Jacques v. Chase Bank USA, N.A. et al
Filing
51
MEMORANDUM OPINION regarding Motions to Dismiss (D.I. 20 , 29 , 36 ). Signed by Judge Richard G. Andrews on 2/3/2016. (nms)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ROSE M. JACQUES,
Plaintiff,
v.
Civ. No. 15-548-RGA
CHASE BANK USA, N.A., et al.,
Defendants.
Rose M. Jacques, Lewes, Delaware. Pro Se Plaintiff.
John C. Cordrey, Esq., and. Kimberly E. Connolly Lawson, Esq., Reed Smith LLP,
Wilmington, Delaware. Counsel for Defendant Chase Bank USA, N.A.
Christopher Viceconte, Esq., and Jeffrey A. Dougherty, Esq., Gibbons P.C.,
Wilmington, Delaware. Counsel for Defendants Seterus, Inc. and Federal National
Mortgage Association.
MEMORANDUM OPINION
1.
2016
February
Wilmington, Delaware
~.~·
~. District Judge:
ANDREWS,
Plaintiff Rose M. Jacques, who appears pro se and has paid the filing fee, filed
this action on June 26, 2015, alleging violations of the Fair Debt Collection Practices
Act ("FDCPA"), 15 U.S.C. § 1692, et seq., identity theft, and the Truth in Lending Act
("TILA"), 15 U.S.C. § 1601, et seq. (D.I. 2, 28). 1 Defendants Chase Bank USA, N.A.,
Seterus, Inc., and Federal National Mortgage Association ("Fannie Mae") move for
dismissal pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6). (D.L 29, 36). Plaintiff
opposes. Briefing on the matter has been completed. (D.I. 30, 31, 37, 38, 45, 46, 47).
BACKGROUND
Plaintiff, who resides at 33692 Reservoir Drive, in Lewes, Delaware, obtained .a
loan from Chase Bank, secured by a mortgage on the Lewes property, dated June 29,
2007. (D.I. 28at1, 2, 6). On May 17, 2013, Chase Bank assigned Fannie Mae the
mortgage on the property through an assignment of mortgage. (D.I. 31, Exs. Cat 2, H).
Seterus services the mortgage loan for Fannie Mae. (Id., Ex. G at 4, 14).
Chase Bank initiated foreclosure proceedings action in the Superior Court of the
State of Delaware in and for Sussex County on June 22, 2010 See Jacques v. Chase
Bank USA, N.A., 2012 WL 1623393 (Del. May 8, 2012). (D.I. 28 at 3; D.I. 31, Ex.Cat
10). In 2010, during the pendency of the foreclosure action, the servicing of the
mortgage loan transferred to Seterus2 and the mortgage was assigned to Fannie Mae
1
Plaintiff filed an Amended Complaint (D.I. 28) in response to the first motion to
dismiss filed by Defendant Chase Bank USA, N.A. (D.I. 20). The Court will dismiss, as
moot, Chase Bank's first motion to dismiss. (Id.). The Amended Complaint is the
operative pleading.
2
After entry of judgment against the property, Plaintiff moved to stop the Sheriff's
sale of the property. The Delaware Superior Court denied the motion on March 14,
2014, and, in doing so, rejected Plaintiff's argument that the servicing transfer of her
by an assignment of mortgage. 3 (D.I. 31, Ex. G at 14, Ex. H). Following the trial, the
Superior Court entered an order on June 24, 2011 that granted an in rem judgment
against the property in favor of Chase Bank. (D.I. 31, Ex. Cat 6). Plaintiff appealed,
and, on May 8, 2012, the Delaware Supreme Court affirmed the judgment, Jacques v.
Chase Bank USA, N.A., 2012 WL 1623393 (Del. May 8, 2012). The Delaware
Supreme Court observed that the record reflected that Plaintiff had not made a
mortgage payment on the property since April 2009, and that attached to the
foreclosure complaint were copies of the executed mortgage, note, "and the notice
required by the Fair Debt Collection Practices Act." (Id. at *1 ). In addition, the
Delaware Supreme Court held, "[T]here was no evidence presented at the trial
supporting [Plaintiff's] claims of fraud on the part of Chase." (Id. at *2). Finally, the
Delaware Supreme Court rejected Plaintiff's arguments that Chase Bank is not the
holder of the mortgage and note on the property, that Chase Bank is a predatory lender
mortgage loan was relevant to the foreclosure action. The Court stated, "[t]he mere
transfer of servicing rights is of no consequence for these proceedings." (D.I. 31, Ex. G
at 2).
