United States District Court, D. Hawaii
MINA E. HEMMY, Plaintiff,
MIDLAND FUNDING LLC, et al., Defendant.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT
ERC'S MOTION TO DISMISS COMPLAINT AND GRANTING IN PART
AND DENYING IN PART DEFENDANT MIDLAND'S MOTION FOR
JUDGMENT ON THE PLEADINGS
E. Kobayashi United States District Judge
the Court are: Defendant Enhanced Recovery Company, LLC's
(“ERC”) Motion to Dismiss Complaint, Filed
7/25/16 [Dkt. 1] (“ERC's Motion”), filed on
October 11, 2016; and Defendant Midland Funding, LLC's
(“Midland”) Motion for Judgment on the Pleadings
(“Midland's Motion”), filed on November 7,
2016. [Dkt. nos. 17, 40.] Pro se Plaintiff Mina E. Hemmy
(“Plaintiff”) filed a memorandum in opposition to
ERC's Motion on October 21, 2016, and Midland filed a
statement of no position as to ERC's Motion on December
6, 2016. [Dkt. nos. 29, 47.] ERC filed a reply in support of
its motion (“ERC Reply”) on December 13, 2016.
[Dkt. no. 48.] Plaintiff failed to file a timely response to
Midland's Motion. On December 13, 2016, Midland filed a
reply in support of its motion (“Midland Reply”).
[Dkt. no. 49.] Plaintiff filed a response to the Midland
Reply (“Plaintiff's Midland Response”) on
December 16, 2016, and Midland filed a reply to
Plaintiff's Midland Response (“Supplemental Midland
Reply”) on December 22, 2016. [Dkt. nos. 53, 54.]
December 14, 2016, the Court issued an entering order finding
these matters suitable for disposition without a hearing
pursuant to Rule LR7.2(d) of the Local Rules of Practice of
the United States District Court for the District of Hawai`i
(“Local Rules”). After careful consideration of
the motions, supporting and opposing memoranda, and the
relevant legal authority, the ERC Motion and the Midland
Motion are HEREBY GRANTED IN PART AND DENIED IN PART for the
reasons set forth below. Specifically, the motions are
GRANTED insofar as all of Plaintiff's claims against ERC
and Midland are DISMISSED. The dismissal of Plaintiff's
claim against Midland in Count IV is WITH PREJUDICE, but the
dismissal of all Plaintiff's other claims against Midland
and all of Plaintiff's claims against ERC is WITHOUT
PREJUDICE. In other words, this Court will allow Plaintiff to
try to amend her Complaint to cure the defects in those
claims that this Court has identified in this Order.
25, 2016, Plaintiff filed her Complaint for Permanent
Injunction and Other Relief (“Complaint”) against
Midland, ERC, and Defendant “Kirk Neste of Cades and
Schutte” (“Neste”). Plaintiff brings this
action pursuant to sections 5(a) and 13(b) of the Fair Debt
Collections Practices Act (“FDCPA”), 15 U.S.C.
§§ 1692-1692p, and the Hawai`i Uniform Commercial
Code (“UCC”), Haw. Rev. Stat. Chapter 490,
Article 9. [Complaint at ¶¶ 1-2.] According to the
Complaint, “[t]he alleged debt instrument has been
treated as a tradable security secured by [Plaintiff's]
legal name in commerce for alleged goods and services or
other money owed, which was by an alleged contract/instrument
sold or assigned to a third party.” [Id. at
to the Complaint as Exhibit A is a letter dated April 12,
2016 from Plaintiff to Midland regarding
“correspondence purporting to allege a debt claimed
by” Credit One Bank, N.A., in the amount of $778.35
(“Midland Letter”). [Complaint, Exh. A at 1.] The
letter gave Midland notice that Plaintiff was disputing the
debt and she demanded that Midland cease and desist
collection until it provided validation and verification of
the debt. Plaintiff demanded the following information to
verify the debt:
1) The name and address of the person or persons of Credit
One bank, [sic] N.A. alleging a claim of a debt.
2) The ORIGIN of the funds used to create this alleged claim
of a debt.
3) The name of the actual creditor even if that is I.
4) The actual records of the organization or other government
unit showing the time and place of the DEPOSIT and
distribution of the funds used to create this alleged claim
5) The actual records of the organization or other
governmental unit showing that an actual loan was made from
the organization or other governmental unit's own funds
that resulted in the enclosed alleged claim of a debt.
6) The actual FINANCIAL records of the organization or other
governmental unit with a live signature on any and all
document/instrument(s) used to allege the existence of a REAL
LOAN of funds or debt from the organization or other
governmental unit, to myself.
7) The actual records (or affidavit) of the organization or
other governmental unit showing that any and all
document/instrument(s) containing my signature or the
likeness of my signature were not negotiated or pledged by
the organization or other governmental unit against my credit
to create the funds used for the appearance of a debt and
resulting in this alleged claim of debt.
[Id. at 2-3 (some emphases omitted).] Plaintiff also
demanded information showing that the person preparing the
validation of the debt had the authority and the personal
knowledge to do so. [Id. at 3-4.] She asserted that
she was entitled to this information pursuant to “the
truth in lending laws of the United States Code, Title 15
§ 1601 et seq. and Regulation Z” and the FDCPA.
