Abrahamian v. loanDepot.com LLC

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Lee Abrahamian, No. CV-23-00728-PHX-SMB

10 Plaintiff, ORDER

11 v.

12 loanDepot.com LLC,

13 Defendant. 14 15 Plaintiff Lee Abrahamian filed suit against Defendant loanDepot.com LLC after he 16 allegedly received unsolicited calls and text messages from Defendant in violation of the 17 Telephone Consumer Protection Act (“TCPA”) (Doc. 14 (First Amended Class Action 18 Complaint (“Amended Complaint”))). See 47 U.S.C. § 227 et seq.; 47 C.F.R. 19 § 64.1200(c)(2). Defendant filed an Answer asserting thirty-one affirmative defenses 20 (Doc. 31). Plaintiff now moves to strike various affirmative defenses as improperly 21 asserted or legally insufficient (Doc. 34 (Plaintiff’s Motion to Strike Purported Affirmative 22 Defenses)). The parties fully briefed the Motion (see Doc. 36 (Defendant’s Response); 23 Doc. 40 (Plaintiff’s Reply)). The Court has considered the parties’ arguments and 24 applicable law and will grant Plaintiff’s Motion in part and deny it in part for the following 25 reasons. 26 I. BACKGROUND 27 Plaintiff, a resident of Buckeye, Arizona, has had his personal phone number 28 registered on the National Do Not Call Registry (“DNC Registry”) since 2007. (Doc. 14 1 at 2–3 ¶¶ 5, 11.) Defendant is a national home mortgage lender headquartered in 2 California. (Id. at 2 ¶ 6; Doc. 31 at 2 ¶ 6.) Plaintiff alleges that he received two phone 3 calls and one text message from Defendant within the last year, in which Defendant 4 encouraged him to purchase a home equity loan and its other products and services. (Doc. 5 14 at 4 ¶¶ 16–20.) Plaintiff claims that he did not give Defendant permission to contact 6 him, nor did he have any relationship with Defendant prior to the calls. (Id. ¶¶ 14–15.) 7 Plaintiff brings this lawsuit as a class action pursuant to Federal Rule of Civil 8 Procedure 23 on behalf of himself and others unlawfully contacted by Defendant. (Id. at 6 9 ¶ 26–27.) Plaintiff asserts a single count against Defendant for violations of the TCPA. 10 (Id. at 7–8 ¶¶ 36–4.) Consequently, Plaintiff claims entitlement to $500.00 in statutory 11 damages and treble damages per violation under 47 U.S.C. § 227(c)(5)(B). (Id. at 8 ¶ 42.) 12 Defendant raised thirty-one defenses. (Doc. 31 at 9–15.) Plaintiff moves pursuant to 13 Federal Rule of Civil Procedure 12(f) to strike the following defenses (collectively, the 14 “challenged defenses”): 15 1. Plaintiff’s First Amended Complaint fails to state a claim upon which 16 relief may be granted.

17 2. This Court lacks personal jurisdiction as to the claims of absent class 18 members who reside outside of California or whose claims have no connection whatsoever to California. 19 20 3. Plaintiff and the putative class’s claims against loanDepot are barred, in whole or in part, because the alleged injuries were caused by acts or 21 omissions of Plaintiff/the putative class members and/or third parties and/or by events outside the control of any of the parties and/or a 22 superseding intervening cause and not by loanDepot. 23 4. loanDepot did not violate the TCPA directly, and Plaintiff fails to allege 24 a claim under any theory of vicarious liability. 25 . . . . 26

27 7. Plaintiff and the putative class’s claims are barred under the doctrines of laches and/or unclean hands. 28 1 8. To the extent that Plaintiff’s and the purported class members’ claims relate to conduct beyond the applicable statute of limitations, such claims 2 are barred. 3 9. Plaintiff’s and the purported class members’ claims are barred to the 4 extent they are not the “called party” within the meaning of the TCPA. 5 10. Plaintiff’s and the purported class members’ claims are barred, or 6 damages reduced, to the extent that any harm or injuries were the result 7 of, in whole or in part, the negligent or intentional acts or omissions of third parties. 8

9 . . . .

