Wright v. Ocwen Loan Servicing, LLC
| Decision Date | 07 October 2013 |
| Docket Number | Case No. 12-14762 |
| Parties | CAROL LEE WRIGHT, Plaintiff, v. OCWEN LOAN SERVICING, LLC, Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
Honorable Julian Abele Cook, Jr.
In this civil action, the Plaintiff, Carol Wright, complains that the Defendant, Ocwen Loan Servicing, LLC ("Ocwen Loan"), violated the Fair Debt Collection Practices Act ("FDCPA") by improperly contacting her and failing to respond to her request for a validation of her loan. Currently before the Court is Ocwen's motion to dismiss Wright's claims pursuant to Fed. R. Civ. P. 12(b)(6).
In January of 2005, Wright received a loan from the Fremont Investment & Loan Company ("Fremont Investment") to purchase a home in Shelby Township, Michigan. In conjunction with this loan process, she executed a promissory note in the sum of $238,500.00 that was secured by a mortgage against her newly acquired property. This note was granted in favor of Mortgage Electronic Registration Systems, Inc. as the nominee for Fremont and its successors and assigns. In July 2005, her note was sold to Real Estate Mortgage Investment Conduit trust for which HSBC Bank is the trustee. In June 2008, Litton Loan Servicing ("Litton") began servicing Wright's loan.
According to Ocwen Loan, foreclosure proceedings against Wright were initiated in May 2009 because Wright had defaulted under the terms and conditions of her note and the mortgage. On April 18, 2011, the mortgage was assigned to HSBC, who continued the foreclosure proceedings with Trott & Trott, P.C. ("Trott"), its foreclosure counsel. On May 18, 2011, Wright filed a lawsuit, in which she disputed HSBC's right to bring foreclosure proceedings and alleged numerous violations of the FDCPA.
On November 4, 2011, Wright received a letter which informed her that Ocwen Loan had become the new servicer of her loan. The letter also provided a summary of her debt and information that she could use to contact Ocwen Loan and its agents, including customer care coordinators and relationship managers. It explains that Wright may request verification of the validity of the debt summarized in the letter within thirty days of her receipt of the letter. Below the body of the letter is written the following disclaimer: "This communication is from a debt collector attempting to collect a debt; any information obtained will be used for that purpose."
In response, Wright mailed Ocwen Loan a letter on or about November 30, 2011 which requested verification of the debt. It was received by Ocwen Loan on December 1, 2011. Wright asserts that, despite her request for verification, she continued to receive telephone phone calls and letters from Ocwen Loan. These communications did not explicitly mention that Ocwen Loan is a debt collector.
On March 29, 2012, Wright's initial lawsuit to contest foreclosure proceedings was dismissed. On October 8, 2012, Wright filed a lawsuit against Ocwen Loan, in which she complained that (1) Ocwen failed to verify her debt after it received her request; (2) the phone calls from Ocwen Loan failed to identify it as a debt collector; and (3) the initial letter from Ocwen Loanattempted to collect impermissible "collection costs."
Approximately three weeks later, on October 26, 2012, Wright filed this second lawsuit suit against Ocwen Loan, alleging that it did not stop making efforts to communicate directly with Wright. According to Wright, the filing of this second lawsuit ended Ocwen Loan's communication efforts. In response to the lawsuit, Ocwen Loan filed a motion to dismiss.
When considering a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court accepts the plaintiff's well-pleaded allegations as true and construes each of them in a light that is most favorable to it. Bennett v. MIS Corp., 607 F.3d 1076, 1091 (6th Cir. 2010). However, this assumption of truth does not extend to the plaintiff's legal conclusions because "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The complaint "must contain either direct or inferential allegations respecting all material elements to sustain a recovery under some viable legal theory." Bishop v. Lucent Techs., Inc., 520 F.3d 516, 519 (6th Cir. 2008) (citation and internal quotation marks omitted).
In order to survive an application for dismissal, the complaint must allege "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). To meet this standard, the "plaintiff [must] plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949. In essence, "[a] pleading that states a claim for relief must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2).
In considering a 12(b)(6) motion, "documents attached to the pleadings become part of thepleading and may be considered." Commercial Money Ctr., Inc. v. Ill. Union Ins. Co., 508 F.3d 327, 335 (6th Cir. 2007) (citing Fed. R. Civ. P. 10(c)). "In determining whether to grant a Rule 12(b)(6) motion, the court primarily considers the allegations in the complaint, although matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint, also may be taken into account." Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001) (emphasis omitted)). Moreover, "documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to [the plaintiff's] claim." Weiner, D.P.M. v. Klais & Co., 108 F.3d 86, 88 n.3 (6th Cir. 1997); see also Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir. 2008). Supplemental documents attached to the motion to dismiss do not convert the pleading into one for summary judgment where the documents do not "rebut, challenge, or contradict anything in the plaintiff's complaint." Song v. City of Elyria, 985 F.2d 840, 842 (6th Cir. 1993) (citing Watters v. Pelican Int'l, Inc., 706 F. Supp. 1452, 1457 n.1 (D. Colo. 1989)).
In her complaint, Wright alleges the following violations of the Fair Debt Collections Act: (1) Ocwen Loan left multiple telephone voicemails which did not indicate that it is a debt collector, in violation of 15 U.S.C. § 1692e(11); (2) After Wright requested validation of her debt, Ocwen Loan continued to contact her without first responding to the validation request, in violation of 15 U.S.C. § 1692g(a), (b); and (3) Even after Ocwen Loan was aware that Wright is represented by an attorney, it continued to contact her directly, in violation of 15 U.S.C. § 1692c(a)(2). Wright contends that each of these violations fails to state a claim for which relief can be granted.
Wright first submits that Ocwen Loan violated § 1692e(11) of the FDCPA by leaving voicemails on her phone which failed to inform her that it is a debt collector. In its motion to dismiss, Ocwen Loan contends that section 1692e(11) does not apply to the voice mails because they were merely follow-up communications to the November 4, 2011 letter, which clearly states that it is a debt collector. Wright, on the other hand, maintains that the statute requires that all "subsequent communications" - including the voice mails - must disclose Ocwen Loan's identity as a debt collector regardless as to whether this fact had been disclosed to her at an earlier time.
"A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Subsection 11 identifies the following conduct as a violation of this directive:
The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.
First, Ocwen Loan asserts that the Court must determine whether the voice mails were "deceptive" or "misleading" by applying the "least sophisticated debtor standard." See Smith v. Computer Credit, Inc., 167 F.3d 1052, 1054 (6th Cir. 1999). According to Ocwen Loan, a less sophisticated consumer should have understood that it and the "Ocwen" in the voice mail were one and the same entity. This argument misses the mark. The "least sophisticated debtor standard" is used by courts to determine whether "language used by a debt collector is deceptive or misleading." Grden, 643 F.3d 169, 172 (6th Cir. 2011). In this case, the issue is not whether the language used byOcwen Loan was deceptive. Rather, the question is whether the communication by this corporate entity contained the statutorily required disclosures.
In support of its argument that the voice mails were not required to contain disclosures, Ocwen Loan asks this Court to follow the reasoning of the Ninth Circuit in Pressley v. Capital Credit & Collection Serv., 760 F.2d 922 (9th Cir. 1985) (per curiam), which determined that once a debt collector identifies itself as such in an initial communication, it need not repeat the disclosure in any follow-up communications. Id. at 925. However, the Sixth Circuit has rejected the Pressley approach by holding that subsection 1692e(11) applies to all communications, including follow-up notices. Frey v. Gangwish, 970 F.2d 1516, 1520 (6th Cir. 1992) (citing Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d...
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