PSAROS v. GREEN TREE SERVICING, LLC. et al
Filing
27
OPINION. Signed by Judge Jose L. Linares on 12/21/2015. (anr)
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
STEVEN PSAROS,
Plaintiff,
Civil Action No.: 15-4277 (JLL) (JAD)
v.
OPINION
GREEN TREE SERVICING, LLC, STERN
LA VINTHAL & FRANKENBERG LLC, and
JOHN DOES I-X,
Defendants.
LINARES, District Judge.
This matter comes before the Court by way of Defendant Stern Lavinthal & Frankenberg
LLC ("Stern Lavinthal")'s Motion for Judgment on the Pleadings. (ECF No. 15.) The Court has
considered the parties' submissions and decides this matter without oral argument pursuant to Rule
78 of the Federal Rules of Civil Procedure. For the reasons set forth below, the Court denies Stern
Lavinthal's motion.
FACTUALBACKGROUND 1
Plaintiff Steven Psaros purchased the property at 81 Arlington Ave, Hawthorne, NJ in 1999
and has resided there since that time. (ECF No. 1 ("Compl.") iI 6.) In January 2008 Plaintiff
entered into a refinance loan whereby Plaintiff executed a promissory note payable to Mortgage
Line Financial Corp, and also executed a mortgage to secure the loan. (Id.
1
ilil 7, 8.) Plaintiff
This background is derived from Plaintiff's Complaint, and other documents that are integral to and/or explicitly
relied upon in the Complaint, which the Court must accept as true at this stage of the proceedings. See Alston v.
Countrywide Fin. Corp., 585 F.3d 753, 758 (3d Cir. 2009).
alleges that he specifically negotiated the 2008 loan so that property insurance and real estate taxes
would
(Id.
if
paid directly by Plaintiff, rather than through an escrow account managed by the lender.
see also id. Ex. 1 ("Escrow Waiver").)
On September 22, 2010 BAC Home Loans Servicing, L.P. by way of its counsel Stem
Lavinthal filed a debt collection foreclosure action under New Jersey docket F-46572-10. (Id.
if
11.) Stem Lavinthal was not retained to pursue debt collection activities until after the loan was
in default. (Id.
if 12.)
June 2013 Plaintiff received a letter from Green Tree advising that effective June 1,
201
17,
servicing was transferred to Green Tree. (Id.
if 13; id. Ex. 2.) By way ofletters dated June
3 and July 18, 2013, Green Tree requested that Plaintiff send proof of property insurance
to a designated Fax number. (Id.
ifif 14, 16; id. Exs. 3, 5.) On July 30, 2013 Plaintiffs insurance
agent sent proof of property insurance to the designated fax number provided by Green Tree. (Id.
if l
Ex. 6.) By way ofletter dated August 4, 2013, Green Tree advised Plaintiff that force-
placed insurance was obtained by Green Tree, and the policy (effective June 1, 2013) had an annual
premium of $3,661.00. (Id.
if 19; id. Ex. 8.) After receiving the August 4, 2013 letter, Plaintiff
again sent proof of insurance to Green Tree. (Id.
if 20; id. Ex. 9.)
March 2014, a motion was granted in the foreclosure debt collection lawsuit substituting
Green Tree as foreclosing plaintiff. (Id.
if 22.)
On April 24, 2015, Stem Lavinthal, on behalf of Green Tree, filed a motion for entry of
judgment in the foreclosure action. (See id. Ex. 11 at 1-2 ("State Court Notice of Motion").) As
part
the State Court Notice of Motion, Stem Lavinthal stated that it "shall file the attached
Certification of Proof of Amount Due required by law which will establish that there is due upon
2
Plaintiffs obligation and mortgage the sum of $377,287.24 as of April 9, 2015, together with
interest thereon." (Id. at 2.) In an attached document captioned "Proof of Amount Due Affidavit
and Schedule" and dated April 23, 2015, Green Tree employee Danielle Froelich executed a
certification of amount due, which included the sum of $10,974.37 for "Home Owners Insurance
Premiums" due as of April 9, 2015 within the $377,287.24 total amount due. (Compl ~ 23; id. Ex.
