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MacVicar v. Barnett

United States District Court, D. Oregon

June 1, 2019

JOHN MACVICAR, JR; and MARY SCHMITT, Plaintiffs,
v.
ABRAHAM J. BARNETT; CHRISTENE D. CENCER; BEN F. VERALRUD; THE BARNETT FIRM, LLC; and BOHICA, INC., dba FREEBORN MOTOR COMPANY, Defendants.

          Justin M. Baxter BAXTER & BAXTER LLP, Keith D. Karnes KARNES LAW OFFICES, PC Attorneys for Plaintiff

          Brian B. Williams Alison R. Barber HITT HILLER MONFILS WILLIAMS LLP Attorneys for Defendants Abraham Barnett and The Barnett Firm, LLC

          Nicholas E. Wheeler Brandon L. Thornburg COSGRAVE VERGEER KESTER LLP Attorneys for Christene D. Cencer

          OPINION & ORDER

          MARCO A. HERNÁNDEZ, UNITED STATES DISTRICT JUDGE

         Plaintiffs John MacVicar, Jr., and Mary Schmitt bring this action against Defendants Abraham J. Barnett, The Barnett Firm, and Christene Cencer.[1] Plaintiffs bring state tort claims along with federal claims under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, and 42 U.S.C. § 1983. Defendants now move to dismiss this action for lack of subject matter jurisdiction and for failure to state a claim.[2] The Court grants in part and denies in part Defendants' motions.

         BACKGROUND

         BOHICA, Inc., dba Freeborn Motors, operates a used car lot in Lafayette, Oregon. First Amended Compl. (“FAC”) ¶ 10. During the events that underlie this action, Defendant Barnett and The Barnett Firm (“Barnett Firm”) represented BOHICA and, in this capacity, collected debts for BOHICA by suing customers in default, garnishing their wages, and engaging in other collection efforts. FAC ¶ 11. Defendant Cencer collected debts as an attorney employed by Defendant Barnett Firm. FAC ¶¶ 4, 12.

         In September 2011, Plaintiff MacVicar purchased a vehicle from BOHICA. Def. BOHICA Req. Judicial Notice (“Def. RJN”) Ex. 1 at 4, ECF 21; FAC ¶ 13. Around May 14, 2014, Defendant Barnett and Barnett Firm, on behalf of BOHICA, filed a suit against Plaintiff MacVicar alleging that he had defaulted on his payments to BOHICA. FAC ¶ 13; Def. RJN Ex. 1. Three months later, Defendants obtained a default judgment against Plaintiff MacVicar. FAC ¶ 14. Two months after that, Defendants filed a motion in the underlying debt-collection action alleging that they had served interrogatories on Plaintiff MacVicar and that he failed to respond. FAC ¶ 15; Def. RJN Exs. 3-4. The next day, the Yamhill County Circuit Court entered an order to show cause why Plaintiff MacVicar should not be held in contempt for his failure to respond to the interrogatories. FAC ¶ 16. This order generated a new case in Yamhill County for remedial contempt against Plaintiff MacVicar. Id.

         In February of 2015, Plaintiff MacVicar appeared for a hearing in the contempt matter in the Yahmill County Circuit Court and met with Ben Veralrud, an attorney employed by Defendant Barnett Firm. FAC ¶¶ 5, 17; Def. RJN Ex. 6 (transcript of proceedings). Allegedly, after speaking with Plaintiff MacVicar, Mr. Veralrud realized that Plaintiff MacVicar did not have the ability to pay the judgment. FAC ¶ 19. Accordingly, Mr. Veralrud presented Plaintiff Mac Vicar with: (1) a document whereby Plaintiff Mac Vicar would pay BOHICA $60 per month towards the debt and (2) a stipulated judgment of contempt and money award holding Plaintiff Mac Vicar in contempt should he fail to make payments as required under the new agreement. Id; Def RJN Ex. 6 at 9:22-10:9, Ex. 7. These agreements were entered into the record in the contempt case. FAC ¶ 20; Def. RJN Ex. 7. Plaintiffs allege, however, that these documents are null and void because they would require Plaintiff Mac Vicar to pay $60 per month from his own labor or face being jailed, placing Plaintiff Mac Vicar “in an illegal state of peonage in violation of 42 U.S.C. § 1994.” FAC ¶¶ 21, 22.

         The Yamhill County Circuit Court set a hearing for December 5, 2016, to review the status of Plaintiff Mac Vicar's agreement to pay $60 per month. FAC ¶¶ 23, 24. That day, Defendant Cencer moved to continue the hearing because Plaintiff Mac Vicar had been making ongoing payments. FAC ¶ 25; Def. RJN Ex. 10. She allegedly also told the court that Plaintiff Mac Vicar had not been served with the motion to continue because he was in default, even though “there were no default findings in the contempt matter.” FAC ¶¶ 25, 26; Def. RJN Ex. 11 at 3. The hearing was reset to December 28, 2017, but Plaintiff Mac Vicar was not served with the order resetting the hearing. FAC ¶ 27; Def. RJN Ex. 11 at 1-2. As a result, Plaintiff Mac Vicar did not appear at the hearing on December 28. FAC ¶ 28.

