Carrera v. Allied Collection Services, Inc.

• Court: District Court, D. Nevada
• Decided: March 17, 2025
• Docket: 2:22-cv-01604
• Status: Unknown

Opinion

1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 MARGARITA CARRERA, 4 Plaintiff, Case No.: 2:22-cv-01604-GMN-DJA 5 vs. ORDER GRANTING, IN PART, AND 6 ALLIED COLLECTION SERVICES, INC., DENYING, IN PART, MOTION FOR 7 RECONSIDERATION Defendant. 8

9 10 Pending before the Court is the Motion for Reconsideration, (ECF No. 37), filed by 11 Defendant Allied Collection Services Inc. Plaintiff Margarita Carrera filed a Response, (ECF 12 No. 38), to which Defendant filed a Reply, (ECF No. 39). 13 For the reasons discussed below, the Court GRANTS, in part, and DENIES, in part, 14 Defendant’s Motion for Reconsideration. 15 I. BACKGROUND 16 This action arises from a default judgment obtained by Defendant in Nevada state court 17 in 2009 and the subsequent renewal of that judgment in 2022. (See generally Compl., ECF No. 18 1). Plaintiff alleges this judgment was improperly obtained and renewed through 19 misrepresentations and unfair conduct and brought this action to recover damages under the 20 Federal Debt Collections Practices Act (“FDCPA”). (Id.). The full background is articulated in 21 the Court’s Order granting, in part, and denying, in part, the Cross Motions for Summary 22 Judgment, (the “Order”), which the Court incorporates by reference. (Order, ECF No. 30). 23 In its Order, this Court held that Plaintiff and Defendant were entitled to summary 24 judgment on certain claims. Defendant now moves the Court to reconsider that Order. 25 1 II. LEGAL STANDARD 2 Pursuant to Rule 59, a district court may grant a motion for reconsideration only where: 3 (1) it is presented with newly discovered evidence; (2) it has committed clear error, or the 4 initial decision was manifestly unjust; or (3) there has been an intervening change in controlling 5 law. Nunes v. Ashcroft, 375 F.3d 805, 807 (9th Cir. 2004); Kona Enters., Inc. v. Estate of 6 Bishop, 229 F.3d 877, 890 (9th Cir. 2000). Further, a “Rule 59(e) motion may not be used to 7 raise arguments or present evidence for the first time when they could reasonably have been 8 raised earlier in the litigation.” Kona, 229 F.3d at 890. Moreover, Rule 60(b) permits a court to 9 grant relief from a final order on a showing of mistake, surprise, or excusable neglect, Rule 10 60(b)(1); newly discovered evidence, Rule 60(b)(2); fraud, Rule 60(b)(3); a void judgment, 11 Rule 60(b)(4); a satisfied or discharged judgment, Rule 60(b)(5); or other circumstances 12 justifying relief, Rule 60(b)(6). “A party seeking reconsideration . . . must state with 13 particularity the points of law or fact that the court has overlooked or misunderstood. Changes 14 in legal or factual circumstances that may entitle the movant to relief also must be stated with 15 particularity.” L.R. 59-1. “Motions for reconsideration are disfavored.” Id. 16 III. DISCUSSION 17 Pursuant to FRCP 59(a)(1)(e) and 60(b)(6), Defendant moves the Court to reconsider 18 and amend its Order. (See generally Mot. Reconsideration, ECF No. 37). Its primary argument 19 is that the Court erred in its application of the Rooker-Feldman doctrine, made irreconcilable 20 conclusions, erred in not finding that Plaintiff’s claims were time barred by the relevant statute

