United States District Court, S.D. California
VICTORIA A. AMELINA, and individual; and A.A., D.S., and B.S. each individuals and minors by and through their Guardian Ad Litem, Victoria A. Amelina, Plaintiffs,
MANUFACTURERS AND TRADERS TRUST COMPANY aka M&T BANK SAFEGUARD PROPERTIES, LLC; and THE WOLF LAW FIRM, A Law Corporation, Defendants.
WILLIAM Q. HAYES, Judge.
matters before the Court are (1) the Motion to Dismiss
Plaintiffs Third Amended Complaint (ECF No. 66)
filed by Defendant The Wolf Law Firm ("Wolf), (2) the
Motion to Dismiss Plaintiff s Third Amended Complaint (ECF
No. 67) filed by Defendant Safeguard Properties, LLC
("Safeguard"), and (3) the Motion to Dismiss
Plaintiff s Third Amended Complaint (ECF No. 68) filed by
Defendant Manufacturers and Traders Trust Company aka M&T
August 13, 2014, Plaintiff Victoria Amelina and Plaintiffs
A.A., D.S., and B. S., each minors by and through their
Guardian Ad Litem, Victoria Amelina, initiated this action by
filing a Complaint in this Court. (ECF No. 1). On October 30,
2014, the Court issued an Order granting the joint motion for
leave to file a First Amended Complaint, and the proposed
First Amended Complaint ("F AC") (ECF No. 12)
became the operative pleading. (ECF No. 13).
March 12, 2015, the Court granted Defendants' motions to
dismiss (ECF Nos. 18, 20, 28). (ECF No. 35). The Court
concluded that Plaintiffs FAC failed to allege sufficient
facts to state a claim under the Fair Debt Collection
Practices Act ("FDCPA") against any of the
30, 2015, the Court issued an Order granting Plaintiffs'
Motion for Leave to File a Second Amended Complaint. (ECF No.
46). On June 30, 2015, Plaintiffs filed a Second Amended
Complaint ("SAC"). (ECF No. 47).
November 17, 2015, the Court granted Defendants' motions
to dismiss (ECF Nos. 48, 49, 50). (ECF No. 57). The Court
concluded that Plaintiffs failed to allege facts to show that
the activities of Defendant Wolf or Defendant Safeguard
constituted debt collection under the FDCPA and therefore
failed to state a federal claim against Defendant Wolf or
Defendant Safeguard. The Court concluded that the SAC did not
allege sufficient facts to establish that Defendant
M&T's principal business purpose was debt collection
or that M&T regularly collects debts owed to another
entity and therefore failed to state a federal claim against
M&T. The Court declined to exercise supplemental
jurisdiction over Plaintiffs' state law claims.
February 3, 2016, the Court issued an Order granting
Plaintiffs' Motion for Leave to File a Third Amended
Complaint. (ECF No. 64). On February 3, 2016, Plaintiffs
filed the Third Amended Complaint ("TAC"), which is
the operative pleading in this case. (ECF No. 65).
February 17, 2016, Defendant Wolf filed a motion to dismiss
the TAC. (ECF No. 66). On February 22, 2016, Defendant
Safeguard filed a motion to dismiss the TAC. (ECF No. 67). On
February 22, 2016, Defendant M&T filed a motion
to dismiss the TAC (ECF No. 68). On March 7, 2016, Plaintiffs
filed an opposition to Defendant Wolfs motion. (ECF No. 70).
On March 14, 2016, Plaintiffs filed an opposition to
Defendant Safeguard's motion. (ECF No. 72). On March 14,
2016, Plaintiffs also filed an opposition to Defendant
M&T's motion. (ECF No. 73). On March 14, 2016,
Defendant Wolf filed a reply. (ECF No. 71). On March 18,
2016, Defendant Safeguard filed a reply. (ECF no. 74). On
March 21, 2016, Defendant M&T filed a reply. (ECF No.
