Keeton v. Countrywide Home Loans, Inc.
| Decision Date | 14 November 2016 |
| Docket Number | Civil Action No. 16-1623 (JEB) |
| Citation | 217 F.Supp.3d 177 |
| Parties | Barbara J. KEETON, et al., Plaintiffs, v. COUNTRYWIDE HOME LOANS, INC., et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Roxan Althea Kerr, Law Offices of RA Kerr, PLLC, Washington, DC, for Plaintiffs.
Andrew Justin Narod, Thomas R. Lynch, Bradley Arant Boult Cummings LLP, Washington, DC, Aaron Drew Neal, McNamee, Hosea, Jernigan, Kim, Greenan & Lynch, P.A., Greenbelt, MD, for Defendants.
Plaintiffs Barbara Keeton and Wilbert Keeton, Jr. are waging a desperate battle to retain possession of their family home. In support of that effort, they have pursued this multi-year litigation against several lending entities to challenge the validity of the loan that has put their property in jeopardy of foreclosure. The Keetons recently added a new Defendant, Specialized Loan Servicing LLC, to this mix, alleging that the Company has violated the Fair Debt Collection Practices Act since taking over their loan servicing in 2014. Having removed the case to federal court, SLS now moves to dismiss these FDCPA claims on several grounds. As the Court concludes that the claims are defective, but not necessarily beyond repair, it will dismiss SLS without prejudice and give the Keetons a brief opportunity to see if they can fix the deficiencies with another amended complaint.
The Court, as it must at this stage, draws the facts from Plaintiffs' Second Amended Complaint and treats them as true. Sparrow v. United Air Lines, Inc. , 216 F.3d 1111, 1113 (D.C. Cir. 2000). Plaintiffs are an elderly married couple who own a home at 5303 13th Street, NW, Washington, D.C. See ECF No. 1-1 (Second Amended Complaint), ¶¶ 1, 7-8. Wilbert, the sole breadwinner, hit a rough patch in his business during the economic downturn in 2006. Id. , ¶ 10. At the same time, Barbara experienced a serious flare-up in her rare lung condition, causing her to be hospitalized around Thanksgiving Day with double pneumonia. Id. , ¶ 11. Her condition was so dire that she fell into a coma during her months-long stay in the hospital. Id. , ¶ 12. She did not regain consciousness again until January 2007, at which time she remained heavily medicated and dependent on medical equipment to eat and breathe. Id. , ¶¶ 14-17.
Drowning in this sea of despair, Wilbert desperately seized at a life raft that appeared in the form of a telephone solicitation from a Countrywide Home Loans, Inc., loan officer in January 2007. Id. , ¶¶ 13, 18. Over several conversations, the loan officer convinced Wilbert that he could solve the Keetons' growing financial woes through a loan and an equity line of credit both to be secured by their family home. Id. , ¶ 19. Wilbert initially protested that his wife was deathly ill and could not possibly consent to encumbering her share of their house, but the loan officer pushed on, assuring him that Barbara could simply be left off the necessary loan documents. Id. , ¶¶ 21-22. Wilbert, yearning for the respite, filled out the loan application that same month. Id. , ¶ 24.
A few weeks later, in February 2007, the loan officer and Wilbert visited the Rehabilitation Center where Barbara remained hospitalized to sign additional loan forms with the assistance of a notary public. Id. , ¶¶ 25-26. Barbara, however, was so heavily sedated that the Countrywide officer had to direct Wilbert to assist her in signing the documents. Id. , ¶ 27. Though Barbara herself had no idea what she was signing, these agreements effectively divested her of her full rights in their shared home. Id. , at 2, ¶¶ 28–29. The loan was settled shortly thereafter in her absence, leaving Wilbert free to finalize a home-equity line of credit as well. Id. , ¶¶ 33-34.
Although Barbara later got out of the hospital—also in February 2007—she remained heavily medicated and sedated for much of the year. Id. , ¶¶ 31-32. Two years later, in 2009, she continued to be physically weak and thus was unable to participate in a modification of the home loan that Wilbert secured from the new holder of the mortgage, Bank of America. Id. , ¶¶ 37-38. Barbara, in fact, could not communicate fully again until 2011, when she tried to help her husband seek another modification of the loan. Id. , ¶¶ 39-40. The bank, however, refused to speak with her about it. Id. , ¶ 41.
