LLOYD v. PLUESE BECKER SALTZMAN LLC
Filing
36
OPINION. Signed by Judge Renee Marie Bumb on 11/18/2019. (rss, n.m.)
[Docket No. 26, 31]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
CAROL LLOYD,
Plaintiff,
Civil No. 18-9420 (RMB/AMD)
v.
OPINION
PLUESE, BECKER, & SALTZMAN,
LLC,
Defendant.
APPEARANCES:
CAROL LLOYD, pro se
60 Coachlight Drive
Sicklerville, New Jersey 08081
PLUESE, BECKER, & SALTZMAN, LLC
By: Stuart H. West, Esq.
20000 Horizon Way, Suite 900
Mount Laurel, New Jersey 08054
Attorneys for Defendant
BUMB, UNITED STATES DISTRICT JUDGE:
Pro se Plaintiff, Carol Lloyd, brings this suit alleging
that the law firm which represents her mortgage lender in the
underlying state foreclosure action, Defendant Pluese, Becker,
Saltzman, LLC (“PBS”), violated the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), by filing a
motion with the court in the foreclosure action.
Before the
Court is PBS’s “Motion to Dismiss Amended Complaint pursuant to
1
Fed. R. Civ. P. 12(b)(6), 12(d) and 56.” [Docket No. 26-4]
The
instant motion is PBS’s second attempt to secure dismissal of
this suit prior to the commencement of discovery.
For the
reasons stated herein, the motion will be granted in part,
denied in part, and denied without prejudice in part. 1
I.
FACTUAL BACKGROUND
The Court set forth the factual allegations of the
operative pleading-- the First Amended Complaint [Docket No. 7]- in its previous opinion of May 9, 2019 [Docket No. 23], see
also, Lloyd v. Pluese, Becker, & Saltzman, LLC, No. CV 18-9420
(RMB/AMD), 2019 WL 2062438 at *1 (D.N.J. May 9, 2019).
The
Court incorporates herein the “Factual Background” section of
that opinion.
To summarize, Lloyd asserts that PBS, a law firm
representing Lloyd’s mortgage lender in a judicial foreclosure
proceeding, violated various sections of the FDCPA when it filed
a motion to reinstate the administratively dismissed
foreclosure.
According to Lloyd, PBS knew that a condition
precedent to foreclosure-- specifically, a face-to-face meeting
pursuant to the applicable federal regulations incorporated into
1
Also before the Court is Lloyd’s “Motion to Strike” PBS’s
Motion [Docket No. 31], which the Court construes as both a
Motion to Strike PBS’s instant motion, and opposition to PBS’s
Motion. Lloyd’s Motion to Strike is addressed further at
footnote 2.
2
the mortgage documents-- had not occurred, and therefore
foreclosure was legally precluded.
II.
LEGAL STANDARDS
A.
To withstand a motion to dismiss under Federal Rule of
Civil Procedure 12(b)(6), “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) (quoting 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. at 662.
“[A]n unadorned, the
defendant-unlawfully-harmed-me accusation” does not suffice to
survive a motion to dismiss.
Id. at 678.
“[A] plaintiff’s
obligation to provide the ‘grounds’ of his ‘entitle[ment] to
relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will
not do.” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain,
478 U.S. 265, 286 (1986)).
In reviewing a plaintiff’s allegations, the district court
“must accept as true all well-pled factual allegations as well
as all reasonable inferences that can be drawn from them, and
construe those allegations in the light most favorable to the
3
plaintiff.”
2012).
Bistrian v. Levi, 696 F.3d 352, 358 n.1 (3d Cir.
Only the allegations in the complaint, and “matters of
public record, orders, exhibits attached to the complaint and
items appearing in the record of the case” are taken into
consideration.
Oshiver v. Levin, Fishbein, Sedran & Berman, 38
F.3d 1380, 1384 n.2 (3d Cir. 1994) (citing Chester Cnty.
Intermediate Unit v. Penn. Blue Shield, 896 F.2d 808, 812 (3d
Cir. 1990)).
B.
Summary judgment shall be granted if “the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Civ. P. 56(a).
Fed. R.
A fact is “material” only if it might impact the
“outcome of the suit under the governing law.”
Gonzalez v.
Sec’y of Dept of Homeland Sec., 678 F.3d 254, 261 (3d Cir.
2012).
A dispute is “genuine” if the evidence would allow a
reasonable jury to find for the nonmoving party.
Id.
In determining the existence of a genuine dispute of
material fact, a court’s role is not to weigh the evidence; all
reasonable inferences and doubts should be resolved in favor of
the nonmoving party.
Melrose, Inc. v. City of Pittsburgh, 613
F.3d 380, 387 (3d Cir. 2010).
4
III.