11 at 4-7 ("State Court Proof of Amount Due").) Additionally, Stem Lavinthal attorney Donna
M. Miller submitted a "Certification of Diligent Inquiry'' which states in relevant part as follows:
2.
On April 7, 2015 and again on April 24, 2015, I
communicated by client interface and overnight delivery with the
following named employee(s) of plaintiff/plaintiffs servicer, who
informed me that he/she has personally reviewed the documents
submitted to the Court, affidavit of amount due and the original or a
true copy of the note, mortgage, and recorded assignments, if any,
and that he/she confirmed the accuracy of all documents:
Name of employee(s) of Servicer for Plaintiff/Plaintiff: DANIELLE
FROELICH
Title of employee(s) of Servicer
FORECLOSURE REPRESENTATIVE
for
Plaintiff/Plaintiff:
Responsibilities of employee(s) of Servicer for Plaintiff/Plaintiff:
REVIEWS AND CONFIRMS THE ACCURACY OF THE
FORECLOUSRE AFFIDAVIT.
3.
Based on my communication with the above-named
employee(s) of Plaintiff, as well as my own inspection of the
documents filed with the court and other diligent inquiry, I execute
this certification to comply with the requirements of Rule 4:64-2(d)
and Rule 1:4-8(a).
(Compl. Ex. 11 at 8-9 ("State Court Cert. of Diligent Inquiry").)
Plaintiff alleges that all times pursuant to the 2008 Mortgage Loan contract, Plaintiff has
maintained an insurance policy on the property, has sent all insurance premiums to the insurance
3
carrier to pay for the hazard insurance policy, and has provided copies of same to the loan servicer
upon request. (Id.
iii! 24, 26.) Accordingly, Plaintiff avers that Green Tree has not incurred costs
of $10,974.37 for payment of insurance premiums. (Id.
ii 25.)
PROCEDURAL HISTORY
Plaintiff commenced this action on June 24, 2015, two months after the alleged false
representation occurred, by filing a two count Complaint. (Compl.) With respect to Stem
Lavinthal, Plaintiff alleges that it violated the Fair Debt Collection Practices Act, 15 U .S.C. § 1692,
et
("FDCPA") by demanding payment of insurance premiums that were not actually owed
under Plaintiff's loan agreement. (Id. at 6-8.) 2
August 17, 2015, Stem Lavinthal filed an Answer to the Complaint, which includes a
cross-claim against its client Green Tree. (ECF No. 11.) On October 9, 2015: Stem Lavinthal
filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b) (ECF No. 13);
withdrew the Motion to Dismiss so that it could be re-filed as a Motion for Judgment on the
Pleadings (ECF No. 14); and filed the instant Motion for Judgment on the Pleadings (ECF No. 15;
see
No. 15-2 ("Mov. Br.")). On October 26, 2015, Green Tree filed an Answer to Stem
Lavinthal' s cross-claim and filed a cross-claim against Stem Lavinthal. (ECF No. 21.) On October
28,
Stem Lavinthal filed an Answer to Green Tree's cross-claim. (ECF No. 23.) On
November 23, 2015, Plaintiff filed opposition to the instant motion (ECF No. 25 ("Opp. Br.")),
and on November 30, 2015, Stem Lavinthal filed a reply (ECF No. 26 ("Reply Br.")).
2
The second count of the Complaint alleges violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601,
et seq. against Green Tree only, and is thus not pertinent to the instant Motion. (See Compl. at 9-10.)
4
LEGAL STANDARDS
A. Motion for Judgment on the Pleadings
Under Federal Rule of Civil Procedure 12(c), "[a]fter the pleadings are closed-but early
enough not to delay trial-a party may move for judgment on the pleadings." Fed. R. Civ. P.
