Brandenstein v. PennyMac Loan Services, LLC.
OPINION AND ORDER adopting Magistrate Judge Janet F. King's Final Report and Recommendation 7 and dismissing this action with prejudice.. Signed by Judge William S. Duffey, Jr on 12/1/17. (ddm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
LORI G. BRANDENSTEIN,
PENNYMAC LOAN SERVICES,
OPINION AND ORDER
This matter is before the Court on Magistrate Judge Janet F. King’s Final
Report and Recommendation  (“Final R&R”) granting Defendant Pennymac
Loan Services, LLC’s (“Defendant”) Motion to Dismiss Plaintiff’s Verified
Complaint  (the “Motion”). Plaintiff Lori G. Brandenstein (“Plaintiff”) does not
oppose the Motion or object to the Final R&R. The Court finds no plain error in
the Final R&R, and therefore adopts the recommendations of Magistrate Judge
On June 19, 2017, Plaintiff, proceeding pro se, filed her Complaint [1.1]
challenging Defendant’s conduct relating to the July 5, 2017, foreclosure of
Plaintiff’s former residence, real property located at 2244 Josephine Court,
Marietta, Georgia, 30062 (“Property”). Defendant was the servicer of Plaintiff’s
mortgage loan on the Property. ([1.1] ¶ 8).
The Foreclosure of Plaintiff’s Property
On January 30, 2010, Plaintiff Brandenstein, along with Richard W.
Brandenstein (“Mr. Brandenstein”), who is not a complainant or party to the
instant suit, obtained a mortgage loan from First Option Mortgage, LLC (“First
Option” or “Lender”), in the principal amount of $213,776.00 (“Loan”). ([1.1] ¶ 6).
In connection with and to secure payment on the Loan, Plaintiff and
Mr. Brandenstein executed a Security Deed in favor of Mortgage Electronic
Registration Systems, Inc. (“MERS”), as nominee for First Option, and its
successors and assigns. ([1.1] ¶ 7; see also Security Deed [1.3]). The Security
Deed was recorded on February 15, 2010, in Deed Book 14754, Pages 4296–4307
The Court recites facts from the Final R&R and the record. The parties have
not objected to any facts in the Final R&R, and the Court finds no plain error in
them. The Court thus adopts the facts set out in the R&R, including those that it
judicially noticed. See Garvey v. Vaughn, 9993 F.2d 776, 779, n.9 (11th Cir.
of the Cobb County, Georgia, records. ([1.3]).
On October 29, 2014, the Security Deed was assigned to Bank of America,
N.A. (“BANA”) by MERS. (Assignment [3.2]; see also [1.1] ¶ 7). The
assignment was recorded on November 19, 2014, in Deed Book 15199, Pages
4869-70 of the Cobb County, Georgia records. ([3.2])
On or about May 2, 2017, as a result of Plaintiff’s alleged default on the
Loan, the law firm of Rubin Lublin, LLC, on behalf of Defendant, advertised its
first Notice of Sale Under Power (“Notice”) of Plaintiff’s Property to occur on
July 5, 2017. ([1.1] ¶ 8). Plaintiff alleges the Notice did not identify the holder of
the Security Deed and identified Defendant as the loan servicer. (Id.). On
May 12, 2017, apparently operating under the assumption that Defendant still acted
as the loan servicer, Plaintiff sent Defendant a request for disclosure, rescission,
and validation of debt under Truth in Lending Act (“TILA”) and a “qualified
written request” under Real Estate Settlement Procedures Act (“RESPA”). ([1.1] ¶
10). According to Plaintiff, Defendant did not respond.
On July 5, 2017, BANA exercised its power of sale in the Security Deed and
foreclosed on the Property. The Property was transferred to Arch Property
Holdings, LLC, under a Deed Under Power. (Deed Under Power [4.1]). On
August 20, 2017, the Deed Under Power was recorded in Deed Book 15472 at
Pages 3016-19 in the Cobb County, Georgia records.
