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Montoya v. O'Friel

United States District Court, D. New Mexico

November 27, 2017

DENNIS W. MONTOYA, Plaintiff,
v.
DANIEL J. O'FRIEL and O'FRIEL & LEVY, P.C., Defendants.

          MEMORANDUM OPINION AND ORDER

         In DEFENDANTS' MOTION TO DISMISS (Doc. No. 9) (Motion), [1] Defendants Daniel J. O'Friel (O'Friel), an attorney, and the law firm of O'Friel & Levy, P.C., (together Defendants) ask the Court to dismiss the claim brought by Plaintiff Dennis W. Montoya (Montoya) for violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. See COMPLAINT FOR VIOLATION OF THE FAIR DEBT COLLECTION PRACTICES ACT (Doc. No. 1) (Complaint). Defendants argue they are not subject to the FDCPA because they are not “debt collectors” as defined under the FDCPA. Alternatively, Defendants contend that when Montoya filed Chapter 7 bankruptcy, his claim became property of his bankruptcy estate, and Montoya has no standing to bring this claim. Defendants maintain that under the Bankruptcy Code and the Federal Rules, the Chapter 7 Trustee must prosecute this claim.

         After carefully considering all arguments, the Court finds that the Complaint fails to sufficiently allege that Defendants were debt collectors within the meaning of the FDCPA. Consequently, the Court will dismiss the Complaint with prejudice. Since the claim fails as a matter of law, the Court will not address the substitution of the Chapter 7 trustee as the real party in interest under Fed.R.Civ.P. 17(a)(3).

         I. STANDARD OF REVIEW

         Under Rule 12(b)(6) a court may dismiss a claim “for failure to state a claim upon which relief can be granted[.]” Fed.R.Civ.P. 12(b)(6). “The court's function on a Rule 12(b)(6) motion is . . . to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Brokers' Choice of America, Inc. v. NBC Universal, Inc., 757 F.3d 1125, 1135 (10th Cir. 2014) (citing Miller v. Glanz, 948 F.2d 1562, 1565 (10th Cir. 1991)). In evaluating a Rule 12(b)(6) motion, the court must “accept as true all well-pleaded facts, as distinguished from conclusory allegations, and view the facts in the light most favorable to the nonmoving party.” Maher v. Durango Metals, Inc., 144 F.3d 1302, 1304 (10th Cir. 1998). Even though the court must accept as true all well-pleaded facts in the complaint, the court is under no obligation to accept bare conclusory allegations. Hall v. Belmon, 935 F.2d 1106, 1110 (10th Cir. 1991). And the court is not required to accept legal conclusions without factual support. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). To summarize, a complaint must contain sufficient factual allegations “to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true. . . .” Twombly, 550 U.S. at 555.

         In ruling on a motion to dismiss, a court typically considers only the well-pleaded facts alleged in the complaint. Martin v. Central States Emblems, Inc., 150 Fed.Appx. 852, 857 (10th Cir. Oct. 11, 2005) (unpublished) (citing County of Santa Fe v. Pub. Serv. Co. of N.M., 311 F.3d 1031, 1035 (10th Cir. 2002)). However, a court may also consider documents referred to in a complaint, without converting a motion to dismiss into a motion for summary judgment, if the documents are central to the plaintiff's claim and the parties do not dispute their authenticity. Martin, 311 F.3d at 1035 (citing County of Santa Fe). A court may also consider documents of which the court may take judicial notice. S.E.C. v. Goldstone, 952 F.Supp.2d 1060, 1190 (D.N.M. 2013).

         II. BACKGROUND

         A. Federal Civil Rights Case No. 05 CV 1155 JB/LAM

         On November 4, 2002, Dennis O'Brien (O'Brien), then a sergeant with the Santa Fe Sheriff's Office (SFSO), shot Walter Mitchell (Mitchell), who was allegedly intoxicated, mentally ill, and threatening O'Brien with a sword during a domestic abuse call. In the First Judicial District Court, Santa Fe County, New Mexico, Mitchell was found guilty but mentally ill on the charge of assault with a deadly weapon. State v. Mitchell, D-101-CR-2002-1027.

         On November 2, 2005, Montoya, then a practicing attorney, filed a civil rights lawsuit on behalf of Mitchell against the City of Santa Fe, the Santa Fe Police Department, and “Dennis O'Brian [sic].” Mitchell v. City of Santa Fe and Dennis O'Brien, No. 05 CV 1155 JB/LAM, COMPLAINT FOR CIVIL RIGHTS VIOLATIONS (Doc. No. 1) (D.N.M.) (Mitchell Complaint). Return of service for the Mitchell Complaint was executed indicating service on O'Brien and the City of Santa Fe.

