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Rosario Alonso v. Blackstone Financial Group LLC

February 25, 2013




Plaintiff seeks to amend her complaint to add the owner and manager of Defendant Blackstone, Jason Elsen, as a defendant in this action on the theory that he was involved with the company's debt collection activities. (Mot. for Leave to File First Amended Compl. 4, ECF No. 22.) Defendant Blackstone opposes the motion on the ground that the cases finding owners liable in debt collection actions are not on point, and Plaintiff has not set forth sufficient facts to allow piercing the corporate veil. (Mem. of P. & A. in Opp. to Mot. to Amend Compl. 2, ECF No. 24.) Alternately, Defendant Blackstone moves that, should the amendment be allowed, this action should be transferred to the Central District of California which is the proper venue. (Id. at 3.)


This action was filed on October 11, 2011, against Defendants Blackstone Financial Group ("Defendant Blackstone") and Steve Darwin alleging violations of 15 U.S.C. §§ 1692, et. seq. (Fair Debt Collection Practices Act ("FDCPA")) and Cal. Civ. Code §§ 1788-1788.32 (Rosenthal Fair Debt Collection Practices Act). (ECF No. 1.) Following Plaintiff's notice of voluntary dismissal, Defendant Darwin was dismissed from the action on November 8, 2011. (ECF Nos. 6, 7.) On January 22, 2013, Plaintiff filed the instant motion to amend the complaint to add Jason Elsen as a defendant in this action due to statements he made during his deposition on November 5, 2012. (ECF No. 22.) Defendant filed an opposition on February 6, 2013, and Plaintiff filed a reply on February 8, 2013. (ECF Nos. 24, 26.)

This Court conducted a hearing on Plaintiff's motion to amend the complaint on February 20, 2013. Counsel William Krieg appeared for Plaintiff and counsel Michael Goode appeared by telephone for Defendant. The Court has read and reviewed the Plaintiff's moving papers and Defendant's opposition, including all supporting documents. The Court further considered the arguments of counsel on the record. The following order hereby issues granting Plaintiff's motion to amend and denying Defendant's cross motion for a change of venue.


After Plaintiff incurred a financial obligation and fell behind in payments, the debt was assigned to Defendant Blackstone for collection. (Compl. ¶¶ 19, 21, 22, ECF No. 1.) Plaintiff alleges that on October 11, 2010, an agent of Defendant Blackstone contacted Plaintiff's former husband, Michael Alonso, at work and identified himself as a law enforcement officer. (Id. at ¶¶ 23, 28.) This agent of Defendant Blackstone informed Mr. Alonso that a legal case was pending against Plaintiff, that he was liable for the debt, and his wages could be garnished. The caller left a phone number and case number and told Mr. Alonso to have Plaintiff call that day to speak with him. (Id. at ¶ 25.)

Plaintiff received the message and called the phone number left with Mr. Alonso. (Id. at ¶¶ 34-35.) The phone was answered by a woman who said, "Blackstone Financial Group," and when Plaintiff asked for the officer, she was connected with Steven Darwin who stated he was taking the officer's calls and repeated the misrepresentations told to Mr. Alonso. (Id. at ¶ 35.) Plaintiff was told she had to make a payment that day or an officer would come to her work the following day to escort her from work. (Id. at ¶ 41.) On the same day, Plaintiff borrowed money from a family member and made a $100 payment on the account. (Id. at ¶ 42.)


Federal Rule of Civil Procedure 15 provides for liberal pleading standards, mandating that leave to amend should be freely given when justice so requires. Fed.R.Civ.P. 15(a)(2); Foman v. Davis, 371 U.S. 178, 182 (1962). "This policy is to be applied with extreme liberality." Owens v. Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001) (quoting Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). In determining whether to grant a plaintiff leave to amend, the district court is to consider the presence of bad faith, prejudice to the opposing party, undue delay, and futility. Bowles v. Reade, 198 F.3d 752, 757 (9th Cir. 1999). It is the consideration of prejudice to the opposing party that carries the greatest weight. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). "Absent prejudice, or a strong showing on any of the remaining [factors], there exists a presumption under Rule 15(a) in favor of granting leave to amend." Eminence, 316 F.3d at 1052. Defendant Blackstone did not argue in the opposition or during the hearing that the factors of bad faith, undue delay, or prejudice weigh against allowing the amendment of the complaint. Independently, the Court also finds that the factors of bad faith, prejudice to the defendant, and undue delay weigh in favor of allowing the amendment to the complaint.*fn1 As the only obstacle to amending the complaint is futility, the Court's analysis shall focus on this single issue.

Additionally, when an amended pleading is filed after the applicable statute of limitations period, as here, Rule 15(c) governs whether the pleading relates back to the timely filing of the original complaint. An amendment relates back to the date of the original pleading when allowed by the applicable statute of limitations, and the amendment asserts a claim that arose out of the conduct, transaction, or occurrence alleged in the original pleading. Fed.R.Civ.P. 15(c)(1). Where the amended pleading changes the name of a party, the party sought to be added must have received notice of the action so he will not be prejudiced in defending the action on the merits and he must have known or should have known that the action would have been brought against him, but for a mistake concerning the identity of the proper party. Fed.R.Civ.P. 15(c)(1)(C). Relation back "depends on what the party to be added knew or should have known, not on the amending party's knowledge or its timeliness in seeking to amend the pleading." Krupski v. Costa Crociere S. p. A., 130 S.Ct. 2485, 2490 (2010).


Plaintiff argues that the factors to be considered in determining whether to allow the amendment of the complaint weigh in favor of allowing the amendment. (ECF No. 22 at 7.) As noted above, the only factor at issue in this case is futility.

In determining futility, the Court must determine if Elsen would be a proper defendant in this action. Additionally, this action was brought under the FDCPA which requires that the action must be brought "within one year from the date on which the violation occurs." 15 U.S.C. ยง 1692k(d). Since the amended complaint was not filed within the statute of limitations, the court must also determine if the first amended complaint would relate back to the filing of the original complaint. Therefore, in determining whether the motion to amend should be ...

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