WILLIAM S. DUFFEY, JR., District Judge.
This matter is before the Court on Vito J. Fenello, Jr. and Beverly H. Fenello's (collectively, "Plaintiffs") Motion for Leave to Amend their Complaint [30]. Also before the Court is Bank of America, N.A. ("BANA") and The Bank of New York Mellon, as Trustee for CWALT, Inc.'s ("BONYM") (together, "Defendants") Motion to Dismiss [28] Plaintiffs' Amended Complaint [26].
On January 30, 2007, Plaintiffs obtained a loan from Pulte Mortgage, LLC ("Pulte") in the amount of $181,352.00, to purchase real property located at 289 Balaban Circle, Woodstock, Georgia (the "Property"). (Am. Compl. ¶ 7; Pls' Ex. 13).
In early 2008, Plaintiffs contacted BANA — the "apparent loan servicer at the time" — and inquired about available options involving their loan, "including a mortgage modification, a short sale, and a deed in lieu of foreclosure." (Id. ¶ 9). BANA responded that relief was not available until Plaintiffs had missed at least two monthly payments, and suggested that Plaintiffs skip the next two payments and then contact BANA again to apply for relief under the Home Affordable Modification Program ("HAMP"). (Id. ¶¶ 10-11). Relying on this suggestion, Plaintiffs skipped the next two monthly payments and on April 24, 2010, applied for relief under the HAMP. (Id. ¶ 12).
On April 5, 2011, Plaintiffs received a letter from Shuping, Morse & Ross, LLP ("Shuping"), on behalf of BAC Home Loans Servicing, LP ("BACHL"). (Id. ¶ 15; Pls' Ex. 1). The letter states that BACHL is the servicer of Plaintiffs' loan, BONYM is the creditor, the principal balance of Plaintiffs' loan is $179,488.21, and foreclosure proceedings would be forthcoming. (Pls' Ex. 1). Shuping sent Plaintiffs similar letters on April 25 and May 5, 2011, containing the same information (Pls' Exs. 3, 4).
On April 13, 2011, MERS, as nominee for Pulte, assigned to BONYM ("Assignment") "all right, title, interest, powers and options in, to and under [the Security Deed] as well as the land described therein and the indebtedness secured thereby." (Assignment [28.3] at 1).
On April 25, 2011, Plaintiffs sent Shuping a "Demand for Proof of Standing," requesting that Shuping provide documentation to support that BONYM is "the current beneficiary, ... Holder in Due Course, and that it has [s]tanding to pursue collections and/or foreclosure in this matter." (Pls' Ex. 2).
On May 5, 2011, Shuping sent Plaintiffs a Foreclosure Advertisement and Notice of Sale Under Power ("May 5th NSUP"), which states:
(May 5th NSUP, Pls' Ex. 21 [26.2] at 2-3). The May 5th NSUP was published in the Cherokee Tribune on May 5, 2011. (Am. Compl. ¶ 68).
On June 6, 2011, Shuping notified Plaintiffs that the foreclosure sale scheduled for the next day had been withdrawn. (Pls' Ex. 5).
On June 13, 2011, Plaintiffs received from BANA a "Special Forbearance Agreement" modification offer. (Am. Compl. ¶ 19). The proposed modification would have more than doubled Plaintiffs' original monthly, interest-only payment. (Id.). BANA told Plaintiffs that they could accept the modification or refuse it and re-apply in thirty days. (Id. ¶ 20).
On July 1, 2011, BACHLS merged with and into its parent company, BANA.
On July 7, 2011, Plaintiffs received a letter (the "July 7th Letter") from BANA stating that "[e]ffective July 1, 2011, the servicing of home loans by [its] subsidiary — BAC Home Loans Servicing, LP, transfers to its parent company — Bank of America, N.A." (Am. Compl. ¶ 21; Pls' Ex. 7). The July 7th Letter states that "[u]nder the federal Fair Debt Collections [sic] Practices Act and certain state laws, [BANA] is considered a debt collector" and "that this communication is from a debt collector attempting to collect a debt...." (July 7th Letter at 1). The July 7th Letter asserts that, as of July 7, 2011, Plaintiffs owes $198,432.72 to "BANK OF N.Y. (CWALT 2007-5CB) G1" and that Plaintiffs are required to dispute the debt within thirty (30) days or else BANA would assume it was valid. (Id. at 3). The July 7th Letter further states that if Plaintiffs dispute the debt, BANA will obtain verification of the debt and mail it to them. (Id.).
