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Fairbank v. Underwood

United States District Court, D. Oregon

December 8, 2013

ADI FAIRBANK, Plaintiff,

Order Filed: November 12, 2013

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[Copyrighted Material Omitted]

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Adi Fairbank, Plaintiff, Pro se, Porland, OR.

For Defendants: Frank H. Lagesen, Shane P. Swilley, Cosgrave Vergeer Kester, LLP, Portland, OR.


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MARCO A. HERNANDEZ, United States District Judge.

Magistrate Judge Hubel issued a Findings and Recommendation (#27) on November 12, 2013, in which he recommends that the Court grant Defendants' request for judicial notice (#7), grant in part and deny in part Defendants' motion to dismiss

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(#2), deny Defendants' motion for sanctions (#10), and grant Defendants' motion to strike Plaintiff's sur-reply (#23). The matter is now before me pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b).

Because no objections to the Magistrate Judge's Findings and Recommendation were timely filed, I am relieved of my obligation to review the record de novo . United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc); see also United States v. Bernhardt, 840 F.2d 1441, 1444 (9th Cir. 1988) ( de novo review required only for portions of Magistrate Judge's report to which objections have been made). Having reviewed the legal principles de novo, I find no error.


The Court adopts Magistrate Judge Hubel's Findings and Recommendation (#27). Accordingly, Defendants' request for judicial notice (#7) is granted, Defendants' motion to dismiss (#2) is granted in part and denied in part, Defendants' motion for sanctions (#10) is denied, and Defendants' motion to strike Plaintiff's sur-reply (#23) is granted.



DENNIS J. HUBEL, United States Magistrate Judge.

In this fair debt collection practices action, Defendants James Underwood (" Underwood" ) and Eddie Medina (" Medina" ) (collectively " Defendants" ) move, pursuant to Federal Rules of Civil Procedure (" Rule" ) 12(b)(5) and 12(b)(6), to dismiss Plaintiff Adi Fairbank's (" Plaintiff" ) complaint for insufficient service of process and failure to state a claim upon which relief can be granted. Defendants also move for the imposition of Rule 11 sanctions. For the reasons that follow, Defendants' motion (Docket No. 2) to dismiss should be granted in part and denied in part and Defendants' motion (Docket No. 10) for Rule 11 sanctions should be denied.


As a preliminary matter, Defendants have asked the Court to take judicial notice of court filings from a Multnomah County Circuit Court proceeding involving the parties, as well as an arbitration award stemming from that proceeding. Judge Hernandez took judicial notice of the same documents in dismissing a very similar action Plaintiff brought against Citibank (South Dakota), N.A. (" Citibank" ), Nancy A. Smith & Associates (" NSA" ), and Underwood. See Fairbank v. Citibank (South Dakota), N.A., No. 3:12-cv-00864-HZ, 2012 WL 6154759, at *1 n.1 (D. Or. Dec. 11, 2012) ( Fairbank I ). This Court will do the same. Because the documents are matters of public record, and because their authenticity cannot be questioned, Defendants' request for judicial notice should be granted.

On April 27, 2011, after Plaintiff defaulted on his credit card, Citibank filed a collection action against him in Multnomah County Circuit Court. The next month, Plaintiff filed a motion to stay the action pending arbitration, which was subsequently granted on June 30, 2011.

Soon thereafter, Plaintiff proceeded to attempt to initiate arbitration with Judicial Arbitration, Mediation and ADR Services (" JAMS" ), but failed to pay the requisite filing fee. Citibank then commenced arbitration with the American Arbitration Association (" AAA" ), but Plaintiff " did not participate despite being properly notified of the hearing." (Defs.' Req. Judicial Notice, Ex. C at 5.) Citibank was represented in Multnomah County Circuit Court proceeding

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and AAA arbitration by Defendants, who were working for NSA at the time.[1]

On March 26, 2012, Citibank obtained an arbitration award in its favor. In the months that followed, Plaintiff moved to vacate the arbitration award, a hearing was held on the motion to vacate, which was ultimately denied, and the state court entered judgment in favor of Citibank.

