Collins v. Bsi Fin. Servs., Servis One Inc.
| Decision Date | 15 November 2016 |
| Docket Number | CASE NO. 2:16-CV-262-WHA (WO) |
| Parties | MARIANN COLLINS, RICK COLLINS, Plaintiff, v. BSI FINANCIAL SERVICES, SERVIS ONE INC., MCM CAPITAL PARTNERS LLC, VENTURES TRUST 2013-I-H-R, and CITIMORTGAGE, INC., Defendants. |
| Court | U.S. District Court — Middle District of Alabama |
This matter comes before the court on a Motion to Dismiss Amended Complaint (Doc. # 19), filed by the Defendant, CitiMortgage, Inc. ("CitiMortgage") and the Joinder in CitiMortgage's Motion to Dismiss (Doc. # 21), filed by the other Defendants.
On March 7, 2016, Plaintiffs, Mariann Collins and Rick Collins (collectively, the "Plaintiffs") filed a Complaint against the Defendants in state court (Doc. # 1-6). CitiMortgage properly removed this action to federal court with joinder by the other Defendants, and, subsequently, CitiMortgage filed a Motion to Dismiss (Doc. # 8), under Rule 12(b)(6) of the Federal Rules of Civil Procedure ("FRCP"). In response, Plaintiffs sought leave to amend their complaint under FRCP 15(a)(2), (Doc. # 11), which this court granted on May 23, 2016. (Doc. # 12). The Amended Complaint, (Doc. # 17), repled the same causes of action as the original Complaint, including: (1) Negligence; (2) Wantonness; (3) Unjust Enrichment; (4) Wrongful Foreclosure; (5) Slander of Title; (6) Breach of Contract; (7) Fraud; (8) False Light Invasion of Privacy; (9) Defamation, Libel, Slander; (10) Violations of the Truth in Lending Act, 15 U.S.C. §§ 1601-1667f ("TILA"); (11) Violations of the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601-2617 ("RESPA"); (12) Violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681y ("FCRA"); (13) Violations of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p ("FDCPA"); and (14) Claim for Declaratory Relief. Id. Each claim is asserted against all Defendants. CitiMortgage again moved to dismiss all of Plaintiffs' claims (Doc. # 19), and the other Defendants joined (Doc. # 21).1 For reasons to be discussed, the Motion to Dismiss is due to be GRANTED in part and DENIED in part.
The court accepts the plaintiffs' factual allegations as true, Hishon v. King & Spalding, 467 U.S. 69, 73 (1984), and construes the complaint in the plaintiffs' favor, Duke v. Cleland, 5 F.3d 1399, 1402 (11th Cir. 1993). In analyzing the sufficiency of pleading, the court is guided by a two-prong approach: one, the court is not bound to accept conclusory statements of the elements of a cause of action and, two, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to entitlement to relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To survive a motion to dismiss, a complaint need not contain "detailed factual allegations," but instead the complaint must contain "only enough facts to state a claim to relief that is plausibleon its face." Id. at 570. The factual allegations "must be enough to raise a right to relief above the speculative level." Id. at 555.
The allegations of the Plaintiffs' complaint are as follows:
On June 19, 2000, Plaintiffs purchased a home in Montevallo, Alabama and entered into a mortgage loan with Ronnie Miskelly, Jr. on the property. (Doc. # 17). Thereafter, the loan was transferred; first, to Riverside Mortgage Company, Inc.; then, to "The Associates;" and, finally, to CitiMortgage. Id. When CitiMortgage received the loan, Plaintiffs were allegedly behind on their payments. Accordingly, the Plaintiffs agreed to pay an additional amount for twelve (12) months to bring the account up to date. Id.
In July 2014, Plaintiffs allegedly fell behind on their payments, and CitiMortgage initiated foreclosure proceedings on the Plaintiffs' property. Id. Plaintiffs allege, however, that they were not in default on their mortgage at the time and that the foreclosure proceedings were improper at that time. Id. Plaintiffs sent a letter to CitiMortgage's attorney including a qualified written request ("QWR"), asking for an accounting of the loan. Id. However, CitiMortgage did not respond until January 2015. At that point, the Plaintiffs again made arrangements to bring the account up to date. Id.