10 12. loanDepot is informed and believes that Plaintiff’s claims and the claims 11 of the putative class members are barred in whole or in part as a result of their failure to mitigate their alleged damages, if any, and any recovery 12 should be reduced in proportion to their failure to mitigate such damages. 13 13. loanDepot did not willfully or knowingly contact Plaintiff on the phone 14 numbers at issue without prior express consent. To the extent that there was any violation of the TCPA, which loanDepot denies, loanDepot shall 15 be liable for no more than a $500.00 penalty, as loanDepot denies that it 16 willfully and knowingly violated the TCPA pursuant to 47 U.S.C. § 227(b)(3)(C). 17

18 . . . .

19 15. loanDepot’s actions were proper and legal, and at all times it acted with 20 good faith and without malice. Thus, to the extent there was any violation of the TCPA, which loanDepot denies, such violation(s) were not 21 knowing and willful. 22 16. To the extent there was any violation of the TCPA, which loanDepot 23 denies, loanDepot’s actions were not knowing and/or willful because any 24 violation was unintentional and the result of a bona fide error despite the maintenance of procedures reasonably adapted to avoid such violations. 25 26 . . . .

27 18. By reason of Plaintiff’s and the putative class members’ inaction with respect to and/or ratification of the calls he alleges were made by 28 loanDepot, Plaintiff and the putative class members are estopped from 1 recovery herein and Plaintiff and the putative class members’ claims against loanDepot are barred by the doctrines of waiver and/or estoppel 2 (including res judicata, collateral estoppel, and judicial estoppel). 3 19. loanDepot’s compliance with the statutes, rules, and regulations which 4 govern the subject matter of this lawsuit precludes its liability to Plaintiff 5 and the putative class members.

6 . . . . 7 24. The allegations of the First Amended Complaint, and the purported cause 8 of action alleged in the First Amended Complaint, are not pleaded with 9 sufficient particularity, are uncertain, vague, ambiguous and unintelligible, and fail to meet the applicable pleading requirements. 10 11 25. Plaintiff’s and the putative class members’ claims are barred, in whole or in part, because Plaintiff’s and the putative class members’ requested 12 relief is too speculative and/or remote and/or impossible to prove and/or 13 allocate.

14 . . . .

15 27. Plaintiff’s and the putative class members’ claims fail or are otherwise 16 barred, in whole or in part, because the calls—to the extent they occurred—were made with the prior express consent of Plaintiff and the 17 putative class members. 18 28. loanDepot reserves the right to assert arbitration. 19

