McNamee v. Nationstar Mortgage, LLC
Filing
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ORDER granting 3 Motion to Dismiss for Failure to State a Claim. Signed by Judge Algenon L. Marbley on 9/4/2015. (cw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
CHARLES D. MCNAMEE, et al.,
Plaintiffs,
v.
NATIONSTAR MORTGAGE, LLC,
Defendant.
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Case No. 14-1948
JUDGE ALGENON L. MARBLEY
Magistrate Judge King
OPINION & ORDER
I.
INTRODUCTION
This matter is before the Court on Defendant’s Fed. R. Civ. P. 12(b)(6) Motion to
Dismiss. (Doc. 3). Defendant Nationstar Mortgage, LLC (“Nationstar”) seeks to dismiss Count
II—Violations of the Fair Debt Collection Practices Act (“FDCPA”) under §1692(f)—set forth
in Plaintiffs’ Complaint, (Doc. 1), for failure to state a claim upon which relief can be granted.
For the reasons set forth herein, Defendant’s Motion to Dismiss is GRANTED.
II.
BACKGROUND
A. Factual Background
On or about June 10, 2009, Plaintiff Charles D. McNamee (“Plaintiff”) executed a Note
in the amount of $181,936.00 payable to the American Eagle Mortgage Company. (Doc 1, ¶6).
Plaintiff also executed a mortgage in favor of The American Eagle Mortgage Company to secure
their former residential real property located at 8641 Ross Dr., Mechanicsburg, Ohio 43044.
(Id.) The American Eagle Mortgage Company endorsed the Note to Taylor, Bean, and Whitaker
Mortgage Company, who in turn, endorsed the Note to Bank of America. (Id. at ¶7).
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On May 29, 2012, Plaintiffs filed a voluntary Chapter 7 petition jointly with his spouse.
(Id. at ¶8). At the time of the filing, Plaintiffs were in default on the Note due to Bank of
America. (Id. at ¶9). On May 29, 2012, Plaintiffs filed a Statement of Intention informing Bank
of America of his intention to surrender the Property. (Id. at ¶10). On September 25, 2012,
Plaintiff received a Chapter 7 discharge. (Id. at ¶14). On September 28, 2012, upon the request
of Bank of America, the Chapter 7 Trustee formally abandoned the bankruptcy estate’s interest
in the Property. On December 17, 2012, Bank of America executed an assignment of the
mortgage on the Property to Nationstar (Id. at ¶16). On March 20, 2013, Nationstar filed an in
rem foreclosure complaint to dispose of the Property. (Id. at ¶17). On October 8, 2013,
Defendant obtained a “Final Judgment Entry In Rem” as, and for, its decree of foreclosure. (Id.
at ¶18).
Plaintiffs allege that, as early as January 2013, Defendant sent them monthly statements
demanding payment of the monetary obligation discharged in their Chapter 7 proceeding. (Id. at
¶19). Plaintiffs also allege that in addition to sending them monthly statements, Defendant
engaged in telephone calls seeking payment of the discharged debt. (Id. at ¶21). Plaintiffs asked
Defendant during at least one telephone call to cease and desist communicating with them for the
discharged debt and Defendant allegedly did not honor that request. (Id. at ¶23).
B. Procedural Background
On October 17, 2014, Plaintiffs filed a Complaint against Defendant alleging violations
of the FDCPA, 15 U.S.C. §1692. Specifically, Plaintiffs’ Complaint asserts that Defendant
committed two distinct FDCPA violations: (1) violation of 15 U.S.C. §1692(e) (Count One), for
the use of numerous false, deceptive, and/or misleading statements or means in connection with
the collection of debts and for falsely representing the character, amount, and/or legal status of
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the Loan debt; and, (2) violation of 15 U.S.C. §1692(f) (Count Two), for the use of unfair and
unconscionable means to collect or attempt to collect the debts once owed by Plaintiff and all
putative Class members.
In response to Plaintiffs’ Complaint, Defendant filed its Motion to Dismiss, asking this
Court to dismiss Count II of Plaintiffs’ Complaint for failure to state a claim upon which relief
can be granted, pursuant to Fed. R. Civ. P. 12(b)(6). This matter has been fully briefed and is
ripe for review.
