Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Scally v. Ditech Financial, LLC

United States District Court, S.D. California

November 21, 2017

KENDALL SCALLY, individually and on behalf of all others similarly situated, Plaintiff,
v.
DITECH FINANCIAL, LLC, Defendant.

          ORDER

          WILLIAM Q. HAYES UNITED STATES DISTRICT JUDGE

         The matter before the Court is the motion to dismiss the second amended complaint filed by Defendant Ditech Financial, LLC. (ECF No. 24).

         I. Background

         On August 9, 2016, Plaintiff Kendall Scally initiated this action by filing a class action complaint against Defendant Ditech Financial alleging causes of action under the Fair Debt Collection Practices Act (“FDCPA”) and the Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”). (ECF No. 1). On September 30, 2016, Plaintiff filed a first amended complaint alleging the same causes of action against Defendant. On January 26, 2017, the Court issued an Order granting a motion to dismiss and dismissing the first amended complaint without prejudice. The Court concluded that Plaintiff's claims were precluded by the Bankruptcy Code because they hinged on allegations that Defendant was attempting to collect a debt previously discharged in bankruptcy. (ECF No. 17).

         On May 30, 2017, Plaintiff filed a second amended class action complaint against Defendant. (ECF No. 23). Plaintiff again alleges a cause of action for violations of the FDCPA and a cause of action for violations of the Rosenthal Act on behalf of himself and other similarly situated. Id.

         On June 13, 2017, Defendant filed a motion to dismiss for failure to state a claim. (ECF No. 24). On June 30, 2017, Plaintiff filed a response in opposition. (ECF No. 25). On July 10, 2017, Defendant filed a reply. (ECF No. 26).

         II. Allegations of the Complaint

          “Plaintiff is a ‘consumer' as the term is defined by 15 U.S.C. section 1692a(3) and a ‘debtor' as the term is defined by California Civil Code section 1788.2(h).” (ECF No. 23 at ¶ 9). “Plaintiff is informed and believes . . . that Defendant is a ‘debt collector' as the term is defined by Civil Code section 1788.2(c).” Id. ¶ 12. “Defendant attempted to collect a ‘consumer debt' as the term is defined by the FDCPA and Rosenthal FDCPA.” Id. ¶ 13.

         “Sometime after March 25, 2016, Plaintiff received a collection notice dated, March 25, 2016, from Defendant. The March 25, 2016 stated that Plaintiff owed a debt in the amount of $7, 662.12 to Defendant.” (ECF No. 23 ¶ 18). “The March 25, 2016 collection notices stated that ‘Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater.'” Id. ¶ 19. “The March 25, 2016 collection notice was false, confusing, and misleading, because it informs the least sophisticated debtor that interest is accruing on the debt when in fact there was no interest accruing.” Id. ¶ 46. “Defendant's statement attempted to trick Plaintiff into believing that interest, late charges, or other charges are accruing which could force Plaintiff to pay the debt immediately in order to avoid any further increase of the debt.” Id.

         “Sometime after June 20, 2016, Plaintiff received a second collection notice, dated June 20, 2016, from Defendant.” Id. ¶ 21. “The June 20, 2016 collection stated in part that ‘We are required to report any debt forgiveness to the Internal Revenue Service.'” Id. ¶ 22. “This statement is false and misleading . . . because there are many exceptions to IRS reporting requirements and not every debt forgiveness is required to be so reported.” Id. ¶ 47.

         Plaintiff alleges that these statements are in violation of 15 U.S.C. § 1692e, 15 U.S.C. 1692e(10), and California Civil Code section 1788.17. Id. ¶¶ 45, 4754. “As a direct result of these statements, Plaintiff suffered bewilderment and confusion over whether he owed any amount to Defendant, what amount in particular was owed, and what his tax consequences may or may not be upon any amount claimed to be owed.” Id. ¶ 23. Plaintiff brings this action on his own behalf and on behalf of all other similarly situated and identifies four classes in this action. Id. ¶¶ 25-29.

         III. Legal Standard

         Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Federal Rule of Civil Procedure 8(a) provides that “[a] pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). “All factual allegations set forth in the complaint are taken as true and construed in the light most favorable to plaintiffs.” Lee, 250 F.3d at 679. “A district court's dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) is proper if there is a ‘lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.'” Conservation Force v. Salazar, 646 F.3d 1240, 1242 (9th Cir. 2011) (quoting Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990)).

         “[A] plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed.R.Civ.P. 8(a)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citation omitted). “In sum, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.