12(c). "The pleadings are considered to be 'closed' after the complaint and answer have been
filed, along with any reply to additional claims asserted in the answer." Liberty Int 'l Underwriters
Canada v. Scottsdale Ins. Co., 955 F. Supp. 2d 317, 323 (D.N.J. 2013) (citation omitted). When
a party makes a motion for judgment on the pleadings based on the defense of failure to state a
claim upon which relief can be granted, the Court "appl[ies] the same standards as under Rule
12(b)(6)." Turbe v. Gov't of Virgin Islands, 938 F.2d 427, 428 (3d Cir.1991); see Caprio v.
Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 146 (3d Cir. 2013).
withstand a motion to dismiss for failure to state a claim, "a complaint must contain
suflicient 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 Atl. 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."
Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). "The plausibility standard is not akin to
a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted
unlawfully." Id.
determine the sufficiency of a complaint under Twombly and Iqbal in the Third Circuit,
the court must take three steps: first, the court must take note of the elements a plaintiff must plead
to state a claim; second, the court should identify allegations that, because they are no more than
5
conclusions, are not entitled to the assumption of truth; finally, where there are well-pleaded
factual allegations, a court should assume their veracity and then determine whether they plausibly
give rise to an entitlement for relief. See Burtch v. Mi/berg Factors, Inc., 662 F.3d 212, 221 (3d
Cir.
1) (citations omitted). "In deciding a Rule 12(b)(6) motion, a court must consider only
the complaint, exhibits attached to the complaint, matters of the public record, as well as
undisputedly authentic documents if the complainant's claims are based upon these documents."
Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010). Among the public records a court may
to resolve a motion to dismiss is a judicial proceeding from a different court or
case,
court must be mindful of the distinction between the existence of a fact and its truth. S.
Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Grp. Ltd., 181F.3d410, 426, 427 n.7 (3d
Cir. 999).
B. Fair Debt Collection Practices Act
The purpose of the FDCP A is "to eliminate abusive debt collection practices by debt
collectors, to insure that those debt collectors who refrain from using abusive debt collection
practices are not competitively disadvantaged, and to promote consistent State action to protect
consumers against debt collection abuses." 15 U.S.C. § 1692(e). When Congress passed the
legislation in 1977, it found that "[a]busive debt collection practices contribute to the number of
personal bankruptcies, to marital instability, to the loss of jobs, and invasions of individual
privacy." Id. § 1692(a). "As remedial legislation, the FDCP A must be broadly construed in order
to give full effect to these purposes." Caprio, 709 F.3d at 148.
Accordingly, the Court must
"analyze the communication giving rise to the FDCPA claim 'from the perspective of the least
sophisticated debtor.'" Kaymark v. Bank of America, N.A., 783 F.3d 168, 174 (3d Cir. 2015)
6
(quoting Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008). Furthermore, "(t]heFDCPA
is a strict liability statute to the extent it imposes liability without proof of an intentional violation."
Allen ex
Martin v. LaSalle Bank, NA., 629 F.3d 364, 368 (3d Cir. 2011).
prevail on an FDCPA claim, a plaintiff must prove that (1) she is a consumer, (2) the
defendant is a debt collector, (3) the defendant's challenged practice involves an attempt to collect
a 'debt' as the Act defines it, and (4) the defendant has violated a provision of the FDCPA in
attempting to collect the debt." Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir.
201
(citation omitted). Here, Plaintiff has alleged all four elements (Compl.
~~
28, 29, 33, 35),
and Stern Lavinthal does not dispute the first three prongs. At issue is the fourth prong: whether
Stern Lavinthal violated a provision of the FDCP A in attempting to collect the debt.
ANALYSIS
Plaintiff alleges that Stern Lavinthal violated 15 U.S.C. § 1692e by making and/or using
"false, deceptive and/or misleading representations in connection with its effort to collect a debt"
(id.~
35(a)), in particular with respect to "the character and amount of the debt it sought to collect
from Plaintiff, in violation of 15 U.S.C. § 1692e(2)."
(Id.~
35(b).) The relevant statute states as
follows:
False or misleading representations. A debt collector may not use
any false, deceptive, or misleading representation or means in
connection with the collection of any debt. Without limiting the
general application of the foregoing, the following conduct is a
violation of this section:
(2) The false representation of -(A) the character, amount, or legal status of any debt; or
7
(B) any services rendered or compensation which may be
lawfully received by any debt collector for the collection of a
debt.
