McCleary v. DLJ Mortgage Capital, Inc. et al

Filing 121

ORDER granting in part and denying in part 107 Motion for Summary Judgment. Signed by District Judge William H. Steele on 10/11/17. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
KELIA WEAVER MCCLEARY,
Plaintiff,
v.
DLJ MORTGAGE CAPITAL, INC.,
et al.,
Defendants.

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) CIVIL ACTION 15-0098-WS-C
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ORDER
This matter is before the Court on the motion of the three remaining
defendants (“the defendants”) for summary judgment. (Doc. 107). The parties
have submitted briefs1 and evidentiary materials in support of their respective
positions, (Docs. 107-08, 116-18), and the motion is ripe for resolution. After
careful consideration, the Court concludes the motion is due to be granted in part
and denied in part.
BACKGROUND
According to the second amended complaint, (Doc. 77), the plaintiff
financed the purchase of her home with a loan from Wilmington Finance
1

“Principal briefs in support of, or in opposition to, any motion must not exceed
thirty (30) pages ….” Civil Local Rule 7(e). The plaintiff’s brief stretches some 60
pages. (Doc. 116). The plaintiff did not seek or obtain permission to file such a monster
and, after reviewing it, the Court can discern no justification for its length. Had the Court
realized when it was filed that the plaintiff’s brief was so long, it would have stricken the
brief and required a substitute in compliance with Rule 7(e). However, because the
motion for summary judgment is now ripe, and because the final pretrial conference is
only a few weeks away, the Court in its discretion considers the brief despite the
plaintiff’s gross violation of governing rules. The defendants’ motion to strike the final
thirty pages of the plaintiff’s brief, (Doc. 118 at 4), is denied.

(“Wilmington”), executing a promissory note in favor of Wilmington and a
mortgage with Mortgage Electronic Registration Systems, Inc. (“MERS”) as
nominee for Wilmington. The loan was sold to U.S. Bank N.A., (“U.S. Bank”),
although the plaintiff disputes the validity of the transfer. MERS transferred the
mortgage to GMAC but lacked authority to do so. MERS and GMAC then
assigned the mortgage and note to U.S. Bank as trustee but lacked authority to do
so. (Id. at 3).
Since 2010, there have been four servicers of the loan. In chronological
order, they are: Green Tree Servicing, Inc. (“Green Tree”); Select Portfolio
Servicing, Inc. (“Select”); Selene Finance, LP (“Selene”); and DLJ Mortgage
Capital, Inc. (“DLJ”). The only remaining defendants in this action are Select,
Selene and DLJ (“the defendants”).2 These defendants serviced the loan from
June 2013 to the present. (Doc. 77 at 3-4).
In November 2014, Selene, DLJ and U.S. Bank began foreclosure
proceedings. They did so even though the plaintiff was not in default and even
though the defendants had failed to accept the plaintiff’s payments, had returned
her payments, had accepted payments without properly crediting them to her
account, had improperly assessed fees and expenses to the account, and had failed
to respond to her written request for information and explanation. Moreover, the
defendants initiated foreclosure proceedings even though the assignment of the
note and mortgage was defective, void or otherwise unenforceable and even
though the foreclosing entity lacked standing or authority to initiate such
proceedings. The plaintiff’s credit and reputation were damaged by the
2

The only other defendants under the second amended complaint are MERS, U.S.
Bank and Green Tree. After the mediator reported that the parties had reached a
settlement, the entire action was dismissed in February 2016, subject to a right of
reinstatement should the paperwork reflecting the settlement not be reduced to an
executed writing within a specified time. (Doc. 89). The settlement documentation as to
these three defendants was consummated. (Docs. 90, 98). As to Select, Selene and DLJ,
the documentation was not consummated and, upon timely motion of the plaintiff, the
action was reinstated as to them. (Doc. 99).
2

defendants’ publication of information regarding the foreclosure and the plaintiff’s
alleged default as well as by their reporting false information regarding her alleged
default to national credit bureaus. The plaintiff claims economic damages,
reputational damages and mental anguish as a result of the defendants’ actions.
(Doc. 77 at 4-9).
The second amended complaint includes eleven causes of action, each one
asserted against all three defendants:
• Count One

Negligence

• Count Two

Wantonness

• Count Three

Unjust enrichment

• Count Four

Breach of contract

• Count Five

False light

• Count Six

Defamation

• Count Seven

Truth in Lending Act (“TILA”)

• Count Eight

Real Estate Settlement Procedures Act (“RESPA”)

• Count Nine

Fair Credit Reporting Act (“FCRA”)

• Count Ten

Fair Debt Collection Practices Act (FDCPA”)

• Count Eleven

Declaratory relief

(Doc. 77 at 9-31).
DISCUSSION
Summary judgment should be granted only if “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). The party seeking summary judgment bears “the initial
burden to show the district court, by reference to materials on file, that there are no
genuine issues of material fact that should be decided at trial.” Clark v. Coats &
Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its
burden in either of two ways: (1) by “negating an element of the non-moving

3

party’s claim”; or (2) by “point[ing] to materials on file that demonstrate that the
party bearing the burden of proof at trial will not be able to meet that burden.” Id.
“Even after Celotex it is never enough simply to state that the non-moving party
cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305,
1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992).
“When the moving party has the burden of proof at trial, that party must
show affirmatively the absence of a genuine issue of material fact: it must support
its motion with credible evidence ... that would entitle it to a directed verdict if not
controverted at trial. [citation omitted] In other words, the moving party must
show that, on all the essential elements of its case on which it bears the burden of
proof, no reasonable jury could find for the nonmoving party.” United States v.
Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc)
(emphasis in original); accord Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115
(11th Cir. 1993).
“If the party moving for summary judgment fails to discharge the initial
burden, then the motion must be denied and the court need not consider what, if
any, showing the non-movant has made.” Fitzpatrick, 2 F.3d at 1116; accord
Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 608.
“If, however, the movant carries the initial summary judgment burden ...,
the responsibility then devolves upon the non-movant to show the existence of a
genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving
party fails to make ‘a sufficient showing on an essential element of her case with
respect to which she has the burden of proof,’ the moving party is entitled to
summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett,
477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a
party fails to properly support an assertion of fact or fails to properly address
another party’s assertion of fact as required by Rule 56(c), the court may …
consider the fact undisputed for purposes of the motion ….”).

4

In deciding a motion for summary judgment, “[t]he evidence, and all
reasonable inferences, must be viewed in the light most favorable to the
nonmovant ….” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243
(11th Cir. 2003). “Therefore, the plaintiff’s version of the facts (to the extent
supported by the record) controls, though that version can be supplemented by
additional material cited by the defendants and not in tension with the plaintiff’s
version.” Rachel v. City of Mobile, 112 F. Supp. 3d 1263, 1274 (S.D. Ala. 2015),
aff’d, 633 Fed. Appx. 784 (11th Cir. 2016).
There is no burden on the Court to identify unreferenced evidence
supporting a party’s position.3 Accordingly, the Court limits its review to the
exhibits, and to the specific portions of the exhibits, to which the parties have
expressly cited.4 Likewise, “[t]here is no burden upon the district court to distill
3

Fed. R. Civ. P. 56(c)(1)(A) (“A party asserting that a fact cannot be or is
genuinely disputed must support the assertion by … citing to particular parts of materials
in the record ….”); id. Rule 56(c)(3) (“The court need consider only the cited materials,
but it may consider other materials in the record.”). “[A]ppellate judges are not like pigs,
hunting for truffles buried in briefs,” and “[l]ikewise, district court judges are not
required to ferret out delectable facts buried in a massive record ….” Chavez v.
Secretary, Florida Department of Corrections, 647 F.3d 1057, 1061 (11th Cir. 2011)
(internal quotes omitted).
4