On June 19, 2017, Plaintiff filed her Complaint. In it, she identifies six
causes of action, which she describes as follows: (Count 1) Fraudulent Conversion;
(Count 2) Mortgage Servicing Fraud; (Count 3) Declaratory Judgment (Credit
Default Swap); (Count 4) Unfair and Deceptive Trade Practices/Fair Debt
Collection Practices Act; (Count 5) Fraud/Attempted Fraud; and (Count 6)
Intentional Infliction of Emotional Distress (“IIED”). Plaintiff also alleges, within
the Fact Section of her Complaint, violations of TILA and RESPA. ([1.1] ¶ 1012). Plaintiff also seeks prelitigation discovery and injunctive relief.
On July 19, 2017, Defendant properly and timely removed the case pursuant
to 28 U.S.C. §§ 1331, 1332, 1441, and 1446. (Notice of Removal ; see also 
at 8, n.5). On July 26, 2017, Defendant moved to dismiss on multiple grounds,
including under Rules 4(m), 9, 12(b)(6) of the Federal Rules of Civil Procedure.
(Motion to Dismiss [3.1]).2 Defendant further contends that the relief Plaintiff
seeks is moot given that foreclosure has already occurred.
On November 6, 2017, the Magistrate Judge issued her Final R&R
Defendant has since expressly waived its service-related defense pursuant to
Rule 12(b)(5) in favor of a ruling on the merits pursuant to Rule 12(b)(6).
recommending granting Defendant’s Motion to Dismiss. No party filed objections
to the Final R&R.
Motion to Dismiss
On a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure, the Court must “assume that the factual allegations in the
complaint are true and give the plaintiff the benefit of reasonable factual
inferences.” Wooten v. Quicken Loans, Inc., 626 F.3d 1187, 1196 (11th Cir.
2010). Although reasonable inferences are made in the plaintiff’s favor,
“‘unwarranted deductions of fact’ are not admitted as true.”
Aldana v. Del Monte Fresh Produce, N.A., 416 F.3d 1242, 1248 (11th Cir. 2005)
(quoting S. Fla. Water Mgmt. Dist. v. Montalvo, 84 F.3d 402, 408 n.10 (1996)).
The Court also is not required to accept as true conclusory allegations and legal
conclusions. See Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th
Cir. 2010) (construing Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atl. Corp. v.
Twombly, 550 U.S. 544 (2007)); see also White v. Bank of America, NA, 597 F.
App’x 1015, 1018 (11th Cir. 2014) (“[C]onclusory allegations, unwarranted
deductions of facts or legal conclusions masquerading as facts will not prevent
dismissal.”) (quoting Oxford Asset Mgmt., Ltd. V. Jaharis, 297 F.3d 1182, 1188
(11th Cir. 2002)).
“To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Mere “labels and
conclusions” are insufficient. Twombly, 550 U.S. at 555. “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). This requires more than
the “mere possibility of misconduct.” Am. Dental, 605 F.3d at 1290 (quoting
Iqbal, 556 U.S. at 679). The well-pled allegations must “nudge their claims
across the line from conceivable to plausible.” Id. at 1289 (quoting Twombly,
550 U.S. at 570).3
Plaintiff filed her Complaint pro se. “A document filed pro se is to be
liberally construed, and a pro se complaint, however inartfully pleaded, must be
Federal Rule of Civil Procedure 8(a)(2) requires the plaintiff to state “a short
and plain statement of the claim showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2). In Twombly, the Supreme Court recognized the liberal
minimal standards imposed by Federal Rule 8(a)(2) but also acknowledged that
“[f]actual allegations must be enough to raise a right to relief above the speculative
level . . . .” Twombly, 550 U.S. at 555.
held to less stringent standards than formal pleadings drafted by lawyers.”
Erickson v. Pardus, 551 U.S. 89, 94 (2007). Nevertheless, a pro se plaintiff must
comply with the threshold requirements of the Federal Rules of Civil Procedure.
See Beckwith v. Bellsouth Telecomms. Inc., 146 F. App’x 368, 371 (11th Cir.
