Stephens et al v. Bank of America Corp.,et al
Filing
28
MEMORANDUM AND OPINION.Signed by Magistrate Judge William B Carter on 9/21/12. (KFB, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT CHATTANOOGA
RAY STEPHENS and
ANGIE STEPHENS
v.
BANK OF AMERICA, CORP. a/k/a
BANK OF AMERICA, N.A.,
WILSON & ASSOCIATES, PLLC, and
DAVID M. GRAHAM
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Case No. 1:12-cv-53
JUDGE CARTER
MEMORANDUM
I. Introduction
Defendant Wilson & Associates, PLLC (Wilson & Associates) and defendant Bank of
America, Corp. a/k/a Bank of America, N.A. have moved to dismiss this action pursuant to Fed.
R. Civ. P. 12(b)(6). [Docs. 4 and 6, respectively). This action arises from defendants=
foreclosure on the Bank of America Corp.’s security interest in the plaintiff=s residence. In
addition to several claims brought under state law, plaintiffs allege defendants have violated the
Truth in Lending Act (TILA), 15 U.S.C. § 16391 and the Fair Debt Collections Practices Act
(FDCPA), 15 U.S.C. § 1692(e), by providing misrepresentations about the foreclosure sale of
their residence and by conducting the foreclosure sale despite representations that the foreclosure
sale was on hold. For the reasons stated herein, the Court concludes plaintiffs have failed to state
a claim under TILA or the FDCPA. The Court will decline to exercise supplemental jurisdiction
over the state law causes of action, and the Court will REMAND the remaining state law claims
to the Bradley County Circuit Court.
1 Plaintiffs erroneously refer to 15 U.S.C. § 1639 as part of the Fair Debt Collection Practices
Act. However, 15 U.S.C. § 1639 is part of the Truth in Lending Act, 15 U.S.C. § ' 1601 et seq.
See Mills v. EquiCredit Corp., 172 Fed. Appx. 652 (6th Cir. 2006).
1
II. Standard of Review
A motion to dismiss brought pursuant to Fed. R. Civ. P. 12(b)(6) is meant to test the
sufficiency of the complaint; it does not resolve the facts of the case. Thielen v. GMAC Mortg.
Corp., 671 F.Supp.2d 947, 950 (E.D. Mich. 2009); Cox v. Shelby State Community College, 48
Fed. Appx. 500, 503 (6th Cir. Sept. 24, 2002) (unpublished); Metz v. Supreme Court of Ohio, 46
Fed. Appx. 228, 233 (6th Cir. Aug. 19, 2002) (unpublished). “Federal Rule of Civil Procedure
8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled
to relief,’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon
which it rests,’ Bell Atlantic v. Twombley, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson,
355 U.S. 41, 47 (1957)). In determining whether a party has set forth a claim in his complaint
for which relief can be granted, all well-pleaded factual allegations contained in the complaint
must be accepted as true. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam). This tenet
does not apply to legal conclusions set forth in a complaint. Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. More than “unadorned, the-defendant-unlawfullyharmed me accusation[s]” are required to state a claim. Id. “Nor does a complaint suffice if it
tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Id. at 696 (brackets
original)(quoting Bell Atlantic Corp. v. Twombly, 550 U.S 544, 557 (2007)). The complaint
must state “a plausible claim.” Id. at 679. Plausibility has been defined by the Supreme Court in
the following manner:
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. [Bell Atlantic Corp. v. Twombley,] 550 U.S. 544, 556, 127
S.Ct. 1955. The plausibility standard is not akin to a “probability requirement,”
2
but it asks for more than a sheer possibility that a defendant has acted unlawfully.
Ibid. Where a complaint pleads facts that are “merely consistent with” a
defendant's liability, it “stops short of the line between possibility and plausibility
of ‘entitlement to relief.’ ” Id., at 557, 127 S.Ct. 1955 (brackets omitted).
Id. at 678. In determining whether a complaint states a plausible claim for relief, the Court may
draw on its judicial experience and common sense. Id. at 1950. Well-pleaded facts that permit
the court to infer no more than a mere possibility of misconduct will not permit a complaint to
survive a motion to dismiss. Id.
III. Relevant Alleged Facts
Plaintiffs= complaint alleges the following: On August 14, 2004, plaintiffs purchased a
home in Charleston, Tennessee by executing two deeds of trust, one in the amount of $220,000
and another in the amount of $41,250. The deed of trust in the amount of $220,000 (the Deed of
Trust) was originally held by Countrywide Home Loans, Inc. On July 15, 2011, the Deed of
Trust was assigned to BAC Home Loan Servicing, LP, formerly known as Countrywide Home
Loan Servicing, LP. BAC Home Loan Servicing, LP merged into Bank of America, N.A.