On July 27, 2011, "Plaintiffs sent a certified letter disputing the debt, indicating that the purported creditor was unknown to Plaintiffs, and demanding that Bank of America provide `documentation that BANK of N.Y. is the legal holder in due course, along with proof of each and every transfer in the chain of assignments that resulted in BANK of N.Y. attaining this status.'" (Am. Compl. ¶ 22; Pls' Ex. 8). Plaintiffs claim they never received verification of the debt from BANA. (Am. Compl. ¶ 23).
On September 8, 2011, Shuping, on behalf of BANA, sent Plaintiffs a letter (the "September 8th Letter") seeking to collect on Plaintiffs' indebtedness to BANA and stating that "[i]t is anticipated that foreclosure proceedings will be forthcoming." (Id. ¶ 30; Pls' Ex. 9). The September 8th Letter states also that "[u]nless you notify us within 30 days from the date of your receipt of this notice that you dispute the validity of this debt or any portion thereof, we will assume the debt is valid." (Pls' Ex. 9).
On September 14, 2011, Plaintiffs replied to Shuping's September 8th Letter and again demanded "written documentation that CWALT, Inc. is indeed the current creditor/beneficiary, that it is indeed the Holder in Due Course, and that it has Standing to pursue collections and/or foreclosure in this matter." (Am. Compl. ¶ 32; Pls' Ex. 10).
On September 19, 2011, Shuping replied to Plaintiffs' demand for verification of their indebtedness and provided a "Payoff
On September 26, 2011, Plaintiffs replied to the verification of indebtedness provided by Shuping, asserted that it was deficient, and stated that the Fair Debt Collection Practices Act requires Shuping and Defendants to "cease collection efforts until [they] are able to verify [their] claims" of indebtedness against Plaintiffs. (Am. Compl. ¶ 38; Pls' Ex. 14).
On September 29, 2011, Shuping sent Plaintiffs another demand letter stating that "foreclosure proceedings are being instituted in the manner provided in the Promissory Note and Deed to Secure Debt;" seeking to collect on their indebtedness to BANA; and stating "you have 10 days from the date of your receipt of this notice to pay the entire principal balance and accrued interest due on the Promissory Note" without being required to also pay attorney's fees. (Am. Compl. ¶ 39; Pls' Ex. 15).
Also on September 29, 2011, Shuping sent Plaintiffs a second Foreclosure Advertisement and Notice of Sale Under Power ("September 29th NSUP"), which states:
(September 29th NSUP, Pls' Ex. 22 [26.3] at 2-3). The September 29th NSUP was published in the Cherokee Tribune on September 29, 2011. (Am. Compl. ¶ 69).
On October 21, 2011, Plaintiffs, proceeding together pro se, filed this action in the Superior Court of Cherokee County, Georgia, against Shuping, BANA, and BONYM, alleging violations of various federal and state laws pertaining to the attempted foreclosure of the Property. (Notice of Removal ¶¶ 1-3; Compl. [1.1 at 3-24] passim).
On November 30, 2011, BANA and BONYM removed the Cherokee County action to this Court. (Notice of Removal at 1).
On December 6, 2011, the parties consented to the dismissal of Shuping [4].
On December 7, 2011, Defendants moved to dismiss Plaintiffs' Complaint for failure to state a claim for relief [6].
On July 17, 2012, the Court granted Defendants' motion to dismiss with respect to all but one of Plaintiffs' claims ("July 17th Order") [24]. The Court concluded that, with the exception of their claim for violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"), all of Plaintiffs' claims were implausible, unfounded and without merit, and that amendment of these claims would be futile. The Court permitted Plaintiffs an opportunity to amend their FDCPA claim and ordered:
(July 17th Order at 51).
On August 2, 2012, Plaintiffs filed their Amended Complaint [26], reasserting their FDCPA claim against BANA. Plaintiffs, without seeking leave to do so, also asserted additional claims for attempted wrongful foreclosure and negligence against BANA and BONYM.