ANALYSIS
PBS asserts: (A) it is not a “debt collector” as defined by
the FDCPA; (B) the Amended Complaint fails to state a claim for
violation of any section of the FDCPA; (C) the Court should
abstain from adjudicating this suit; and (D) “Ms. Lloyd’s
conduct precludes her claims.”
The Court addresses each
argument in turn.
A.
Relying on Obduskey v. McCarthy & Holthus LLP, 139 S.Ct.
1029 (March 20, 2019), PBS argues that it is not a “debt
collector” as defined by the FDCPA.
Obduskey held that a law
firm that merely enforced a security interest by initiating a
nonjudicial foreclosure on behalf of its client was not a “debt
collector” under the FDCPA’s primary definition of a debt
collector found in § 1692a(6).
PBS argues that Obduskey
supports a conclusion that law firms enforcing a security
interest on behalf of their clients in judicial foreclosures
also are not “debt collectors” under the FDCPA’s primary
definition.
According to PBS, the rationale of Obduskey should
apply to judicial foreclosures which are “more protective” to
homeowners than nonjudicial foreclosures.
2
(Moving Brief, p. 11) 2
Lloyd argues that PBS’s argument in this regard is made
in bad faith and is sanctionable under Federal Rule of Civil
Procedure 11. Lloyd’s argument has no merit. While the Court
does not agree with PBS’s argument concerning Obduskey, the
5
PBS cites no cases extending Obduskey’s reasoning to
judicial foreclosures.
Indeed, the few courts to have
considered Obduskey in the eight months since it was decided
have read the decision narrowly, and have specifically
distinguished judicial foreclosures from nonjudicial
foreclosures.
See Berg v. McCalla Raymer Leibert Pierce, LLC,
2019 WL 5592720 at *2 n.2 (N.D. Ill. Oct. 30, 2019) (observing
in dicta that Obduskey’s “holding expressly did not affect cases
involving judicial foreclosure proceedings as here.”); Gold v.
Shapiro, Dicaro & Barak, LLC, 2019 WL 4752093 at *6 (E.D.N.Y.
Sept. 30, 2019) (distinguishing judicial and nonjudicial
foreclosures and declining to extend Obduskey’s holding to the
judicial foreclosure context); Flowers v. Baltax 2017, LLC, 2019
WL 3501584 at *4 (D. Md. August 1, 2019) (in an FDCPA case
argument is nonetheless a quintessential “nonfrivolous argument
for extending . . . existing law,” Fed. R. Civ. P. 11(b)(2).
Relying on Fed. R. Civ. P. 12(g)(2), Lloyd also argues that
this Court should decline to consider PBS’s Obduskey argument,
as well as all other arguments in the instant motion, because
PBS failed to raise them in its first Motion to Dismiss. The
first Motion to Dismiss was fully briefed prior to the Obduskey
decision. Thus, PBS’s Obduskey argument was not “available” to
PBS, Fed. R. Civ. P. 12(g)(2), and therefore Rule 12(g)(2)’s
limit on further motions does not apply. Additionally, the
Court exercises its discretion to construe PBS’s instant Rule
12(b)(6) motion as a Motion for Judgment on the Pleadings
pursuant to Fed. R. Civ. P. 12(c). See Fed. R. Civ. P. 12(g)(2)
(excepting from the limit on further motions “a motion under
Rule 12(c),” Fed. R. Civ. P. 12(h)(2)(B)). Accordingly, to the
extent Lloyd’s Motion to Strike asserts that this Court should
dismiss PBS’s instant motion altogether without considering the
arguments made therein, the Motion to Strike will be denied.
6
premised on actions taken by a law firm in a judicial
foreclosure, holding that “Obduskey does not mandate dismissal
of Plaintiff’s FDCPA claims.”). 3
The Court adopts the reasoning set forth in Gold and
Flowers.
Judicial foreclosures are meaningfully distinguishable
from nonjudicial foreclosures in a manner that is inconsistent
with extending Obduskey’s reasoning to the judicial foreclosure
context.
Whether or not PBS is correct that judicial
foreclosures are “more protective” of debtors, the critical
distinction-- as Gold and Flowers held, and Obduskey itself
suggested 4-- is the availability of a deficiency judgment against
3
See also, Gagnon v. Hal P. Gazaway and Assocs., LLC, 2019
WL 4539926 at *2 (D. Alaska Sept. 19, 2019) (explaining that
Obduskey’s holding did not support dismissal of FDCPA claim
premised on a law firm’s actions taken in connection with a
nonjudicial foreclosure because the firm’s alleged actions were
not required by state law, in contrast to Obduskey); Cooke v.