(BANA) which is a subsidiary of defendant Bank of America Corp.2
Sometime in 2010, before the assignment of the Deed of Trust to BAC Home Loan
Servicing, LP (which allegedly merged into BANA), plaintiffs fell behind in their payments on
the notes securing the two deeds of trust. Wilson & Associates, a law firm acting on behalf of
BANA, sent plaintiffs a notice, dated November 10, 2010, of right to a non-judicial foreclosure
on the Deed of Trust. Plaintiffs then applied through BANA for a loan assistance program.
BANA denied this application, and the plaintiffs filed another such application on March 8,
2011.
2 In their second amended complaint, plaintiffs frequently refer to “BANA” but do not identify
the entity for which “BANA” is an acronym. The undersigned assumes “BANA” is an acronym
for Bank of America, N.A.
3
On March 15, 2011, Wilson & Associates sent a second notice of a non-judicial
foreclosure scheduling a foreclosure sale on April 11, 2011. Plaintiffs contacted BANA and
Wilson & Associates, and both informed plaintiffs the sale would be postponed to May 11, 2011.
On May 2, 2011, plaintiffs contacted David at Wilson & Associates who told plaintiffs
the sale had been postponed, that Wilson & Associates had closed their file on plaintiffs’
property, and it appeared plaintiffs would receive a loan modification. Plaintiffs contacted
BANA which confirmed the sale had been postponed. On April 4, 2011, plaintiffs= financial
circumstances improved, and they asked for a reinstatement calculation of their payments which
BANA sent. Plaintiffs were prepared to reinstate their loan if their application for a loan
modification was denied.
On May 20, 2011, BANA sent plaintiffs a letter stating their request for a loan
modification had been denied. Plaintiffs contacted BANA, and Emily told them their
conventional modification was denied but the government modification was still under review.
In May 2011, BANA indicated to plaintiffs that it was considering setting up trial payments. In
June, plaintiffs contacted BANA which told them their government modification was still under
review.
On June 13, 2011, plaintiffs contacted David at Wilson & Associates who told plaintiffs
BANA had sent a referral to place the foreclosure sale on hold. Every week during June and
July 2011, plaintiffs contacted BANA and were told their government loan modification
application was still under review. On August 2, 2011, plaintiffs received a letter from BANA
titled “Notice of Intent to Accelerate.”
On September 1, 2011, Plaintiffs received another non-judicial foreclosure notice from
Wilson & Associates setting a foreclosure sale on October 3, 2011. Plaintiffs contacted BANA
4
which said their loan modification was still under review and the foreclosure would be
postponed. Plaintiffs were prepared to reinstate their loan if modification was denied.
Thereafter, plaintiffs contacted Cory at Wilson & Associates who told them that Wilson &
Associates had two files on plaintiffs’ home, one open and one active.
In September 2011, plaintiffs’ authorized representative contacted BANA which told him
the October 3, 2011 foreclosure sale was rescheduled to November 2, 2011. The representative
contacted BANA again and was told the November 2, 2011 foreclosure sale was also postponed.
On October 7, 2011, Wilson and Associates were appointed Successor Trustee for the Deed of
Trust. On November 1, 2011, BANA informed the plaintiffs by letter that plaintiff’s original
loan modification application had been denied, but, because their information had changed, they
could reapply. Plaintiffs reapplied on November 15, 2011. On November 17, 2011, BANA sent
plaintiffs a letter stating they did not qualify for a home loan modification.
On or about November 18, 2011, plaintiffs began receiving several foreclosure notices
from Wilson & Associates setting a foreclosure sale for December 2, 2011. Plaintiffs=
representative immediately contacted BANA and was assured that the December 2, 2011
foreclosure sale would be postponed pending a final review of all plaintiff=s options.
