Hamby v. Seterus, Inc.

• Decision Date: 18 February 2016
• Docket Number: No. 7:15-CV-125-FL,7:15-CV-125-FL
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: JAMES HAMBY, Plaintiff, v. SETERUS, INC., Defendant.

JAMES HAMBY, Plaintiff, v. SETERUS, INC., Defendant.

No. 7:15-CV-125-FL

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA SOUTHERN DIVISION

February 18, 2016

MEMORANDUM AND RECOMMENDATION

This matter is before the court on Defendant Seterus, Inc.'s ("Defendant") motions to dismiss the complaint and first amended complaint of pro se Plaintiff James Hamby ("Plaintiff") for failure to state a claim upon which relief may be granted pursuant to Rules 8 and 12(b)(6) of the Federal Rules of Civil Procedure. [DE-10, DE-18]. All responsive briefing is complete, and the pending motions are ripe for adjudication. These motions were referred to the undersigned and are considered here for a recommendation to the District Court. See 28 U.S.C. § 636(b)(1)(A), (B); see also Local Civil Rule 72.3(c). For the reasons set forth below, it is recommended that Defendant's first motion to dismiss [DE-10] be denied as moot and Defendant's second motion to dismiss [DE-18] be granted.

I. BACKGROUND

On June 5, 2015, Plaintiff filed a complaint alleging claims under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., related to Defendant's debt collection practices. Compl. [DE-1]. After being granted an extension of time to answer [DE-8], on July 21, 2015, Defendant filed the first motion to dismiss the complaint pursuant to Rules 8 and 12(b)(6) [DE-10] in lieu of filing an answer. On August 12, 2015, Plaintiff filed a response in opposition to the first motion to dismiss [DE-15] and filed an amended complaint as of right pursuant to Rule 15 ("Am. Compl.") [DE-14]. On August 26, 2015, Defendant filed a reply [DE-17] and a motion to dismiss Plaintiff's amended complaint pursuant to Rules 8 and 12(b)(6) [DE-18]. Plaintiff filed a response in opposition to the second motion to dismiss on September 4, 2015 [DE-21], and Defendant filed a reply on September 18, 2015 [DE-22].

II. FACTUAL ALLEGATIONS

The following factual summary is taken from the amended complaint and attached exhibits [DE-14] and exhibits offered in support of the motions to dismiss. On July 1, 2008, Plaintiff executed a promissory note in favor of RBC Bank in the amount of $91,5000.00, secured by a deed of trust on the real property located at 9 Crown Point Road, Hubert, North Carolina, 28539. Am. Compl. [DE-14] at 3 ¶¶ 9-10; Note [DE-10-1]; Deed of Trust [DE-10-2]. The deed of trust identifies Mortgage Electronic Registration Systems, Inc. ("MERS") as nominee for RBC Bank and its successors and assigns and the beneficiary of the deed of trust. Deed of Trust [DE-10-2] at 3-4. Both the note and the deed of trust provide that they may be sold or transferred. Note [DE-10-1 ] at 2; Deed of Trust [DE-10-2] at 12-13.

On June 19, 2013, MERS assigned the deed of trust to JP Morgan Chase Bank, N.A. ("Chase"). [DE-10-3]. Chase then assigned the deed of trust to the Federal National Mortgage Association ("Fannie Mae") on June 13, 2014. [DE-14-3]. Plaintiff was in default on his home loan prior to June 1, 2014. Am. Compl. [DE-14] at 3 ¶ 12; ¶ 19. On June 10, 2014, Defendant sent Plaintiff a letter titled "Transfer of Servicing Notice," wherein Defendant advised Plaintiff that it became the servicer of Plaintiff's loan effective June 1, 2014. Am. Compl. [DE-14] at 4 ¶ 13; [DE- 14-1]. Defendant also advised Plaintiff that "[t]he assignment, sale, or transfer of the servicing of the mortgage loan does not affect any term or condition of the mortgage instruments, other than terms directly related to the servicing of your loan." [DE-14-1] at 1.

