Woody et al v. Aurora Commercial Corp.
Filing
69
ORDER granting 50 Motion for Summary Judgment. Signed by Judge Samuel H. Mays, Jr on 4/19/2018. (Mays, Samuel)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
YVETTE D. WOODY and SIMON D.
WOODY,
Plaintiffs,
v.
AURORA COMMERCIAL
CORPORATION, successor entity
to Aurora Bank FSB; AURORA
LOAN SERVICING, LLC; and
NATIONSTAR MORTGAGE, LLC,
Defendants.
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No. 15-cv-2747-SHM-tmp
ORDER
Before the Court is Defendants Aurora Commercial
Corporation, Aurora Loan Services, LLC 1
(collectively
“Aurora”), and Nationstar Mortgage, LLC’s (“Nationstar”)
October 13, 2017 Motion for Summary Judgment.
(ECF No. 50.)
Plaintiffs Yvette D. Woody and Simon D. Woody responded on
February 6, 2018.
February 23, 2018.
(ECF No. 64.)
Defendants replied on
(ECF No. 68.)
For the following reasons, the Motion for Summary Judgment
is GRANTED.
1
Defendants note that “Aurora Loan Services, LLC” is Aurora Loan’s
correct name, not “Aurora Loan Servicing, LLC,” as stated in the Complaint.
(ECF No. 50 at 387 n.1 (emphasis added).)
I.
Background
On or about September 21, 2015, Plaintiffs sent a letter
to Defendant Aurora Loan Services, LLC and copied Nationstar.
(ECF No. 50-1; ECF No. 64-1 ¶ 1.)
The letter states that
Plaintiffs have “received a dunning letter notice from AURORA
LOAN SERVICES, LLC.”
(ECF No. 50-1 at 390.)
It questions how
Nationstar came to service Plaintiffs’ defaulted mortgage and
how Aurora Loan Services, LLC came to own the Note.
391-92.)
(Id. at
Attached to the letter is a Creditor Disclosure
Statement, which Plaintiffs ask that Aurora Loan Services, LLC
answer.
(Id. at 393-94.)
On or about October 21, 2015, Plaintiffs sent a second
letter to Aurora Loan Services, LLC.
64-1 ¶ 2.)
(ECF No. 50-2; ECF No.
The letter states that it “is a request for
validation made pursuant to the Fair Debt Collection Practices
Act 15 USC ¶ 1692g(1)(2),” seeking “competent evidence that
[Plaintiffs] have some contractual obligation to pay [Aurora
Loan Services, LLC].”
(ECF No. 50-2 at 396.)
As in their
previous letter, Plaintiffs attached a Creditor Disclosure
Statement, which they asked Aurora Loan Services, LLC to
“complete and return.”
(Id.)
On or about October 21, 2015, Plaintiffs sent a letter to
Prommis Solutions, LLC on behalf of Nationwide Trustee
2
Services, Inc., copying the Consumer Financial Protection
Bureau and Nationstar.
(ECF No. 50-3; ECF No. 64-1 ¶ 3.)
letter is dated October 26, 2015.
(ECF No. 50-3.)
The
It states
that it “is a request for validation made pursuant to the Fair
Debt Collection Practices Act 15 USC ¶ 1692g(1)(2),” seeking
“competent evidence that [Plaintiffs] have some contractual
obligation to pay . . . .”
(ECF No. 50-3 at 399.)
As in their
previous letters, Plaintiffs attached a Creditor Disclosure
Statement, which they asked the recipients to “complete and
return.”
(Id.)
On November 4, 2015, Aurora Commercial Corp. sent
Plaintiffs a letter (the “Aurora Letter”).
No. 64-1 ¶ 4.)
(ECF No. 50-4; ECF
It states that it “is in response to
[Plaintiffs’] communication dated October 26, 2015. . . .”
(ECF No. 50-4 at 403.)
It notifies Plaintiffs that Aurora
Commercial Corp.’s “business records reflect that the abovereference mortgage loan account was service transferred to
Nationstar Mortgage LLC effective July 1, 2012 (see attached).”
(Id.) 2
The Aurora Letter states that Plaintiffs should “direct
all future communications to Nationstar Mortgage LLC.”
2
(Id.)
Attached to the letter is a photocopy of a June 15, 2012 letter
addressed to Plaintiffs, notifying them “that the servicing of [their]
loan, that is, the right to collect payments from [Plaintiffs], is being
transferred from Aurora Bank FSB (Aurora Bank) to Nationstar Mortgage LLC
effective July 1, 2012.” (ECF No. 50-4 at 404.)