BANA then sent plaintiffs a letter dated November 22, 2011. The letter stated plaintiffs
were not eligible for a home loan modification but BANA was currently reviewing their
information to see if there were other options available to them. The letter further stated BANA
would contact them in ten days to let plaintiffs know what other options they had besides
foreclosure. The letter further stated they would not lose their home during this review period,
but, if they received a foreclosure notice, plaintiffs should respond to protect their rights under
applicable foreclosure law. The letter also stated plaintiffs had 30 days to appeal the denial of
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their home loan modification. As with all previous foreclosure notices, the amount of the
plaintiffs’ debt was not mentioned anywhere in the November 22, 2013, letter. 3
After receiving this letter, plaintiffs’ representative contacted BANA which told him the
December 2, 2011 foreclosure sale had been postponed. Nevertheless, on December 2, 2011, a
representative of Wilson & Associates sold plaintiffs= residence to defendant David Graham, a
Tennessee resident, for $219,254.73.
IV. Analysis
Plaintiffs= complaint as it relates specifically to their claim under the FDCPA is quite
short. It states:
72.
Plaintiffs allege that BANA and Wilson and Associates violated the
[FDCPA], specifically 15 U.S.C. §1639 and 15 U.S.C. § 1692(e).
Plaintiffs allege that BANA did not properly disclose to plaintiffs that the
foreclosure sale would occur despite the representations in the November
22, 2011 letter from BANA. Plaintiffs further allege that Wilson and
Associates provided false and misleading information to Plaintiffs and/or
their representative, Warnie Shaw [,] that the foreclosure sale was on
Ahold.@ Plaintiff=s [sic] further allege that Wilson and Associates used
unfair practices when Wilson and Associates maintained two different
files on Plaintiffs within their offices.
73.
Plaintiffs allege that Defendants are subject to civil liability to Plaintiffs
pursuant to 15 U.S.C. § 1640 and [sic] 1992(k). Plaintiffs request they be
awarded statutory damages in an amount to be proven at trial and their
attorney fees.4
3 Each of the aforementioned letters is attached as an exhibit to the plaintiffs’ original complaint.
The second amended complaint refers to these same letters as being attached to the second
amended complaint, but the plaintiffs did not attach them when they filed the second amended
complaint. The Court thinks this is an oversight and will consider the letters and other exhibits,
e.g. the Deed of Trust, attached to the original complaint as being attached to the second
amended complaint. “[D]ocument[s] attached to the pleadings become part of the pleadings and
may be considered on a motion to dismiss.” Commercial Money Ctr., Inc. v. Ill. Union Ins. Co.,
508 F.3d 327, 335 (6th Cir. 2007); see also Fed. R. Civ. P. 10(c) (“A copy of a written
instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”)
4 15 U.S.C. § 1640 provides a private right of action and damages under the Truth in Lending
Act (TILA), and 15 U.S.C. § 1692(k) provides a private right of action and damages under the
FDCPA. Neither section defines what constitutes a violation of the TILA or the FDCPA. See
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(Second Amended Complaint, Page ID # 258) (footnote added).
A. The Truth in Lending Act- 15 U.S.C. § 1639 - Disclosures
15 U.S.C. § 1639 is part of the Truth in Lending Act (TILA), 15 U.S.C. § ' 1601 et seq.
The purpose of TILA is to promote the informed use of credit by assuring meaningful disclosure
of credit terms to consumers. Baker v. Sunny Chevrolet, Inc., 349 F.3d 862, 865 (6th Cir. 2003).
Section 1639 sets forth many types of disclosures a creditor must give and when and how a
creditor must give them in relation to the terms of a mortgage loan. Such disclosures concern
matters like interest rates, monthly payment amounts, prepayment penalties and additional fees.
There are no disclosure requirements in Section 1639 relating to foreclosures. See generally 15
U.S.C. § 1639. Plaintiffs do not identity which of the several subsections under Section 1639
they contend defendants violated. In this case, the disclosures at issue are representations made
by Wilson & Associates and BANA that the foreclosure sale would not go forward on December
2, 2011 in order that plaintiffs could continue to pursue a loan modification. These disclosures
do not address the terms of the mortgage and thus do not fall within the ambit of Section 1639 -nor do the plaintiffs so argue in their responses to defendants= respective motions to dismiss.
Consequently, the Court concludes that even when considering all factual allegations in the
complaint to be true, the complaint fails to state a claim for relief under TILA, 15 U.S.C. § 1639.
B. The Fair Debt Collection Practices Act - Section 1692e
In order to state a claim under which relief can be granted under Section 1692e, the
plaintiff must plead: (1) the defendant is a “debt collector,” and (2) the defendant used false,
deceptive or misleading communication or means (3) in order to collect a debt. See 15 U.S.C. §
generally, 15 U.S.C. § 1640 and 15 U.S.C. § 1692(k). They are not at issue in this motion to
dismiss.