The plaintiff filed no evidence along with her brief. Instead, her brief
announced that she is relying on “some of” the defendants’ submissions. (Doc. 116 at 2).
However, her brief cites to none of these submissions – not even generally, much less by
“particular parts.”
Despite receiving three extensions of time that ultimately gave her 61 days to file
her opposition brief and evidentiary materials, (Doc. 115), the plaintiff filed a complete
copy of her deposition two full weeks after finally submitting her brief. (Doc. 117). She
neither sought nor received permission to do so, and she had been expressly warned that
she would be given no further extensions of time. (Id. at 2). In such a situation, the
Court has discretion to refuse to consider the deposition. E.g., Young v. City of Palm
Bay, 358 F.3d 859, 864 (11th Cir. 2004). The Court so exercises its discretion.
Moreover, even though Civil Local Rule 5(a) requires that “only the relevant
portions of the [discovery] material shall be filed with the motion or response,” the
plaintiff filed the entire 146 pages of her deposition. Worse, neither in her brief nor in
her notice of submission does the plaintiff cite any particular portion of her deposition.
5

every potential argument that could be made based upon the materials before it on
summary judgment.” Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599
(11th Cir. 1995); accord Gennusa v. Canova, 748 F.3d 1103, 1116 (11th Cir. 2014).
The Court accordingly limits its review to those arguments the parties have
expressly advanced.5
I. Negligence and Wantonness.
Counts One and Two allege that the defendants negligently or wantonly:
(1) serviced the plaintiff’s loan; (2) attempted to collect sums she did not owe; (3)
caused her property insurance to be canceled; (4) defaulted her; (5) attempted a
foreclosure sale; (6) failed to ensure that information disseminated to third parties
regarding the loan’s payment history was not false and was maximally accurate;
(7) failed to properly train their employees on how to investigate disputed
accounts; (8) failed to properly train and/or supervise their employees and agents
regarding the handling of her account; and (9) failed to remove adverse reporting
from her credit after she disputed it. (Doc. 77 at 9-11). The defendants argue that
all aspects of these claims are claims for negligent or wanton mortgage servicing,
which cause of action Alabama does not recognize. (Doc. 108 at 4-6).
Due to this gross violation of Rule 56(c)(1)(A), the Court would not review the plaintiff’s
deposition on her behalf even had she timely submitted it.
The defendants move to strike the plaintiff’s deposition from the record. (Doc.
118 at 3 n.1). The motion is denied. “As the Court has often noted, the proper response
to [objectionable] evidence … is to discount such materials, not to strike them from the
record.” Collar v. Austin, 2015 WL 5444347 at *2 (S.D. Ala. 2015) (internal quotes
omitted). Although striking an evidentiary submission may be appropriate as a sanction
for noncompliance with court orders and applicable rules, English v. CSA Equipment Co.,
2006 WL 2456030 at *2 n.5 (S.D. Ala. 2006), declining to consider the evidence serves
the same purpose.
5

According to the second amended complaint, the defendants serviced the loan
sequentially, not simultaneously. (Doc. 77 at 4). Nevertheless, except as noted in Part
IX, the defendants have advanced no argument that their situations should be considered
individually. The Court therefore does not do so.
6

As this Court has noted, “[r]ecent federal precedent interpreting Alabama
law has uniformly found that no cause of action for negligent or wanton servicing
of a mortgage account exists under Alabama law, at least in the absence of
personal injury or property damage ….” Selman v. CitiMortgage, Inc., 2013 WL
838193 at *5 (S.D. Ala. 2013). Moreover, “[t]he Court agrees with these
decisions’ construction of Alabama law, and particularly their emphasis that the
mortgage servicing obligations at issue here are a creature of contract, not of tort,
and stem from the underlying mortgage and promissory note executed by the
parties, rather than a duty of reasonable care generally owed to the public.” Id. at
*6. Therefore, such claims “fail as a matter of law.” Id. at *5; accord James v.
Nationstar Mortgage, LLC, 92 F. Supp. 3d 1190, 1198-99 (S.D. Ala. 2015); Quinn
v. Deutsche Bank National Trust Co., 2014 WL 977632 at *6-7 (S.D. Ala. 2014).
All three of these cases involved negligent servicing claims brought against a
servicer.6 The Court acknowledged these principles in resolving the defendants’
motion to dismiss. (Doc. 74 at 2-3). The Court granted their motion to dismiss
these claims to the extent they expressly or in effect assert a claim of negligent or
wanton loan servicing. (Id. at 9). However, because the defendants “have not
undertaken to demonstrate that the entirety of Counts One and Two is captured by
the foregoing rule[,] [t]he parameters of the movants’ legal victory thus remain
indeterminate.” (Id. at 3).
The plaintiff does not ask the Court to reconsider its ruling, but the
defendants request the Court to extend it to all nine aspects of the negligence and
6

“The James court has correctly stated Alabama law as it applies to claims
alleging that lenders have acted wantonly with regard to servicing and handling
mortgages.” U.S. Bank National Association v. Shepherd, 202 So. 3d 302, 315 (Ala.
2015) (emphasis added). Because Shepherd did not involve a negligence claim, or any
claim against a servicer, the italicized words do not indicate disagreement with this
Court’s application of the same rule to negligence claims or to claims against servicers.
Nor does the plaintiff argue that the rule is or should be different when the claim is
brought against a servicer with which the plaintiff is not in a contractual relationship. See
generally Blake v. Bank of America, N.A., 845 F. Supp. 2d 1206, 1210-11 (M.D. Ala.
2012) (explaining the rule as applied to servicers).
7

wantonness claims. They note the plaintiff’s “admission” in her deposition that
“all of the alleged actions or inactions of the defendants in [Counts One and Two]
pertain to the servicing of [her] mortgage loan.” (Doc. 108 at 5). Whether
conduct of a servicer falls within the prohibition on claims of negligent or wanton
loan servicing, however, is a legal question that must be answered by legal
authority and legal reasoning, not by a lay plaintiff’s casual description of her
claim.
The defendants also cite Gregory v. Select Portfolio Servicing, Inc., 2016
WL 4540891 (N.D. Ala. 2016). (Doc. 108 at 3 n.2). The plaintiff in Gregory
made exactly the same allegations of negligence and wantonness as does the
plaintiff herein. Id. at *10. The Gregory Court ruled that the first five of these
allegations fell within the prohibition on claims of negligent or wanton loan
servicing. It also ruled that the sixth and ninth allegations were preempted by
FCRA and that the seventh and eighth allegations failed because the plaintiff could
not establish all the elements of a claim for negligent employment. Id. at *10-11.
The Court agrees with the Gregory Court as to the first five of the
plaintiff’s allegations. Negligent servicing, negligent collection, negligent
insurance cancellation, negligent default and negligent foreclosure all address the
defendants’ performance of their servicing obligations. The Court likewise
considers the sixth and ninth allegations (negligent dissemination of inaccurate
information and negligent failure to remove adverse reporting disputed by the
plaintiff) to implicate the defendants’ servicing obligations. E.g., Jackson v. Bank
of New York Mellon, 2016 WL 4942085 at *4 (S.D. Ala. 2016).7
The seventh and eighth allegations (negligent training and supervision) fall
in a different category. While they appear also to implicate the defendants’
7