On May 16, 2012, two months before the state court filed its opinion and order, Plaintiff filed an action in federal court against Citibank, NSA, and Underwood (collectively, " the Fairbank I defendants" ), alleging violations of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § § 1692-1692p, the Fair Credit Reporting Act (" FCRA" ), 15 U.S.C. § § 1681-1681x, and § 4 of the Federal Arbitration Act (" FAA" ), 9 U.S.C. § 4.[2] The so-called FAA claim was alleged against all of the Fairbank I defendants, the FDCPA claim was alleged against NSA and Underwood, and the FCRA claim was alleged against Citibank.

Importantly, paragraphs one, four and five of the Fairbank I complaint provided as follows:

1. Plaintiff brings this complaint to seek relief for violations of 15 U.S.C. § 1692 ('FDCPA'), and 15 U.S.C. § 1681 ('FCRA').

. . . .

4. At this time, Plaintiff is not asking this Court to award damages on the claims contained herein. Rather, Plaintiff asks this court to compel Defendants to arbitrate these claims according to the terms of the pre-dispute arbitration agreement, pursuant to 9 U.S.C. § 4.

5. Should some of the Defendants named in this complaint be ruled in the arbitration as not a party to the pre-dispute arbitration clause, Plaintiff will ask this Court to award damages on those claims.

Complaint at 1-2, Fairbank v. Citibank, No. 12-864 (D. Or. May 16, 2012).

On August 30, 2012, the Fairbank I defendants moved to dismiss the complaint for failure to state a claim. In their moving papers, NSA and Underwood argued that Plaintiff's FDCPA claim was barred by claim and issue preclusion in light of the arbitration that occurred, and award that was confirmed, in the Multnomah County Circuit Court proceeding after Fairbank I was filed. NSA and Underwood also asserted that some of the statements and actions taken by Underwood, which Plaintiff alleged violated the FDCPA, were actually true and/or permitted under applicable law.

On October 5, 2012, Plaintiff filed a response to NSA and Underwood's motion to dismiss, wherein he stated (1) " Defendants' arguments on the invalidity of Plaintiff's claims, to be decided in JAMS arbitration, are not properly decided by this court at this time. Plaintiff listed these claims merely to show that this court had jurisdiction to compel arbitration under 9 U.S.C. § 4" ; (2) " Plaintiff merely asks this court to compel Defendants to arbitrate his claims against them (listed in the complaint merely to show this court's jurisdiction)

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in JAMS, according to the arbitration agreement" ; and (3) " Plaintiff believes [the validity of his FDCPA and FCRA claims] should be decided by the JAMS arbitrator, and need not be argued here." Objection Mot. Dismiss at 2-5, Fairbank v. Citibank, No. 12-864 (D. Or. Oct. 5, 2012). However, on page five of his response brief, Plaintiff also stated: " Plaintiff is merely asking that his claims be heard in some forum, for the first time." Id. at 5.

On December 11, 2012, Judge Hernandez filed an Opinion and Order dismissing Fairbank I without leave to amend.[3] See generally Lopez v . Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (" [W]e have repeatedly held that 'a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts .'" ) (citation omitted) (emphasis added). Notably, based on the statements quoted above at page 5, lines 5-15 from Plaintiff's response brief, Judge Hernandez construed Plaintiff's complaint as only asserting a single claim for violation of the FAA. Fairbank, 2012 WL 6154759, at *2. That opinion does not mention paragraphs 1, 4 and 5 of the complaint in Fairbank I the Court quoted above at page 4, lines 7-14, nor the statement at page 5 of the response of Plaintiff quoted above at page 5, lines 17-18.[4] Because NSA and Underwood were not parties to the credit card agreement (unlike Citibank), Judge Hernandez dismissed the Fairbank I complaint without leave to amend. See [WL] at *4 (" Plaintiff's complaint is dismissed because it cannot be cured through amendment to state a claim under [the FAA]" ) (emphasis added). Final judgment was entered the following day, December 12, 2012.

On March 8, 2013, Plaintiff brought the present action against Defendants, alleging a single cause of action for violation of the FDCPA. Every allegation in Plaintiff's complaint concerns actions taken by Defendants (on behalf of Citibank) during the Multnomah County Circuit Court proceeding and AAA arbitration.

On April 1, 2013 and April 23, 2013, respectively, Defendants filed their motion to dismiss and motion for imposition of Rule 11 sanctions, which are now before the Court.


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