Yeager v. Ocwen Loan Servicing, LLC, CIVIL ACTION NO. 1:14cv117–MHT(WO)

• Decision Date: 22 February 2017
• Docket Number: CIVIL ACTION NO. 1:14cv117–MHT(WO)
• Citation: 237 F.Supp.3d 1211
• Parties: Richard A. YEAGER and Deana J. Yeager, individually and on behalf of a class of similarly situated individuals, Plaintiffs, v. OCWEN LOAN SERVICING, LLC, Defendant.
• Court: U.S. District Court — Middle District of Alabama

237 F.Supp.3d 1211

Richard A. YEAGER and Deana J. Yeager, individually and on behalf of a class of similarly situated individuals, Plaintiffs,

v.OCWEN LOAN SERVICING, LLC, Defendant.

CIVIL ACTION NO. 1:14cv117–MHT(WO)

United States District Court, M.D. Alabama, Southern Division.

Signed February 22, 2017

Earl Price Underwood, Jr., Underwood & Riemer, PC, Fairhope, AL, Kenneth Joseph Riemer, Underwoord & Riemer, Mobile, AL, for Plaintiffs.

Michael R. Pennington, Robert J. Campbell, Bradley Arant Boult Cummings LLP, Birmingham, AL, for Defendant.

OPINION

Myron H. Thompson, UNITED STATES DISTRICT JUDGE

Plaintiffs Richard A. Yeager and Deana J. Yeager bring claims under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seq , against defendant Ocwen Loan Servicing, LLC for failing to provide a notice of debt validation by the deadline prescribed by the statute. This case is before the court on the recommendation of the United States Magistrate Judge that Ocwen Loan's renewed motion for judgment on the pleadings be denied. Also before the court are Ocwen Loan's objection to the recommendation. After an independent and de novo review of the record, the court is of the opinion that the objection should be sustained, the recommendation rejected, and the renewed motion granted.

I. BACKGROUND

A. Statutory Framework

Congress enacted the FDCPA 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 consumers' rights, establishes requirements for debt collectors, and sets forth penalties for violations of the statute, including actual and statutory damages. See 15 U.S.C. §§ 1692 et seq .

The validation-notice requirement of the FDCPA requires a debt collector to send a written notice to the consumer with information about the debt, such as the amount of the debt and the creditor's name, while providing notice about the consumer's right to dispute the debt and the effects of the consumer's failure to do so. The debt collector must send the validation notice to the consumer "[w]ithin five days after the initial communication with [the] consumer in connection with the collection of any debt ... unless the [ ] information is contained in the initial communication or the consumer has paid the debt." 15 U.S.C. § 1692g(a).¹ The purpose of the validation-notice requirement is to "eliminate the recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid." S. Rep. No. 95–382, at 4 (1977), as reprinted in 1977 U.S.C.C.A.N. 1695, 1699; accord FTC Staff Commentary, 53 Fed. Reg. 50,097, 50,108–50,109 (1988) (stating that validation-notice requirement "is intended to assist the consumer when a debt collector inadvertently contacts the wrong consumer at the start of his collection efforts"). The validation-notice requirement is a "significant feature of [the] legislation." S. Rep. No. 95–382, at 4 (1977), as reprinted in 1977 U.S.C.C.A.N. 1695, 1699.

B. Factual Background

Ocwen Loan is a corporation engaged in the collection of debts. Compl. (doc. no. 1) ¶ 5. In late 2012, the company acquired Homeward Residential Holdings, Inc. and its various residential mortgage loan-servicing and origination-operating subsidiaries. Id. ¶ 9. The servicing rights to the Yeagers' mortgage loan was among those included in the acquisition. Id. ¶ 11.

On or about March 15 or 16, 2013, Ocwen Loan initially contacted the Yeagers by sending a letter entitled "NOTICE OF SERVICING TRANSFER (RESPA) and WELCOME TO OCWEN LOAN SERVICING, LLC." Id. ¶ 15; Compl. Ex. A (doc. no. 1–1) at 2. The letter informed the Yeagers that, effective April 1, 2013, Ocwen Loan would service their loan; provided contact information; made certain disclosures; and answered a list of frequently asked questions. The letter also stated that Ocwen Loan "is a debt collector attempting to collect a debt." Compl. Ex. A (doc. no. 1–1) at 4. Ocwen Loan maintains that it sent the letter to comply with the Real Estate Settlement Procedures Act (RESPA), which mandates that a mortgage loan servicer shall notify the borrower in writing of a sale of the loan servicing "not less than 15 days before the effective date of transfer of the servicing of the mortgage loan." 12 U.S.C. § 2605(b)(2)(A).²

