WILLIAM S. DUFFEY, JR., District Judge.
This matter is before the Court on Magistrate Judge Janet F. King's Final Report and Recommendation [7] ("Final R&R") granting Defendant Pennymac Loan Services, LLC's ("Defendant") Motion to Dismiss Plaintiff's Verified Complaint [3] (the "Motion"). Plaintiff Lori G. Brandenstein ("Plaintiff") does not oppose the Motion or object to the Final R&R. The Court finds no plain error in the Final R&R, and therefore adopts the recommendations of Magistrate Judge King.
On June 19, 2017, Plaintiff, proceeding pro se, filed her Complaint [1.1] challenging Defendant's conduct relating to the July 5, 2017, foreclosure of Plaintiff's former residence, real property located at 2244 Josephine Court, Marietta, Georgia, 30062 ("Property"). Defendant was the servicer of Plaintiff's mortgage loan on the Property. ([1.1] ¶ 8).
On January 30, 2010, Plaintiff Brandenstein, along with Richard W. Brandenstein ("Mr. Brandenstein"), who is not a complainant or party to the instant suit, obtained a mortgage loan from First Option Mortgage, LLC ("First Option" or "Lender"), in the principal amount of $213,776.00 ("Loan"). ([1.1] ¶ 6). In connection with and to secure payment on the Loan, Plaintiff and Mr. Brandenstein executed a Security Deed in favor of Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee for First Option, and its successors and assigns. ([1.1] ¶ 7;
On October 29, 2014, the Security Deed was assigned to Bank of America, N.A. ("BANA") by MERS. (Assignment [3.2];
On or about May 2, 2017, as a result of Plaintiff's alleged default on the Loan, the law firm of Rubin Lublin, LLC, on behalf of Defendant, advertised its first Notice of Sale Under Power ("Notice") of Plaintiff's Property to occur on July 5, 2017. ([1.1] ¶ 8). Plaintiff alleges the Notice did not identify the holder of the Security Deed and identified Defendant as the loan servicer. (
On July 5, 2017, BANA exercised its power of sale in the Security Deed and foreclosed on the Property. The Property was transferred to Arch Property Holdings, LLC, under a Deed Under Power. (Deed Under Power [4.1]). On August 20, 2017, the Deed Under Power was recorded in Deed Book 15472 at Pages 3016-19 in the Cobb County, Georgia records.
On June 19, 2017, Plaintiff filed her Complaint. In it, she identifies six causes of action, which she describes as follows: (Count 1) Fraudulent Conversion; (Count 2) Mortgage Servicing Fraud; (Count 3) Declaratory Judgment (Credit Default Swap); (Count 4) Unfair and Deceptive Trade Practices/Fair Debt Collection Practices Act; (Count 5) Fraud/Attempted Fraud; and (Count 6) Intentional Infliction of Emotional Distress ("IIED"). Plaintiff also alleges, within the Fact Section of her Complaint, violations of TILA and RESPA. ([1.1] ¶ 10-12). Plaintiff also seeks prelitigation discovery and injunctive relief.
On July 19, 2017, Defendant properly and timely removed the case pursuant to 28 U.S.C. §§ 1331, 1332, 1441, and 1446. (Notice of Removal [1];
On November 6, 2017, the Magistrate Judge issued her Final R&R recommending granting Defendant's Motion to Dismiss. No party filed objections to the Final R&R.
On a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must "assume that the factual allegations in the complaint are true and give the plaintiff[] the benefit of reasonable factual inferences."
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'"
Plaintiff filed her Complaint pro se. "A document filed pro se is to be liberally construed, and a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers."
After conducting a careful and complete review of the findings and recommendations, a district judge may accept, reject, or modify a magistrate judge's report and recommendation. 28 U.S.C. § 636(b)(1);
Plaintiff's Complaint also asserts a number of fraud-based claims, including fraudulent conversion, mortgage servicing fraud, and fraud or attempted fraud. Defendant argues in its Motion that Plaintiff fails to meet the specificity pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure. ([3.1] at 5-10);
To state a claim for common law fraud under Georgia law, Plaintiff must allege facts to support the following elements: "(1) false representation by defendant; (2) with scienter, or knowledge of falsity; (3) with intent to deceive plaintiff or to induce plaintiff into acting or refraining from acting; (4) on which plaintiff justifiably relied; (5) with proximate cause of damages to plaintiff."
The Magistrate Judge found that Plaintiff's "conclusory allegations of fraud do not state a claim and do not comport with the strict pleading requirements of Rule 9(b)." ([7] at 15). Specifically, the Magistrate Judge determined that Plaintiff's fraudulent conversion claim constitutes a "nonsensical challenge to the banking system, the validity of the Loan, and foreclosure of the Property." ([7] at 16). The Magistrate Judge also noted that, to the extent Plaintiff's fraudulent conversion claim is based upon the foreclosure of real property, it must be dismissed as a matter of law because Plaintiff fails to meet the elements required under Georgia law. (
As to Plaintiff's claim alleging mortgage servicing fraud, the Magistrate Judge found that Plaintiff fails to "identify any specific action taken by [Defendant] in connection with her Loan that she contends amounts to fraud." ([7] at 18). The Magistrate Judge stated that "[t]he Complaint purports to `explain to the Court how the Defendant is committing servicing fraud' but then reads like an editorial on the adverse impact of servicers in the mortgage industry, minus any related facts." (
Finally, as to Plaintiff's allegations of fraud and/or attempted fraud, the Magistrate Judge found that Plaintiff failed to identify specifically who made the "purported [fraudulent] representations, what the content of the alleged representations were, or when and where any alleged representations were made." ([7] at 19). Based on these deficiencies, the Magistrate Judge held this claim similarly failed to meet the strict requirements of Rule 9(b).