3
During the pendency of the foreclosure action, on May 12, 2012, Plaintiff filed a
bankruptcy petition pursuant to Chapter 7 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware. In re Jacques, No. 12-11544-BLS. The
schedules with the petition do not refer to any causes of action against Chase Bank,
although Plaintiff listed her debt to Chase Bank as a secured claim and did not identify
the debt as contingent, unliquidated or disputed. (D.I. 47, Ex. Cat 21, 25). On June
25, 2012, the Chapter 7 Trustee filed a notice of abandonment as to the property of the
estate. (Id., Ex. B). The Trustee Report of No Distribution, submitted July 13, .2012,
indicates that the Trustee made a diligent inquiry into the financial affairs of Plaintiff and
the location of the property belonging to the estate, and there was no property available
for distribution from the estate over and above that exempted by law. (Id., Ex. A at 4
("D.I. 13")).
2
and has engaged in fraud, and that the Delaware Superior Court did not afford Plaintiff
a fair opportunity to present her defenses to Chase Bank's claims. (Id.).
Plaintiff commenced this action on June 26, 2015. On July 7, 2015, in Delaware
Superior Court, Plaintiff filed a motion to stay the Sheriff's sale that was scheduled for
August 18, 2015, pending the conclusion of this case. (Id., Exs. C, I). On August 7,
2015, the Superior Court granted the unopposed motion to stay the Sheriff's sale, and
the Superior Court action is now stayed. (Id.).
The operative complaint, that is, the Amended Complaint (D.I. 28), is about
thirty-two pages long, and has attached to it about fifty pages of various notices and
letters sent by Plaintiff to Chase, Seterus, and/or Fannie Mae on or about January 19,
2009, March 11 and May 5, 2010, and May 15 and June 9, 2015. The only specific
facts alleged in the Amended Complaint concern the locations of Plaintiff and
Defendants, that there was a June 29, 2007, recorded mortgage for $408, 120 from
Plaintiff to Chase Bank USA, N.A., and that "some time in 2009, ... the Defendant
[Chase, presumably] began attempting to foreclose under the terms.of the mortgage."
(D.I. 28 at 1-3). Plaintiff also states, "Eventually, the Defendant [Chase, presumably]
obtained enough information ... to allow it to complete a foreclosure judgment against
the plaintiff." (Id. at 13). Most of the Amended Complaint is written at such a high level
of generality that it is, at best, difficult to fathom what the facts are that form the basis
for Plaintiff's complaint.
Plaintiff raises FDCPA and identity theft claims against Chase Bank, Seterus, and
Fannie Mae and TILA claims against Chase Bank and Fannie Mae. She seeks
statutory and actual damages. Defendants move for dismissal on the grounds that this
3
action is barred by the Rooker-Feldman doctrine, the Younger abstention doctrine, and
res judicata. They also move for dismissal arguing that Plaintiff fails to state claims
upon which relief may be granted, and that the FDCPA and TILA claims are timebarred.
STANDARDS OF LAW
Defendants seek dismissal pursuant to Rules 12(b )( 1) and 12(b)(6) of the
Federal Rules of Civil Procedure and have submitted matters of public record as well as
documents referred to in the complaint in support of their motion. Plaintiff argues that
the rules do not permit such evidence, and that the Court cannot consider such
evidence and unsworn statements in making its determinations.
In deciding motions to dismiss pursuant to Rule 12(b)(6), courts generally
consider only the allegations in the complaint, exhibits attached to the complaint,
matters of public record, and documents that form the basis of a claim. A
document forms the basis of a claim if the document is 'integral to or explicitly
relied upon in the complaint.' The purpose of this rule is to avoid the situation
where a plaintiff with a legally deficient claim that is based on a particular
document can avoid dismissal of that claim by failing to attach [that] document.
Further, considering such a document is not unfair to a plaintiff because, by
relying on the document, the plaintiff is on notice that the document will be
. considered.
Lum v. Bank of Am., 361 F.3d 217 n.3 (3d Cir. 2004) (internal citations omitted). The
documents submitted to the Court are mostly matters of public record, and may
properly be considered in ruling on Defendants' motions to dismiss.
Because Plaintiff proceeds pro se, her pleading is liberally construed and her
Amended Complaint, "however inartfully pleaded, must be held to less stringent
standards than formal pleadings drafted by lawyers.'' Erickson v. Pardus, 551 U.S. 89,
94 (2007) (internal quotation marks omitted).
4
Rule 12(b)(1)
Rule 12(b)(1) of the Federal Rules of Civil Procedure permits the dismissal of an
action for "lack of subject matter jurisdiction." A Rule 12(b)(1) motion may be treated as
either a facial or factual challenge to the court's subject matter jurisdiction. See
Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357-58 (3d Cir. 2014). "In reviewing
a facial attack, 'the court must only consider the allegations of the complaint and
documents referenced therein and attached thereto, in the light most favorable to the
plaintiff,"' and the standards relevant to Rule 12(b)(6) apply. Id. at 358 (quoting In re
Schering Plough Corp. lntron!Temodar Consumer Class Action, 678 F.3d 235, 243 (3d
Cir. 2012)).
