Jenkins v. BAC Home Loan Servicing, LP

• Decision Date: 29 September 2011
• Docket Number: Civil Case No. 7:11–cv–73 (HL).
• Parties: Randy JENKINS, Plaintiff, v. BAC HOME LOAN SERVICING, LP, McCalla Raymer, LLC, Defendants.
• Court: U.S. District Court — Middle District of Georgia

822 F.Supp.2d 1369

Randy JENKINS, Plaintiff,

v.BAC HOME LOAN SERVICING, LP, McCalla Raymer, LLC, Defendants.

Civil Case No. 7:11–cv–73 (HL).

United States District Court,M.D. Georgia,Valdosta Division.

Sept. 29, 2011.

Randy Jenkins, Moultrie, GA, pro se.

Andrew G. Phillips, McGuirewoods LLP, Atlanta, GA, for Defendants.

ORDER

HUGH LAWSON, Senior District Judge.

Before this Court is the Defendants' Motion to Dismiss (Doc. 13). In conjunction with this Motion to Dismiss, the Court is taking under consideration Plaintiff's Response to the Motion to Dismiss (Doc. 21), Defendants' Reply (Doc. 22), and a second Response from Plaintiff (Doc. 23).

I. Background

On July 20, 2007, Plaintiff executed a Security Deed on his home (“Subject Property”) in favor of non-party Countrywide Home Loans, Inc., as Lender, and Mortgage Electronic Registration Systems, Inc. (“MERS”), as Nominee, to secure a promissory note in the amount of $175,750.00. On March 2, 2010, MERS assigned its interest in the Security Deed to Defendant BAC Home Loan Servicing, LP (“BAC”). On August 18, 2010, Plaintiff received a letter from Defendant McCalla Raymer (“McCalla”) notifying Plaintiff that he was in default and that a foreclosure sale of the Subject Property would take place unless the mortgage was paid in full. A second letter was sent to Plaintiff on September 27, 2010 to the same effect.

In his version of the facts, Plaintiff contends that the assignment from Countrywide Home Loans to Defendant BAC was fraudulent. (Doc. 8, ¶¶ 16–25, 28–36.) To support this allegation, Plaintiff asserts that Defendants were participating in “foreclosure fraud,” an offense that included filing false documents with the Clerk of the Superior Court of Colquitt County. (Doc. 8, ¶ 26.) Additionally, Plaintiff maintains that Defendants repeatedly harassed him to collect “alleged but nonexistent debt.” (Doc. 8, ¶ 39.) Defendants deny all of these factual allegations.

Based upon these allegations, Plaintiff asserts claims against Defendants for violations of the Fair Debt Collection Practice Act (“FDCPA”), 15 U.S.C. §§ 1692 et seq. (Counts I–VI), the Georgia Fair Business Practice Act (“FBPA”), O.C.G.A. § 10–1–390 et seq. (Count VII), the Real Estate Settlement Procedures Act of 1974 (“RESPA”), 12 U.S.C. § 2601 et seq. (Count VIII), as well as claims for unjust enrichment, breach of implied covenant of good faith and fair dealing, conversion, libel and defamation, breach of contract, fraud and deceit, mortgage fraud and abuse (Counts IX–XVI). Plaintiff seeks compensatory damages, in addition to other relief.

II. Standard of Review

On a motion to dismiss, the Court must accept the factual allegations in the complaint as true and construe the complaint in the light most favorable to the plaintiff. SEC v. ESM Group, Inc., 835 F.2d 270, 272 (11th Cir.1988). To survive a motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “Where the well pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘shown’—that the pleader is entitled to relief.” Id. at 1950. A complaint must contain enough facts to indicate the presence of the required elements. Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1302 (11th Cir.2007). However, “conclusory allegations, unwarranted deductions of fact, or legal conclusions masquerading as facts will not prevent dismissal.” Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir.2002).

III. Claims against Defendants

Plaintiff has asserted a wide variety of claims against Defendants. Each of these claims is addressed below in the order in which Plaintiff alleges them in his Amended Complaint. (Doc. 8.)

a. Counts I–VI: Fair Debt Collection Practices Act

In Plaintiff's Amended Complaint (Doc. 8), he alleges six counts against Defendants under the Fair Debt Collection Practices Act (“FDCPA”). However, five out of six of these charges are immediately dismissed because the FDCPA provisions are inapplicable to Defendants.

The FDCPA applies to situations where there is evidence that: (1) the plaintiff is objecting to a collection activity arising from consumer debt; (2) the defendant who is attempting to collect debt qualifies as a “debt collector;” and (3) the defendant engaged in a prohibited act or failed to perform certain requirements under the statute. Buckley v. Bayrock Mortg. Corp., No. 1:09–cv1387–TWT, 2010 WL 476673, at *6 (N.D.Ga. Feb. 5, 2010). “Debt collector” means “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a.