3
On November 4, 2015, Nationstar sent Plaintiffs a letter
(the “Nationstar Letter”).
(ECF No. 50-5; ECF No. 64-1 ¶ 13.)
It states that Nationstar has received Plaintiffs’ letter dated
October 26, 2015.
(ECF No. 50-5 at 405.)
The Nationstar
Letter states that:
Some information you have requested does not pertain
directly to the servicing of the loan, does not
identify any specific servicing errors, and/or is
considered proprietary and confidential. Therefore,
this information is considered outside the scope of
information that must be provided.
However, the
information below and enclosed documents should
address any of your relevant questions and requests.
Enclosed, you will find the following documents: Note
and Security Instrument . . . [and] Payment History .
. . .
(ECF No. 50-5 at 405-06.)
The Nationstar Letter also describes
the contents of the Note and Security Instrument and Payment
History attachments.
It represents that:
The Note and Security Instrument will validate the
above-mentioned loan.
These documents will explain
our rights to:
• Collect any remaining debt owed under the Note
and Security Instrument
• Assess fees and costs to the loan as
necessary, including late fees if a payment is
received after the specified grace period and
legal fees if a loan is in default.
• Inspect
fees
the
property
and
charge
• Purchase lender placed insurance
• Pay taxes on the mortgagor’s behalf
4
applicable
(Id. at 405.)
It further represents that “[t]he payment
history reflects a complete history for the period Nationstar
has serviced the loan” and reflects
• When payments were received
• How the payments were applied to the loan
• Any disbursements made from the loan, including,
but
not
limited
to,
disbursements
for
taxes,
insurance,
property
inspections,
brokers
price
opinions (BPOs), and legal fees.
• A description for each transaction, with running
balances of the unpaid principal and escrow accounts
• The date fees and charges were assessed, if any
• Any amounts paid towards fees
• Any waivers/reversals of fees
(Id. at 405-06.)
At the bottom of each page, the letter contains the
following disclaimer:
Nationstar is a debt collector. This is an attempt
to collect a debt and any information obtained will
be used for that purpose.
However, if you are
currently in bankruptcy or have received a discharge
of bankruptcy, this communication is not an attempt
to collect a debt from you personally to the extent
that it is included in your bankruptcy or has been
discharged,
but
is
provided
for
informational
purposes only.
(Id. at 405-07.)
The Nationstar Letter also notifies Plaintiffs of the
current owner of the Note, of Nationstar’s servicing
5
responsibilities, and of records that show a foreclosure was
completed on January 5, 2012.
(Id. at 406-07.)
On November 18, 2015, Plaintiffs filed a pro se complaint
against Defendants.
(ECF No. 1.)
Complaint on May 6, 2016.
Plaintiffs filed an Amended
(ECF No. 20.)
The Amended Complaint sought (1) a declaratory judgment
that Plaintiffs’ Note is void as against public policy and in
violation of the Truth in Lending Act (the “TILA”); (2)
rescission of the Note under the TILA and correspondingly a
release of the Deed of Trust encumbering the property and
rescission of the foreclosure; (3) relief under the Fair Debt
Collection Practices Act (the “FDCPA”); (4) damages for various
TILA violations; (5) damages for violations of the Real Estate
Settlement Procedures Act (the “RESPA”); (6) damages for
Defendants’ civil conspiracy, under Tennessee law; (7) damages
and other relief for Defendants’ fraud and misrepresentation,
under Tennessee law; and (8) damages for misrepresentations
under the Tennessee Consumer Protection Act (the “TCPA”).
No. 20 ¶¶ 62-108.)
(ECF
Plaintiffs also sought compensatory
damages, punitive damages, statutory attorney’s fees, expenses,
costs, an injunction prohibiting Defendants from selling the
property before the property can be returned to Plaintiffs
6
unencumbered by the Deed, and “other damages, which the Court
believes are just.”
(Id. at 112-13.)
On June 1, 2016, Defendants moved to dismiss Plaintiffs’
amended complaint.
(ECF No. 25.)
On March 28, 2017, the Court entered an Order dismissing
all claims except Plaintiffs’ FDCPA claim for alleged violation
of 15 U.S.C. § 1692e(2)(A).
II.
(ECF No. 34 at 344.)
Legal Standard
Federal Rule of Civil Procedure 56(a) provides that a
party moving for summary judgment must “identify[] each claim
or defense -- or the part of each claim or defense -- on which
summary judgment is sought” and “show[] that there is no
genuine dispute of material fact and the movant is entitled to
judgment as a matter of law.”