21 of limitations, and erred in holding that Plaintiff had standing. (Id.). The Court takes up each 22 argument in turn as they are organized in Defendant’s Motion. 23 A. Rooker-Feldman Doctrine Application 24 Defendant contends that the Court erred in its application of the Rooker-Feldman 25 doctrine because (1) the Court considered an exception that was not argued by Plaintiff nor 1 supported by the record, and (2) Plaintiff’s claims are barred by the statute of limitations. (Id. 2 6:4–27). 3 To Court begins with Defendant’s first argument and incorporates its discussion of the 4 Rooker-Feldman doctrine in the previous Order. (See Order at 8–9, ECF No. 30). Defendant 5 argues that Plaintiff does not use the word “fraud,” or argue a fraud exception to Rooker- 6 Feldman in her Complaint, during discovery, or in her Motion for Summary Judgment briefing. 7 (Mot. Reconsideration 6:14–17). While the Court agrees that Plaintiff did not use the word 8 “fraud” during the litigation process, she adequately alleged facts and presented evidence to 9 establish that the fraud exception should nonetheless be analyzed by the Court in its Order. 10 In response to Defendant’s Motion for Summary Judgment, Plaintiff advanced that her 11 claims are not a forbidden de facto appeal because “she asserts legal wrongs by Defendant in its 12 debt collection practices that encompass more than just obtaining the [s]tate [c]ourt judgment.” 13 (Resp. Def.’s MSJ 6:20–22, ECF No. 22). In her Complaint and Motion for Summary 14 Judgment, Plaintiff asserts that Defendant used “false representations or deceptive means to 15 collect debt from Plaintiff,” and made “misrepresentations” and “misleading representations.” 16 (See Compl. ¶ 31, 33); (see generally Pl.’s MSJ, ECF No. 19). These allegations provided a 17 basis for the Court’s inclusion of a fraud exception analysis. Benavidez v. Cnty. of San Diego, 18 993 F.3d 1134, 1143 (9th Cir. 2021) (“[W]here a party alleges extrinsic fraud by an adverse 19 party in procuring a state court judgment, the Rooker-Feldman doctrine does not apply, because 20 such a claim does not challenge the state court decision directly.”); see also Bailey v. I.R.S., 188

21 F.R.D. 346 (D. Ariz. 1999), aff’d sub nom. Bailey v. U.S. Internal Revenue Serv., 232 F.3d 893 22 (9th Cir. 2000) (“Examples of [extrinsic fraud] include circumstances where a party was kept in 23 ignorance of a lawsuit or was induced not to appear, a claim or defense was concealed from a 24 party, and where the prevailing party obtained the judgment through coercion or duress.”). 25 Moreover, Rooker-Feldman relates to a court’s subject matter jurisdiction, and therefore can be 1 raised sua sponte. Worldwide Church of God v. McNair, 805 F.2d 888, 890 (9th Cir. 1986). 2 Thus, even though the Parties argued the issue of Rooker-Feldman generally, the Court did not 3 err in discussing the doctrine’s exceptions because it is in the Court’s authority to raise issues 4 of subject matter jurisdiction. 5 Nevertheless, Defendant argues that the fraud exception is not supported by the record. 6 In its Order, the Court explained that to date, Defendant had not produced the agreement 7 showing that Plaintiff was liable for the debt. Moreover, this Court found that the only 8 evidence provided by the parties as to who owns the account was Plaintiff’s assertions 9 disavowing ownership. (Carrera Dep. 135:25–136:22, Ex. 1 to Resp. Def.’s MSJ., ECF No. 22- 10 2). However, Defendant argues that the Court should have considered two attorney 11 declarations it attached as exhibits to its Motion for Summary Judgment. (Mot. Reconsideration 12 6:18–23). Indeed, the declarations affirm that Plaintiff allegedly owed the debt at issue in the 13 2009 state court case. Moreover, the Assignment of Account,1 which was also not considered 14 by the Court in its Order, likewise confirms that Plaintiff owed the alleged debt at issue. (See 15 Smith Decl. ¶¶ 10–11, Ex. 2 to Def.’s MSJ, ECF No. 18-2); (see also Duncan Aff. at 21, Ex. 2 16 to Def.’s MSJ, ECF No. 18-2); (see also Assignment of Account at 23, Ex. 2 to Def.’s MSJ, 17 ECF No. 18-2). Plaintiff’s Response to the present Motion sets forth no argument regarding 18 this evidence. (See generally Resp., ECF No. 38). 19 After considering Defendant’s evidence, which was available to the Court at the 20 summary judgment stage, the Court now concludes that a genuine dispute of material fact exists

