Goldsmith v. Aargon Collection Agency, Inc.
2:16-cv-02066
| D. Nev. | Mar 30, 2018Background
- Plaintiffs (multiple consumer-debtors) allege Aargon Agency, Inc. and Armand Fried (debt collectors) used installment payment agreements secured by confessions of judgment (COJs) that unlawfully added a 9.25% interest rate, $75 document fee, and $74 court costs.
- COJs were signed and filed between Aug 2014 and Jan 2016; consolidated federal complaints were filed Feb–May 2017 asserting FDCPA violations, abuse of process, NDTPA claims, and (for some) civil conspiracy.
- Smith separately alleges a 2013 default judgment and five subsequent writs of execution (latest Nov 11, 2016) that sought amounts beyond the judgment; the fifth writ allegedly occurred within one year of his federal complaint.
- Defendants moved to dismiss for lack of jurisdiction (Rooker–Feldman), as time-barred under the FDCPA one‑year statute, and on other merits; court treated pleadings and judicially noticeable state-court filings.
- The court held Rooker–Feldman inapplicable because plaintiffs did not seek to overturn state judgments but alleged independent wrongful collection practices; however, most FDCPA claims were dismissed as time‑barred absent facts invoking the discovery or continuing‑violation rules.
- Result: FDCPA and related state claims dismissed without prejudice for Landeros, the Hegners, Pili, Mercado, Jackson, Phillips, and Serrata (leave to amend); Smith’s FDCPA claim based on the fifth writ and his abuse of process claim survive; Smith’s NDTPA claim dismissed with prejudice; his conspiracy claim dismissed without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rooker–Feldman jurisdictional bar | Plaintiffs: claims target defendants’ unlawful collection practices, not state‑court rulings | Defendants: federal suit is de facto appeal of state judgments | Court: Rooker–Feldman does not apply because plaintiffs challenge collectors’ conduct, not state‑court decisions; jurisdiction exists |
| FDCPA statute of limitations (timeliness) | Plaintiffs: discovery rule or continuing violation (e.g., satisfactions) makes claims timely | Defendants: one‑year limit began when IPAs/COJs disclosed terms or when COJs were filed; claims filed >1 year after | Court: Absent allegations when plaintiffs knew of violations, limitations ran at latest upon COJ filing; most COJ‑based FDCPA claims time‑barred; leave to amend allowed |
| Continuing‑violation tolling | Plaintiffs: ongoing collection (including satisfactions) continued violations into limitations period | Defendants: no continuous, similar acts alleged; only discrete filings | Court: Plaintiffs pled only conclusory repetition; continuing‑violation doctrine not shown; cannot save time‑barred claims |
| Smith’s writs of execution (timely claim) | Smith: fifth writ (Nov 11, 2016) sought amounts beyond judgment — FDCPA violation within one year | Defendants: claim derives from 2013 judgment and therefore untimely | Court: Smith sufficiently alleges a distinct, timely FDCPA violation based on the fifth writ; that claim survives |
| Abuse of process (Smith) | Smith: defendants used court process to collect unlawful fees/interest | Defendants: no ulterior purpose or improper use pleaded | Court: Taking allegations as true (COJ + post‑judgment writs exceeding judgment), abuse of process claim adequately pleaded; survives |
| NDTPA applicability (Smith) | Smith: NDTPA covers defendants’ deceptive collection practices | Defendants: NDTPA doesn’t apply to debt collection | Court: NDTPA does not apply to debt collection in Nevada; claim dismissed with prejudice |
| Civil conspiracy (Smith) | Smith: Aargon and Fried conspired to violate law | Defendants: actions were in agent capacity for principal — no individual‑capacity conspiracy | Court: Complaint alleges agency/respondeat superior and uses conjunctive/“and/or” phrasing insufficient to show individual‑capacity acts; conspiracy claim dismissed without prejudice |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for complaints)
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not accepted as true on Rule 12(b)(6))
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (scope of Rooker–Feldman)
- Naas v. Stolman, 130 F.3d 892 (FDCPA limitations for filed collection lawsuits)
- Lyons v. Michael & Assocs., 824 F.3d 1169 (discovery rule applies to FDCPA claims)
- Mangum v. Action Collection Serv., Inc., 575 F.3d 935 (limitations period begins when plaintiff knows or should know of injury)
- Joseph v. J.J. Mac Intyre Cos., L.L.C., 281 F. Supp. 2d 1156 (continuing‑violation doctrine applied to prolonged collection conduct)
- Lopez v. Smith, 203 F.3d 1122 (leave to amend after 12(b)(6) dismissal)