Fed. R. Civ. P. 56(a).
The
court must view the record in the light most favorable to the
nonmoving party.
Loyd v. St. Joseph Mercy Oakland, 766 F.3d
580, 588 (6th Cir. 2014).
To overcome a properly supported summary-judgment motion,
the nonmoving party must set forth specific facts showing that
there is a “genuine” dispute for trial.
Fed. R. Civ. P. 56(c).
A “genuine” dispute exists when the nonmoving party presents
“significant probative evidence” “on which a reasonable jury
7
could return a verdict for [it].”
E.E.O.C. v. Ford Motor Co.,
782 F.3d 753, 760 (6th Cir. 2015) (quoting Chappell v. City of
Cleveland, 585 F.3d 901, 913 (6th Cir. 2009)).
The court does
not have the duty to search the record for such evidence.
See,
e.g., Meachem v. Memphis Light, Gas & Water Div., 119 F. Supp.
3d 807, 813 (W.D. Tenn. 2015) (citing Fed. R. Civ. P. 56(c)(3);
InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir.
1989)).
The nonmoving party “‘must do more than simply show
that there is some metaphysical doubt as to the material
facts.’”
Ford Motor Co., 782 F.3d at 770 (quoting Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586
(1986)).
“[I]t is black-letter law that the party opposing the
motion for summary judgment may not rely solely on the
pleadings. . . .”
Lindsey v. Detroit Entm't, LLC, 484 F.3d
824, 830 n.7 (6th Cir. 2007).
Courts must use summary judgment carefully, but when
appropriate, it is “an integral part of the Federal Rules as a
whole, which are designed to secure the just, speedy, and
inexpensive determination of every action[,] rather than a
disfavored procedural shortcut.”
F.D.I.C. v. Jeff Miller
Stables, 573 F.3d 289, 294 (6th Cir. 2009) (internal quotation
marks and citations omitted).
8
III. Analysis
A. Plaintiffs’ New Claims
In their response to Defendants’ Motion for Summary
Judgment, Plaintiffs raise claims of fraud and civil
conspiracy.
(ECF No. 64 at 502-03.)
Similar claims were
dismissed in the Court’s March 28, 2017 Order.
337.)
(ECF No. 34 at
Plaintiffs’ response also includes a bare request to
“Amend and Supplement the complaint.”
(Id. at 507.)
Plaintiffs do not provide a proposed amended complaint or state
what the amendments would be.
Defendants oppose Plaintiffs’
request, to the extent it seeks to amend the complaint, as
untimely and futile.
(ECF No. 68 at 854-58.)
The Sixth Circuit has repeatedly held that a non-moving
plaintiff may not raise new claims for the first time in
response to an opposing party’s summary judgment motion.
See,
e.g., Tucker v. Union of Needletrades, Ind. & Textile
Employees, 407 F.3d 784, 788 (6th Cir. 2005); Desparois v.
Perrysburg Exempted Village School District, 455 F. App’x 659,
666 (6th Cir. 2012) (“[A] plaintiff may not expand his claims
to assert new theories for the first time in response to a
summary judgment motion.”); Bridgeport Music, Inc. v. WM Music
Corp., 508 F.3d 394, 400 (6th Cir. 2007).
Allowing a plaintiff
to do so would “subject defendants to unfair surprise.”
9
Tucker, 407 F.3d at 788 (citing Guiffre v. Local Lodge No.
1124, 940 F.2d 660 (6th Cir. 1991) (refusing to hear claims
raised for the first time in response to a summary judgment
motion, because “the defendants had no opportunity to
investigate them when they conducted their own discovery”)).
The appropriate avenue for a non-moving plaintiff to bring
new allegations before the Court at the summary judgment stage
is a motion to amend the complaint.
App’x at 666.
See Desparois, 455 F.
Courts are not required to construe a request to
amend contained in a brief opposing a grant of summary judgment
as a motion to amend, and may decline to consider the new
claims altogether.
Willecke v. Kozel, 395 F. App'x 160, 168
(6th Cir. 2010) (citing PR Diamonds, Inc. v. Chandler, 364 F.3d
671, 699 (6th Cir. 2004)); Desparois, 455 F. App’x at 666.
Plaintiffs have not filed a motion to amend their
complaint.
They have improperly sought to raise new claims in
response to Defendants’ Motion for Summary Judgment.
The Court
declines to consider Plaintiffs’ request as a motion to amend
the complaint.
Plaintiffs’ fraud and civil conspiracy claims
are not before the Court.
