Duran v. Portfolio Recovery Associates, LLC ( 2023 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 JOSUE DURAN, Case No. 1:22-cv-01605-JLT-SAB 12 Plaintiff, FINDINGS AND RECOMMENDATIONS RE: MOTION TO AMEND 13 v. (ECF Nos. 11, 14) 14 PORTFOLIO RECOVERY ASSOCIATES, LLC, OBJECTIONS DUE WITHIN FOURTEEN 15 DAYS Defendant. 16 17 18 19 20 I. 21 INTRODUCTION 22 Plaintiff Josue Duran (“Plaintiff”) initiated this civil action against Defendant Portfolio 23 Recovery Associates, LLC (“Defendant”) on December 15, 2022. (ECF No. 1.) Presently before 24 the Court is Plaintiff’s motion to amend the complaint. (ECF No. 11.) The District Judge 25 referred the motion to amend to this Court for the preparation of findings and recommendations 26 and/or other appropriate action. (ECF No. 12.) 27 A hearing on the motion was held on May 17, 2023. Counsel Bobby Charles Walker 28 appeared by videoconference for Plaintiff. Counsel Nathan A. Searles appeared by 1 videoconference for Defendant. (See ECF No. 15.) Having considered the moving and 2 opposition papers, the declarations and exhibits attached thereto, the arguments presented at the 3 May 17, 2023 hearing, as well as the Court’s file, the Court issues the following findings and 4 recommendations recommending the motion to amend be granted. 5 II. 6 BACKGROUND 7 In this debt collection action, Plaintiff alleges he incurred a consumer debt for personal, 8 family, and household purposes. (Compl. at ¶ 7, ECF No. 1.) The debt purportedly went into 9 default and was sold to Defendant, a third-party debt collector that collects debts from consumers 10 across the country. (Id. at ¶¶ 5, 8.) Thereafter, Plaintiff alleges Defendant made multiple 11 attempts to collect on the debt that Plaintiff purportedly owes to Defendant. (Id. at ¶ 7.) Plaintiff 12 alleges Defendant regularly called Plaintiff on his cell phone to collect the debt (id. at ¶¶ 9, 12), 13 even after Plaintiff told Defendant to stop calling him and informed Defendant he would take 14 legal against it if it did not cease calling (id. at ¶¶ 14, 15, 17, 18). Plaintiff alleges Defendant 15 calls Plaintiff from different phone numbers to “coerce” Plaintiff into answering the phone and 16 making payment on the debt. (Id. at ¶ 16.) Plaintiff alleges Defendant’s conduct was 17 unprofessional, harassing, and designed to harass Plaintiff and “squeeze sums of money from 18 [him],” even though he made it clear that he did not owe the consumer debt in question. (Id. at ¶¶ 19 19, 20, 22.) Plaintiff has expended time, resources, and expenses speaking with his attorney 20 regarding his rights in this situation. (Id. at ¶ 21.) He alleges he has suffered invasion of privacy, 21 aggravation, emotional distress, and the violation of his state and federally-protected interests as a 22 result of Defendant’s abusive debt collection practices. (Id. at ¶ 23.) 23 Plaintiff initiated this action on December 15, 2022. (ECF No. 1.) The operative 24 complaint asserts two causes of action: (1) violation of the Fair Debt Collection Practices Act 25 (“FDCPA”), 15 U.S.C. §§ 1692 et seq., and (2) violation of the Rosenthal Fair Debt Collection 26 Practices Act (“RFDCPA”), Cal. Civ. Code §§ 1788 et seq. (Id. at 1, 5–10.) Plaintiff seeks 27 statutory and actual damages, declaratory and injunctive relief, and attorneys’ fees and costs. (Id. 28 at 8–9, 10.) 1 Defendant answered the complaint on February 10, 2023. (ECF No. 5.) On March 23, 2 2023, a scheduling order issued. (ECF No. 10.) As relevant here, the scheduling order set the 3 deadline to stipulate to or request leave to amend the pleadings for April 12, 2023. (Id. at 2.) 4 On April 12, 2023, Plaintiff filed the instant motion to amend. (ECF No. 11.) Defendant 5 opposed the motion on April 26, 2023. (ECF No. 14.) No reply briefing was filed. On May 17, 6 2023, the parties appeared before the Court for a hearing on the motion. (See ECF No. 15.) The 7 matter is now deemed submitted. 8 III. 9 LEGAL STANDARD 10 Under Federal Rule of Civil Procedure (“Rule”) 15, a party may amend the party’s 11 pleading once as a matter of course within twenty-one days after serving the pleading, or within 12 twenty-one days after service of a responsive pleading or service of a motion under Rule 12(b), 13 (e), or (f). Fed. R. Civ. P. 15(a)(1). Otherwise, a party may amend only by leave of the court or 14 by written consent of the adverse party. Fed. R. Civ. P. 15(a)(2). In this case, since it has been 15 more than twenty-one days since Plaintiff’s complaint was filed and no responsive pleading or 16 motion under Rule 12 has been served, Plaintiff requires leave of court to file a first amended 17 complaint. 