The Court finds no plain error in the Magistrate Judge's findings and recommendations regarding Plaintiff's fraud-based claims.
Plaintiff seeks a declaratory judgment finding that Defendant is not entitled to the remedy of non-judicial foreclosure because the Loan was backed by a credit default swap agreement ("CDSA"), and when Plaintiff allegedly defaulted on the Loan the true owner of the Loan was made whole by the CDSA. ([1.1] ¶¶ 85-86). The Magistrate Judge found that Plaintiff's Complaint fails to allege any specific facts concerning a CDSA, and that Plaintiff would not have been a party (or third-party beneficiary) to any CDSA. ([7] at 21). The Magistrate Judge thus concluded that Plaintiff would lack standing to challenge any credit default swap arrangement. The Magistrate Judge further found that the Declaratory Judgment Act does not provide relief to Plaintiff because foreclosure has already occurred. (
In Count IV, Plaintiff alleges unfair and deceptive business practices in violation of the Georgia Fair Businesses Practices Act of 1975 ("GFBPA"), O.C.G.A. § 10-1-3,
The GFBPA provides a private right of action to a "party who suffers injury or damages as a result of `[u]nfair or deceptive acts or practices in the conduct of consumer transactions and consumer acts or practices in trade or commerce.'"
The Magistrate Judge found that the GFBPA does not apply to residential mortgage loan transactions or mortgage lending or servicing. ([7] at 25);
Plaintiff next alleges Defendant violated Section 1692d of the FDCPA by allegedly attempting to collect on a debt and foreclose on the property. ([1.1] ¶¶ 89-91). Title 15, United States Code, Section 1692d provides:
15 U.S.C.A. § 1692d. "Banned conduct includes the `use of violence,' the `use of obscene or profane language,' and repeated phone calls intended to annoy or harass `any person at the called number.'"
To state a plausible FDCPA claim, Plaintiff must allege: (1) that she has been the object of collection activity arising from a consumer debt; (2) that the defendant attempting to collect the debt qualifies as a "debt collector" under the statute; and (3) that the defendant has engaged in a prohibited act or has failed to perform a requirement imposed by the FDCPA.
The Magistrate Judge found that Plaintiff failed to allege facts showing that Defendant meets the statutory definition of "debt collector." ([7] at 27). The Magistrate Judge also determined that Plaintiff provided only "vague" allegations in support of her FDCPA claim, including that "Defendant knowingly and intentional engaged in harassing, oppressive, and/or abusive conduct toward Plaintiff through [unspecified] phone calls and correspondence via [unidentified] persons aimed at collecting on the debt and subsequently relating to foreclosure. ([1.1] ¶¶ 90-91). The Magistrate Judge concluded that Plaintiff's FDCPA claim thus fails for insufficiency of pleading.
The Court finds no plain error in the Magistrate Judge's findings and recommendations regarding Plaintiff's GFBPA and FDCPA claims.
Plaintiff also contends that Defendant intentionally inflicted emotional distress "by attempting to take Plaintiff's real property through foreclosure" without a legal right to do so. ([1.1] ¶ 97). Plaintiff further alleges that Defendant's actions have caused her emotional distress, including "extreme humiliation, anxiety[,] and loss of sleep." ([1.1] ¶ 97).
Under Georgia law, the tort of IIED requires proof of the following: "`1) that defendant's behavior was willful and wanton or intentionally directed to harming plaintiff; 2) that the actions of defendant were such as would naturally humiliate, embarrass, frighten, or outrage the plaintiff; [and] 3) that conduct caused mental suffering or wounded feelings or emotional upset or distress to plaintiff.'"
The Magistrate Judge found that "Plaintiff's Complaint fails to state a claim for IIED as a matter of law because the nature of the conduct Plaintiff complains about, namely, the foreclosure of the property, does not amount to extreme and outrageous conduct." ([7] at 34);
The Court finds no plain error in the Magistrate Judge's findings and recommendation as to Plaintiff's IIED claim.
Plaintiff also appears to allege two claims in addition to the causes of action listed in her Complaint.
Plaintiff, in passing, alleges that she sent Defendant "a request for disclosure, rescission, and validation of [the] debt" and that Defendant "failed to comply with its legal obligations under TILA[.]" ([1.1] ¶¶ 10, 12). The Magistrate Judge found this one, conclusory allegation insufficient to state a claim that Defendant violated TILA. ([7] at 35). The Magistrate Judge also found that, even if Plaintiff alleged facts sufficient to state a violation of TILA, TILA does not apply to Defendant. (
Plaintiff also makes a conclusory statement in her Complaint, without identifying it as a separate cause of action, that Plaintiff sent Defendant a "qualified written request" under RESPA on May 12, 2017. ([1.1] ¶ 10).
RESPA imposes certain requirements on servicers of federally-related mortgage loans, including responding to inquiries and providing certain notices to borrowers. "If the servicer does not comply with RESPA's deadlines, the borrower can recover actual damages from the failure to communicate, but the borrower is limited to actual damages unless there is a pattern or practice of noncompliance."
The Magistrate Judge found Plaintiff "does not allege facts to establish that the correspondence she claims to have sent [Defendant] on May 12, 2017, constituted a valid QWR or met the statutory definition of a QWR." ([7] at 40). The Magistrate Judge noted that "[a]lthough Plaintiff asserts that a request for information was sent to Defendant on May 12, 2017, she does not adequately describe the information or documents sought or the questions posed therin; she does not set forth the contents of the communication nor does she attach the communication to the Complaint." (
The Court finds no plain error in the Magistrate Judge's findings and recommendation as to Plaintiff's alleged RESPA claim.
For the foregoing reasons,