Carbone v. Caliber Home Loans, Inc.
MEMORANDUM & ORDER granting 24 Motion to Dismiss for Failure to State a Claim; Defendant's motion to dismiss (Docket Entry 24) is GRANTED, and Plaintiff's claims are DISMISSED WITH PREJUDICE. The Clerk of the Court is directed to enter judgment in favor of Defendant and mark this matter CLOSED. So Ordered by Judge Joanna Seybert on 9/19/2017. C/ECF (Valle, Christine)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
JANINE CARBONE, on behalf of
plaintiff and a class,
MEMORANDUM & ORDER
-againstCALIBER HOME LOANS, INC.,
Abraham Kleinman, Esq.
626 RXR Plaza
Uniondale, New York 11556
Tiffany N. Hardy, Esq.
Edelman Combs Latturner & Goodwin LLC
20 South Clark Street, Suite 1500
Chicago, Illinois 60603
David T. Biderman, Esq.
Perkins Coie LLP
1888 Century Park East, Suite 1700
Los Angeles, California 90067
Manny Joseph Caixeiro, Esq.
Jalina Joy Hudson, Esq.
Perkins Coie LLP
30 Rockefeller Plaza, 22nd Floor
New York, New York 10112
SEYBERT, District Judge:
filed an Amended Complaint alleging that Defendant Caliber Home
(“FDCPA”), 15 U.S.C. §§ 1692 et seq.
(Am. Compl., Docket Entry
Her initial Complaint failed to plausibly allege that she
was a “consumer” within the meaning of the statute.
Plaintiff has failed to cure this deficiency, the Court GRANTS
Defendant’s motion to dismiss the Amended Complaint.
Dismiss, Docket Entry 24.)
summarizes the relevant portions below.
In doing so, the Court
accepts all well-pled facts as true and draws all reasonable
inferences in Plaintiff’s favor.
Cleveland v. Caplaw Enters., 448
F.3d 518, 521 (2d Cir. 2006).
Carbone has a residential mortgage loan serviced by
Caliber Home Loans, Inc.
(Am. Compl. ¶ 15.)
Carbone signed the
mortgage, but her husband signed the promissory note.1
a borrower, Carbone has the right to redeem the property if the
Unfortunately, the Carbones fell behind on their payments.
required by New York law, Caliber sent a pre-foreclosure notice.
(Pre-Foreclosure Notice, Am. Compl. Ex. D, Docket Entry 23-4.)
This notice, along with a default letter, explained, among other
things: “This is an attempt by a debt collector to collect a debt
and any information obtained will be used for that purpose.” (Pre-
Michael Carbone filed a separate lawsuit, which is currently
pending. See Case No. 15-CV-4914 (E.D.N.Y.).
Foreclosure Notice at 3; Default Ltr., Am. Compl. Ex. E, Docket
Entry 23-5, at 3 (omitting capitalization).)
Unhappy with these letters, Carbone filed this lawsuit
against Caliber on September 8, 2015.
(See Compl., Docket Entry
She alleges that these communications contained “false,
Section 1692(e) of the FDCPA and legally deficient advisories in
violation of Section 1692(g).
(Compl. ¶¶ 30–32, 37, 43.)
filed a motion to dismiss, which the Court granted.
M&O, Docket Entry 22, at 11–12.) In so ruling, the Court concluded
that Carbone failed to plausibly allege that she was a “consumer”
under the FDCPA and thus Caliber could not have violated Sections
1692(e) or (g).
(Id. at 6–11.)
Plaintiff amended her Complaint on October 31, 2016.
While this new version amplifies a few facts, none help her cause.
(See, e.g., Am. Compl. ¶¶ 16–19.)
As a result, the Court grants
Defendant’s motion to dismiss the Amended Complaint.2
Carbone raises a number of subsidiary arguments, which the
Court already rejected in its prior order. (Sept. 2016 M&O
at 9–10.) In short, Carbone attached “Federal Truth-in-Lending
Disclosure Statements,” (TILA Stmts., Am. Compl. Ex. B, Docket
Entry 23-2), but the Amended Complaint, like the initial
version, asserts no TILA violations. And contrary to
Plaintiff’s assertions (Pl.’s Br., Docket Entry 26, at 6-7),
only a consumer can bring Section 1692(e) claims, Papetti v.
Rawlings Fin. Servs., LLC, 121 F. Supp. 3d 340, 348, 353
Standard of Review
To avoid dismissal, a complaint must plead “enough facts
to state a claim to relief that is plausible on its face.”
Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974,
167 L. Ed. 2d 929 (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
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.
Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).
To assert a claim under the FDCPA, a plaintiff must
allege, among other things, that she is a “consumer.”
NCO Portfolio Mgmt., Inc., 132 F. Supp. 3d 567, 578 (S.D.N.Y. 2015)
(citing Plummer v. Atl. Credit & Fin., Inc., 66 F. Supp. 3d 484,
488 (S.D.N.Y. 2014)).