2005). “Even though a pro se complaint should be construed liberally, a pro se
complaint still must state a claim upon which the Court can grant relief.”
Grigsby v. Thomas, 506 F. Supp. 2d 26, 28 (D.D.C. 2007). “[A] district court does
not have license to rewrite a deficient pleading.” Osahar v. U.S. Postal Serv.,
297 F. App’x 863, 864 (11th Cir. 2008).
Magistrate Judge’s Report and Recommendation
After conducting a careful and complete review of the findings and
recommendations, a district judge may accept, reject, or modify a magistrate
judge’s report and recommendation. 28 U.S.C. § 636(b)(1);
Williams v. Wainwright, 681 F.2d 732 (11th Cir. 1982. A district judge “shall
make a de novo determination of those portions of the report or specified proposed
findings or recommendations to which objection is made.” 28 U.S.C. § 636(b)(1).
Where, as here, no party has objected to the report and recommendation, the Court
conducts only a plain error review of the record. United States v. Slay, 714 F.2d
1093, 1095 (11th Cir. 1983) (per curiam).
Plaintiff’s Direct Challenge to Foreclosure
At the outset, the Magistrate Judge found that, to the extent Plaintiff
challenges the foreclosure itself, Plaintiff’s challenge fails. The Magistrate Judge
reasoned that the underlying Loan documents reveal that BANA—not
Defendant—was the foreclosing entity. ( at 12). The Magistrate Judge found
that the Security Deed properly granted and conveyed the power of sale of the
Property to BANA, and that BANA and its successors were entitled to exercise
such power. (Id.). The Magistrate Judge further held that because Plaintiff does
not allege that she made the tender required to have the foreclosure set aside, she is
now precluded from seeking equitable relief. Heritage Creek Development Corp.
v. Colonial Bank, 268 Ga. App. 369, 601 S.E.2d 842, 844-45 (2004) (“Georgia law
requires a plaintiff asserting a claim of wrongful foreclosure to establish a legal
duty owed to it by the foreclosing party, a breach of that duty, a causal connection
between the breach of that duty and the injury it sustained, and damages.”). The
Court finds no plain error in the Magistrate Judge’s findings and recommendations
regarding Plaintiff’s direct foreclosure challenge.
Plaintiff’s Fraud Claims
Plaintiff’s Complaint also asserts a number of fraud-based claims, including
fraudulent conversion, mortgage servicing fraud, and fraud or attempted fraud.
Defendant argues in its Motion that Plaintiff fails to meet the specificity pleading
requirements of Rule 9(b) of the Federal Rules of Civil Procedure. ([3.1] at 5-10);
see also Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake.”).
To state a claim for common law fraud under Georgia law, Plaintiff must
allege facts to support the following elements: “(1) false representation by
defendant; (2) with scienter, or knowledge of falsity; (3) with intent to deceive
plaintiff or to induce plaintiff into acting or refraining from acting; (4) on which
plaintiff justifiably relied; (5) with proximate cause of damages to plaintiff.”
WESI, LLC v. Compass Environmental, Inc., 509 F. Supp. 2d 1353, 1358 (N.D.
Ga. 2007) (citations and internal quotation marks omitted).
The Magistrate Judge found that Plaintiff’s “conclusory allegations of fraud
do not state a claim and do not comport with the strict pleading requirements of
Rule 9(b).” ( at 15). Specifically, the Magistrate Judge determined that
Plaintiff’s fraudulent conversion claim constitutes a “nonsensical challenge to the
banking system, the validity of the Loan, and foreclosure of the Property.”
