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Picazo v. Kimball, Tirey, & St. John LLP

United States District Court, S.D. California

April 2, 2018

ROSALIA PICAZO and ARTURO URBINA, Plaintiffs,
v.
KIMBALL, TIREY, & ST. JOHN LLP, Defendant.

          ORDER GRANTING DEFENDANT'S SPECIAL MOTION TO STRIKE AND MOTION FOR SUMMARY JUDGMENT

          JEFFREY T. MILLER UNITED STATES DISTRICT JUDGE.

         Defendant Kimball, Tirey, & St. John (“KTS”) moves the court to strike Plaintiffs' Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”) claims pursuant to California's anti-SLAPP statute, and also moves the court for summary judgment of their Fair Debt Collection Practices Act (“FDCPA”) claims. (Doc. No. 11-2.) Plaintiffs Rosalia Picazo and Arturo Urbina oppose both motions. The court finds the matter suitable for decision without oral argument pursuant to Civil Local Rule 7.1(d)(1) and, for the following reasons, grants Defendant's motions.

         BACKGROUND

         In October 2001, Plaintiff Picazo, aka Roselia Naranjo, entered into a lease agreement with the Chicano Federation of San Diego (“CFSD”), a group that provides affordable housing to low-income residents through the federal Department of Housing and Urban Development's HOME Investment Partnership Program (“HOME Program”). (Doc. Nos. 11-2 at 10, 13 at 8.)[1] In July 2004, Picazo entered into a new lease agreement with CFSD. In August 2015, Picazo renewed her lease by signing a lease addendum, also subject to the HOME Program. Each lease, including the 2015 addendum, required Picazo to verify her income annually, and “acknowledge[] that Tenant's failure to provide accurate information regarding such requirements (regardless of whether such inaccuracy is intentional or unintentional) or the refusal to comply with the request for information with respect thereto, shall be deemed a violation of this lease provision, and a material breach of the tenancy and shall constitute cause for immediate termination of the tenancy.” (Doc. No. 11-3 (“Ruiz Decl.”) Exh. 4.)

         On December 29, 2015, the San Diego Housing Commission (“Commission”), which administers the HOME Program in San Diego, informed CFSD that Picazo had withheld information regarding her income and directed CFSD to issue Picazo a notice to terminate tenancy. (Ruiz Decl. Exh. 5.) As a result, CFSD issued Picazo a sixty-day notice of termination of tenancy on February 3, 2016. (Ruiz. Decl. Exh. 6.)

         In May 2016, CFSD sent Picazo's file to KTS for possible legal action regarding Picazo's alleged failure to verify her income with the Commission. (Ruiz. Decl. ¶ 10.) KTS is a law firm. One service KTS offers, among others, is to collect debts for its clients. (See Doc. No. 13-2 (“Lickel Decl.”) Exh. U.) CFSD retained KTS to evaluate the lease for legal action regarding Picazo's alleged failure to comply with the Commission's annual income certification. (Ruiz Decl. ¶ 10.)

         On May 16, 2016, KTS issued Picazo a new sixty-day notice of termination (“Notice of Termination”), superseding the February notice. KTS declared a forfeiture of Picazo's lease based on the Commission's notice that Picazo had failed to report income from her 2015 employment. The Notice of Termination gave Picazo until July 18, 2016, to terminate her tenancy. (Doc. No. 11-10 (“Fortune Decl.”) Exh. 1.) In response, Picazo met with CFSD personnel to inform them that she had already provided the documents needed to verify her income for 2015. (Doc. No. 13-1 (“Picazo Decl.”) ¶ 21.) The Notice of Termination did not allege that Picazo owed any rent at this time.

         Plaintiffs remained on the property and Picazo paid July 2016 rent in full. (Picazo Decl. Exhs. K-K.1.) On July 22, 2016, KTS initiated an unlawful detainer action against Plaintiffs on CFSD's behalf. (Ruiz Decl. ¶ 11.) In its complaint, KTS sought forfeiture of the lease agreement and damages for each day that Plaintiffs remained in possession from July 19, 2016, through entry of judgment. KTS did not select the box to seek past-due rent. (Doc. No. 11-12 (“RJN”) Exh. A.)[2] During the course of discovery in the unlawful detainer action, KTS learned that Picazo's failure to report income was likely the result of an inadvertent mistake on her recertification documents, possibly due to a language barrier. Accordingly, CFSD asked KTS to voluntarily dismiss the unlawful detainer action. (Fortune Decl. ¶ 13; Ruiz Decl. ¶ 12.)

         On July 17, 2017, Plaintiffs filed this action against KTS for violations of the FDCPA and Rosenthal Act. (Doc. No. 1.) In response, KTS filed the instant special motion to strike Plaintiffs' Rosenthal Act claims and motion for summary judgment on Plaintiffs' FDCPA claims. (Doc. No. 11.)

         LEGAL STANDARDS

         I. California Code of Civil Procedure Section 425.16 - Anti-SLAPP

         “California law provides for the pre-trial dismissal of certain actions, known as Strategic Lawsuits Against Public Participation, or SLAPPs, that masquerade as ordinary lawsuits but are intended to deter ordinary people from exercising their political or legal rights or to punish them for doing so.” Makaeff v. Trump Univ., LLC, 715 F.3d 254, 261 (9th Cir. 2013) (internal quotation marks omitted).

         Although the statute providing for an anti-SLAPP motion is codified as a state procedural rule, anti-SLAPP motions can be used in federal court. See Batzel v. Smith, 333 F.3d 1018, 1025-26 (9th Cir. 2003); Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1109 (9th Cir. 2003). However, an anti-SLAPP motion in federal court can only be used to challenge state-law claims. See Hilton v. Hallmark Cards, 599 F.3d 894, 901 (9th Cir. 2009); see also In re Bah, 321 B.R. 41, 46 (B.A.P. 9th Cir. 2005) (noting that the anti-SLAPP statute applies also to state-law claims asserted pendent to federal question claims) (citing Globetrotter Software, Inc. v. Elan Computer Grp., Inc., 63 F.Supp.2d 1127, 1130 (N.D. Cal. 1999)).

         To prevail, “the moving defendant must make a prima facie showing that the plaintiff's suit arises from an act in furtherance of the defendant's constitutional right to free speech.” Makaeff, 715 F.3d at 261. “The burden then shifts to the plaintiff . . . to establish a reasonable probability that it will prevail on its claim in order for that claim to survive dismissal.” Id.

         A “prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney's fees and costs.” Cal. Civ. Proc. Code § 425.16(c).

         II. Federal Rule of Civil Procedure 56 - Summary Judgment

         A motion for summary judgment shall be granted where “there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). The moving party bears the initial burden of informing the court of the basis for its motion and identifying those portions of the file that it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). But Rule 56 contains “no express or implied requirement . . . that the moving party support its motion with affidavits or other similar materials negating the opponent's claim.” Id. (emphasis in original).

         In response to a motion for summary judgment, the nonmoving party cannot rest on the mere allegations or denials of a pleading, but must “go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.” Id. at 324 (internal citations omitted). In other words, the nonmoving party may not rely solely on conclusory allegations unsupported by factual data. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). The court must examine the evidence in the light most favorable to the nonmoving party, United States v. Diebold, Inc., 369 U.S. 654, 655 (1962), and any doubt as to the existence of an issue of material fact requires denial of the motion, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

         DISCUSSION

         I. California Code of Civil Procedure Section ...


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