The FDCPA defines a “consumer” as “any
natural person obligated or allegedly obligated to pay any debt.”
15 U.S.C. § 1692a(3).
To date, the Second Circuit Court of Appeals has not
addressed “whether the initiation of a foreclosure action is done
in connection with the collection of any debt.” Carlin v. Davidson
Fink LLP, 852 F.3d 207, 213 n.1 (2d Cir. 2017) (internal quotation
marks and citation omitted).
It is true, as Plaintiff argues
(Pl.’s Br. at 14), that the Sixth Circuit classifies mortgage
foreclosure as “debt collection under the FDCPA.”
Glazer v. Chase
Home Fin. LLC, 704 F.3d 453, 461 (6th Cir. 2013).
But “[t]he Sixth
Circuit’s rationale in Glazer has been rejected by numerous other
Circuits,” including the Fifth, Ninth, and Eleventh Circuits.
Salewske v. Trott & Trott P.C., No. 16-CV-13326, 2017 WL 2888998,
at *5 n.2 (E.D. Mich. July 7, 2017) (collecting cases); Aurora
Loan Servs., LLC v. Kmiecik, 992 N.E.2d 125, 133 (Ill. App. Ct.
foreclosure is not debt collection within the meaning of the
After all, a mortgage is a security interest, not a
Hill v. DLJ Mortg. Capital, Inc., No. 15-CV-
3083, 2016 WL 5818540, at *7 (E.D.N.Y. Oct. 5, 2016), aff’d on
other grounds, 689 F. App’x 97 (2d Cir. 2017).
And “[t]he object
of a non-judicial foreclosure is to retake and resell the security,
not to collect money from the borrower.”
Vien-Phuong Thi Ho v.
ReconTrust Co., NA, 858 F.3d 568, 572 (9th Cir. 2016), pet. for
cert. docketed, No. 17-278 (U.S. Aug. 22, 2017).
Pre-foreclosure notices, like the one Caliber sent, “are
entirely different from the harassing communications that the
FDCPA was meant to stamp out.”
Id. at 574.
In fact, New York law
requires that these notices be disseminated to protect homeowners.
See N.Y. REAL PROP. ACTS. LAW § 1304(1); Avail Holding LLC v. Ramos,
No. 15-CV-7068, 2017 WL 979027, at *2 (E.D.N.Y. Mar. 10, 2017)
(“In response to the mortgage foreclosure crisis, New York enacted
. . . a series of legal protections and foreclosure prevention
opportunities to homeowners at risk of losing their homes.”).3
Of course, Caliber’s Pre-Foreclosure Notice contained
debt-demand language: “This is an attempt by a debt collector to
collect a debt and any information obtained will be used for that
“This statement, however, does not
convert the non-judicial foreclosure into an attempt to collect a
debt under the FDCPA.”
Evalobo v. Aldridge Pite, LLP, No. 16-CV-
0539, 2016 WL 7379021, at *5 (D. Nev. Dec. 20, 2016) (analyzing
nearly identical language) (citation omitted).
As noted above,
Caliber sent its notice to meet statutory requirements, not to
collect any debt.
Thus, Mrs. Carbone has failed to plausibly
allege that she is a “consumer” under the FDCPA.
She is not
“allegedly obligated to pay a[ ] debt,” 15 U.S.C. § 1692a(3), and
so her claims under Sections 1692(e) and (g) fail for that reason.
At any rate, out-of-circuit courts have permitted FDCPA claims
if the debt collector also seeks a deficiency judgment. Kabir
v. Freedman Anselmo Lindberg LLC, No. 14-CV-1131, 2015 WL
4730053, at *4 (N.D. Ill. Aug. 10, 2015); Goodin v. Bank of Am.,
N.A., 114 F. Supp. 3d 1197, 1206–07 (M.D. Fla. 2015). But in
New York, “defendants cannot file a motion for a deficiency
judgment against plaintiff until after the foreclosure sale,” so
Caliber has “not engaged in any conduct related to the
collection of money to date.” See Hill, 2016 WL 5818540, at *7,
Leave to Amend
“When a motion to dismiss is granted, the usual practice
is to grant leave to amend the complaint,” Hayden v. Cty. of
Nassau, 180 F.3d 42, 53 (2d Cir. 1999), unless doing so would be
futile, Darden v. DaimlerChrysler N. Am. Holding Corp., 191 F.
Supp. 2d 382, 399 (S.D.N.Y. 2002).
Carbone already filed an
Amended Complaint and failed to identify other communications from
Caliber that could be construed as attempts to collect a debt
against her and thus serve as the basis for FDCPA claims.
basis, the Court DENIES leave to amend.
GRANTED, and Plaintiff’s claims are DISMISSED WITH PREJUDICE.
Clerk of the Court is directed to enter judgment in favor of
Defendant and mark this matter CLOSED.
_/s/ JOANNA SEYBERT_____
Joanna Seybert, U.S.D.J.
September __19___, 2017
Central Islip, New York
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?