HUMPHREY v. PENNYMAC HOLDINGS, LLC.

Filing 49

MEMORANDUM OPINION. Signed by Judge Kevin McNulty on 7/26/17. (cm, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

Civ. No. 15-3622 (KM) (MAH)

VIRGIL HUMPHREY,
Plaintiff,

MEMORANDUM OPINION

V.

PENNYMAC HOLDINGS, LLC,
Defendant.

KEVIN MCNULTY. U.S.D.J.:
I.

INTRODUCTION
The plaintiff, Virgil Humphrey, brings this action under the Fair Debt

Collection Practices Act (FDCPA), 15 U.S.C.

§ 1692.’ Now before the court is

the motion (ECF no. 42) of the defendant, PennyMac Holdings, LLC,
(“PennyMac”) for summary judgment, pursuant to Fed. R. Civ. P. 56.2 For the

I previously dismissed two other counts alleging violations of the Fair Credit
Reporting Act (“FCRA”), 15 U.S.C. § 1681, and the New Jersey Consumer Fraud Act
(“NJCFA”), N.J. Stat. Ann. § 56:8-1 et seq. (Memorandum Opinion and accompanying
Order, ECF nos. 12, 13)
2

Record items cited repeatedly will be abbreviated as follows:
“Compl.”
“Def. Br.”

Memorandum of Law in Support of Defendant’s Motion for
Summary Judgment (ECF no. 43)

=

“Def. Facts”
“P1. Aff.”

Complaint (ECF no. 1)

=

=

=

Defendant’s Statement of Material Facts Not in Dispute
(ECF no. 44)
Affidavit of Virgil Humphrey in Support of Plaintiffs Cross
Motion for Summary Judgment, dated January_, 2017,
and faxed on January 2, 2017. This affidavit was not filed
on the docket, but a copy was supplied to defense counsel
and the Court, and it is cited in the papers. I have filed a
copy to complete the record.

reasons expressed below, PennyMac’s motion for summary judgment is
GRANTED.
II.

BACKGROUND
A. Relevant Facts3
On June 15, 2006, Humphrey obtained a mortgage loan (the “Loan”) in

the amount of $182,000 from Washington Mutual Bank, FA (“Washington
Mutual”) to purchase real property located at 97 Wilkinson Avenue, Jersey
City, New Jersey 07305 (the “Property”). (Def. Facts

¶

1—2) Humphrey

executed a Note and a Mortgage securing the loan. (Id. Ex. A; Ex. B)
In his loan application, signed June 15, 2006, Humphrey identified a
Powder Spring, Georgia address as his home address. (Id.

“Def. Reply”

=

¶17

9—10; Ex. C)

Defendant’s Response to Plaintiffs Cross Motion for
Summary’ Judgment and Reply in Support of Defendant’s
Motion for Summary Judgment (ECF no. 46)

PennyMac submitted a Statement of Material Facts, to which Humphrey has
not responded. PennyMac asks that the Court consider the facts in its statement to be
admitted for the purpose of summary’ judgment. (Def. Reply 3)
If a party fails to address the other party’s properly supported assertion of fact,
the court may consider “grant[ing] summary judgment if the motion and supporting
materials—including the facts considered undisputed—show that the movant is
entitled to it
Fed. R. Civ. P. 56(e). Local Civil Rule 56.1(a) deems a movant’s
statement of material facts undisputed where a party does not respond or file a
counterstatement. L. Civ. R. 56(a). A failure to dispute a party’s statement of material
facts, however, “is not alone a sufficient basis for the entry of a summary’ judgment.”
See Anchorage Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 175 (3d Cir.
1990) (holding that even where a local rule deeming unopposed motions to be
conceded, the court was still required to analyze the movant’s summary’ judgment
motion under the standard prescribed by Fed. R. Civ. P. 56(e)); see also Muskett v.
Cenegy Check Sews., Inc., Civ. No. 08-3975, 2010 WL 2710555 (D.N.J. July 6, 2010)
(“In order to grant Defendant’s unopposed motion for summar judgment, where, as
here, ‘the moving party does not have the burden of proof on the relevant issues,
the [Court] must determine that the deficiencies in [Plaintiffs] evidence designated in
or in connection with the motion entitle the [Defendants] to judgment as a matter of
law.”’ (quoting Anchorage Assoc., 922 F.2d at 175)).
.

.

.

