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Andrew G. Kalnoki, Individually v. First American Loanstar Trustee Services LLC

September 7, 2012

ANDREW G. KALNOKI, INDIVIDUALLY, KATHI KALNOKI, INDIVIDUALLY,
PLAINTIFFS,
v.
FIRST AMERICAN LOANSTAR TRUSTEE SERVICES LLC, WELLS FARGO HOME MORTGAGE, FIRST AMERICAN TITLE INSURANCE COMPANY, AND DOES 1- 10, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. Senior United States District Judge

ORDER

Defendants Wells Fargo Bank, N.A. ("Wells Fargo"), U.S. Bank National Association ("U.S. Bank"), First American Title Insurance Company ("FATCO"), and First American Trustee Servicing Solutions, LLC, formerly known as First American LoanStar Trustee Services, LLC ("LoanStar," and collectively, "Defendants") each move under Federal Rule of Civil Procedure ("Rule") 12(b)(6) for dismissal of all claims in Plaintiffs' Third Amended Complaint ("TAC"). Plaintiffs filed opposition briefs.

This case concerns the foreclosure of Plaintiffs' real property pursuant to a deed of trust. Plaintiffs' TAC is comprised of claims alleging each Defendant violated the Fair Debt Collection Practices Act ("FDCPA").

I. LEGAL STANDARD

Decision on Defendants' Rule 12(b)(6) dismissal motions requires determination of "whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief." Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., 637 F.3d 1047, 1054 (9th Cir. 2011) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949-50 (2009)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

When determining the sufficiency of a claim under Rule 12(b)(6), "[w]e accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the non-moving party." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (citation and internal quotation marks omitted). The court is "not, however, required to accept as true allegations that contradict exhibits attached to the Complaint or matters properly subject to judicial notice, or allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). "Therefore, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Fayer, 649 F.3d at 1064 (citation and internal quotation marks omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009) ("A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555).

II. DISCUSSION

Each Defendant argues Plaintiffs fail to state an actionable FDCPA claim against it. (Wells Fargo & U.S. Bank's Mot. 4:3-4; FATCO & LoanStar's Mot. 3:10-12.) "Congress intended the FDCPA to eliminate abusive debt collection practices by debt collectors . . . and to promote consistent state action to protect consumers against debt collection abuses." Schlegel v. Wells Fargo Bank, N.A., 799 F. Supp. 2d 1100, 1103 (N.D. Cal. 2011) (internal quotation marks and citation omitted). "The FDCPA prohibits debt collectors from resorting to 'false, deceptive, or misleading representation or means' in connection with the collection of any debt." Id. (quoting 15 U.S.C. § 1692e). "To plead entitlement to relief under the FDCPA, Plaintiffs . . . must allege facts [from which a reasonable inference could be drawn] that (1) [each] Defendant was collecting debt as a debt collector, and (2) its debt collection actions [violated the FDCPA]." Id. (citation omitted). Under the FDCPA,

[t]he term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

15 U.S.C. § 1692a(6).

A. Wells Fargo

Wells Fargo argues "none of [its] three alleged misdeeds were undertaken 'in connection with the collection of any debt.'" (Wells Fargo & U.S. Bank's Mot. 7:27-8:1.) Plaintiffs do not address this argument in their opposition briefs.

Plaintiffs allege Wells Fargo violated the FDCPA when it sent Plaintiffs a letter dated March 22, 2010, the Substitution of Trustee, and an IRS form reporting acquisition of Plaintiffs' property. (Pls.' Third Am. Compl. ("TAC") ¶¶ 11, 12 & 31.)

1. March 22, 2010 Letter

Wells Fargo argues Plaintiffs fail to allege it "engaged in an act or omission prohibited by the FDCPA" when it sent Plaintiffs the March 22, 2010 letter. (Wells Fargo & U.S. Bank's Mot. 4:6-6:4.) Plaintiffs do not address this portion of Wells Fargo's dismissal motion.

Plaintiffs' allegations concerning Wells Fargo's March 22, 2010 letter are comprised of the following: "On March 22, 2010, [Wells Fargo] sent a letter to Plaintiffs, informing them that as the servicer of their loan, 'it will be collecting a debt and any information obtained will be used for that purpose.'" (TAC ΒΆ 11.) This conclusory allegation is ...


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