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1692e (AA debt collector shall not use any false, deceptive, or misleading representations or
means in connection with the collection of any debt.”5). “Debt” is defined by the FDCPA as
“any 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).
Defendants argue that Section 1692e does not apply because the alleged
misrepresentations were not made in connection with an attempt to collect a debt; rather, the
alleged misrepresentations and offending conduct was made in connection with their foreclosure
on a security interest.6 After examining this issue carefully, the Court concludes the defendants
are correct.
The complaint alleges both BANA and Wilson & Associates made promises and
representations which they did not keep in connection with the foreclosure of their home, not in
connection with an attempt to collect the outstanding debt due on the Deed of Trust. BANA
explicitly promised not to foreclose on the plaintiffs’ house during the ten day period after
5 The next sentence of Section 1692e states, [w]ithout limiting the general application of the
foregoing, the following conduct is a violation of this section….” (Emphasis added). Section
1692e continues with 16 different examples of conduct which violates Section 1692e. The
plaintiffs have not identified nor do they argue that any of these 16 examples is conduct engaged
in by defendants. Consequently, defendants argue, plaintiffs’ complaint is too vague and fails to
state a claim under Section 1692e. However, as the statute indicates, the 16 item list is not
inclusive and the examples themselves do not limit the general application of Section 1692e.
6 BANA also argues it cannot be a debt collector because it was only the loan servicer.
However, according to the complaint, the loan originator, Countrywide Home Loans, Inc.,
assigned all rights, title, and interest to BAC Home Loans Services, LP, which was later merged
into defendant BANA, on July 15, 2011, after plaintiffs were in default on their home loan. See
Assignment of Deed of Trust, Page ID # # 33-35. Under the FDCPA, an entity that did not
originate the debt in question but acquires it and attempts to collect on it after the debt is in
default, is a debt collector for purposes of the FDCPA. Bridge v. Ocwen, 681 F.3d 355, 359 (6th
Cir. 2012)
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November 22, 2011 in order to investigate if plaintiffs had any other options besides foreclosure.
BANA also implicitly promised not to foreclose on plaintiffs’ house in the thirty day period after
November 22, 2011 because it told plaintiffs they would have thirty days to appeal the denial of
the loan modification application. A thirty day window to appeal would be a meaningless
opportunity if plaintiffs’ house were to be sold at foreclose during this time. Further, according
to plaintiffs, Wilson & Associates indicated the foreclosure sale was on “hold.” Plaintiffs
further allege that despite these representations, defendants sold their home at a foreclosure sale
during the period of time that defendants had indicated they would not.
While selling a house at a foreclosure sale in order to recoup monies due on a mortgage
in default and seeking to collect a monetary debt due on a mortgage in default without
foreclosing on the house may seem, for all practical purposes, to be substantially the same
conduct, the FDCPA treats foreclosure on a security interest and collection of monetary debts
differently. This distinction is delineated in the FDCPA’s definition of a debt collector. ADebt
collector@ is defined by the FDCPA in relevant part as:
… any person who uses any instrumentality of interstate commerce or the mails in any
business the principal purpose of which is 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. … For the purpose of section 1692f(6) of this title, such term also
includes any person who uses any instrumentality of interstate commerce or the mails in
any business the principal purpose of which is the enforcement of security interests.
15 U.S.C. § 1692a(6) (emphasis added) (footnote added). According to BANA and Wilson &
Associates, based on the definition of debt collector under Section 1692a(6), it can be a “debt
collector” under the FDCPA only for purposes of section 1692f(6) because they were only
enforcing a security interest on a debt, not attempting to collect the underlying debt itself. There
is persuasive support for this argument.
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In a well-reasoned decision in which the court canvasses the law, the district court in
Stamper v. Wilson & Associates, 2010 WL 1408585 (E.D. Tenn. Mar. 31, 2010) (Phillips, J.)
held that a law firm hired solely to institute non-judicial foreclosure proceedings was merely an
enforcer of a security interest and “enforcers of security interests may not be held liable under
the general provisions of the FDCPA. That is, enforcers of security interests may only be sued
under 15 U.S.C. § 1692f(6).” 7 Id. at *5; see also cases cited therein. As the Stamper Court
explained after examining the definition of “debt collector” provided by Section 1692(a)(6),
[c]ourts have held that those who enforce security interests do not qualify as “debt
collectors” under the FDCPA, except for the purpose of § 1692f(6). Although Congress
included within the definition of “debt collectors” those who enforce security interests, it
limited this definition only to the provisions of § 1692f(6). As the Sixth Circuit has
explained, “[s]uch a purposeful inclusion for one section of the FDCPA implies that the
term ‘debt collector’ does not include an enforcer of a security interest for any other
section of the FDCPA.” Montgomery v. Huntington Bank, 346 F.3d at 693, 700 (6th
Cir.2003) (internal citations omitted).
