Jackson v. Ocwen Loan Servicing, LLC

Filing 32

ORDER granting 15 the defendant's motion to dismiss to the extent the plaintiff must replead but otherwise denying it without prejudice to reasserting any arguments in response to the amended complaint. By February 3, 2017, the parties mus t confer and notify the Court whether they would like the Court to stay the case to allow sufficient time for settlement talks. Absent a stay, the plaintiff must file an amended complaint by February 17, 2017. See order for further details. Signed by Magistrate Judge Patricia D. Barksdale on 1/19/2017. (BGK)

United States District Court
Middle District of Florida
Jacksonville Division
MAUDE BURROUGHS JACKSON,
Plaintiff,
V.

NO. 3:16-CV-10-J-39PDB

OCWEN LOAN SERVICING, LLC,
Defendant.

Order
Maude Burroughs Jackson has filed a complaint alleging Ocwen Loan
Servicing, LLC (“Ocwen”), violated state and federal consumer-protection laws,
breached a settlement agreement, and wrongfully initiated a foreclosure action
against her. Doc. 1. Before the Court is Ocwen’s motion to dismiss the complaint for
failure to state a claim upon which relief may be granted. Doc. 15. Jackson opposes
the motion. Doc. 27.
I.

Allegations
In the complaint, Jackson alleges the following facts.
In February 2005, Jackson refinanced her home mortgage. Doc. 1 ¶ 12. In July

2009, after falling on hard times, she requested and received a mortgage modification
through the loan servicer, Litton Loan Servicing, L.P. (“Litton”). Doc. 1 ¶ 13. Through
June 2010, she made each payment under the modified terms. Doc. 1 ¶ 14.
Litton would not accept Jackson’s July 2010 payment and notified her that the
loan was in default and her home was in foreclosure. Doc. 1 ¶ 14. On July 28, 2010,
Litton’s law firm faxed a letter to her demanding $12,926.72 to reinstate the

