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Karen Quinlan Aka Karen Betzler, An Individual v. Citimortgage

November 2, 2011

KAREN QUINLAN AKA KAREN BETZLER, AN INDIVIDUAL; BOB BETZLER, AN INDIVIDUAL, PLAINTIFFS,
v.
CITIMORTGAGE, INC., A NEW YORK CORPORATION; GC SERVICES LIMITED PARTNERSHIP, A DELAWARE PARTNERSHIP; ALLIED INTERNATIONAL CREDIT CORP., A CANADIAN CORPORATION; AND NATIONWIDE CREDIT RECOVERY, A CALIFORNIA CORPORATION, DEFENDANTS.



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

MEMORANDUM AND ORDER

Presently before the Court is a Motion to Dismiss filed on behalf of behalf of Defendant Citimortgage, Inc. ("CMI"). CMI's Motion is brought on grounds that the claims asserted against it in Plaintiffs' Second, Third, Fourth, Fifth and Seventh claims for relief are uncertain and fail to state a claim upon which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

As set forth below, CMI's Motion will be granted in part and denied in part.*fn1

BACKGROUND

According to Plaintiffs' First Amended Complaint ("FAC"),*fn2 Plaintiff Karen Quinlan obtained a home mortgage loan in the amount of $7,152.15 on or about March 18, 1999. Under the terms of the operative promissory note, "[b]eginning on the tenth anniversary from the date [of the note], all principal and deferred interest repayment obligations shall be forgiven free and clear." FAC, ¶ 11.

At some point before the loan's tenth anniversary, the instrument was transferred to CMI. Plaintiffs allege that in contravention of the terms of the note, CMI contacted them demanding repayment of the note after March 18, 2009. CMI threatened to accelerate the alleged amount due and report the note as delinquent to national credit bureaus. On April 23, 2009, however, Plaintiffs claim they spoke to a CMI representative, Troy Goddard, who stated that no balance was due and confirmed that the debt had been forgiven.

Although Plaintiffs accordingly believed the issue had been resolved, only a few months later they began to receive contacts from debt collection agencies demanding full repayment of the $7,152.15 principal balance on the loan. Plaintiffs allege that they were contacted by some three different agencies between September 15, 2009 and July 19, 2010. Plaintiffs claim that the debt collection agencies acted on behalf of CMI, alleging that "each of the Defendants were the agents, servants and employees of each and every one of the other Defendants." FAC, ¶ 7.

Plaintiffs filed the instant action on April 13, 2011 and allege a variety of state and federal claims against both CMI and two of the involved debt collection agencies, Defendants Allied International Credit Corp. and Nationwide Credit, Inc. CMI now moves to dismiss certain of the claims Plaintiffs assert against it.

STANDARD

On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6),*fn3 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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual allegations. However, "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." Id. (internal citations and quotations omitted). A court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (quoting 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 (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) (stating that the pleading must contain something more than "a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.")).

Furthermore, "Rule 8(a)(2)...requires a showing, rather than a blanket assertion, of entitlement to relief." Twombly, 550 U.S. at 556 n.3 (internal citations and quotations omitted). Thus, "[w]ithout some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only 'fair notice' of the nature of the claim, but also 'grounds' on which the claim rests." Id. (citing 5 Charles Alan Wright & Arthur R. Miller, supra, at § 1202).

A pleading must contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 570. If the "plaintiffs...have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed."

Id. However, "[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and 'that a recovery is very remote and unlikely.'" Id. at 556 ...


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