Id. at *3 - *4. The Stamper Court further stated,
The issue then is the following: are law firms that initiate non-judicial foreclosure
proceedings collecting a debt (and therefore subject to the general provisions of the
FDCPA, such as 15 U.S.C. § 1692e), or are they enforcing a security interest (and
therefore only subject to 15 U.S.C. § 1692f(6))? While the Sixth Circuit has not
addressed this issue, the majority of courts hold that law firms in this situation are not
liable under the general provisions of the FDCPA. See Maynard v. Cannon, 2008 WL
2465466, at *4 (D.Utah. June 16, 2008) (where evidence showed that defendant attorney
was hired for limited purpose of non-judicially foreclosing a deed of trust, and plaintiff
offered no evidence as to the frequency of defendant's security enforcement or debt
715 U.S.C. § 1692f(6) provides:
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:
(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.
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collection practices, defendant's activities fell outside the FDCPA's general definition of
“debt collector”); Chomillo v. Shapiro, Nordmeyer & Zielke, LLP, 2007 WL 2695795, at
*6 (D.Minn. Sept.12, 2007) (holding that a law firm execut[ing] a security interest rather
than collecting a debt … thus fell outside the ambit of the FDCPA except for the
provisions of § 1692f(6)); Acosta v. Campbell, 2006 WL 3 804729, at *4 (M.D.Fla. Dec.
22, 2006) (“Nearly every court that has addressed the question has held that foreclosing
on a mortgage is not a debt collection activity for the purposes of the FDCPA”); Hulse v.
Ocwen Federal Bank, FSB, 195 F.Supp.2d 1188, 1210 (D.Or.2002) (actions taken by
attorneys as part of foreclosure of trust deed “may not be challenged as FDCPA
violations”). In other words, the majority of courts hold that law firms that initiate nonjudicial foreclosure proceedings are not collecting a debt, but rather, enforcing a security
interest.
Stamper, 2010 WL 148585 *5. Thus, it would seem clear that foreclosing on a security interest
is not actionable under Section 1692e because it is not a “means” made “in connection with the
collection of any debt.” 15 U.S.C. § 1692e. However, though neither party cited this case, this
analysis would not be complete without a discussion of Grden v. Leikin Ingber & Winters PC,
643 F.3d 169 (6th Cir. 2011), in which the Sixth Circuit considered when a communication is
made in connection with the collection of a debt for purposes of Section 1692e.
In Grden, the plaintiff owed a medical provider for treatment of an infection. The debt
was referred to a collections agency which hired defendant law firm to collect the debt. The law
firm sued the plaintiff for the outstanding debt. The plaintiff then called the law firm to verify his
account balance. A law firm employee erroneously told him he owed more than he actually did.
The plaintiff sued the law firm for violating the FDCPA by, inter alia, making false statements
about his outstanding balance. The law firm argued that the incorrect statements were not
actionable under Section 1692e because they were not made “in connection with the collection
of any debt.” 15 U.S.C. § 1692e. Relying on a Seventh Circuit case, Gburek v. Litton Serv. LP,,
614 F.3d 380 (7th Cir. 2010), the Grden Court stated,
for a communication to be in connection with the collection of a debt, an animating
purpose of the communication must be to induce payment by the debtor. See id. at 385
(“a communication made specifically to induce the debtor to settle her debt will be
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sufficient to trigger the protections” of the Act). Obviously, communications that
expressly demand payment will almost certainly have this purpose. But so too might a
communication that merely refers the debtor to some other communication that itself
demands payment. See, e.g., id. at 386 (third-party letter directing debtor to contact
creditor was sent in connection with collection of a debt). Thus, to use the language of §
1692e, a letter that is not itself a collection attempt, but that aims to make such an attempt
more likely to succeed, is one that has the requisite connection.
Grden, 643 F.3d at 173. The Grden Court then concluded that because the plaintiff had
requested the balance, the erroneous statements “were merely a ministerial response to a debtor
inquiry, rather than part of a strategy to make payment more likely” and “[t]hus, under the
circumstances present here, a reasonable jury could not find that an animating purpose of the
statements was to induce payment by Grden.” Id. at 173.