10
B. Plaintiffs’ FDCPA Claim - § 1692e(2)(A)
Defendants argue that they are entitled to summary
judgment on Plaintiffs’ § 1692e(2)(A) claim because the
November 2015 letters are not debt collection activities in
violation of 15 U.S.C. § 1692e.
(ECF No. 51 at 451.)
They
contend that the letters were “informational” and in “response
to Plaintiffs’ inquiry.”
(Id. at 453.)
Defendants argue that
the inclusion of a “boilerplate FDCPA disclaimer” at the bottom
of the letterhead and a balance statement in the Nationstar
Letter do not transform it into a debt collection activity.
(Id. at 451-52.)
Plaintiffs do not argue that the Aurora Letter is a debt
collection activity.
(See ECF No. 64.)
They concede that the
letter was sent in response to Plaintiffs’ inquiry.
64-1 ¶¶ 3-4, 6.)
(ECF No.
They concede that the letter informs
“Plaintiffs that Aurora Bank, FSB had merged into ACC,” that
the mortgage servicing was “transferred to Nationstar effective
July 1, 2012,” and “that all future communication should be
directed at Nationstar.”
(Id. ¶ 5.)
They concede that the
letter does not expressly demand payment or threaten any legal
action.
(Id. ¶¶ 7-8, 11.)
not list a payment due date.
They concede that the letter does
(Id. ¶ 9.)
11
Plaintiffs argue that the Nationstar Letter constitutes a
debt collection activity for four reasons.
First, Plaintiffs
argue that Nationstar identified itself as a debt collector
attempting to collect a debt at the bottom of its letterhead.
(ECF No. 64 at 497.)
Second, Plaintiffs argue that Nationstar
threatened to take action when it described its rights under
the “Note and Security Instrument.”
(Id. at 497-98.)
Third,
Plaintiffs argue that “Nationstar expressly referenced the
amount owed in the [Payment History] . . . and [its] right to
collect under the note/deed of trust.”
added).)
(Id. at 498 (emphasis
Fourth, Plaintiffs argue that “[b]y reference to the
Note and Security Agreement without delineation, Nationstar
explicitly threatened legal action under the terms of the note
and deed of trust. . . .”
(Id. (emphasis added)). 3
Section 1692e prohibits the use of “false, deceptive, or
misleading representation[s] or means in connection with the
collection of any debt.”
15 U.S.C. § 1692e.
To prevail under
this section, “a plaintiff must show that a defendant violated
one of the substantive provisions of the FDCPA while engaging
3
Plaintiffs also claim the Nationstar Letter referred to (1) the
status of Plaintiffs’ forbearance, (2) a suspension account, (3) the
ownership of the Note, (4) compliance with federal and state law, and (5)
the payment history report. (ECF No. 64 at 498-500.) Plaintiffs do not
explain how or whether those references transform the Nationstar Letter
into a debt collection activity under the FDCPA. Even if the references
were “false, deceptive, or misleading representation[s]” under section
1692e, they were not made “in connection with the collection of any debt”
for the reasons discussed in the remainder of this subsection.
12
in debt collection activity.”
Clark v. Lender Processing
Servs., 562 F. App'x 460, 465–66 (6th Cir. 2014) (emphasis
added) (citing Glazer v. Chase Home Fin. LLC, 704 F.3d 453,
459–60 (6th Cir. 2013)).
Not every communication between a debt collector and a
debtor is a debt collection activity.
Grden v. Leikin Ingber &
Winters PC, 643 F.3d 169, 173 (6th Cir. 2011) (citing Gburek v.
Litton Loan Serv. LP, 614 F.3d 380, 385 (7th Cir. 2010)).
Whether a communication constitutes a debt collection activity
is a factual inquiry.
The “communication need not itself be a
collection attempt; it need only be ‘connect[ed]’ with one” and
have the “animating purpose of . . . induc[ing] payment by the
debtor.”
Id.
The animating purpose of a communication is a
question of fact generally given to a jury.
Id.
Nevertheless,
summary judgment is appropriate if a reasonable jury could not
find that the animating purpose of the communication was to
induce payment.
Id. (citing Estep v. Manley Deas Kochalski,
LLC, 552 F. App’x 502, 505 (6th Cir. 2014); Grden, 643 F.3d at
173.).
At summary judgment, courts weigh seven factors when
deciding whether a reasonable jury could find that the
animating purpose of the communication was to induce payment:
13
(1) the nature of the relationship of the parties;
(2) whether the communication expressly demanded
payment or stated a balance due; (3) whether it was
sent in response to an inquiry or request by the
debtor; (4) whether the statements were part of a
strategy to make payment more likely; (5) whether the
communication was from a debt collector; (6) whether
it stated that it was an attempt to collect a debt;
and (7) whether it threatened consequences should the
debtor fail to pay.
