Froid v. Ditech Financial, LLC

Filing 12

ORDER granting 9 Ditech's Motion to Dismiss. This case is dismissed, by Judge Lewis T. Babcock on 2/13/2018. (ebuch)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
LEWIS T. BABCOCK, JUDGE
Civil Action No. 17-cv-01565-LTB
MICKEY FROID,
Plaintiff,
v.
DITECH FINANCIAL, LLC
Defendant.
______________________________________________________________________________
ORDER
______________________________________________________________________________
This case revolves around the impact of a letter Defendant Ditech Financial,
LLC (Ditech) sent to Plaintiff Mickey Froid. The letter wrongly told Mr. Froid that
the statute of limitations on a debt he owed had expired. Based on that letter, Mr.
Froid wants this Court to enter declaratory judgment in his favor. Ditech asks this
Court to dismiss the case, arguing that because the statute of limitations has not
expired, the complaint does not state a claim for relief. I agree with Ditech that the
complaint does not state a claim for relief. I accordingly GRANT Ditech’s motion to
dismiss under Federal Rule of Civil Procedure 12(b)(6). (ECF No. 9.)

I. BACKGROUND
Ditech is a mortgage servicing company that services the loan Mr. Froid has
on real property located at 5800 Tower Road #404 in Denver, Colorado. Under the
terms of the loan, Mr. Froid must repay the note in monthly installments, with the
final payment of any unpaid principal and interest due on the note’s maturity date
of October 25, 2030. (Note, ECF No. 9-1.)
On January 8, 2016, Ditech mailed a form letter to Mr. Froid, explaining
various debt collection laws. (Jan. 8, 2016 letter, ECF No. 10-1.) In postscript at the
bottom of the letter, it reads, “[p]lease be advised that we cannot bring a legal
action to collect this debt or threaten to do so because the statute of limitations has
expired.” (Id.) After he received the letter, Mr. Froid filed suit in this Court, seeking
a “[d]eclaratory judgment that the lien held by Ditech on Plaintiff’s property has
been extinguished,” because “once the statute of limitations to enforce a note has
expired, the corresponding lien is extinguished.” (Compl. ¶¶ 6, 8(a).)
Ditech filed a motion to dismiss the case under Rule 12(b)(6), arguing that
despite what the letter says, the statute of limitations on the note has not expired
and its lien is valid.

II. RULE 12(b)(6) S TANDARD
A.

General Standard
Under Rule 12(b)(6), “[d]ismissal is appropriate only if the complaint, viewed

in the light most favorable to plaintiff, lacks enough facts to state a claim to relief
that is plausible on its face.” United States ex rel. Conner v. Salina Regional Health

Center, 543 F.3d 1211, 1217 (10th Cir. 2008) (quotation omitted). A claim is
plausible on its face “when the plaintiff pleads factual content that enables the
court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic

Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “The plausibility standard is not akin
to a ‘probability requirement,’ but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Id.
Although plaintiffs need not provide “detailed factual allegations” to survive
a motion to dismiss, they must provide more than “labels and conclusions” or “a
formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555;

see also Ashcroft, 556 U.S. at 678 (explaining that a complaint will not suffice if it
offers “naked assertions devoid of further factual enhancement” (quotations and
alterations omitted)). Furthermore, conclusory allegations are “not entitled to be
assumed true.” Ashcroft, 556 U.S. at 679.
A court may not dismiss a complaint merely because it appears unlikely or
improbable that a plaintiff can prove the facts alleged or ultimately prevail on the
merits. Twombly, 550 U.S. at 556. Instead, a court must ask whether the facts
alleged raise a reasonable expectation that discovery will reveal evidence of the

necessary elements. Id. If, in view of the facts alleged, it can be reasonably
conceived that the plaintiff could establish a case that would entitle him to relief,
the motion to dismiss should not be granted. Id. at 563 n.8.
Granting a motion to dismiss is a “harsh remedy” that should be “cautiously
studied” to “effectuate the liberal rules of pleading” and “protect the interests of
justice.” Dias v. City & Cty. of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009)
(quotations omitted).
B.

B.

Documents Outside the Pleadings

At the motion to dismiss stage, courts generally cannot consider evidence
outside of the pleadings. See, e.g., Gee v. Pacheco, 627 F.3d 1178, 1186 (10th Cir.
2010) (“Generally, the sufficiency of a complaint must rest on its contents alone.”).
However, a court may properly consider additional documents in a Rule 12(b)(6)
motion if they are (1) “mentioned in the complaint,” (2) “central to [the] claims,” and
(3) not challenged as inauthentic. Toone v. Wells Fargo Bank, N.A., 716 F.3d 516,
521 (10th Cir. 2013). I accordingly consider the note Mr. Froid signed (Note, ECF
No. 9-1) and the January 8, 2016 letter Ditech sent to Mr. Froid (Jan. 8, 2016 letter,
ECF No. 10-1), which the parties agree meet these requirements.

III. ANALYSIS
Even viewing the facts in the complaint in the light most favorable to Mr.
Froid, the complaint does not state a plausible claim for relief. To establish the
right to declaratory relief sufficient to withstand a Rule 12(b)(6) motion to dismiss,
Mr. Froid must plausibly allege that the cause of action any right set forth in the
note accrued more than six years ago. Colo. Rev. Stat. § 13-80-103.5(1)(a). To make
that showing, Mr. Froid must allege that the full amount of loan was due more than
six years ago. See Colo. Rev. Stat. § 13-80-108(4).
None of the allegations in the complaint suggest that the full amount of loan
was due six years ago. The terms of the note itself suggest it isn’t due until October
25, 2030. (Note, ECF No. 9-1.) While Mr. Froid suggests, in his briefing, that the
loan could have been accelerated, the allegations in the complaint do not suggest it
was. Under Colorado law, a lender must perform a “clear, unequivocal act” to
accelerate a loan, Hassler v. Account Brokers of Larimer Cnty., Inc., 274 P.3d 547,
553 (Colo. 2012), and there is nothing in the complaint approaching that level of
clarity. The mere possibility that the loan here could have been accelerated, without
any suggestion it actually was, does not push allegations into the plausible realm.

Ashcroft, 556 U.S. at 678. Similarly, the fact that the Ditech sent a letter suggesting
the statute of limitations had run does not state of a claim for relief where, as here,
the terms of the note show otherwise and the allegations in the complaint do not
suggest that the loan’s terms were ever altered. See id.

IV. CONCLUSION
For the foregoing reasons, Ditech’s motion to dismiss is GRANTED. (Mot.
Dismiss, ECF No. 9.) This case is dismissed.

BY THE COURT:

s/Lewis T. Babcock
LEWIS T. BABCOCK, JUDGE
DATED: February 13, 2018