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Cordova v. Jenkins

United States District Court, D. New Mexico

April 20, 2017

JOSHUA CORDOVA, on his own behalf, and on behalf of all others similarly situated, Plaintiff,
v.
JODY JENKINS and JENKINS, WAGNON & YOUNG, P.C., Defendants.

          MEMORANDUM OPINION AND ORDER

         This matter comes before the Court upon Defendants Jody Jenkins and Jenkins, Wagnon & Young, P.C.'s (“Defendants'”) Rule 12(b)(6) Motion to Dismiss and Motion for Judgment on the Pleadings (“Motion”), filed on May 27, 2016. (Doc. 5). Plaintiff filed a response (“Response”) on June 24, 2016, and Defendants filed a reply (“Reply”) on July 22, 2016. (Docs. 14 and 15). Having reviewed the Motion and the accompanying briefs, the Court DENIES the Motion.[1]

         I. Background

         Plaintiff Joshua Cordova originally filed a Class Action Complaint for Damages (“Complaint”) in the Second Judicial District Court in the County of Bernalillo, New Mexico (“State District Court”). (Doc. 1-1) at 8-15. In the Complaint, Plaintiff alleges that attorney Jody Jenkins (“Defendant Jenkins”) and his law firm, Jenkins, Wagnon & Young, P.C. (“Defendant JWY”) submitted fraudulent attorney fee affidavits in their New Mexico debt collection cases, resulting in hundreds of inflated judgments against New Mexico residents. (Id. at 8). Plaintiff claims that Defendants' conduct violated the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”), the New Mexico Unfair Practices Act, NMSA 1978, §§ 57-12-1, et seq. (“UPA”), and constituted malicious abuse of process, fraud, and unjust enrichment. Id.

         As the basis for Plaintiff's claims, Plaintiff specifically alleges that, on June 16, 2014, Defendant Jenkins filed suit in State District Court on behalf of debt buyer Auto vest, L.L.C. (“Auto vest”), against Plaintiff (the “Lawsuit”). (Doc. 1-1) at 9. The complaint in that case alleged that Auto vest was the owner and holder of an auto loan contract, acquired from Wells Fargo, that Plaintiff had signed in 2006 to finance the purchase of a motor vehicle. Id. The complaint further alleged that Plaintiff defaulted on the auto loan and, as a result, was indebted to Auto vest. Id. Throughout the Lawsuit, no responsive pleadings were filed, no hearings were held, and Defendant Jenkins did not make any court appearances. Id. at 9-10. Subsequently, Defendant Jenkins filed a Motion for Default Judgment on behalf of Auto vest, to which he attached a signed, notarized, “Itemized Affidavit in Support of Attorney's Fees” (“Fee Affidavit”). Id. at 10.

         The Fee Affidavit sought attorney's fees for the hours Defendants Jenkins and JWY spent on the Lawsuit under the lodestar method. Id. In support of their request, Defendant Jenkins stated, under oath, that Defendant JWY had spent a total of 4.25 attorney hours, at a reasonable rate of $250 per hour, on the Lawsuit, itemized as follows: (1) receive and review file and general demand letter - .5; (2) draft complaint, summons, affidavit in support of complaint, and non-military affidavit - 1.0; (3) file complaint, correspond with process server - .5; (4) draft letter to clerk to file return of service with certificate of mailing - .25; (5) draft Motion for Default Judgment and Final Judgment - 1.0; and (6) miscellaneous communication with client - 1.0. Id. On October 30, 2014, the State District Court granted Auto vest default judgment and awarded Defendants attorney's fees. Id.

         Plaintiff alleges that Defendant Jenkins did not perform 4.25 of work in the Lawsuit. In support, Plaintiff attaches several other nearly identical Fee Affidavits, which Defendant Jenkins submitted in other debt collection cases resolved by default judgment around the time of the Lawsuit. Id. at 10, 16-23; (Doc. 1-2) at 1-11. In those Fee Affidavits, Defendant Jenkins claims that he performed 4.25 hours of work, with the same itemization of attorney time. Id. In addition, Plaintiff attaches a one-page Motion for Default Judgment which was filed in the Lawsuit, along with five other examples of nearly identical motions for default judgment filed in similar cases. (Doc. 1-2) at 11-16. As a result, Plaintiff claims that Defendant Jenkins could not have performed all these tasks and that they more likely were completed by support staff in less than 4.25 hours. Thus, Defendants' Fee Affidavits contained false statements. (Doc. 1-1) at 11.

         Defendants removed the case to this Court on May 20, 2016. (Doc. 1). Subsequently, they filed their Motion, seeking dismissal of Plaintiff's claims under Fed.R.Civ.P. 12(b)(6), and judgment on the pleadings pursuant to the doctrines of res judicata and collateral estoppel. (Doc. 5). In response, Plaintiff argues that he has stated a viable claim under the FDCPA and that he has otherwise alleged sufficient factual matter to survive a Rule 12(b)(6) motion to dismiss. In addition, Plaintiff maintains that his claims are not barred by res judicata or collateral estoppel.

         II. Standard of Review

         In reviewing a Rule 12(b)(6) motion asserting a failure to state a claim upon which relief can be granted, the Court must accept all well-pleaded allegations as true and must view them in a light most favorable to the plaintiff. Zinermon v. Burch, 494 U.S. 113, 118 (1990). Rule 12(b)(6) requires that a complaint set forth the grounds of a plaintiff's entitlement to relief through more than labels, conclusions and formulaic recitation of the elements of a cause of action. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a 12(b)(6) motion to dismiss, a complaint need not include detailed factual allegations, but “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. In other words, dismissal of a complaint under Rule 12(b)(6) is proper only where it is obvious that the plaintiff failed to set forth “enough facts to state a claim to relief that is plausible on its face.” Id. at 570.

         Where a complaint alleges fraud, however, “a party must state with particularity the circumstances constituting fraud . . . . Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. 9(b). “At a minimum, Rule 9(b) requires that a plaintiff set forth the ‘who, what, when, where and how' of the alleged fraud.” U.S. ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702, 726-27 (10th Cir. 2006) (citing Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir.1997)). In addition, a complaint alleging fraud must “set forth the time, place and contents of the false representation, the identity of the party making the false statements and the consequences thereof.” Koch v. Koch Industries, Inc., 203 F.3d 1202, 1236 (10th Cir. 2000) (internal quotation omitted).

         III. Discussion

         Defendants move to dismiss the Complaint under Fed.R.Civ.P. 12(b)(6) and 9(b), and for judgment on the pleadings pursuant to the doctrines of res judicata and collateral estoppel. The Court will address each argument in turn.

         A. 12(b)(6) and 9(b)

         Defendants argue that Plaintiff has failed to state a viable FDCPA claim based on the allegations in the Complaint. In addition, Defendants contend that Plaintiff has otherwise failed to set forth sufficient factual allegations to support her claims, pursuant to Fed.R.Civ.P. 12(b)(6) and 9(b). Plaintiff responds that he has stated a viable claim under the FDCPA, and that he has otherwise alleged sufficient factual matter to survive a Rule 12(b)(6) motion to dismiss.

         The purpose of the FDCPA is “to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). A prima facie case for violation of the FDCPA requires proof of the following four elements:

(1) the plaintiff is any natural person who is harmed by violations of the FDCPA, or is a “consumer” within the meaning of 15 U.S.C.A. §§ 1692a(3), 1692c(d) for purposes of a cause of action ...

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