Johnson v. PHH Mortgage Service Center, et al

Filing 5

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiff's motion to proceed in forma pauperis [ECF No. 2] is GRANTED. IT IS FURTHER ORDERED that the Clerk of Court shall docket this case as Vera L. Johnson v. PHH Mortgage Service Center and W ilmington Trust Company, Kristin J. Conwell, Trustee. IT IS FURTHER ORDERED that, as to plaintiff's federal claims, the Clerk shall not issue process or cause process to issue upon the complaint, because the complaint is legally frivolous and fa ils to state a claim upon which relief can be granted. See 28 U.S.C. § 1915(e)(2)(B). IT IS FURTHER ORDERED that plaintiff's pendent state-law claims are DISMISSED, without prejudice. A separate Order of Dismissal shall accompany this Memorandum and Order.. Signed by District Judge Rodney W. Sippel on 11/27/12. (LGK)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
VERA L. JOHNSON,

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Plaintiff,
v.
PHH MORTGAGE SERVICE
CENTER, et al.,
Defendants.

No. 4:12-CV-2105-RWS

MEMORANDUM AND ORDER
This matter is before the Court on plaintiff’s motion to proceed in forma
pauperis and submission of a civil complaint. Upon consideration of the financial
information provided with the motion, the Court finds that plaintiff is financially
unable to pay any portion of the filing fee. As a result, plaintiff will be granted leave
to proceed in forma pauperis. Additionally, the Court will dismiss plaintiff's federal
claims pursuant to 28 U.S.C. § 1915(e)(2)(B) and will decline to exercise jurisdiction
over her pendent state-law claims.
28 U.S.C. § 1915(e)
Pursuant to 28 U.S.C. § 1915(e)(2)(B), the Court may dismiss a complaint filed
in forma pauperis if the action is frivolous, malicious, fails to state a claim upon
which relief can be granted, or seeks monetary relief against a defendant who is

immune from such relief. An action is frivolous if “it lacks an arguable basis in either
law or in fact.” Neitzke v. Williams, 490 U.S. 319, 328 (1989). An action is
malicious when it is undertaken for the purpose of harassing litigants and not for the
purpose of vindicating a cognizable right. Spencer v. Rhodes, 656 F. Supp. 458, 46163 (E.D.N.C. 1987), aff’d 826 F.2d 1059 (4th Cir. 1987).
To determine whether an action fails to state a claim upon which relief can be
granted, the Court must engage in a two-step inquiry. First, the Court must identify
the allegations in the complaint that are not entitled to the assumption of truth.
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950-51 (2009).

These include “legal

conclusions” and “[t]hreadbare recitals of the elements of a cause of action [that are]
supported by mere conclusory statements.” Id. at 1949. Second, the Court must
determine whether the complaint states a plausible claim for relief. Id. at 1950-51.
This is a “context-specific task that requires the reviewing court to draw on its
judicial experience and common sense.” Id. at 1950. The plaintiff is required to
plead facts that show more than the “mere possibility of misconduct.” Id. The Court
must review the factual allegations in the complaint “to determine if they plausibly
suggest an entitlement to relief.”

Id. at 1951.

When faced with alternative

explanations for the alleged misconduct, the Court may exercise its judgment in

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determining whether plaintiff’s proffered conclusion is the most plausible or whether
it is more likely that no misconduct occurred. Id. at 1950, 1951-52.
The Complaint
Plaintiff brings this action against PHH Mortgage Service Center1 and
“Wilmington Trust Company, Kristin J. Conwell, Trustee” for alleged violations of
the following federal statutes: Truth in Lending Act ("TILA"), 15 U.S.C. § 1601 et
seq., Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C. § 1639 et
seq., Real Estate Settlement Procedure Act ("RESPA"), 12 U.S.C. § 2601 et seq.,
Equal Credit Opportunity Act ("ECOA"), 15 U.S.C. § 1691 et seq., Gramm-LeachBliley Act ("GLBA"), 15 U.S.C. § 6801 et seq., Home Mortgage Disclosure Act
("HMDA"), 12 U.S.C. § 2801 et seq., Fair Credit Reporting Act ("FCRA"), 15 U.S.C.
§ 1681 et seq., and Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692
et seq. In addition, plaintiff asserts pendent state-law claims for fraud, fraudulent
misrepresentation, larceny, breach of contract, and unfair or deceptive acts and
practices under Missouri law, as well as a violation of several Missouri statutes
concerning the sale of foreclosed property and notice of mortgage defaults. Plaintiff