A number of sister courts have held that allegations comparable to the plaintiff’s
sixth and ninth allegations are preempted by FCRA. E.g., Gregory, 2016 WL 4540891 at
*10; Bush v. J.P. Morgan Chase Bank, N.A., 2016 WL 324993 at *8 (N.D. Ala. 2016).
Because the defendants do not raise a preemption argument, the Court does not consider
that possibility.
8

servicing obligations, they are dressed in the language of a separately recognized
family of torts, and it is not immediately apparent that the Alabama courts would
not analyze them in the latter context. Even under that analysis, however, the
plaintiff’s claim would fail. Such a claim requires that “the employee committed a
tort recognized under Alabama law ….” Selman, 2013 WL 838193 at *6; accord
Gregory, 2016 WL 4540891 at *11. The only perceivable underlying tort an
employee of the defendants could have committed with respect to investigating
disputed accounts and handling the plaintiff’s account is negligent or wanton loan
servicing which, as noted above, is not a recognized tort under Alabama law. Id.;
accord Costline v. BAC Home Loans, 946 F. Supp. 2d 1224, 1235 (N.D. Ala.
2013); Collins v. BSI Financial Services, 2016 WL 6776284 at *10 (M.D. Ala.
2016); Bennett v. Nationstar Mortgage, LLC, 2015 WL 5294321 at *7 (S.D. Ala.
2015).
The plaintiff in her response does not address or contest any of the
foregoing. Instead, she argues that these counts are based on a duty not to mislead
her by providing inaccurate information about the status of her loan. (Doc. 116 at
52-53). The second amended complaint’s allegations of negligence and
wantonness have been set forth above, and they do not include any allegation of
misrepresentations to, or the provision of erroneous information to, the plaintiff.
(Doc. 77 at 9-11). Because the plaintiff cannot amend her complaint by brief,8 the
Court need not and does not consider her argument further.
For the reasons set forth above, the defendants’ motion for summary
judgment as to Counts One and Two is due to be granted.

8

“A plaintiff may not amend her complaint through argument in a brief opposing
summary judgment.” Dukes v. Deaton, 852 F.3d 1035, 1046 (11th Cir. 2017) (internal
quotes omitted).
9

II. Unjust Enrichment.
Count Three alleges that the plaintiff “has been forced to pay charges” that
were improper and that the defendants have been unjustly enriched “by the
payment of unauthorized and unearned” fees and other charges. (Doc. 77 at 12).
The parties agree that, in order to prevail at trial on this claim, the plaintiff
must prove that the defendants “hold” funds that should be returned to her. (Doc.
108 at 7; Doc. 116 at 54). See, e.g., Mantiply v. Mantiply, 951 So. 2d 638, 654
(Ala. 2006) (“In order for a plaintiff to prevail on a claim of unjust enrichment, the
plaintiff must show that the defendant holds money which, in equity and good
conscience, belongs to the plaintiff or holds money which was improperly paid to
defendant because of mistake or fraud.”) (emphasis added, internal quotes
omitted).
As the defendants point out, (Doc. 108 at 16), the plaintiff admits that the
fees and charges on which Count Three is based have been charged to her account
but have never been paid by her, voluntarily or otherwise, and the defendants
consequently do not hold any of her money. (Doc. 107-1 at 31-33). The plaintiff
offers no relevant response. (Doc. 116 at 53-55). Accordingly the defendants’
motion for summary judgment as to Count Three is due to be granted.
III. Breach of Contract.
Count Four alleges that the defendants misapplied the plaintiff’s monthly
payments in violation of paragraph 2 of the mortgage and failed to send proper
notices in violation of paragraph 22 of the mortgage. Pursuant to paragraph 22,
the plaintiff disputes the existence of a default on her mortgage indebtedness.
(Doc. 77 at 13-16).9 The defendants acknowledge that the plaintiff’s claim also

9

Count Four also alleges that MERS and Green Tree made or attempted improper
assignments, but those allegations do not extend to the defendants.

10

includes allegations that they failed to honor a loan modification agreement and
that they charged fees and costs not permitted by contract. (Doc. 108 at 8).10
The defendants do not address this claim as it relates to violations of
paragraphs 2 and 22 of the mortgage. (Doc. 108 at 7-9). To that extent, the claim
necessarily survives the defendants’ motion.11
With respect to breach of the modification agreement, the defendants argue:
(1) the plaintiff has no evidence they breached the contract; (2) it is
uncontroverted the plaintiff is in breach; and (3) the plaintiff admits she has no
actionable damages. (Doc. 108 at 3-4, 7-8).12

10

The acknowledgment is appropriate, since Count Four incorporates preceding
paragraphs, including those denying the plaintiff was in default and complaining of
improper charges. (Doc. 77 at 5, 8, 12, 13).
11

In their reply brief, the defendants for the first time acknowledge and address
these aspects of Count Four. (Doc. 118 at 7). As the Court has repeated many times,
“[d]istrict courts, including this one, ordinarily do not consider arguments raised for the
first time on reply.” Georgia-Pacific Consumer Products LP v. Zurich American
Insurance Co., 184 F. Supp. 3d 1337, 1340 n.4 (S.D. Ala. 2016) (internal quotes
omitted). Indeed, the Court has articulated and applied the rule in this very case. (Doc.
73 at 4 n.1). The defendants offer no reason the Court should depart from this rule to
consider an argument they had full opportunity and incentive to assert in their principal
brief.
In any event, the defendants’ only argument is the one-sentence assertion that “the
record is devoid of any evidence supporting these assertions.” (Doc.118 at 7). The
defendants misapprehend their burden on motion for summary judgment. A movant
cannot simply announce that there is no evidence to support a claim but must point
specifically to those portions of the record that either affirmatively negate an element of
the claim (e.g., the plaintiff admits the defendant did not breach the agreement) or show
the plaintiff cannot prove the element (e.g., the plaintiff relies exclusively on a piece of
evidence that does not support the element). Clark, 929 F.2d at 608. The defendants
having failed to attempt either approach, it is legally irrelevant whether the plaintiff in her
response presented evidence supporting her claim. Id. In short, the defendants’ argument
would fail even had it been timely asserted.
12

The defendants assert the latter argument globally as to every claim. (Doc. 108

at 3-4).
11

The first two arguments are intertwined. Looking only at the evidence
submitted by the defendants,13 and viewing that evidence and the reasonable
inferences therefrom in the light most favorable to the plaintiff, the defendants are
in breach and the plaintiff is not. The note and mortgage were executed in 2006
and called for monthly payments of $1,612.35. The plaintiff obtained a loan
modification that reduced her monthly payments to $806, which she made.14 The
mortgage was foreclosed in 2010 but, in May 2012, a consent order was entered
that nullified the foreclosure deed, revived and reinstated the note and mortgage,
and declared the loan account current. In June 2012, the plaintiff sent her $806
payment to Green Tree, which returned it and demanded payment of
approximately $56,000, representing roughly two years of assertedly past-due
payments. The plaintiff sent no more payments to Green Tree and instead tried
without success to resolve the issue, until Select succeeded Green Tree in 2013.
At that point, the plaintiff sent an $806 payment to Select, which returned it along
with a demand for approximately $88,000. In 2014, the plaintiff sent an $806
payment to Selene, which likewise returned it. (Doc. 107-1 at 6-7, 17, 31-32, 34,
36, 38-42; Doc. 107-4).
Based on this evidence, the plaintiff’s loan was current as of May 2012, and
her monthly payment going forward was $806. The plaintiff timely made her next
monthly payment of $806 in June 2012, but Green Tree improperly refused it and
wrongly insisted the plaintiff’s loan was not current but some $56,000 in arrears.
The plaintiff attempted to straighten out the error and twice more attempted to
make her monthly payment, but she was uniformly rebuffed by the defendants,
who continued to insist she owed large amounts she did not owe.
13

See note 4, supra. The defendants’ evidence consists exclusively of: (1)
excerpts from the plaintiff’s deposition; (2) the note; (3) the mortgage; and (4) a consent
order. (Docs. 107-1 to -4). Therefore, the only version of the plaintiff’s loan history
before the Court is the plaintiff’s.
14

