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Connelly v. Ekimoto & Morris, LLLC

United States District Court, D. Hawaii

July 5, 2018

CRAIG CONNELLY and KRISTINE CONNELLY, as individuals and on behalf of all others similarly situated, Plaintiffs,
v.
EKIMOTO & MORRIS, LLLC, a Hawai`i limited liability law company, as individual entities; ASSOCIATION OF APARTMENT OWNERS OF KO OLINA KAI GOLF ESTATES AND VILLAS, a Hawai`i corporation as individual entities and on behalf of all others similarly situated; DOE DEFENDANTS 1-100, Defendants.

          ORDER GRANTING DEFENDANT EKIMOTO & MORRIS, LLLC'S MOTION TO DISMISS THIRD AMENDED CLASS ACTION COMPLAINT FILED MAY 18, 2018

          LESLIE E. KOBAYASHI UNITED STATES DISTRICT JUDGE

         Before the Court is Defendant Ekimoto & Morris, LLLC's (“E&M”) Motion to Dismiss Third Amended Class Action Complaint Filed May 18, 2018 (“Motion”), filed on June 1, 2018. [Dkt. no. 171.] On June 8, 2018, this Court issued an entering order (“6/8/18 EO”): finding the Motion 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”); stating further briefing on the Motion was not necessary; and informing the parties of this Court's rulings on the Motion. [Dkt. no. 173.] The instant Order supersedes the substantive rulings in the 6/8/18 EO. E&M's Motion is hereby granted for the reasons set forth below.

         BACKGROUND

         The salient factual allegations in this case are set forth in the August 30, 2017 order ruling on motions to dismiss (“8/30/17 Order”). [Dkt. no. 95.[1] As relevant to the Motion currently before it, this Court: denied the motions to dismiss as to the claim for declaratory relief against all of the defendants; dismissed the wrongful foreclosure claim against E&M with prejudice; dismissed the unfair or deceptive acts or practices (“UDAP”) claim against E&M with prejudice; 2017 WL 3763843, at *10; and dismissed the Fair Debt Collections Practices Act (“FDCPA”) claim against E&M without prejudice, id. at *12-13.

         The operative pleading at this time is Plaintiffs Craig Connelly and Kristine Connelly's (“Plaintiffs”) Third Amended Class Action Complaint (“Third Amended Complaint”).[2] [Filed 5/18/18 (dkt. no. 162).] The Third Amended Complaint alleges the following claims: declaratory relief against E&M and Defendant Association of Apartment Owners of Ko Olina Kai Golf Estates and Villas (“the AOAO” and “Count I”); [id. at ¶¶ 39-42;] wrongful foreclosure against the AOAO (“Count II”); [id. at ¶¶ 43-47;] a FDCPA claim against E&M and the AOAO (“Count III”); [id. at ¶¶ 48-53;] and a UDAP claim against the AOAO (“Count IV”); [id. at ¶¶ 54-64;] and an improper foreclosure claim against the AOAO (“Count V”), [id. at ¶¶ 65-71]. In the instant Motion, E&M seeks dismissal of Plaintiffs' claims against it on the ground that it was not attempting to collect a “debt” within the meaning of the FDCPA when it represented the AOAO in the foreclosure sale of Plaintiff's condominium unit at issue in this case (“the Unit”).

         DISCUSSION

         Count III alleges E&M violated 15 U.S.C. §§ 1692e and 1692f. [Third Amended Complaint at ¶¶ 51-52.] Section 1692e states, in pertinent part:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:
(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

         (Emphasis added.) Section 1692f prohibits the use of “unfair or unconscionable means to collect or attempt to collect any debt.” (Emphasis added.) For purposes of the FDCPA:

The term “debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

15 U.S.C. § 1692a(5) (emphasis added).

         In the summary judgment context, this district court has stated that, in determining whether an obligation or alleged obligation is a debt for purposes of the FDCPA, “courts examine the transaction as a whole and pay ‘particular attention to the purpose for which the credit was extended in order to determine whether [the] transaction was primarily consumer or commercial in nature.'” Heejoon Chung v. U.S. Bank, N.A., Civ. No. 16-00017 ACK-RLP, 2017 WL 1395605, at *13 (D. Hawai`i Apr. 17, 2017) (alteration in Heejoon Chung) (some citations and internal quotation marks omitted) (quoting Slenk v. Transworld Sys., Inc., 236 F.3d 1072, 1075 (9th Cir. 2001)). “The FDCPA does not require the debt be incurred exclusively for personal, family, or household purposes, but only primarily.” Id. (citing Rust v. Bittner & Hahs, PC, No. CV-11-3057-LRS, 2012 WL 1358506, at *3 (E.D. Wash. Apr. 19, 2012)).

         In Kitamura v. AOAO of Lihue Townhouse, this Court granted summary judgment to the defendants on the ...


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