In reviewing a factual challenge to the Court's subject matter jurisdiction, the
Court is not confined to the allegations of the complaint, and the presumption of
truthfulness does not attach to the allegations in the complaint. Mortensen v. First Fed.
Sav. and Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). Instead, the Court may
consider evidence outside the pleadings, including affidavits, depositions and
testimony, to resolve any factual issues bearing on jurisdiction. Gotha v. United States,
115 F.3d 1-76, 179 (3d Cir. 1997). Once the Court's subject matter jurisdiction over a
complaint is challenged, the. plaintiff bears the burden of proving that jurisdiction exists.
Mortensen, 549 F.2d at 891.
Rule 12(b)(6)
Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting the
well-pleaded allegations in the complaint as true and viewing them in the light most
favorable to the plaintiff, a court concludes that those allegations "could not raise a
5
claim of entitlement to relief." Bell At/. Corp. v. Twombly, 550 U.S. 544, 558 (2007).
Though "detailed factual allegations" are not required, a complaint must do more than
simply provide "labels and conclusions" or "a formulaic recitation of the elements of a
cause of action." Davis v. Abington Mem'I Hosp., 765 F.3d 236, 241 (3d Cir. 2014)
(quoting Twombly, 550 U.S. at 555). In addition, a plaintiff must plead facts sufficient to
show that a claim has substantive plausibility. See Johnson v. City of Shelby,
_U.S._, 135 S.Ct. 346, 347 (2014). A complaint may not dismissed; however, for
imperfect statements of the legal theory suppqrting the claim asserted. See id. at 346.
Under the pleading rules established by Twombly and Iqbal, a court reviewing
the sufficiency of a complaint must ta.ke three steps: (1) take note of the elements the
plaintiff must plead to state a claim; (2) identify allegations that, because they are no
more than conclusions, are not entitled to the assumption of truth; and (3) when there
are well-pleaded-factual allegations, the court should assume their veracity and then
determine whether they plausibly give rise to an entitlement to relief. Connelly v. Lane
Const. Corp., _F.3d_, 2016 WL 106159, at *4 (3d Cir. Jan. 11, 2016) (internal
citations and quotations omitted). Deciding whether a claim is plausible will be a
"context-specific task that requires the reviewing court to draw on its judicial experience
and common sense." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), a complaint must
contain sufficient factual matter, accepted as true, to state a claim to relief that is
plausible on its face. See Williams v. BASF Catalysts LLC, 765 F.3d 306, 315 (3d Cir.
2014) (citing Iqbal, 556 U.S. at 678 and Twombly, 550 U.S. at 570).
6
DISCUSSION
Rooker-Feldman Doctrine/Younger Abstention Doctrine/Res Judicata
Defendants argue that this Court lacks jurisdiction over Plaintiff's claims by
reason of the Rooker-Feldman doctrine, that the Court should abstain from intervening
in the foreclosure action pursuant to the Younger abstention doctrine, and that the
claims are barred by res judicata. Defendants argue that all of Plaintiff's claims are
based on the same allegations previously asserted in the Delaware Superior Court
foreclosure action. The State courts ruled that there was a proper basis to foreclose.
Plaintiff argues that the Rooker-Feldman doctrine, the Younger abstention doctrine, and
res judicata are inapplicable because the Amended Complaint does not seek to
challenge the previously obtained judgment, but seeks damages against Defendants for
unfair and deceptive collection practices and the previously obtained judgment does not
cure these violations. (D.I. 46) She also argues that she seeks damages for the theft
of her personal information as Defendants obtained it with false representations,
without consent, and for ulterior purposes. In addition, she argues that she does not
seek to have this Court overturn another Court's decision, but asks the Court to bar all
Superior Court and Supreme Court judgments/submissions. Finally, Plaintiff argues
that her pleas to the State courts for fraud were thrown out, and this is why she needs
the federal court to hear her case.
For the reasons discussed below, the Court will deny Defendants' motions to
dismiss based upon the Rooker-Feldman doctrine, the Younger abstention doctrine,
and res judicata. ·
7
Rooker-Feldman Doctrine
Plaintiff states, "the Plaintiff's complaint does not seek to challenge the
previously obtained [state court] judgment." (D.I. 46 at 2). As noted, Plaintiff moved
successfully to stay the state court judgment pending the outcome of this case, which
seems contrary to the above representation. It should be clear that nothing this Court is
able to do, or will do, can constitute review of the foreclosure decision.
To the extent Plaintiff seeks review and rejection of Delaware state decisions,
her claims would fall under the purview of the Rooker-Feldman doctrine. The RookerFeldman doctrine refers to principles set forth by the Supreme Court in Rooker v.
Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v.
Feldman, 460 U.S. 462 (1983). Federal district courts are courts of original jurisdiction
and have no authority to review final judgments of a state court in judicial proceedings.