mortgage. Doc. 1 ¶ 15. Even though no foreclosure action had been filed, the amount
included $906 for filing fees, $40 for “Mandatory Clerk Costs,” $390 for title-search
and examination fees, $220 for service-of-process fees, and $650 for attorney’s fees.
Doc. 1 ¶ 16.
Jackson disputed the amounts demanded and immediately sent the law firm a
letter asserting that “the demand was ‘grossly incorrect and completely without
basis,’ and that the demand did not identify any property or delinquent account, and
that [she] was current on all payments.” Doc. 1 ¶ 17. She also spoke to law firm
representatives on the telephone, explaining the loan had been modified and she had
made all of her payments before the July 2010 notification, but they refused to
acknowledge the information and withdraw the foreclosure threat. Doc. 1 ¶ 18.
Fearing foreclosure and loss of her family’s home, Jackson contacted the law
firm and asked if she could make partial payments of the reinstatement amount. Doc.
1 ¶ 19. The law firm refused that and other requests and demanded she pay the entire
reinstatement amount. Doc. 1 ¶ 19. Over the next three months, through December
2010, the law firm sent additional letters demanding more and more money each
time. Doc. 1 ¶ 20.
In December 2010, hoping to save her home and unable and unwilling to “pay
the amounts unlawfully demanded,” Jackson, without a lawyer, sued Litton and the
law firm in state court for “breach of contract, fraud, false credit reporting, and
abusive collection practices.” Doc. 1 ¶ 21.
The following year, in November 2011, Ocwen acquired Litton and obtained
servicing rights for Jackson’s loan. Doc. 1 ¶ 22. At that time, “the loan was alleged to
be in default.” Doc. 1 ¶ 23. In November and December 2011, she sent Ocwen two
monthly payments of $1383.33. Doc. 1 ¶ 25. Ocwen told her the payments would be
held in suspense and applied to the loan balance upon finalizing an agreement to
settle the state action. Doc. 1 ¶ 25.
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In June and July 2012, to settle the state action, Jackson and Ocwen executed
a “Settlement and Release Agreement” and “Modification Agreement.” Doc. 1 ¶ 24;
see Doc. 1-1 (settlement agreement). The parties agreed to a new principal balance of
$184,013, a new fixed interest rate of 3.89 percent for the rest of the loan period, and
new monthly payments of $1257.43, consisting of $1016.85 to pay the principal and
interest and $240.58 to pay property taxes and insurance. Doc. 1 ¶ 24; see Doc. 1-1.
After settlement, Ocwen used the suspended November and December 2011
payments to pay not the loan balance but what it had labeled “outstanding
fees/expenses,” totaling $2291.50, which included attorney’s fees and costs incurred
to defend the state action, filing and service fees for the foreclosure action never filed,
and numerous “Property Inspection” and “Property Valuation” fees even though,
under the settlement agreement, the fees and expenses had been released and
prohibited from being assessed against the loan account and the suspended
November and December 2011 payments. Doc. 1 ¶ 27; Doc. 1-2.
For tax year 2012, even though the settlement terms just reestablished the
original modification terms, Ocwen filed with the Internal Revenue Service a
Substitute Form 1099-C, titled “Cancellation of Debt,” in which it represented it had
discharged $29,383.63 of debt (including $24,064.20 in interest) associated with the
loan, which resulted in tax liability for Jackson. Doc. 1 ¶¶ 28–29.
From June 2012 to February 2013, Jackson made timely monthly payments
under the settlement agreement terms. Doc. 1 ¶ 30. But her bank erroneously
dishonored the February 2013 payment. Doc. 1 ¶ 31. She “immediately brought the
account current in the following months” and made timely monthly payments
thereafter, but Ocwen charged multiple returned-check fees for the same returned
check and late charges “in each subsequent month.” Doc. 1 ¶ 31.
On August 22, 2013, while payments were current, Jackson mailed Ocwen a
letter requesting that it (1) “remove the escrow impound account” based on her intent
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to directly pay property taxes and insurance and (2) stop calling her about the loan.
Doc. 1 ¶¶ 32–33; Doc. 1-3. On August 27, 2013, she sent a letter requesting a review
of her account and corrections of improperly assessed late fees, property taxes, and
insurance, and a failure to credit the August 2013 payment. Doc. 1 ¶ 34; Doc. 1-4.
Jackson timely sent cashier’s checks for October, November, and December
2013 principal and interest payments. Doc. 1 ¶¶ 35, 37. She excluded amounts for
property taxes and insurance in light of her request to pay them directly. Doc. 1 ¶¶ 35,
37.
On December 13, 2013, Jackson mailed Ocwen a letter reasserting she
intended to directly pay property taxes and insurance and requesting “a thorough
review of the account,” an accounting of all payments she had made and the method
of payment, and a termination of her escrow impound account. Doc. 1 ¶ 36; Doc. 1-5.
Ocwen did not apply Jackson’s payments for October through December 2013
to her balance and instead made collection calls to her. Doc. 1 ¶ 37. During the calls,
its representatives acknowledged the payments but told her they had been rejected.
Doc. 1 ¶ 37. Ocwen did not return them to her and sent no notice to her indicating it
had rejected them. Doc. 1 ¶ 37. The representatives said it did not have to apply the
payments or return them to her. Doc. 1 ¶ 37.
On December 18, 2013, Ocwen sent Jackson a letter informing her the loan
