Schooley v. Option One Mortg. Corp.
| Decision Date | 07 September 2022 |
| Docket Number | 5:21-cv-219-AW/MJF |
| Parties | GLEN SCHOOLEY, Plaintiff, v. OPTION ONE MORTGAGE CORPORATION, a/k/a, SAND CANYON CORPORATION, et al., Defendants. |
| Court | U.S. District Court — Northern District of Florida |
REPORT AND RECOMMENDATION
Plaintiff Glen Schooley's claims arise from a mortgage originated and serviced by Defendant Sand Canyon Corporation (“SCC”), which formerly was known as “Option One Mortgage Corporation.”[1] The mortgage identifies Defendants Linda Flowers and Sharon Cason, along with Schooley, as “mortgagors.” At some point Schooley “defaulted” on the mortgage. In his third amended complaint, Schooley asserts that SCC violated several federal laws in servicing the mortgage.
SCC moved to dismiss Schooley's claims for failure to state a claim upon which relief can be granted. Doc. 28. Schooley responded in opposition.[2] Doc. 30. Because Schooley fails to state a plausible claim for relief against SCC, the District Court should grant SCC's motion to dismiss and should deny Schooley leave to file a fourth amended complaint.
Schooley's factual allegations are convoluted. The following is the undersigned's best effort to understand and summarize the substance of those allegations.
On November 10, 2006, Schooley executed a mortgage with SCC for property located at 1400 Grant Rd., Ponce De Leon, Florida 32455-6281. Doc. 24-1 at 2-11. Although Flowers, Cason, Schooley, and another individual (“Sheiman”) are listed as “mortgagors” on the first page of the mortgage, only Schooley and Sheiman are identified later as “borrowers.” Id. at 9, 11. Flowers and Cason are identified as “witnesses,” and Flowers notarized the mortgage. Id. at 9.
On July 16, 2019, SCC assigned the mortgage to Wells Fargo Bank, N.A., “as trustee for Option One Mortgage Loan Trust 2007-FXD2.” Id. at 14-15. Schooley contends that the assignment was “fraudulently prepared and executed . . ., making the [assignment] a forgery and void ab initio.” Doc. 24 at 9 ¶ 47. He also contends that the mortgage is void for three reasons: (1) the mortgage became a “nullity” when SCC assigned the mortgage without the note; (2) the mortgage was assigned into a “closed trust”; and (3) “fraud, criminal billing practices, unfair trade practices and felonious misconduct in loan servicing.” Id. at 10-11 ¶¶ 51-52, 56 (errors in original).
At some point, Schooley “default[ed]” on the mortgage. See id. at 5, 23 ¶¶ 1819, 111. SCC then allegedly “demanded” that Schooley execute a loan modification, which “falsely stat[ed]” that he “was part of a ‘trust'” and “was intend[ed] to circumvent” Florida's probate laws. Id. at 5-6 ¶¶ 19-24. Schooley also alleges that by “improperly” and “fraudulently” imposing “fees and costs” on him, SCC breached the mortgage agreement. Id. at 11 ¶ 55. According to Schooley:
[SCC] never had standing to collect or enforce the subject satisfied and voided mortgage because they were in violation of their own governing documents, and were operating illegally and convicted by the State of New York, voided the mortgage when it separated from the note and further voided it when it securitized the same into a closed Option One trust and collected payment in full from CIFG and did not credit the same to the borrowers account.
Doc. 24 at 11 ¶ 56 (errors in original). He further alleges that “THE MORTGAGE IS PAID IN FULL AS THE MORTGAGE PAYMENT INSURANCE OR BOND FROM CIFG ASSURANCE WAS COLLECTED BY THE DEFENDANT AND SATISFIED THE MORTGAGE IN FULL.” Id. at 7 ¶ 37 (emphasis in original).
Schooley attributes to SCC a “funding scheme” in which “sub-prime mortgages” are bundled and “securitized into a closed trust.” Doc. 24 at 8 ¶¶ 38-39. According to Schooley, the “trust then issues RMBS to the investors, and at the same time, insures those mortgages through, in this case, CIFG Assurance, who issued bonds which pay the mortgage off if the borrower defaults.” Id. ¶ 40 (errors in original). Schooley contends that the servicer then puts “the borrower into default,” and “does not credit the payment of those mortgages to the borrower.” Id. ¶ 43. Instead, SCC purportedly “continues to add fraudulent charges,” and “impose fees and costs which are neither due nor owing and forecloses on the property, selling it and keeping the proceeds from the sale, since the trust has already been paid in full from CIFG Assurance.” Id. (errors in original); see id. at 4-5, 12-13 ¶¶ 18, 59-65.
