COUNSEL: For Jeffrey Nabatmama, Plaintiff: John Louis Dell, LEAD ATTORNEY, Law Office of Louis Dell, Burbank, CA.

JUDGES: Mark C. Scarsi, United States District Judge.

OPINION: Mark C. Scarsi

Defendant Ross Morgan & Company, Inc., moved to dismiss Plaintiff's Complaint. (MTD, ECF No. 14.) Plaintiff Jeffrey Nabatmama opposed, (Opp'n, ECF No. 24), and Defendant replied, (Reply, ECF No. 25). The Court deems this matter appropriate for decision without a hearing. Fed. R. Civ. P. 78(b); C.D. Cal. R. 7-15.

I. BACKGROUND

According to the Complaint, Plaintiff resides at a property within the jurisdiction of Shenandoah Villas Homeowners Association ("the HOA"). (Compl. ¶ 5, ECF No. 1.) Although Plaintiff resides at the property, he is not the owner. (Id. ¶ 11.) Defendant is the HOA's property manager. (See id. ¶¶ 6, 16-17.) In late March 2024, the HOA held a meeting where it imposed fines over $106,000 against Plaintiff for alleged violations of the HOA's covenants, conditions, and restrictions. (Id. ¶ 12.) Plaintiff alleges the HOA did not provide the owner of the property proper notice of this meeting. (Id.) Shortly thereafter Plaintiff [*2]  received a letter notifying him of the fines and threatening that the unpaid fines would be collected via monetary judgment, impositions of liens, and foreclosure proceedings. (Id. ¶¶ 12-15.)

Plaintiff alleges that Defendant, acting as a debt collector for the HOA, has wrongfully billed Plaintiff for these fines, despite Plaintiff having no legal ownership interest in the property. (Id. ¶¶ 16-17.) Plaintiff alleges that Defendant has continued to invoice and threaten him with collection of the fines despite knowing or having reason to know Plaintiff is not responsible for the debts. (Id. ¶¶ 17, 19.) Plaintiff avers he requested meeting minutes and proof of notice from the HOA, which has not provided the requested documentation. (Id. ¶ 18.)

Plaintiff alleges that Defendant, inter alia, levied fines upon Plaintiff without proper notice of the meeting at which the fines were imposed, (id. ¶ 12), threatened to collect unpaid fines via "monetary judgment and impositions of lien and foreclosure proceedings," (id. ¶ 15), wrongfully billed Plaintiff and the Jeffrey Nabatmama Trust, (id. ¶ 16), "continued to invoice and threaten to collect fines against Plaintiff for which he is not liable, misrepresenting [*3]  the nature and status of the debt," (id. ¶ 17), and failed to send disclosures required under the Fair Debt Collection Practices Act ("FDCPA"), (id. ¶¶ 21-22, 25). Plaintiff generally alleges this conduct violates eight provisions of the FDCPA and that he has suffered actual damages, emotional distress, and is entitled to statutory damages. (Id. ¶¶ 26, 28-29.)

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) allows an attack on the pleadings for "failure to state a claim upon which relief can be granted." "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.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "Dismissal under Rule 12(b)(6) is proper when the complaint either (1) lacks a cognizable legal theory or (2) fails to allege sufficient facts to support a cognizable legal theory." Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir. 2013).

The determination of whether a complaint satisfies the plausibility standard is a "context-specific task that requires the reviewing court to draw on its judicial experience and common [*4]  sense." Id. at 679. Generally, a court must accept the factual allegations in the pleadings as true and view them in the light most favorable to the plaintiff. Park v. Thompson, 851 F.3d 910, 918 (9th Cir. 2017); Lee v. City of Los Angeles, 250 F.3d 668, 679 (9th Cir. 2001). The Court must disregard allegations that are legal conclusions, even when disguised as facts. See Iqbal, 556 U.S. at 681 ("It is the conclusory nature of respondent's allegations, rather than their extravagantly fanciful nature, that disentitles them to the presumption of truth."). "Although 'a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof is improbable,' plaintiffs must include sufficient 'factual enhancement' to cross 'the line between possibility and plausibility.'" Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990, 995 (9th Cir. 2014) (quoting Twombly, 550 U.S. at 556-57) (citation omitted).

III. ANALYSIS

To state a claim under the FDCPA, Plaintiff must allege:

(1) [he] is a consumer within the meaning of 15 U.S.C. § 1692a(3); (2) the debt arises out of a transaction entered into for personal purposes; (3) the defendant is a debt collector within the meaning of 15 U.S.C. § 1692a(6); and (4) the defendant violated one of the provisions of the FDCPA, 15 U.S.C. §§ 1692a-1692o.

