Oppong v. First Union Mortg. Corp.

• Citation: 566 F.Supp.2d 395
• Decision Date: 24 July 2008
• Docket Number: Civil Action No. 02-2149.
• Parties: Atuahene OPPONG, Plaintiff, v. FIRST UNION MORTGAGE CORP. et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

566 F.Supp.2d 395

Atuahene OPPONG, Plaintiff, v. FIRST UNION MORTGAGE CORP. et al., Defendants.

Civil Action No. 02-2149.

United States District Court, E.D. Pennsylvania.

July 24, 2008.

COPYRIGHT MATERIAL OMITTED

Atuahene Oppong, Levittown, PA, pro se.

Autherine B. Smith, Daniel S. Bernheim, Wilentz, Goldman & Spitzer, Philadelphia, PA for Defendants.

MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

On April 16, 2002, plaintiff Atuahene Oppong ("Oppong"), a pro se litigant, filed this action against defendants First Union Mortgage Corporation ("First Union"), Wells Fargo Home Mortgage, Inc. ("Wells Fargo"), and Francis SJ Hallinan, Esquire ("Hallinan"), under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., based on defendants' efforts to foreclose on a mortgage on Oppong's residence, located at 7200 Sprague Street in Philadelphia, Pennsylvania. Specifically, Oppong has alleged that the defendants did not provide him with the requisite validation information concerning his debt pursuant to § 1692(g).¹

I. BACKGROUND

On December 29, 2003, the Court granted summary judgment for all defendants, finding that none were "debt collectors" and thus could not be held liable under the FDCPA. Oppong v. First Union Mortgage Corp., 2003 WL 23162436, 2003 U.S. Dist. LEXIS 23722 (E.D.Pa. Dec. 30, 2003). As the remaining state law claims against First Union and Hallinan were supplemental to plaintiffs FDCPA claim, the Court exercised its discretion and dismissed them without prejudice. Oppong timely appealed and on November 20, 2004, the Third Circuit affirmed as to First Union and Hallinan, but vacated and remanded as to the FDCPA claim against Wells Fargo. The Third Circuit held that a genuine issue of material fact existed regarding Wells Fargo's status as a debt collector. Oppong v. First Union Mortgage Corp., 112 Fed.Appx. 866 (3d Cir. 2004).

After some additional discovery, the parties filed cross-motions for summary judgment. On December 29, 2005, the Court granted Wells Fargo's second motion for summary judgment and denied Oppong's motion for summary judgment, holding that while Wells Fargo was a "debt collector," Oppong's claim was barred by res judicata.² Oppong v. First Union Mortgage Corp., 407 F.Supp.2d 658 (E.D.Pa. 2005). Again, plaintiff timely appealed and on January 26, 2007, the Third Circuit affirmed in part and vacated in part. The Court held that Oppong's claim against Wells Fargo was not barred by res judicata because the Common Pleas Court decision was not on the merits. Oppong v. First Union Mortgage Corp., 215 Fed. Appx. 114 (3d Cir.2007). However, it upheld the Court's determination that Wells Fargo was a "debt collector" within the meaning of the Act. Thus, the Third Circuit remanded the case for a second time.³ Id.

Following remand, the Court held a daylong trial on October 30, 2007, at which it heard testimony from Oppong and received documentary evidence from both parties. Pursuant to Federal Rule of Civil Procedure 52(a), the Court enters the following findings of fact and conclusions of law.

II. FINDINGS OF FACT⁴

1. On March 6, 1995, Atuahene Oppong obtained a loan from First Union which

was secured by a mortgage on his residence.⁵

2. A year later, Oppong defaulted on the loan.

3. On January 19, 2000,⁶ First Union filed a complaint ("Foreclosure Complaint") in the Court of Common Pleas of Philadelphia County. The firm of Federman and Phelan ("Federman") was retained as counsel on behalf of First Union.

4. On February 26, 2001, while the foreclosure action was pending, Wells Fargo sent a letter to Oppong indicating that on March 16, 2001, First Union would be transferring the servicing of Oppong's mortgage to Wells Fargo. The letter stated that as of that date, Wells Fargo would be responsible for processing loan payments, answering loan-related questions, and that loan repayment checks should be payable to Wells Fargo in the future. The letter also indicated that if Oppong's mortgage loan was in default, which it happened to be, the letter was to serve as notice that Wells Fargo would attempt to collect that debt.