III.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) allows a case to be dismissed for “failure to
state a claim upon which relief can be granted.” Such a motion is a “test of the plaintiff’s cause
of action as stated in the complaint, not a challenge to the plaintiff’s factual allegations.” Golden
v. City of Columbus, 404 F.3d 950, 958-59 (6th Cir. 2005). Thus, the Court must construe the
complaint in the light most favorable to the non-moving party. Total Benefits Planning Agency,
Inc. v. Amthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008). The Court is not
required, however, to accept as true mere legal conclusions unsupported by factual allegations.
Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). Although liberal, Rule 12(b)(6) requires more than
bare assertions of legal conclusions. Allard v. Weitzman, 991 F.2d 1236, 1240 (6th Cir. 1993)
(citation omitted).
A complaint need not set down in detail all the particularities of a plaintiff’s claim against
a defendant. See United States v. School Dist. Of Ferndale, 577 F.2d 1339, 1345 (6th Cir. 1978);
Westlake v. Lucas, 537 F.2d at 858; Dunn v. Tennessee, 697 F.2d 121, 125 (6th Cir. 1983). The
complaint simply requires a “short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ .P. (8)(a)(2). The function of the complaint is to “give the
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defendant fair notice of what the claim is, and the ground upon which it rests.” Nader v.
Blackwell, 545 F.3d 459, 470 (6th Cir. 2008) (quoting Erickson v. Pardus, 551 U.S. 89, 93
(2007)). In short, a complaint’s factual allegations “must be enough to raise a right to relief
above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). It must
contain “enough facts to state a claim of relief that is plausible on its face.” Id. at 570.
IV.
ANALYSIS
Defendant seeks to dismiss Count II Violations of the Fair Debt Collection Practices Act
(“FDCPA”) under §1692(f) for failure to state a claim upon which relief can be granted, arguing
that the §1692(f) claim is duplicative of the §1692(e) claim.
Plaintiffs’ first claim alleges that the communications described in ¶19-22 contains
numerous false, deceptive, and/or misleading statements in violation of 15 U.S.C. §1692(e)1.
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15 U.S.C. § 1692(e) reads:
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:
(1) The false representation or implication that the debt collector is vouched for, bonded by, or
affiliated with the United States or any State, including the use of any badge, uniform, or facsimile
thereof.
(2) The false representation of-(A) the character, amount, or legal status of any debt; or
(B) any services rendered or compensation which may be lawfully received by any debt collector
for the collection of a debt.
(3) The false representation or implication that any individual is an attorney or that any
communication is from an attorney.
(4) The representation or implication that nonpayment of any debt will result in the arrest or
imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or
wages of any person unless such action is lawful and the debt collector or creditor intends to take
such action.
(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.
(6) The false representation or implication that a sale, referral, or other transfer of any interest in a
debt shall cause the consumer to-(A) lose any claim or defense to payment of the debt; or
(B) become subject to any practice prohibited by this subchapter.
(7) The false representation or implication that the consumer committed any crime or other
conduct in order to disgrace the consumer.
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Such violations include: (1) a violation of 15 U.S.C.§1692(e)(2) because Nationstar allegedly
falsely represented the character, amount, and/or legal status of the debts by giving the
misleading impression that lawfully discharged debts were still collectible; (2) a violation of
§1692(e)(5) because Nationstar allegedly threatened to take action that could not be legally taken
when they told Plaintiff and all putative Class members that they would report their information
to credit bureaus; and (3) a violation of §1692(e)(8) because Nationstar threatened to
communicate credit information which is known to be false when they told Plaintiff and all
putative Class members that they would report their information to credit bureaus.
Plaintiffs’ second claim alleges that the Defendant’s use of the communications in ¶19-22
constitutes unfair and unconscionable means to collect or attempt to collect debts owed by
Plaintiff and all putative Class members in violation of 15 U.S.C.§1692(f)2. Such violations
(8) Communicating or threatening to communicate to any person credit information which is
known or which should be known to be false, including the failure to communicate that a disputed
debt is disputed.
(9) The use or distribution of any written communication which simulates or is falsely represented
to be a document authorized, issued, or approved by any court, official, or agency of the United
States or any State, or which creates a false impression as to its source, authorization, or approval.
