Dowell v. Bayview Loan Servicing, LLC et al

Filing 46

ORDER ADOPTING REPORT AND RECOMMENDATIONS - IT IS ORDERED THAT: 1. The Court ADOPTS the Report and Recommendation 28 , of Chief Magistrate Judge Schwab;2. The Phelan Defendants, Bayview, and Wells Fargos motions 9 , 12 & 17 to dismiss are GRANTE D IN PART and DENIED IN PART; 3. Defendants motions 9 , 12 & 17 to dismiss are GRANTED as follows: a. Plaintiffs request for an injunction is DENIED; b. Plaintiffs claims pursuant to 42 U.S.C. § 1983 are DISMISSED WITH PREJUDICE; c. Counts One, Three, and Four of Plaintiffs Complaint are DISMISSED WITH PREJUDICE; 4. Defendants motions 9 , 12 & 17 to dismiss are otherwise DENIED; 5. Plaintiffs motion 41 for professional examination is DENIED; and 6. This matter is recommitted to Chief Magistrate Judge Schwab to conduct further pretrial proceedings. Signed by Honorable Yvette Kane on 9/25/17. (rw)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
ZACHARY THOMAS DOWELL,
Plaintiff
v.

BAYVIEW LOAN SERVICES, LLC,
et al.,
Defendants

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No. 1:16-cv-02026
(Judge Kane)
(Chief Magistrate Judge Schwab)

ORDER
THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:
Before the Court is: Chief Magistrate Judge Schwab’s May 4, 2017 Report and
Recommendation (Doc. No. 28), addressing three pending motions to dismiss filed by
Defendants Phelan, Hallinan, Diamond & Jones, LLP and Mario J. Hanyon (“the Phelan
Defendants”) (Doc. No. 9), Bayview Loan Servicing, LLC (“Bayview”) (Doc. No. 12), and
Wells Fargo, N.A. (“Wells Fargo”) (Doc. No. 17); Defendants’ objections to the Report and
Recommendation (Doc. Nos. 32, 35, 37); Plaintiff Zachary Thomas Dowell’s response to
Defendants’ objections (Doc. No. 44); and Plaintiff’s motion for professional examination (Doc.
No. 41).
In her Report and Recommendation, Chief Magistrate Judge Schwab recommends: (1)
granting Defendants’ motions to dismiss Plaintiff’s request for an injunction staying the relevant
state court foreclosure proceedings; (2) granting Defendants’ motions to dismiss Plaintiff’s 42
U.S.C. § 1983 claims; (3) granting Defendants’ motions to dismiss Plaintiff’s Fair Debt
Collection Practices Act (“FDCPA”) claims to the extent those claims are not based on the filing
of the motion for summary judgment in the state court foreclosure action (“the MSJ”), but
denying the motions to dismiss Plaintiff’s FDCPA claims to the extent those claims are based on
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the filing of the MSJ; and (4) denying the motions to dismiss Plaintiff’s Pennsylvania Fair Credit
Extension Uniformity Act (“FCEUA”) claims. (Doc. No. 28 at 64-65.)
Defendants have filed lengthy objections to the Report and Recommendation. (Doc. Nos.
32, 35, 37.) With regard to Plaintiff’s FCEUA claims, Wells Fargo and Bayview argue that
Plaintiff’s FCEUA claims should be dismissed because the debt on which the claims are based is
a purchase money mortgage, and the FCEUA prohibits claims based on such mortgages. (Doc.
Nos. 32 ¶¶ 3-7, 35-1 at 10-11.) In addition, the Phelan Defendants argue that the FCEUA does
not apply to them because they are not debt collectors. (Doc. No. 38 at 2-3.)
With regard to the FDCPA claims, Bayview and the Phelan Defendants argue that all
FDCPA claims should be dismissed due to the FDCPA’s one year statute of limitations. They
posit that the alleged fraudulent actions surrounding the filing of the MSJ are not independent
violations of the FDCPA that toll the statute of limitations. (Doc. Nos. 35-1 at 3-10, 38 at 3-9.)
In addition, two Defendants request clarifying orders relating to Chief Magistrate Judge
Schwab’s FDCPA recommendations. Specifically, Wells Fargo requests clarification that all
FDCPA claims against Wells Fargo will be dismissed with prejudice because Wells Fargo was
no longer a party to the state court foreclosure action at the time the MSJ was filed. (Doc. No. 32
¶¶ 1-2.) The Phelan Defendants request clarification as to which FDCPA claims will remain in
the event this Court adopts Chief Magistrate Judge Schwab’s recommendation to dismiss the
FDCPA claims that are not based on the filing of the MSJ. (Doc. No. 38 at 21-22).
Finally, Defendants object to the Report and Recommendation on a number of
miscellaneous grounds. Among those objections, Bayview argues that Chief Magistrate Judge
Schwab erred in her application of the Younger doctrine, and asserts that the Court should
abstain from or stay this litigation because it involves court orders that are “uniquely in