Allegations of the Complaint
Victoria Amelina entered into an Adjustable Rate Note
("Note") and Deed of Trust to purchase a home on
April 23, 2010 with RPM Mortgage Company for Bank of
America." Id. ¶ 66. "[O]n or about
February 1, 2013, Victoria defaulted on the Note by failing
to make payments ... and continued to remain in
default...." Id. ¶ 71. On April 19, 2013
(77 days after the loan went into default), Bank of America
sent a Notice of Intent to Accelerate and Foreclose to
Plaintiff Victoria...." Id. ¶ 73. [O]n
July 5, 2013 ... Bank of America informed Plaintiff Victoria
that her loan was in default, stating, 'The loan is in
serious default because the required payments have not been
made.'" Id. ¶ 75.
On July 31, 2013 ... the alleged debt was assigned, placed,
or otherwise transferred, to Lakeview Loan Servicing who
subsequently assigned, placed, or otherwise transferred the
debt to M&T Bank for collection. Victoria's Note was
transferred . . . along with approximately 24, 000 other
defaulted loans in the last few days of July 2013.
On or about July 25, 2013, M&T Bank mailed a letter to
Victoria The letter expressed that "Bank of America will
stop accepting payments on August 1, 2013'; and
'[M&T Bank] will begin accepting payments from
[Plaintiff] effective August 2, 2013. Please send all
payments on or after that date to [M&T Bank]."
Id. ¶¶ 78-79. "On August 2, 2013,
Defendant M&T Bank acquired Plaintiff Victoria's
defaulted loan ...." Id. ¶77.
Bank took on this defaulted residential mortgage in order to
make a profit This loan was one of the thousands of loans
that M&T Bank has acquired over the years." Id.
¶22. "In the recent past, Defendant M&T
Bank has collected thousands, and perhaps hundreds of
thousands, of these defaulted consumer loans." Id.
¶ 25. "The volume of consumer loans collected
by M&T Bank is enormous, with more than 24, 000 defaulted
consumer loans originating in late July of 2013 alone from
such banks as Bank of America." Id. ¶26.
"Defendant M&T Bank maintains an active collections
department that routinely collects on defaulted mortgage
accounts." Id.¶ 27.
Once defaulted loans are acquired . . . M&T Bank begins
its efforts to collect on the defaulted loan by sending
letters and initiating telephone calls on a monthly basis, if
not daily. In nearly all correspondence from M&T Bank to
Plaintiff Victoria, M&T Bank refers to itself as a debt
collector and/or its efforts as an effort to collect on a
Id. ¶ 28. "Defendant M&T Bank accepted
for service Plaintiffs defaulted loan after it was 182 days
in default as defined by the mortgage note"
Id.¶ 29. "M&T Bank . . .regularly and
directly collects] or attempt[s] to collect debts asserted to
be owed or due to another by purchasing and or accepting for
collection defaulted residential loans in bulk and
subsequently collecting on those loans in their effort to
collect from their collection practices."
Id.¶31. "[I]n its effort to collect from
Plaintiff this defaulted personal loan for this California
residential property, M&T Bank hired ... Defendant Wolf
Law Firm, because it specializes in such defaulted
debts." Id. ¶ 36. "Subsequently . . .
Wolf hired another Company that specializes in assisting debt
collection law firms like Wolf in the collection of these
types of defaulted residential loans. This company is
Defendant Safeguard Properties, LLC." Id.
began receiving collection letters from M&T Bank."
Id.¶80. An "August 14, 2013 letter,
stated, in part: 1) M&T Bank was now servicing
Victoria's mortgage; 2) The amount of debt in connection
with the mortgage was '$236, 704.14'; 3) Pursuant to
the FDCPA, Victoria had thirty days to dispute the amount of
debt and request a verification of the alleged debt; and 4)
The name of the creditor to whom the debt was owed to was a
company called 'Lakeview Loan Servicing.' .. .."