21 as to whether Plaintiff owed the debt. If originally considered by the Court, this evidence 22 would have demonstrated that Defendant met its initial burden at the summary judgment stage, 23 and Plaintiff’s evidence would have established that a genuine dispute of material fact existed. 24 The same would be true when applying the burden shifting analysis to Plaintiff’s Motion for 25 1 The Assignment of Account transfers Plaintiff’s alleged debt from one entity to another. 1 Summary Judgment. If Plaintiff indeed owed the debt, then a fraud exception would not apply, 2 and her claim would thus be barred by Rooker-Feldman. But, if she did not owe the debt, then 3 the fraud exception would apply, and her claim would not be barred. Accordingly, the Court 4 holds that a genuine dispute of material fact exists as to whether Plaintiff’s 15 U.S.C. 5 § 1692e claim, based on Defendant’s conduct in obtaining the state court judgment, is barred by 6 Rooker-Feldman. The Court maintains its holding that her claim, as it relates to Defendant’s 7 attempt to collect on the state court judgment, is barred by the doctrine. 8 Defendant’s second argument contends that regardless of Rooker-Feldman’s 9 applicability, Plaintiff’s claims are nonetheless barred by the statute of limitations under 15 10 U.S.C. § 1692k. But the Motion for Reconsideration is the first time Defendant raised a statute 11 of limitations defense. A Motion for Reconsideration brought under Rule 59 “shall not raise 12 arguments or present evidence for the first time when they could reasonably have been raised 13 earlier in the litigation.” Kona, 229 F.3d at 890. Moreover, relief under Rule 60, is reserved for 14 “extraordinary circumstances.” Ashford v. Steuart, 657 F.2d 1053, 1055 (9th Cir. 1981) (see 15 also 12 James Wm. Moore, et. al., Moore’s Federal Practice § 60.48[3][c] (3d ed. 2005) (“fault 16 by movant usually means [a] lack of ‘extraordinary circumstances’”). Accordingly, the Court 17 concludes that it is impermissible for Defendant to raise its statute of limitations defense for the 18 first time in its Motion for Reconsideration and does not find that its failure to raise it sooner 19 qualifies as an “extraordinary circumstance.”2 20 In sum, a genuine dispute of material fact exists as to Plaintiff’s 15 U.S.C. § 1692e claim

21 regarding Defendant’s actions in obtaining the state court judgment. Thus, the Motion for 22 Reconsideration is GRANTED as to this claim. 23 24

25 2 Defendant asserts a statute of limitations defense numerous times throughout its Motion for Reconsideration. The Court’s discussion of the impermissible nature of this argument applies generally to the entire Motion. 1 B. Triable Issues as to 15 U.S.C. § 1692e Claim 2 Next, Defendant argues that the Court’s discussion and conclusion regarding Plaintiff’s 3 15 U.S.C. § 1692e claim is contradictory. The Court agrees. 4 Relevant to Defendant’s Motion for Summary Judgment, this Court held that “a material 5 dispute of fact exists as to Plaintiff’s 15 U.S.C. §1692e claims because Defendant initiated a 6 lawsuit to claim a nonexistent debt.” (Order 15:08, 15:21–23). Then this Court found that 7 relative to Plaintiff’s Motion for Summary Judgment, “taken together, the record before the 8 Court lends itself to the conclusion that Defendant misrepresented to the state court Plaintiff’s 9 ownership of the Chase Account and initiated a legal action that could not legally be taken.” 10 (Id. 22:12–14). It then held that “Plaintiff is entitled to summary judgment on her 15 U.S.C. § 11 1692e claims.” (Id. 22:17–18). The Court agrees with Defendant that it cannot hold that there 12 is a genuine dispute of material fact as to a claim presented by one party and then grant 13 summary judgment for the other party on the same claim. 14 For the reasons discussed in Section A, the Court holds that a genuine dispute of 15 material fact exists as to whether Plaintiff’s 15 U.S.C. § 1692e claim based on Defendant’s 16 conduct in obtaining the state court judgment is barred by Rooker-Feldman. The Court 17 maintains its holding that her claim as it relates to Defendant’s attempt to collect on the state 18 court judgment is barred by the doctrine. Thus, the Motion for Reconsideration is GRANTED 19 as to this argument. 20 C. Standing

