Judge: Armen Tamzarian, Case: BC720986, Date: 2022-07-26 Tentative Ruling

Case Number: BC720986    Hearing Date: July 26, 2022    Dept: 52

Tentative Ruling:

Defendants Ladera Crest Homeowners Association and Lordon Management’s Motion to Strike Fifth Amended Complaint

Defendants Ladera Crest Homeowners Association and Lordon Management move to strike plaintiff Donnie Muldrow’s entire fifth amended complaint or, in the alternative, paragraphs 13-72, 75-77, 80-81, 83-105, 107, 111, 117, 118, 121, 124-127, 129-40, 142-150, 164-203, paragraphs 1(a), 1(c)-(f), and 2-9 of the prayer for relief, and Exhibit B.

Courts may strike portions of an amended pleading that are outside the scope of the order granting leave to amend.  (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal. App. 4th 1018, 1023.)  On the final status conference on June 10, 2022, the court granted plaintiff’s oral motion for leave to file a fifth amended complaint.  The court’s order permitted plaintiff to amend the complaint to add two additional theories of his case.  At the hearing, the court stated, “The other stuff doesn't matter.  Those are just arguments.  They don’t have to put every argument in their complaint.  There’s two issues.  There’s two theories.  They didn’t own the property during those two years, and you didn’t apply the payments right. That’s it.” (McCliman Decl., Ex. 1, June 13 FSC Transcript, 50:23-28.)  The court further stated, “Make your arguments at the trial.”  (Id., 51:5-6.)

Plaintiff’s fifth amended complaint includes numerous amendments beyond the scope of the court’s order.  Plaintiff added dozens of new paragraphs of factual allegations, new prayers for relief, and a new exhibit.  Plaintiff contends these amendments are within the scope of the order granting leave to amend because they merely clarify plaintiff’s preexisting legal theories rather than adding new theories.  The court’s reference to “mak[ing] it clear” (Opp., p. 3) did not mean plaintiff could rewrite the complaint as to his prior theories.  In context, that statement meant plaintiff could clarify the complaint by removing theories from it. 

Plaintiff filed this action in September 2018.  He has amended the complaint five times.  The trial is set for August 17, 2022.  At this stage, plaintiff may not substantially rewrite the complaint.

The court denies defendants’ motion as to striking the entire fifth amended complaint.

The motion is granted in part.  The court hereby strikes the following portions of plaintiff’s fifth amended complaint: paragraphs 13-72, 75-77, 80-81, 83-105, 107, 111, 117, 118, 121, 124-127, 129-40, 142-149, 164-203, paragraphs 1(a), 1(c)-(f), and 2-9 of the prayer for relief, and Exhibit B.

Defendant Pamela Abbott Moore’s Motion to Strike Fifth Amended Complaint

Defendant Pamela Abbott Moore moves to strike portions of plaintiff Donnie Muldrow’s fifth amended complaint.  Courts may strike “any irrelevant, false, or improper matter” (CCP § 436(a)) including allegations that are “not essential to the statement of a claim or defense,” “neither pertinent to nor supported by an otherwise sufficient claim or defense,” or “[a] demand for judgment requesting relief not supported by the allegations” (CCP § 431.10(b)).

Pre-Lien Letter

Moore moves to strike portions of the fifth amended complaint referring to a “pre-lien notice” sent to plaintiff on October 26, 2016.  (5AC, ¶¶ 66-71.)  The pre-lien notice is not essential or pertinent to any claim in plaintiff’s fifth amended complaint. 

Plaintiff contends the letter supports his eighth cause of action for violation of the federal Fair Debt Collection Practices Act (FDCPA) and ninth cause of action for violation of the Rosenthal FDCPA.  Both causes of action have a statute of limitations of one year.  (15 U.S.C. § 1692k(d); Civ. Code, § 1788.30(f).)  Plaintiff filed this action on September 6, 2018, more than one year after the pre-lien notice was allegedly sent in 2016.  The statute of limitations bars any claim under the federal and Rosenthal FDCPA arising from the pre-lien notice.  The pre-lien notice therefore is not essential or pertinent to any claim.

