Joseph Zizlsperger v. Maxwell & Morgan Pc , 565 F. App'x 633 ( 2014 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAR 25 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
JOSEPH ZIZLSPERGER; JUDY No. 11-17787
ZIZLSPERGER,
D.C. No. 2:11-cv-01376-FJM
Plaintiffs - Appellants,
v. MEMORANDUM*
MAXWELL & MORGAN PC,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Arizona
Frederick J. Martone, Senior District Judge, Presiding
Submitted March 21, 2014**
Before: THOMAS and McKEOWN, Circuit Judges, and KENDALL, District
Judge.***
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Virginia M. Kendall, District Judge for the U.S.
District Court for the Northern District of Illinois, sitting by designation.
Joseph and Judy Zizlsperger appeal the district court’s dismissal of their
claims pursuant to Federal Rule of Civil Procedure 12(b)(6). Because the parties
are familiar with the history of this case, we need not recount it here. We have
jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
I
We review de novo a district court’s dismissal under Rule 12(b)(6). Fayer v.
Vaughn, 649 F.3d 1061, 1063-64 (9th Cir. 2011) (per curiam). A Rule 12(b)(6)
motion to dismiss may be granted if the complaint either (1) lacks a cognizable
legal theory or (2) fails to allege sufficient facts under a cognizable legal theory.
Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). “We accept
factual allegations in the complaint as true and construe the pleadings in the light
most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins.
Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But a plaintiff’s factual allegations
“must be enough to raise a right to relief above the speculative level.” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 545 (2007). We are “not limited to a
consideration of the grounds upon which the district court decided the issues; we
can affirm the district court on any grounds supported by the record.” Tanaka v.
Univ. of S. Cal., 252 F.3d 1059, 1062 (9th Cir. 2001) (internal quotation marks and
citation omitted). Finally, while a court considering a Rule 12(b)(6) motion is
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generally limited to considering the contents of the complaint, “it may consider
documents on which the complaint necessarily relies and whose authenticity . . . is
not contested.” Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1141 n.5
(9th Cir. 2003) (internal quotation marks and citation omitted) (alteration in
original).
II
The district court properly dismissed the complaint for failure to state a
claim as to violations of the Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. §§ 1692–1692p.
A
The Zizlspergers claim that Maxwell & Morgan’s (“Maxwell”) attempts to
collect attorneys’ fees violated the FDCPA. However, a request for an amount
does not violate the FDCPA if “such amount is expressly authorized by the
agreement creating the debt or permitted by law.” 15 U.S.C. § 1692f(1). The
requested amounts were permitted by law.
The Maricopa County Justice Court entered a judgment in December 2009
against the Zizlspergers for $1,124.73 and ordered them to pay for “all reasonable
costs and attorney fees incurred by [the Association] after entry of this Judgment in
collecting the amounts listed in this Judgment.” Then the superior court in April
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2010 confirmed the underlying judgment and concluded that the outstanding
amount was $2,192.74. Maxwell’s fee requests were based on these state court
determinations. Moreover, the fees were authorized by state law: A.R.S. §
33-1807(H) provides that “[a] judgment or decree in any action brought under this
section shall include costs and reasonable attorney fees for the prevailing party.”
The Zizlspergers counter that the district court did not consider its claims
related specifically to Maxwell’s attorneys’ fees incurred in applying for the writ of
garnishment and that the state court did not grant these fees because they were
statutorily prohibited under A.R.S. § 12-1598.07.
Even assuming that the district court did not consider this specific argument,
those fees are not statutorily prohibited. A.R.S. § 12-1598.07(E) provides that
“[t]he prevailing party may be awarded costs and attorney fees in a reasonable
amount determined by the court. An award of attorney fees shall not be assessed
against nor is it chargeable to the judgment debtor unless the judgment debtor is
found to have objected solely for the purpose of delay or to harass the judgment
creditor.” A.R.S. § 12-1598.07(E) (emphasis added). Thus, Maxwell merely
requested a discretionary award. The state court denied the award for policy
reasons, not because it concluded that the amount was statutorily prohibited.