[Id. at 2.]
B is a letter dated October 22, 2015 from Plaintiff to AFNI
Inc. regarding its “report of a collection on [her]
credit” on behalf of AT&T in the amount of $2, 456
(“AFNI Letter”). [Complaint, Exh. B at 1.] The
AFNI Letter is similar to the Midland Letter. Exhibit C is a
letter dated May 20, 2016 from Plaintiff to Neste regarding
“correspondence around May 10th alleging a debt
from” House's Homes LLC for an “[a]lleged
pending judgment” (“Neste Letter”).
[Id., Exh. C at 1.] The Neste Letter is similar to
the Midland Letter.
Complaint alleges the following claims: failure to report to
consumer credit bureaus that a debt is disputed, in violation
of 15 U.S.C. § 1692e(8) (“Count I”);
reporting an unverified/invalid debt to third parties and/or
credit bureaus, in violation of 15 U.S.C. § 1692g(b)
(“Count II”); a common law defamation claim
(“Count III”); and a UCC claim based upon the
alleged failure to provide an authentic statement of account
upon request, in violation of Haw. Rev. Stat. §
490:9-210, 625(f). Plaintiff prays for the following relief
from an unspecified defendant: an order requiring the
defendant “to delete this unverified debt from its
accounting books”; [id. at ¶ 15.A;] an
injunction requiring the defendant to comply with the FDCPA
and the UCC in all future debt collections; court
supervision, or supervision of a special master to ensure
compliance; fees and costs pursuant to 5 U.S.C. §
552(a)(4)(E) or any other applicable law; damages and
penalties for the FDCPA and UCC violations; and any other
Motion argues that this Court must dismiss Plaintiff's
claims against it because the Complaint does not contain any
factual allegations against it. Further, the allegations of
the Complaint and the exhibits thereto foreclose
Plaintiff's state law claims, which must be dismissed
Midland Motion argues that: Plaintiff fails to state a FDCPA
claim against Midland; Plaintiff fails to state a defamation
claim; and Plaintiff's debts do not fall within the scope
of the UCC.
Court turns first to the merits of the Midland Motion.
filed its answer to the Complaint on October 7, 2016. [Dkt.
no. 12.] Midland brings its motion pursuant to Fed.R.Civ.P.
12(c), which states: “After the pleadings are closed -
but early enough not to delay trial - a party may move for
judgment on the pleadings.”
under Rule 12(c) is substantially identical to analysis under
Rule 12(b)(6) because, under both rules, a court must
determine whether the facts alleged in the complaint, taken
as true, entitle the plaintiff to a legal remedy.”
Pit River Tribe v. Bureau of Land Mgmt., 793 F.3d
1147, 1155 (9th Cir. 2015) (citation and quotation marks
omitted). However, this Court is not required to accept as
true “[t]hreadbare recitals of the elements of a cause
of action, supported by mere conclusory statements.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555,
127 S.Ct. 1955 (2007) (Although for the purposes of a motion
to dismiss we must take all of the factual allegations in the
complaint as true, we “are not bound to accept as true
a legal conclusion couched as a factual allegation”
(internal quotation marks omitted))).
district court has stated:
To state a claim under the FDCPA, a plaintiff must show: (1)
that he or she is a consumer; (2) that the debt arises out of
a transaction entered into for personal purposes; (3) that
the defendant is a debt collector; and (4) that the defendant
violated one of the provisions of the FDCPA.
Minichino v. Piilani Homeowners Ass'n, CIVIL NO.
16-00461 DKW-RLP, 2016 WL 7093431, at *3 (D. Hawai`i Dec. 2,
2016) (citing Freeman v. ABC Legal Servs. Inc., 827
F.Supp.2d 1065, 1071 (N.D. Cal. 2011)).
FDCPA defines a consumer as “any natural person
obligated or allegedly obligated to pay any debt.” 15
U.S.C. § 1692a(3). The Complaint quotes this definition,
[Complaint at ¶ 7, ] and alleges that Plaintiff
“is established as a secured party creditor of the
defendants alleged claim of a debt” [id. at
¶ 5]. In considering Midland's Motion, this Court is
not required to accept Plaintiff's recitation of the
statutory definition and her conclusory statement. However,
because Plaintiff is proceeding pro se, this Court must
liberally construe the Complaint. See, e.g.,
Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir.
1987) (“The Supreme Court has instructed the federal
courts to liberally construe the ‘inartful
pleading' of pro se litigants.” (citing Boag v.
MacDougall, 454 U.S. 364, 365, 102 S.Ct. 700, 701, 70
L.Ed.2d 551 (1982) (per curiam))). Liberally construing the
Midland Letter together with allegations in the Complaint,
Plaintiff sufficiently alleges that she is a consumer for
purposes of the FDCPA.
even liberally construing the Complaint together with the
Midland Letter, Plaintiff's allegations do not satisfy
the second element of a FDCPA claim - that “the debt
ar[ose] out of a transaction entered into for ...