( at 16). The Magistrate Judge also noted that, to the extent Plaintiff’s
fraudulent conversion claim is based upon the foreclosure of real property, it must
be dismissed as a matter of law because Plaintiff fails to meet the elements
required under Georgia law. (Id.); see also Powell v. Bank of America, N.A., 2014
WL 2118821, at *3 (N.D. Ga. May 21, 2014) (holding that a plaintiff must show
title to the property, possession by the defendant, demand for possession, and
refusal to surrender the property, or an actual conversion prior to the filing of the
As to Plaintiff’s claim alleging mortgage servicing fraud, the Magistrate
Judge found that Plaintiff fails to “identify any specific action taken by
[Defendant] in connection with her Loan that she contends amounts to fraud.” (
at 18). The Magistrate Judge stated that “[t]he Complaint purports to ‘explain to
the Court how the Defendant is committing servicing fraud’ but then reads like an
editorial on the adverse impact of servicers in the mortgage industry, minus any
related facts.” (Id.; see also [1.1] ¶ 63). The Magistrate Judge concluded that,
beyond the foreclosure itself, Plaintiff fails to allege any specific harm caused by
Defendant during the time it serviced the Loan. ( at 18).
Finally, as to Plaintiff’s allegations of fraud and/or attempted fraud, the
Magistrate Judge found that Plaintiff failed to identify specifically who made the
“purported [fraudulent] representations, what the content of the alleged
representations were, or when and where any alleged representations were made.”
( at 19). Based on these deficiencies, the Magistrate Judge held this claim
similarly failed to meet the strict requirements of Rule 9(b).
The Court finds no plain error in the Magistrate Judge’s findings and
recommendations regarding Plaintiff’s fraud-based claims.
Declaratory Judgment Action (Credit Default Swap)
Plaintiff seeks a declaratory judgment finding that Defendant is not entitled
to the remedy of non-judicial foreclosure because the Loan was backed by a credit
default swap agreement (“CDSA”), and when Plaintiff allegedly defaulted on the
Loan the true owner of the Loan was made whole by the CDSA. ([1.1] ¶¶ 85-86).
The Magistrate Judge found that Plaintiff’s Complaint fails to allege any specific
facts concerning a CDSA, and that Plaintiff would not have been a party (or thirdparty beneficiary) to any CDSA. ( at 21). The Magistrate Judge thus concluded
that Plaintiff would lack standing to challenge any credit default swap
arrangement. The Magistrate Judge further found that the Declaratory Judgment
Act does not provide relief to Plaintiff because foreclosure has already occurred.
(Id. at 22). The Court finds no plain error in the Magistrate Judge’s findings and
recommendations regarding Plaintiff’s credit default swap claim.
Unfair and/or Deceptive Business Practices Act
In Count IV, Plaintiff alleges unfair and deceptive business practices in
violation of the Georgia Fair Businesses Practices Act of 1975 (“GFBPA”),
O.C.G.A. § 10-1-3, et seq., and a violation of Section 1962d of the Fair Debt
Collection Practices Act (“FDCPA”).
The GFBPA provides a private right of action to a “party who suffers injury
or damages as a result of ‘[u]nfair or deceptive acts or practices in the conduct of
consumer transactions and consumer acts or practices in trade or commerce.’”
Henderson v. Gandy, 623 S.E.2d 465, 467 (Ga. 2005) (quoting O.C.G.A.
§ 10-1-393 et seq.); Kinzy v. Wells Fargo Bank, N.A., 1:13-CV-357-CAP, 2013
WL 12068984, at *2 (N.D. Ga. Nov. 4, 2013). To state a claim for a violation of
the GFBPA, a plaintiff must allege that the defendant engaged in deceptive or
unfair practices that have the potential to harm the general consuming public.
Friedlander v. PDK Labs, Inc., 59 F.3d 1131, 1132 (11th Cir. 1995).
The Magistrate Judge found that the GFBPA does not apply to residential
mortgage loan transactions or mortgage lending or servicing. ( at 25); see also
Stewart v. Suntrust Mortg., Inc., 331Ga. App. 635, 640 & n.4 (Ga. App. Ct. 2015).
The Magistrate Judge further determined that, even if the GFBPA applied here,
Plaintiff’s allegations are insufficient because Plaintiff fails to identify what type of
servicing fees that she contends were false, when the fees were assessed, or the
amount of alleged damage. ( at 26).