.“

I have therefore reviewed Humphrey’s complaint, his cross motion and Affidavit,
and the entire case file, with an eye to assertions of fact that may be supported by the
evidence of record.
2

Humphrey also represented that this New Jersey Property was to be used for
“Investment” purposes. (Id.

¶

11; Ex. C) On that date, Humphrey also executed

an “Occupancy, Misrepresentation and Nondisclosure Affidavit and
Agreement,” dated June 15, 2006 (“Occupancy Affidavit”), in which he
confirmed under oath that he “shall rent the Property and shall not occupy the
Property’.” (Id.

9

12; Ex. D)

On September 25, 2008, pursuant to a Purchase and Assumption
Agreement, the Federal Deposit Insurance Company (“FDIC”) was appointed
receiver for Washington Mutual. The FDIC transferred the Washington Mutual
assets to JPMorgan Chase Bank, N.A. (“Chase”). (Id.

¶

4; Ex. E)

The FDIC assigned the Mortgage to Chase and the assignment was
recorded in Hudson County’s real property records. (Id.

¶

5; Ex. F) Thereafter,

in April 2014, Chase assigned the Mortgage to PennyMac. This second
assignment was also recorded in Hudson County’s real property records. (Id.

¶

6; Ex. 0)
PennyMac is the holder of the Note and Mortgage securing the Property.
(Id.

¶

7) PennyMac’s primary business is the ownership of mortgage loans. (Id.)
B. Procedural Background
On July 16, 2014, PennyMac filed a foreclosure complaint against

Humphrey in the Superior Court of New Jersey, Chancery Division, Hudson
County. (Id.

¶

19) On March 20, 2015, the Superior Court entered its Order

Granting Summan’ Judgment, which granted the foreclosure relief requested
by PennyMac. (Id.

¶

31)

Subsequently, on May 29, 2015, Humphrey initiated this federal-court
action. (Id.

¶

37) On December 5, 2016, PennyMac filed the motion for

summary judgement, pursuant to Fed. R. Civ. P. 56, that is now before this
Court.
The briefing schedule set by Magistrate Judge Hammer required that
papers in opposition to PennyMac’s motion be filed by December 21, 2016.(ECF
no. 41

¶

5 & p. 3) To date, Humphrey has not filed any Opposition to
3

PennyMac’s summary judgment motion with the Court. On January 6, 2017,
however, PennyMac filed a Reply on its summary judgment motion and
response to Humphrey’s cross-motion. (Def. Reply, ECF no. 46) That Reply
stated that Humphrey had served a Cross Motion for Summary Judgment and
Affidavit via fax to PennyMac’s counsel on Januan’ 2, 2017. (Def. Reply at 1
n.1)
As of June 5, 2017, however, no papers from Humphrey had been filed
on the docket or received by the Court. The Court entered an order requiring
that, if Humphrey intended to oppose PennyMac’s motion for summary
judgment, he provide reasons for missing the December 21, 2016 deadline and
attach a proposed brief in opposition to the motion. (ECF no. 47) Humphrey
filed nothing in response.
Out of abundant consideration for Humphrey’s pro se status, the Court
requested from PennyMac’s counsel copies of Humphrey’s unfiled Cross Motion
and Affidavit. I have filed those documents on the Court’s docket. I have
considered them as if they had been timely filed in opposition to PennyMac’s
summary judgment motion.
III.

SUMMARY JUDGMENT STANDARD

Federal Rule of Civil Procedure 56(a) provides that summary judgment
should 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.”
Fed. R. Civ. p. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248, 106 S. Ct. 2505 (1986); Kreschollek v. S. Stevedoring Co., 223 F.3d 202,
204 (3d Cir. 2000). In deciding a motion for summary judgment, a court must
construe all facts and inferences in the light most favorable to the nonmoving
party. See Boyle v. County of Allegheny Pennsylvania, 139 F.3d 386, 393 (3d
Cir. 1998). The moving party bears the burden of establishing that no genuine
issue of material fact remains. See Celotex Corp. v. Catrett, 477 U.S. 317, 322—
23, 106 5. Ct. 2548 (1986). “[Wjith respect to an issue on which the nonmoving
party bears the burden of proof.

.