Id. ¶ 82.
days later, on September 9, 2013, Victoria disputed the debt,
in writing, with M&T Bank . . . ."
Id.¶ 88. "M&T Bank was now required to
cease collection of the debt until it obtained verification
of the debt and produced that verification to Victoria, in
writing." Id. ¶ 89. "Notwithstanding
this fact, M&T Bank thereafter continued to collect on
the alleged debt without verification." Id.
¶90. "[F]rom September 17, 2013 through
February 5, 2014, M&T Bank sent multiple collection
letters to Victoria, each time demanding payment...."
Id. ¶ 91. "Some of these letters were
dated the same date as each other and were delivered to
Victoria all at once, the natural consequence of which was to
harass, oppress, or abuse ...." Id. ¶ 93.
"M&T Bank never provided Victoria with the notice
required by Cal. Civ. Code § 1812.700 ...." Id.
¶ 94. "[E]ach of these collection letters
demanded an amount in excess of what Plaintiff owed; set
conflicting deadlines for payment; and threatened imminent
foreclosure." Id. ¶ 95. "M&T Bank
initiated this onslaught of letters as to Plaintiff Victoria
in an effort to abusively mislead and coerce her into paying
more than was actually owed to M&T Bank." Id.
¶ 97. "M&T refused to provide validation
or fully explain who 'Lakeview Loan Servicing' was .
..." Id. ¶ 98.
at the instruction of M&T Bank, Safeguard Properties, LLC
sent Victoria a pink postcard . . . ." Id.
¶ 99. "The purpose of this communication with
Victoria was to convey information regarding a debt directly
or indirectly to Victoria, specifically, the name and
telephone number of M&T Bank to encourage Victoria to
contact M&T Bank so that M&T Bank could collect the
debt alleged to be owed ... ." Id. ¶ 103.
"Victoria was startled, confused, and embarrassed by
this postcard." Id. ¶ 111.
"[I]nviting a mortgager to contact M&T Bank has
nothing to do with securing the property. This is
Safeguard's attempt to facilitate communication between
Victoria and M&T Bank to aid M&T Bank in collection
of an alleged debt." Id. ¶ 114.
advertises field services that it provides to its clients,
and among these services are communicating with delinquent
borrowers on behalf of mortgage companies, contacting
mortgagors to request they call mortgage companies, and
reporting back to mortgage companies whether it has made
contact with mortgagers and regarding the condition of the
mortgaged properties." Id.¶54.
"Defendant Safeguard offers such services to its
mortgage companies clients for the purpose of facilitating
debt collection, directly and indirectly." Id.
¶ 55. "Defendant Safeguard ... advertises to
its customers that it has been involved in lobbying efforts
in Congress to exempt companies like Safeguard from being
regulated by the FDCPA, thereby acknowledging that it is a
debt collector under the FDCPA." Id.¶ 56.
"Defendant Safeguard, on its website, also offers its
services to assist creditor and collectors such as M&T
Bank to make personal visits in an attempt to facilitate the
consumer to contact the creditor in an effort to get the
consumer to pay on the alleged debt, " Id.
¶57. "Defendant Safeguard instructs its
employees to not use language such as 'debt' and
'collection, ' in order to evade being characterized
as a debt collector, despite facilitating and aiding its
client with debt collection being the main objection of its
operation." Id. ¶ 58. "Defendant
Safeguard routinely takes the actions alleged herein to
collect alleged debt and enforce security interest from
consumers across the United States." Id. ¶
62. "Defendant Safeguard, in its regular practice,
intimidated and invaded Plaintiffs' privacy in an attempt
to secure property from Plaintiffs or in the alternative aid
M&T Bank to collect money and property from Plaintiffs by
facilitating communications between Plaintiffs and M&T
Bank." Id. ¶ 63.
January 4, 2014, Safeguard, at the instruction of M&T
Bank, sent an agent to Plaintiffs' home (hereinafter,
'the intruder')." Id. ¶ 115.