It is not clear to me on the pleadings that the state courts resolved, or even addressed,
the TILA and identity theft claims. The state courts did address at least some aspects
of possible FDCPA claims, but given the vagueness of Plaintiff's current claims, it is not
clear to me that the state courts addressed all of them.
The Rooker-Feldman doctrine applies to the extent this is a case "brought by [a]
state-court loser [ ] complaining of injuries caused by the state-court judgments
rendered before the district court proceedings commenced and inviting district court
review and rejection of those judgments." Exxon Mobil Corp. v. Saudi Basic Indus.
Corp., 544 U.S. 280 (2005). The Amended Complaint reveals that Plaintiff's
allegations include that Defendants had no right to foreclose on the property and,
therefore, violated various statutes in seeking foreclosure. Some portion of her
8
present claims would be, in essence, an attack on the foreclosure judgment. But
Plaintiff also claims violations occurring in 2015, long after the foreclosure judgment
occurred. The Court finds that the Rooker-Feldman doctrine would bar some aspects
of Plaintiff's claims to the extent the relief she seeks would require "(1) the federal
court [to] determine that the state court judgment was erroneously entered in order to
grant the requested relief, or (2) the federal court [to] take an action that would negate
the state court's judgment ...." In re Knapper, 407 F.3d 573, 581 (3d Cir. 2005).
Thus, while Defendants' assertion of the Rooker-Feldman doctrine has some
merit, I cannot base a decision on it on this record.
Younger Abstention Doctrine
The Younger abstention analysis would be similar to the Rooker-Feldman
analysis. The record reflects that the State foreclosure action, including the Sheriff's
sale, was stayed pending the conclusion of this action. Hence, to the extent it remains
pending in State court and has not yet reached final resolution, the Court must abstain
by reason of the abstention doctrine as defined in Younger v. Harris, 401 U.S. 37
(1971 ), which has been extended to civil cases and state administrative proceedings.
See Middlesex Cnty. Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423 (1982);
Huffman v. Pursue Ltd., 420 U.S. 592 (1975). Under the Younger abstention doctrine,
a federal district court must abstain from hearing a federal case which interferes with
certain state proceedings. Abstention is appropriate only when: (1) there are ongoing.
state proceedings that are judicial in nature; (2) the state proceedings implicate
important state interests; and (3) the state proceedings provide an adequate
opportunity to raise the federal claims. Lazaridis v. Wehmer, 591 F.3d 666, 670 (3d
9
Cir. 2010). The doctrine applies to proceedings until all appellate remedies have been
exhausted, unless the matter falls within one of the Younger exceptions. 4 Huffman,
420 U.S. at 608.
Plaintiff's action seeks, among other things, damages due to the loss of the fair
market value of her property, the costs of defending the state foreclosure action, and
other damages relating to the foreclosure action. (D.I. 28 at 31 ). She also seeks
damages that do not so obviously implicate the state proceedings. To the extent she
seeks the former damages, the Younger elements have been met and rione of the
exceptions apply. First, there are on-going state proceedings for the foreclosure of
real property, including the stayed Sheriff's sale. Second, Delaware has an important
interest in resolving real estate issues, and a ruling in the Delaware courts implicates
the important interest of preserving the authority of the state's judicial system. See
e.g., Almazan v. 151
2nd
Mortg. Co. of NJ, Inc., 2011 WL 2670871 (D.N.J. 2011) (finding
that the State has important interests in the foreclosure of property under the Younger
doctrine); Greg v. Pagano, 287 F. App'x 155 (3d Cir. 2008) (court abstained under the
Younger doctrine where plaintiffs sought a declaration that the judge was not
authorized to nullify transfer of title and for an order enjoining the sheriff from
conducting a sheriff's sale). Finally, Plaintiff had an adequate opportunity to raise any
foreclosure-related potential claims in state court. Accordingly, to the extent Plaintiff
4
Exceptions to the Younger doctrine exist where irreparable injury is "both great
and immediate," Younger, 401 U.S. at 46, where the state law is "flagrantly and patently
violative of express constitutional prohibitions," id. at 53, or where there is a showing of
"bad faith, harassment, or ... other unusual circumstances that would call for equitable
relief." Id. at 54.
10
seeks to set aside the effect of the foreclosure judgment, the Court would have to
abstain pursuant to Younger and its progeny. See Pennzoil Co. v. Texaco, Inc., 481
U.S. 1, 15 (1987) (stating that Younger abstention is favored even after the plaintiffs
failed to raise theirfederal claims in the ongoing state proceedings). Under the
circumstances here, though, I do not think Younger absention provides a complete
basis for dismissal.
Res Judicata
Defendants also move for dismissal on the basis of res judicata. They argue
that, assuming the Court has jurisdiction, res judicata precludes Plaintiff's claims.
Plaintiff responds that res judicata is inapplicable because she is not challenging the
· previously obtained judgment, she seeks damages against Defendants for unfair and
deceptive collection practices, the State court judgment does not cure those violations,
and this case has merit of its own.
