Mohamad v. Wells Fargo Bank, N.A.

• Decision Date: 16 May 2019
• Docket Number: Case No: 6:18-cv-1386-Orl-CEM-DCI
• Court: U.S. District Court — Middle District of Florida
• Parties: ANSARI MOHAMAD and SHAMEENA MOHAMAD, Plaintiffs, v. WELLS FARGO BANK, N.A., HSBC BANK USA, AND BROCK AND SCOTT, PLLC, Defendants.

ANSARI MOHAMAD and SHAMEENA MOHAMAD, Plaintiffs, v. WELLS FARGO BANK, N.A., HSBC BANK USA, AND BROCK AND SCOTT, PLLC, Defendants.

Case No: 6:18-cv-1386-Orl-CEM-DCI

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA ORLANDO DIVISION

May 16, 2019

REPORT AND RECOMMENDATION

This cause comes before the Court for consideration without oral argument on the following motions:

MOTION: DEFENDANT WELLS FARGO BANK, N.A.'S MOTION TO DISMISS AMENDED COMPLAINT (Doc. 46)

FILED: February 1, 2019

THEREON it is RECOMMENDED that the motion be GRANTED in part and DENIED in part.

MOTION: DEFENDANT BROCK AND SCOTT, PLLC'S MOTION TO DISMISS AMENDED COMPLAINT (Doc. 64)

FILED: March 5, 2019

THEREON it is RECOMMENDED that the motion be GRANTED.

I. Introduction

This matter first came to this Court in December 2016 when Plaintiffs Ansari and Shameena Mohamad (Plaintiffs) filed an action against, among others, HSBC Bank N.A. and America's Servicing Company, a division of Wells Fargo. See Mohamad et al. v. H.S.B.C. et al, 6:16-cv-2239-ORL-41DCI (M.D. Fla.). Ultimately, that underlying case settled following a settlement conference before United States Magistrate Judge Thomas B. Smith. See id. at Doc. 59. Thus, on May 15, 2018, the Court dismissed the case with prejudice, subject to the parties moving to re-open the case within 60 days. Id. at Doc. 61. The parties never sought to re-open the case within the time permitted.

Instead, on August 22, 2018, Plaintiffs filed a complaint initiating this action. Doc. 1. Thereafter, Plaintiffs filed a seven-count Amended Complaint that remains the operative pleading. Doc. 34. In the Amended Complaint, Plaintiffs alleged the following claims:

• Counts I and II: violations by Wells Fargo of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692. Doc. 34 at 10-12.

• Count III: violation by Wells Fargo of the Florida Consumer Collections Practices Act (FCCPA), Florida Statutes § 559.72(9). Doc. 34 at 12-13.

• Count IV: breach by Wells Fargo, Brock and Scott, and HSBC (collectively, Defendants) of a settlement agreement (the Settlement Agreement) entered into between Defendants and Plaintiffs that had resolved Mohamad et al. v. H.S.B.C. et al, 6:16-cv-2239-ORL-41DCI (M.D. Fla. March 27, 2018). Doc. 34 at 13-14.

• Count V: breach by Brock and Scott and HSBC of an implied duty of good faith and fair dealing arising from the terms of the Settlement Agreement. Doc. 34 at 14-16.

• Count VI: violation by Brock and Scott and HSBC of Florida Statutes section 701.04(2). Doc. 34 at 16-17.

• Count VII: request for declaratory relief in the form of a declaration of the rights of the parties under the Settlement Agreement. Doc. 34 at 17-18.

As alleged, the FDCPA claims in the Amended Complaint relate to a mortgage statement dated July 16, 2018, that was sent from Wells Fargo to Plaintiffs' attorney. Doc. 34, Exhibit C.¹

Pursuant to Federal Rule of Civil Procedure 12(b)(6), Wells Fargo and Brock and Scott separately move to dismiss the alleged violations contained within the Amended Complaint. Specifically, Wells Fargo moves to dismiss Counts I, II, III, IV, and VII of the Amended Complaint. Doc. 46. In its own motion, Brock and Scott moves to dismiss Counts IV, V, VI, and VII. Doc. 64.

Separately, it appears from a review of the docket that Plaintiff has never served HSBC and, as such, it is recommended that the Court dismiss HSBC from this action without prejudice.² See Fed. R. Civ. P. 4(d). This report shall serve as notice of the potential of that dismissal as required by Rule 4(d), and Plaintiffs may object to this Report if they seek to prosecute this case against HSBC.

a. The Allegations in the Complaint - Counts I, II, and III

Because the undersigned is considering motions to dismiss made pursuant to Rule 12(b)(6), the undersigned must take as true the factual allegations in the Complaint. Specifically relevant to the FDCPA and FCCPA violations are the following factual allegations, all of which were incorporated by reference in Counts I, II, and III (all paragraph citations are to the Amended Complaint (Doc. 34)):

• Plaintiffs have been subjected to the WELLS FARGO's [sic] false representations of its right to collect on a promissory note, which led to thePlaintiffs being named as defendant in a wrongful mortgage foreclosure. ¶ 34.