The defendants indicate the loan modification occurred in 2008. (Doc. 108 at

14).
12

It is an element of a claim for breach of contract that the plaintiff have
performed her obligations under the contract. E.g., Winkleblack v. Murphy, 811
So. 2d 521, 529 (Ala. 2001). The defendants argue the plaintiff cannot prove she
performed her obligations because: (1) she admits her monthly payments after her
loan modification were $1,331.22; (2) she has no documentary evidence that she
ever attempted to make any $806 payments; and (3) she has no excuse for not
continuing to remit monthly payments every month since June 2012. (Doc. 108 at
8).
As to the defendants’ first contention, they have presented no evidence that
the post-modification monthly payments were anything other than $806.15 As to
the second contention, the defendants have offered no authority for the proposition
that a plaintiff’s testimony that she sent in payments is inadequate to create a fact
issue as to whether she did so.16 As to the third contention, the plaintiff has
explained that every time she submitted a monthly payment, the servicer returned
it and erroneously announced she owed several years of payments (at the
unmodified, original rate) even though the consent order had wiped out any such
debt owed prior to its entry. To prevail on motion for summary judgment, it is
incumbent on the defendants to demonstrate why futility or some similar concept
does not excuse the plaintiff’s failure to engage in the apparently pointless
exercise of submitting payments the servicers had made clear would not be
accepted. The defendants have attempted no such demonstration.
15

The defendants cite generally to “Exh. A” (the plaintiff’s deposition excerpts).
They provide no pinpoint citation. Nor does their statement of facts (which does provide
pinpoint citations) mention anything about a modified monthly payment of any amount
other than $806. (Doc. 107). The Court, although under no obligation to do so, has
reviewed every page of the plaintiff’s deposition submitted by the defendants and finds
no reference to $1,331.22 or to any post-modification amount other than $806. As noted,
the defendants have submitted no evidence from their own files regarding the plaintiff’s
payment history, including evidence regarding the correct monthly payment amount.
16

The defendants cite only Fullman v. Graddick, 739 F.2d 553, 557 (11th Cir.
1984), which does not remotely support the proposition for which it is cited.

13

The foregoing discussion reflects that, according to the plaintiff’s evidence,
the defendants breached the loan modification agreement by refusing to accept her
proper monthly payments and by demanding that she pay tens of thousands of
dollars she did not owe. The evidence also reflects that the plaintiff did not breach
the agreement but only stopped making payments when the defendants and Green
Tree refused to accept her proper monthly payments and made clear they would
continue to do so.
The defendants argue the plaintiff has no actionable damages from their
breach of the modification agreement because she is still living in the property, the
loan has not been foreclosed, she has made no (accepted) monthly payments in
several years, and she has never paid the extra charges that show up on her
statements. (Doc. 108 at 3-4). The defendants assume rather than demonstrate
that these are the only elements of damage the plaintiff could recover under this
claim. Perhaps they are right, but the Court is not required on motion for
summary judgment either to accept their ipse dixit or to perform its own research
on their behalf in order to determine what damages the plaintiff could or could not
recover.17
This leaves for consideration the plaintiff’s claim that the defendants
charged fees and costs not contemplated by the relevant agreements. The
defendants argue the plaintiff: (1) cannot prove the total amount of the improper
17

By way of example only, the second amended complaint alleges that, even
though the plaintiff was not in default (as discussed in text), the defendants declared that
she was and began foreclosure proceedings. (Doc. 77 at 4-5). (The defendants, (Doc.
108 at 4), say the foreclosure sale has not occurred.) The defendants have not offered to
show that Alabama law precludes the plaintiff from recovering under Count Four the
expenses she incurred in defending those proceedings.
Moreover, the second amended complaint alleges that the plaintiff was denied
credit and had her homeowner’s insurance canceled due to the defendants’ statements
regarding default and foreclosure. (Doc. 77 at 18). The defendants have not attempted to
demonstrate that Alabama law precludes the plaintiff from recovering these damages
under her contract claim.

14

fees and costs; (2) cannot identify the provisions that make such fees and costs
improper; and (3) has no actionable damages. (Doc. 108 at 3-4, 9).
As to the second contention, the defendants point to no record evidence that
the plaintiff is unable to identify the relevant provisions.18 As to the first
contention, they likewise point to no record evidence that the plaintiff cannot
quantify the improper fees and costs.19 Nor do they offer any explanation or legal
authority for the facially dubious proposition that a plaintiff cannot recover on a
claim unless she can quantify it with precision. As to the third contention, the
plaintiff testified that the defendants have been adding these charges to the amount
they say is due. (Doc. 107-1 at 30-32). This means those amounts are part of the
alleged debt to collect which the defendants filed foreclosure proceedings; as
discussed in note 17, supra, the defendants have not attempted to show that the
plaintiff cannot recover under Count Four damages flowing from this conduct.
For the reasons set forth above, the defendants’ are not entitled to summary
judgment as to Count Four.
IV. False Light.
Count Five alleges that the defendants made untrue statements to the
national credit reporting media and to the plaintiff’s homeowner insurance carrier
that she was behind on her debt, which caused her to be held up to public ridicule

18

As is their custom, the defendants in brief merely cite generally to “Exh. A.”
(Doc. 108 at 8). The defendants’ statement of facts does include pinpoint citations to the
plaintiff’s deposition, but the single page identified in support of this claim, (Doc. 107 at
4), reflects that the plaintiff was not asked whether she could identify which provisions of
the contracts do not permit the challenged charges and fees. (Doc. 107-1 at 30).
19

The only relevant question asked of the plaintiff was how much she paid in
objectionable charges. The plaintiff first said she did not know but then said she had not
paid any of these charges. (Doc. 107-1 at 30, 32-33). That is, the plaintiff did not testify
(because she was not asked) that she could not calculate the amount of the challenged
charges.
15

or shame, to have negative credit reports, and to be denied homeowner’s
insurance. (Doc. 77 at 16-17).
The defendants argue that a “false light” claim of invasion of privacy
requires widespread dissemination of the false report and, at least in the creditor
context, a “systematic campaig[n] designed to vilify the debtor or expose him to
public ridicule.” Liberty Loan Corp. v. Mizell, 410 So. 2d 45, 47-48 (Ala. 1982).
(Doc. 108 at 10, 12-13). The plaintiff offers no response to the defendants’
arguments and no defense of this claim at all.
“One who gives publicity to a matter concerning another that places the
other before the public in a false light is subject to liability” under certain
circumstances. Butler v. Town of Argo, 871 So. 2d 1, 12 (Ala. 2003) (internal
quotes omitted). “‘Giving publicity’ is making a matter public, by communicating
it to the public at large, or to so many persons that the matter must be regarded as
substantially certain to become one of public knowledge. … The ‘publicity’
element is not satisfied by the communication of a fact to a single person or even
to a small group of persons.” Regions Bank v. Plott, 897 So. 2d 239, 245 (Ala.
2004) (internal quotes omitted) (defendant bank’s return of two checks stamped
“insufficient funds” to two presenting banks and two merchants did not constitute
“publicity”). The tort extends only to a communication “that reaches, or is sure to
reach, the public.” Butler, 871 So. 2d at 13 (internal quotes omitted) (identifying,
as examples of publicity, publication in a periodical, distribution of a handbill to a
large number of persons, a radio broadcast, or an address made to a large
audience).
The plaintiff alleges dissemination to only a handful of entities, and she
makes no argument that this satisfies the publicity requirement of Alabama law.
The Court is aware that a sister court has ruled that “reporting of inaccurate
information to the national credit bureaus satisfies the ‘publicity’ requirement [of a
false light claim] … because of the near limitless individuals and/or entities which
can and do access such information.” Champion v. Global Credit Card Services,
16

LLC, 2012 WL 3542225 at *6 (N.D. Ala. 2012). The Court is doubtful. In Plott,
“many of the merchants referred the matter to credit bureaus and credit-reporting
agencies.” 897 So. 2d at 242. While it is not clear that the two merchants
involved in the false light claim had done so, the Plott Court made no suggestion
that such a circumstance would make any difference to the “publicity” element.
Another federal court has ruled that reporting false information to credit reporting
agencies does not constitute “publicity” under Alabama law. In re: BFW
Liquidation, LLC, 471 B.R. 652, 664 (Bankr. N.D. Ala. 2012). Moreover, federal
courts in Pennsylvania have ruled similarly regarding that state’s false light cause
of action.20 Because credit reports “are provided upon the request of the party
concerned, reach but a relatively limited readership, and in most cases are kept in
strict confidence,” inquiries to credit reporting agencies “and the resulting reports
produced by the agencies do not constitute publicity” for purposes of a false light
claim. Mnatsakanyan v. Goldsmith & Hull APC, 2013 WL 10156242 at *9 (C.D.
Cal. 2013) (internal quotes omitted).21

