McGuire v. Credit Collection Serv. Commercial, Recovery Partners, LLC

KEVIN MCGUIRE, BOP #03841-22, Plaintiff, v. CREDIT COLLECTION SERV. COMMERCIAL,RECOVERY PARTNERS, LLC, FARMERS INSURANCE, Defendants.

CIV. NO. 16-00170 DKW/RLP

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

May 26, 2016

ORDER DISMISSING COMPLAINT PURSUANT TO 28 U.S.C. § 1915(e)(2)

Before the court is pro se Plaintiff Kevin McGuire's pleading, titled "Notice of Motion and Motion to Enjoin the Defendants from attempts to obtain double-recovery in violation of statute 15 U.S.C. §§ 1692f and 1692j through provisions of 28 U.S.C. § 1335 and Haw. Rev. Stat. § 657-11." Doc. No. 1. The court construes this document as Plaintiff's civil Complaint, in which he alleges Defendants Credit Collection Services, Recovery Partners, LLC, and Farmers Insurance violated his rights under the Fifth, Sixth, and Fourteenth Amendments, the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692e(6)(A), 1692f, and 1692g, and the "State of Hawaii Consumer Protection Act," Hawaii Revised Statutes, Section 480-13.¹ See, Doc. Nos. 1 (Compl.); 2 (Pl.'s Mem. in Supp.); and 3 (Pl.'s Decl.).

Plaintiff is proceeding in forma pauperis. Doc. No. 6. For the following reasons, Plaintiff's Complaint is DISMISSED with leave to amend for failure to state a claim pursuant to 28 U.S.C. § 1915(e)(2).

I. BACKGROUND²

Plaintiff was taken into custody on or about April 21, 2015, pursuant to his conviction in United States v. McGuire, Cr. No. 14-00389 HG (D. Haw. Mar. 13, 2015) (Doc. No. 51).³ He is presently incarcerated at FCI Sheridan.

On February 18, 2015, two months before Plaintiff was taken into custody, he was involved in a traffic accident on Kaukonahua Road, Oahu. The other driver was insured by Defendant Farmers Insurance. See Doc. No. 3-1, PageID #22.Plaintiff was issued a traffic citation for failure to keep registration documents in the vehicle. Id., PageID #24-26.

On March 23, 2015, the District Court of the First Circuit, State of Hawaii, Wahiawa Division, entered Default Judgment against Plaintiff for $70.00, for his failure to answer its notice of traffic infraction. Id., PageID #24.

By letter dated March 24, 2015, Farmers Insurance notified Plaintiff at P.O. Box 92, Waialua, HI 96791, that it had attempted to contact him to discuss their insured's claim, but was unable to reach him. Id., PageID #22-23. Farmers Insurance provided Plaintiff a prepaid envelope and telephone number so that he could respond.

By letter dated April 22, 2015, Defendant Credit Collection Services notified Plaintiff at P.O. Box 1032, Waialua, HI 96791, of its subrogated claim against him for $1,151.81, regarding the February 18, 2015 accident. Doc. No. 3-2, PageID #30. The letter informed Plaintiff that if he provided proof of valid insurance coverage, they would suspend recovery efforts against him personally, and that failure to respond could result in legal action contingent on applicable state law.

By letter dated May 29, 2015, the City and County of Honolulu Division of Motor Vehicle, Licensing and Permits notified Plaintiff at P.O. Box 92, Waialua, HI 96791, that his drivers license had been suspended. Doc. No. 3-1, PageID #27.

By letter dated July 13, 2015, Defendant Credit Collection Services notified Plaintiff at P.O. Box 92, Waialua, HI 96791, that it had tried to contact him unsuccessfully numerous times regarding a subrogated claim of $14,256.00. Doc. No. 3-2, PageID #29. They told him again that if he provided valid insurance information, efforts to recover the debt would be suspended, and that a failure to do so could result in legal action.

By letter dated November 23, 2015, Defendant Recovery Partners notified Plaintiff that Farmers Insurance had referred a debt of $7,526.48, incurred from the February 18, 2015 accident, to them for collection. Doc. No. 3-3, PageID #31.

On March 14, 2016, Recovery Partners offered settlement of the debt for $6,379.32. Id., PageID #32. This letter noted, however, that the amount due was $9,814.34, and stated that failure to resolve the claim "may also result in our client pursuing legal action against you." Id.