However, in July 2015, CitiMortgage again commenced foreclosure proceedings. Id. CitiMortgage attempted at least two other foreclosure proceedings in 2015, but each proceeding was stalled or canceled due to improper publication notices in the Montgomery Independent newspaper. CitiMortgage never foreclosed on the property. Id.
In November 2015, the loan was sold to Ventures Trust 2013-I-H-R and serviced by BSI Financial Services, Servis One Inc., and MCM Capital Partners LLC (collectively, the "otherDefendants").2 Id. On November 8, 2015, the other Defendants improperly and wrongfully began foreclosure proceedings on the property. Id. Plaintiffs allege that the remaining Defendants reported such foreclosure to the national credit bureaus, which negatively affected their credit and reputation. Id.
Plaintiffs maintain, however, that at no point was the mortgage loan in default and that the attempted foreclosure proceedings were wrongful. Id.
Plaintiffs did not respond to CitiMortgage's arguments to dismiss Plaintiffs' false light invasion of privacy claim (Count Eight), or its claim for Declaratory Relief (Count Fourteen). Consequently, Plaintiffs have abandoned these claims and they are subject to dismissal. See Coal. for the Abolition of Marijuana Prohibition v. City of Atlanta, 219 F.3d 1301, 1326 (11th Cir. 2000) (); see also McMaster v. United States, 177 F.3d 936, 940-41 (11th Cir. 1999) ().
Plaintiffs allege four (4) federal claims against CitiMortgage: (i) Violations of TILA, (ii) Violations of RESPA, (iii) Violations of the FCRA, and (iv) Violations of the FDCPA. The court will address these claims in succession.
With respect to Plaintiffs' TILA claim, CitiMortgage argues that it fails because CitiMortgage is not a creditor and because it is barred by the statute of limitations.3 Also, this argument has been adopted by the remaining Defendants. TILA provides a private right of action to consumers against any "creditor" who fails to comply with the requirements imposed under the law. 15 U.S.C. § 1640(a). TILA defines the term "creditor" as follows:
The term "creditor" refers only to a person who both (1) regularly extends, whether in connection with loans, sales of property or services, or otherwise consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement."
15 U.S.C. § 1602(g). To qualify as a creditor under TILA, the entity must meet both prongs. See Parker v. Potter, 232 F.App'x 861, 864 (11th Cir. 2007).
Plaintiffs admit that CitiMortgage was not the initial creditor to whom the mortgage loan was first made payable. Plaintiffs' allege that they entered into the mortgage loan with Ronnie Miskelly, Jr. (Doc. # 17, p. 2). Further, Plaintiffs do not allege that any Defendant was involved in the mortgage loan at its inception, but rather only became involved after the loan was latertransferred to CitiMortgage and then to Ventures Trust. Therefore, by Plaintiffs' own admission, the Defendants cannot qualify as a creditor under the second prong of TILA's definition of creditor, because they were not the creditor to whom the debt was initially made payable. See Rice, 2014 WL 3889472, at *4.
Second, Plaintiffs' TILA claim is time barred. TILA establishes a one year statute of limitations from the date the transaction is consummated. See 15 U.S.C. § 1640(e);4 see also Velardo, 298 F. App'x at 892. ("Nondisclosure is not a continuing violation for purposes of the statute of limitations.") Plaintiffs allege that the mortgage loan at issue in this case originated on June 19, 2000. Thus, the statute of limitations ran on June 19, 2001. Because Plaintiffs did not commence this action until March 7, 2016, Plaintiffs' TILA claim is time-barred as to all Defendants.
In Count Eleven, Plaintiffs allege that Defendants violated RESPA "by failing to acknowledge or respond to the Plaintiffs' Qualified Written Request (QWR)." (Doc. # 17, pp. 18-19). To state a claim under 12 U.S.C. § 2605(e), Plaintiffs must show: (1) that Defendants are servicers; (2) that Defendants received a QWR from the borrower; (3) that the QWR related to the servicing of the loan; (4) that Defendants failed to respond adequately; and (5) that Plaintiffs are entitled to actual or statutory damages. 12 U.S.C. § 2605(e); Renfroe v. Nationstar Mortgage, LLC, 822 F.3d 1241, 1246 (11th Cir. 2016) ()
Defendants move for dismissal of Plaintiffs' RESPA claim, arguing, first, that Plaintiffs never submitted a QWR. (Doc. # 19, pp. 35-36). For a request to "qualify"—as a QWR—it must (1) be in writing, (2)...
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