was in default based on her failure to make payments from October 2013. Doc. 1 ¶ 38;
Doc. 1-6. Despite possessing the three cashier’s checks for October, November, and
December 2013 for the principal and interest payments, which totaled $3153, Ocwen
demanded $5912.50 to reinstate the loan. Doc. 1 ¶ 38.
On January 3, 2014, Jackson filed a complaint with Florida’s Office of the
Attorney General concerning Ocwen’s “faulty accounting of her payments and the
runaround it gave her concerning reinstatement,” its payment of legal expenses in
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violation of the parties’ settlement agreement, its refusal to terminate her escrow
account despite her direct payment of property taxes and insurance, and its “false
reporting of canceled debt” to the IRS. Doc. 1 ¶ 40; Doc. 1-7.
Because an account statement showed $1314 credited on October 2, 2013,
Jackson mailed Ocwen a cashier’s check for $1445.50, which, with the $1314 credit
and her three previous cashier’s checks for October, November, and December 2013
principal and interest payments totaling $3153, equaled the $5912.50 reinstatement
demand. Doc. 1 ¶ 41; Doc. 1-8. Ocwen received the check on January 8, 2014, at 9:06
a.m. Doc. 1 ¶ 41. On the same day, Ocwen sent her a letter enclosing the three earlier
cashier’s checks, stating they were “insufficient to cure default.” Doc. 1 ¶ 42.
On January 11, 2014, Jackson called Ocwen and spoke to Robin Abraham. Doc.
1 ¶ 43. Abraham told her the $1314 credit represented her September 2013 payment,
and Ocwen was holding $1192.26 in suspense. Doc. 1 ¶ 43. Abraham explained Ocwen
had increased her monthly payment by $122.02 in August 2013, so it had not accepted
her August and September 2013 payments as full installment payments. Doc. 1 ¶ 43.
Abraham confirmed Ocwen had sent no written notice of the increase. Doc. 1 ¶ 43.
On January 13, 2014, Jackson faxed a letter to Ocwen outlining what had
happened and stating that, to cure the alleged default, she would send by overnight
mail cashier’s checks for $3153 and $131.74. Doc. 1 ¶ 44; Doc. 1-9. She explained those
amounts, with the $1192.26 held in suspense, would equal the amount it demanded
for reinstatement. Doc. 1 ¶ 44. She instructed Ocwen to reinstate the loan. Doc. 1
¶ 44; Doc. 1-9. Ocwen refused to apply those payments and instead demanded
$6791.52 to reinstate the loan. Doc. 1 ¶ 45.
On January 31, 2014, Jackson paid that “disputed” amount ($6791.52). Doc. 1
¶ 46. She timely made all installment payments from then until November 2014,
when she had to postpone her payment due to a family emergency. Doc. 1 ¶ 47. At
the time and on several other occasions, she told Ocwen no payment would have been
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necessary that month had it properly credited her account. Doc. 1 ¶ 47.
On December 17, 2014, Jackson paid Ocwen $1330, an amount exceeding the
$1280 due for December 2014. Doc. 1 ¶ 48. On December 30, 2014, she paid Ocwen
$1324.72, an amount exceeding the $1280 due for January 2015. Doc. 1 ¶ 49. On
March 2, 2015, she paid Ocwen $1280 for February 2015. Doc. 1 ¶ 50. On March 24,
2015, Ocwen sent a notice of default to her. Doc. 1 ¶ 51. On March 30, 2015, she paid
Ocwen $1280 for April 2015. Doc. 1 ¶ 52.
In early April 2015, Jackson applied for a loan modification through the Home
Affordable Mortgage Program (“HAMP”). Doc. 1 ¶ 54. By letter dated April 3, 2015,
Ocwen told her she was ineligible for the program because her payments were
current. Doc. 1 ¶ 55; Doc. 1-10.
On April 18, 2015, Jackson answered a collection call from Ocwen and spoke
to a representative named “Rustan,” who told her that her home was in foreclosure.
Doc. 1 ¶ 56. She told him an attorney represented her in planned litigation against
Ocwen and gave him the attorney’s name and contact information. Doc. 1 ¶ 56. He
responded, “You cannot have an attorney—Ocwen must approve any decision
whether or not to allow you to have an attorney.” Doc. 1 ¶ 56. Distraught, she called
her adult son to the telephone to speak to Rustan. Doc. 1 ¶ 57. After completing the
security authorization to allow her son to talk to Rustan about her account, Rustan
told him, “Your mom cannot have an attorney. [Ocwen] must approve any decision
whether or not to allow you to have an attorney.” Doc. 1 ¶ 57. Frustrated and
outraged, her son hung up. Doc. 1 ¶ 57.
On June 3, 2015, Jackson paid Ocwen $1280 for May 2015. Doc. 1 ¶ 58. Despite
that and the other timely monthly payments, Ocwen continued to “improperly
allocate” her payments and “assess false, misleading, and unearned fees and charges”
to the loan, including fees that were expressly released, waived, or prohibited under
the settlement agreement. Doc. 1 ¶ 53.
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On June 17, 2015, Ocwen returned Jackson’s payment for May 2015, stating it
was “insufficient to cure default.” Doc. 1 ¶ 60. On June 26, 2015, it sent her a letter
titled, “Reinstatement Quote,” stating that she was delinquent on her loan payments
and had to pay $6285.88 to reinstate the loan. Doc. 1 ¶ 59; Doc. 1-11.
On August 31, 2015, Ocwen filed a foreclosure action in state court against
Jackson. Doc. 1 ¶ 61. On September 29, 2015, it served her with process. Doc. 1 ¶ 62.
That foreclosure action remains pending. 1
Ocwen’s actions have caused and continue to cause Jackson “emotional
distress, anxiety, fear, worry, embarrassment, and mental suffering, pain, anguish,
and loss of capacity for the enjoyment of life.” Doc. 1 ¶¶ 63–64.
II.