Plaintiff says he received notice of the traffic court judgment and insurance claims against him when a family member forwarded them to him at FCI-Sheridan, but he does not allege when this occurred. On April 11, 2016, Plaintiff filed the present suit.

Plaintiff alleges Defendants violated: (1) the FDCPA, 15 U.S.C. §§ 1692(e) & (e)(6), 1692f, 1692g(a) by failing to personally serve him notice of their intent tocollect a debt pursuant to Rules 4, 5, "16(a)(1)(e) [sic]," and 26 of the Federal Rules of Civil Procedure, and Rule "58(d)(G) [sic]" of the Federal Rules of Criminal Procedure; (2) his right to due process and a fair hearing under the Fifth, Sixth, and Fourteenth Amendments; and (3) Hawaii Revised Statutes §§ 480-13 & 657-11.⁴ Compl., Doc. No. 1, PageID #3-4. He also claims that Defendants are trying to obtain double-recovery of damages. Plaintiff seeks compensatory and punitive damages, and injunctive relief.

II. LEGAL STANDARD

The court must screen all civil actions brought in forma pauperis pursuant 28 U.S.C. § 1915(e)(2). Complaints or claims must be dismissed if they are frivolous, malicious, fail to state a claim on which relief may be granted, or seek relief from a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2).

A complaint that lacks a cognizable legal theory or alleges insufficient facts under a cognizable legal theory fails to state a claim. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). A pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R.Civ. P. 8(a)(2). This does not demand detailed factual allegations, but requires "more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. A claim is plausible "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.

The court is not required to "'assume the truth of legal conclusions merely because they are cast in the form of factual allegations.'" Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (per curiam) (quoting W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981)). "[C]onclusory allegations of law and unwarranted inferences are insufficient." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004); accord Iqbal, 556 U.S. at 678.

Leave to amend should be granted if it appears the plaintiff can correct the defects in the complaint. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc). When it is clear the complaint cannot be saved by amendment, dismissalwithout leave to amend is appropriate. Sylvia Landfield Trust v. City of L.A., 729 F.3d 1189, 1196 (9th Cir. 2013).

III. SUBJECT MATTER JURISDICTION

Plaintiff makes confusing allegations regarding the court's jurisdiction. Federal courts are courts of limited jurisdiction. One basis for jurisdiction is federal question jurisdiction which governs matters authorized by the Constitution and Congress. 28 U.S.C. § 1331. Although Plaintiff alleges violations of the FDCPA and the United States Constitution, he does not assert federal question jurisdiction under § 1331. The court, however, construes the action as alleging federal question jurisdiction.

Rather, Plaintiff asserts diversity jurisdiction exists. District courts have "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States." 28 U.S.C. § 1332(a)(1). For purposes of diversity jurisdiction, plaintiff(s) and defendant(s) must be completely diverse. See Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005) ("we have consistently interpreted § 1332 as requiring complete diversity: In a case with multiple plaintiffs and multiple defendants, the presence in the action of a single plaintiff from the same State as a single defendant deprives the district court oforiginal diversity jurisdiction over the entire action."); In re Digimarc Corp. Derivative Litig., 549 F.3d 1223, 1234 (9th Cir. 2008).

For purposes of § 1332, "a corporation shall be deemed to be a citizen of every State . . . by which it has been incorporated and of the State . . . where it has its principal place of business." 28 U.S.C. § 1332(c)(1). Further, "the amount in controversy [in diversity actions] is determined from the face of the pleadings." Crum v. Circus Circus Enter., 231 F.3d 1129, 1131 (9th Cir. 2000). To justify dismissal for lack of diversity jurisdiction, "it must appear to a legal certainty that the claim is really for less than the jurisdictional amount." Id. (internal citation and quotation marks omitted).

Plaintiff fails to allege the citizenship of the parties. And, even if the parties are completely diverse, Plaintiff seeks relief for debt of less than $15,000.00. The court finds to a legal certainty that the amount in controversy here is less than $75,000. Diversity jurisdiction is inappropriate.

Plaintiff also asserts jurisdiction under 28 U.S.C. § 1335, as an interpleader action. A statutory interpleader action requires (1) claims to a stake valued at $500 or more; (2) by two or more claimants of diverse citizenship; and (3) a deposit by the plaintiff of the stake claimed or a bond to ensure the plaintiff's compliance with the court's future order. See id. Plaintiff's assertion of jurisdiction as aninterpleader action makes little sense; he is not a third-party plaintiff nor asserting an...