Durham v. NewRez, LLC

• Decision Date: 29 January 2023
• Docket Number: 3:22-cv-89-MMH-MCR
• Court: U.S. District Court — Middle District of Florida
• Parties: COURTNEY D. DURHAM, Plaintiff, v. NEWREZ, LLC, a foreign limited liability company; NEWREZ, LLC d/b/a SHELLPOINT MORTGAGE SERVICING, a Florida registered fictitious name entity solely registered to do business in Duval County; ROBERTSON, ANSCHUTZ, SCHNEID, CRANE & PARTNERS, PLLC, a Florida limited liability company; and FEDERAL NATIONAL MORTGAGE ASSOCIATION, a foreign company, Defendants.

COURTNEY D. DURHAM, Plaintiff,
v.
NEWREZ, LLC, a foreign limited liability company; NEWREZ, LLC d/b/a SHELLPOINT MORTGAGE SERVICING, a Florida registered fictitious name entity solely registered to do business in Duval County; ROBERTSON, ANSCHUTZ, SCHNEID, CRANE & PARTNERS, PLLC, a Florida limited liability company; and FEDERAL NATIONAL MORTGAGE ASSOCIATION, a foreign company, Defendants.

No. 3:22-cv-89-MMH-MCR

United States District Court, M.D. Florida, Jacksonville Division

January 29, 2023

Hon. Marcia Morales Howard, United States District Judge

REPORT AND RECOMMENDATION ^[1]

MONTE C. RICHARDSON, UNITED STATES MAGISTRATE JUDGE

THIS CAUSE is before the Court on Defendants' Motion to Dismiss Plaintiff's Second Amended Complaint (Doc. 50), Plaintiff's Response thereto (Doc. 55), the Motion of Defendant Robertson, Anschutz, Schneid, Crane &

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Partners, PLLC to Dismiss the Second Amended Complaint (Doc. 52), and Plaintiff's Response thereto (Doc. 57). For the reasons that follow, it is RECOMMENDED that Defendants' Motions be GRANTED in part and DENIED without prejudice in part.

I. Introduction

On January 25, 2022, Plaintiff, Courtney D. Durham (“Ms. Durham”),^[2]commenced this action by filing a seven-count, class-action Complaint against Defendants, NewRez, LLC (“NewRez”) and NewRez, LLC d/b/a Shellpoint Mortgage Servicing (“Shellpoint”),^[3]pursuant to Chapters 559 and 501 of the Florida Statutes, 11 U.SC. §§ 105(b) and 524(a)(2) and (j), and 15 U.S.C. § 1692. (Doc. 1.) On March 25, 2022, with opposing counsel's consent, Ms. Durham filed her Amended Class Action Complaint (“Amended Complaint”) against the same Defendants. (Doc. 16.) On April 8, 2022, Defendants moved to dismiss the Amended Complaint and to strike the class action allegations (see Doc. 19), but their motion was denied as moot after Ms.

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Durham, again with opposing counsel's consent, filed her 26-count Second Amended Complaint on June 22, 2022. (See Doc. 35.)

The Second Amended Complaint added two new Defendants: Robertson, Anschutz, Schneid, Crane & Partners, PLLC (“RAS”) and Federal National Mortgage Association (“Fannie Mae”), and dropped all previous class-action allegations and alleged violations of the Fair Credit Reporting Act (“FCRA”) and the Florida Consumer Collection Practices Act (“FCCPA”). (Id.) The Second Amended Complaint alleges that Defendants violated a Chapter 7 bankruptcy discharge injunction and multiple provisions of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., the Real Estate and Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605, et seq., and the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., during a state court foreclosure action filed against Ms. Durham. (Doc. 35.) The twenty-six (26) counts of the Second Amended Complaint are as follows:

1. Contempt of bankruptcy order - 11 U.S.C. § 524(a) & (j) through 11 U.S.C. § 105 (against NewRez)

2. Contempt of bankruptcy order - 11 U.S.C. § 524(a) & (j) through 11 U.S.C. § 105 (against Shellpoint)

3. Contempt of bankruptcy order - 11 U.S.C. § 524(a) & (j) through 11 U.S.C. § 105 (against Fannie Mae);

4. FDCPA violation - 15 U.S.C. § 1692e(2)(A) (against NewRez);

5. FDCPA violation - 15 U.S.C. § 1692e(2)(A) (against Shellpoint);

6. FDCPA violation - 15 U.S.C. § 1692e(8) (against NewRez);

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7. FDCPA violation - 15 U.S.C. § 1692e(8) (against Shellpoint);

8. FDCPA violation - 15 U.S.C. § 1692e(2)(A) (against NewRez);

9. FDCPA violation - 15 U.S.C. § 1692e(2)(A) (against Shellpoint);

10. FDCPA violation - 15 U.S.C. § 1692e(2)(B) (against NewRez);

11. FDCPA violation - 15 U.S.C. § 1692e(2)(B) (against Shellpoint);

12. FDCPA violation - 15 U.S.C. § 1692e(10) (against NewRez);

13. FDCPA violation - 15 U.S.C. § 1692e(10) (against Shellpoint);

14. FDCPA violation - 15 U.S.C. § 1692e(10) (against NewRez);

15. FDCPA violation - 15 U.S.C. § 1692e(10) (against Shellpoint);

16. FDCPA violation - 15 U.S.C. § 1692f(1) (against NewRez);

17. FDCPA violation - 15 U.S.C. § 1692f(1) (against Shellpoint);

18. RESPA violation - 12 U.S.C. § 2605(b)(2)(A) (against NewRez);

19. RESPA violation - 12 U.S.C. § 2605(b)(2)(A) (against Shellpoint);

20. FDCPA violation - 15 U.S.C. § 1692e(2)(A) (against RAS);

21. FDCPA violation - 15 U.S.C. § 1692e(2)(A) (against RAS);

22. FDCPA violation - 15 U.S.C. § 1692e(2)(B) (against RAS);

23. FDCPA violation - 15 U.S.C. § 1692e(6)(A) (against RAS);

24. FDCPA violation - 15 U.S.C. § 1692e(2)(B) (against RAS);

25. RICO violation - 18 U.S.C. § 1961(1)(B) through § 1341 (against all Defendants);

26. RICO violation - 18 U.S.C. § 1961(1)(B) through § 1343 (against all Defendants).

(Doc. 35.)