Claims
On January 6, 2016, Jackson filed the complaint in this action. Doc. 1. She

asserts five claims. For each, Jackson “realleges and incorporates by reference” all of
the factual allegations. See Doc. 1 ¶¶ 66, 77, 85, 92, 97.
In count I, Jackson asserts Ocwen violated §§ 1692c(a)(2), 1692c(c), 1692d,
1692e(2)(A), 1692e(8), 1692e(10), and 1692f of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692–1692p. Doc. 1 ¶¶ 66–76. In count II, she asserts it

1At

any stage and on its own, a court may judicially notice a fact that cannot
be reasonably disputed because it is generally known or can be readily and accurately
determined from sources whose accuracy cannot reasonably be questioned. Fed. R.
Evid. 201. If a court takes judicial notice of a fact before notifying a party, the party
still may be heard upon request. Fed. R. Evid. 201(e). “Courts may take judicial notice
of publicly filed documents, such as those in state court litigation.” U.S. ex rel.
Osheroff v. Humana, Inc., 776 F.3d 805, 811 n.4 (11th Cir. 2015).
Here, the Court may judicially notice facts about Ocwen’s state foreclosure
action against Jackson because they can be readily and accurately determined from
sources whose accuracy cannot be reasonably questioned (state court documents).
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violated §§ 559.72(5), (7), (9), and (18) of the Florida Consumer Collection Practices
Act (“FCCPA”), Fla. Stat. §§ 559.55–559.77. Doc. 1 ¶¶ 77–84. In count III, she asserts
it violated § 2605(k)(1)(C) of the Real Estate Settlement Procedures Act (“RESPA”),
12 U.S.C. §§ 2601–2617, and its implementing regulations, 12 C.F.R. §§ 1024.35–
1024.36. Doc. 1 ¶¶ 85–91. In count IV, she asserts it breached the 2012 settlement
agreement. Doc. 1 ¶¶ 92–96. And in count V, she asserts it wrongfully initiated
foreclosure proceedings against her. Doc. 1 ¶¶ 97–101. She seeks damages, costs,
attorney’s fees, interest, and equitable relief. Doc. 1 at 17–21.
III.