Plaintiff next alleges Defendant violated Section 1692d of the FDCPA by
allegedly attempting to collect on a debt and foreclose on the property. ([1.1] ¶¶
89–91). Title 15, United States Code, Section 1692d provides:
A debt collector may not engage in any conduct the natural
consequence of which is to harass, oppress, or abuse any person in
connection with the collection of a debt.
15 U.S.C.A. § 1692d. “Banned conduct includes the ‘use of violence,’ the ‘use of
obscene or profane language,’ and repeated phone calls intended to annoy or harass
‘any person at the called number.’” Miljkovic v. Shafritz and Dinkin, P.A., 791
F.3d 1291, 1305 (11th Cir. 2015) (quoting § 1692d(1)-(6)).
To state a plausible FDCPA claim, Plaintiff must allege: (1) that she has
been the object of collection activity arising from a consumer debt; (2) that the
defendant attempting to collect the debt qualifies as a “debt collector” under the
statute; and (3) that the defendant has engaged in a prohibited act or has failed to
perform a requirement imposed by the FDCPA. See Elrod v. Bank of America,
N.A., 2015 WL 12843876, at *8 (N.D. Ga. October 28, 2015), report and
recommendation adopted by 2015 WL 12856446 (N.D. Ga. November 17, 2015).
The Magistrate Judge found that Plaintiff failed to allege facts showing that
Defendant meets the statutory definition of “debt collector.” ( at 27). The
Magistrate Judge also determined that Plaintiff provided only “vague” allegations
in support of her FDCPA claim, including that “Defendant knowingly and
intentional engaged in harassing, oppressive, and/or abusive conduct toward
Plaintiff through [unspecified] phone calls and correspondence via [unidentified]
persons aimed at collecting on the debt and subsequently relating to foreclosure.
([1.1] ¶¶ 90–91). The Magistrate Judge concluded that Plaintiff’s FDCPA claim
thus fails for insufficiency of pleading.
The Court finds no plain error in the Magistrate Judge’s findings and
recommendations regarding Plaintiff’s GFBPA and FDCPA claims.
Intentional Infliction of Emotional Distress
Plaintiff also contends that Defendant intentionally inflicted emotional
distress “by attempting to take Plaintiff’s real property through foreclosure”
without a legal right to do so. ([1.1] ¶ 97). Plaintiff further alleges that
Defendant’s actions have caused her emotional distress, including “extreme
humiliation, anxiety[,] and loss of sleep.” ([1.1] ¶ 97).
Under Georgia law, the tort of IIED requires proof of the following: “‘1) that
defendant’s behavior was willful and wanton or intentionally directed to harming
plaintiff; 2) that the actions of defendant were such as would naturally humiliate,
embarrass, frighten, or outrage the plaintiff; [and] 3) that conduct caused mental
suffering or wounded feelings or emotional upset or distress to plaintiff.’” Se. Sec.
Ins. Co. v. Hotle, 222 Ga. App. 161, 163, 473 S.E.2d 256, 259–60 (1996)).
The Magistrate Judge found that “Plaintiff’s Complaint fails to state a claim
for IIED as a matter of law because the nature of the conduct Plaintiff complains
about, namely, the foreclosure of the property, does not amount to extreme and
outrageous conduct.” ( at 34); see also Echeverria v. BAC Home Loans
Servicing, LP, 523 F. App’x. 675, 677 (11th Cir. 2013) (affirming Rule 12(b)(6)
dismissal of plaintiff’s IIED claim based upon holder of mortgage loan and loan
servicer’s conduct, including “not providing the plaintiffs with correct information
concerning their mortgage loan, refusing to modify that loan, losing papers and
documents, and threatening foreclosure” and finding that conduct was not “so
outrageous in character, and so extreme in degree, as to go beyond all possible
bounds of decency”) (citation and internal quotation marks omitted); Lewis v. PNC
Bank, N.A., 2013 WL 6817090, at *7 (N.D. Ga. Dec. 26, 2013) (A “lawful
foreclosure, as emotionally distressing as that may be, is not extreme and
outrageous behavior that would give rise to a claim for [IIED].”).