18 “Rule 15(a) is very liberal and leave to amend ‘shall be freely given when justice so 19 requires.’ ” AmerisourceBergen Corp. v. Dialysis West, Inc., 465 F.3d 946, 951 (9th Cir. 2006) 20 (quoting Fed. R. Civ. P. 15(a)). “This policy is to be applied with extreme liberality.” C.F. ex 21 rel. Farnan v. Capistrano Unified Sch. Dist., 654 F.3d 975, 985 (9th Cir. 2011). “This liberality in 22 granting leave to amend is not dependent on whether the amendment will add causes of action or 23 parties.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). However, courts 24 “need not grant leave to amend where the amendment: (1) prejudices the opposing party; (2) is 25 sought in bad faith; (3) produces an undue delay in the litigation; or (4) is futile.” 26 AmerisourceBergen Corp., 465 F.3d at 951. 27 /// 28 /// 1 IV. 2 DISCUSSION 3 In his motion, Plaintiff requests leave to file a first amended complaint that adds newly- 4 discovered facts, discovered as a result of the informally-produced evidence from Defendant. 5 (ECF No. 11 at 2.) Plaintiff maintains the amendments support additional bases for his FDCPA 6 and RFDCPA claims against Defendant. (Id.) Defendant opposes the motion, arguing that the 7 proposed amendments are futile. (ECF No. 14.) 8 The Court notes Plaintiff’s motion, while attaching a proposed amended complaint, did 9 not clearly identify in his briefing which additional facts and resultant causes of action or claims 10 would result from the amendment, nor did he identify the “newly discovered facts” resulting from 11 the parties’ initial discovery triggered Plaintiff’s need for amendment. Defendant’s objections in 12 opposition to the motion are well-taken as to this point. However, at hearing, Plaintiff provided 13 the necessary clarification as to his attempt to add an additional claim to his FDCPA count under 14 § 1692e. 15 As to Plaintiff FDCPA claim, the original complaint asserts specific violations of §§ 16 1692d, 1692d(5); 12 C.F.R. §§ 1006.14(b) and 1006.14(h); §§ 1692e and 1692e(10); and § 1692f. 17 (Compl. ¶¶ 24–37.) Specifically, regarding Plaintiff’s claim that Defendant violated § 1692e, 18 Plaintiff seeks to add facts relating to a recording of an August 9, 2022 phone conversation 19 between Plaintiff and Defendant, in which Plaintiff stated that he did not owe a debt, and 20 Defendant represented to Plaintiff that his debt was outside the State of California’s four-year 21 statute of limitations for written and open-ended credit accounts. (See ECF No. 11-2 at ¶¶ 20, 37, 22 41.) Plaintiff argues these additional facts which are alleged in the proposed first amended 23 complaint, support Plaintiff’s additional FDCPA claim for violations of § 1692e(2)(A). 24 Defendant argues the proposed amendment does not add sufficient facts to state a 25 cognizable claim under 1692(e)(2)(A), because Plaintiff does not purport to add facts showing 26 that he was harmed in any way by the alleged false misrepresentation; therefore, he has not 27 established standing, and the proposed amendment would be futile. The Court disagrees. 28 Looking to the complaint, Plaintiff has already alleged that he was frustrated and confused 1 over Defendant’s conduct, spoke with his attorney abut his rights, exhausted time, resources, and 2 expenses, was harassed, and suffered concrete harm as a result of Defendant’s actions, including 3 but not limited to invasion of privacy, aggravation that accompanies unwanted collection 4 telephone calls, and emotional distress. (See ECF No. 11-2 at ¶¶ 26–28.) These allegations apply 5 not only to Plaintiff’s original claims, but also the proposed amended FDCPA claim. According, 6 the allegations are sufficient at the pleading stage to establish harm and, therefore, standing. 7 Furthermore, at this early pleading stage, the Court finds the proposed amendment that Defendant 8 misrepresented to Plaintiff that the subject consumer debt was outside the State of California’s 9 four-year statute of limitations for written and open-ended credit accounts, “when it was not” 10 triggers § 1692e(2)(A), which prohibits “the false representation of the character, amount, or legal 11 status of any debt.” 15 U.S.C. § 1692e(2)(A); see also Ramirez v. Midland Credit Mgmt., Inc., 12 No. 22-cv-02772-VC, 2023 WL 2277108, at *1 (N.D. Cal. Feb. 27, 2023) (denying motion to 13 dismiss, noting § 1692e is “a strict liability statute ... that should be construed liberally in favor of 14 the consumer”) (citations and internal quotations omitted). Thus, the proposed amended is not 15 futile. 