Green et al v. Specialized Loan Servicing, LLC et al
ORDER denying 17 Motion to Dismiss for Failure to State a Claim. Signed by Senior Judge Neal B. Biggers on 5/26/2020. (llw)
Case: 1:19-cv-00076-NBB-DAS Doc #: 27 Filed: 05/26/20 1 of 5 PageID #: 201
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
PAMELA D. GREEN AND MARCUS GREEN
CIVIL ACTION NO. 1:19-cv-076-NBB-DAS
SPECIALIZED LOAN SERVICING, LLC
ORDER DENYING MOTION TO DISMISS
This cause comes before the court upon the defendant Specialized Loan Servicing, LLC’s
(“SLS”) motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
Upon due consideration of the motion, response, and applicable authority, the court finds that the
motion is not well taken and should be denied.
Facts and Procedural Posture
In their First Amended Complaint, Plaintiffs Pamela D. Green and Marcus Green
characterize this action as “a lawsuit about mortgage-servicing Hell and unlawful, ‘Rambo-style’
collection activities on the part of Specialized Loan Servicing, LLC.” Doc. 16. More specifically,
Plaintiffs allege SLS engaged in an illegal and fraudulent scheme to charge Plaintiffs’ mortgage
account with unneeded and inflated lender protection insurance (“LPI”) premiums in order to
generate illegal profits. Plaintiffs allege SLS never issued such an insurance policy despite its
ongoing false billing, aggressive collection activities, and numerous threatened foreclosure
attempts based on falsely alleged account delinquencies. Further, SLS was fully aware that
Plaintiffs maintained their own private adequate homeowner’s insurance policy at all relevant
In 1998, Plaintiffs took out a mortgage loan on a property located in Baldwyn,
Mississippi. The original lending company was later acquired by Bank of America, which sold
Case: 1:19-cv-00076-NBB-DAS Doc #: 27 Filed: 05/26/20 2 of 5 PageID #: 202
Plaintiffs’ mortgage in 2013 in a mortgage-backed security product (“MBS bond”). After the sale
of the loan, Defendant SLS managed all loan-servicing obligations and liabilities relating to the
forced placement of insurance as the mortgage-servicing company for the Bank of New York
Mellon, trustee for the bond certificate holders.
Plaintiffs assert their monthly mortgage payment increased inexplicably from $486.35 to
$755.71 immediately upon SLS taking over the servicing of their mortgage account in late 2013.
The source of the unexpected increase in their monthly mortgage payment is the allegedly
fraudulent LPI coverage that SLS force-placed on Plaintiffs’ account. Plaintiffs contend they
have maintained continuous, adequate, and loan-compliant private homeowner’s insurance
coverage for the property with State Farm since December 2013. SLS received notice of this
private homeowner’s insurance coverage at each renewal period under the State Farm policy.
Additionally, Plaintiffs and State Farm would follow up each notice of force-placed LPI
coverage from SLS by telephoning SLS, explaining the error, and then sending proof of
insurance to SLS. Despite this coverage and SLS’s continuing awareness of its existence,
Plaintiffs allege SLS continued to force-place the coverage and charge delinquencies to
Plaintiffs’ mortgage account. Plaintiffs allege SLS has instigated multiple foreclosure sales based
on these false and fraudulent delinquencies since 2014. The foreclosure sales would be scheduled
and published only to be canceled at the last minute upon Plaintiffs’ threats of legal action.
Plaintiffs brought this lawsuit against SLS on April 18, 2019, and filed their First
Amended Complaint on July 19, 2019. The amended complaint asserts claims for violations of
the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et seq., fraud, violations of
the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., violations of the
Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., breach of contract, and breach of
Case: 1:19-cv-00076-NBB-DAS Doc #: 27 Filed: 05/26/20 3 of 5 PageID #: 203
the duty of good faith and fair dealing. Defendant SLS subsequently filed the present motion to
dismiss pursuant to Rule 12(b)(6).
Standard of Review
“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.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Id.
“Motions to dismiss under Rule 12(b)(6) are viewed with disfavor and are rarely granted.”
Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232-33 (5th Cir. 2009). A court must accept all
well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Id.
The court is not, however, bound to accept as true legal conclusions couched as factual
allegations. Iqbal, 556 U.S. at 678.