1

Plaintiff claims that "PHH Mortgage Service, Mortgage Service Center is the
current mortgage company that was transferred duty from Mortgage Service Center."
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seeks monetary relief and punitive damages in the amount of $250,000.2 In addition,
plaintiff asks this Court to quiet title in her favor.
Plaintiff states that she is the owner of a home in St. Louis County, where she
has lived for the past thirty-two years. She states that PHH is the "nominee and/or
beneficiary under the deed of trust." Plaintiff further states that, after undergoing
surgery in June 2010, she found it difficult to keep up with her bills, and she
ultimately fell four months behind on her mortgage note. Plaintiff alleges that
approximately two years later, in March 2012, she sent a monthly mortgage check to
PHH, but the check was returned because it did not include all of the late payments
or the assessed late fees. Plaintiff complains that a myriad of expenses were added
to the amount owed, including fees for an attorney, title updates, mailing, property
inspection, trustee, and publications. Plaintiff states that "in violation of good faith
and fair dealing, defendant consistently placed the amount due just outside the reach
of plaintiff to make [the] mortgage current."
Plaintiff filed for bankruptcy protection on August 2, 2012. On October 18,
2012, the bankruptcy court granted a motion to remove the automatic stay. Plaintiff
states that she was advised she could contact the mortgage company to find out the

2

On November 9, 2012, this Court denied plaintiff's ex parte motion for a
temporary restraining order [ECF No. 4].
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amount due on her mortgage, but when she did, she was told her house was scheduled
to be sold on October 19, 2012. Plaintiff alleges that she did not receive a notice of
default or notice of trustee sale relative to the October 19th sale, which apparently
never took place. Plaintiff states that she subsequently received a letter from
defendant's attorney, stating that she owed $6,000 in past-due mortgage payments and
$4,123.03 in fees. Plaintiff states that, again, defendant intentionally kept the amount
due "just out of reach," in violation of good faith and fair dealing.
Plaintiff states that on October 26, 2012, she “had a mortgage assessment of her
mortgage documents by her legal advisor . . . and found discrepancy and nondisclosure of the required documents by federal law that requires a disclosure of
financial documents and not disclosed to [her].” Plaintiff alleges that there is a
"Notice of Trustee's Sale" which states that her home will be sold at public auction
to the highest bidder, but "none of these alleged beneficiaries or representatives of the
beneficiary have the original note to prove that they are in fact the party authorized
to conduct the foreclosure on November 19, 2012." Plaintiff claims that the sale of
her home would violate Missouri law, because "the Trustee was not in possession of
the original Note, [and] the Note when it was assigned to the current beneficiary did
not convey the power of sale because it violated the terms of that the assignment
when it was made to the current that [sic] the Note executed by Plaintiff was no
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longer a negotiable instrument because the assignment was not physically applied to
the Note."
Plaintiff asserts federal jurisdiction over her claims pursuant to 28 U.S.C. §
1331 (federal question).
Discussion
Plaintiff’s pro se complaint is long and rambling and often times incoherent.
After a comprehensive review of the allegations, and for the reasons set forth below,
the Court will dismiss the federal claims pursuant to 28 U.S.C. § 1915(e)(2)(B), and
will decline to exercise jurisdiction over the pendent state-law claims.
A. Federal Claims
1. FDCPA Claim
To establish a prima facie FDCPA case, a plaintiff must plead and prove that
(1) the defendant was a debt collector; (2) the defendant’s conduct in attempting to
collect a debt was prohibited by the Act; and (3) the debt was a consumer debt. E.g.,
In re Creditrust Corp., 283 B.R. 826, 831 (Bankr. D. Md. 2002). To satisfy the first
element of proof, that the defendant is a debt collector, the Court looks to 15 U.S.C.
§ 1692a(6) which, in relevant part, defines a "debt collector" as “[A]ny person who
uses any instrumentality of interstate commerce or the mails in any business the
principal purpose of which is the collection of debts, or who regularly collects or
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attempts to collect, directly or indirectly, debts owed or due or asserted to be owed
or due another.” Pursuant to § 1692a(6)(A), a creditor collecting its own debts is not
a “debt collector” and is exempt from the requirements under the FDCPA. See
Newman v. Boehm, Pearlstein & Bright, Ltd., 119 F.3d 477, 482 n. 3 (7th Cir. 1997)
(FDCPA did not apply to the activities of a homeowners or condominium association
in collecting a debt on its own behalf); Munk v. Federal Land Bank of Wichita, 791
F.2d 130, 132 (10th Cir. 1986) (FDCPA did not apply to individuals “not attempting
to collect another’s debt”). In the instant case, plaintiff does not allege, nor is there
any indication, that defendant PHH Mortgage Service Center is a debt collector
within the meaning of the FDCPA. As to Willmington Trust Company, plaintiff does
not allege that this defendant’s conduct in attempting to collect a debt was prohibited
by the Act.3 Thus, plaintiff has failed to state a claim under the FDCPA.
2. TILA Claim
The Truth in Lending Act (“TILA”) requires that a creditor or lessor disclose
to the person who is obligated on a consumer lease or a consumer credit transaction
the information required under the Act. 15 U.S.C. § 1631(a). The purpose of TILA
is “to assure a meaningful disclosure of credit terms so that the consumer will be able