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furtherance of the state court’s ability to perform its judicial functions.” (Doc. No. 35-1 at 1115.) The Phelan Defendants also argue (1) that Plaintiff’s claims are implausible and should be
dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6); (2) that Plaintiff is estopped
from arguing that the mortgage and promissory note are fraudulent; (3) that the motions to
dismiss should have been converted into motions for summary judgment pursuant to Federal
Rule of Civil Procedure 12(d); and (4) that Plaintiff does not plead fraud with specificity as
required by Federal Rule of Civil Procedure 9(b). (Doc. No. 38 at 9-21.)
Having thoroughly reviewed these objections, this Court finds that Chief Magistrate
Judge Schwab correctly and comprehensively addressed the substance of Defendants’ objections
in the Report and Recommendation. In addition, this Court declines to address the new
arguments that the Phelan Defendants raise in their objections but failed to raise before Chief
Magistrate Judge Schwab in their motion to dismiss.1 The Court will, however, clarify the Chief

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Generally, “interests of judicial economy weigh against allowing a party to raise a new issue in
objection to a Magistrate Judge’s report and recommendation that was not raised before the
Magistrate Judge.” Witmer v. Gallagher & Co., No. 1:08-cv-1329, 2009 WL 904877, at * 3
(M.D. Pa. Mar. 31, 2009) (citing Paterson-Leitch Co., Inc. v. Mass. Mun. Wholesale Elec. Co.,
840 F.2d 985, 991 (1st Cir. 1988) (“Systemic efficiencies would be frustrated and the
magistrate’s role reduced to that of a mere dress rehearse if a party were allowed to feint and
weave at the initial hearing, and save its knockout punch for the second round. In addition, it
would be fundamentally unfair to permit a litigant to set its case in motion before the magistrate,
wait to see which way the wind was blowing, and—having received an unfavorable
recommendation—shift gears before the district judge.”)); Hubbard v. Pleasant Valley Sch. Dist.,
No. 3:cv-03-0797, 2006 WL 42093, at * 7 (M.D. Pa. Jan. 6, 2006) (“Issues raised for the first
time in objections to the magistrate judge’s recommendation are deemed waived.”); Breeden v.
Eckard, No. 14-6832, 2016 WL 1106893, at * 5-6 (E.D. Pa. Mar. 22, 2016) (“The court does not
find that the interests of justice warrant[] consideration of this belatedly-raised evidence and
issue when the petitioner had more-than ample time to raise it before [the] Magistrate Judge . . .
.”). The new arguments raised by the Phelan Defendants in their objections, which include
objections pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6), could easily have
been raised in their motion to dismiss. In addition, the Court has considered these new
objections and finds that they are meritless. Therefore, the Court declines to further address
these arguments.
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Magistrate Judge’s Report and Recommendation, as requested by Wells Fargo and the Phelan
Defendants.
Wells Fargo requests an order stating that all FDCPA claims against Wells Fargo are
dismissed with prejudice. (Doc. No. 32 ¶ 2.) Wells Fargo argues that when Chief Magistrate
Judge Schwab recommended dismissal of all FDCPA claims except those based on alleged false
statements made in the MSJ, the result was that all FDCPA claims against Wells Fargo were
recommended for dismissal, because when the MSJ was filed in the foreclosure proceeding,
Wells Fargo was no longer a party or the mortgage-holder. (Id.) The Court agrees. In the
Complaint, Plaintiff admits that Wells Fargo “mysteriously assigned [the mortgage] to
[Bayview] on/or about July 29, 2016 . . . .” 2 (Doc. No. 1 ¶ 21.) Plaintiff also admits that the
MSJ was filed on September 15, 2016. (Id. ¶ 41.) Because the Report and Recommendation
recommended dismissing those FDCPA claims that were not “based on the purported false