A legally sufficient complaint must establish more than a “sheer possibility” that the
plaintiff’s claim is true. Id. It need not contain detailed factual allegations, but it must go beyond
labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Twombly,
550 U.S. at 555. In other words, the face of the complaint must contain enough factual matter to
raise a reasonable expectation that discovery will reveal evidence of each element of the
plaintiff’s claim. Lormand, 565 F.3d at 255-57.
Defendant’s primary arguments in support of dismissal are (1) that Plaintiffs’ claims are
barred by judicial estoppel based on Plaintiffs’ Chapter 13 bankruptcy, which was discharged on
January 3, 2018, (2) that Plaintiffs have failed to plead plausible violations of the TCPA by SLS,
Case: 1:19-cv-00076-NBB-DAS Doc #: 27 Filed: 05/26/20 4 of 5 PageID #: 204
(3) that Plaintiffs have failed to plead fraud with the particularity required by Rule 9 of the
Federal Rules of Civil Procedure, (4) that Plaintiffs’ FDCPA claims are barred by the applicable
statute of limitations and fail as a matter of law, (5) that Plaintiffs have failed to state a
cognizable claim under the FCRA, and (6) that Plaintiffs’ claims for breach of contract and
breach of the duty of good faith and fair dealing are barred by the “filed rate doctrine.” The court
finds no merit to Defendant’s arguments.
First, as to the bankruptcy matter, Plaintiffs have brought claims in this matter which they
allege continue to accrue to the present day. In response to Defendant’s judicial estoppel
argument, Plaintiffs “stipulate and explicitly represent to the court that this lawsuit only seeks
relief for legal injuries that have accrued, in whole or in part, since January 4, 2018,” the day
after their Chapter 13 bankruptcy was discharged. Doc. 23, p. 3. Second, contrary to Defendant’s
assertions, the court finds that Plaintiffs have pleaded plausible violations and alleged all
requisite elements of their TCPA claims. Third, Plaintiffs have pleaded plausible fraud claims
with extensive detail and particularity and, in the court’s view, have fully satisfied the
requirements of Rule 9. The Fifth Circuit has stated that “articulating the elements
of fraud with particularity requires a plaintiff to specify the statements contended to be
fraudulent, identify the speaker, state when and where the statements were made, and explain
why the statements were fraudulent.” Williams v. WMX Technologies, Inc., 112 F.3d 175, 177
(5th Cir. 1997). Plaintiffs’ amended complaint is replete with these requisite details, and though
it is this process – pleading with particularity – which opens the door to discovery for fraud
claims in the first instance, the level of specificity Plaintiffs have accomplished without the
benefit of discovery is commendable. Fourth, as to the one-year statute of limitations applicable
to Plaintiffs’ FDCPA claims, Defendant implicitly acknowledges that allegations of SLS
Case: 1:19-cv-00076-NBB-DAS Doc #: 27 Filed: 05/26/20 5 of 5 PageID #: 205
wrongdoing after April 18, 2018 – one year prior to Plaintiffs’ filing of their complaint – would
be viable as falling within the statutory period, and Plaintiffs assert that in this one year SLS has
engaged in all the wrongful actions required to support their claims under the FDCPA. Fifth, the
court finds that Plaintiffs have pleaded plausible violations and alleged all requisite elements of
their FCRA claims sufficient to survive 12(b)(6) dismissal. Finally, the court finds that Plaintiffs’
claims for breach of contract and breach of the duty of good faith and fair dealing are not barred
by the “filed rate doctrine.” This doctrine, recognized by the Mississippi Supreme Court,
provides that any insurance rate approved by the governing regulatory agency of the state is “per
se reasonable and unassailable in judicial proceedings brought by ratepayers.” American
Bankers’ Ins. Co. of Fla. v. Wells, 819 So. 2d 1196, 1203-04 (Miss. 2001). Defendant’s argument
misses the mark, however, as Plaintiffs assert their mortgage account was charged with
premiums and subsequent delinquencies for an insurance policy that was never issued. The court
finds that Plaintiffs have met their burden of pleading plausible claims for breach of contract and
breach of the duty of good faith and fair dealing. Accepting Plaintiffs’ factual allegations as true,
as it must under Rule 12(b)(6) analysis, and being unpersuaded by each of Defendant’s
arguments in favor of dismissal, the court finds that Defendant’s motion to dismiss should be
denied in its entirety.
In accordance with the foregoing analysis, it is ORDERED AND ADJUDGED that
Defendant’s motion to dismiss pursuant to Rule 12(b)(6) is DENIED.
This 26th day of May, 2020.
/s/ Neal Biggers
NEAL B. BIGGERS, JR.
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?