         On April 20, 2006, Mitchell filed a FIRST AMENDED COMPLAINT FOR CIVIL RIGHTS VIOLATIONS (Doc. No. 13) (Mitchell FAC) replacing Defendant City of Santa Fe with Defendant Board of County Commissioners of the County of Santa Fe (the County); correcting the spelling of O'Brien's name; and identifying O'Brien as “[a] Deputy Sheriff with the Santa Fe Sheriff's Department.” Id. No return of service was filed for the Mitchell FAC. In the Mitchell FAC, Mitchell alleged that O'Brien shot him from behind a total of three times. Id. ¶ 11.

         Neither O'Brien nor the County responded to the Mitchell Complaint and the Mitchell FAC. Mitchell v. City of Santa Fe and Dennis O'Brien, No. 05 CV 1155 JB/LAM, MEMORANDUM OPINION AND ORDER (Doc. No. 60) (Relief from Default Judgment MOO) at 2 (D.N.M. Mar. 31, 2011). On April 11, 2006, Montoya on behalf of Mitchell filed a motion for default judgment against O'Brien asserting that O'Brien was properly served with the Mitchell Complaint. Id. On April 12, 2006, the Clerk of the United States District Court for the District of New Mexico docketed an entry of default against O'Brien. Id. at 2-3. On May 9, 2006, the Honorable United States District Judge James O. Browning entered an order granting Mitchell's application for default judgment. Id. at 3.[2] A hearing on damages was scheduled for June 16, 2006. Id. Mitchell, however, did not personally serve O'Brien with notice of the hearing. Id. At the beginning of the scheduled hearing on damages, Montoya withdrew Mitchell's jury demand for purposes of the hearing. Id. However, Montoya argued that if O'Brien made an appearance in the case, Mitchell reserved the right to renew his jury demand. Id.

         On May 9, 2007, Judge Browning ruled on two legal issues in a MEMORANDUM OPINION AND ORDER (Doc. No. 18) (Default Judgment MOO). Id. at 4. First, Judge Browning ruled that Mitchell was not required to serve O'Brien with notice of the hearing on damages. Id. Second, Judge Browning ruled that under Fed.R.Civ.P. 38(d), Mitchell could not unilaterally withdraw his jury demand; therefore, Mitchell's damages had to be determined by a jury. Id.

         On December 10, 2007, a jury trial on damages was held. Clerk's Minutes (Doc. No. 46). The jury awarded Mitchell $2.5 million in compensatory damages and $500, 000 in punitive damages. Relief from Default Judgment MOO at 4. On December 28, 2007, Montoya on behalf of Mitchell filed a notice of voluntary dismissal under Fed.R.Civ.P. 41, and the Board of Commissioners of the County of Santa Fe (Board) was dismissed from the case.[3] Id. On December 31, 2007, Judge Browning entered a Final Judgment against O'Brien. Id. Sometime after the Final Judgment was entered, Mitchell died. Id.

         On March 23, 2010, the Board and O'Brien filed an independent action as a motion under Fed.R.Civ.P. 60(d)(1) seeking to vacate the $ 3 million Final Judgment.[4] Mitchell v. City of Santa Fe and Dennis O'Brien, No. 05 CV 1155 JB/LAM, Defendants' Independent Action for Relief from Judgment (Doc. No. 49). The Board and O'Brien asserted that service of the Mitchell Complaint and the Mitchell FAC was deficient or non-existent; that neither the Board nor O'Brien received notice of the lawsuit; and that the jury trial on damages and the entry of the $ 3 million Final Judgment violated the Board's and O'Brien's due process rights. Id. at 7-9. Judge Browning denied that request concluding that relief could be granted only through a separate action instead of a motion in the Mitchell case. Relief from Default Judgment MOO at 7.

         On May 11, 2011, the Board and O'Brien filed an independent action against Mitchell's estate. See O'Brien v. David E. Mitchell, Personal Representative of the Estate of Walter Mitchell, Case No. 11 CV 409 JB/WDS, COMPLAINT TO SET ASIDE JUDGMENT (Doc. No. 1). The parties settled that case and agreed to vacate the Final Judgment in the Mitchell case. On December 13, 2012, Judge Browning entered a STIPULATED ORDER VACATING FINAL JUDGMENT AND DISSOLVING LIS PENDENS (Doc. No. 61) in Case No. 05 CV 1155 JB/LAM, and a STIPULATED ORDER VACATING FINAL JUDGMENT AND DISSOLVING LIS PENDENS (Doc. No. 68) in Case No. 11 CV 409 JB/WDS.

         B. Malicious Abuse of Process Case in New ...


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