Langley v. Green Tree Servicing, LLC
| Decision Date | 10 November 2015 |
| Docket Number | CIVIL ACTION NO. 4:15-CV-02063 |
| Parties | GLEN LANGLEY, et al, Plaintiffs, v. GREEN TREE SERVICING, LLC, et al, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Pending before the Court is the defendants', Green Tree Servicing, LLC ("Green Tree") and Flagstar Bank, FSB's ("Flagstar"), motion to dismiss the plaintiffs' original complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) (Dkt. No. 6). The plaintiffs, Glen and Anita Langley, filed a response in opposition to the motion (Dkt. No. 10). After having carefully considered the motion, response, and the applicable law, the Court determines that the defendants' motion to dismiss should be GRANTED.
On October 16, 2008, the plaintiffs purchased a home located at 106 Dove Call Ct., Spring, Texas 77382. To finance the purchase, the plaintiffs entered into a residential mortgage loan agreement with Flagstar. The plaintiffs have since occupied the home. On February 25, 2015, Flagstar sent the plaintiffs an offer to enter into a loan modification agreement. Accompanying the offer was a letter with specific instructions on how to accept and execute the agreement. The plaintiffs timely executed the agreement. On March 31, 2015, the plaintiffs received a notification that the debt was assigned to Green Tree. After the assignment, the plaintiffs began receiving conflicting billing statements from Green Tree regarding how much they were required to pay in order to maintain good standing on the debt. Several billing statements contained delinquency notices. On May 18, 2015, Green Tree sent the plaintiffs a "notice of default and right to cure default" on the debt.
On July 16, 2015, the plaintiffs commenced the instant action against the defendants alleging violations under the Fair Debt Collection Practices Act ("FDCPA"), the Texas Debt Collection Act ("TDCA"), and the Texas Deceptive Trade Practices Act ("DTPA"). The defendants now move to dismiss the plaintiffs' claims pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim. The plaintiffs assert federal question jurisdiction pursuant to 28 U.S.C. § 1331.
Federal Rule of Civil Procedure 12(b)(6) authorizes a defendant to move to dismiss for "failure to state a claim upon which relief may be granted." Fed. R. Civ. P. 12(b)(6). Under the demanding strictures of a Rule 12(b)(6) motion, "[t]he plaintiff's complaint is to be construed in a light most favorable to the plaintiff, and the allegations contained therein are to be taken as true." Oppenheimer v. Prudential Sec., Inc., 94 F.3d 189, 194 (5th Cir. 1996) (citing Mitchell v. McBryde, 944 F.2d 229, 230 (5th Cir. 1991)). Dismissal is appropriate only if, the "[f]actual allegations [are not] enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1965, 167 L. Ed.2d 929 (2007). Moreover, in light of Federal Rule of Civil Procedure 8(a)(2), "[s]pecific facts are not necessary; the [factual allegations] need only 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93, 127 S. Ct. 2197, 2200, 167 L. Ed.2d 1081 (2007) (per curiam) (quoting Twombly, 550 U.S. at 555, 127 S. Ct. at 1964). Even so, "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." Twombly, 550 U.S. at 555, 127 S. Ct. at 1964-65 (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 92 L. Ed.2d 209 (1986)).
In Ashcroft v. Iqbal, the Supreme Court expounded upon the Twombly standard, reasoning that "[t]o survive a motion to dismiss, a complaint 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, 129 S. Ct. 1937, 1949, 173 L. Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S. Ct. at 1974). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678, 129 S. Ct. at 1949 (citing Twombly, 550 U.S. at 556, 127 S. Ct. at 1955). "But 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 'show [n]'-'that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679, 129 S. Ct. at 1950 (quoting Fed. R. Civ. P. 8(a)(2)).
Nevertheless, when considering a 12(b)(6) motion to dismiss, the Court's task is limited to deciding whether the plaintiff is entitled to offer evidence in support of his or her claims, not whether the plaintiff will eventually prevail. Twombly, 550 U.S. at 563, 127 S. Ct. at 1969 n.8 (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L. Ed.2d 90 (1974)); see also Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999). In this regard, its review is limited to the allegations in the complaint and to those documents attached to a defendant's motion to dismiss to the extent that those documents are referred to in the complaint and are central to the claims. Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004). The Court may also, however, "take judicial notice of documents in the public record . . . , and may consider such documents in determining a motion to dismiss." R2 Invs. LDC v. Phillips, 401 F.3d 638, 640 n. 2 (5th Cir. 2005) (citing Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1017-18 (5th Cir. 1996). "Such documents should be considered only for the purpose of determining what statements [they] contain, not to prove the truth of [their] contents." Lovelace, 78 F.3d at 1018 (internal citation omitted). "If, based on the facts pleaded and judicially noticed, a successful affirmative defense appears, then dismissal under Rule 12(b)(6) is proper." Hall v. Hodgkins, No. 08-40516, 2008 WL 5352000, *3 (5th Cir. Dec. 23, 2008) (citing Kansa Reinsurance Co., Ltd. v. Cong. Mortg. Corp. of Tex., 20 F.3d 1362, 1366 (5th Cir. 1994)).
Counts one through six of the plaintiffs' original complaint allege a number of claims against Green Tree for violations under the FDCPA. In response, the defendants contend that Green Tree is exempt from the FDCPA because it is not a debt collector, based on its status as a loan servicer. The purpose of the FDCPA is to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). The FDCPA defines "debt collectors" as "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(6). The act explicitly exempts from the definition, "any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was originated by such person [or] concerns a debt which was not in default at the time it was obtained by such person." 15 U.S.C. § 1692a(6)(F); Brumberger v. Sallie Mae Servicing Corp., 84 F. App'x 458, 459 (5th Cir. 2004); see also Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985) (); Montgomery v. Wells Fargo Bank, N.A., 459 F. App'x 424, 428 n. 1 (5th Cir. 2012).
The plaintiffs cite Bridge v. Ocwen Fed. Bank, FSB, 681 F.3d 355, 360 n.4 (6th Cir. 2012), to support their argument that "a loan servicer will become a debt collector under § 1692a(6)(F)(iii) if the debt was in default or treated as such when it was acquired." In Bridge, The plaintiff's bank erroneously dishonored her personal check issued for her monthly mortgage payment to her mortgage company. See id. at 357. After notice of the dishonor, the plaintiff made a second attempt to make the mortgage payment by issuing an "official check", which was also erroneously dishonored. Id. On the third attempt, the plaintiff issued another official check, which was ultimately honored by her bank. Id. At the same time, however, the bank eventually honored the first attempted payment resulting in a double mortgage payment for the same month. Id. To make up for the double payment, the plaintiff did not make a payment the following month. Id. Despite proof of the double payment, the mortgage company began "dunning" the plaintiff and her husband for the payment claimed to be overdue. Id. During this time, the debt was assigned to a subsequent loan servicer who continued the collection efforts. Id. The plaintiff and her husband filed suit against the bank, mortgage company, and loan servicer for alleged violations of the FDCPA. Id. The loan servicer argued that it was not a debt collector because, as the plaintiffs alleged, the loan was not actually in default status at the time of the transfer. Id. The Sixth Circuit focused on the loan servicer's conduct surrounding the alleged debt noting that:
the § 1692a(6)(F)(iii) exception, which may operate to remove a loan...
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