5. On January 25, 2002, trial commenced on First Union's foreclosure action against Oppong. During the proceeding, Sheetal R. Shah-Jani, Esquire, an attorney with Federman, provided Oppong with a "payoff figure," that is, an itemization of the amounts allegedly owed by Oppong on the loan, totaling $115,931.37, including both the balance owed by Oppong on the loan and the various attorneys' fees which had accumulated.

6. On February 12, 2002, judgment was entered in favor of First Union and against Oppong in the foreclosure action.

7. On February 24, 2002, Oppong wrote a letter to Federman and to Wells Fargo, disputing the amount of the debt for the first time.

8. On March 12, 2002, Shah-Jani responded to Oppong's letter, stating that Oppong only had thirty days to dispute the debt from the date he received notice that the servicing of his mortgage had been transferred to Wells Fargo, February 26, 2001, and that said time had already passed.

9. The only interaction between Oppong and Wells Fargo, at any relevant time, was the letter sent by Wells Fargo to Oppong, dated February 26, 2001, stating that it had assumed the role of servicer of plaintiffs mortgage.

10. Wells Fargo never sent Oppong a validation notice.

11. Wells Fargo never attempted to collect the debt.

III. CONCLUSIONS OF LAW

A. Foreclosure Complaint as an Initial Communication

The FDCPA was enacted to provide a remedy to victims of abusive, deceptive and unfair collection practices by debt collectors. Piper v. Portnoff Law Assoc., 396 F.3d 227, 232 (3d Cir.2005). The applicable section of the FDCPA reads:

Within 5 days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing —

1) the amount of the debt;

2) the name of the creditor to whom the debt is owed;

3) a statement that unless the consumer, within 30 days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assume to be valid by the debt collector;

4) a statement that if the consumer notifies the debt collector in writing within the 30-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

5) a statement that, upon the consumer's written request within the 30-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

15 U.S.C. § 1692g. A correspondence from the creditor to the debtor containing the above information is known as a validation notice. Wilson v. Quadramed, 225 F.3d 350, 354 (3d Cir.2000). The purpose of the validation notice is to inform a debtor of his rights and obligations to his creditors. Id.

Oppong contends that he was not provided with a validation notice, either before or after the transfer of his debt to Wells Fargo. Wells Fargo argues that Oppong had in fact been provided with the information required in a validation notice by Federman and Phelan on behalf of First Union. Wells Fargo contends that the Foreclosure Complaint in the foreclosure action constituted the initial communication and that it contained all the information required by the statute. It is necessary, then, for this Court to first determine whether (1) the Foreclosure Complaint filed on behalf of First Union qualified as an "initial communication" and if so (2) whether it contained all of the necessary information to constitute a proper validation notice.⁷

The FDCPA, defines a "communication" as the conveying of information regarding a debt directly or indirectly to any person through any medium. 15 U.S.C. § 1692a(2). In the Third Circuit, it is clear that communications by the creditor to the debtor in the context of litigation, specifically filing a foreclosure complaint, constitute "initial communications" and are thus covered under the FDCPA. Piper, 396 F.3d at 235; see also Goldman v. Cohen, 445 F.3d 152 (2d Cir.2006) (holding that there was no reason to exclude legal pleadings from the definition of a communication under the FDCPA). Additionally, at least two courts have argued that excluding pleadings from the definition of "communication" would allow "debt collectors [to] avoid their obligation to advise debtors of their validation rights altogether by initiating litigation." Jerman v. Carlisle, 502 F.Supp.2d 686, 692 (N.D.Ohio 2007) (citing Thomas v. Cybak, 392 F.3d 914, 919 (7th Cir.2004).) Therefore, the Court finds that the Foreclosure Complaint in this case served as an "initial communication" to the debtor,⁸ triggering the FDCPA requirements.

The remaining question is whether the Foreclosure Complaint satisfied the elements of § 1692g. The statute requires that a validation notice contain: (1) the amount of the debt; (2) the name of the creditor; (3) a statement that the debtor may dispute the debt's validity within 30 days of receipt of the communication; (4) a statement that if the debtor does dispute the debt within 30 days, the debt collector shall send the debtor a verification of the debt or a copy of a judgment entered against him; and (5) a statement that if requested within the 30 day period, the debt collector will send to the debtor the name and address of the original creditor if different from the current one.

In the Foreclosure Complaint, Oppong was provided with the following information:

Paragraph 1—Plaintiff is

FIRST UNION MORTGAGE CORPORATION, S/B/M TO CORESTATES MORTGAGE SERVICES CORPORATION 1100 CORPORATE CENTER...