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Karen Quinlan Aka Karen Betzler, An Individual v. Citimortgage

June 21, 2012

KAREN QUINLAN AKA KAREN BETZLER, AN INDIVIDUAL; BOB BETZLER, AN INDIVIDUAL,
PLAINTIFFS,
v.
CITIMORTGAGE, INC., A NEW YORK CORPORATION; ALLIED INTERNATIONAL CREDIT CORP., A CANADIAN CORPORATION; AND NATIONWIDE CREDIT, INC., A GEORGIA CORPORATION; PENTAGROUP FINANCIAL LLC, A TEXAS LIMITED LIABILITY COMPANY; AMERICAN CORADIUS INTERNATIONAL, LLC, A DELAWARE LIMITED LIABILITY COMPANY; CITIFINANCIAL, INC., A MARYLAND CORPORATION; CITIBANK, NATIONAL ASSOCIATION, A FEDERALLY-CHARTERED NATIONAL BANK; 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 Defendant Citimortgage, Inc. ("CMI"), CITIFINANCIAL, INC.("CFI"), and CITIBANK, N.A.("CITI")(herein collectively referred to as "the CITIBANK Defendants" unless otherwise noted). The motion is brought on grounds that the Plaintiffs added new parties without proper leave of the court and that Plaintiff Quinlan's claim for violation of the Rosenthal Act against CITIBANK Defendants is time-barred and does not provide sufficient facts to establish a claim against the CITIBANK Defendants for which relief can be granted under Rule 12(b)(6) of the Federal Rules of Civil Procedure. In addition, the CITIBANK Defendants assert that Plaintiff Quinlan's claim for breach of contract fails against Defendants CFI and CITI because she had no contract with them. Finally, the CITIBANK Defendants submit that Plaintiffs have failed to establish the required elements of the invasion of privacy tort they attempt to allege.

As set forth below, the CITIBANK Defendants' Motion will be denied in its entirety.*fn1

BACKGROUND

According to Plaintiffs' Third Amended Complaint ("TAC"),*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." TAC, ¶ 15.

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 the ten-year period. TAC, ¶ 19. 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 four different agencies between September 15, 2009 and August 5, 2011. Plaintiffs claim that the debt collection agencies acted on behalf of the CITIBANK Defendants, alleging that "At all times, the collection agencies, including Defendants Allied International Credit Corp., Nationwide Credit, Inc., Pentagroup Financial, LLC, and American Coradius International, LLC, have acted as the agents for Defendants CitiMortgage, Inc. or Citifinancial Inc. or Citibank, National Association for the purpose of collecting the debt allegedly owed by Plaintiff Karen Quinlan." TAC, ¶ 13.

More specifically, Plaintiffs allege that the letters they received from the collection agencies represented that they were collecting the debt on behalf of each of the CITIBANK Defendants. (See TAC ¶ 26, 31, 34, 36, 41, 44.)

Plaintiffs filed the instant action on April 13, 2011, and allege a variety of state and federal claims against the three CITIBANK Defendants, as well as against four collection agencies. The CITIBANK Defendants now move to dismiss the claims that Plaintiffs have asserted.

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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