The issue before the Court is whether Stern Lavinthal violated § l 692e when it filed the
State Court Notice of Motion and the State Court Cert. of Diligent Inquiry. As noted, the State
Court Notice of Motion stated that Stern Lavinthal "shall file the attached Certification of Proof
of Amount Due required by law which will establish that there is due upon Plaintiff's obligation
and mortgage the sum of $377,287.24 as of April 9, 2015, together with interest thereon." (Id. at
2.)
State Court Notice of Motion referenced the State Court Proof of Amount Due, in which
Green Tree employee Danielle Froelich included the sum of $10,974.37 for "Home Owners
Insurance Premiums" in the $377,287.24 total amount due. (State Court Proof of Amount Due at
3.)
respect to the State Court Cert. of Diligent Inquiry, Stern Lavinthal attorney Donna M.
Miller stated in relevant part as follows:
2.
On April 7, 2015 and again on April 24, 2015, I
communicated by client interface and overnight delivery with the
following named employee(s) of plaintiff/plaintiffs servicer, who
informed me that he/she has personally reviewed the documents
submitted to the Court, affidavit of amount due and the original or a
true copy of the note, mortgage, and recorded assignments, if any,
and that he/she confirmed the accuracy of all documents:
Name of employee(s) of Servicer for Plaintiff/Plaintiff: DANIELLE
FROELICH
Title of employee(s) of Servicer
FORECLOSURE REPRESENTATIVE
for
Plaintiff/Plaintiff:
Responsibilities of employee(s) of Servicer for Plaintiff/Plaintiff:
REVIEWS AND CONFIRMS THE ACCURACY OF THE
FORECLOUSRE AFFIDAVIT.
8
3.
Based on my communication with the above-named
employee(s) of Plaintiff, as well as my own inspection of the
documents filed with the court and other diligent inquiry, I execute
this certification to comply with the requirements of Rule 4:64-2(d)
and Rule 1:4-8(a).
(State Court Cert. of Diligent Inquiry at 1-2.)
Stem Lavinthal moves for dismissal on two grounds. First, Stem Lavinthal contends that
its alleged conduct does not implicate the FDCP A because it did not make a false representation.
(Mov.
at 13-17; Reply Br. at 6-11.) Stem Lavinthal contends that Plaintiff's claim fails as a
matter
law because the State Court Cert. of Diligent Inquiry "is utterly devoid of any false
representations whatsoever" and that there is a fundamental and dispositive distinction between
affirmatively "certifying the accuracy" of Green Tree's statements, as Plaintiff alleges in the
Complaint, versus merely filing a "Certification of Diligent Inquiry," as required by the New
Jersey Court Rules. (Mov. Br. at 3-4, 6-9, 13-17; Reply Br. at 6-11.) Second, Stem Lavinthal
alternatively argues that Plaintiff waived his right to contest the amount owed to Green Tree by
declining to oppose the underlying foreclosure, (Mov. Br. at 18-19; Reply Br. at 12-13), and
similarly argues that the doctrine of judicial estoppel prohibits Plaintiff from taking a position
inconsistent with his decision to forego any defense in the underlying foreclosure action (Mov. Br.
at
1; Reply Br. at 13-14).
opposition, Plaintiff first argues that because Stem Lavinthal's motion "includes several
exhibits not directly relating to the controversy'' the Court should either deny the motion outright
or convert it to one for summary judgment. (Opp. Br. at 5-7.) Second, Plaintiff argues that the
motion should be denied as procedurally untimely because the pleadings were still open when it
was filed, thus making Rule 12(c) inapplicable on its face. (Id. at 7-8.) Third, even ifthe motion
9
is considered procedurally proper, Plaintiff contends that the Complaint sets forth a valid claim for
relief under the FDCPA: by seeking to collect $10,974.37 not owed by Plaintiff (included in the
total amount sought of $377,287.24), Stem Lavinthal violated 15 U.S.C. § 1692e(2) because it
made a false representation of the amount of debt owed. (Opp. Br. at 8-13.) Plaintiff argues that
Stem Lavinthal has not established the lone defense to liability where a debt collector has engaged
in conduct that violates the FDCPA, and avers that "Stem Lavinthal cannot evade its
responsibilities as a debt collector by blaming its client for providing it with factually inaccurate
information used in the process of collecting a debt." (Id. at 13-15(citing15 U.S.C. § 1692k(c)).)