Motion to Dismiss & Response
Ocwen moves to dismiss the complaint and particular claims on several

grounds. As a threshold matter, it argues the complaint is an impermissible shotgun
pleading because each count incorporates paragraphs 1 through 65 without
indicating which allegations support which claim. 2 Doc. 15 at 2–4. Jackson responds

2Ocwen

argues four counts fail to state claims on which relief may be granted.
On the FDCPA claim, it argues Jackson fails to sufficiently allege it is a “debt
collector” because she does not allege her loan was actually in default or it treated
the loan as in default when it acquired servicing rights. Doc. 15 at 5–8. On the FCCPA
claim, it argues she fails to sufficiently allege it acted with intent or knowledge, as
required under FCCPA §§ 559.72(5), (7), (9), and (18), and any allegations supporting
the FCCPA claim must concern events within the two-year statute of limitations. Doc.
15 at 8–10. On the RESPA claim, it argues she alleges no actual damages arising
from conduct after RESPA’s January 10, 2014, effective date. Doc. 15 at 10–11. On
the wrongful-foreclosure claim, it argues she alleges no foreclosure sale occurred;
Florida law recognizes no cause of action for attempted wrongful foreclosure; and,
even if such a cause of action exists, it would have been a compulsory counterclaim
in the foreclosure action. Doc. 15 at 12–15. It does not challenge the merits of the
breach-of-contract claim but argues the Court should decline to exercise
supplemental jurisdiction over all state-law claims if the Court dismisses the FDCPA
and RESPA claims. Doc. 15 at 11 n.7.
Jackson argues the complaint sufficiently alleges Ocwen treated the loan as in
default when it acquired servicing rights based on its predecessor’s treatment of the
loan, the absence of any indication it viewed the loan differently, its settlement of her
state lawsuit, and its self-identification as a “debt collector” in letters to her. Doc. 27
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the complaint appropriately groups factual allegations common to all counts in a
single, chronologically organized section and does not fall within any category of
“shotgun pleadings” the Eleventh Circuit has identified. Doc. 27 at 3–4.
IV.

Law & Analysis
Federal Rule of Civil Procedure 1 provides that the rules “should be construed,

administered, and employed by the court and the parties to secure the just, speedy,
and inexpensive determination of every action and proceeding.” Rule 8(a)(2) provides
that a complaint must contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.” Rule 10(b) provides that a party must state claims in
numbered paragraphs, “each limited as far as practicable to a single set of
circumstances.” Rule 12(b)(6) provides that a party may move to dismiss a claim for
failure to state a claim upon which relief can be granted. And Rule 12(e) provides that
a party “may move for a more definite statement of a pleading to which a responsive
pleading is allowed but which is so vague or ambiguous that the party cannot
reasonably prepare a response.”
Complaints that do not comply with Rule 8(a)(2), Rule 10(b), or both “are often
disparagingly referred to as ‘shotgun pleadings.’” Weiland v. Palm Beach Cty.
Sheriff’s Office, 792 F.3d 1313, 1320 (11th Cir. 2015). The Eleventh Circuit has
“identified four rough types or categories of shotgun pleadings” while recognizing that
“the groupings cannot be too finely drawn.” Id. at 1321. “The most common type—by

