Edgerton et al v. Nationstar Mortgage LLC

Filing 18

ORDER Adopting 14 Report and Recommendation for Granting in Part and Denying in Part 6 Motion to Dismiss. Signed by District Judge Sean F. Cox. (BGar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

Terry Edgerton, et al.,
Plaintiffs,
v.

Case No. 18-12020

Nationstar Mortgage LLC, dba
Mr. Cooper, a Delaware Limited
Liability Company.

Sean F. Cox
United States District Court Judge

Defendant.
______________________________/
ORDER ADOPTING
12/31/18 REPORT AND RECOMMENDATION
Plaintiffs Terry Edgerton, Charles Archibald, and Tracy Archibald (“Plaintiffs”) filed this
action against Defendant Nationstar Mortgage LLC, d/b/a Mr. Cooper, a Delaware Limited
Liability Company, based on diversity jurisdiction. Plaintiffs’ Complaint asserts the following
nine counts: 1) “Intentional Infliction of Emotional Distress” (Count I); 2) “MRCPA, M.C.L. §
445.257” (Count II); 3) “FDCPA, 15 U.S.C. §§ 1692e, 1692f, 1692k” (Count III); 4) “TILA, 15
U.S.C. § 1692k” (Count IV); 5) “MBLSLA, M.C.L. § 445.1681” (Count V); 6) “ECOA, 15
U.S.C. § 1691e” (Count VI); 7) “FCRA, 15 U.S.C. § 1681n” (Count VII); 8) “RESPA, 12 U.S.C.
§ 2605” (Count VIII); and “Defamation” (Count IX).
Defendant filed a Motion to Dismiss (ECF No. 6), that this Court referred to Magistrate
Judge Stephanie Dawkins Davis for issuance of a report and recommendation.
After full briefing by the parties and oral argument, the magistrate judge issued a fortyfour page Report and Recommendation (“R&R”) on December 31, 2018. (ECF No. 14). In it,
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she recommends that the Court grant the motion in part and deny it in part. More specifically,
she recommends that:
1.

Plaintiffs’ TILA claim should be DISMISSED to the extent it is based on
any claim that accrued more than one year before the complaint in this
case was filed, but the remainder of defendant’s motion to dismiss the
TILA claim should be DENIED;

2.

Defendant’s motion to dismiss plaintiffs’ ECOA claim should be
DENIED;

3.

Defendant’s motion to dismiss plaintiffs’ FCRA claims should be
DENIED;

4.

Defendant’s motion to dismiss plaintiffs’ FDCPA claim should be
GRANTED based on plaintiffs’ agreement to dismissal of this claim;

5.

Defendant’s motion to dismiss plaintiffs’ RESPA claim should be
GRANTED;

6.

Defendant’s motion to dismiss plaintiffs’ IIED claim should be DENIED;

7.

Defendant’s motion to dismiss plaintiffs’ MRCPA claim should be
DENIED;

8.

Defendant’s motion to dismiss plaintiffs’ MBLSLA claim should be
DENIED; and

9.

Defendant’s motion to dismiss plaintiffs’ defamation claims should be
GRANTED.

(R&R at 41-42).
On January 14, 2019, Defendant filed objections to the R&R. (ECF No. 15). Plaintiffs
then filed a response to those objections on January 24, 2010. (ECF No. 16). Although Fed. R.
Civ. P. 72(b)(2) does not provide for the filing of a reply in support of a parties’ objections,
Defendant nevertheless filed one on January 31, 2019. (ECF No. 17). Thus, Defendant’s
objections have been exhaustively briefed by the parties.

