Bainbridge v. Ocwen Loan Servicing, LLC, CIVIL ACTION NO. 3:16-CV-0411
| Decision Date | 30 March 2017 |
| Docket Number | CIVIL ACTION NO. 3:16-CV-0411 |
| Parties | CHRISTOPHER BAINBRIDGE, ET AL., Plaintiffs v. OCWEN LOAN SERVICING, LLC, ET AL., Defendants |
| Court | U.S. District Court — Middle District of Pennsylvania |
(Judge Nealon)
Plaintiffs, Christopher and Kelly Bainbridge, filed an amended complaint against Defendants U.S. Bank, N.A. as Trustee for the C-BASS Mortgage Loan Trust Asset-Back Certificates, Series 2007-CB6 ("U.S. Bank"); Udren Law Offices, P.C. ("Udren"); and Ocwen Loan Servicing, LLC ("Ocwen") (collectively "Defendants"). (Doc. 14). Plaintiffs allege that Ocwen and Udren violated the Fair Debt Collection Practices Act,15 U.S.C. § 1692, et seq. ("FDCPA"). (Id. at pp. 5-6). Plaintiffs also claim that Defendants made wrongful use of civil proceedings in violation of 42 Pa. C.S.A. § 8351, et seq. ("Dragonetti Act"), and violated the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1, et seq. ("UTPCPL"). (Id. at pp. 6-9). On May 6, 2016, Udren filed a motion to dismiss the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and brief in support. (Docs. 21, 22). On May 16, 2016, U.S. Bank and Ocwen filed a motion to dismiss the amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) and brief in support. (Docs. 23, 24). On June 6, 2016, Plaintiffs filed their brief in opposition to the motions to dismiss. (Doc. 27). On June 20, 2016, Defendants filed a joint reply brief. (Doc. 28). As a result, the aforementioned motions to dismiss are ripe for disposition. For the reasons set forth below, Defendants' respective motions to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) will be denied in part and granted in part.
As stated, both motions to dismiss have been brought pursuant to Federal Rule of Civil Procedure 12(b)(6). See (Docs. 21-24). "This rule provides for the dismissal of a complaint, in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted." Suessenbach Family v. Access Midstream, 2015 U.S. Dist. LEXIS 40900, at *2 (M.D. Pa. Mar. 31, 2015) (Mannion, J.). The moving party bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). All factual allegations are accepted as true and all inferences are construed in the light most favorable to the non-moving party. Kaymark v. Bank of Am., N.A., 2015 U.S. App. LEXIS 5548, at *7 (3d Cir. Apr. 7, 2015) (citing Fleisher v. Standard Ins. Co., 679 F.3d 116,120 (3d Cir. 2012)). "[D]ismissal is appropriate only if, accepting all of the facts alleged in the complaint as true, the plaintiff has failed to plead 'enough facts to state a claim to relief that is plausible on its face.'" Suessenbach Family, 2015 U.S. Dist. LEXIS 40900, at *2 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)). The non-moving party's allegations must be sufficient to "raise a right to relief above the speculative level." Twombly, 550 U.S. at 544. "This requirement 'calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of' necessary elements of the plaintiff's cause of action." Suessenbach Family, 2015 U.S. Dist. LEXIS 40900, at *2-3 (quoting Twombly, 550 U.S. at 544). "Furthermore, in order to satisfy federal pleading requirements, the plaintiff must 'provide the grounds of his entitlement to relief,' which 'requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.'" Id. (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008)).
"Generally, the court should grant leave to amend a complaint before dismissing it as merely deficient." Aspinall v. Thomas, 118 F. Supp. 3d 664, 670-71 (M.D. Pa. 2015) (Mannion, J.) (citing Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247, 252 (3d Cir. 2007); Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d Cir. 2002); Shane v. Fauver, 213 F.3d 113, 116-17(3d Cir. 2000)). "Dismissal without leave to amend is justified only on the grounds of bad faith, undue delay, prejudice, or futility." Alston v. Parker, 363 F.3d 229, 236 (3d Cir. 2004).
Pursuant to the above-discussed motion to dismiss standard of review, all facts are taken from Plaintiffs' amended complaint, (Doc. 14), unless otherwise noted.
On February 7, 2008, Plaintiffs became the owners of the property located at 25 5th Street, Hawley, Pennsylvania 18428. (Id. at p. 2). "On or about March 28, 2007, Plaintiffs initiated a mortgage loan with Defendants' predecessor, Imperial Lending, LLC." (Id.). On or about November 4, 2010, Plaintiffs filed Chapter 13 bankruptcy in the United States District Court for the Middle District of Pennsylvania. (Id. at p. 3). On October 12, 2011, "Ocwen filed a Transfer of Claim document reflecting transfer of servicing rights" regarding Plaintiff's loan "from Litton Loan Servicing, L.P. to Ocwen." (Id.). Ocwen "acquired the servicing rights to the mortgage debt disputed herein from Litton Loan Servicing when alleged to be in default." (Id. at p. 2).