20

Bolick v. DFS Services LLC, 2011 WL 4359987 at *2 n.24 (E.D. Pa. 2011);
Lennon v. Penn Waste, Inc., 2009 WL 3255238 at *1 n.1 (M.D. Pa. 2009); Gagliardi v.
Experian Information Solutions, Inc., 2009 WL 365647 at *5 (W.D. Pa. 2009).
21

Even could the provision of false information to credit reporting agencies ever
amount to “publicity” for purposes of a false light claim, it would require proof in an
individual case of the scope of dissemination by those agencies. Credit reporting
agencies are not like the periodicals and broadcasters mentioned in Butler; the media’s
distribution of the information is guaranteed to reach a large, broad audience, such that
the mere fact of publication or broadcast establishes “publicity.” The extent of
dissemination by a credit reporting agency, in contrast, depends on the number of third
parties seeking out the information, and that number can range in any given case from
zero to a few to, perhaps, more than a few. Dissemination by credit reporting agencies
thus parallels Butler’s examples of handbills and public addresses, which in any given
case may reach few if any readers or hearers and as to which the plaintiff must show a
“large” number of recipients. 871 So. 2d at 13. The Champion Court provided no
support for its perception that a “near limitless” number of persons and entities “do”
access false information provided to credit reporting agencies as to any given person,
which conclusion the Court thus cannot accept as an established fact.

17

Because the plaintiff cannot prove the “publicity” element of her false light
claim, the defendants are entitled to summary judgment as to Count Five.
V. Defamation.
Count Six alleges the foreclosure notices published in the Washington
County News defamed the plaintiff by stating or implying that she was in default
and that the defendants were entitled to foreclose. Count Six also alleges the
defendants defamed the plaintiff by falsely informing credit reporting agencies
and/or other third parties that the plaintiff had defaulted, was in foreclosure, and/or
by providing these entities other false information regarding her credit history and
creditworthiness. (Doc. 77 at 18-21).
The defendants raise four arguments in opposition to this claim: (1) the
plaintiff in her deposition blamed others for the defamation; (2) she identified no
false statement by the defendants; (3) she provided no documentation of any
written statement other than the newspaper publications; and (4) she failed to
plead and prove special damages as required in cases of slander per quod. (Doc.
108 at 9, 10-11).22
As to the first contention, the plaintiff did not exonerate the defendants.
While she did testify that someone associated with the newspaper made oral
statements to the effect the plaintiff must not pay her bills, (Doc. 107-1 at 51-54),
she did not testify that only this person made false statements about her; indeed,
she was not asked whether anyone else had made false statements about her.23 As
22

In their reply brief, the defendants present a fifth argument: that they made no
false statement, since the plaintiff in fact was in default. (Doc. 118 at 8). As stated in
note 11, supra, the Court generally will not consider arguments a defendant fails to
include in its principal brief. Because the defendants offer no excuse for not presenting
this argument initially, the Court will follow the general rule. Even if this tardy argument
had been timely asserted, it would fail; as discussed in Part III, the plaintiff has
demonstrated a genuine issue as to whether she was in default.
23

The plaintiff was asked to identify “what exactly has been said that is not true.”
(Doc. 107-1 at 48 (emphasis added); accord id. at 49). She was not asked to identify who
18

to the second contention, the plaintiff was not asked to identify any, much less all,
untrue statements made by the defendants.24 As to the third contention, the
defendant has again failed to demonstrate that a plaintiff must produce written
proof in order to establish her claim.25 As to the fourth contention, the defendants
have failed to demonstrate that the plaintiff’s claim relies on any oral statements
so as to implicate rules governing cases of slander. At any rate, the plaintiff
testified that she was denied a car loan shortly after the defamatory statements
were made, (Doc. 107-1 at 55), which, as this Court recently noted, constitutes
special damages. Ellis v. Bureaus, Inc., 2017 WL 3034327 at *5 (S.D. Ala. 2017).
For the reasons set forth above, the defendants are not entitled to summary
judgment as to Count Six.
VI. TILA.
Count Seven alleges that the defendants violated TILA by: (1) failing to
provide a copy of the statutorily required notices; (2) issuing a disclosure
statement that did not provide required disclosures prior to consummation of the
transaction, did not provide required disclosures clearly and conspicuously in
writing, and did not include in the finance charge certain charges imposed
(including attorney’s fees and late fees); (3) understating the annual percentage
rate; (4) improperly amortizing the loan; and (5) failing to send proper monthly
statements. (Doc. 77 at 21-24).

had made untrue statements. Neither as to what was said nor as to who said it was the
plaintiff asked to confirm that she had provided a complete listing.
24

See note 23, supra.

25

Any libelous statements made by the defendants to credit reporting agencies or
other third parties would have been created and issued by the defendant to those entities;
it is not immediately apparent how the plaintiff could be in possession of them absent
discovery. The plaintiff’s deposition was taken in January 2016, and discovery did not
end until May 2017. (Doc. 102; Doc. 107-1 at 2).
19

The defendants argue the plaintiff’s TILA claim fails because: (1) she
failed to provide proof of what the alleged violations were; (2) she failed to
provide proof of how she was damaged or of a causal link between the alleged
violations and her damages; and (3) the claim is barred by the statute of
limitations. (Doc. 108 at 13-14).
Suit under Sections 1639, 1639b or 1639c must be brought “before the end
of the 3-year period beginning on the date of the occurrence of the violation.” 15
U.S.C. § 1640(e). Suit under any other provision must be brought “within one
year from the date of the occurrence of the violation.” Id. Count Seven expressly
identifies the Code provisions under which it is brought, and they do not include
the sections carrying an extended limitations period. Therefore, all aspects of the
plaintiff’s TILA claim are subject to a one-year limitations period.
“This Court has observed that a TILA nondisclosure violation occurs when
the transaction is consummated, in other words, at the time of closing of a
residential mortgage transaction.” Frazile v. EMC Mortgage Corp., 382 Fed.
Appx. 833, 838 (11th Cir. 2010) (internal quotes omitted) (describing In re: Smith,
737 F.2d 1549, 1552 (11th Cir. 1984)). The Court agrees with the defendants that,
to the extent Count Seven is based on nondisclosures occurring more than a year
before suit was filed on January 20, 2015,26 the plaintiff’s claim is time-barred.27
As noted, Count Seven also alleges that the defendants “failed to send
proper monthly statements” to the plaintiff. (Doc. 77 at 24). The plaintiff testified
that every monthly statement since 2012 has improperly added new late charges
and finance charges and has utilized an interest rate of 9.45% even though the loan
modification had reduced the interest to 2%. (Doc. 107-1 at 53-54). The

26

(Doc. 1-1 at 3).

27

As the defendants argue, this ruling extends to any claim based on
nondisclosures in connection with the original mortgage transaction (2006), the loan
modification (2008), or the reinstatement of the mortgage (2012).