On August 20, 2012, Defendants moved to dismiss Plaintiffs' Amended Complaint [28]. Defendants argue that the Plaintiffs again fail to state a claim for relief under the FDCPA, and that the Court should dismiss their two new claims because the July 17th Order allowed Plaintiffs to amend only their FDCPA claim. Defendants contend that, even if Plaintiffs had sought leave to assert these claims, the Amended Complaint does not state viable claims for attempted wrongful foreclosure or negligence.
In response, on September 4, 2012, Plaintiffs moved for leave to pursue their attempted wrongful foreclosure and negligence claims asserted in the Amended Complaint [30].
The law governing motions to dismiss pursuant to Rule 12(b)(6) is well-settled. Dismissal of a complaint is appropriate "when, on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action." Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas Dist., 992 F.2d 1171, 1174 (11th Cir.1993).
In considering a motion to dismiss, the Court accepts the plaintiff's allegations as true and considers the allegations in the complaint in the light most favorable to the plaintiff. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir.2007); see also Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1273 n. 1 (11th Cir.1999) ("At the motion to dismiss stage, all well-pleaded facts are accepted as true, and the reasonable inferences therefrom are construed in the light most favorable to the plaintiff."). The Court, however, is not required to accept a plaintiff's legal conclusions. See Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260 (11th Cir.2009) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)), abrogated on other grounds by Mohamad v. Palestinian Authority, ___ U.S. ___, 132 S.Ct. 1702, 182 L.Ed.2d 720 (2012). Nor will the Court "accept as true a legal conclusion couched as a factual allegation." See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Ultimately, the complaint is required to contain "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
To state a claim to relief that is plausible, 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, 556 U.S. at 678, 129 S.Ct. 1937. "Plausibility" requires more than a "sheer possibility that a defendant has acted unlawfully," and a complaint that alleges facts that are "merely consistent with" liability "stops short of the line between possibility and plausibility of `entitlement to relief.'" Id. (citing Twombly, 550 U.S. at 557, 127 S.Ct. 1955). "To survive a motion to dismiss, plaintiffs must do more than merely state legal conclusions; they are required to allege some specific factual bases for those conclusions or face dismissal of their claims." Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1263 (11th Cir. 2004) ("[C]onclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal.") (citations omitted).
In its July 17th Order, the Court allowed Plaintiffs to amend their Complaint
Plaintiffs claim that BANA failed to verify the debt Plaintiffs owed on their mortgage, in violation of Section 1692g(b). Section 1692g(b) provides that "if a consumer notifies a debt collector in writing that a debt is disputed, the collector must cease collection of that debt until the debt collector verifies the debt and mails a copy of the verification to the consumer." Warren v. Countrywide Home Loans, Inc., 342 Fed.Appx. 458, 460 (11th Cir.2009) (citing 15 U.S.C. § 1692g(b)).
To state a claim under the FDCPA, a plaintiff must establish, among other things, that the defendant is a "debt collector." Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1216 (11th Cir.2012); Buckley v. Bayrock Mortg. Corp., No. 1:09-cv-1387-TWT, 2010 WL 476673, at *6 (N.D.Ga. Feb. 5, 2010). The FDCPA clearly defines the term "debt collector" and excludes "any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity ... (ii) concerns a debt which was originated by such person; [or] (iii) concerns a debt which was not in default at the time it was obtained by such person[.]" 15 U.S.C. § 1692a(6)(F). "[A] debt collector does not include the consumer's creditors, a mortgage servicing company, or an assignee of a debt, as long as the debt was not in default at the time it was assigned." LaCosta v. McCalla Raymer, LLC, No. 1:10-cv-1171-RWS, 2011 WL 166902, at *6 (N.D.Ga. Jan. 18, 2011) (quoting Perry v. Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir.1985)).
Plaintiffs claim that BANA is a debt collector because Plaintiffs' loan already was in default when BACHLS transferred servicing to BANA in July 2011. Plaintiffs defaulted on their loan obligations in April 2010, when BACHLS was their loan servicer. In July 2011, BACHLS and BANA merged. As a result of the merger, BANA acquired "all the property, rights, powers, trusts, duties, and obligations" of BACHLS, including the servicing of Plaintiffs' loan. See O.C.G.A. § 7-1-536(c) (in a merger, "each party ... shall cease to exist as a separate entity but shall continue in, and the parties to the [merger] shall be, a single corporation"); Moore v. McCalla Raymer, LLC, 916 F.Supp.2d 1332, 1338 n. 7, 2013 WL 28253, at *2 n. 7 (N.D.Ga. Jan. 2, 2013) (recognizing that BANA, as successor-by-merger to BACHLS, stands in the place of BACHLS); see also State Bank & Trust Co. v. Newby, 170 Ga.App. 865, 318 S.E.2d 738, 739 (1984) ("[T]he necessity of a formal transfer or assignment of the property of the constituent bank to the consolidated bank" is eliminated by the statute). That the merger occurred after Plaintiffs' default does not change that, by operation of law, BANA now stands in the place of BACHLS as Plaintiffs' loan servicer.
