Montijo v. Hrdlicka, 1:20-cv-00125-DAD-EPG

ALEJANDRO MONTIJO, JR., et al., Plaintiffs, v. STEVEN R. HRDLICKA, Defendant.

No. 1:20-cv-00125-DAD-EPG

United States District Court, E.D. California

August 30, 2021

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS WITHOUT LEAVE TO AMEND (Doc. No. 10)

This matter is before the court on the motion to dismiss filed by defendant Steven R. Hrdlicka on May 18, 2020. (Doc. No. 10.) Pursuant to General Order No. 617 addressing the public health emergency posed by the COVID-19 pandemic defendant's motion was taken under submission on the papers. (Doc. No. 11.) For the reasons explained below, the court will grant the pending motion to dismiss.

BACKGROUND

On January 22, 2020, plaintiffs Alejandro Montijo, Jr. and Joseph Banuelos, Jr. (“plaintiffs”) filed a complaint initiating this action in which they allege that defendant attempted to “unlawfully and abusively collect a debt allegedly owed by plaintiffs pursuant to a residential lease agreement” in violation of the federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692, et seq., and California's Unfair Competition Law (“UCL”), California Business & Professions Code §§ 17200, et seq. (Doc. No. 1 at ¶¶ 4-5.)

In their complaint, plaintiffs allege as follows. Plaintiffs are former tenants of an apartment owned and managed by Conam Management Corporation (“Conam”) in Fresno California. (Id. at ¶ 18.) Defendant Hrdlicka is an attorney licensed to practice law in California and “is the sole proprietor of the Law Offices of Steven R Hrdlicka, a for profit law firm specializing in prosecuting [unlawful detainer] cases and collecting debts on behalf of third-party creditors.” (Id. at ¶¶ 14-15.) “Defendant operates the most prolific full-service eviction and debt collection practice in the Central Valley, ” and between 2007 and 2016 “[d]efendant filed and prosecuted 10, 099 [unlawful detainer] cases against Fresno County tenants on behalf of landlord-creditors” in the Fresno County Superior Court. (Id. at ¶ 6.)

On August 31, 2018, defendant filed a verified unlawful detainer complaint against plaintiffs in the Fresno County Superior Court on behalf of his client, Conam, and continued to represent Conam throughout the unlawful detainer proceedings.^[1] (Id. at ¶¶ 19-20.) As Conam alleged in that complaint, plaintiffs were served with a three-day notice to perform covenants or quit based on an alleged breach of the “maintenance/bed bug addendum, ” in which plaintiffs allegedly failed to maintain and clean the apartment and to prepare it for inspection and treatment by pest control for bed bugs. (Doc. No. 15-1 at 7, 18.) Conam requested the following relief in state court: possession of the premises, costs incurred in the proceedings, reasonable attorneys' fees, forfeiture of the lease agreement, and damages in the amount of the fair rental value of the premises of $12.90 per day for each day that plaintiffs remained in possession from September 1, 2018 through the entry of judgment (i.e., holdover damages). (Id. at 8.) Conam's unlawful detainer action was based upon plaintiffs' alleged failure to perform covenants-not any failure to pay rent; Conam did not allege that plaintiffs had failed to pay rent or request any amounts for past due rent as relief. (Id. at 7-8.)

Plaintiffs timely filed an answer to that unlawful detainer complaint, and a trial on the merits took place on October 9, 2018. (Id. at ¶¶ 19-20.) The issues at trial were whether Conam was entitled to possession of the premises and to holdover damages. (Id. at ¶ 22.) At the conclusion of the trial, the Fresno County Superior Court entered a judgment in favor of Conam for possession only; holdover damages or any other monetary relief were not awarded. (Id. at ¶ 23.) As ordered by the state trial court, plaintiffs vacated the premises on October 24, 2018. (Id. at ¶ 24.)

Plaintiffs struggled to secure new housing. (Id. at ¶ 25.) One prospective landlord was willing to rent to them but later refused “because their credit report showed that they owed money to a prior landlord based upon a judgment for monetary damages.” (Id. at ¶ 26.) This was the first time that plaintiffs learned of any judgment for damages entered against them. (Id. at ¶ 27.)