Goodson v. Bank of Am., N.A., 600 F. App’x 422, 431 (6th Cir.
2015) (citing Grden, 643 F.3d at 173; McDermott v. Randall S.
Miller & Assocs., P.C., 835 F. Supp. 2d 362, 370-71 (E.D. Mich.
2011)).
In Goodson, the Sixth Circuit weighed the seven factors in
determining whether two letters sent from the defendant debt
collector in July 2011 and October 2011 were debt collection
activities under the FDCPA.
600 F. App’x at 430-41.
The court
concluded that the first, second, and fifth factors weighed in
favor of finding that the July 2011 letter constituted a debt
collection activity because “the letter was sent by a debt
collector who had no relationship with [the plaintiff] prior to
her default, and stated the balance owed as of June 30, 2011. .
. .”
Id. at 432.
The court found the remaining factors did
not support finding the letter was a debt collection activity.
The court concluded that “[t]he letter did not make an express
demand for payment, list a payment due date or threaten
consequences should [the plaintiff] fail to pay.
14
Further, the
standard disclaimer language -- which stated that [the
defendant] was ‘a debt collector attempting to collect a debt’
-- did not, by itself, transform the informational letter into
debt collection activity.”
Id.
(citing Gburek, 614 F.3d at
386 n.3; Maynard v. Cannon, 401 F. App’x 389, 395 (10th Cir.
2010)).
The court concluded that the “animating purpose” of
the letter was to inform the plaintiff of a loan servicer
change, not to induce payments on a default mortgage.
Id.
The court also concluded that, on balance, the factors
weighed in favor of finding the October 2011 letter was not a
debt collection activity.
plaintiff’s inquiry.
That letter was sent in response to
The court reasoned that, “[w]hen
communications are ‘merely a ministerial response to a debtor
inquiry, rather than part of a strategy to make payment more
likely,’ . . . inducing payment is not [the communication’s]
animating purpose.”
Id. (quoting Grden, 643 F.3d at 173).
The
court rejected the argument that a letter sent in response to a
debtor inquiry could be used to show a “strategy to make
payment more likely.”
Id. at 433.
The court also found that
“the letter did not make a demand for payment, state a balance
due, indicate that it was an attempt to collect a debt, or
threaten negative consequences should [the plaintiff] fail to
pay.”
Id. at 432.
15
Here, the November 2015 letters do not constitute debt
collection activities.
The Aurora Letter was sent in response
to Plaintiffs’ October 26, 2015 communication, and informed
Plaintiffs that Nationstar would be servicing the loan.
No. 50-4.)
(ECF
It does not make a demand for payment, state a
balance due, indicate that it is an attempt to collect a debt,
or threaten negative consequences should Plaintiffs fail to
pay.
(See id.)
On balance, a reasonable jury could not find
that the animating purpose of the Aurora Letter was to induce
payment.
The Nationstar Letter was sent by a debt collector that
had no relationship with Plaintiffs, and attached a “Payment
History” that had a remaining balance.
(ECF No. 50-5.)
Nevertheless, the letter was sent in response to Plaintiffs’
October 26, 2015 communication.
(ECF No. 64-1 ¶¶ 13, 15.)
It
did not make an express demand for payment, list a payment due
date, or expressly threaten consequences if Plaintiffs failed
to pay.
Nationstar’s reference to the Note and Security
Instrument and the Payment History, along with its explanation
of the contents of those attachments, was informational.
Nationstar did not explicitly demand payment, set a due date,
or threaten legal action.
The animating purpose of the
Nationstar Letter was to respond to Plaintiffs’ “validation”
16
request and inform them that Nationstar was servicing their
loan.
(See ECF Nos. 50-3 & 50-5.)
As in Goodson, standard
disclaimer language does not transform an informational letter
into a debt collection activity.
On balance, a reasonable jury
could not find that the animating purpose of the Nationstar
Letter was to induce payment.
Because a reasonable jury could not find that the
animating purpose of the November 2015 letters was to induce
payment, summary judgment on Plaintiffs’ § 1692e(2)(A) claim is
appropriate.
Defendants’ Motion for Summary Judgment is
GRANTED.
IV.
Conclusion
For the foregoing reasons, Defendants’ Motion for Summary
Judgment is GRANTED.
So ordered this 19th day of April, 2018.
/s/ Samuel H. Mays, Jr.
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE
17
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