at 5–7. She argues the complaint sufficiently alleges Ocwen had the knowledge or
intent required to establish violations of FCCPA §§ 559.72(5), (7), (9), and (18), and
the Court may consider allegations outside the FCCPA’s two-year statute of
limitations based on the “continuing violation” doctrine. Doc. 27 at 8–17. She argues
the complaint sufficiently alleges continuing emotional-distress damages arising
from alleged RESPA violations, and she need not establish the precise dates of those
alleged violations at this stage. Doc. 27 at 18–19. She argues the complaint alleges a
viable wrongful-foreclosure claim, and she was not required to bring it in the state
foreclosure case. Doc. 27 at 19–20.
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a long shot—is a complaint containing multiple counts where each count adopts the
allegations of all preceding counts, causing each successive count to carry all that
came before and the last count to be a combination of the entire complaint.” Id. The
second type is “replete with conclusory, vague, and immaterial facts not obviously
connected to any particular cause of action.” Id. at 1322. The third type fails to
“separat[e] into a different count each cause of action or claim for relief.” Id. at 1323.
And the fourth type “assert[s] multiple claims against multiple defendants without
specifying which of the defendants are responsible for which acts or omissions, or
which of the defendants the claim is brought against.” Id. “The unifying characteristic
of all types of shotgun pleadings is that they fail to one degree or another, and in one
way or another, to give the defendants adequate notice of the claims against them
and the grounds upon which each claim rests.” Id.
Shotgun pleadings “unnecessarily tax the time and resources” of trial and
appellate courts. Keith v. DeKalb Cty., Ga., 749 F.3d 1034, 1045 n.39 (11th Cir. 2014).
The Eleventh thus has “roundly, repeatedly, and consistently” condemned them.
Paylor v. Hartford Fire Ins. Co., 748 F.3d 1117, 1126 (11th Cir. 2014).
“A defendant served with a shotgun complaint should move the district court
to dismiss the complaint pursuant to Rule 12(b)(6) or for a more definite statement
pursuant to Rule 12(e) on the ground that the complaint provides it with insufficient
notice to enable it to file an answer.” Id. at 1126−27 (internal footnotes omitted). In
the absence of either, “nothing should stop District Courts from demanding, on their
own initiative, that the parties replead the case.” Id. at 1127.
Dismissal under Rule 12(b)(6) is warranted if the allegations fail to state a
claim upon which relief can be granted; dismissal under Rule 8(a)(2) or Rule 10(b) is
warranted if “it is virtually impossible to know which allegations of fact are intended
to support which claim(s) for relief.” Weiland, 792 F.3d at 1325 (emphasis in original;
internal quotation marks omitted).
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Here, by incorporating all factual allegations into all counts, and with some
counts containing alleged violations of multiple and varied statutory provisions, the
complaint does not perfectly fit the rough categories of shotgun pleadings the
Eleventh Circuit has identified but shares their unifying characteristic: it fails to give
Ocwen sufficient notice of each claim against it and the grounds upon which each
claim rests. See Weiland 792 F.3d at 1323; see also Johnson Enters. of Jacksonville,
Inc. v. FPL Grp., Inc., 162 F.3d 1290, 1332–33 (11th Cir. 1998) (using the “shotgun”
label for a “complaint that began with thirty-seven paragraphs of general allegations
that were incorporated by reference into each count”).
Because of the shotgun nature of the complaint, Ocwen seeks dismissal of the
complaint under Rule 12(b)(6). That relief is unwarranted because the complaint does
not entirely fail to state a claim upon which relief may be granted (for example, Ocwen
does not seek dismissal of the breach-of-contract claim for any other reason). That
relief is unwarranted under Rules 8(a)(2) and 10(b) because it is not virtually
impossible to know which factual allegations are intended to support which claims
for relief. But, as Ocwen contends, it is very difficult, particularly for the counts
containing alleged violations of multiple and varied statutory provisions. To obtain a
more just, speedy, and inexpensive resolution through a more tailored and carefully
drawn complaint, striking the complaint and requiring repleader is warranted.
Some cases are good candidates for early resolution, and this case seems to be
one of them. The Court directs the parties to confer on whether they would like the
Court to stay the case and discharge the current case-management and scheduling
order deadlines, Doc. 30, to allow sufficient time for settlement talks (before Peter
Grilli or, if the parties request, a United States Magistrate Judge) before discovery
and dispositive-motion expenses mount. They must file a notice concerning how they
would like to proceed by February 3, 2017. Absent a stay, Jackson must file an
amended complaint by February 17, 2017, and either party or both must file a
motion to extend the case-management and scheduling order deadlines, Doc. 30, if
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desired, including for reasons similar to those in the previous joint motion for
extension, Doc. 29.
The motion to dismiss, Doc. 15, is granted to the extent Jackson must replead
but otherwise denied without prejudice to reasserting any arguments in response
to the amended complaint.
Ordered in Jacksonville, Florida, on January 19, 2017.

c:

The Honorable Brian J. Davis
Counsel of Record

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