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Owens v. Jp Morgan Chase Bank

United States District Court, Third Circuit

May 14, 2013



ROBERT C. MITCHELL, Magistrate Judge.


Now pending before the Court is Defendant's, Residential Credit Solutions', Motion to Dismiss Plaintiffs' Amended Complaint. [ECF No. 25]. For the reasons that follow, Defendant's Motion is granted.


In or about 1996[1], Plaintiffs obtained a mortgage loan on their personal residence through EMC Mortgage Corporation. Am. Compl. [ECF No. 18] at §§ 5, 14. Plaintiffs filed a Chapter 13 Bankruptcy in the Western District of Pennsylvania on or about March 30, 2006. Id. at § 13. At the time the bankruptcy was filed, EMC Mortgage Corporation ("EMC") owned and serviced the loan. Id. at § 14; Pl.'s Bankruptcy Claim Form [ECF No. 18-2]. Although the specific date was not included in the Complaint, sometime after Plaintiffs filed for Chapter 13 Bankruptcy, Defendant JPMorgan Chase Bank ("JPMorgan Chase") became the owner and servicer of Plaintiffs' mortgage loan. Am. Compl. [ECF No. 8] at § 11. Plaintiffs allege that they made all of the payments due under the Chapter 13 Plan, and as a result, on October 27, 2011, the Bankruptcy Court entered an Order that cured Plaintiffs of "any and all monetary defaults as of the payment date for which the Trustee last made a distribution, and no additional interest, late fees, or penalties may be assessed for time periods or payments due prior to that date." Id. at § 21; 10/27/11 No. 06:21929 United States Bankruptcy Court Order. On or about May 1, 2012, Residential Credit Solutions ("RCS") obtained servicing rights of the mortgage loan from JPMorgan Chase. Am. Compl. [ECF No. 18] at § 10.

After Plaintiffs filed their bankruptcy claim in 2006, EMC filed a proof of claim wherein EMC claimed the mortgage was in arrears and provided the monthly payment under the Chapter 13 plan. Id. at § 14. Plaintiffs allege that EMC's proof of claim "stated a contractual monthly payment due of $463.13, ... provided a detailed breakdown of the claimed arrears and total indebtedness... [and] included a claim for escrow advances.'" Id. §§ 15-16. Plaintiffs also allege that during the bankruptcy proceedings while EMC remained as the owner and servicer of Plaintiffs' mortgage loan, "EMC did not file a Notice of Mortgage Payment Change, nor did EMC provide notice of any changes in the monthly payment to the Court or to the Chapter 13 Trustee." Id. at § 17. Plaintiffs further allege that no party objected to the cure of Plaintiffs' mortgage and the bankruptcy has closed. Id. at § 22.

In or about July 2011, Plaintiffs allege they resumed making monthly mortgage payments, but Defendants informed Plaintiffs that the mortgage payments were insufficient because they failed to account for "escrow shortages." Id. at § 25. Plaintiffs allege that despite the claim of escrow shortage, neither JPMorgan Chase nor RCS filed "a Notice of Mortgage Payment Change, or an Amended Proof of Claim, or any other document substantiating their claim of a post-petition/pre-closing escrow shortage, [and did not inform] the Court of any changes to escrow at all." Id. at § 27. Plaintiffs allege that on many occasions, the payments remitted were returned without being credited to their account. Id. at § 36. Plaintiffs also allege they have paid an amount of $3, 033 to the Defendants as a good faith cure to any post-discharge arrears and to make the mortgage current. Id. at § 38. Plaintiffs claim that Defendants deposited the check, but refuse "to acknowledge receiving the check or accounting for that check in a notice to accelerate the debt." Id.

Plaintiffs brought the instant action on July 31, 2012 against JPMorgan Chase and RCS alleging that (1) RCS violated the federal Fair Debt Collection Practices Act ("FDCPA") by, inter alia, "falsely representing the character, amount, and legal status of the debt[, ]" implicating that the failure to make payments would result in foreclosure, using false representations to collect late fees, increasing the escrow amount, and attempting to collect unauthorized fees; (2) that RCS and JPMorgan Chase violated the Bankruptcy Court's Order and should be found in contempt under 11 U.S.C. § 105(a); (3) that JPMorgan violated Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL"); and (4) RCS and JPMorgan violated the Real Estate Settlement Procedures Act ("RESPA"). See id. at §§ 40-71.

RCS filed the instant Motion to Dismiss arguing that Counts 1 (FDCPA), 2 (contempt for violating the Bankruptcy Court's Order) and 4 (RESPA) of Plaintiffs' Amended Complaint should be dismissed with prejudice as Plaintiffs fail to state a claim under Federal Rule of Civil Procedure 12(b)(6) against RCS. Specifically, as to the claim under the FDCPA, RCS argues that it is not a "debt collector" as defined by the Act for liability to attach. Def.'s Br. in Support of Mot. to Dis. [ECF No. 26] at 4. As to the contempt claim, RCS contends that it is not a creditor as defined by the Bankruptcy Code that could subject it to liability. Id. at 6. Lastly, RCS contends that it cannot be liable under RESPA because Plaintiffs did not send it a "qualified written request" as required by the statute. Id. at 8.


Jurisdiction is proper pursuant to federal question jurisdiction, 28 U.S.C. § 1331, as Plaintiffs advance claims under The Fair Debt Collection Practices Act ("FDCPA") 15 U.S.C. § 1601, et seq., the Real Estate Settlement Procedures Act ("RESPA") 12 U.S.C. §2601, et seq. and the Bankruptcy Code 11 U.S.C. § 101 et seq. Similarly, the Court may exercise its supplemental jurisdiction pursuant to 28 U.S.C. § 1367 of the state law claims arising under Pennsylvania's Unfair Trade Practices and Consumer Protection Law ("UTPCPL") 73 Pa.C.S.A. § 201-1 et seq. Additionally, all parties have consented to jurisdiction to proceed before a United States Magistrate Judge under 28 U.S.C. § 636(c). Accordingly, this Court has the authority to decide dispositive motions and to eventually enter final judgment.


It is well-settled that in reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). Dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) is proper only where the averments of the complaint plausibly fail to raise directly or inferentially the material elements necessary to obtain relief under a viable legal theory of recovery. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 561 (2007). "Threadbare 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) (citing Twombly, 550 U.S. at 555). Allegations of the complaint must be factually grounded to move the claim from the realm of mere possibility to one that "is plausible on its face." Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Under the post Twombly/Iqbal standard, civil complaints "must contain more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009) (internal quotations omitted).

Along with the well-pleaded factual allegations of a complaint, "a court may consider matters of public record and other matters of which a court may take judicial notice, court orders, and exhibits attached to the complaint" without converting the motion to dismiss into one for summary judgment under Federal Rule of Civil Procedure 56. See West Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 97 (3d Cir. 2010) (court may consider documents integral to or explicitly relied upon in complaint); Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1385, n.2 (3d Cir. 2004); In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997). Such documents that a court can consider include, inter alia, indisputably authentic documents such as court dockets, opinions and orders "in related or underlying cases which have a direct relation to the matters at issue." Golden v. Cook, 293 F.Supp.2d 546, 551 (W.D.Pa. 2003) (citations ...

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