21 Defendant further contends that the Court erred in concluding that Plaintiff has standing 22 to bring her claims. (Mot. Reconsideration 7:24–25). In its Motion for Summary Judgment, 23 Defendant argued that the Court lacked subject matter jurisdiction because Plaintiff failed to 24 introduce evidence showing a concrete injury. (Def.’s Resp. to Pl.’s MSJ 17:2–4). Defendant 25 now argues that it cannot reconcile the Court’s holding that Plaintiff’s claims regarding 1 Defendant’s collection of the state court judgment are barred by Rooker-Feldman, but Plaintiff 2 has standing to sue. 3 The issue of standing is a threshold determination of “whether the litigant is entitled to 4 have the court decide the merits of the dispute or of particular issues.” Warth v. Seldin, 422 5 U.S. 490, 498 (1975). The Rooker-Feldman doctrine is a jurisdictional rule that prevents 6 federal district courts from hearing cases that effectively seek to appeal state court judgments. 7 Benavidez, 993 F.3d at 1142. The doctrine does not relate to standing, nor is it a defense. 8 Rather it is a limitation on the subject matter jurisdiction of federal courts. A plaintiff can have 9 a concrete injury to satisfy standing, but a federal district court can nonetheless be barred from 10 addressing the injury per Rooker-Feldman because the state court decision can only be 11 reviewed by the United States Supreme Court. Worldwide Church of God, 805 F.2d at 891; see 12 28 U.S.C. § 1257; see also Exxon Mobil Corp. v. Saudi Basic Indust. Corp., 544 U.S. 280, 291 13 (2005). So, while standing and Rooker-Feldman both relate to a court’s subject matter 14 jurisdiction, they are distinct principles. Accordingly, the Court did not err when it determined 15 that Plaintiff had standing to sue for the reasons discussed in its Order and also held that some 16 of Plaintiff’s claims were barred by Rooker-Feldman. Thus, the Motion for Reconsideration is 17 DENIED as to this argument. 18 D. 15 U.S.C § 1692f Claims 19 Defendant avers that the Court provided conflicting conclusions as to Plaintiff’s 15 20 U.S.C § 1692f claims. This Court granted summary judgment to Defendant for these claims,

21 but in its conclusion, set forth that “Plaintiff is entitled to judgment on her § 1692f claims in 22 their entirety.” (Order 17:22–25, 18:16–17, 23:10). Plaintiff now asks the Court to enter 23 summary judgment in her favor for these claims, but the Court finds that she has not met her 24 burden now, nor in her Motion for Summary Judgment. (Resp. to Mot. Reconsideration 11:24– 25 28). The Court maintains its reasoning for granting Defendant summary judgment on 1 Plaintiff’s §1692(f) claims as articulated in its Order and believes it made a typographical error 2 in its conclusion. Accordingly, Defendant is entitled to judgment on Plaintiff’s § 1692f claims 3 in their entirety. Thus, the Motion for Reconsideration is GRANTED as to this claim. 4 E. Damages 5 Lastly, Defendant avers, based on its standing argument, that where the Court accepted 6 the Rooker-Feldman bar for Defendant’s post judgment activities, finding “the state court 7 judgment did not cause her injuries,” (Order 22:16–17), Plaintiff’s damages could only attach 8 to prior activities such as bringing suit and obtaining judgment, which are barred by the 9 limitations period. For the reasons discussed above in Sections A and C, the Court disagrees 10 with Defendant’s assertions regarding damages. Thus, the Motion for Reconsideration is 11 DENIED as to this argument. 12 In conclusion, Defendant’s Motion for Reconsideration is GRANTED, in part, and 13 DENIED, in part. 14 IV. CONCLUSION 15 IT IS HEREBY ORDERED that Defendant’s Motion for Reconsideration, (ECF No. 16 37), is GRANTED, in part, and DENIED, in part. 17 The Amended Conclusion of this Court’s Order, (ECF No. 30), shall be: 18 IT IS HEREBY ORDERED that Defendant’s Motion for Summary Judgment, (ECF 19 No. 18), is GRANTED, in part, and DENIED, in part. 20 IT IS FURTHER ORDERED that Plaintiff’s Motion for Summary Judgment, (ECF

21 No. 19), is DENIED. 22 IT IS FURTHER ORDERED that the parties will have thirty days from the date of this 23 Order to file a jointly proposed pretrial order pursuant to LR 16-3(b) using the form provided in 24 LR 16-4. 25 1 The Clerk of Court is kindly instructed to open the case. Defendant 1s entitled to 2 judgment on Plaintiff's § 1692e claims to the extent they are based on Defendant’s conduct 3 || after it obtained the state court judgment. Defendant is also entitled to judgment on Plaintiff's 4 || § 1692f claims in their entirety. There remains, however, a triable issue of fact as to whether 5 || Plaintiff's § 1692e claims, to the extent they are based on Defendant’s conduct in obtaining the 6 || state court default judgment, are barred by Rooker-Feldman. 7 8 DATED this _!7_ day of March, 2025. /y Yi, 10 LA V/A Wl Gloria M (af os District Judge United States District Court 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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