In February 2012, the Keetons retained counsel to assist them with their mortgage woes. Id. , ¶ 42. Barbara only then learned that the bank would not discuss the loan with her because she was not a party to it and may have signed documents in the hospital that changed her rights to the property. Id. , ¶¶ 43-44. A year and a half later, the Keetons also received a letter from the Department of Justice that indicated Countrywide may have discriminated against Barbara by requiring her to execute the mortgage-related documents. Id. , ¶ 45.
On May 29, 2014, the Keetons filed a Complaint in the Superior Court for the District of Columbia, accusing Bank of America, Countrywide, and another lending subsidiary of various unlawful actions in relation to the loan and equity line of credit. Id. , ¶ 47. A short time later, they also learned that Bank of America had "transferred their loan to Defendant SLS." Id. , ¶ 48.
At some subsequent date, SLS contacted the Keetons directly in an effort to collect payment on the home loan. Id. , ¶ 49. Over the next two years, SLS and the Keetons also unsuccessfully attempted to work out another loan modification. Id. , ¶¶ 50-51. When those negotiations finally collapsed, Plaintiffs filed a Second Amended Complaint to join SLS as a Defendant in the ongoing action against the lenders, accusing the Company of violating the FDCPA through its efforts to collect on the loan. Id. , ¶¶ 77-81. SLS immediately removed the case to this Court and now moves to dismiss the sole FDCPA count against it. See ECF Nos. 1 (Notice of Removal), 6 (Motion to Dismiss). That Motion is now ripe.
The Federal Rules of Civil Procedure require a plaintiff to include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of an action where such a complaint fails "to state a claim upon which relief can be granted." In evaluating a Rule 12(b)(6) motion, the Court must "treat the complaint's factual allegations as true ... and must grant plaintiff ‘the benefit of all inferences that can be derived from the facts alleged.’ " Sparrow , 216 F.3d at 1113 (quoting Schuler v. United States , 617 F.2d 605, 608 (D.C. Cir. 1979) ) (citation omitted). The pleading rules are "not meant to impose a great burden," Dura Pharm., Inc. v. Broudo , 544 U.S. 336, 347, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005), and "detailed factual allegations" are thus not necessary. See Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A complaint, however, "must contain 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). The Court need not accept as true "a legal conclusion couched as a factual allegation," nor an inference unsupported by the facts set forth in the complaint. Trudeau v. Fed. Trade Comm'n , 456 F.3d 178, 193 (D.C. Cir. 2006) (quoting Papasan v. Allain , 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986) (internal quotation marks omitted)). The facts instead "must be enough to raise a right to relief above the speculative level" even if "recovery is very remote and unlikely." Twombly , 550 U.S. at 555–56, 127 S.Ct. 1955 (citing Scheuer v. Rhodes , 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) ).
In seeking dismissal of the FDCPA claims against it, SLS essentially throws everything but the kitchen sink at the Complaint. More specifically, the Company asserts that the relief requested by Plaintiffs is not available under the statute, SLS is not sufficiently alleged to be a debt collector subject to the FDCPA, the claims are time-barred, most of the claims are inadequately pled, and, finally, it is prejudiced by being joined as a Defendant at this late date. The Court takes up each of these arguments in the sections that follow. Because it ultimately concludes that the Complaint must be dismissed for its failure to sufficiently allege that SLS is a debt collector, however, the last three issues receive only abbreviated treatment.
Plaintiffs seek several types of relief against SLS in their latest Complaint, including an injunction barring foreclosure or transfer of the loan, punitive damages, and treble damages. See Sec. Am. Compl. at 13. SLS first asserts that, because none of this relief is available under the FDCPA, the sole count against the Company must be dismissed. Plaintiffs do not contest that these types of relief are beyond their reach, only that this does not warrant dismissal. See Opp. at 5 ().
This implicit concession is for good reason. The FDCPA provides that private parties are limited to actions for "any actual damages sustained by such person as a result of [a debt collector's] failure" to comply with the Act, "such additional damages as the court may allow, but not exceeding $1,000," and costs and reasonable attorney fees. See 15 U.S.C. § 1692k(a) (emphasis added); see also Sibley v. Fulton DeKalb Collection Service , 677 F.2d 830, 834 (11th Cir. 1982) (); Bolin v. Sears, Roebuck & Co. , 231 F.3d 970, 977 n.39 (5th Cir. 2000) (). To the extent,...
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