20

defendants assert that, because the lay plaintiff in deposition could not answer the
legal question of whether each statement constitutes a new statutory violation with
its own limitations period, this aspect of her claim is barred by the statute of
limitations. (Doc. 108 at 14). On motion for summary judgment, however, it is
for the defendants to demonstrate that the most recent of the plaintiffs’ monthly
statements are time-barred, and they have not effectively engaged that challenge.28
As to the defendants’ first contention, the plaintiff described in her
deposition the challenged elements of her monthly statements. (Doc. 107-1 at 5154). Despite this testimony, the defendants say she “failed to provide proof” of the
violations because she was insufficiently specific in her testimony, because she
offered no documentation to prove her claims, and because she did not know the
amounts of the challenged charges. (Doc. 108 at 13). The defendants have neither
identified the “specifics” the plaintiff failed to provide, shown that she admitted to
having no additional information regarding the claim, nor demonstrated that a
plaintiff is required on penalty of dismissal to provide more detail than she
provided. Likewise, the defendants have not shown that a plaintiff may not
lawfully proceed on such a claim absent documentation.29 Nor have they shown
that a plaintiff sitting in her deposition is required by law to know by heart the
dollar amount of the charges she contests or else suffer dismissal of her claim as
the penalty of her ignorance. As previously stated, the Court will not develop and
support arguments raised by the defendants only as ipse dixit.
As to the defendants’ second contention, it may be that the plaintiff can
show no causal connection between any timely raised TILA violation and some
28

Neither case cited by the defendants addresses a similar situation.

29

Nor have the defendants shown that the plaintiff has no such documentation
(such as the monthly statements themselves). They acknowledge that the plaintiff
produced 256 documents prior to her deposition, (Doc. 107-1), but they have not
attempted to show either that their requests for production extended to such documents or
that the plaintiff’s production did not include such documents.

21

element of actual damage from the violation. The Court need not consider that
possibility because the plaintiff also demands statutory damages and asserts she
need not prove actual damages as a predicate to recovery of statutory damages.
(Doc. 77 at 22). See, e.g., Shroder v. Suburban Coastal Corp., 729 F.2d 1371,
1380 (11th Cir. 1984) (“[T]he statutory civil penalties must be imposed for such a
violation regardless of the district court’s belief that no actual damages resulted
….”) (internal quotes omitted). The defendants have not addressed this issue, and
the Court will not do so on their behalf.
For the reasons set forth above, the defendants are entitled to summary
judgment as to Count Seven to the extent, and only to the extent, it is based on
nondisclosures preceding January 20, 2014.
VII. RESPA.
Count Eight alleges the defendants violated RESPA by failing to respond to
the plaintiff’s qualified written request (“QWR”). (Doc. 77 at 24-26). The
defendants raise two arguments: (1) the plaintiff cannot prove she ever sent a
QWR; and (2) she has failed to establish damages caused by any RESPA
violation. (Doc. 108 at 14-16).
The plaintiff testified that she sent the defendants a QWR by certified mail
on September 29, 2014 and that she sent them another QWR by certified mail on
November 13, 2014. (Doc. 107-1 at 11-14, 21). The defendants acknowledge this
testimony but argue that, because the plaintiff has not produced a copy of the
QWR’s or the certified mail receipts, her claim fails “as a matter of law.” (Doc.
108 at 15). The cases on which they rely for this proposition, however, do not
remotely support it. To the extent the defendants use these cases to suggest a
plaintiff must have evidence that the QWR included her name and address, the
identity of the addressee, the subject matter of the communication and/or a
statement that explains why she believes her account is in error or that provides
sufficient detail regarding other information sought, (id.), they have presented
22

nothing from the plaintiff’s deposition that either negates any of these components
of a QWR or that demonstrates she cannot prove they were included in her
QWR’s.30
Absent a pattern or practice of noncompliance, RESPA provides for
recovery of “actual damages.” 12 U.S.C. § 2605(f)(1). “We join our sister
Circuits in recognizing that damages are an essential element in pleading a RESPA
claim.” Renfroe v. Nationstar Mortgage, LLC, 822 F.3d 1241, 1246 (11th Cir.
2016). But what are actual damages? “We have not defined ‘actual damages’
under RESPA, and that term is not defined in the statute itself.” Baez v.
Specialized Loan Servicing, LLC, ___ Fed. Appx. ___, 2017 WL 4220292 at *3
(11th Cir. 2017). Noting Renfroe’s command that RESPA should be construed
liberally, the Baez Court assumed without deciding that the term includes nonpecuniary losses. Id. The defendants have not attempted to define the reach of
“actual damages” under RESPA, and without such a definition they cannot meet
their burden of showing the plaintiff cannot prove any such damages. Moreover,
they did not ask the plaintiff in her deposition about her RESPA damages, so even
if they had a working definition of such damages they could not show her inability
to prove such damages.31
30

Again, the defendants cannot rely on the plaintiff’s failure to offer certain
testimony at her deposition as proof she cannot prove a part of her case unless they
demonstrate that their questioning was sufficiently precise to rule out the possibility of
such evidence. Because the defendants did not ask the plaintiff to describe the content of
her QWR’s, they have not shown that the plaintiff has no such evidence.
To the extent the defendants suggest the correspondence must be “labeled as a
qualified written request,” (Doc. 108 at 15), the very authority they cite expressly rejects
the proposition. At any rate, the same point applies: the defendants failed to ask the
plaintiff whether her correspondence was so labeled and thus have not shown she cannot
so testify.
31

Count Eight alleges that the plaintiff was damaged because, without the
information a proper response to the QWR would have provided, she was unable to stop
the foreclosure. (Doc. 77 at 25). The defendants do not address that allegation or try to
show that such a result of a RESPA violation would not constitute actual damages. Cf.
23

For the reasons set forth above, the defendants are not entitled to summary
judgment as to Count Eight.
VIII. FCRA.
Count Nine alleges that the defendants repeatedly reported to various credit
reporting agencies that the plaintiff was delinquent and in default; that she
repeatedly contacted the defendants to dispute their inaccurate reporting of her
delinquency and default; that she also repeatedly contacted the credit reporting
agencies, advised them of the inaccurate information and disputed same; that the
defendants failed to properly investigate and respond to her dispute, including her
reporting to credit reporting agencies, and failed to retract or delete the false
information; and that the credit reporting agencies never changed their reports
because the defendants kept reporting the account as delinquent and in foreclosure.
(Doc. 77 at 26-29). The plaintiff testified that this claim is based on the continued
reporting of the 2010 foreclosure even after it was set aside by consent order in
2012. (Doc. 107-1 at 34).
The defendants press the following arguments: (1) the plaintiff produced
no copies of any communications voicing her dispute; (2) she failed to prove the
credit reporting agencies tendered the dispute to them;32 (3) she does not “know” if
the inaccurate information in her credit reports came from the defendants or
independently from the credit reporting agencies after correction by the

Baez, 2017 WL 4220292 at *5 (“We have recognized that a plaintiff could potentially
prove actual damages for purposes of RESPA by showing that the servicer’s deficient
response prevented her from taking some important action.”) (internal quotes omitted).
32

The plaintiff agrees she must prove both that she registered a dispute with a
credit reporting agency and that such entity notified the defendants of the dispute. (Doc.
77 at 48). See Nawab v. Unifund CCR Partners, 553 Fed. Appx. 856, 861 (11th Cir.
2013) (FCRA “provides a private right of action but only where the furnisher received
notice of the consumer’s dispute from a consumer reporting agency”).

24

defendants; and (4) she admits that a credit report she was shown in her deposition
did not mention her mortgage at all. (Doc. 108 at 16-17).
As to the defendants’ first contention, they have again simply assumed,
without offer of any legal authority, that the plaintiffs’ claim must fail if
unaccompanied by documentation corroborating her testimony.33 As to their
second contention, they have again failed to direct the Court to any portion of the
record that either negates tender or reflects that the plaintiff cannot produce
evidence of tender.34 As to the third contention, no principle of law requires that a
party “know” a fact it is attempting to prove; it is sufficient if the evidence and
reasonable inferences therefrom would permit the jury to find the fact. If the
plaintiff has evidence that she made a dispute to a credit reporting agency (and she
does), that the credit reporting agency notified the defendants of the dispute (and
the defendants have failed to show she does not), and that the false information
nevertheless was not corrected (and she does), a reasonable inference from those
facts is that the defendants did not notify the credit reporting agencies that the
plaintiff’s mortgage was not foreclosed. As to the fourth contention, the plaintiff
testified that the false reporting continued from entry of the consent order in May
2012 up until the date of her deposition in January 2016, (Doc. 107-1 at 34); that a
credit report dated December 17, 2015 does not show the plaintiff’s mortgage as
foreclosed, (id. at 44-45), scarcely negates the presence of such incorrect
information at earlier times, or in reports by other credit reporting agencies.
As to the defendants’ global challenge to actionable damages, (Doc. 108 at
3-4), they have not identified what damages may properly be recovered in such an
action, much less shown that the plaintiff has incurred no such damages.