Unbeknownst to plaintiffs at the time, defendant had appeared in the Fresno County Superior Court on January 29, 2019 to “prove-up” default judgments in seventeen cases, by reading the amount of damages into the record, presenting prepared default judgment forms to the court for signature, and filing them with the state court's clerk. (Id. at ¶¶ 34-36.) In default cases, the landlord's attorney files either “a request for the clerk to enter a default judgment for a writ of possession because the tenant failed to file an answer” or “a request for the judge to issue[] a default judgment for writ of possession because the tenant failed to appear for trial.” (Id. at ¶ 8.) Despite the fact that the plaintiffs had both answered the unlawful detainer complaint and appeared for trial in that action, defendant prepared a judgment form for the superior court to sign at the January 29, 2019 proceedings that falsely represented that “relief is awarded pursuant to a default entered by the court's clerk as a result of plaintiffs' failure to respond to the unlawful detained complaint.” (Id. at ¶¶ 35, 36.) Defendant did not inform the superior court of the October 9, 2018 trial and judgment. (Id. at ¶ 33.) Defendant did not give any prior notice of the January 29, 2019 proceedings to plaintiffs, and the proceedings therefore occurred in plaintiffs' absence. (Id. at ¶ 31.) Defendant did not file a memorandum of costs or a properly noticed motion for attorneys' fees. (Id. at ¶ 30.) Nonetheless, the superior court “granted monetary relief based upon defendant's misrepresentation that he was simply ‘proving-up' a default judgment.” (Id. at ¶ 32.) Specifically, the default judgment entered against plaintiffs on January 29, 2019 awarded Conam $2, 736.60 in monetary relief, consisting of “$696.60 in holdover damages, $1, 350 in attorneys' fees, and $690.00 in court costs.” (Id. at ¶¶ 28, 29; Doc. No. 10-1 at 10.) According to plaintiffs, “defendant took advantage of his position as an officer of the court” and “falsely represented the amount and legal status of the alleged debt and proceeded in a way patently prohibited by law in order to secure a judgment for amounts not authorized by law.” (Doc. No. 1 at ¶ 9.)

Plaintiffs filed a motion in the superior court to vacate the January 29, 2019 default judgment, which defendant did not oppose and which the superior court granted on June 6, 2019.^[2]

(Id. at ¶ 37; Doc. No. 10-1 at 14.) Plaintiffs also filed a motion for sanctions and “reasonable attorneys' fees incurred in bringing their motion to vacate a void judgment that [Conam] obtained through [defendant] Hrdlicka's frivolous actions made in bad faith, ” which the superior court denied on October 24, 2019. (Doc. No. 10-1 at 12, 16.)

Plaintiffs also allege that defendant's allegedly unlawful actions had significant consequences for plaintiffs because “[t]he fraudulent judgment was reflected in their rental history and credit reports which, in turn, marked them as high-risk renters.” (Id. at ¶¶ 39, 40.) Plaintiffs struggled for six months to secure a new apartment, during which their rental applications were repeatedly denied, and they spent “hundreds of dollars in gas and application fees.” (Id. at ¶¶ 41, 42.) “Having their rental applications constantly rejected, having to inconvenience others, and the loss of their privacy caused plaintiffs embarrassment, fear, and anxiety, ” and plaintiff Banuelos “fell into a deep depression that required therapy he still needs to this day.” (Id. at ¶¶ 44, 45.)

As noted, plaintiffs filed their complaint in this action on January 22, 2020, alleging that defendant violated the FDCPA and the UCL and that as a proximate result of those violations, plaintiffs have suffered emotional distress damages, “damages related to injury to credit histories and credit scores, and other monetary and nonmonetary damages.” (Doc. No. 1 at 6-7.) Defendant was served with the summons and complaint on April 17, 2020. (Doc. No. 9.)

On May 18, 2020, defendant filed the pending motion to dismiss plaintiffs' complaint, along with a request for judicial notice. (Doc. Nos. 10, 10-1.) On July 7, 2020, plaintiffs filed an opposition to the pending motion to dismiss, along with a request for judicial notice. (Doc. Nos. 13, 14.) On July 14, 2020, defendant filed a reply thereto, along with another request for judicial notice. (Doc. No. 15.)

LEGAL STANDARD

The purpose of a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is to test the legal sufficiency of the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A dismissal may be warranted where there is “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). A claim for relief 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). Though Rule 8(a) does not require detailed factual allegations, a plaintiff is required to allege “enough facts to state a claim for relief that is plausible on its face.” Bell Atl Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

In determining whether a complaint states a claim on which relief may be granted, the court accepts as true the...