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Dickman v. Kimball, Tirey & St. John, LLP

United States District Court, S.D. California

November 6, 2013

ANNETTE DICKMAN, an individual, Plaintiff,
KIMBALL, TIREY & ST. JOHN, LLP, a California limited liability partnership, Defendant

For Annette Dickman, an individual, Plaintiff: Daniel J Lickel, LEAD ATTORNEY, Rooney & Lickel, San Diego, CA.

For Kimball, Tirey & St. John, LLP, a California limited liability partnership, Defendant: Erik S. Velie, LEAD ATTORNEY, Erik Velie, Los Angeles, CA.


Hon. Jeffrey T. Miller, United States District Judge.

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On August 27, 2013, Plaintiff filed a complaint alleging Defendant violated the

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Federal Fair Debt Collection Practices Act (" FDCPA" ). Compl. (Dkt. No. 1). On September 12, 2013, Defendant filed a motion to dismiss for failure to state a claim. Dkt. No. 3. Plaintiff filed an opposition to Defendant's motion on October 21, 2013. Dkt. No. 6. Defendant did not file a reply brief. As neither party requested oral argument, the court took the motion to dismiss under submission on October 29, 2013. For the reasons set forth below, Defendant's motion to dismiss is denied.


On June 15, 2012, Plaintiff entered into a residential lease agreement for property located in Escondido, California (" the Escondido Property" ). Compl. ¶ 14. Plaintiff signed the lease on June 27, 2012, for a one-year term starting on July 1, 2012, and ending on June 30, 2013; however, Plaintiff alleges the lease contains a typographical error stating that it terminated on June 30, 2012. Id. Plaintiff entered into the lease agreement with ENL Investments, LLC and Ed Forrester. Id. ¶ 15. Ed Forrester is the owner of ENL Investments, LLC, and he was Plaintiff's point of contact regarding the lease agreement. Id. Plaintiff began residing at the Escondido Property on July 1, 2012. Id. ¶ 14.

The lease agreement required Plaintiff to make monthly rental payments of $1,900.00 by electronic deposit into ENL Investments, LLC's bank account. Id. ¶ 16. Plaintiff alleges that it was her regular practice to timely make these deposits at the beginning of each month. Id. Plaintiff's payments were processed online by her bank and cleared her account on the next business day. Id.

Unbeknownst to Plaintiff, a notice of default and notice of trustee's sale had been recorded against the property prior to the date that she signed the lease agreement and took possession of the property. Id. On July 5, 2012, Mr. Forrester filed for bankruptcy relief under Chapter 7 of the bankruptcy code. Id. ¶ 18. As a result, a pending foreclosure sale on the Escondido Property was rescheduled for August 23, 2012. Id. Mr. Forrester filed papers with the bankruptcy court claiming to be an owner of the Escondido Property pursuant to an unrecorded quit claim deed prepared prior to the date that he filed for bankruptcy relief. Id. ¶ 19. Plaintiff alleges she was unaware of the scheduled foreclosure sale of the Escondido Property. Id. ¶ 18.

On August 23, 2012, U.S. Financial, LP (" U.S. Financial" ) bought the Escondido Property at the trustee's sale without Plaintiff's knowledge. Id. ¶ 20. A trustee's deed was delivered to the County recorder's office for recording on August 31, 2012. Id. As a result of the standard procedures used by the San Diego County Recorder's Office, the transfer deed did not become visible in the public record until two business days later on September 5, 2012. Id. Plaintiff received no notice of the recorded deed prior to its public filing. Id.

During the foreclosure process, Plaintiff initiated the electronic funds transfer on Saturday, September 1, 2012, to pay rent to ENL Investments, LLC for the month of September. Id. ¶ 23. As the payment was made on a three-day weekend, the payment did not clear Plaintiff's bank account until September 4, 2012. Id. Plaintiff alleges that she did not have actual or constructive notice of the transfer of the Escondido Property to U.S. Financial at the time she made the September rent payment. Id.

On about September 9, 2013, Don Rady, the owner of U.S. Financial, left a business card for Plaintiff at the Escondido Property. Id. ¶ 24. The back side of the business card had a handwritten note stating

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that " we are the new owners of this house, please call us." Id. This card was the first actual notice Plaintiff received that ownership of the Escondido Property had changed hands. Id. On September 13, 2012, Defendant, acting as legal counsel for U.S. Financial, drafted, signed, and directed that a three-day Notice to Pay Rent or Quit (" Notice" ) be served on Plaintiff. Id. ¶ 25. Plaintiff received service of the Notice on September 13, 2012. Id.

The Notice demanded payment of $1,900.00 for September rent " WITHIN THREE DAYS" or legal proceedings would be instituted to recover possession of the subject premises, court costs, attorney's fees, and statutory damages up to $600.00. Id. ¶ 26. The Notice further informed Plaintiff that if she failed to pay the requested $1,900.00 within three days, the owner of the subject premises would elect to declare Plaintiff's rental agreement for the Escondido Property forfeit. Id. ¶ 27. This suggested to Plaintiff that her rental agreement was still in effect. Id.

At the same time that Defendant served the Notice on Plaintiff, Defendant also sent a letter to Plaintiff stating: " If we receive a judgment against you, the Sheriff will remove you from the premises. Our client could also garnish your wages, levy on your bank accounts, and/or attach your non-exempt personal property for judicial sale in order to collect all monies due." Id. ¶ 34. This letter further stated: " This debt will be assumed to be valid unless you notify us within 30 days of receipt of this letter that you dispute all or part of the debt. If you notify us in writing within this same 30-day period, we will send you verification of this debt. Upon written request within the thirty-day period, we will provide you with the name and address of the original creditor, if different from the current creditor." Id. ¶ 35.

On about September 17, 2012, after expiration of the three-day Notice, U.S. Financial sent a letter acknowledging that Plaintiff had paid the rent to the prior owner, and claiming that Plaintiff " failed to acknowledge [U.S. Financial] as the owner of the Property, [Plaintiff] completely disregarded the tenant questionnaire and [Plaintiff] improperly paid rent to the prior owner of the Property." Id. ΒΆ 37. However, Plaintiff had received no notice ...

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