ALICIA G. SKINNER, Plaintiff,
MOUNTAIN LION ACQUISITIONS, INC., a California corporation; JUDITH EAST, individually and in her individual capacity; D. SCOTT CARRUTHERS, A PROFESSIONAL LAW CORPORATION, a California corporation; and DENNIS SCOTT CARRUTHERS, individually and in his official capacity, Defendants.
ORDER GRANTING IN PART DEFENDANTS' MOTION TO DISMISS SKINNER'S COMPLAINT WITH LEAVE TO AMEND Re: Dkt. Nos. 35, 47
NATHANAEL M. COUSINS, Magistrate Judge.
In this action arising out of defendants' attempts to collect plaintiff Alicia Skinner's debt defendants move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). The issue before the Court is whether the sale of Skinner's debt to defendants violated California Finance Code § 22340 and thus made the debt void and unenforceable under the California Finance Lenders Law. Given that § 22340 does not prohibit any conduct and applies only to real estate backed loans, Skinner's attempt to state a claim under the Fair Debt Collection Practices Act predicated entirely on defendants' alleged violation of § 22340 fails. For the reasons set forth below, defendants' motion is GRANTED IN PART with leave to amend.
A. Skinner's Allegations
On July 13, 2006, Alicia Skinner obtained a loan from CashCall "primarily for personal, family or household purposes." Dkt. No. 1 at ¶ 16. CashCall later sold Skinner's debt to defendant Mountain Lion Acquisitions, a debt collector. Id. at ¶¶ 11, 20. On February 23, 2012, Mountain Lion filed a lawsuit in Contra Costa County Superior Court, seeking to collect on Skinner's debt. Id. at ¶ 21. On January 11, 2013, Mountain Lion "unilaterally dismissed the Mountain Lion v. Skinner complaint when the case was called for trial." Id. at ¶ 37.
The current action was initiated when Skinner filed a complaint against Mountain Lion, Judith East, an employee of Mountain Lion, D. Scott Carruthers, a Professional Law Corporation in the business of debt collection ("Carruthers Law Office"), and Dennis Scott Carruthers, attorney and director of Carruthers Law Office. Dkt. No. 1. Skinner alleges four causes of action: (1) violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq.; (2) common law malicious prosecution; (3) declaratory relief under the California Finance Lenders Law ("CFLL"), California Financial Code § 22000, et seq.; and (4) violation of the Rosenthal Fair Debt Collection Practices Act ("RFDCPA"), California Civil Code § 1788, et seq. Id. at ¶¶ 39, 50, 64, 80. Skinner alleges each claim against all defendants, with the exception of Carruthers, who is not named as a defendant on the RFDCPA claim. Id. at ¶¶ 11-14, 39, 50, 64, 80.
B. Procedural History
On February 19, 2013, Skinner filed her complaint. Dkt. No. 1. On April 9, 2013, defendants filed an answer to Skinner's complaint. Dkt. No. 11. On July 5, 2013, defendants moved to dismiss the FDCPA claim for failure to state a claim under Rule 12(b)(6). Dkt. No. 35 at 3-4. Defendants also requested that the Court decline to exercise supplemental jurisdiction over the state law claims and dismiss them without prejudice. Id.
After defendants' motion to dismiss was fully briefed and taken under submission, Skinner moved for leave to amend her complaint on January 20, 2014. Dkt. No. 60 at 1. Skinner seeks leave to add claims for violations of 15 U.S.C. §§ 1692d and 1692e, based on recently discovered information that defendants allegedly used a forged declaration in attempting to collect her debt. Id. at 2. Skinner also seeks to withdraw her claims for declaratory relief under the CFLL, violation of the RFDCPA, and malicious prosecution. Id.
The Court has jurisdiction under 28 U.S.C. § 1331, as Skinner alleges violations of 15 U.S.C. §§ 1692e and 1692f. Dkt. No. 1 at ¶¶ 6, 47. The Court has supplemental jurisdiction over the state law claims under 28 U.S.C. § 1367. Id. at ¶ 6. All parties have consented to the jurisdiction of a United States magistrate judge under 28 U.S.C. § 636(c). Dkt. No. 13.
II. STANDARD OF REVIEW
Defendants moved to dismiss for failure to state a claim under Rule 12(b)(6), after answering the complaint. Accordingly, the Court will construe their motion as one for judgment on the pleadings pursuant to Rule 12(c). Rule 12(c) permits a party to move for judgment on the pleadings "[a]fter the pleadings are closed-but early enough not to delay trial." Fed.R.Civ.P. 12(c). The main difference between motions filed under Rule 12(b) and Rule 12(c) is the time of filing. Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). Because Rule 12(b) and Rule 12(c) motions are "functionally identical, " the standard of review is the same. Id. On a motion for judgment on the pleadings, all material allegations in the complaint are taken as true and construed in the light most favorable to the non-movant. McGlinchy v. Shell Chem. Co., 845 F.2d 802, 810 (9th Cir. 1988). A court may grant a motion for judgment on the pleadings when the movant clearly establishes that no material issues of fact remain to be resolved, and it is entitled to judgment as a matter of law. Doleman v. Meiji Mut. Life Ins. Co., 727 F.2d 1480, 1482 (9th Cir. 1984). If a court grants a motion for judgment on the pleadings, leave to amend should be granted unless "the Court is satisfied that an amendment could not cure the deficiency." Harris v. Cnty. of Orange, 682 F.3d 1126, 1135 (9th Cir. 2012).
A. Skinner Fails To State a Claim ...