• On August 24, 2006, the Plaintiffs executed and delivered a promissory note and mortgage securing payment to Dream House Mortgage Association. ¶ 38

• The mortgage and note on which WELLS FARGO are [sic] attempting to collect money is "debt" within the meaning of section 15 U.S.C. § 1692a(5), as the foreclosure lawsuit addresses an alleged obligation of a consumer to pay money arising out of transaction [sic] in which the money, property, insurance, or services which were the subject of the transaction were primarily for personal, family, or household purposes. ¶ 35.

• WELLS FARGO is "debt collector(s)" [sic] as that term is defined by 15 U.S.C. § 1692a(6), to wit: WELLS FARGO used the mail in a business the principal purpose of which was to collect debt; regularly [sic] attempts to collect debts owed or due to another; attempted to collect a debt that was already in default when it acquired the debt. ¶ 36.

• WELLS FARGO is a "debt collector(s)" because the debt was in default when acquired by the Defendants. . . . ¶ 37.

• The foreclosure sale of the Mohamad's property took place on September 11, 2018. ¶ 39.

• The Plaintiff is not indebted to the Defendant for any sums of money due under a mortgage, note, or contract. ¶ 42.

• Wells Fargo mailed to the Plaintiffs' counsel a monthly mortgage statement(s) (Exhibit C) that contained the loan number of xxxxxx9317 with a minimum amount due of $334,517.93 to reinstate the Plaintiffs' account. The mortgage statement mailed by WELLS FARGO provided a payment coupon that was pre-addressed to Wells Fargo, P.O. Box 14591, Des Moines, IA 50306-3591. ¶ 43.

• The mortgage statements were mailed by WELLS FARGO for the purpose to [sic] induce the Plaintiffs to pay a phantom debt by misleading the Plaintiffs into believing that Plaintiffs could keep their home if the delinquent amount due $334,517.94 is paid rather that [sic] the amount need [sic] to satisfy the final judgment of foreclosure to exercise their right of redemption [of $679,333.42]. ¶ 44.

• As "least sophisticated consumer(s)," the Plaintiffs would reasonably believe that WELLS FARGO, by mailing monthly mortgage statements, was attempting to induce payment on a phantom debt and/or that thePlaintiffs could keep their home by reinstating the subject loan and keep their home by making a payment of $334,517.93 to WELLS FARGO instead of satisfying the nearly $700,000.00 amount now due under the final judgment. ¶ 45.

b. The Allegations in the Complaint - Counts IV, V, VI, and VII

Specifically, relevant to the remaining counts are the following factual allegations, all of which were incorporated by reference in Counts IV, V, VI, and VII (all paragraph citations are to the Amended Complaint (Doc. 34)):

• On August 24, 2006, the Mohamads executed and delivered a promissory note and mortgage securing payment under the note in favor of Dream House Mortgage Association. On November 14, 2007, HSBC Bank USA, National Association, as Trustee for the Holders of Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series 2007-1 ("HSBC" or "Lender") sought to foreclose the mortgage executed by Plaintiffs for failure to make payments in the above-styled action. ¶ 14.

• On September 8, 2008, the [state] Court entered in-personam Final Summary Judgment of Foreclosure was entered [sic] in the Foreclosure Action (the "Foreclosure Judgment") when HSBC requested and the court reserved jurisdiction to enter a deficiency judgment against the Mohamads. ¶ 14.

• Post-judgment, the Mohamad's [sic] commenced two federal court actions against various entities, including Wells Fargo, the Plaintiff's servicer, and Brock and Scott, PLLC ("B & S"), the Plaintiff's counsel in the foreclosure complaint, alleging violation of the 15 U.S.C. 1692 - Fair Debt Collections Practices Act. ¶ 15.

• On May 11, 2018, the Plaintiff, WELLS FARGO, B&S, the Mohamad's, and their respective counsel entered into a confidential settlement agreement as part of a court-ordered mediation before United States Magistrate Judge Thomas B. Smith. As part of the settlement, Plaintiffs voluntarily dismissed with prejudice all their actions and claims, including those against Wells Fargo, in exchange for a complete release of all debts and judgments the Plaintiff sought to collect from the Mohamads, including a waiver of deficiency amounts. . . . ¶ 16.

• On May 11, 2018, the Plaintiffs, and HSBC, and its counsel, B&S, and WELLS FARGO agreed, in writing, to release the Mohamads from their obligations due under the promissory note and mortgage subject to the foreclosure action. Further, the Defendants agreed that all sums of moneydue, by reason of any loans made for which the foreclosed property is collateral, are discharged and the mortgage and/or final judgment entered into this case would be satisfied. ¶ 17.

• The public auction of the Plaintiffs' property pursuant to the Foreclosure Judgment occurred on September 11, 2018. ¶ 18.

• A final judgment of foreclosure can be in rem (against the property), in personam (against the homeowner), or both. ¶ 20.

• The court's reservation of jurisdiction for a deficiency judgment constitutes an in-personam judgment against Plaintiffs. ¶ 21.

• The Defendants failed to execute any and all supplementary documents, and to take all additional actions that may be necessary or appropriate to give full force and effect to the terms and intent of the parties' agreement. ¶ 22.

• Because the Defendants have failed to update their records or record an instrument acknowledging the Mohamads' satisfaction of the mortgage pursuant to the parties' settlement agreement, the Mohamad's have no way of knowing whether the Defendants will seek a

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