20 29. Plaintiff’s and the putative class members’ claims are barred, in whole or in part, because loanDepot has established and implemented written 21 procedures to comply with the National DNC rules. 22 . . . . 23 24 31. loanDepot is without sufficient knowledge or information to form a belief as to whether it may have additional, but yet unstated, affirmative 25 defenses available to it, and accordingly, loanDepot reserves the right to 26 assert additional defenses in the event discovery indicates that the same would be appropriate. 27 28 (Doc. 34; Doc. 40.) 1 II. LEGAL STANDARD 2 On its own or by motion by either party, “[t]he court may strike from a pleading an 3 insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. 4 R. Civ. P. 12(f). “[T]he function of a 12(f) motion to strike is to avoid the expenditure of 5 time and money that must arise from litigating spurious issues by dispensing with those 6 issues prior to trial.” Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983). 7 These motions are generally disfavored, “as they involve a drastic remedy and may be used 8 as a ‘dilatory or harassing tactic.’” J & J Sports Prods. Inc. v. Mosqueda, No. CV-12-0523 9 PHX DGC, 2013 WL 951366, at *1 (D. Ariz. Mar. 12, 2013) (citation omitted). “As such, 10 even when a motion to strike an insufficient defense is ‘technically appropriate and 11 well-founded, Rule 12(f) motions often are not granted in the absence of a showing of 12 prejudice to the moving party.’” BBK Tobacco & Foods LLP v. Skunk Inc., No. 13 CV-18-02332-PHX-JAT, 2019 WL 6065782, at *1 (D. Ariz. Nov. 15, 2019) (quoting 5C 14 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1381 n.34 (3d 15 ed. 2019)). “The Ninth Circuit applies a ‘fair notice standard’ to motions to strike 16 affirmative defenses,” in which “an affirmative defense need only describe the nature of 17 the defense in general terms.” Cabanillas v. 4716 Inc., No. CV-20-00894-PHX-MTL, 18 2021 WL 1889798, at *1 (D. Ariz. Mar. 3, 2021) (citation omitted); see also Kohler v. 19 Flavia Enterprises, Inc., 779 F.3d 1016, 1019 (9th Cir. 2015). This does not require the 20 party show an entitlement to relief. Ameristar Fence Prod., Inc. v. Phoenix Fence Co., No. 21 CV-10-299-PHX-DGC, 2010 WL 2803907, at *1 (D. Ariz. July 15, 2010). In responding 22 to a pleading in general, a party must “state in short and plain terms its defenses to each 23 claim asserted against it.” Fed. R. Civ. P. 8(b)(1)(A). The pleading of affirmative defenses 24 is governed by Federal Rule of Civil Procedure Rule 8(c). The Rule requires a party to 25 “affirmatively state any avoidance or affirmative defense.” Fed. R. Civ. P. 8(c)(1). 26 III. DISCUSSION 27 A. The Parties’ Arguments 28 Plaintiff objects to the challenged defenses as being factually or legally insufficient. 1 Plaintiff moves to strike fifteen of the challenged defenses as factually insufficient to fair 2 notice of the purported defenses. (Doc. 34 at 3.) These defenses include Defendant’s: 3 First, Third, Fourth, Seventh, Eighth, Tenth, Twelfth, Thirteenth, Fifteenth, Eighteenth, 4 Nineteenth, Twenty-Fourth, Twenty-Fifth, Twenty-Seventh, Twenty-Eighth, and 5 Thirty-First Affirmative Defenses.1 Plaintiff argues that the Ninth Circuit has not 6 addressed whether a heightened pleading standard of Twombly and Iqbal applies to the 7 “fair notice” standard for affirmative defenses and contends that these defenses fail even a 8 lower “fair notice” standard. (Doc. 40 at 2–4.) According to Plaintiff, the inquiry into the 9 amount of factual detail required depends on the defense in question, but even so, 10 Defendant’s mere legal conclusions are insufficient to plead an affirmative defense. (Id.) 11 Defendant responds that many of Plaintiff’s contentions inappropriately impute Twombly 12 and Iqbal’s Rule 8(a) pleading requirements to its affirmative defenses, and courts in this 13 District routinely refuse to apply that heightened pleading standard. (Doc. 36 at 7–8.) In 14 Defendant’s view, all that Rule 8(c) and the case law requires is “fair notice” by stating the 15 nature and grounds for an affirmative defense, in which Defendant argues it has adequately 16 pleaded. (Id. at 9–11.) 17 Plaintiff also moves to strike Defendant’s Second, Third, Seventh, Ninth, Tenth, 18 Twelfth, Sixteenth, Eighteenth, and Twenty-Ninth Defenses as legally insufficient as not 19 cognizable defenses to his statutory TCPA claim or not actual affirmative defenses. (Doc. 20 34 at 6–7.) Defendant responds that circumstances exist, and future discovery may reveal 21 evidence to support their various defenses. (Doc. 36 at 13–16.) Defendant also argues that 22 Plaintiff’s contention that its defenses are conclusory, thus insufficient, provides a similar 23 conclusory argument to which Plaintiff fault Defendant and not grounds to strike those 24 defenses. (Id. at 16–17.) 25 A. The Defenses

