18-1045
Qurashi v. Ocwen Loan Servicing


                                  UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                          SUMMARY ORDER

Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this court, a party must cite either the Federal Appendix or an electronic
database (with the notation “summary order”). A party citing a summary order must serve
a copy of it on any party not represented by counsel.

        At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the
24th day of January, two thousand nineteen.

PRESENT:
            ROBERT A. KATZMANN,
                  Chief Judge,
            PETER W. HALL,
            GERARD E. LYNCH,
                  Circuit Judges.
_____________________________________

SHAHNEWAZ QURASHI,

                           Plaintiff-Appellant,

NAHID A. QURASHI,

                           Plaintiff,

                  v.                                                       18-1045

OCWEN LOAN SERVICING, LLC, MERSCORP
HOLDINGS, INC., FKA MERS/MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS,

                           Defendants-Appellees,

SENECA MORTGAGE SERVICING,

                  Defendant.
_____________________________________
For Plaintiff-Appellant:              SHAHNEWAZ QURASHI, pro se, Hollis, NY.

For Defendants-Appellees:             BRETT L. MESSINGER and BRIAN J. SLIPAKOFF, Duane
                                      Morris LLP, New York, NY.


       Appeal from a judgment of the United States District Court for the Eastern District of New

York (Azrack, J.).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment of the district court is AFFIRMED.

       Shahnewaz Qurashi and Nahid A. Qurashi (collectively “the Qurashis”), appearing pro se,

sued Ocwen Loan Servicing, LLC (“Ocwen”), Merscorp Holdings, Inc. (“MERS”), and Seneca

Mortgage Servicing (“Seneca”), 1 for violations of the Fair Debt Collection Practices Act

(“FDCPA”), 15 U.S.C. § 1692, and state law in connection with a mortgage on real property in

Coram, New York. Broadly construed, the Qurashis alleged that the defendants failed to validate a

debt request and that MERS’s predecessor company invalidly assigned their mortgage to another

entity. They also sought to quiet title and alleged various state-law violations. The district court

adopted the magistrate judge’s Report and Recommendation (“R&R”) finding the complaint devoid

of the factual allegations needed to state the elements of a plausible FDCPA claim and declining to

exercise supplemental jurisdiction over any potential state law claims. Shahnewaz Qurashi

(“Qurashi”)2 appeals the district court’s grant of the defendants’ motion to dismiss the complaint




       1
         By electronic order dated March 29, 2017, the district court dismissed the complaint as
against Seneca upon consent and with prejudice. Qurashi does not challenge Seneca’s dismissal
on appeal.
       2
           Only Shahnewaz Qurashi appealed the district court’s judgment.
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for failure to state a claim under the FDCPA. We assume the parties’ familiarity with the underlying

facts, the procedural history of the case, and the issues on appeal.

       This Court “review[s] the grant of a motion to dismiss de novo, accepting as true all factual

claims in the complaint and drawing all reasonable inferences in the plaintiff’s favor.” Fink v. Time

Warner Cable, 

, 740–41 (2d Cir. 2013) (per curiam).3 To survive a Rule 12(b)(6)

motion to dismiss, the complaint must plead “enough facts to state a claim to relief that is plausible

on its face.” Bell Atl. Corp. v. Twombly, 

, 570 (2007). Although allegations in a

complaint are assumed to be true, this tenet “is inapplicable to legal conclusions” and “[t]hreadbare

recitals of the elements of a cause of action, supported by mere conclusory statements, do not

suffice.” Ashcroft v. Iqbal, 

, 678 (2009).

       Although the defendants argue that we should deem all appellate issues waived given

“Qurashi’s brief, two sentence argument in support of reversal,” Appellees’ Br. 8, we liberally

construe Qurashi’s pro se brief as raising a general challenge to the district court’s dismissal of the

FDCPA claim, see Ortiz v. McBride, 

, 194 (2d Cir. 2003) (“This court construes

appellate briefs submitted by pro se litigants liberally and reads such submissions to raise the

strongest arguments they suggest.”). However, Qurashi has not challenged either (1) the district

court’s decision to refrain from exercising supplemental jurisdiction or (2) the district court’s

determination that granting leave to amend would be futile. Therefore, these two issues are waived

for purposes of this appeal. See Moates v. Barkley, 

, 209 (2d Cir. 1998) (stating that



       3 Unless otherwise indicated, case quotations omit all internal quotation marks, alterations,
footnotes, and citations.
                                                  3
while pro se litigants are afforded some latitude, this Court need not decide issues that a party fails

to raise clearly in his or her appellate brief).

        The only federal cause of action identifiable in the Qurashis’ complaint is a violation of the

FDCPA. The FDCPA aims to “eliminate abusive debt collection practices by debt collectors” and

to “protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). With certain exceptions

inapplicable here, creditors are generally not considered “debt collectors” subject to the FDCPA.

Vincent v. The Money Store, 

, 96 (2d Cir. 2013) (explaining that the FDCPA gives rights

to consumers “whose debts are placed in the hands of professional debt collectors for collection”).

        The Qurashis’ complaint fails adequately to allege that the defendants qualify as debt

collectors for purposes of the FDCPA, which only applies to statutorily defined “debt collectors.”

15 U.S.C. § 1692a(6) (defining “debt collector” as “any person who uses . . . interstate commerce

or the mails in any business the principal purpose of which is the collection of any debts, or who

regularly collects or attempts to collect . . . debts owed . . . or due another”). The FDCPA excludes

from this definition of debt collector “any person collecting or attempting to collect any debt owed

. . . or due another to the extent such activity . . . concerns a debt which was not in default at the

time it was obtained by such person.” 

        The Qurashis have not alleged that either Ocwen or MERS obtained an interest in the

mortgage while the obligation was in default. To the contrary, MERS is identified in the mortgage

as the nominee for the lender at the time of origination of the loan. Additionally, the Qurashis do

not allege that MERS itself undertook any efforts to collect on the obligation. Thus, the Qurashis

have not plausibly alleged that MERS is a debt collector under the FDCPA.

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        As for Ocwen, the complaint is devoid of any allegations concerning its role as a loan

servicer and the status of the Qurashis’ loan at the time Ocwen began servicing it. A loan servicer

acting on behalf of the owner of a debt obligation is not a debt collector unless it began its servicing

duties after the loan entered default status. See Roth v. CitiMortgage Inc., 

, 183 (2d

Cir. 2014); accord Obduskey v. Wells Fargo, 

, 1219–20 (10th Cir.), cert. granted on

other grounds sub nom. Obduskey v. McCarthy & Holthus LLP, 

(2018) (mem.);

Glazer v. Chase Home Fin. LLC, 

, 457 (6th Cir. 2013); Perry v. Stewart Title Co., 

, 1208 (5th Cir. 1985). Therefore, a complaint that “does not allege that [a servicer]

acquired [the plaintiff’s] debt after it was in default . . . fails to plausibly allege that [the servicer]

qualifies as a debt collector under FDCPA.” 

. Because the Qurashis do not

allege that their home loan was already in default at the time Ocwen became the servicer of their

mortgage, they have not plausibly alleged that Ocwen was a debt collector under the FDCPA.

        For these reasons, the Qurashis have failed to plead facts demonstrating that the FDCPA

applies to defendants Ocwen and MERS. Accordingly, the district court properly granted the

defendants’ motion to dismiss. The judgment of the district court is AFFIRMED.

                                                FOR THE COURT:
                                                Catherine O’Hagan Wolfe, Clerk of Court




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