Res judicata, or claim preclusion, applies where the party invoking it
establishes: "(1) a final judgment on the merits in a prior suit involving (2) the same
parties or their privies, and (3) a subsequent suit based on the same cause of action."
Duhaney v. Attorney Gen., 621 F.3d 340, 347 (3d Cir. 2010) (quotation marks
omitted). Res judicata "bars not only claims that were brought ... , but also claims
that could have been brought." Id.
Defendants' position is that: (1) the parties are the same; (2) Chase Bank filed
the prior litigation, a foreclosure action, against Plaintiff in 2010, and Plaintiff did not
challenge the jurisdiction of the Superior Court; (3) Fannie Mae is in privity with Chase
Bank as a result of the mortgage assignment and Seterus is in privity with Chase Bank
11
because it began servicing the mortgage loan during the pendency of the bankruptcy
proceeding, and they are entitled to the benefit of the State court decisions; (4) the
Superior Court judgment and the Delaware Supreme Court order qualify as a "final
judgment on the· merits" and establish the propriety of the mortgage foreclosure and
that Defendants properly exercised their rights under the mortgage loan; (5) Plaintiff's
claim in the instant case relating to, or arising from, the transfer of servicing rights to
Seterus during the pendency of the foreclosure litigation was fully litigated, as the
Superior Court held the claim to be of no consequence; and (6) the original cause of
action and the issues decided therein are the same as the claims raised by Plaintiff in
this case, or the current claims could have and should have been brought in the prior
action.
Having reviewed the filings submitted by the parties, the Court agrees that the
claims raised by Plaintiff in the Amended Complaint would be barred by res judicata to
the extent that they were previously litigated and resolved by final judgments in the
Delaware state courts. The Delaware state courts had jurisdiction over the subject
matter and the parties. The parties from the original suit are the present parties or are
in privity with them. Plaintiff's allegations in this action arise from the same set of facts
surrounding the mortgage and the foreclosure proceeding. In the State courts, Plaintiff
raised defenses that Chase Bank was not the holder of the mortgage and note on the
property, Chase Bank is a predatory lender and engaged in fraud, and the State court
did not afford her a fair opportunity to present her defenses to Chase Bank's claims.
Jacques v. Chase Bank USA, N.A., 2012 WL 1623393. The State court held that
Chase was the valid holder of the note and Mortgage and found no evidence
12
supporting Plaintiff's fraud claims against Chase. Those matters are thus resolved.
However, to the extent that Plaintiff attempts to raise new claims (e.g., FDCPA
violations, TILA violations, or identity theft), the new claims are- not all based on
Defendants' alleged conduct concerning the mortgage loan and during the foreclosure
action. Further, some of the claims do not seem to have been raised in the state court
mortgage foreclosure, and it is not entirely clear that all of them, such as "identity
theft," could have been raised in the State court proceeding.
Fair Debt Collection Practices Act
Plaintiff alleges that Defendants violated the FDCPA, 15 U.S.C. § 1692, et seq.,
as follows: (1) when Chase Bank (a) made false representations that it was the holder
-of the note; (b) falsely representing the alleged amount owed; (c) failed to provide an
accounting of its claim; (d) used a false or fictitious name of its business, company or
organization; and (e) threatened to undertake a foreclosure against Plaintiff when it did
not have the right to do so; and (2) when Seterus and Fannie Mae (a) falsely
represented that Defendants held the mortgage loan and/or had the right to foreclose
the mortgage on the property; (b) failed to identify or misrepresented Defendants'
interests in the property; (c) used a false name to undertake collection actions; (d)
failed to provide an accounting of Defendants' claim and misrepresented the amount
owed under the mortgage loan; (e) falsely represented that Plaintiff's credit accounts
were sold; (f) failed to validate the debt within five business days; and/or (g)
impermissibly used Plaintiff's personal information for personal gain. (D.I. 28 at 4-5, 8- 15).
13
Defendants move for dismissal of these claims on the grounds that the claims
are time-barred and that Chase Bank and Fannie Mae are not debt collectors as
defined under the FDCPA. Plaintiff responds that she has stated a claim, and fraud 5 is
never time-barred. She contends that Defendants did not establish that they had any
rights to engage in debt collection (i.e., foreclosure), that Defendants are not her
creditors; and it is likely that the trust deed provides them no legal rights or interests
under which they were foreclosing.
The FDCPA prohibits debt collectors from "making false or misleading
representations and from engaging in various abusive and unfair practices." Heintz v.
Jenkins, 514 U.S. 291, 292 (1995). It provides that "an action to enforce any liability
created by [the Fair Debt Collection Practices Act] may be brought ... within one year
from the date on which the violation occurs." See 15 U.S.C. § 1692k(d). This is a
one-year statute of limitations. Thus, since this lawsuit was filed on June 26, 2015, the
statute of limitations had run on any FDCPA violations occurring before June 26, 2014.