Schooley also contends that someone by the name of “Joe A. Simmons”-“a notorious forger and robo-signer”-is the “likely . . . mastermind behind this scheme and artifice to defraud” because Simmons “worked in all three companies, the trust, the servicer and even worked at the Assurance Company.” Doc. 24 at 7-8, 10 ¶¶ 33, 44, 50.
Schooley asserts that SCC violated the Consumer Financial Protection Act (“CFPA”) and the Fair Debt Collection Practices Act (“FDCPA”).[3] Id. at 13-18, 1923. Additionally, he asserts against SCC a quiet-title claim, presumably under Florida law,[4] although Schooley does not specify this. Id. at 18-19. Furthermore, Schooley asserts a “Violation of Federal Deceptive Trade Practices Act.” Id. at 1921. In the allegations offered in support of this claim, Schooley cites 12 U.S.C. §§ 5531 and 5536, and mentions the CFPA. Id. at 19, 21 ¶¶ 94, 100. In his response to SCC's motion to dismiss, Schooley confirms that this is a CFPA claim and “stipulates to striking” this claim because he “accidentally” included it in his third amended complaint. In light of this concession, the undersigned does not address this abandoned claim in this report and recommendation.
Federal Rule of Civil Procedure 12(b)(6) authorizes defendants to move to dismiss a claim for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). For a claim to survive dismissal, the “complaint must contain sufficient factual matter, accepted as true,” to state a facially plausible claim. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Id. (citing Twombly, 550 U.S. at 556). Allegations that merely suggest the possibility that the defendant acted unlawfully are insufficient; the allegations must be “enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555; see Iqbal, 556 U.S. at 678 ().
When evaluating a claim's plausibility, courts accept all well-pleaded factual allegations of the complaint as true and evaluate all reasonable inferences derived from those facts in the light most favorable to the plaintiff. Newbauer v. Carnival Corp., 26 F.4th 931, 934 (11th Cir. 2022) (citation omitted). Courts also “hold the allegations of a pro se complaint to less stringent standards than formal pleadings drafted by lawyers.” Campbell v. Air Jam. Ltd., 760 F.3d 1165, 1168 (11th Cir. 2014). But courts “cannot act as de facto counsel or rewrite an otherwise deficient pleading to sustain an action.” Bilal v. Geo Care, LLC, 981 F.3d 903, 911 (11th Cir. 2020) (citation omitted).
Schooley alleges that SCC violated the CFPA by representing in the mortgage documents that all mortgage payments “would be credited to his account” and by “fail[ing] to report the satisfaction of the mortgage by the third party PMI or bond from CIFG Assurance Corporation or other similar guarantor.” Doc. 24 at 14 ¶¶ 7273 (errors in original). SCC moves to dismiss this claim because Congress did not authorize a private cause of action in the CFPA. Doc. 28 at 5-6.
The CFPA empowers the Consumer Financial Protection Bureau and state attorneys general “to prevent a . . . service provider from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.” 12 U.S.C. § 5531(a); see Id. § 5552(a).
The CFPA does not, however, create a private cause of action. Schneider v. Credit Hum. Fed. Credit Union, No. 4:20-cv-1747, 2022 WL 971464, at *3 (N.D. Ohio Mar. 31, 2022); McMillan v. Nationstar Mortg. Co., No. 20-1321, 2020 WL 4201605, at *3 (E.D. Pa. July 22, 2020); Ford v. Bass & Assocs., P.C., No. 5:19-cv-159-TES, 2019 WL 5196386, at *2 n.3 (M.D. Ga. Oct. 15, 2019); Mayall v. Randall Firm, PLLC, No. 1:13-cv-166-TC, 2017 WL 3432033, at *2 (D. Utah Aug. 9, 2017); Tillman v. air Autovest, LLC, No. 2:16-cv-211-RDP, 2016 WL 4379455, at *7 (N.D. Ala. Aug. 17, 2016) (collecting cases); Gingras v. Rosette, No. 5:15-cv-101, 2016 WL 2932163, at *22 (D. Vt. May 18, 2016); Beider v. Retrieval Masters Creditors Bureau, Inc., 146 F.Supp.3d 465, 472 (E.D.N.Y. 2015).
In an effort to overcome this problem, Schooley alleges that he is asserting his CFPA claim “under the Private Attorney General statutes permitting him to enforce Sections 1054 and 1055” of the CFPA. Doc. 24 at 13 ¶ 69. But Schooley fails to identify the “Private Attorney General statutes” that purportedly enable him to assert a claim under the CFPA, and the undersigned is not aware of any such statute. “[T]he fact that a federal statute has been violated and some person harmed does not automatically give rise to a private cause of action in favor of that person.” Cannon v. Univ. of Chi., 441 U.S. 677, 688 (1979). Here, C...
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