(10) The use of any false representation or deceptive means to collect or attempt to collect any
debt or to obtain information concerning a consumer.
(11) The failure to disclose in the initial written communication with the consumer and, in
addition, if the initial communication with the consumer is oral, in that initial oral communication,
that the debt collector is attempting to collect a debt and that any information obtained will be
used for that purpose, and the failure to disclose in subsequent communications that the
communication is from a debt collector, except that this paragraph shall not apply to a formal
pleading made in connection with a legal action.
(12) The false representation or implication that accounts have been turned over to innocent
purchasers for value.
(13) The false representation or implication that documents are legal process.
(14) The use of any business, company, or organization name other than the true name of the debt
collector's business, company, or organization.
(15) The false representation or implication that documents are not legal process forms or do not
require action by the consumer.
(16) The false representation or implication that a debt collector operates or is employed by a
consumer reporting agency as defined by section 1681a(f) of this title.
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15 U.S.C. § 1692(f) reads:
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include: (1) a violation of 15 U.S.C. §1692(f)(1) because Nationstar’s attempted collection of
debts that were lawfully discharged was not “permitted by law”; and (2) a violation of 15
U.S.C.§1692(f)(1) because the attempted collection of legal fees that were both lawfully
discharged and not legally recoverable under state law was not “permitted by law.”
Defendant avers that §1692(f) of the FDCPA was meant to capture conduct not covered
by any of the other sections. Therefore, if the Plaintiffs wanted to bring a cause of action under
that section, they had to allege a different set of facts than they alleged for the §1692(e) claim.
In response, Plaintiffs argue that the claim should stand because: (1) the Federal Rules of Civil
Procedure allows them to raise an alternate statement of a claim; and (2) §1692(e) and §1692(f)
are non-exhaustive lists that are not mutually exclusive.
A debt collector may not use unfair or unconscionable means to collect or attempt to collect any
debt. Without limiting the general application of the foregoing, the following conduct is a
violation of this section:
(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the
principal obligation) unless such amount is expressly authorized by the agreement creating the
debt or permitted by law.
(2) The acceptance by a debt collector from any person of a check or other payment instrument
postdated by more than five days unless such person is notified in writing of the debt collector's
intent to deposit such check or instrument not more than ten nor less than three business days prior
to such deposit.
(3) The solicitation by a debt collector of any postdated check or other postdated payment
instrument for the purpose of threatening or instituting criminal prosecution.
(4) Depositing or threatening to deposit any postdated check or other postdated payment
instrument prior to the date on such check or instrument.
(5) Causing charges to be made to any person for communications by concealment of the true
purpose of the communication. Such charges include, but are not limited to, collect telephone calls
and telegram fees.
(6) Taking 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.
(7) Communicating with a consumer regarding a debt by post card.
(8) Using any language or symbol, other than the debt collector's address, on any envelope when
communicating with a consumer by use of the mails or by telegram, except that a debt collector
may use his business name if such name does not indicate that he is in the debt collection business.
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The purpose of the FDCPA 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 abuse.” 15 U.S.C. §1692.
In order to address such a widespread problem, Congress created an “extraordinarily
broad” statute. Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir. 1992). Even though Congress
enumerated certain specific practices that are violations, they knew that they would not be able to
catch every single abusive practice a debt collector might do. Baker v. Allstate Financial
Services, Inc, 554 F.Supp.2d 945, 953 (D.Minn 2008). So, when they created section §1692(f),
the intent was to create a section that would serve as a “backstop function” to catch those
practices that did not fall under the other sections. Edwards v. McCormick, 136 F.Supp.2d 795,
806 (S.D. Ohio 2001) (Marbley, J); Baker, 554 F.Supp.2d at 953; Foti v. NCO Financial
Systems, Inc., 424 F.Supp.2d 643, 667 (S.D. New York 2006); Taylor v. Heath W. Williams,
L.L.C, 510 F.Supp.2d 1206, 1217 (N.D. Georgia 2007).
This Court holds, like it held in Edwards, that a plaintiff cannot bring a cause of action
under §1692(f) when the factual allegations fit more narrowly into another subsection of the
FDCPA, and a plaintiff does in fact bring a duplicative claim under another subsection using the
same set of facts. Id.