Plaintiff argues that Defendants are subject to the FDCPA's disclosure
requirements in all of her requests since 2010 and that they repeatedly failed to
produce records and disclosures requested under the Act. The Amended Complaint
does not provide specific dates for the purported actions of Defendants, although it
appears the conduct complained of occurred before, or during, the foreclosure of the
property in 2011 and 2012. (See, e.g., D.I. 28, Ex.Cat 41-80). The Court takes
5
The Court notes that the Delaware Supreme Court was specific in stating,
"There was no evidence presented .at the trial supporting [Plaintiff's] claims of fraud on
the part of Chase." Jacques v. Chase Bank USA, N.A., 2012 WL 1623393.
14
judicial notice that the foreclosure action commenced in June 2010. The Amended
Complaint fails to allege any actions by Defendants that occurred after June 26, 2014
that give rise to the FDCPA claims. Plaintiff's FDCPA claims are barred by the oneyear statute of limitations period. Therefore, dismissal of the FDCPA claims is
appropriate.
In addition, Defendants are not debt collectors pursuant to the FDCPA. Under
the FDCPA, a "debt collector" is defined as "any person 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). Excluded from the definition are "any officer or
employee of a creditor while, in the name of the creditor, collecting debts for such
creditor'' and "any person collecting or attempting to collect any debt owed or due or
asserted to be owed or due another to the extent such activity ... concerns a debt
which was not in default at the time it was obtained by such person." 15 U.S.C.
§§ 1692a(6)(A), (F).
The FDCPA is not applicable to a creditor seeking to recover a debt owed to it.
See Po/lice v. National Tax Funding, L.P., 225 F.3d 379, 403 (3d Cir. 2000) ("Creditors
- as opposed to 'debt collectors' - generally are not subject to the FDCPA"). The
Amended Complaint alleges that, in June 2007, Plaintiff entered into a "collateral"
agreement-with Chase Bank USA NA, and this instrument was recorded in the Sussex
County records on the date of June 29, 2007. (D.I. 28 at 2). Because Chase Bank
was the lender prior to the loan being in default, it cannot be considered a debt
collector pursuant to the FDCPA and, therefore, the claim against Chase Bank fails as
a matter of law.
15
The Court takes judicial notice that the mortgage was assigned to Fannie Mae.
(See D.I. 31, Ex. H). Fannie Mae's role with respect to mortgage loans does not make
it a "debt collector" under the FDCPA. See Hepler v .. Washington Mut. Bank, F.A.,
2009 WL 1045470 at *4 (C.D. Cal. Apr. 17, 2009) ('The law is well-settled ... that
creditors, [and] mortgagors ... are not debt collectors and are statutorily exempt from
liability under the FDCPA."); Kee v. R-G Crown Bank, 656 F. Supp. 2d 1348, 1355 (D.
Utah 2009) (holding that "Fannie Mae [is] not a 'debt collector' within the meaning of
section [1692a(6)] of the FDCPA because Fannie Mae is not attempting to collect the
debt of another, and thus, as a matter of law, the FDCPA allegation against Fannie
Mae is also dismissed.") (emphasis omitted).
Based upon the foregoing, the Court will grant Defendants' motions to dismiss
the FDCPA claims. She lias not alleged anything that hints at a FDCPA violation
within the statute of limitations.
Identity Theft
Plaintiff alleges all Defendants committed identity theft when they used
Plaintiff's public and private information in the mortgage foreclosure action.
Defendants move for dismissal on the grounds that there is no private right of action
for an identity theft claim. In Plaintiff's response, she seems to imply that she may
bring the claim under either the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681,
et seq., or the Fair and Accurate Credit Transaction Act ("FACTA") of 2003, Pub.L.
108-159, allegations not raised in the Amended Complaint. Plaintiff may not amend
her complaint with these claims via her oppositions to the motions to dismiss.
Commonwealth of Pa. ex rel. Zimmerman v. Pepsico, Inc., 836 F.2d 173, 181 (3d Cir.
16
1988). In addition, Plaintiff fails to identify the applicable sections of either act. Even
were the Court to consider claims under the FCRA, the FACTA, or as a private right of
action, which I will do since Plaintiff is pro se, the claims cannot survive the motions to
dismiss.
The purpose of the FCRA is to "require that consumer reporting agencies adopt
reasonable procedures for meeting the needs of commerce for consumer credit,
personnel, insurance, and other information in a manner which is fair and equitable to
the consumer, with regard to the confidentiality, accuracy, relevancy, and proper
utilization of such information." 15 U.S.C. § 1681(b). Under the FCRA there is no
private right of action under§ 1681 s-2(a). 6 See SimmsParris v. Countrywide Fin.