Counts 1 through 7 are grouped together as relating to “collection through credit bureau reporting.” (Id. at 22.) In Counts 1 through 3, Ms. Durham alleges that NewRez/Shellpoint and Fannie Mae knew or should have known that her debt was discharged in bankruptcy, but continued to report the negative information to the credit reporting agencies (“CRA's”) on a monthly basis in complete disregard of her rights and the bankruptcy court

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order. (Id. at 22-25.) In Counts 4 and 5, in addition to the above stated allegations, Ms. Durham alleges that NewRez/Shellpoint “made false and misleading statements to the credit bureaus as to the character of the debt by failing to disclose that same is disputed.” (Id. at ¶¶ 142, 147.) In Counts 6 and 7, Ms. Durham alleges that NewRez/Shellpoint reported false information to the credit bureaus, namely, that they “had a right to report the debt for purposes of compelling payment by Ms. Durham,” continued to do so even after notification from Ms. Durham, and “made false and misleading statements to the credit bureaus as to the status of the debt without any disclosure that the debt was and is disputed.” (Id. at ¶¶ 149, 152, 153, 155, 158, 159.)

Counts 8 through 26 are grouped together as relating to “debt collection in the foreclosure proceeding.” (Id. at 29.) In Counts 8 and 9, Ms. Durham alleges that NewRez/Shellpoint, “though no longer having any authority to enforce the debt, falsely represented that the debt was owed to [them, rather than to Select Portfolio Servicing, Inc. (SPS) and DLJ Mortgage Capital, Inc. (DLJ)] by continuing to prosecute collection of the Note in the foreclosure proceeding from summary judgment hearing through pending appeal.” (Id. at ¶¶ 162-163, 166-167.) In Counts 10 and 11, Ms. Durham alleges that NewRez/Shellpoint, “though lacking any right to payment for services

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rendered or compensation for payments made or expenses paid in relation to the terms of the Note, continued to prosecute collection of the Note in the foreclosure proceeding through pending appeal.” (Id. at ¶¶ 172, 177.) In Counts 12 and 13, Plaintiff alleges that NewRez/Shellpoint lacked an independent right to enforce the Note, and NewRez/Shellpoint, Ditech Financial f/k/a Green Tree Servicing LLC, and Fannie Mae were never “both holders and owners of both the Note and Mortgage,” but nevertheless continued to falsely state otherwise and to prosecute the foreclosure action. (Id. at ¶¶ 179-185, 187-193.) In Counts 14 and 15, Ms. Durham adds that NewRez/Shellpoint “knew or should have known that the sale and transfer of its alleged interest to another entity stopped its right to continue prosecution of the foreclosure proceeding yet it continued to do so after” and “failed to provide any evidence in contradiction of their express representations [in] correspondence to Ms. Durham and January 17, 2022 [state court] Motion to Substitute that the Note is now enforceable by SPS and DLJ.” (Id. at ¶¶ 195, 202, 204, 211.) In Counts 16 and 17, Ms. Durham alleges, in part, that NewRez/Shellpoint “falsely swore through its representative in the Affidavit of Indebtedness that amounts were due” and “unconscionably had been and is still seeking to collect amounts due without a legal right.” (Id. at ¶¶ 214, 218, 223, 227.) In Counts 18 and 19, Ms. Durham alleges that

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NewRez/Shellpoint failed to give her the statutorily required 15-day notice of change of servicer as to SPS and moved for summary judgment in the foreclosure action prior to providing the notice “in order to have a final judgment of foreclosure entered enabling it to receive monies by sale of Ms. Durham's residence.” (Id. at ¶¶ 231-232, 235-236.)

In Counts 20 and 21, Ms. Durham alleges that RAS knew or should have known that the inception and continued prosecution of the foreclosure action on behalf of NewRez/Shellpoint and Fannie Mae falsely represented the character of the debt and the entity to whom the debt was owed. (Id. at ¶¶ 239, 246.) In Count 22, Ms. Durham alleges that RAS sought compensation for legal services and other expenses on behalf of Defendants in the foreclosure proceeding with knowledge that collection of the debt was not a legal right of Defendants or itself. (Id. at ¶ 251.) In Count 23, Ms. Durham alleges that RAS falsely represented that NewRez/Shellpoint had the right to collect on the debt based on a power of attorney from Ditech and that Ditech had authority to enforce the debt pursuant to the Note; also, RAS knew that there was no power of attorney or servicer agreement between NewRez and Ditech to support authority to enforce the Note. (Id. at ¶¶ 254, 258.) In Count 24 (similar to Count 22), Plaintiff alleges that RAS sought compensation for legal services and other expenses on behalf of Defendants

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and Ditech in the foreclosure proceeding, with knowledge that collection of the debt was not a legal right of Defendants, Ditech, or RAS. (Id. at ¶ 261.)

In Counts 25 and 26, Ms. Durham alleges that using the instrumentalities of the U.S. mail and electronic wire, “Defendants made false...