On July 18, 2013, U.S. Bank filed a motion in Plaintiffs' bankruptcy action "for relief from the stay alleging plaintiffs had not made post-petition monthlymortgage payments beginning February 1, 2013." (Doc. 14, p. 3). On August 8, 2013, the United States Bankruptcy Court for the Middle District of Pennsylvania "entered an order granting US Bank relief from the stay due to plaintiffs' bankruptcy counsel failing to respond to the motion without the knowledge of the plaintiffs." (Id.).
On June 26, 2014, "Defendants filed a complaint in mortgage foreclosure against Plaintiffs in Wayne County, Pennsylvania Court of Common Pleas." (Id.). In that foreclosure action, "Defendants alleged . . . that plaintiffs had not made post-petition monthly mortgage payments beginning" on September 1, 2013. (Id.). Defendants "alleged that the aforesaid mortgage was in default in that the payment due on or about September 1, 2013, and alleged that all subsequent payments had not been made." (Id.). Plaintiffs "never missed a single payment after relief was granted to" U.S. Bank in the Plaintiffs' bankruptcy action until "Ocwen began returning plaintiffs' payments in January 2014." (Id.). Ocwen returned these payments "despite Plaintiffs having copies of checks and bank statements evidencing payment for every month alleged unpaid." (Id.). Additionally, "Defendants cashed the checks." (Id.).
Defendants instituted the underlying mortgage foreclosure action against Plaintiffs "without investigating the claimed default." (Id. at p. 4). Subsequent tothe complaint being filed in the underlying mortgage foreclosure action, Plaintiffs "continually informed Defendants of their mistake." (Doc. 14, p. 4). Defendants, however, continued to pursue the foreclosure action. (Id.). On March 13, 2015, in the Wayne County Court of Common Pleas, the Honorable Raymond L. Hamill entered a verdict in favor of Plaintiffs and against Defendants in the underlying foreclosure action. (Id.).
On or about October 7, 2015, Plaintiffs "received a discharge of their chapter 13 bankruptcy wherein they had paid $12,600 in pre-petition arrears to Ocwen and its predecessor servicer, Litton." (Id.). On or about that same date, Ocwen filed "a Response under BR 3002.1(g)" in Plaintiffs' bankruptcy action "alleging a post-petition mortgage loan default by plaintiffs for the months [of] December 1, 2013 through October 1, 2015 in the total amount of $36,851.75." (Id.).
Based on the foregoing, "Plaintiffs' credit has been damaged causing them to be unable to purchase a new truck . . . [and they] also have been forced to rent rather than purchase a new home because they cannot qualify for an affordable mortgage." (Id.). Moreover, Plaintiffs spent "approximately $7,000 to retain attorneys" for their representation in the underlying mortgage foreclosure action. (Id.).
Both motions currently before the Court argue that Plaintiffs' FDCPA claims concerning the underlying foreclosure action are barred by the FDCPA's one (1) year statute of limitations. (Doc. 22, p. 7); (Doc. 24, pp. 1, 5, 6-8). According to Udren, "Plaintiffs claim that 'Defendants' violated the FDCPA by falsely filing a foreclosure action to take Plaintiffs' home and that 'Defendants' sent in and out-of-court correspondence concerning the amounts due." (Doc. 22, p. 7). However, Udren states that Plaintiffs provide "[n]o further specification." (Id.). Furthermore, Udren argues that since the FDCPA has a one-year (1) statute of limitations, "only alleged FDCPA violations occurring after March 8, 2015 are actionable in this proceeding." (Id.). Udren notes that the relevant "Foreclosure Action was filed on June 26, 2014," and "Plaintiffs filed an Answer on September 26, 2014." (Id.). Udren claims that the "[t]rial occurred [on] March 3, 2015." (Id.). Thus, Udren concludes, "[t]he alleged communications by Udren 'in and out of court' would have had to occur after March 8, 2015 to fall within the statute of limitations." (Id.). But, according to Udren, "[b]ecause all the conduct complained of possibly attributable to Udren occurred more than one (1) year before all of the above dates, it is not actionable under the FDCPA." (Id.).
Udren also argues that while Plaintiffs "make unsupported assertions that the purported FDCPA violations continued through the 'present date,'" they "cannot maintain a 'continuation of violation' theory to somehow toll the date of accrual of their FDCPA claim beyond June 26, 2014, the date of commencement of the mortgage foreclosure action or service of the Complaint on August 26, 2014." (Doc. 22, p. 8). Udren claims that "[i]t is well-settled that a specific date is affixed for the accrual of a purported FDCPA violation . . . and the subsequent course of litigation is not actionable under a 'continuing violation'...
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