Corp., 652 F.3d 355, 358 (3d Cir. 2011 ). The duties imposed by§ 1681 s~2(b) 7 apply
only where a creditor is notified by a credit reporting agency that a consumer has
disputed information furnished by that creditor." Young v. Equifax Credit Info. Servs.,
Inc., 294 F.3d 631, 639 (5th Cir. 2002) (notice to a credit rating agency "is necessary to
trigger the furnisher's duties under Section 1681 s-2(b).").
Plaintiff does not save her claim by invoking the FCRA. The identify theft
allegations simply do not fall within the ambit of the FCRA.
Plaintiff fares no better under FACTA. In 2003, Congress passed FACTA to
require merchants to hide all but the last five digits of the account number and entire
6
Section 1681 s-2(a) sets forth the duties of furnishers of information to provide
accurate information.
7
Section 1681 s-2(b) sets forth the duties of furnishers of information upon notice
of dispute.
17
expiration date of their customers' credit or debit cards. 15 U.S.C. § 1681 c(g).
FACTA's purpose is "to prevent criminals from obtaining access to consumers' private
financial and credit information in order to reduce identity theft and credit card fraud."
Pub.L. No. 110-241, § 2, 122 Stat. 1565 (June 3, 2008). "FACTA does not contain a
separate provision establishing a private cause of action; the right to sue is granted
under the FCRA." Pezl v. Amore Mio, Inc., 259 F.R.D. 344, 347 (N.D. Ill. 2009). In
addition, a violation of FACTA is limited to individual consumers who use a personal
credit or debit card. See Pezl, 259 F.R.D. at 347-48 (N.D. Ill.) ("Section 1681 n ·
provides a private. right of action for consumer cardholders to enforce FACTA's
requirements ... only consumer cardholders have a private right of action under
FACTA."). Similar to the FCRA, the allegations in the Amended Complaint do not fall
within the ambit of FACTA.
The identity theft claims do not allege any cognizable injury (the foreclosure
related injury claims being unavailable to Plaintiff under Rooker-Feldman and res
judicata) due to the alleged identify theft. See Reilly v. Ceridian Corp., 664 F.3d 38,
44-46 (3d Cir. 2011) (mere allegations of an increased risk of identity theft or risk of
some hypothetical, future injuries are insufficient to establish standing and dismissal is
appropriate). While there is a criminal statute for identity theft, it does not permit a
private right of action. See 18 U.S.C. § 1028A.
For the reasons stated, the Court will grant the motions to dismiss the identity
theft claims. 8
8
It may also be worth noting that the identity theft claims, if based on state law,
would only properly be in federal court pursuant to supplemental jurisdiction, since there
18
Truth in Lending Act
Plaintiff raises claims against Chase Bank and Fannie Mae for violations of the
Truth in Lending Act, 15 U.S.C. § 1601, et seq. Chase Bank and Fannie Mae seek
dismissal of the claim on the grounds that they are time-barred. Attached to the
Amended Complaint are letters to Defendants, dated May 15, 2015, giving them notice
that Plaintiff intended "to rescind the purported obligation under the mortgage and
note." (D.I. 28 at 30, Ex. A). The Amended Complaint alleges that Plaintiff served
notices to rescind upon Defendants on or around May 15, 2015, that they had a duty to
either sue Plaintiff to reestablish what they claimed to be the debt, or return Plaintiff's
money or property within twenty days of receipt of the notice to rescind. (Id. at 30).
Plaintiff seeks compensatory damages. (Id. at 31 ).
In Plaintiff's opposition she attached a letter dated May 5, 2010 to Chase Home
Financing LLC and Fannie Mae for "actual and constructive notice of rescission of
agreement." (D.I. 46, Ex. C, at 23). She argues that the TILA claims are not timebarred by reason of equitable tolling. She further argues that the May 5, 2010 notice
of rescission is within the statute of limitations period for the notice requirements and,
therefore, she is not precluded from advancing this claim.
Regardless of whether the notice of rescission was on May 5, .2010 or May 15,
2015, the TILA claim is time-barred. The TILA "is a federal consumer protection
statute, intended to promote the informed use of credit by requiring certain uniform
is not complete diversity of the parties. I would not choose to exercise supplemental
jurisdiction (if the federal claims were all dismissed), as, in this case, state court is a
more suitable venue for the identity theft litigation, particularly given its role in the
related foreclosure litigation.
19
disclosures from creditors." In re Commun{ty Bank of Northern Virginia, 418 F.3d 277,
303 (3d Cir. 2005).
Claims for rescission of a mortgage loan pursuant to TILA must be brought within
three years from the date of the transaction at issue.· See 15 U.S.C. § 1635(f) ("[a]n
obligor's right of rescission shall expire three years after the date of consummation of
the transaction or upon the sale of the property, whichever occurs first."). "According to
the most natural reading of the statutory language, an obligor must send valid written
notice of rescission before the three years expires." 9 Sherzer v. Homestar Mortg.