         At the hearing, Defendant Cencer asked the court to enter the stipulated judgment of contempt and issue an order for a bench warrant for Plaintiff Mac Vicar's arrest. FAC ¶ 29; Def. RJN Ex. 12 at 3:19-22. In seeking the judgment and warrant, Defendant Cencer allegedly informed the court that Plaintiff Mac Vicar had been served notice of the order requiring his appearance at the December 28, 2017 hearing and that Plaintiff Mac Vicar was not making the agreed-upon payments to BOHICA. FAC ¶ 30; Def. RJN Ex. 12 at 3:10-19. Accordingly, the court issued the bench warrant and signed the stipulated judgment. FAC ¶ 30; Def. RJN Exs. 13- 14. The stipulated judgment found Plaintiff MacVicar in contempt of court for willfully failing to respond to the interrogatories in the underlying debt collection matter. Def. RJN Ex. 13. It further provided that a Plaintiff MacVicar:

[S]hall be confined for the shorter of so long as the contempt continues or six months, that bail shall be set at $9, 804.47, that the warrant shall direct any funds posted as bail to be disbursed to [Defendants or BOHICA], that [BOHICA] have judgment against [Plaintiff MacVicar] for attorney fees in the amount of $1, 281.25 and costs in the amount of $150.00, and that an execution shall issue for these amounts.

Def. RJN Ex. 13. Plaintiffs allege that no one informed Plaintiff MacVicar “of his right to counsel as required prior to the arrest warrant being issued.” FAC ¶ 29. Plaintiffs also allege that both of Defendant Cencer's statements to the court were false. FAC ¶ 31.

         On January 19, 2018, Plaintiff MacVicar was arrested and spent two days in Washington County Jail. FAC ¶¶ 33, 34. He was held on $9, 804.47 bail, roughly the outstanding judgment owed to BOHICA. FAC ¶ 35. To raise bail, Plaintiff MacVicar called his mother-Plaintiff Mary Schmitt-who used her savings to pay the bail in full. FAC ¶ 37.

         Plaintiff MacVicar was released from jail and contacted Defendant Barnett Firm to determine what steps he needed to take to settle his debt. FAC ¶¶ 38, 39. Allegedly, Defendant Barnett Firm and Plaintiff MacVicar agreed that a payment of $4, 500 would satisfy the debt owed to BOHICA in full. FAC ¶ 40. Around January 24, 2018, Plaintiff MacVicar paid Defendant Barnett Firm $4, 500 and received a satisfaction of judgment signed by Defendant Cencer. FAC ¶ 41; Pls. Req. Judicial Notice (“Pls. RJN”) Ex. 1.

         On January 30, 2018, Defendant Barnett filed a motion to vacate the satisfaction claiming the “satisfaction signed by [Defendant] Cencer was ‘inadvertent.'” FAC ¶ 41; Pls. RJN Exs. 2-3. Defendant Barnett's motion was granted ex parte. FAC ¶ 43; Pls. RJN Ex. 4. A week later, Defendant Barnett filed an ex parte motion for disbursement of the entire bail money despite also having possession of the $4, 500 paid by Plaintiff MacVicar the previous month. FAC ¶ 44; Def. RJN Ex. 15. This, too, was granted without notice or a hearing to Plaintiff MacVicar. FAC ¶ 45; Pls. RJN Ex. 7. Plaintiffs allege that Defendants retained possession of both the bail money and the $4, 500. FAC ¶ 46.

         Plaintiff Schmitt called Defendant Barnett and complained about the duplicative payments. FAC ¶ 47. Defendant Barnett “indicated that if [Plaintiff] Schmitt continued to complain he would bill against the $4, 500 for his time in dealing with her and stated [Plaintiff] MacVicar should still be in jail.” Id.

         Plaintiffs filed this action on July 23, 2018. Compl., ECF 1. They filed a First Amended Complaint on October 5, 2018. FAC, ECF 16. Plaintiffs allege that Defendants have violated various sections of the FDCPA. FAC ¶¶ 51-52. Plaintiffs also allege that by procuring a contempt order, obtaining an arrest warrant, and collecting bail money (among other things), Defendants have acted under color of state law and violated Plaintiff MacVicar's Fourth, Fifth, Sixth, Thirteenth, and Fourteenth Amendment rights as well as his right to be free from peonage. FAC ¶¶ 53-57. Plaintiffs also bring claims for false imprisonment, abuse of a vulnerable person under Or. Rev. Stat. § (“ORS”) 124.100 et seq., and intentional infliction of emotional distress. FAC ¶¶ 58-66. Plaintiff MacVicar alleges that as a result of Defendants' conduct, he “has suffered the loss of his money, confinement in jail, upset, worry, frustration, and other negative emotions.” FAC ¶ 49. Plaintiff Schmitt has also “suffered lost [sic] use of her money, upset, worry, frustration, and other negative motions.” FAC ¶ 50.

         STANDARDS

         I. Subject Matter Jurisdiction

         A motion to dismiss brought pursuant to Federal Rule of Civil Procedure 12(b)(1) addresses the court's subject matter jurisdiction. The party asserting jurisdiction bears the burden of proving that the court has subject matter jurisdiction over his claims. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994).

         A Rule 12(b)(1) motion may attack the substance of the complaint's jurisdictional allegations even though the allegations are formally sufficient. See Corrie v. Caterpillar, Inc., 503 F.3d 974, 979-80 (9th Cir. 2007) (court treats motion attacking substance of complaint's jurisdictional allegations as a Rule 12(b)(1) motion); Dreier v. United States, 106 F.3d 844, 847 (9th Cir. 1996) ("[U]nlike a Rule 12(b)(6) motion, a Rule 12(b)(1) motion can attack the substance of a complaint's jurisdictional allegations despite their formal sufficiency[.]") (internal quotation omitted). Thus, the court may consider evidence outside the pleadings to resolve factual disputes. Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009); see also Dreier, 106 F.3d at 847 (a challenge to the court's subject matter jurisdiction under Rule 12(b)(1) may rely on affidavits or any other evidence properly before the court).

         II. Failure to State a Claim

         A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the claims. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “All allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party.” Am. Family Ass'n, Inc. v. City & Cnty. of S.F., 277 F.3d 1114, 1120 (9th Cir. 2002). To survive a motion to dismiss, a complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face[, ]” meaning “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal ...


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