Alonso v. Blackstone Fin. Grp., LLC, 962 F. Supp. 2d 1188, 1193-94 (E.D. Cal. 2013) (internal quotation marks omitted). Among other grounds, Defendant argues that Plaintiff's complaint fails to state a claim because the fines at issue do not fall under the FDCPA's definition of debt. [*5]  (MTD 6-8.) The Court only reaches this issue because it is dispositive. "Because not all obligations to pay are considered debts under the FDCPA, a threshold issue in a suit brought under the Act is whether or not the dispute involves a 'debt' within the meaning of the statute." Turner v. Cook, 362 F.3d 1219, 1226-27 (9th Cir. 2004) (citing Slenk v. Transworld Sys., Inc., 236 F.3d 1072, 1075 (9th Cir. 2001)). The FDCPA defines "debt" as:

any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

15 U.S.C. § 1692a(5); see also McNair v. Maxwell & Morgan PC, 893 F.3d 680, 682 (9th Cir. 2018). Defendant argues that the fines it and the HOA are seeking to collect from Plaintiff do not fall under the FDCPA's definition of debt. (MTD 6-7.)
Courts in this circuit have recognized that "an ongoing obligation to pay assessments to a homeowners' association is a consumer 'debt' under the FDCPA because the promise to pay occurs when the homeowner purchases the property and therefore 'arises' out of the consumer real estate transaction." Mlnarik v. Smith, Gardner, Slusky, Lazer, Pohren & Rogers, LLP, No. 14-cv-01849-BLF, 2014 U.S. Dist. LEXIS 163448, 2014 WL 6657747, at *3 (N.D. Cal. Nov. 21, 2014); see Thies v. L. Offs. of William A. Wyman, 969 F. Supp. 604, 606-08 (S.D. Cal. 1997). The Ninth Circuit has also endorsed this view. See Mashiri v. Epsten Grinnell & Howell, 845 F.3d 984, 989 (9th Cir. 2017) ("Mashiri's obligation to pay the assessment fee relates to [*6]  her household and arises from her membership in the HOA. The overdue assessment fee is a debt.").1

Defendant argues that in contrast to HOA assessments, which create a financial obligation arising from a consensual transaction, the fines at issue in this case "are by their very nature nonconsensual and are not consumer-related since they arise from a violation of the association's internal rules." (MTD 7 (citing Hupp v. Solera Oak Valley Greens Ass'n, No. ED CV 15-1693-VAP (SP), 2015 U.S. Dist. LEXIS 140131, 2015 WL 13447707, at *4 (C.D. Cal. Oct. 8, 2015)).) This distinction, based on consent, mirrors the view of courts which "have concluded uniformly that a fine does not stem from a consensual transaction and thus is not a debt under the FDCPA." Gulley v. Markoff & Krasny, 664 F.3d 1073, 1075 (7th Cir. 2011) (collecting cases). Plaintiff cites Mashiri, McNair, and Thies in support of the proposition that HOA assessments are considered debt under the FDCPA. (Opp'n 5-6.) Defendant does not dispute this point, but it does not need to because the point is immaterial. There is a distinction between a party's affirmative obligation to pay regular HOA assessments arising from the initial purchase of the property and fines that arise from a later violation of HOA rules. Plaintiffs assert that this distinction and Defendant's reliance upon Hupp are misplaced because both fines and assessments [*7]  arise from the same set of rules that govern HOA members. (Opp'n 6-7.) But this argument misunderstands the caselaw and the operative provision of the FDCPA. The FDCPA "is limited in its reach to those obligations to pay arising from consensual transactions, where parties negotiate or contract for consumer-related goods or services." Turner, 362 F.3d at 1227 (internal quotation marks omitted). "The 'transaction' (if one could call it that) out of which the fines arose was not the purchase of the Property, but Plaintiff['s] . . . violation of restrictive covenants and [Defendant's] imposition of fines for that violation." Mlnarik, 2014 U.S. Dist. LEXIS 163448, 2014 WL 6657747, at *4. And "[t]here is nothing consensual about either plaintiff['s] alleged violation of the [HOA rules] (to which defendant[] did not consent), or the imposition of the . . . fine for that violation (to which plaintiff[] did not consent)." Hupp, 2015 U.S. Dist. LEXIS 140131, 2015 WL 13447707, at *4. Because these HOA fines are not "obligations to pay arising from consensual transactions," Turner, 362 F.3d at 1227, the Court finds that the fines at issue are not debt for the purposes of the FDCPA.

For the reasons explained above, the Court GRANTS Defendant's motion to dismiss Plaintiff's FDCPA claim. Plaintiff asks that he be granted leave to amend if the Court grants the [*8]  motion to dismiss. (Opp'n 9-10.) As a general rule, leave to amend a dismissed complaint should be freely granted unless it is clear the complaint could not be saved by any amendment. Fed. R. Civ. P. 15(a); Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). The fines that serve as the debt supporting Plaintiff's claim are not debt within the meaning of FDCPA. Plaintiff offers additional facts he might add to his pleading, but he identifies no other facts he might plead regarding obligations that might qualify as debt. (Opp'n 9-10.) Accordingly, the Court finds that granting leave to amend would be futile.

IV. CONCLUSION

The motion is GRANTED. Plaintiff's FDCPA claim is dismissed with prejudice. The Court will enter judgment consistent with this order.
IT IS SO ORDERED.

JUDGMENT

Pursuant to this Court's Order Granting Defendant's Motion to Dismiss Plaintiff's Complaint, it is ordered, adjudged, and decreed that the complaint is dismissed in its entirety. Plaintiff shall take nothing from this action.
IT IS SO ORDERED.