"At the instruction of Safeguard and M&T Bank, the
intruder attempted to physically enter the home of Victoria
and her minor children." Id. ¶116.
"Victoria was not home... however, her children, A.A.;
D.S.; and B.S., who were nine, twelve, and seventeen years of
age, respectively, were at home." Id.¶117.
"Because the intruder attempted to enter the home . ..
without the authorization or permission of any occupants . .
. attempting to forcibly enter the home through a locked
door, A.A., Victoria's nine year-old daughter became
terrified." Id. ¶ 119. "A.A., a
child, refused to open the door to M&T Bank's
agent." Id.¶121. "The
intruder then continued to batter on the door with more force
and eventually told A.A. that if she did not open the door
immediately, her parents would 'be in big
trouble.'" Id. ¶122. "B.S., who
has a deep voice that people expect a very large imposing
adult to possess, inquired as to the identity of the
intruder." Id. ¶ 125. "If not for
B.S. the intruder would not have been deterred from his
objective of entering the property and frightening the
family." Id. ¶126. "Victoria returned
home shortly thereafter and found that the children were in
shock due to the intruder's actions." Id.
¶127. "A.A. was particularly traumatized by
this incident, and unable to speak." Id.
¶128. "A.A. was also having
difficulty breathing due to the anxiety and stress caused by
the intruder." Id. ¶129. "A.A. stated
to Victoria that she feared for her safety, and the safety of
her parents . ..." Id. ¶130.
Safeguard routinely takes actions above and beyond what would
be reasonable behavior to secure property, by abusing and
harassing alleged debtors like Plaintiffs in an effort to
intimidate them into paying their debts." Id.
¶134. "Through these actions, Defendant
Safeguard at the instruction and assistance of M&T Bank,
intended and took efforts to effect dispossession and
disablement of Plaintiffs' property ...."
January 28, 2014, M&T Bank sent another letter to
Victoria, in an attempt to collect a debt, still without
verifying the alleged debt." Id. ¶136.
"Through this conduct, M&T Bank engaged in conduct
the natural consequence of which was to harass, oppress, or
abuse .. .." Id.¶137. "This letter
stated, in part, that Victoria's 'mortgage documents
have been forwarded to our attorney's office for
foreclosure proceedings' and that '[a]ll
communications concerning the mortgage must now be directed
to:' Wolf Law Firm . ..." Id. ¶138.
identifies itself as a debt collector in correspondence to
consumers." Id. ¶ 41. "Defendant Wolf
advertises itself on its website as a collection firm and
even maintains a separate contact fax and email address for
the Collections Department." Id. ¶42.
"Wolf advertises itself as being a law firm that has,
for over twenty-five years, regularly 'provided . . .
cradle-to-grave services' that include 'Collection,
Replevin/Claim and Delivery, ' all regulated debt
collection practices under the FDCPA and California's
Rosenthal Act." Id. ¶ 43. "Defendant
Wolf is a law firm who sought the collection of money and
property from Plaintiffs . ..." Id. 45.
January 30, 2014, M&T Bank sent two more letters to
Victoria, stating that the foreclosure process has begun but
Victoria still had alternatives if she contacted M&T
Bank, even though Victoria had previously been told not to
contact M&T Bank but contact only Wolf Law Firm."
Id.¶142. "In reality, M&T Bank had not
begun foreclosure proceedings, and was using this false,
deceptive, or misleading representations or means in
connection with the collection of a debt to coerce payment
from Victoria ... ." Id. ¶ 143.
April 28, 2014, the Wolf Law Firm sent Victoria ten (10)
identical packets, five (5) by certified mail, and five (5)
by regular mail, each addressed to Plaintiff Victoria at her
residential address. Victoria received all of these packets
at once a few days later." Id.¶ 145.