Ninth Cause of Action: Rosenthal Fair Debt Collection Practices Act

Moore moves to strike the ninth cause of action for several reasons.  Plaintiff does not allege a “consumer credit transaction” as required for her to be liable under the Rosenthal FDCPA.   

To be liable, Moore must be a “debt collector.”  (Civ. Code, § 1788.30.)  A “debt collector” is a person who “engages in debt collection.”  (Civ. Code, § 1788.2(c).)  “‘[D]ebt collection’ means any act or practice in connection with the collection of consumer debts.”  (Civ. Code, § 1788.2(b).)  “Consumer debts” applies to money or property due “by reason of a consumer credit transaction.”  (Civ. Code, § 1788.2(f).)  Finally, “consumer credit transaction” means a transaction “in which property, services, or money is acquired on credit.”  (Civ. Code, § 1788.2(e).)

The debt plaintiff alleges Moore attempted to collect was overdue homeowners’ association assessments.  Those assessments do not arise from any “consumer credit transaction” because Muldrow did not obtain anything “on credit.”  “[T]he phrase ‘on credit’ can be stated as obtaining something of value without immediate payment on the promise to make a payment or payments in the future.”  (Davidson v. Seterus, Inc. (2018) 21 Cal.App.5th 283, 296.)  Ladera Crest Homeowners Association’s governing document provides that regular assessments are made “to meet anticipated authorized expenditures of the Association.”  (5AC, Ex. A, § 4.4, p. 23.)  Thus, rather than plaintiff acquiring something on the promise to pay in the future, the assessments represent payments due in advance for services to be acquired later. 

Disposition

The court declines to rule on this motion now because of additional issues not briefed by the parties, which are discussed below.

The court hereby continues defendant Pamela Abbott Moore’s motion to strike to August 17, 2022, at 9:00 a.m.

Order to Show Cause

Though not briefed by the parties, the court raises the following questions about plaintiff’s eighth and ninth causes of action:

1.      Is Ladera Crest Homeowners Association exempt from the federal FDCPA because it collected its own debts? 

The federal FDCPA defines “debt collector” as one who regularly collects “debts owed or due or asserted to be owed or due another.”  (15 U.S.C. § 1692a(6).)  The federal FDCPA thus “does not apply to creditors seeking to collect their own debts; however, the Rosenthal Act does.”  (Best v. Ocwen Loan Servicing, LLC (2021) 64 Cal.App.5th 568, 279 Cal.Rptr.3d 69, 74; accord MacDermid v. Discover Financial Services (6th Cir. 2007) 488 F.3d 721, 734 [defendant “is clearly not a ‘debt collector’; rather, it is the very party to whom the debt is due”].)

Plaintiff alleges Ladera Homeowners Association sought to collect homeowners’ association assessments he owed to Ladera.  Based on these allegations, Ladera may be exempt from the federal FDCPA (though not the Rosenthal FDCPA) because it was collecting its own debts.

2.      Is attorney Moore exempt from the applicable version of the Rosenthal FDCPA?

Plaintiff filed this action in 2018.  Before 2020, the Rosenthal FDCPA explicitly provided that attorneys are not “debt collectors.”  (Former Civ. Code, § 1788.2(c) [“The term ‘debt collector’ … does not include an attorney or counselor at law.”]; see also Carney v. Rotkin, Schmerin & McIntyre (1988) 206 Cal.App.3d 1513, 1526 [the Act “specifically exempts attorneys from its coverage”].) 

If that version of the statute applies instead of the current version, Moore would not be a “debt collector” under the Rosenthal FDCPA.  In enacting that amendment, the Legislature stated, “The amendments of subdivision (f) of Section 1788.2 of the Civil Code made by this act do not constitute a change in, but are declaratory of, existing law.”  (Stats. 2019, ch. 545, § 1.)  The Legislature made no such statement about the amendment to subdivision (c), which removed the attorney exception.

The court hereby sets an order to show cause re: plaintiff’s eighth and ninth causes of action for August 17, 2022, at 9:00 a.m.  Plaintiff must file any response to this order to show cause at least nine court days before the hearing.  Defendants must file any reply at least five court days before the hearing.