It is well-established that mortgage servicers do not fall within the definition of debt collector. See Warren v. Countrywide Home Loans, Inc., 342 Fed.Appx. 458, 460 (11th Cir.2009) (determining that “the act of foreclosing on a security interest is not debt collection activity for the purposes of the FDCPA.”); Bentley v. Bank of Am., N.A., 773 F.Supp.2d 1367, 1371 (S.D.Fla. Mar. 23, 2011) (concluding that plaintiff's claims under the FDCPA should be dismissed because “neither Defendants are ‘debt collectors' as contemplated by the statute which explicitly excludes mortgage servicing companies”); Hennington v. Greenpoint Mortg. Funding, Inc., Nos. 1:09–cv–676–RWS, 1:09–cv–962–RWS, 2009 WL 1372961, at *6 (N.D.Ga. May 15, 2009) (noting that “[i]t is well established that the FDCPA applies only to ‘debt collectors' and not to creditors or mortgage servicers.”).

In this case, Plaintiff has not shown that either Defendant was acting as a “debt collector” within the scope of the statute. Since mortgage servicing is not considered debt collection activity, neither Defendant can be considered a “debt collector” for purposes of the FDCPA. Thus, Defendant BAC Home Loan Servicing, LP (“BAC”), a mortgage servicer, and Defendant McCalla, a law firm acting under the direction of BAC, are exempt from almost all claims under the FDCPA. Thus, Count I under 15 U.S.C. § 1692d, Count II under 15 U.S.C. § 1692e, Count III under 15 U.S.C. § 1692e(10), Count IV under 15 U.S.C. § 1692f, and Count VI under 15 U.S.C. § 1692g(b) are all barred because the FDCPA is not applicable.

Count V of Plaintiff's Amended Complaint is the only claim under the FDCPA that merits further discussion. Count V alleges a violation of section 1692f(6) of the FDCPA, which contains an exception to the definition of “debt collector” that arises in the context of foreclosure.

Under section 1692f(6), the term “debt collector” includes “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.” Warren, 342 Fed.Appx. at 460. The statutory language in this section refers to “enforcement of security interests” as opposed to “enforcement of debts,” significantly broadening the reach of this particular provision. Under section 1692f(6), a debt collector, as broadly defined for purposes of this section, may not take or threaten to take a consumer's property in a non-judicial action if “(a) there is no present right to the property through an enforceable security interest, (b) there is no present intention to take possession of the property, or (c) the property is exempt from being taken.” 15 U.S.C. § 1692f(6).

In this case, section 1692f(6) is broad enough to include Defendants; however, neither Defendant violated the provisions of the statute. Section 1692f(6) only forbids threats against a consumer's property if there is no enforceable security interest in the property. Here, BAC had a present interest in the property since BAC was the mortgagee and in possession of the Security Deed, and McCalla pursued foreclosure at the direction of BAC. Thus, the actions of the Defendant do not constitute violations of the FDCPA and Count Five must be dismissed.

Accordingly, none of the six counts alleged under the FDCPA contain claims upon which relief can be granted, and therefore, they are dismissed.

b. Count VII: Georgia Fair Business Practices Act

Count VII of the Amended Complaint alleges that Defendants violated the Georgia Fair Business Practices Act (“FBPA”). The FBPA was created “to protect consumers and legitimate business enterprises from unfair or deceptive practices in the conduct of any trade or commerce.” O.C.G.A. § 10–1–391(a). The statute includes a private right of action that allows individuals who are injured under the statute to file a claim against violators to recover injunctive relief, as well as general and exemplary damages. See O.C.G.A. § 10–1–399(a).

A violation of the FBPA has three elements: (1) a violation of the Act, (2) causation, and (3) injury. Zeeman v. Black, 156 Ga.App. 82, 86–87, 273 S.E.2d 910, 916 (Ga.Ct.App.1980). Additionally, courts have implied a reliance component into the causation element of the prima facie case under the FBPA. Id. Thus, “a claimant who alleges the FBPA was violated as a result of a misrepresentation must demonstrate that he was injured as the result of the reliance upon the alleged misrepresentation.” Id.

Before analyzing the elements of the prima facie case, the applicability of the FBPA must be addressed as a threshold question. The FBPA was created by the Georgia Legislature to protect the public interest, and therefore only transactions affecting the general public are regulated under the FBPA.

The legislature has evidenced a clear intent to limit the scope of the [FBPA] to the consumer market ... Taking into...