff prior to the consummation of the transaction, in violation of the federal Truth in Lending Act ("TILA"), 15 U.S.C. § 1638(b). Specifically, Plaintiff alleges that Defendant failed to provide such disclosures clearly and conspicuously in writing as mandated by 15 U.S.C. § 1632(a), Defendant failed to properly identify property subject to a security interest as mandated by 15 U.S.C. § 1638(a)(9), and Defendant failed to advise Plaintiff that in the event of a default, Defendant would record a judgment against any property owned by Plaintiff.

STANDARD

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).

ANALYSIS

The purpose of TILA is "to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit..." 15 U.S.C. § 1601(a).

Plaintiff alleges that Defendant failed to provide mandatory disclosures as required under TILA. Defendant argues that Plaintiff's claim for TILA violations is time-barred because civil penalties under TILA are subject to a one-year statute of limitations.

Specifically the statute of limitations for damages under TILA, codified at 15 U.S.C. ยง 1640(e), states that, "Any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, ...


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