Services, 707 F.3d 255, 267 (3d Cir. 2013); see a/so Jesinoski v. Countrywide Home
Loans, Inc., _U.S._, 135 S.Ct. 790 (2015). In a mortgage transaction, a borrower's
right to rescind begins to run on the date the mortgage is executed. See Bartholomew
v. Northampton Nat'/ Bank of Easton, 584 F.2d 1288, 1296 (3d Cir. 1978).
Plaintiff alleges that the closing of the loan took place on June 29, 2007 and,
thus the statute of limitations began to run that day. Plaintiff was required to ·serve
notice of rescission under the TILA by June 29, 2010 - three years after the loan was
originated. In the Amended Complaint, however, it is alleged that Plaintiff sought
rescission on May 15, 2015, nearly five years after expiration of the three-year period.
Hence, the May 15, 2015 notice of rescission was not timely submitted.
The time limit for seeking rescission is an absolute bar to a cause of action if the
right is not exercised within the three-year period. See Ramadan v. Chase Manhattan
Corp., 156 F.3d 499, 505 (3d Cir. 1998) (indicating that "the time limit for rescinding a
9
The statute says nothing, however, about filing suit within that three-year period.
Sherzer, 707 F.3d at 267.
20
loan transaction under ... TILA extinguishes the right itself, as opposed to the right to a
remedy, and thus is not a typical statute of limitations"). This three-year period is a
statute of repose, rather than a statute of limitations, meaning that the· right is
extinguished after the three-year period passes and is not subject to equitable tolling.
See Beach v. Ocwen Fed. Bank, 523 U.S. 410, 419 (1998). Contrary to Plaintiffs
position, the three-year period is not subject to equitable tolling. Plaintiff's right of
rescission had been extinguished by the time she submitted the May 15, 2015 notice of
rescission. Therefore, the Court will grant Defendants' motion to dismiss this claim.
Alternatively, were the Court to consider May 5, 2010 as the date of the notice of
rescission, a date that falls within three years of the transaction, the claim also fails as
Plaintiff failed to timely file a lawsuit to enforce her rights. Plaintiff seeks compensatory
damages as a result of Defendants' alleged failure to act upon her notice of rescission.
When a borrower exercises a valid right of rescission, the creditor must act within
twenty days of receipt of the notice of rescission, returning the borrower's money and
terminating its security interest. 15 U.S.C. § 1635(b). Failure to respond to the
borrower's request constitutes a separate TILA violation. 15 U.S.C. § 1640(a). A one
year statute of limitations for violations of rescission under § 1635(b) theri runs from
twenty days after a plaintiff provides notice of rescission. 10 15U.S.C.§1640(e); Frazile
v. EMC Mortg. Corp., 382 F. App'x 833, 839 (11th Cir. 2010).
10
Because the TILA does not expressly supply a limitations period for this claim,
the Court borrows the most closely analogous federal statute. See Agency Holding
Corp. v. Mal/ey-Duff &Assocs., Inc., 483 U.S. 143, 146-50 (1987). Section 1640(e) of
the TILA provides a one-year statute of limitations for the filing of a suit once a violation
of TILA has occurred.
21
Plaintiff's claim is barred by the TILA's one-year statute of limitations. Plaintiff
executed the mortgage loan documents on June 29, 2007 and purportedly provided the
lender written notice of her right to rescind on May 5, 2010. The lender had twenty
days from May 5, 2010, in which to respond. Plaintiff, thereafter, was required to file
suit within one year. She did not file the instant lawsuit until June 26, 2015, close to
four years after the expiration of the statute of limitations.
To the extent Plaintiff asserts equitable tolling as to the one-year time period,
she "must also demonstrate that [she] 'exercised reasonable diligence in investigating
and bringing the claims."' Mil/er v. New Jersey Dept. of Corrections, 145 F.3d 616, 61819 (3d Cir. 1998). This she has failed to do. The foreclosure proceedings were
initiated against Plaintiff in June 2010 and, once served, Plaintiff actively participated in
the litigation. Plaintiff makes no factual allegations that would support equitable tolling.
The filings and exhibits do not suggest that Plaintiff exercised reasonable diligence in
investigating and bringing this claim.
Finally, Jesinoski does not help Plaintiff's position. It holds that a borrower must
give written notice of rescission under the Truth in Lending Act, 15 U.S.C. § 1635(a), (f),
within (at most) three years after the date the loan was consummated, but does not
speak to the issue of the whether a borrower filed suit in a timely manner.
For these reasons, the Court will grant the motions to dismiss the TILA claims.
CONCLUSION
For the above reasons, the Court will dismiss as moot Chase Bank USA, N.A.'s
first motion to dismiss (D.I 20) and will grant Defendants' motions to dismiss. (D.I 29,
36) The Court finds amendment would be futile.
22
An appropriate order will be entered.
UNITED STATES DISTRICT JUDGE
23
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