The letter did not set forth the FDCPA information: the amount of the debt or the name of the creditor to whom the debt was owed; a statement that, unless the consumer within 30 days after receipt of the notice disputed the validity of the debt, the debt would be assumed to be valid; a statement that, if the consumer notified the debt collector within the 30–day period that the debt was disputed, the debt collector would mail verification of the debt to the consumer; and a statement that, upon the consumer's written request within the 30–day period, the debt collector would provide the consumer with the name and address of the original creditor. Compl. (doc. no. 1) ¶ 15. The Yeagers received no other communication or written notice within five days after the initial letter. Id. ¶ 16. The Yeagers claim that the above omissions in the initial letter, and Ocwen Loan's failure to send another communication within five days thereafter that contained the missing information, constitute a violation of the validation-notice requirement of the FDCPA, 15 U.S.C. § 1692g(a). Compl . (doc. no. 1) ¶ 20.

On April 2, 2013, Ocwen Loan sent the Yeagers a letter that included the information missing from the initial contact necessary to satisfy the FDCPA's validation-notice requirement. Answer (doc. no. 26) ¶ 15 & Answer Ex. A (doc. no. 26–1).

C. Procedural Background

In February 2014, the Yeagers filed a complaint against Ocwen Loan, asserting a putative class-action lawsuit that the company had violated the FDCPA. They claim that Ocwen Loan violated their statutory procedural right to timely receipt of the validation notice required by the FDCPA. See 15 U.S.C. § 1692g(a). They allege that the company did not provide all of the information in the validation notice within five days of the company's initial contact on March 15, 2013. They have not alleged any additional harm or material risk of harm beyond this statutory violation. The pleadings also reveal that Ocwen Loan provided the Yeagers with information sufficient to satisfy the validation-notice requirement by April 2, 2013. Thus, the Yeagers' claim rests solely on the contention that the company failed to comply with the validation-notice requirement until 13 days after the statutory deadline.

Ocwen Loan filed an answer and a motion for judgment on the pleadings pursuant to Rule 12(c) and 12(h)(2)–(h)(3) of the Federal Rules of Civil Procedure, arguing that the Yeagers lacked standing because the validation notice to which they say they were entitled was in fact sent to them by the company the day after it acquired servicing rights to their loan. On the magistrate judge's recommendation, the court denied that motion "with leave to Ocwen Loan to renew its standing arguments at any time after the Supreme Court's decision in [ Spokeo, Inc. v. Robins , ––– U.S. ––––, 135 S.Ct. 1892, 191 L.Ed.2d 762 (2015) (granting cert.) ]." Order (doc. no. 39) at 2.

After the Supreme Court released its decision in Spokeo, Inc. v. Robins , ––– U.S. ––––, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016), Ocwen Loan renewed its motion for judgment on the pleadings as to the issue of standing, the magistrate judge recommended denying the motion, and Ocwen Loan objected to the magistrate judge's recommendation.

II. LEGAL STANDARD

Rule 12(c) permits a motion for judgment on the pleadings "[a]fter the pleadings are closed[,] but early enough not to delay trial." Fed. R. Civ. P. 12(c). "Judgment on the pleadings is appropriate when there are no material facts in dispute, and judgment may be rendered by considering the substance of the pleadings and any judicially noticed facts." Hawthorne v. Mac Adjustment, Inc. , 140 F.3d 1367, 1370 (11th Cir. 1998) (internal citations omitted). In deciding a motion for judgment on the pleadings, the facts in the complaint are accepted as true and viewed in the light most favorable to the nonmoving party. Id .

On a motion for judgment on the pleadings, the court may consider documents attached to the pleadings, such as those documents attached to the complaint and answer in this case. Horsley v. Feldt , 304 F.3d 1125, 1134 (11th Cir. 2002).

III. DISCUSSION

Article III of the Constitution limits the jurisdiction of the federal courts to litigants with standing to sue. Spokeo, Inc. v. Robins , –––U.S. ––––, 136 S.Ct. 1540, 1547, 194 L.Ed.2d 635 (2016). To establish standing, a "plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Id. And, "[w]here, as here, a case is at the pleading stage, the plaintiff must ‘clearly ... allege facts demonstrating’ each element." Id. (quoting Warth v. Seldin , 422 U.S. 490, 518, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) ).

This case turns on the first requirement for standing, injury in fact. To establish injury in fact, a plaintiff is required to show that he or she "suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’ " Spokeo , 136 S.Ct. at 1548 (quoting Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ).

Ocwen Loan argues that the Yeagers have failed to satisfy the ‘concreteness' aspect of the injury requirement. Concreteness is an "independent" requirement that must be established in addition to particularization. 136...