Opinion
No. CV 11-02143-PHX-FJM
03-14-2012
Renee M. Zinni and Marco S. D'Alonzo, Plaintiffs, v. Jackson White, P.C.; James L. Tanner; Scott L. Potter; Aaron M. Finter; Anthony H. Misseldine; John Does 1-10; ABC Entities 1-10, Defendants.
ORDER
We have before us defendants' motion to dismiss (doc. 28), plaintiffs' response and notice of plaintiffs' motion for leave to amend complaint (doc. 29), plaintiffs' supplement to opposition to motion (doc. 30), plaintiffs' motion for leave to amend (doc. 31), defendants' reply in support of motion to dismiss (doc. 32), defendants' response to motion for leave to amend (doc. 33), and plaintiffs' reply (doc. 35).
I
Plaintiffs failed to comply with LRCiv 15.1, which requires a party who moves for leave to amend a pleading to "attach a copy of the proposed amended pleading as an exhibit to the motion [and] indicate in what respect it differs from the pleading which it amends, by bracketing or striking through the text to be deleted and underlining the text to be added." Plaintiffs' proposed amended complaint contains no indication of how it differs from their original complaint. Their reply completely fails to address this problem or the arguments against amendment in defendants' response.
The court should freely grant leave to amend under Rule 15, Fed. R. Civ. P. Leave to amend may be denied, though, if the proposed amendment is futile or the amended complaint would be subject to dismissal. Saul v. United States, 928 F.2d 829, 843 (9th Cir. 1991). Granting or denying leave to amend is within the discretion of the trial court. Swanson v. U.S. Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996).
As far as the court can tell, the amended complaint adds a claim for aiding and abetting and adds facts about the recent trustee's sale. The predicate of an aiding and abetting claim is "harm resulting to a third person from the tortious conduct of another." Restatement (Second) of Torts § 876 (1979); see also Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 485, 38 P.3d 12, 23 (recognizing § 876(b) as the standard in Arizona).
Plaintiffs claim that defendants are liable for aiding and abetting M&I Marshall & Ilsley Bank in the wrongful foreclosure of their home and making misrepresentations. But in Zinni v. M&I Marshall & Ilsley Bank, No. CV-09-2035-PHX-FJM, 2011 WL 1792552 (D. Ariz. May 11, 2011), we granted summary judgment in favor of M&I Marshall & Ilsley Bank and against plaintiffs on all claims. Because no principal tortfeasor exists, defendants cannot be liable for aiding and abetting. Accordingly, an amendment to the complaint to add this cause of action would be futile and subject to dismissal.
II
Defendants move for dismissal pursuant to Rule 12(b)(6), Fed. R. Civ. P. If a complaint does not state a plausible claim for relief on its face, it cannot survive a Rule 12(b)(6) motion to dismiss. Ashcroft v. Iqbal, 556 U.S. _, 129 S. Ct. 1937, 1950 (2009). "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. at 1949. "[A] forumulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1965 (2007). When ruling on a motion to dismiss, this court must accept a plaintiff's factual allegations and reasonable inferences as true, but is "not bound to accept as true a legal conclusion couched as a factual allegation." Id. (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 2944 (1986)). Dismissal under Rule 12(b)(6) may be "based on the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
III
Count one of plaintiffs' complaint alleges a violation of the Fair Debt Collection Practices Act ("FDCPA"). The FDCPA prevents abusive practices by a "debt collector," defined as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). A "debt" is "any obligation or alleged obligation of a consumer to pay money arising out of a transaction . . . primarily for personal, family, or household purposes." 15 U.S.C. § 1692a(5).
"[A] non-judicial foreclosure proceeding is not the collection of a 'debt' for purposes of the FDCPA." Mansour v. Cal-Western Reconveyance Corp., 618 F. Supp. 2d 1178, 1182 (D. Ariz. 2009). Moreover, "mortgagees and their assignees, servicing companies, and trustee fiduciaries are not included in the definition of 'debt collector.'" Id.; see also Narramore v. HSBC Bank USA, N.A., 2010 WL 2732815, at *10-12 (D. Ariz. July 7, 2010) (same); Earl v. Wachovia Mortgage FSB, 2010 WL 2336191, at *5 (D. Ariz. June 10, 2010) (same). Because a foreclosure trustee is not a debt collector and a non-judicial foreclosure is not the collection of a debt, plaintiffs' FDCPA claim must be dismissed.