26 1 The Court notes that, although Plaintiff does not mention Defendant’s Thirty-First Affirmative Defense directly in his Motion, he argues an attempt to reserve an affirmative 27 defense for a later date is improper (Doc. 34 at 4 n.2.), which is what the defense addresses, and he expounds in his Reply brief that this defense lacks a valid factual basis (Doc. 40 28 at 4). Defendant also addresses this similitude in their Response. (See Doc. 36 at 8 n.1.) Therefore, the Court finds that it is appropriate to address. 1 The Court agrees with Defendant as to the applicable standard for affirmative 2 defenses. Although the Ninth Circuit’s holding in Kohler requires defendants to plead 3 affirmative defenses in “general terms,” the court did not squarely address the applicability 4 of the Twombly and Iqbal standard. Courts in this District have consistently applied the 5 lower standard, which does not require detailed factual allegations. See, e.g., Ameristar 6 Fence Prod., Inc. v. Phoenix Fence Co., No. CV-10-299-PHX-DGC, 2010 WL 2803907, 7 at *1 (D. Ariz. July 15, 2010); Martinez v. Alltran Fin. LP, No. CV-18-04815-PHX-DLR, 8 2019 WL 1777300, at *2 (D. Ariz. Apr. 23, 2019); Cabanillas, 2021 WL 1889798, at *1; 9 Top Brand LLC v. Cozy Comforts Co. LLC, No. CV-21-00597-PHX-SPL, 2021 WL 10 3666293, at *3 (D. Ariz. Aug. 18, 2021); IFIXITUSA LLC v. Ifixit Corp., No. CV-21- 11 00887-PHX-DGC, 2022 WL 3647788, at *3 (D. Ariz. Aug. 24, 2022). However, denials 12 of allegations in a complaint or allegations that the plaintiff cannot prove the necessary 13 elements of a claim are not affirmative defenses. See Major v. Bossard Inc., No. CV-20- 14 00530-TUC-JCH, 2021 WL 2566984, at *1 (D. Ariz. Mar. 12, 2021) (noting “[a]n 15 affirmative defense is a defense on which the defendant has the burden of proof”). 16 The challenged defenses Plaintiff contends are factually insufficient include the: 17 First (failure to state a claim), Third (fault), Fourth (no violation of TCPA), Seventh 18 (laches/unclean hands), Eighth (statute of limitations), Tenth (third-party fault), Twelfth 19 (mitigation of damages), Thirteenth (knowledge/willfulness), Fifteenth (good faith), 20 Eighteenth (waiver/estoppel), Nineteenth (liability preclusion), Twenty-Fourth (failure to 21 meet pleading requirements), Twenty-Fifth (speculative relief), Twenty-Seventh (consent 22 to calls), Twenty-Eighth (arbitration), and Thirty-First Affirmative Defenses (reservation 23 to assert additional defenses). The First, Third2, Fourth, Tenth, Nineteenth, 24 Twenty-Fourth, Twenty-Fifth, and Twenty-Seventh generally challenge the adequacy of 25 Plaintiff’s Complaint, deny that he can meet his burden of proof, or dispute the merits of 26 the claim. In other words, these defenses are not true affirmative defenses. Plaintiff has 27 2 Defendant argues this defense by explaining that it “may assert that Plaintiff or the 28 putative class consented to the calls at issue, thereby barring their claims.” (Doc. 36 at 14.) The Court finds this defense essentially duplicative of the Twenty-Seventh. 1 not asserted he would suffer prejudice in defending against these defenses, and there is 2 nothing stopping Defendant from arguing on motion or at trial the merits of Plaintiff’s 3 claims or sufficiency of proof. Therefore, the Court strikes these defenses as this presents 4 a “no harm, no foul” situation. See Martinez, 2019 WL 1777300, at *2–4 (noting that 5 striking the offending affirmative defenses amounted to a “no harm, no foul” situation 6 because it had no practical effect on the litigation). Additionally, the Thirty-First defense 7 does not present a defense at all, and to the extent Defendant seeks to add affirmative 8 defenses, it must comply with Rule 15 of the Federal Rules of Civil Procedure. See Fed. 9 Trade Comm’n v. N. Am. Mktg. & Assocs., LLC, No. CV-12-0914-PHX-DGC, 2012 WL 10 5034967, at *3 (D. Ariz. Oct. 18, 2012). Therefore, the Court will also strike this defense. 