In the instant case, plaintiffs’ complaint indicates BANA sent a letter to the plaintiffs on
November 22, 2011 stating plaintiffs had not qualified for a loan modification but that BANA
would review their financial information in the next ten days to determine if plaintiffs had some
option besides foreclosure. The letter further indicated the plaintiffs would not lose their home
during this time; nevertheless, Wilson & Associates, who had been hired by BANA to foreclose
on plaintiffs’ home, sold the home on the last day of the ten day review period. One could argue
that BANA’s representations that it would consider other options for plaintiffs besides
foreclosure during the ten day period was “animated” by a desire to collect the outstanding debt
rather than foreclose on the home. However, the focus of plaintiffs’ FDCPA claim is not that
BANA made misrepresentations that it would forebear from foreclosure during a ten day period
in order to collect Plaintiffs’ debt. Rather, the gravamen of this FDCPA claim is that BANA
foreclosed during a time when it said it would not. As plaintiffs argue in their response to
BANA’s motion to dismiss, “BANA violated the Fair Debt Collection Act by not properly
disclosing to Plaintiffs that the foreclosure sale will [sic] occur despite representations in the
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November 22, 200 [sic] letter that Plaintiffs would not lose their home during the 10-day review
period.” (Plaintiffs’ Response, Page ID #155). Since foreclosure of a security interest is not
covered under Section 1692e, plaintiffs’ complaint fails to state a claim under that section.
As to plaintiffs’ claim that Wilson & Associates violated Section 1692e by maintaining
two files on their home, the Court also concludes this claim must fail because there is nothing in
the Plaintiffs’ Second Amended Complaint to indicate that Wilson & Associates did anything
more than attempt to foreclose on the plaintiffs’ home.
Finally, in its response brief to BANA’s motion to dismiss, plaintiffs argue they have
stated a claim under Section 1692f(6)(A). Section 1692f(6)(B) prohibits a debt collector from
‘[t]aking or threatening to take any nonjudicial action to effect dispossession or disablement of
property if… there is no present intention to take possession of the property….” 15 U.S.C. §
1692f(6)(B). For purposes of Section 1692f(6), a debt collector includes “any person who uses
any instrumentality of interstate commerce or the mails in any business the principal purpose of
which is the enforcement of security interests.” 15 U.S.C. § 1692a(6). Neither Section 1692f(6)
nor its language is mentioned in the plaintiffs’ complaint. Importantly, plaintiffs have not moved
to amend their complaint to add this claim. A close reading of the complaint, including all its
factual allegations, does not give defendants fair notice that plaintiffs intended to assert a claim
under Section 1692f(6), and the Court consequently finds no such claim has been asserted.
C. Remand to State Court
Diversity jurisdiction pursuant to 28 U.S.C. § 1332 is lacking in this case because both
plaintiffs and defendants Wilson & Associates and David M. Graham are citizens of Tennessee.
See 28 U.S.C. § 1332. Several state law claims remain in this action. While this Court has
supplemental jurisdiction over the state claims pursuant to 28 U.S.C. § 1367(a), the Court has
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discretion to decline to exercise supplemental jurisdiction where it has dismissed all claims over
which it had original jurisdiction. See 28 U.S.C. § 1367(c). The Sixth Circuit has held “when all
federal claims have been dismissed before trial, the best course is to remand the state law
claims.” Thurman v. DaimlerChrysler, 397 F.3d 352, 359 (6th Cir. 2004) (citations omitted);
accord Burke v. Bradley County Government, 2011 WL 1306766 *4 (E.D. Tenn. April 1, 2011).
Such is the case here.
V. Conclusion
Accordingly, defendants’ respective motions to dismiss will be GRANTED IN PART in
that all claims brought by plaintiffs under the Truth in Lending Act and the Fair Debt Collection
Act will be DISMISSED with prejudice. Defendants’ respective motions to dismiss will be
DENIED IN PART in that plaintiffs’ state law claims will not dismissed. Instead, this action
with its remaining state law claims will be REMANDED to the Chancery Court of Bradley
County, Tennessee. As no further matters remain for adjudication, the Court will DIRECT the
Clerk of Court to CLOSE the case. An appropriate order shall be entered.
ENTER.
SBj|ÄÄ|tÅ UA `|àv{xÄÄ VtÜàxÜ
UNITED STATES MAGISTRATE JUDGE
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