Further, Maxwell did argue before the state court that the Zizlspergers were
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objecting to the application in bad faith. For example, Maxwell wrote in its
January 3, 2011 Reply that the Zizlspergers’ conduct “clearly evidences their intent
to merely harass Plaintiff and/or to cause further unnecessary delay and needlessly
increase the cost of this litigation.”
B
Similarly, the Zizlspergers’ garnishment-related claim does not allege
sufficient facts to state a claim for relief. First, the Zizlspergers allege that
Maxwell violated the FDCPA by sending to Mr. Zizlsperger’s employer, The
Home Depot, a writ of garnishment earnings directing that it withhold and deliver
to Maxwell twenty-five percent of Mr. Zizlsperger’s earnings, in violation of the
state court order setting the rate at fifteen percent. However, the Zizlspergers
allege only one supporting fact: Mr. Zizlsperger received from The Home Depot a
garnishment notification stating that his wages would be garnished at twenty-five
percent. This notification alone is not sufficient to state a claim that Maxwell sent
to The Home Depot an illegal demand. See Twombly, 550 U.S. at 545 (explaining
that a plaintiff’s factual allegations “must be enough to raise a right to relief above
the speculative level.”).
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Second, the Zizlspergers claim that Maxwell violated § 1692e(2)(A) by
falsifying the amount actually garnished. Specifically, the Zizlspergers point out
that on October 13, 2010, Maxwell filed a report detailing that Maxwell had
received via garnishment $1,971.90 between March 15, 2010 and October 13,
2010, but that The Home Depot’s records show that $2,192.74 was the actual
amount garnished during this period. Thus, the Zizlspergers allege that Maxwell
falsely represented that $220.84 was outstanding. While there is clearly a
discrepancy in the amount reported by Maxwell and the amount actually garnished
by The Home Depot, this difference alone does not show that Maxwell falsely filed
a report. A.R.S. § 12-1598.12(C) requires that reports of judgment balance
indicate the amount of money received; it does not require reporting what the
employer actually garnished. Maxwell followed the law. Moreover, the next
report filed by Maxwell, on February 11, 2011, indicates that the $220.84 shortfall
was received on October 26, 2010.
III
Maxwell urges this Court to award it attorneys’ fees and costs of appeal
pursuant to both 15 U.S.C. § 1692k(a)(3) and Federal Rule of Appellate Procedure
38. Section 1692k(a)(3) allows for an award to a defendant of attorneys’ fees and
costs “[o]n a finding by the court that an action under this section was brought in
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bad faith and for the purpose of harassment.” Rule 38 provides that this Court may
award costs to an appellee if the appeal is frivolous.
The Zizlspergers’ actions must be considered in their context. The
Zizlspergers have paid to date at least $2,192.74 on an initial debt of $313.73, and
have been ordered to pay at least an additional $7,934.16. Thus, they were entitled
to aggressively defend against the collection attempts. Although the arguments are
unavailing, they are not frivolous and were not brought in bad faith or to harass.1
AFFIRMED.
1
We grant the Zizlspergers’ March 28, 2012 motion to take judicial notice
of the state court complaint, Maxwell’s April 6, 2012 cross-motion to take judicial
notice of the transcript of the state court proceedings, and Maxwell’s August 1,
2012 motion to take judicial notice of the state appellate decision. Trigueros v.
Adams, 658 F.3d 983, 987 (9th Cir. 2011) (“We retain discretion to take judicial
notice of documents ‘not subject to reasonable dispute.’ Fed.R.Evid. 201(b). In
particular, we may take notice of proceedings in other courts, both within and
without the federal judicial system, if those proceedings have a direct relation to
matters at issue.” (internal quotation marks and citation omitted)).
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