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King v. Legal Recovery Law Offices, Inc.

United States District Court, N.D. California

March 6, 2014

MICHAEL A. KING, Plaintiff,
v.
LEGAL RECOVERY LAW OFFICES, INC., Defendant.

ORDER DENYING DEFENDANT LEGAL RECOVERY LAW OFFICES, INC.'S MOTION TO DISMISS

KANDIS A. WESTMORE, Magistrate Judge.

On January 13, 2014, Defendant Legal Recovery Law Offices, Inc. filed a motion to dismiss Plaintiff Michael A. King's complaint on the grounds that the district court lacks subject matter jurisdiction pursuant to the Rooker-Feldman doctrine, such that the action must be dismissed under Federal Rule of Civil Procedure 12(b)(1).

Upon review of the moving papers, the Court finds this matter suitable for resolution without further briefing and without oral argument pursuant to Civil Local Rule 7-1(b)[1], and DENIES Defendant's motion to dismiss for the reasons set forth below.

I. BACKGROUND

Defendant Legal Recovery Law Offices, Inc. is a professional corporation engaged in the business of collecting debts in California. Its principal place of business is located in San Diego, California. (Compl., Dkt. No. 1 ¶ 8.) Plaintiff Michael A. King alleges that Defendant is a "debt collector" within the meaning of 15 U.S.C. § 1692A(6), and uses mail and telephone to transact business. ( Id. ¶ 9.)

On August 9, 2012, Legal Recovery Law Offices, Inc. filed suit against Plaintiff in Alameda County Superior Court for breach of contract for a debt incurred for personal, family, and household purposes. ( Id. ¶ 12.) Plaintiff alleges that on or about November 7, 2012, Plaintiff's counsel notified Defendant by fax and telephone conversation that Plaintiff had retained counsel in regard to the state court action. (Compl., Ex. A.) Plaintiff filed an answer to Defendant's lawsuit on or about November 30, 2012. (Compl. ¶ 12.)

On January 13, 2013, Plaintiff and Defendant settled the state court action by way of a stipulated judgment. ( Id. ¶ 13; Def.'s Mot. to Dismiss, "Def.'s Mot., " Dkt. No. 4, Ex. 1.) The parties agreed that the stipulated judgment would not be filed unless Plaintiff defaulted on the payment terms. (Compl. ¶ 13.) The stipulated judgment provided that in the event of a default, Defendant would mail a notice of default to Plaintiff's counsel, and give Plaintiff five days to cure the default, before attempting to enter the judgment in state court. ( Id. ¶ 16.)

On January 18, 2013, Defendant notified the state court of the settlement by filing a notice of settlement. ( Id. ¶ 14.) Thereafter, the court "set an OSC Dismissal for July 24, 2017." (Id.) Plaintiff alleges that the state court action remains active, and that his attorney of record continues to be the Law Offices of Collins & Lamore. (Id.) Plaintiff alleges that between November 7, 2012, and the date of filing this complaint in federal court, there have been various communications between Plaintiff's counsel and Defendant's attorney, putting Defendant on notice that Plaintiff is represented by counsel. ( Id. ¶ 15.)

On June 5, 2013, despite knowing that Plaintiff was represented by counsel, Defendant allegedly directly contacted Plaintiff by telephone. ( Id. ¶ 6.) During the phone call, Defendant allegedly demanded that Plaintiff pay what he owed, demanded to know if he was still represented by counsel, and requested a letter by Plaintiff stating that he was no longer represented by an attorney. (Id.)

In addition, Defendant sent Plaintiff a notice of default, dated June 5, 2013, via U.S. mail, which stated that judgment would be requested if Plaintiff failed to make the required payments within five days. (Compl., Ex. B.) Plaintiff claims that pursuant to the settlement agreement, a default judgment cannot be requested until five days after proper service of notice of default, which must be mailed exclusively to Plaintiff's counsel. (Compl. ¶ 16.)

On November 18, 2013, Plaintiff filed a complaint in federal court alleging that Defendant's violation of the settlement terms amounted to a violation of the Fair Debt Collection Practices Act, codified as 15 U.S.C. § 1692, et seq. (hereinafter referred to as "FDCPA"), and the Rosenthal Fair Debt Collection Practice Act, codified as California Civil Code § 1788 et seq. (hereinafter referred to as "RFDCPA"). (Def.'s Mot., Dkt. No. 4.) Specifically, the complaint alleges that Defendant violated the FDCPA by: (1) directly communicating with a consumer who was represented by legal counsel in violation of 15 U.S.C. § 1692b(6); (2) threatening to take legal action it did not have legal authority to take in violation of 15 U.S.C. §§ 1692e(2)(A), 1692e(5); and (3) misrepresenting the status of the debt by stating that they had the right to request default judgment if payment was not made within five days when in fact that statement was untrue in violation of 15 U.S.C. §§ 1692e(2)(A), 1692e(5). (Compl. ¶ 23.)[2] Plaintiff alleges that the telephone calls and letters sent to Plaintiff were intended to harass Plaintiff, in violation of the FDCPA and the RFDCPA, by threatening to take action that Defendant was not legally entitled to take. (Compl. ¶ 17.)

On January 13, 2014, Defendant moved to dismiss the complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1).

II. LEGAL STANDARD

A. Motion to dismiss pursuant to Federal Rule of Civil ...


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