Finally, Plaintiff argues that a debtor has no obligation to notify a debt collect that it has engaged
in conduct violating the FDCP A prior to the debtor filing suit under the FDCPA, such that concepts
of waiver and judicial estoppel are inapplicable to Plaintiffs claims. (Id. at 15-19.)
Court agrees with Plaintiff. 3 The Court first addresses the statute and then discusses
waiver and judicial estoppel.
A. Plaintiff Has Stated a Claim Under 15 U.S.C. § 1692e(2)
When interpreting a statute, the court must begin with the text. Allen ex rel. Martin v.
LaSalle Bank, NA., 629 F.3d 364, 367 (3d Cir. 2011).
"If the statute's plain language is
unambiguous and expresses [Congress's] intent with sufficient precision, we need not look
3
As an initial matter, the Court finds the motion-filed under Rule 12(c) as a motion for judgment on the pleadingsto be procedurally proper. A party may move for judgment on the pleadings under Rule 12(c) "[a]fter the pleadings
are closed-but early enough not to delay trial[.]" Fed. R. Civ. P. 12(c). Here, Stern Lavinthal filed an Answer to
Plaintiff's Complaint on August 17, 2015, and therein asserted a cross-claim against Green Tree. (ECF No. 11.) Thus,
although the pleadings between Stern Lavinthal and Green Tree may not have been closed as of the date the instant
motion was filed, the pleadings between Plaintiff and Stern Lavinthal were closed as of August 17, 2015. Accordingly,
the Court finds the instant motion to be procedurally proper. Additionally, the Court declines to convert the instant
motion to one for summary judgment, because all of the exhibits relied on by the parties are either attached to
Plaintiff's Complaint or matters of public record subject to judicial notice that directly relate to Plaintiff's claims. See
Mayer, 605 F.3d at 230; S. Cross Overseas Agencies, 181 F.3d at426, 427 n.7.
10
further.
Id. (citation omitted). But if the "literal application of a statute will produce a result
demonstrably at odds with the intentions ofits drafters," then we are obligated to "construe statutes
sensibly and avoid constructions which yield absurd or unjust results." United States v. Fontaine,
697
1, 227 (3d Cir. 2012) (internal citations and quotation marks omitted). Where the plain
meaning of a statute would lead to an absurd result, we presume "the legislature intended
exceptions to its language [that] would avoid results of this character." Gov't of Virgin Islands v.
Berry, 604 F.2d 221, 225 (3d Cir. 1979) (quoting United States v. Kirby, 74 U.S. (7 Wall.) 482,
487, 9 L.Ed. 278 (1868)).
A plain reading of the statute leads to the conclusion that a violation has occurred. In
pertinent part, § 1692e(2)(A) prohibits the "false representation of ... [the] amount ... of any
debt[.]" Id. Here, Plaintiff has alleged that Stem Lavinthal made a false representation with
respect to "the character and amount of the debt it sought to collect from Plaintiff, in violation of
15
§ 1692e(2)." (Cornpl.
~
35(b).) Specifically, Plaintiff alleges that "Stem Lavinthal's
demand for payment of $10,974.37 was a demand for funds not owed and fees not incurred" (id.
~ 35(d)),
and that "Stem Lavinthal affirmed the use of false allegations in an effort to collect money
not owed by Plaintiff' by filing the State Court Cert. of Diligent Inquiry (id.~ 35(c)). In essence,
construing the Complaint in a light most favorable to Plaintiff, the Complaint alleges that when
Stem Lavinthal attempted to collect $377,287.24 from Plaintiff on behalf of Green Tree, Stem
Lavinthal misrepresented the amount of the debt in violation of the statute because the total amount
sought included $10,974.37 in Horne Owners Insurance Premiums which were allegedly not owed
to Green Tree. Accepting the allegations as true, as the Court must at this stage, the Court finds
that Plaintiff has sufficiently alleged a violation of the statute's plain language. Because the
11
statute's language is plain, the Court's function is "to enforce it according to its terms," so long as
"the disposition required by that [text] is not absurd." Alston v. Countrywide Fin. Corp., 585 F.3d
753,
(3d Cir. 2009) (quoting Lamie v. U.S. Tr., 540 U.S. 526, 534 (2004)).