"Each of these packets included the following
enclosures: 1) 'NOTICE UNDER THE FAIR DEBT COLLECTION
PRACTICES ACT, ' 2) a letter explaining that the
non-judicial foreclosure process had begun, and 3) recorded
Notice of Default and election to sell under deed of
trust." Id. ¶146. "The Notice under
the FDCPA provided all of the required notices under the
FDCPA for an initial communication and explained that a
foreclosure could be stopped if the default has been
cured." Id. ¶147. "While the recorded
documents were required to be sent as the trustee under
California Foreclosure laws, the other two letters included
in each of the ten (10) packets, were solely for the purpose
of encouraging Plaintiff Victoria to pay the defaulted debt
and outside the scope of a protected foreclosure trustee
activities." Id. ¶148. "In response,
Victoria sent the Wolf Law Firm a request for validation
within 30 days of receiving Wolfs April 28, 2014 letters,
just as she had previously done with M&T Bank."
or about July of 2014 Wolf... sent ten (10) more copies of
another letter dated July 22, 2014 .. . ." Id.
¶ 153. "These letters failed to provide
Victoria with validation of the debt in violation of the
FDCPA and California's Rosenthal Act." Id.
¶156. "[O]nce Wolf recorded a Notice of
Trustee Sale, Wolf mailed an additional twenty-two (22)
copies to Plaintiff of the Notice... each addressed to
Plaintiff Victoria at her residential address." Id.
¶158. Each of the letters sent by Defendant Wolf
"urged Plaintiff Victoria Amelina to pay the alleged
debt or suffer the consequences of foreclosure."
Id.¶ 161. "The purpose of sending all of
these letters from a law firm was to intimidate and embarrass
Victoria and her family and to alert third parties that
Victoria had legal problems." Id. ¶157.
at least two other occasions, Plaintiffs and Plaintiffs'
family noticed strangers conducting surveillance on
Plaintiffs home, which included again trying to open
Plaintiffs entrance door, looking through windows, and taking
pictures of the outside and inside of Plaintiffs home
(through the windows)." Id. ¶164.
"[T]hese visits by Safeguard, at the instruction of
M&T Bank, were intimidation attempts which Safeguard and
M&T Bank try to justify by stating that the intrusions
are simply efforts to secure the property." Id.
thereafter, Victoria began noticing that M&T Bank was
charging her for 'Home Inspections' on her monthly
mortgage statements. The dates referenced for the 'Home
Inspection' entries ... were consistent with the dates
when Plaintiffs and Plaintiffs' family noticed strangers
conducting surveillance . . . ." Id.¶ 167.
"By demanding payment for 'Home Inspections, '
M&T Bank was collecting an amount. .. when such amount
was not expressly authorized by the agreement creating the
debt or permitted by law." Id. ¶170.
a result of M&T Bank and Safeguard's illegal
behavior, Plaintiffs and Plaintiffs' family have not felt
safe in their home for months, and are in constant fear for
their physical safety as well as having to endure the mental
anguish that such conduct brings." Id.
¶171. "Victoria is experiencing intense
anxiety, and has difficulty sleeping at night, causing her to
be drowsy and lethargic." Id.¶
174."As a result of M&T Bank and Safeguard's
relentless collection tactics Victoria has been diagnosed
with severe depression an anxiety and has been prescribed
anti-depressant medication." Id. ¶ 176.
"Moreover, Defendants have continued sending collection
letters to Victoria, which aggravates Victoria's stress,
anxiety, and depression. To mitigate these feelings, Victoria
only checks her mail once a week, so as not to deal with
Defendants' harassing letters on a daily basis."
Id. ¶ 178.
assert five claims, including (1) violation of the Fair Debt
Collection Practices Act ("FDCPA"), 15 U.S.C.
§§ 1692 et seq. against all Defendants; (2)
violation of the Rosenthal Fair Debt Collection Practices
Act, Cal. Civ. Code §§ 1788-1788.32 against ail
Defendants; (3) negligent infliction of emotional distress
against Defendants M&T and Safeguard; (4) intentional
infliction of emotional distress ...