The Court finds no plain error in the Magistrate Judge’s findings and
recommendation as to Plaintiff’s IIED claim.
Claims Alleged in the Complaint’s Fact Section
Plaintiff also appears to allege two claims in addition to the causes of action
listed in her Complaint.
Plaintiff, in passing, alleges that she sent Defendant “a request for
disclosure, rescission, and validation of [the] debt” and that Defendant “failed to
comply with its legal obligations under TILA[.]” ([1.1] ¶¶ 10, 12). The Magistrate
Judge found this one, conclusory allegation insufficient to state a claim that
Defendant violated TILA. ( at 35). The Magistrate Judge also found that, even
if Plaintiff alleged facts sufficient to state a violation of TILA, TILA does not
apply to Defendant. (Id. at 36). The Court finds no plain error in the Magistrate
Judge’s findings and recommendation as to Plaintiff’s apparent TILA.
Plaintiff also makes a conclusory statement in her Complaint, without
identifying it as a separate cause of action, that Plaintiff sent Defendant a
“qualified written request” under RESPA on May 12, 2017. ([1.1] ¶ 10).
RESPA imposes certain requirements on servicers of federally-related
mortgage loans, including responding to inquiries and providing certain notices to
borrowers. “If the servicer does not comply with RESPA’s deadlines, the borrower
can recover actual damages from the failure to communicate, but the borrower is
limited to actual damages unless there is a pattern or practice of noncompliance.”
Bivins v. Nationstar Mortg., LLC, 2016 WL 3855549, at *5 (N.D. Ga. July 14,
2016) (quoting Marks v. PHH Mortg. Corp., 2011 WL 5439164, at *3 (M.D. Ga.
Nov. 9, 2011) (citing 12 U.S.C. § 2605(f))) (internal quotation marks omitted).
“An allegation of damages is a necessary element of a RESPA claim.” Russell v.
Nationstar Mortg., LLC, 2015 WL 5029346, at *6 (S.D. Fla. Aug 26, 2015).
The Magistrate Judge found Plaintiff “does not allege facts to establish that
the correspondence she claims to have sent [Defendant] on May 12, 2017,
constituted a valid QWR or met the statutory definition of a QWR.” ( at 40).
The Magistrate Judge noted that “[a]lthough Plaintiff asserts that a request for
information was sent to Defendant on May 12, 2017, she does not adequately
describe the information or documents sought or the questions posed therin; she
does not set forth the contents of the communication nor does she attach the
communication to the Complaint.” (Id.). The Magistrate Judge further noted
Plaintiff has not pled that she suffered any actual damage as a result of the alleged
failure to respond to her QWR, or that Defendant engaged in a pattern or practice
of not responding to QWRs. (Id. at 41).
The Court finds no plain error in the Magistrate Judge’s findings and
recommendation as to Plaintiff’s alleged RESPA claim.
For the foregoing reasons,
IT IS HEREBY ORDERED that Magistrate Judge Janet F. King’s Final
Report and Recommendation  is ADOPTED.
IT IS FURTHER ORDERED that Plaintiff’s Complaint is DISMISSED
WITH PREJUDICE. 4
SO ORDERED this 1st day of December, 2017.
The Court dismisses with prejudice all claims, including those referred to in
the Complaint’s Fact Section. The claims include: Plaintiff’s fraudulent
conversion claim alleged in Count I; Plaintiff’s mortgage servicing fraud claim
alleged in Count II; Plaintiff’s request for declaratory judgment alleged in Count
III; Plaintiff’s claim within Count IV alleging violations of the GFBPA; Plaintiff’s
claim within Count IV alleging violations of the FDCPA; Plaintiff’s fraud or
attempted fraud claim alleged in Count V; Plaintiff’s IIED claim alleged in Count
VI; and Plaintiff’s TILA and RESPA claims alleged in the Fact Section of her
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