Carrington Mortgage Servs., 2019 WL 3241128 at *2 (D. Md. July
17, 2019) (explaining that Obduskey’s holding did not support
dismissal of FDCPA claim premised on a law firm’s actions taken
in connection with a nonjudicial foreclosure because the firm’s
alleged actions were not required by state law, in contrast to
Obduskey); Sevela v. Kozeny & McCubbin, L.C., 2019 WL 2066924 at
*5 (D. Neb. May 2, 2019) (“Unlike in Obduskey, neither party
here has cited, and the Court has not found, any provision of
Nebraska [nonjudicial foreclosure] law that required K&M to send
the Letter [that is alleged to have violated the FDCPA].”).
4
Obduskey, 139 S. Ct. at 1039 (“here we consider
nonjudicial foreclosure. And whether those who judicially
enforce mortgages fall within the scope of the [FDCPA’s] primary
definition is a question we can leave for another day. . . .
[T]he availability of a deficiency judgment is a potentially
relevant distinction between judicial and nonjudicial
foreclosures.”) (citing Obduskey v. Wells Fargo, 879 F.3d 1216,
7
the debtor in judicial foreclosures 5; a remedy which is typically
not available in nonjudicial foreclosures. 6
Accordingly,
Obduskey does not defeat the claims asserted in this case.
B.
As set forth in the Court’s previous Opinion, Lloyd asserts
the following violations of the FDCPA:
• § 1692d (prohibiting harassing,
abusive conduct by debt collectors);
oppressive,
or
• § 1692e(2), (5) and (10) (prohibiting debt
collectors from using any false, deceptive, or
misleading representation or means in connection with
the collection of any debt, including falsely
representing the legal status of a debt, threatening
to take any action that cannot legally be taken or
that is not intended to be taken, and using any false
1221 (10th Cir. 2018) (“Because enforcing a security interest is
not an attempt to collect money from the debtor, and the
consumer has no obligation . . . to pay money, non-judicial
foreclosure is not covered under the FDCPA.”)); Gold, 2019 WL
4752093 at *6 (“Given that Cohen premised its decision on the
availability of deficiency judgments under New York foreclosure
law, the Court does not find that Obduskey abrogates or
overrules Cohen.”); Flowers, 2019 WL 3501584 at *4 (noting the
Supreme Court’s statement in Obduskey that “the availability of
a deficiency judgment is a potentially relevant distinction
between judicial and nonjudicial foreclosures.”).
5
New Jersey judicial foreclosure law provides for “an
action on the bond or note for any deficiency, if, at the sale
in the foreclosure proceeding, the mortgaged premises do not
bring an amount sufficient to satisfy the debt, interest and
costs.” N.J.S.A. § 2A:50-2.
6
Indeed, PBS’s proposed distinction that judicial
foreclosure is “more protective” of debtors is not inconsistent
with the dispositive distinction-- i.e., the availability of a
deficiency judgment. Judicial foreclosures may well be more
protective of debtors because of the availability of a
deficiency judgment.
8
representation or deceptive
attempt to collect any debt);
means
to
collect
or
• § 1692f and (1) (prohibiting debt collectors from
using unfair or unconscionable means to collect or
attempt to collect any debt, including collecting any
amount not authorized by the agreement creating the
debt); and
• § 1692f(6) (prohibiting debt collectors from taking
or threatening to take any nonjudicial action to
effect dispossession or disablement of property).
Lloyd, 2019 WL 2062438 at *2.
With regard to § 1692f(6), PBS argues that filing the
motion to reinstate the foreclosure was a judicial action, or an
action taken in connection with a judicial foreclosure action,
and reasons that § 1692f(6) cannot apply to this case because
the section, by its terms, applies only to nonjudicial actions. 7
The Court agrees; § 1692f(6), by its terms, is limited to
actions taken in connection with a nonjudicial foreclosure case.
Searle v. Credit Adjustments, Inc., 2012 WL 1079328 (M.D. Pa.
2012); see generally, Obduskey, 139 S.Ct. at 1034-36 (discussing
how the differences between judicial and nonjudicial foreclosure
inform the interpretation of the FDCPA).
Accordingly, PBS’s
Motion to Dismiss will be granted as to the § 1692f(6) claim.
7
The section prohibits the “[t]aking or threatening to
take any nonjudicial action to effect dispossession or
disablement of property if (A) there is no present right to
possession of the property claimed as collateral through an
enforceable security interest; (B) there is no present intention
to take possession of the property; or (C) the property is
exempt by law from such dispossession or disablement.” §
1692f(6).
9
As to Lloyd’s other claims, PBS reasserts that “the
Chancery Judge’s rulings implicitly, but necessarily, constitute
findings that foreclosure was not precluded” (Moving Brief, p.
21), and therefore PBS cannot be found in this suit to have
misrepresented its client’s right to foreclose.
The Court
addressed this argument in its previous opinion when it denied
without prejudice the portion of PBS’s Motion founded upon the
doctrine of issue preclusion.