Plaintiffs next allege that BANA violated Section 1692f(6)(A), which prohibits taking or threatening to take nonjudicial action if there is no present right to possession of the property claimed as collateral through an enforceable security interest. 15 U.S.C. § 1692f(6).
While BANA may qualify as a "debt collector" for the purposes of Section 1692f(6), Plaintiffs fail to allege any facts to support that BANA does not have a present right to possession of the Property. The Security Deed and Assignment evidence BONYM's right to possess the Property, and the letters sent to Plaintiffs by Shuping state that Shuping represents BANA as servicer for BONYM, the holder of Plaintiffs' loan and the Security Deed. The Court notes that Plaintiffs' assertions
Although the Court's July 17th Order permitted Plaintiffs an opportunity to amend their FDCPA claim, Plaintiffs were required to obtain leave to assert new claims in the Amended Complaint. Fed. R.Civ.P. 15. Federal Rule of Civil Procedure 15(a)(2) provides that a court shall freely give leave to amend a pleading when justice so requires. Absent "undue delay, bad faith, dilatory motive or undue prejudice, leave to amend is routinely granted." Forbus v. Sears Roebuck & Co., 30 F.3d 1402, 1405 (11th Cir.1994) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)).
Plaintiffs' Amended Complaint seeks to add claims for attempted wrongful foreclosure and negligence. Although Plaintiffs argue that they have been diligent, these claims are based on the May 5, 2011, and September 29, 2011, Foreclosure Advertisements and Notices of Sale of Power.
Even if it were timely, the claims Plaintiffs now want to assert would be futile. "[T]he denial of leave to amend is justified by futility when the complaint as amended is still subject to dismissal." Burger King Corp. v. Weaver, 169 F.3d 1310, 1320 (11th Cir.1999). "Because justice does not require district courts to waste their time on hopeless cases, leave may be denied if a proposed amendment fails to correct the deficiencies in the original complaint or otherwise fails to state a claim." Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1255 (11th Cir.2008).
To state a claim for attempted wrong foreclosure, Plaintiffs must allege "a knowing and intentional publication of untrue and derogatory information concerning the debtor's financial condition, and that damages were sustained as a direct result of this publication." Jenkins v. McCalla Raymer, LLC, 492 Fed.Appx. 968, 972 (11th Cir.2012) (quoting Aetna Fin. Co. v. Culpepper, 171 Ga.App. 315, 320 S.E.2d 228, 232 (1984)).
Here, Plaintiffs have not alleged that the information contained in the May 5th NSUP and September 29th NSUP submitted to the publisher of the Cherokee Tribune was untrue or derogatory.
To support a claim for negligence in Georgia, a plaintiff must allege:
Burch v. Chase Manhattan Mortg. Corp, No. 1:07-cv-0121-JOF, 2008 WL 4265180, at *15 (N.D.Ga. Sept. 15, 2008) (quoting Bradley Ctr., Inc. v. Wessner, 250 Ga. 199, 296 S.E.2d 693, 695 (1982)).
Plaintiffs conclusorily allege that Defendants "have a duty imposed by statute and by contract ... to avoid unreasonable risk of harm," and rely on the same conduct offered in support of their claims under the FDCPA and for attempted wrongful foreclosure. (Am. Compl. ¶¶ 74-75). Plaintiffs do not allege any specific duty owed to them by Defendants,
For the foregoing reasons,
O.C.G.A. § 23-2-114. Any action that BANA took was as servicer for BONYM. The September 29th NSUP states that BONYM is conducting the foreclosure sale, BANA is the entity with full authority to negotiate, amend or modify the terms of Plaintiffs' mortgage, and that nothing in O.C.G.A. § 44-14-162.2 shall be construed to require BANA, as servicer for BONYM, to do so. (Sept. 29th NSUP at 2-3).