On June 15, 2014, Defendant sent Plaintiff a second letter. Am. Compl. [DE-14] at 4 ¶ 15; [DE-14-2]. In the second letter (the "dunning letter"), Defendant provided information about Plaintiff's home loan, including the name of the creditor, the total amount of debt, the unpaid interest, and late charges. Am. Compl. [DE-14] at 5 ¶ 26; [DE-14-2] at 2. Plaintiff alleges that he was in default when Defendant became the servicer of his debt and when the deed of trust was assigned to Fannie Mae. Am. Compl. [DE-14] at 4 ¶¶ 21-22. Plaintiff asserts the following claims: (1) Defendant failed to make the required disclosures listed in 15 U.S.C. § 1692g(a) in the dunning letter; (2) Defendant used false or misleading representations in violation of 15 U.S.C. § 1692e; and (3) Defendant used unfair or unconscionable means in an attempt to collect interest and fees in violation of 15 U.S.C. § 1692f. The subject-matter jurisdiction of the court arises under 28 U.S.C. § 1331 by virtue of Plaintiff's assertion of claims under the FDCPA.

III. STANDARD OF REVIEW

Pursuant to Rule 12(b)(6), a court may dismiss an action which fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A 12(b)(6) motion to dismiss tests the sufficiency of the facts pleaded in the complaint and the relevant inquiry is whether the plaintiff's factual allegations are "enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In reviewing a motion to dismiss, a court is required to consider the complaint in the light most favorable to the plaintiff and to accept as true all well-pleaded factual allegations. Randall v. United States, 30 F.3d 518, 522 (4th Cir. 1994) (citation omitted). A complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570); see also Robinson v. Am. Honda Motor Co., 551 F.3d 218, 222 (4th Cir. 2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citing Twombly, 550 U.S. at 555).

The Supreme Court has also opined that Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Erickson v. Pardus, 551 U.S. 89, 93 (2007). "Specific facts are not necessary; the statement need only 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Id. at 93 (quoting Twombly, 550 U.S. at 555) (internal quotations omitted). "Although for the purposes of this motion to dismiss we must take all the factual allegations in the complaint as true, we are not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286 (1986). "A document filed pro se is to be liberally construed, and a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers." Erickson, 551 U.S. at 94 (internal quotation marks and citations omitted). However, the liberal construction requirement will not permit a district court to ignore a clear failure to allege facts setting forth a cognizable claim under federal law. Weller v. Dep't of Soc. Servs., 901 F.2d 387, 390-91 (4th Cir. 1990); see also Beaudett v. City of Hampton, 775 F.2d 1274, 1278(4th Cir. 1985) (holding that the court is not required to "conjure up questions never squarely presented.").

"If, on a motion under Rule 12(b)(6) . . . matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." Fed. R. Civ. P. 12(d). However, this rule is subject to several exceptions. "[C]ourts must consider the complaint in its entirety, as well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). The court "may also consider documents attached to the complaint, see Fed. R. Civ. P. 10(c), as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Phillips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009); see also Phillips v. LCI Intern., Inc., 190 F.3d 609, 618 (4th Cir. 1999) (considering a statement attached to a motion to dismiss where "it was integral to and explicitly relied on in the complaint and because the plaintiffs do not challenge its authenticity."). Exhibits that may be incorporated within the pleadings under Rule 10(c) include documents such as affidavits, letters, contracts, and loan documentation. Eagle Nation v. Market Force, Inc., 180 F. Supp. 2d 752, 754 (E.D.N.C. 2001). "[I]n the event of conflict between the bare allegations of the complaint and any exhibit attached pursuant to Rule 10(c) . . . the exhibit prevails." Fayetteville Inv'rs v. Commercial Builders, Inc., 936 F.2d 1462, 1465 (4th Cir. 1991) (citation omitted).

IV. DISCUSSION

A. Defendant's First Motion to Dismiss [DE-10]

Defendant moves to dismiss Plaintiff's complaint pursuant to Rules 8 and 12(b)(6), arguing that Plaintiff has failed to state a claim for which relief may be granted. [DE-10]. Plaintiff responded in opposition to the motion to dismiss [DE-15], and Defendant filed a reply [DE-17]. Subsequent to Defendant filing the motion to dismiss, Plaintiff filed an amended complaint as of right pursuant to Rule 15. Am. Compl. [DE-14]. "Unless the amended complaint specifically refers to and adopts or incorporates by reference the earlier pleadings, the amended complaint supercedes an original complaint and renders the original complaint without legal effect." Singletary ex rel. N.M.M. v. Cumberland Cty. Schs., No. 5:12-CV-744, 2013 WL 4674874, at *3 (E.D.N.C. Aug. 30, 2013) (unpublished) (denying as moot a motion to dismiss plaintiff's original complaint where the court granted plaintiff's motion to file an amended complaint) (citing In re Wireless Tel. Fed. Cost Recovery Fees Lit., 396 F.3d 922, 928 (8th Cir. 2005); King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994)). See also Young v. City...