Finding a violation here, as required by a straightforward application of the plain language
of the statute, is not absurd; rather, it is consistent with the Third Circuit's recent decisions in
McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240, 248 (3d Cir.) cert. denied, 135 S.
Ct. 487 (2014) and Kaymark v. Bank of America, N.A., 783 F.3d 168 (3d Cir. 2015).
In
McLaughlin, a mortgagor alleged that a law firm representing the mortgagee had falsely
represented the amount of the debt in a debt collection demand letter by including not-yet-incurred
fees.
Third Circuit held that the mortgagor had stated a claim under § 1692e, reasoning that
"[a]s
drafter of the Letter, [the law firm] is responsible for its content and for what the least
sophisticated debtor would have understood from it." 756 F.3d at 246.
Kaymark extended this rationale from a demand letter to a formal pleading in a foreclosure
action.
Kaymark, a mortgagor alleged that when a law firm initiated foreclosure proceedings
on behalf of the mortgagee, the body of the foreclosure complaint filed by the law firm falsely
represented the amount of the debt in violation of§ 1692e by including not-yet-incurred attorneys'
fees,
report fees, and property inspection fees. Id. at 171. Despite the fact that the alleged
misrepresentation was contained in a foreclosure complaint, the Third Circuit held that the
mortgagor had adequately stated a claim under § 1692e, upon an analysis of "the statutory text, as
well at
the case law interpreting the text[.]" Id. at 176.
First, the Court noted that it is "well-established in this Circuit" that "the FDCPA covers
attorneys engaged in debt collection litigation[.]" Id. at 176-77 (citing Heintz v. Jenkins, 514 U.S.
12
291
(1995) (holding that attorneys "engage[d] in consumer-debt-collection activity, even
when that activity consists of litigation" are covered by the FDCP A); Piper v. Portnoff Law
Assocs.,
, 396 F.3d 227, 234 (3d Cir. 2005) ("[I]f a communication meets the [FDCPA's]
definition
an effort by a 'debt collector' to collect a 'debt' from a 'consumer,' it is not relevant
that
came in the context of litigation.")). 4 Second, the Court observed that Congress has not
specifically excluded formal pleadings in foreclosure actions from the FDCPA. "Subsequent to
Congress twice amended the statute and exempted 'formal pleading[s] made in connection
with a
action' from 15 U.S.C. § 1692e(l 1), as amended Pub.L. No. 104-208, § 2305(a), 110
Stat. 3009, 3009-425 (1996), and 'cornrnunication[s] in the form of []formal pleading[s]' from§
1692g(d), as amended Pub.L. No. 109-351, § 802(a), 120 Stat. 1966 (2006)." Id. at 177. "If
Congress had wanted to exclude formal pleadings from the protections of the FDCPA under any
of
other provisions, it could have done so. It did not. Thus, except for §§ 1692e(ll) and
1692g(d), [t]he amendment[s] by [their] terms in fact suggest[ ] that all litigation activities,
including formal pleadings, are subject to the FDCPA."' Id. (quoting Sayyed v. Wolpoff &
Abramson, 485 F.3d 226, 231 (4th Cir. 2007)). Ultimately, the Third Circuit concluded "that a
communication cannot be uniquely exempted from the FDCP A because it is a formal pleading, or
in particular, a complaint" and noted that "[t]his principle is widely accepted by our sister
Circuits."
(citing cases); see also id. at 179 (concluding that the FDCP A does not "exclude
foreclosure actions from its reach"). 5
4
As noted, there is no dispute here that Stem Lavinthal acted as a "debt collector" when it "attempt[ed] to collect" a
debt on behalf of Green Tree in the foreclosure proceeding, or that Plaintiff is a "consumer." 15 U.S.C. §§ 1692a(3),
(6).