33

The plaintiff testified that she sent her disputes to the credit reporting agencies
by fax and that she did so multiple times. (Doc. 107-1 at 21, 45).
34

The deposition excerpts submitted by the defendants contain no indication the
plaintiff was asked whether she had evidence of tender by a credit reporting agency to the
defendants.
25

Moreover, FCRA provides for statutory damages, even absent actual damages, in
the case of willful violations, 15 U.S.C. § 1681n(a)(1)(A), and the plaintiff alleges
a willful violation. (Doc. 77 at 27).
For the reasons set forth above, the defendants are not entitled to summary
judgment as to Count Nine.
IX. FDCPA.
Count Ten alleges the defendants committed multiple violations of 15
U.S.C. §§ 1692c, 1692e(2), 1692e(8), 1692e(11) and 1692(f)(1). (Doc. 77 at 2931). The defendants’ primary argument is that they are not “debt collectors” for
purposes of FDCPA. (Doc. 108 at 18-19; Doc. 118 at 9-12). They also argue the
plaintiff failed to establish which defendant or defendants engaged in what
conduct or that the conduct violated FDCPA. (Doc. 108 at 17-18). Finally, they
repeat their global argument that the plaintiff has no actionable damages. (Id. at 34).
FDCPA defines “debt collector” in two generally applicable ways. The
term means either one who “uses any instrumentality of interstate commerce or the
mails in any business the principal purpose of which is the collection of any debts”
or one who “regularly collects or attempts to collect, directly or indirectly, debts
owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). These
definitions are subject to an exclusion for any “debt which was not in default at the
time it was obtained by such person.” Id. § 1692a(6)(F)(iii); Davidson v. Capital
One Bank, N.A., 797 F.3d 1309, 1314 (11th Cir. 2015).
The defendants argue they cannot be debt collectors because they are
servicers “engaging in first party collection efforts.” (Doc. 108 at 18-19). To the
extent the defendants suggest a servicer can never be a debt collector,35 they are
35

“Plaintiff acknowledged that Defendants are servicers of her mortgage loan.
(Exh. A). Thus, Plaintiff’s FDCPA claim fails because Plaintiff cannot establish that
Defendants are ‘debt collectors’ as the term is defined by the FDCPA.” (Doc. 108 at 18).
26

mistaken. E.g., Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985) (a
servicer is not a debt collector “so long as the debt was not in default at the time it
was assigned”); Johns v. Wells Fargo Bank, N.A., 2015 WL 143753 at *5 (S.D.
Ala. 2015) (collecting cases for the proposition a servicer can be a debt collector if
the debt was in default when the servicer acquired the servicing).36 The plaintiffs
having pointed this out, (Doc. 116 at 56-57), the defendants in their reply brief
concede that one can be a debt collector under the “regularly collects” prong “if
the debt being collected was in default when acquired.” (Doc. 118 at 10, 12).
The defendants do not explain how they could have been engaged in “first
party” collection efforts; certainly they do not assert that the plaintiff’s mortgage
debt was owed to them rather than to U.S. Bank. See 15 U.S.C. § 1692a(4)
(defining “creditor” as one “to whom a debt is owed”). Once again, the Court will
not attempt to pour content into the defendants’ ipse dixit.
“For the purpose of section 1692f(6) of this title, such term [“debt
collector”] also includes any person who uses any instrumentality of interstate
commerce or the mails in any business the principal purpose of which is the
enforcement of security interests.” 15 U.S.C. § 1692a(6). Section 1692f(6)
prohibits debt collectors from taking any nonjudicial action to effect dispossession
or disablement of property unless certain conditions are satisfied. The defendants
note without comment that “an enforcer of a security interest, such as a mortgage
company foreclosing on mortgages of real property … falls outside the ambit of
the FDCPA except for the provisions of section 1692f(6).” Warren v.
Countrywide Home Loans, Inc., 342 Fed. Appx. 458, 460 (11th Cir. 2009) (internal
quotes omitted). (Doc. 108 at 18).
36

Although no known published Eleventh Circuit opinion has adopted this
position, several unpublished opinions have relied upon it. Diaz v. First Marblehead
Corp., 643 Fed. Appx. 916, 919 (11th Cir. 2016); Fenello v. Bank of America, NA, 577
Fed. Appx. 899, 902 (11th Cir. 2014). The defendants have suggested no reason the
Eleventh Circuit would depart from this widely accepted understanding of a servicer’s
potential status as a debt collector. On the contrary, their own authorities recognize that a
servicer can be a debt collector if the debt was in default when assigned.
27

Because the defendants articulate no argument based on this quote, there is
really nothing for the Court to consider. But to the uncertain extent they mean to
suggest that an entity falling within one of the two generally applicable definitions
of a “debt collector” is nevertheless not a debt collector for any purpose other than
Section1692f(6) if it also falls within the supplemental definition and/or is
enforcing a security interest, the Court is unpersuaded. Section 1692a(6) sets forth
the two general definitions of a debt collector, with no identifiable limitation on
the substantive provisions to which they apply. It then says the term “also”
includes a third class of entities but exposes this class to liability only for
violations of a single substantive provision. “Also” is a term of addition, not of
subtraction, and it makes little sense to say that an entity that satisfies the
“regularly collects” definition has its broad exposure to liability under many
substantive provisions erased simply because it also satisfies the “security
interests” definition and/or is enforcing a security interest. The Court does not
read Warren to hold to the contrary.
In Reese v. Ellis, Painter, Ratteree & Adams, LLP, 678 F.3d 1211 (11th Cir.
2012), the defendant law firm, on behalf of the lender, sent the plaintiffs a
communication demanding payment of the debt and threatening foreclosure if they
did not pay. Id. at 1214. The Court held that the complaint plausibly alleged the
defendant was a debt collector under the “regularly collects” definition. Id. at
1218. The defendant argued its communication “did not amount to debt collection
activity but instead was merely an attempt to enforce a client’s security interest.”
Id. at 1215. The Court rejected that contention because “[a] communication
related to debt collection does not become unrelated to debt collection simply
because it also relates to the enforcement of a security interest.” Id. at 1218. If an
entity enforcing a security interest could not be a debt collector except for
purposes of Section 1692f(6), the Eleventh Circuit could not easily have held, as it
did, that the defendant was exposed to liability under Section 1692e. Id. at 121819.
28

As another unpublished opinion observes, “[b]ased on the reasoning of
Reese, it is apparent an entity that regularly attempts to collect debts can be a ‘debt
collector’ beyond § 1692f(6) of the FDCPA, even when that entity is also
enforcing a security interest.” Birster v. American Home Mortgage Servicing,
Inc., 481 Fed. Appx. 579, 582 (11th Cir. 2012). Thus, even could Warren be read
in a manner favorable to the defendants, the subsequent published decision in
Reese supersedes it.37
The foregoing discussion exhausts the defendants’ arguments regarding
their status as “debt collectors” as expressed in their principal brief. However,
they return to the subject with renewed vigor in their reply brief. Having
conceded that a servicer can be a debt collector if it acquires the servicing of the
loan after it is in default, and unable to prove the loan was not in default at that
time (since they insist default occurred in mid-2012, a year before any of them
first became the loan’s servicer), the defendants switch to an entirely new line of
argument: that the plaintiff has “failed to make an evidentiary showing” either
that the “principal purpose” of their business is debt collection or that they
“regularly collect” debts owed another. (Doc. 118 at 10-12).