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Defendant objects to the R&R in six respects. The Court will address each of those
objections in turn, but finds them all without merit.
Objection No. 1 - ECOA Count
In its Motion to Dismiss, Defendant argued that Plaintiff Edgerton failed to allege a
prima facie case for an Equal Credit Opportunity Act (“ECOA”) discrimination claim. In
response, however, Edgerton made clear that she is not asserting such a claim. Rather, she
alleges a violation of the duty imposed by the ECOA to timely notify her of the results of her
credit application and reasons for same. (See Pls.’ Compl. at 122) (wherein Plaintiffs allege that
“Nationstar never provided a statement of reasons in writing as to why it rejected Ms.
Edgerson’s application for credit as required by the ECOA.”).
The magistrate judge noted that Defendants produced a notice that Defendant alleges to
have sent to Edgerton, but concluded it would be inappropriate to consider that notice in
connection with a Rule 12(b)(6) motion.
The Court agrees with the magistrate judge that the document was not properly
considered upon the pending motion, filed under Fed. R. Civ. P. 12(b)(6). The document is more
appropriately considered at the summary judgment phase of this action.
Objection No. 2 – FCRA Count
In rejecting Defendant’s challenge to Plaintiffs’ FCRA count, the magistrate judge
concluded that Plaintiffs’ allegations are sufficient to raise the reasonable inference that
Defendant failed to conduct a reasonable investigation. (R&R at 15-17). Defendant objects to
that conclusion. The Court finds the objection without merit because it concurs with the
magistrate judge.

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Objection No. 3 – IIED Count
As to Plaintiffs’ claims for intentional infliction of emotional distress under Michigan
law, the magistrate judge concluded that Plaintiffs have alleged sufficiently extreme and
outrageous conduct that could give rise to this claim. The magistrate judge thoroughly discussed
the applicable case law and the reasons for her recommendation. This Court concurs with her
analysis and conclusion.
Objection No. 4 – MRCPA Count
Defendant also objects to the magistrate judge’s conclusion that Plaintiffs’ complaint
contains sufficient allegations to support a claim under the Michigan Regulation of Collection
Practices Act. The magistrate judge concluded that the complaint included sufficient allegations
as to this count, and made reference to specific factual allegations in the complaint to support her
conclusion. The Court finds this objection without merit.
Objection No. 5 – MBLSLA Count
In the R&R, the magistrate judge rejected Defendant’s assertion that Plaintiffs’ claims
under the Michigan Mortgage Brokers, Lenders, and Servicers Licensing Act (“MBLSLA”) fail
because there is no private right of action under that statute. (R&R at 32-35). In doing so, the
magistrate acknowledged that a prior line of district court cases had so concluded, but found
more recent cases more persuasive in light of their reference to a specific section of the statute
authorizing private actions – Mich Comp. Laws § 445.1681 (providing that “any person” may
bring an action to “[o]btain a declaratory judgment that a method, act, or practice is a violation
of this act” and may “recover actual damages resulting from a violation of this act, or $250.00,
whichever is greater, together with reasonable attorney fees and the costs of bring the action.”).

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Defendant objects to her conclusion, again relying on the prior line of cases. The Court finds
this objection, and Defendant’s remaining objections as to this count, without merit.
Objection No. 6 – TILA Count
As to Plaintiffs’ TILA Count, the magistrate judge recommends that “Plaintiffs’ TILA
claim should be DISMISSED to the extent it is based on any claim that accrued more than one
year before the complaint in this case was filed, but the remainder of defendant’s motion to
dismiss the TILA claim should be DENIED.” (R&R at 41). The magistrate judge rejected
Defendant’s assertion that the remaining claims fail because Defendant is not an assignee and
Defendant objects to that conclusion. The Court finds this objection without merit, as the
complaint alleges that Defendant is both an assignee and a servicer. Defendant’s challenge is
more appropriately raised at the summary judgment phase.
Accordingly, the Court finds Defendant’s objections to be without merit and ORDERS
that the magistrate judge’s December 31, 2018 R&R is ADOPTED.
IT IS FURTHER ORDERED that Defendant’s Motion to Dismiss is GRANTED IN
PART AND DENIED IN PART. The motion is GRANTED to the extent that the Court
ORDERS that:
1)

Any TILA claims (in Count IV) that accrued more than one year before the
complaint in this action was filed are DISMISSED as untimely;

2)

Plaintiff’s FDCPA claims (Count III) are DISMISSED;

3)

Plaintiff’s RESPA claims (Count VIII) are DISMISSED; and

4)

Plaintiffs’ Defamation claims (Count IX) are DISMISSED.

The motion is DENIED in all other respects.

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IT IS SO ORDERED.
s/Sean F. Cox
Sean F. Cox
United States District Judge

Dated: March 4, 2019

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