16 Furthermore, the Court finds no evidence of prejudice, bad faith, or undue delay in the 17 litigation. AmerisourceBergen Corp., 465 F.3d at 951. While Defendant has appeared in the case 18 and answered the complaint, Plaintiff’s motion to amend was filed before the deadline to seek 19 leave to amend had expired, and discovery has only recently begun. More specifically, the Court 20 notes initial disclosures were completed by March 31, 2023, and fact discovery does not close 21 until September 15, 2023. (ECF No. 10 at 2.) Furthermore, the Court notes Defendant had ample 22 notice of Plaintiff’s intent to seek amendment, as Plaintiff sent Defendant his proposed amended 23 complaint on February 28, 2023, and asked Defendant to stipulate to the amendments at that time; 24 and Plaintiff followed up on his request to Defendant on March 3, 7, 17, and 20, 2023. (Id.) The 25 Court further notes the parties’ March 14, 2023 joint scheduling report reveals Plaintiff’s intent to 26 seek to amend the complaint “to include additional facts and allegations in light of informal 27 discovery produced by Defendant.” (ECF No. 8 at 2.) Finally, the Court notes this is Plaintiff’s 28 first request to amend the complaint; thus, under the liberal amendment standard, the Court finds 1 granting Plaintiff’s motion is appropriate. 2 Defendant alternatively argues the informal discovery it provided Plaintiff conclusively 3 demonstrated that Plaintiff’s FDCPA and RFDCPA claims are without merit and subject to 4 dismissal, and that Plaintiff’s proposed allegations misconstrue the evidence presented in the 5 informal discovery Defendant provided to Plaintiff; therefore, it argues it would be prejudiced if 6 Plaintiff were permitted to amend the complaint. However, Defendant provides no specifics 7 regarding the purportedly at-issue evidence. Further, Defendant’s argument appears to suggest a 8 disputed issue of fact with respect to interpretation of certain records not presently before the 9 Court. In any event, the instant motion to amend is not the appropriate forum for Defendant’s 10 evidentiary arguments. Finally, the Court notes Defendant did not challenge the sufficiency of 11 the pleadings of the original complaint, but filed an answer to the complaint. This indicates 12 Defendant’s concession that the face of the complaint itself, asserted cognizable FDCPA and 13 RFDCPA claims. Defendant’s arguments that the evidence does not support Plaintiff’s 14 allegations is one that must be presented in a motion for summary judgment. 15 Given the early posture of this litigation, the timeliness of Plaintiff’s motion, the ample 16 advance notice to Defendant of Plaintiff’s intended amendments, the fact that this is Plaintiff’s 17 first attempt to amend the complaint, as well as the Court’s finding that the proposed amendment 18 is not futile, the Court finds Plaintiff should be granted leave to amend. 19 V. 20 CONCLUSION AND RECOMMENDATIONS 21 Based on the foregoing, IT IS HEREBY RECOMMENDED that: 22 1. Plaintiff’s motion to amend (ECF No. 11) be GRANTED; 23 2. Plaintiff be directed to file his first amended complaint within thirty (30) days of 24 the Court’s order adopting the findings and recommendations; and 25 3. Defendant’s responsive pleading be due within thirty (30) days of the filing of the 26 first amended complaint. 27 These findings and recommendations are submitted to the district judge assigned to this 28 action, pursuant to 28 U.S.C. § 636(b)(1)(B) and this Court’s Local Rule 304. Within fourteen 1 |} (14) days of service of this recommendation, any party may file written objections to these 2 || findings and recommendations with the Court and serve a copy on all parties. Such a document 3 || should be captioned “Objections to Magistrate Judge’s Findings and Recommendations.” The 4 | district judge will review the magistrate judge’s findings and recommendations pursuant to 28 5 || U.S.C. § 636(b)(1)(C). 6 The parties are advised that failure to file objections within the specified time may result 7 || in the waiver of rights on appeal. Wilkerson v. Wheeler, 772 F.3d 834, 839 (9th Cir. 2014) 8 | (citing Baxter v. Sullivan, 923 F.2d 1391, 1394 (9th Cir. 1991)). 9 10 IT IS SO ORDERED. tf (Sc 11 | Dated: _May 19, 2023 _ ee UNITED STATES MAGISTRATE JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28