statements in the summary judgment motion in the foreclosure action” (Doc. No. 28 at 53), and
because Wells Fargo assigned the mortgage to Bayview before the MSJ was filed, the Court
understands the Report and Recommendation to recommend that all FDCPA claims against
Wells Fargo be dismissed with prejudice.
Regarding the Phelan Defendants’ request for clarification (Doc. No. 38 at 21), according
to the Report and Recommendation, all FCEUA claims survive dismissal, as well as all FDCPA
claims that are based on the alleged false statements made in the MSJ. (Doc. No. 28 at 64-65.)
Therefore, Count Six, which alleges violations of the FCEUA, survives dismissal. In addition,
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In one paragraph of the Complaint, Plaintiff alleges that one of the mortgage assignments was
fraudulent. (Doc. No. 1 ¶ 76.) However, these allegations seem to be in reference to the
assignment attached to Plaintiff’s Complaint, which is a 2014 assignment from Mortgage
Electronic Registration Systems, Inc. to Wells Fargo. (Doc. No. 1-2 at 20, 25.) Therefore, this
Court does not construe the Complaint as alleging that Wells Fargo’s assignment of the mortgage
to Bayview was fraudulent.
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Counts Two and Five, which allege violations of the FDCPA, survive dismissal to the extent
they allege violations surrounding the filing of the MSJ. Counts One, Three, and Four are
dismissed because they are completely based on actions that allegedly took place prior to the
filing of the MSJ, and counts based on those actions are barred by the applicable statute of
limitations. (Id. at 51-53.)
ACCORDINGLY, on this 25th day of September 2017, upon extensive review of the
record and the applicable law, IT IS ORDERED THAT:
1. The Court ADOPTS the Report and Recommendation (Doc. No. 28), of Chief Magistrate
Judge Schwab;
2. The Phelan Defendants, Bayview, and Wells Fargo’s motions to dismiss (Doc. Nos. 9,
12, 17), are GRANTED IN PART and DENIED IN PART;
3. Defendants’ motions to dismiss (Doc. Nos. 9, 12, 17), are GRANTED as follows:
a. Plaintiff’s request for an injunction is DENIED;
b. Plaintiff’s claims pursuant to 42 U.S.C. § 1983 are DISMISSED WITH
PREJUDICE;
c. Counts One, Three, and Four of Plaintiff’s Complaint are DISMISSED WITH
PREJUDICE;
4. Defendants’ motions to dismiss (Doc. Nos. 9, 12, 17), are otherwise DENIED; 3
5. Plaintiff’s motion for professional examination (Doc. No. 41), is DENIED;4 and

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Counts Two and Five are not dismissed to the extent they relate to the filing of the motion for
summary judgment in the state court foreclosure proceeding. Moreover, Count Six is not
dismissed.
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While this filing is certainly not a model of clarity, the Court construes Plaintiff’s motion for a
professional examination as a request to conduct discovery. Insofar as Plaintiff’s motion seeks
an order from the Court directing Defendants to produce for inspection certain documents in
connection with the state court foreclosure action, this motion is improvidently filed. Under the
local rules, such requests for documents “shall be served upon other counsel and parties but shall
not be filed with the court” unless authorized by the federal or local rules or by order of the
Court. L. R. 5.4(b) (emphasis added). As Plaintiff has neither obtained authorization from the
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6. This matter is recommitted to Chief Magistrate Judge Schwab to conduct further pretrial
proceedings.

s/ Yvette Kane
Yvette Kane, District Judge
United States District Court
Middle District of Pennsylvania

Court to file this request for discovery, nor included a contemporaneous motion for relief under
the Federal Rules of Civil Procedure with his request for a professional examination, the Court
must deny Plaintiff’s motion for a professional examination as improperly filed.
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