37

Again without comment, the defendants quote Warren for the proposition that
“the act of foreclosing on a security interest is not debt collection activity for the
purposes of the FDCPA.” 342 Fed. Appx. at 460. (Doc. 108 at 19). Whether conduct is
“debt collection activity” is a separate question from whether the entity engaging in that
conduct is a “debt collector.” The defendants have made no effort to show either the
parameters of conduct constituting “foreclosure” or that any – much less all – of the
conduct for which the plaintiff sues falls within those parameters. Count Ten alleges that
the defendants demanded impermissible amounts, threatened impermissible (or not
actually contemplated) legal action, improperly communicated with third parties, falsely
stated the amount of the debt, and failed to identify themselves as debt collectors. (Doc.
77 at 30-31). It is not immediately apparent how this conduct could constitute
foreclosing on a mortgage. See Reese, 678 F.3d at 1217-18 (giving notice of foreclosure
may relate to the enforcement of a security interest, but demanding payment does not,
even when contained in the same communication). Indeed, the defendants acknowledge
the plaintiff’s claim is based on “statements, letter, and … phone calls trying to collect
past due amounts,” not on foreclosure activity. (Doc. 108 at 17).

29

As the Court has noted several times herein, it will not consider an
argument first raised in reply, absent some good reason to do so being offered by
the defendants. The defendants suggest no such reason, and the Court accordingly
declines to consider their tardy argument. But even had the argument been timely
raised, it could not succeed. The defendants have submitted no evidence of their
own to negate that they regularly collect debts owed another or that the principal
purpose of their business is debt collection. Nor have they pointed to any portion
of the plaintiff’s deposition either negating those points or showing she has no
evidence with which to prove them. Because the defendants thus failed to carry
their initial burden on motion for summary judgment, it is legally irrelevant
whether the plaintiff has presented evidence to prove the defendants’ status as debt
collectors.
The defendants’ objection to the plaintiff’s proof of any FDCPA violation
by any or all of them fails for similar reasons. They cite only four pages of the
plaintiff’s deposition regarding this claim, (Doc. 107 at 4), none of which show
that the plaintiff cannot prove her claim.38 While the plaintiff testified she could
not identify specific dates the defendants contacted third parties, (Doc. 107-1 at
26-27), they have not attempted to show that this is legally fatal to her claim.39
The plaintiff testified she kept a notebook recording every person that called her
about her mortgage loan over a two-year-plus period, the date they called, and
where they called (including at her job). (Id. at 66-68).40 And the plaintiff
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Nor have the defendants suggested, much less shown, that the plaintiff admitted
she has no further evidence beyond these four pages in support of her claims.
39

The defendants asked if the plaintiff had the identity of the third parties
contacted, but they did not press for, or obtain, a clear answer. (Doc. 107-1 at 27).
40

The defendants complain that the plaintiff did not produce the notebook in
response to discovery requests, (Doc. 107 at 4), but that does not prove the notebook is
imaginary. The defendants do not state whether they ever pursued discovery of the
notebook after the plaintiff disclosed its existence.

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testified that the defendants sometimes called her from a blocked number, which
tricked her into answering the phone. (Id. at 68).
The plaintiff may not have identified in her deposition which defendant did
what, (Doc. 108 at 17), but the defendants have not demonstrated that they ever
asked her to do so. The plaintiff may not have established that the defendants’
conduct was “deceptive, unfair, or abusive,” (id.), but the defendants have never
successfully shifted the burden to her to do so. The plaintiff’s testimony may (or
may not) be “vague,” (id.), but the defendants have shown neither that any
vagueness is not the result of their non-exhaustive questioning nor that any such
vagueness defeats her claim as a matter of law.41
As for actionable damages, FDCPA provides for recovery of actual
damages as well as statutory damages. 15 U.S.C. § 1692(k)(a)(1), (2)(A). The
defendants have not addressed what constitutes “actual damages” under FDCPA,
and the Court declines to do so on their behalf. Nor have the defendants
considered whether statutory damages may be awarded even absent actual
damages. See Shoup v. McCurdy & Candler, LLC, 465 Fed. Appx. 882, 885 (11th
Cir. 2012) (“‘There is no indication in the statute that [an] award of statutory
damages must be based on proof of actual damages.’”) (quoting Baker v. G.C.
Services Corp., 677 F.2d 775, 780 (9th Cir. 1982)); accord Keele v. Wexler, 149
F.3d 589, 593 (7th Cir. 1997) (“The FDCPA does not require proof of actual
damages as a precursor to the recovery of statutory damages.”).
For the reasons set forth above, the defendants are not entitled to summary
judgment as to Count Ten.

41

The defendants insist the plaintiff admitted they did not threaten her with legal
action, (Doc. 108 at 17), but that is an overstatement. The plaintiff testified she was
threatened with ejection and foreclosure and identified Green Tree and U.S. Bank as the
entities threatening ejection. She was not asked, and did not say, what entity or entities
threatened foreclosure. (Doc. 107-1 at 26).

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X. Declaratory Judgment.
Count Eleven prays that, because the defendants breached the contract and
because the plaintiff is not in default, the Court enter an order declaring: (1) that
she in not in default; (2) that the notice of default is null and void; and (3) that the
defendants have no right or authority to foreclose on her property, and enjoining
the defendants from foreclosing. (Doc. 77 at 31).
The defendants argue this claim is derivative of the plaintiff’s contract and
tort claims and that, because they are entitled to summary judgment as to those
claims, they are also entitled to summary judgment as to this claim. As addressed
in Part III, however, the defendants are not entitled to summary judgment on the
plaintiff’s claim for breach of contract. The defendants’ premise having collapsed,
their conclusion falls with it.42
For the reasons set forth above, the defendants are not entitled to summary
judgment as to Count Eleven.
CONCLUSION
On motion for summary judgment, the initial burden lies with the
defendants to show, by certain specified means, that the plaintiff cannot prove her
case. In large measure they have failed to meet their initial burden and thus have
cast no burden on the plaintiff to provide the Court with record evidence sufficient
42

In their reply brief, the defendants assert that the plaintiff “abandoned” this
claim by not addressing it in her responsive brief. (Doc. 118 at 113). The Court is aware
that a number of sister courts subscribe to this theory, but the Court has rejected it as
inconsistent with published Eleventh Circuit precedent. E.g., Polion v. City of
Greensboro, 26 F. Supp. 3d 1197, 1222 (S.D. Ala. 2014); cf. Gailes v. Marengo County
Sheriff’s Department, 916 F. Supp. 2d 1238, 1241-44 (S.D. Ala. 2013) (applying the
same rule to motions to dismiss). The defendants offer the Court no reason to reconsider
its position.
Even if a claim could properly be deemed “abandoned” merely by not responding
to a motion for summary judgment, the plaintiff did respond. As the defendants insist,
this claim is “derivative” of other claims, especially breach of contract. (Doc. 108 at 19).
Because the plaintiff addressed those other claims in her responsive brief, she effectively
addressed her derivative declaratory judgment claim as well.
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to sustain her claims. At trial, the plaintiff will have the burden of proving every
element of her causes of action, and her opposition brief provides little reason to
believe she is prepared to do so. That suspicion, however, furnishes no legal
grounds for summary dismissal before trial.
For the reasons set forth above, the defendants’ motion for summary
judgment is granted as to Counts One, Two, Three and Five and as to Count
Seven to the extent it is based on nondisclosures preceding January 20, 2014. In
all other respects, the defendants’ motion for summary judgment is denied.
DONE and ORDERED this 11th day of October, 2017.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE

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