5
The Court additionally found that the foreclosure complaint fell within the parameters of § l 692e because the
mortgagor, and not merely the court, was the intended recipient of the communication. Id. at 178 (concluding that the
foreclosure complaint "was unquestionably a communication directed at Kaymark in an attempt to collect the debt"
because the complaint "was served on Kaymark (directly or indirectly through his attorney)").
13
The holdings and underlying rationale in McLaughlin and Kaymark suggest that the
FDCPA extends to the facts of this case. Keeping in mind that "[a]s remedial legislation, the
FDCPA must be broadly construed in order to give full effect to [Congress's] purposes," Caprio,
709 F.3d at 148 (3d Cir. 2013), the Court finds that Plaintiffs allegations that Stem Lavinthal
falsely represented the amount of the debt when it filed the State Court Notice of Motion and State
Court Cert. of Diligent Inquiry in an attempt to collect the debt on behalf of the mortgagee are
sufficient to state a claim under§ 1692e(2). In other words, when analyzing the text of the statute
and
relevant case law interpreting it, the Court cannot say that Congress intended to exempt
litigation activities such as these from the purview of the FDCPA.
As the Third Circuit noted,
"[a]bsent a finding that 'the result [will be] so absurd as to warrant implying an exemption for'
FDCPA claims involving foreclosure actions, [the Court] is not empowered to disregard the plain
language
the statute." Kaymark, 783 F.3d at 179 (quoting Heintz, 514 U.S. at 295). "Thus,
[defendant's] arguments are more 'properly addressed to Congress,' which 'is, of course, free to
amend the statute accordingly."' Id. (quoting Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich
LPA,
U.S. 573, 604 (2010)).
B. Plaintiff Did Not Waive His FDCPA Claim by Failing to Appear in the State Court
Foreclosure Proceeding and the Court Declines to Judicially Estop Plaintiff from
Asserting the Claim
Stem Lavinthal argues that because Plaintiff did not contest the amount of the debt in the
foreclosure proceeding, he either waived his right to assert a claim under the FDCP A, or the Court
should judicially estop him from doing so.
Generally speaking, waiver is a "voluntary
relinquishment-express or implied--of a legal right to advantage[.]" Black's Law Dictionary
1611 (8th ed. 2004). That has not occurred here. First, the Third Circuit has made clear that "a
14
consumer is not required to seek validation of a debt he or she believes is inaccurately described
in a debt communication as a prerequisite to filing suit under§ 1692e." McLaughlin, 756 F.3d at
248; see also 15 U.S.C. § 1692g(c) ("The failure of a consumer to dispute the validity of a debt ..
. may not be construed by any court as an admission of liability by the consumer."). The Court
also notes that the State Court Notice of Motion and the State Court Cert. of Diligent Inquiry-the
documents giving rise to liability here-were filed in April 2015. Plaintiff initiated this lawsuit in
June
Thus, again keeping mind that "[ a]s remedial legislation, the FDCP A must be broadly
construed in order to give full effect to [Congress's] purposes," Caprio, 709 F.3d at 148 (3d Cir.
201
the Court does not find that Plaintiff waived his right to assert a claim under the FDCP A.
By failing to contest the amount owed in the foreclosure proceeding.
similar reasons, the Court also declines to impose the doctrine of judicial estoppel,
which is "a judge-made doctrine that seeks to prevent a litigant from asserting a position
inconsistent with one that she has previously asserted in the same or in a previous proceeding."
Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81F.3d355, 358 (3d Cir. 1996). In short,
Plaintiff did not assert a position in the foreclosure proceeding. He filed this lawsuit instead, which
for the reasons explained above appears to be well within his rights.
15
CONCLUSION
For the reasons above, the Court denies Stem Lavinthal's motion. An appropriate Order
accompanies this Opinion.
DATED: December
5
,£ L. LINARES
ITED STATES DISTRICT JUDGE
16
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?