VI
Plaintiffs' second claim is for violation of A.R.S. §§ 33-420 and 33-801 et seq. They contend that the notice of trustee's sale recorded on August 17, 2009 was invalid. Plaintiffs' complaint requested a preliminary injunction and temporary restraining order cancelling the trustee's sale. They later filed a motion for preliminary injunction (doc. 14) which we denied (doc. 22). We also denied a motion to set aside/cancel trustee's sale (doc. 24), disagreeing with some of the same arguments here about fraudulent and improper recording and improper substitution of trustee. (Doc. 27). There is no showing that the notice of trustee's sale recorded August 17, 2009 was false. Plaintiffs' claim regarding a false notice of sale is groundless.
V
The third claim alleges tortious interference. To state a claim for relief, plaintiffs must show intentional interference inducing or causing a breach of a contract between plaintiffs and a third party. Snow v. Western Sav. & Loan Ass'n, 152 Ariz. 27, 33, 730 P.2d 204, 211 (1986). The purported facts to support this element consist of the recording of a false notice of sale and evicting plaintiffs. As discussed above, there is no evidence that the notice of sale was false. There is also no evidence that defendants wrongfully evicted plaintiffs or sent workers to change locks and drain the pool. The police report from the incident says the workers were sent by the bank. (Doc. 1, ex. P). Plaintiffs' contention that the workers were sent by defendants is contradicted by the evidence submitted here as well as the allegations made in their prior action against the bank. Complaint ¶ 61, Zinni v. M&I Marshall & Ilsley Bank, No. CV-09-2035-PHX-FJM.
VI
Count four, abuse of process, is similarly unavailing. "The essential elements of the tort of abuse of process are an ulterior purpose and a wilful act in the use of judicial process not proper in the regular conduct of the proceeding." Bird v. Rothman, 128 Ariz. 599, 602, 627 P.2d 1097, 1100 (Ct. App. 1981). Filing a counterclaim to judicially foreclose a lien that is in default is not abuse of process.
VII
Count five alleges negligent and intentional infliction of emotional distress. To prevail on a claim for intentional infliction of emotional distress, the conduct complained of must be "extreme and outrageous." Watts v. Golden Age Nursing Home, 127 Ariz. 255, 258, 619 P.2d 1032, 1035 (1980). Liability only attaches to conduct "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Id. (quoting Restatement (Second) of Torts § 46 cmt. d (1965)). On a motion to dismiss, we may determine whether the alleged actions rise to this level. Cervantes, 656 F.3d at 1046. Once again, plaintiffs were in default on their loan and the foreclosure was not wrongful or false. Defendants did not act in such an extreme and outrageous manner as to warrant a finding of liability here.
A claim for negligent infliction of emotional distress requires the plaintiff to witness an injury to a closely related person, suffer mental anguish manifested as physical injury, and be within the zone of danger so as to be subject to an unreasonable risk of bodily harm. Pierce v. Casas Adobes Baptist Church, 162 Ariz. 269, 272, 782 P.2d 1162, 1165 (Ariz. 1989). Plaintiffs do not allege any injury to a closely related person has resulted from defendants' conduct, therefore they fail to state a claim.
VIII
In count six, plaintiffs contend that defendants are liable for libel for making written statements that plaintiffs failed to pay. But plaintiffs did fail to make all payments. Therefore, any statement that they failed to pay their loan is not false. Without a false statement, there can be no claim for libel. See Godbehere v. Phoenix Newspapers, Inc., 162 Ariz. 335, 341, 783 P.2d 781, 787 (1989) ("To be defamatory, a publication must be false . . . .").
IX
Plaintiffs' last claim is for violation of the Arizona Consumer Fraud Act, A.R.S. § 44-1521 et seq. This claim rests on the same allegations as the claims above and is unsuccessful for the reasons already discussed. There is no evidence that defendants were responsible for the presence of workers at plaintiffs' house, the notice of sale was not false, and the plaintiffs were in default.
X
Defendants request attorneys' fees pursuant to A.R.S. §§ 12-349, 12-341.01, or 33-807(E). Any request for fees should be made pursuant to a separate motion which complies with LRCiv 54.2.
XI
IT IS ORDERED DENYING plaintiffs' motion for leave to amend (doc. 31).
IT IS ORDERED GRANTING defendants' motion to dismiss (doc. 28).
____________________________
Frederick J. Martone
United States District Judge