.

the burden on the moving party may be
4

discharged by ‘showing’—that is, pointing out to the district court—that there
is an absence of evidence to support the nonmoving party’s case.” Celotex, 477
U.S. at 325.
Once the moving party has met that threshold burden, the non-moving
party “must do more than simply show that there is some metaphysical doubt
as to material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475
U.s. 574, 586, 106 S. Ct. 1348 (1986). The opposing party must present actual
evidence that creates a genuine issue as to a material fact for trial. Anderson,
477 U.S. at 248; see also Fed. 1?. Civ. P. 56(c) (setting forth types of evidence on
which nonmoving party must rely to support its assertion that genuine issues
of material fact exist). “[U]nsupported allegations

.

.

.

and pleadings are

insufficient to repel summary judgment.” Schoch v. First Fid. Bancorporation,
912 F.2d 654, 657 (3d Cir. 1990); see also Gleason a Nonuest Mortg., Inc., 243
F.3d 130, 138 (3d Cir. 2001) (“A nonmoving party has created a genuine issue
of material fact if it has provided sufficient evidence to allow a jun’ to find in its
favor at trial.”). If the nonmoving party has failed “to make a showing sufficient
to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial,

.

.

.

there can be ‘no

genuine issue of material fact,’ since a complete failure of proof concerning an
essential element of the nonmoving party’s case necessarily renders all other
facts immaterial.” Katz a Aetna Cas. & Sur. Co., 972 F.2d 53, 55 (3d Cir. 1992)
(quoting Celotex, 477 U.S. at 322—23).
A pro se litigant, such as Humphrey here, is ordinarily entitled to
considerable leeway. See Nthlack v. Munay, No. CV12691OMASTJB, 2016 WL
4086775, at*1 n.1 (D.N.J. July 29, 2016) (citing Pratt a Port Auth. ofN.Y. &
N.J., 563 F. App’x 132, 134 (3d Cir. 2014) (“jBJecause [the plaintiff] is
proceeding pro se, we will construe his brief liberally.”); Marcinek u. Comm’r,
467 F. App’x 153, 154 (3d Cir. 2012) (holding that courts are “under an
obligation to liberally construe the submissions of a pro se litigant”)). See
generally Haines a Kemer, 404 U.S. 519 (1972). I have construed Humphrey’s
5

complaint and his (unified) opposition and cross-motion for summary judgment
in the liberal spirit of Haines.
IV.

DISCUSSION AND ANALYSIS
In the sole remaining count of his complaint, Humphrey alleges a

violation of the FDCPA, 15 U.S.C.

§

1692, and in particular, Section 1692g.

Underpinning Humphrey’s claim are the allegations that Humphrey’s mortgage
on the Property is a household “debt” and that PennyMac is a “debt collector”
rather than a “creditor,” as those terms are defined in

§

1692a.

PennyMac, however, contends that Humphrey’s debt is not a household
“debt” as that term is defined in the FDCPA, and that PennyMac is not a “debt
collector” within the meaning of that Act. I agree.
First, for the purposes of the FDCPA, “debt” means:
[Ajny obligation or alleged obligation of a consumer to pay money
arising out of a transaction in which the money, property,
insurance, or services which are the subject of the transaction are
primarily for personal, family, or household purposes, whether or
not such obligation has been reduced to judgment.
15 U.S.C.

§

1692a(5) (emphasis added).

Here, Humphrey’s obligation under the Note and Mortgage arises out of a
transaction in which the Property that is the subject of the transaction was to
be used for “investment” purposes, not “primarily for personal, family, or
household purposes.”4 Humphrey indicated as much in his loan application,

As District Judge Cecchi has noted, “Many courts have found that the FDCPA
does not apply to debts associated with investment properties because the debt was
not incurred for ‘personal, family, or household purposes.”’ Akinfadedn-Abua v.
Dimaiolo, No. 13-CV-3451 CCC, 2014 WL 345690, at *3 (D.N.J. Jan. 30, 2014) (citing
Staub v. Han-is, 626 F.2d 275, 273 (3d Cir. 1980); Klahn v. Clackamas Cnty. Bank, No.
3: 13—CV—621, 2013 WL 3834709. at *4 (D. Or. July 24. 2013) (finding that “a debt
associated with rental properties or for investment purposes is not considered a
consumer debt under the FDCPA”); Affinity Fed. Credit Union a Allstar Contracting,
LLC, No. 11—2423, 2011 WL 6020588, at *2 (D.N.J. Dec. 1,2011) (finding “the FDCPA
is inapplicable to the collection of commercial debts”); Petsche v. EMC Modg. Corp.,
830 F. Supp. 2d 663, 673 (D. Minn. 2011) (finding debt at issue “falls outside of the
FDCPA” because it “relates to a mortgage taken out on an investment property”);
*4.5 (D.
Herschelman u. New Century Mortg. Corp., No. 0—0046 1, 2010 WL 4448224, at
6

4

and he confirmed under oath in the Occupancy Affidavit that he “shall rent the
Property and shall not occupy the Property” (Def. Facts Ex. D). Accordingly, the
Note and Mortgage do not obligate Humphrey to pay a “debt” within the
meaning of the FDCPA.
Second, the FDCPA defines a “debt collector” as:
in any business the principal purpose of which is
[A]ny person.
the collection of any debts, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be
owed or due another.
.