Although Edwards concerned the attempted collection of a healthcare related debt and
this case concerns the attempted collection of a mortgage debt, the material facts of both cases
are similar: Both plaintiffs raised claims under both §1692(e) and §1692(f) using similar factual
allegations for both claims. Id. In Edwards, Defendant McCormick, an attorney who contracted
with the Physicians Credit Bureau, sent the Edwards a letter notifying them that a judgment lien
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was filed in favor of the defendant, and threatened to foreclose on their house if the underlying
debt was not paid—an action that could not be legally taken and was not intended to be taken. Id.
at 804. In addition to the threats, that letter was also signed by McCormick without being
reviewed by him. Id. at 805.
The Edwards brought claims under §1692(e)(5) and §1692(e)(10) claiming that the letter
threatened to take an action that was not intended to be taken and falsely represented that
McCormick had the right to foreclose upon and sell their home. Id. at 805. The Edwards also
brought a cause of action under §1692(f) claiming that the letter was unfair because it was signed
by Mr. McCormick without being reviewed by him. Id.
After granting the Edwards Motion for Partial Summary Judgment on their §1692(e)
claims, this Court denied their Motion for Partial Summary Judgment on their §1692(f) claim,
finding that the structure of the FDCPA counseled against granting the plaintiffs’ §1692(f)
Motion in addition to their §1692(e) Motion. Id. at 806. In so doing, this Court relied upon
Adams v. Law Offices of Stuckert & Yates, a case that dismissed a §1692(f) claim when the same
conduct was already found unlawful under another section of the FDCPA, §1692(g). 926 F.Supp.
521, 528 (E.D.Pa.1996). Following the rationale in Adams, this Court reasoned that since §
1692(d) already prohibited “harassment and abuse” and § 1692(e) already forbade “false or
misleading representations,” §1692(f) served as “backstop function”, allowing the court to
sanction improper conduct that the FDCPA did not specifically address. Id. Thus, while the
factual allegations used for both claims were slightly different, as the §1692(e) claims dealt with
the false or misleading representations in the letter itself and the §1692(f) claim asserted that the
letter was “unfair” because it was signed without review of the signatory, the Court found that
permitting the §1692(f) motion would improperly “expand the reach of §1692(f) to cover
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putative transgressions of ethical dictates.” Id. That is to say, the alleged unlawful conduct could
be abated effectively within the narrower and more specific confines of § 1692(e), and resort to §
1692(f) was unnecessary and duplicative under the circumstances of that case.
This case conforms to the Adams case even more so than Edwards. While the plaintiffs
in Edwards used different portions of the same letter to bring both of their § 1692(e) and §
1692(f) claims, the Plaintiffs in this case use the same exact portions of the letter at issue to bring
their § 1692(e) and § 1692(f) claims. The communication in ¶19-22 allegedly contained
statements that gave the false impression that the Plaintiffs’ debts remained collectible even
though such debts were lawfully discharged. That communication also sought the collection of
legal fees and costs that are not legally collectible under relevant state laws. These
communications fit more narrowly under: § 1692(e)(2) because they allegedly falsely
represented the character, amount, and/or legal status of the debt; § 1692(e)(5) because they
threaten to take actions that cannot legally be taken; and § 1692(e)(8) because they threatened to
communicate credit information that is known to be false.
Because §1692(f) is used to catch conduct that is not covered in the other sections of the
FDCPA, and all of Plaintiffs’ claims fall within subsections of § 1692(e), bringing a separate
claim under § 1692(f) for conduct that fits more narrowly under other provisions of the FDCPA
would be redundant, and contravenes the purpose of §1692(f).
Thus, the Defendant’s Motion to Dismiss claims under § 1692(f) is GRANTED.
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V.
CONCLUSION
For the reasons above, Defendant’s Fed. R. Civ. P. (12)(b)(6) Motion to Dismiss claims
pursuant to § 1692(f), (Doc. 3), is hereby GRANTED.
IT IS SO ORDERED.
/s/ Algenon L. Marbley
ALGENON L. MARBLEY
UNITED STATES DISTRICT JUDGE
DATED: September 4, 2015
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