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Provo v. Rady Children's Hospital-San Diego

United States District Court, S.D. California

June 11, 2015

CHAD and COURTNEY PROVO, Plaintiffs,
v.
RADY CHILDREN'S HOSPITAL-SAN DIEGO; and CMRE FINANCIAL SERVICES, INC., Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

JEFFREY T. MILLER, District Judge.

Defendant CMRE Financial Services, Inc. ("CMRE") moves to dismiss the First Amended Complaint ("FAC") for failure to state a claim. Plaintiffs Chad and Courtney Provo oppose the motion. Defendant Rady Children's Hospital - San Diego ("Rady") filed an answer on March 11, 2015, and did not file a response to the motion. Pursuant to Local Rule 7.1(d)(1), the court finds the matters presented appropriate for resolution without oral argument. For the reasons set forth below, the court grants in part and denies in part CMRE's motion to dismiss.

BACKGROUND

The FAC, filed on February 5, 2015, alleges a single federal law claim for violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §1692 et seq., and a single state law claim for violation of California's Fair Debt Collection Practices Act ("Rosenthal Act"), Cal. Civil Code §188 et seq., Plaintiffs' claims arise from the collection efforts of Defendants related to monies allegedly owed by Plaintiffs for the provision of medical services to Plaintiffs' minor son in May 2013. (FAC ¶¶15-18). "Plaintiffs take no position with regard to the validity of the alleged debt that Defendants have alleged is due and owing." (FAC ¶17).

On October 20, 2014, Plaintiffs provided Rady with a letter containing their cellular telephone numbers and instructing Rady not to contact them by cellular phone, only by writing. (FAC ¶20). In alleged violation of the FDCPA, Rady contacted Plaintiff Courtney's cellular telephone number. On or about December 29, 2014, Rady "informed Plaintiffs that they had until January 12, 2015 to make a payment on the outstanding balance before turning the matter over to collection." (FAC ¶24).

Shortly thereafter, on January 2, 1015, Plaintiffs received a letter informing them that the Rady account had been sent to collections and CMRE "was now contacting Plaintiffs for the purpose [of] collecting upon the alleged debt." (FAC ¶25). The letter also stated that "[o]ur client has given you all the extension of time they feel is justified." (FAC ¶28). Plaintiffs allege that the CMRE letter also wrongfully added interest charges to the outstanding balance in violation of the FDCPA. (FAC ¶31).

Pursuant to Federal Rule of Civil Procedure 12(b)(6), CMRE now moves to dismiss both claims. On February 3, 2015, CMRE filed an earlier motion to dismiss the original complaint or, alternatively, for summary judgment. (Ct. Dkt. No. 3). After Plaintiffs filed the FAC on February 6, 2015, the court denied CMRE's first motion to dismiss as moot.

DISCUSSION

Legal Standards

Federal Rule of Civil Procedure 12(b)(6) dismissal is proper only in "extraordinary" cases. United States v. Redwood City, 640 F.2d 963, 966 (9th Cir. 1981). Courts should grant 12(b)(6) relief only where a plaintiff's complaint lacks a "cognizable legal theory" or sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1990). Courts should dismiss a complaint for failure to state a claim when the factual allegations are insufficient "to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (the complaint's allegations must "plausibly suggest[]" that the pleader is entitled to relief); Ashcroft v. Iqbal, 556 U.S. 662 (2009) (under Rule 8(a), well-pleaded facts must do more than permit the court to infer the mere possibility of misconduct). "The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. at 678. Thus, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. The defect must appear on the face of the complaint itself. Thus, courts may not consider extraneous material in testing its legal adequacy. Levine v. Diamanthuset, Inc., 950 F.2d 1478, 1482 (9th Cir. 1991). The courts may, however, consider material properly submitted as part of the complaint. Hal Roach Studios, Inc. v. Richard Feiner and Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1989).

Finally, courts must construe the complaint in the light most favorable to the plaintiff. Concha v. London, 62 F.3d 1493, 1500 (9th Cir. 1995), cert. dismissed, 116 S.Ct. 1710 (1996). Accordingly, courts must accept as true all material allegations in the complaint, as well as reasonable inferences to be drawn from them. Holden v. Hagopian, 978 F.2d 1115, 1118 (9th Cir. 1992). However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a Rule 12(b)(6) motion. In Re Syntex Corp. Sec. Litig., 95 F.3d 922, 926 (9th Cir. 1996).

The Motion

Plaintiffs assert two theories supporting their claims.[1] First, Plaintiffs claim that it is a violation of FDCPA for a debt collector to collect interest payments from a consumer based upon the original contract between the debtor and the original creditor. Second, Plaintiffs allege that the January 2, 2015 CMRE ...


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