See Lloyd, 2019 WL 2062438 at *4
(D.N.J. May 9, 2019) (“The evidence PBS submits in support of
this argument is insufficient to support summary judgment on
this issue at this time.
The record contains only orders issued
by the Chancery Court (see West Certification Exs G, J and O),
only one of which-- Ex. G-- specifically references 24 C.F.R. §
203.604.8. The record is devoid of any opinion or reasoning of
the Chancery Court upon which a factfinder might find that the
issue of HMFA’s non-compliance with 24 C.F.R. § 203.604 was
fully litigated and decided on the merits in the foreclosure
case.”).
PBS has submitted no additional evidence in support of
its present motion for summary judgment.
Accordingly, the
motion, once again, will be denied without prejudice. 8
8
At the Rule 16 conference, the parties shall explore with
Magistrate Judge Donio the possibility of limiting a first round
of discovery to issues relevant to PBS’s issue preclusion
defense. Perhaps through the use of requests for admissions,
written interrogatories, and / or sworn statements from the PBS
attorney who actually litigated the state court foreclosure
10
C.
PBS argues that this Court should abstain under the
doctrines set forth in Colorado River Water Conservation Dist.
v. U.S., 424 U.S. 800 (1976) and Younger v. Harris, 401 U.S. 37
(1971).
Neither applies to this case.
“Colorado River applies only when the parties and claims in
the state suit are identical, or at least effectively the same
as those in the federal suit.”
Malhan v. Sec’y United States
Dep’t of State, 938 F.3d 453, 465 n.7 (3d Cir. 2019) (internal
citations and quotations omitted).
claims, are identical here.
Neither the parties, nor the
PBS was not a party to the
foreclosure action (it is in this case), and Lloyd did not
assert an FDCPA claim in the foreclosure action (she does in
this case).
“Younger applies to only three exceptional categories of
proceedings: (1) ongoing state criminal prosecutions; (2)
certain civil enforcement proceedings; and (3) pending civil
proceedings involving certain orders uniquely in furtherance of
the state courts’ ability to perform their judicial functions.”
Malhan, 938 F.3d at 462 (applying Sprint Communications, Inc. v.
Jacobs, 134 S.Ct. 584 (2013)).
PBS does not identify which
category of proceeding it asserts the state foreclosure action
case, PBS will be in a position to supplement the evidence it
has provided to the Court thus far.
11
falls under, however, numbers (1) and (2) may be eliminated.
The foreclosure proceeding is neither a criminal prosecution,
nor is it “a civil enforcement proceeding akin to a criminal
prosecution in important respects.”
Id.
As to the third category, the state foreclosure proceeding
is not pending; PBS admits that the case was administratively
dismissed.
Moreover, even if the state foreclosure case were
pending, the Court would not abstain because state foreclosure
actions typically do not result in orders that are uniquely in
furtherance of the state courts’ ability to perform judicial
functions.
See Carrier v. Bank of Am., N.A., 2014 WL 356219 at
*9-10 (D.N.J. Jan. 31, 2014) (Bumb, D.J.), aff’d sub nom.
Carrier v. Bank of Am. NA, 592 F. App’x 135 (3d Cir. 2015)
(declining to apply Younger despite existence of pending
foreclosure action); see also, Hernandez v. Fed. Nat. Mortg.
Ass’n, 2015 WL 3386126 at *2 (D.N.J. May 26, 2015) (“Since
Sprint, courts have declined to apply the Younger doctrine in
the context of state foreclosure proceedings.”).
In short, nothing in the record presently before the Court
supports this Court’s abstention from “its virtually unflagging
obligation to exercise [federal question] jurisdiction” over
this case.
Malhan, 938 F.3d at 465.
D.
12
Lastly, PBS argues that “one who seeks equity must do
equity.”
That is, PBS asserts that “Plaintiff caused the
circumstances from which her claims arise,” (Moving Brief, p.
27), and therefore PBS concludes that Lloyd’s FDCPA claims must
fail.
equity.
The Court disagrees.
Lloyd’s claims do not sound in
Lloyd asserts a federal statutory cause of action
created by an act of Congress-- namely, the FDCPA-- which
creates a right to statutory damages for violations of the Act. 9
Moreover, accepting PBS’s argument would severely and
inappropriately limit the class of plaintiffs entitled to
protection under the FDCPA.
Following PBS’s argument to its
logical conclusion, any plaintiff who defaults on a debt would
be precluded from recovering under the FDCPA.
Such a result
would be inconsistent with the intent of Congress as embodied in
the statute.
IV.
CONCLUSION
For the foregoing reasons, PBS’ Motion will be granted in
part, denied in part, and denied without prejudice in part as
set forth above.
An appropriate Order shall issue on this date.
Dated: November 18, 2019
9
s/ Renée Marie Bumb
__
______
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE
The First Amended Complaint does not demand injunctive
relief.
13
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