3

To the contrary, Exhibit 2 of ECF No. 1-2 indicates that Willimgton Trust
Company acted in compliance with the FDCPA.
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to compare more readily the various credit terms available to him and avoid the
uninformed use of credit . . .” 15 U.S.C. § 1601(a). TILA mandates that certain
information be “clearly and conspicuously disclosed,” such as the “annual percentage
rate” and “finance charge.” 15 U.S.C. § 1632(a).
In the case at bar, plaintiff does not allege that defendants failed to disclose the
information required under the Act, but rather, that certain documents were found to
be "missing" on October 26, 2012, when plaintiff's legal advisor performed a
"mortgage assessment of her mortgage documents." These allegations do not state
a claim against either of the two defendants for the violation of TILA.
In addition, even if plaintiff had a claim against her mortgagee for a violation
of TILA, that claim accrued, and the one-year statute of limitations began to run, on
the date of the alleged violation. See 15 U.S.C. § 1640(e)(one-year statute of
limitations for filing suit once a violation of TILA has occurred); Shaya v.
Countrywide Home Loans, Inc., 2012 WL 1816233 (6th Cir. 2012). Plaintiff is
incorrect in stating that the statute of limitations on her TILA claim commenced on
October 26, 2012. Given the facts of this case, it would appear that TILA's one-year
limitations period expired many years ago.
For these reasons, plaintiff’s TILA claims will be dismissed pursuant to §
1915(e)(2)(B).
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3. FCRA Claim
Plaintiff does not reference the specific statute under which she is attempting
to bring a claim under the FCRA; however, to the extent that she is proceeding under
15 U.S.C. § 1681s-2(a), the claim is legally frivolous, because consumers do not have
a private cause of action under that statute. See 15 U.S.C. § 1681s-2(d) (the duty to
provide accurate information “shall be enforced exclusively under § 1681s of this title
by the federal agencies and officials and the state officials identified in that section”).
To the extent that plaintiff is proceeding under 15 U.S.C. § 1681s-2(b), the
allegations will be dismissed for failure to state a claim or cause of action. Plaintiff's
FCRA claim is based on the sole allegation that two required mortgage documents
were “missing” from her records: the credit score disclosure and the homeowner’s
credit report. Mere allegations of missing documents, however, do not state a claim
for a FCRA violation.
In addition, “although a private citizen may bring an action under 15 U.S.C. §
1681s–2(b), this cause of action is not without limitations.”

SimmsParris v.

Countrywide Financial Corp., 652 F.3d 255, 358 (3d Cir. 2011). The duties placed
on furnishers of information by this subsection are implicated only “[a]fter receiving
notice pursuant to section 1681i(a)(2) of this title of a dispute with regard to the
completeness or accuracy of any information provided by a person to a consumer
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reporting agency.” 15 U.S.C. § 1681s–2(b)(1). “Notice under § 1681i(a)(2) must be
given by a credit reporting agency, and cannot come directly from the consumer.”
SimmsParris, 652 F.3d at 358 (citations omitted). There is no indication that such
notice was given in the instant case.
4. GLBA and HDMA Claims
Plaintiff’s allegations regarding GLBA and HDMA violations will be
dismissed for failure to state a claim, because there is no private right of action under
either statute. See Wood v. Greenberry Financial Services, Inc., 2012 WL 5381817
(D.Haw. 2012) (citations omitted)(GLBA); 15 U.S.C. § 6805(a); Hewett v. Shapiro
& Ingle LLP, 2011 WL 4550139 (M.D.N.C. 2011)(HMDA); 12 U.S.C. § 2804.
5. Remaining Federal Claims
The Court will dismiss plaintiff’s remaining allegations relative to violations
of RESPA, ECOA, FCRA, and HOEPA. Plaintiff has simply failed to allege
sufficient facts to state a claim or cause of action for the violation of her rights under
the aforementioned federal statutes. Her allegations are either conclusory and
unsupported by sufficient facts, or they are riddled with disjointed legalese, followed
by unrelated and general references to one of the aforementioned federal statutes. For
instance, plaintiff states:

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Plaintiff believes and therefore alleges that Defendant
fraudulently omitted to disclose the following: A cause of
action for 'deceit' or fraud requires the Appellant to prove
each of the following elements: (California Civil Code §
1710).
...
Further, third party revealed that Respondent violated of
[sic] the Truth-In-Lending Act (1968).
Plaintiff believes and therefore states that Defendant
violated the Home Ownership and Equity Protection Act
(HOEPA) of 1994, which requires certain disclosures and
clamps restrictions on lenders of high-cost loans. Codified
in Regulation Z at 12 C.F.R. 226.32, it only applies to nonpurchase money transactions. HOEPA was enacted in
1994 in response to Congressional concerns over ‘reverse
redlining.’ According to the Senate Banking Committee
report accompanying the legislation, ‘reverse redlining’ is
the practice of targeting residents of specific disadvantaged
communities for credit on unfair terms, and in particular by
second mortgage lenders, home improvement contractors,
and finance companies. . . .
Plaintiff believes and therefore alleges that Defendant
violated the Real Estate Settlement Procedure Act
(RESPA). Thus, under the Real Estate Settlement
Procedures Act (RESPA), applies [sic] to almost all
mortgage loans and lenders, not just FHA-insured
mortgages.
And so the complaint continues, with plaintiff either failing to provide
sufficient facts to state a claim under, or summarily stating that she "believes and
therefore alleges that defendant violated," RESPA, ECOA, FCRA, and HOEPA.

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The Federal Rules of Civil Procedure require litigants to formulate their
pleadings in an organized and comprehensible manner. Even pro se litigants are
obligated to abide by the Federal Rules of Civil Procedure. See U.S. v. Wilkes, 20
F.3d 651, 653 (5th Cir. 1994); Boswell v. Honorable Governor of Texas, 138
F.Supp.2d 782, 785 (N.D. Texas 2000); Fed.R.Civ.P. 8(a)(2)(complaint should
contain “short and plain statement” of claims); Fed.R.Civ.P. 8(e)(2)(each claim shall
be “simple, concise, and direct”); Fed.R.Civ.P. 10(b)(parties are to separate their
claims within their pleadings “the contents of which shall be limited as far as
practicable to a single set of circumstances”). Although the Court is to give the
complaint the benefit of a liberal construction, the Court will not create facts or
claims that have not been alleged. In the instant case, plaintiff has failed to set forth,
in a simple, concise, and direct manner as to each of the named defendants, the
specific factual allegations supporting each of her RESPA, ECOA, FCRA, and
HOEPA claims. As such, the Court will dismiss these federal claims pursuant to §
1915(e)(2)(B).
B. Pendent State-Law Claims
Because plaintiff's federal claims will be dismissed, all remaining pendent state
claims will be dismissed, as well. See 28 U.S.C. § 1367(c)(3); United Mine Workers
v. Gibbs, 383 U.S. 715, 726 (1966) (if federal claims are dismissed before trial,
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remaining state claims should also be dismissed); Hassett v. Lemay Bank & Trust Co.,
851 F.2d 1127, 1130 (8th Cir. 1988) (where federal claims have been dismissed,
district courts may decline jurisdiction over pendent state claims as a "matter of
discretion").
Accordingly,
IT IS HEREBY ORDERED that plaintiff’s motion to proceed in forma
pauperis [ECF No. 2] is GRANTED.
IT IS FURTHER ORDERED that the Clerk of Court shall docket this case
as Vera L. Johnson v. PHH Mortgage Service Center and Wilmington Trust
Company, Kristin J. Conwell, Trustee.
IT IS FURTHER ORDERED that, as to plaintiff’s federal claims, the Clerk
shall not issue process or cause process to issue upon the complaint, because the
complaint is legally frivolous and fails to state a claim upon which relief can be
granted. See 28 U.S.C. § 1915(e)(2)(B).

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IT IS FURTHER ORDERED that plaintiff’s pendent state-law claims are
DISMISSED, without prejudice.
A separate Order of Dismissal shall accompany this Memorandum and Order.
Dated this 27th day of November, 2012.

RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE

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