15 U.S.C.

§

.

1692(6).

Here, PennyMac’s “primary business is the owners hip of mortgage loans,”
not the collection of debts. (See Def. Facts

¶

7) (emphasis added) Indeed,

PennyMac holds the Note and Mortgage securing the Property by assignment. It
follows that PennyMac’s attempts to collect the Loan were not attempts to
collect debt “owed or due [to] another.” “The [FDCPA] does not apply to persons
or businesses collecting debts on their own behalf.” Staub v. Harris, 626 F.2d
275, 277 (3d Cir. 1980). Accordingly, PennyMac is not a third-party “debt
collector” under the FDCPA.
Finally, I consider Humphrey’s unified Affidavit in opposition to
PennyMac’s motion for summary judgment. The Affidavit states that it is
submitted “in support of Plaintiffs cross motion for summary judgment.” No
such motion was filed, however. Nevertheless, PennyMac responded to it on
that basis, and I will also consider it for that purpose.5

Raw. Oct. 29, 2010) (finding that FDCPA does not apply to the property Plaintiff owns
and rents out to tenants); Martin v. Berke & Spielfogel, No. 95—0005, 1995 WL 214453,
at *4 (ED. Pa. 1995) (finding that FDCPA does not apply to commerciai debt)).
When the parties file cross-motions for summary judgment, the governing
standard “does not change.” Cleuenger v. First Option Health Plan of NJ, 208 F. Supp.
2d 463, 468-69 (D.N.J. 2002) (citing Weissman ii. US.P.S., 19 F. Supp. 2d 254

(D.N.J.1998)). The court must consider the motions independently, in accordance with
the principles outlined above. GoIdwell of N.J, Inc. v. KPSS, Inc., 622 F. Supp. 2d 168,
184 (D.N.J. 2009); Williams u. Philadelphia Housing Auth., 834 F. Supp. 794, 797 (E.D.
Pa. 1993), affd. 27 F.3d 560 (3d Cir.1994). That one of the cross-motions is denied
does not imply that the other must be granted. For each motion, “the court construes
7

Humphrey asserts in his unified Affidavit (1) that PennyMac “is a debt
collector pursuant to 15 U.S.C.

§

1692a(5).”; (2) that Humphrey incurred the

debt “for personal, family, or household services.”; and (3) that Humphrey “was
subject to a debt collection [pursuant to 15 U.S.C.

§

1692a(6)] by the defendant

PENNYMAC.” (P1. Aff. ¶j) 4—5, 7—8) These, however, are unvarnished legal
conclusions; these statements parrot the statutory elements but offer no
supporting facts. All of the evidence is that this debt financed an investment,
not Humphrey’s home, and that PennyMac is a creditor, not a third-party debt
collector. Merely stating otherwise does not create a genuine dispute of
material fact. See Kirleis u. Dickie, Mccamey & Chilcote, P.c., 560 F.3d 156, 161
(3d Cir. 2009) (“[Cjonclusory, self-serving affidavits are insufficient to withstand
a motion for summary judgment.”). Whether considered in opposition to
PennyMac’s motion or in support of Humphrey’s cross-motion, the Affidavit
does not create and genuine issue and does not support granting any relief in
Humphrey’s favor.

V.

CONCLUSION

For the reasons set forth above, PennyMac’s motion for summary
judgment is GRANTED. For the avoidance of doubt, Humphrey’s unified crossmotion for summary judgment is DENIED. An appropriate order follows.

Dated: July 26, 2016

KEVIN MCNULTY
United States District Judge

facts and draws inferences in favor of the party against whom the motion under
consideration is made” but does not “weigh the evidence or make credibility
determinations” because “these tasks are left for the fact-finder.” Pithier u. UNITE, 542
F.3d 380, 386 (3d Cir. 2008) (internal quotation and citations omitted).
8