11 For the Seventh, Eighth, and Eighteenth defenses, the Court finds these present valid 12 affirmative defenses. The Federal Rules do not demand the particularity for which Plaintiff 13 contends is required. BBK Tobacco, 2019 WL 6065782, at *1. Notably, for the Eighth 14 defense relating to an applicable statute of limitations, there is a single claim asserted 15 against Defendant providing Plaintiff with ready means to deduce the applicable 16 limitations. Defendant’s Thirteenth and Fifteenth defenses address the availability of 17 statutory damages exceeding $500.00 per violation or treble damages and provide Plaintiff 18 with fair notice as to its intent to pursue this defense and remains subject to future factual 19 development. At this early stage in litigation, the Court does not find striking these 20 defenses appropriate for factual insufficiency. 21 As to Defendant’s Twelfth defense, “the weight of available authority indicates that 22 there is no duty to mitigate statutory damages in these [TCPA] cases.” Ahmed v. HSBC 23 Bank USA, Nat’l Ass’n, No. EDCV152057FMOSPX, 2017 WL 5720548, at *2 (C.D. Cal. 24 Nov. 6, 2017) (collecting cases). Therefore, the Court will strike this defense. 25 Finally, for the Twenty-Eighth defense, the availability of arbitration and the facts 26 supporting are uniquely in Defendant’s possession. However, Defendant has provided no 27 facts or explanation to provide Plaintiff with notice of the details of its right to assert 28 arbitration. The Court finds this defense fails even under the lesser standard and will strike || the defense. 2 Now the Court turns to the legal sufficiency arguments for the remaining challenged 3 || defenses—Second (personal jurisdiction), Seventh (laches/unclean hands), Ninth (parties not covered by statute), Sixteenth (procedures to avoid violations), Eighteenth (estoppel), 5 || and Twenty-Ninth (written procedures that comply with DNC laws). 6 For the Second defense, Plaintiff has cited no applicable authority or explained why this defense is factually or legally insufficient and has not argued prejudice. Likewise, for 8 || the Seventh and Eighteenth defenses, Plaintiff does not provide any independent reasoning 9|| applicable to the defenses to explain the how are why they are legally insufficient beyond || conclusory argument. Therefore, the Court declines to strike these defenses. 11 Lastly, the Ninth, Sixteenth, and Twenty-Ninth defenses are effectively denials of 12} liability and do not appear to be asserted as affirmative defenses. For the reasons stated 13 || prior, the Court will strike these defenses. 14] IV. CONCLUSION 15 Accordingly, 16 IT IS HEREBY ORDERED Plaintiff's Motion to Strike Purported Affirmative 17|| Defenses (Doc. 34) is granted in part and denied in part. The Court strikes Defendant’s || First, Third, Fourth, Ninth, Tenth, Twelfth, Sixteenth, Nineteenth, Twenty-Fourth, Twenty-Fifth, Twenty-Seventh, Twenty-Eighth, Twenty-Ninth, and Thirty-First. The || Court will not strike Defendant’s remaining defenses. 21 Dated this 22nd day of November, 2024. 22 _ 23 ~ = fe 24 > fonorable Susan M, Brovich United States District Judge 26 27 28

-9-