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Stegall v. SN Servicing Corp.

United States District Court, E.D. Pennsylvania

March 13, 2017

ANTHONY STEGALL, Plaintiff,
v.
SN SERVICING CORPORATION, Defendant.

          OPINION

          Slomsky, J.

         I. INTRODUCTION

         Plaintiff Anthony Stegall brings this action against Defendant SN Servicing Corporation, alleging that Defendant violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., in its attempts to collect past due mortgage payments on Plaintiff's home. (Doc. Nos. 3, 14.) Defendant has filed a Motion to Dismiss the Amended Complaint. (Doc. No. 15.) For reasons that follow, the Court will grant Defendant's Motion to Dismiss. (Id.)

         II. BACKGROUND

         In 1994, Plaintiff Anthony Stegall sought to purchase a home in the suburbs of Philadelphia, Pennsylvania.[1] (Doc. No. 15 at 2.) Like most buyers, Plaintiff needed to borrow money from a bank in order to have sufficient funds to purchase his desired home, located at 212 Maple Terrance, Ardmore, Pennsylvania (referred to as "the property"). (Id.) On February 7, 1994, Plaintiff borrowed money from Regent National Bank. (Id.) He entered into an adjustable rate note with the bank, which was secured by a recorded mortgage on the property. (Doc. No. 15, Ex. A.) According to the terms of the note and mortgage, Plaintiff was obligated to pay $51, 300, plus interest, to the creditor over thirty years or until the debt was fully paid off. (Id.)

         The mortgage on Plaintiff's home was assigned from Regent National Bank to other creditors. (Doc. No. 15, Ex. B.) For instance, on November 19, 2007, the mortgage was assigned to Wachovia National Bank Association, as Trustee of the Security National Mortgage Loan Trust 2004-2. (Id.) On March 26, 2015, the mortgage was reassigned from Wachovia to U.S. Bank National Association, as Trustee of the Security National Mortgage Loan Trust 2004-2. (Id.) Defendant SN Servicing Corporation is the servicer of the mortgage on behalf of U.S. Bank, as Trustee of the Security National Mortgage Loan Trust 2004-2.[2] (Id.)

         Plaintiff defaulted on his monthly mortgage payments. (Doc. No. 15 at 2-3.) On January 27, 2016, SN Servicing Corporation mailed Plaintiff a notice informing him that he was in default. (Doc. No. 14, Ex. 1.) This initial communication is known as an Act 91 Notice and is required to be sent under the provisions of the Pennsylvania Foreclosure Prevention Act, 35 Pa. Const. Stat. Ann. § 1680.401c, which was enacted to establish procedures designed to assist Pennsylvania residents in avoiding foreclosure. (Doc. No. 14, Ex. 1.) On February 9, 2016, Plaintiff mailed a notice to SN Servicing Corporation, explaining that he disputed the debt and requesting verification. (Doc. No. 14, Ex. 2.) In response, on March 10, 2016, SN Servicing Corporation mailed Plaintiff a letter which identified U.S. Bank, as Trustee of the Security National Mortgage Loan Trust 2004-2, as the creditor, and SN Servicing Corporation as the servicer of the mortgage. (Doc. No. 15, Ex. A.) Defendant's letter also verified the debt by including copies of the original note, mortgage, and a payoff statement. (Id.)

         On May 3, 2016, Plaintiff initiated this action pro se against SN Servicing Corporation in this Court. (Doc. No. 1.) He filed an Amended Complaint on November 11, 2016. (Doc. No. 14.) On November 22, 2016, Defendant filed a Motion to Dismiss the Amended Complaint. (Doc. No. 15.) Plaintiff filed a response in opposition to Defendant's Motion. (Doc. No. 21.) The Motion is now ripe for review.[3]

          III. STANDARD OF REVIEW

         The motion to dismiss standard under Federal Rule of Civil Procedure 12(b)(6) is set forth in Ashcroft v. Iqbal. 556 U.S. 662 (2009). After Iqbal it is clear that "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice" to defeat a Rule 12(b)(6) motion to dismiss. Id. at 663; see also Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). "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." Ethypharm S.A. France v. Abbott Labs., 707 F.3d 223, 231 n.14 (3d Cir. 2013) (citing Sheridan v. NGK Metals Corp.. 609 F.3d 239, 262 n.27 (3d Cir. 2010)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Applying the principles of Iqbal and Twombly, the Third Circuit in Santiago v. Warminster Twp., 629 F.3d 121 (3d Cir. 2010), set forth a three-part analysis that a district court must conduct in evaluating whether allegations in a complaint survive a 12(b)(6) motion to dismiss:

First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief."

Id. at 130 (quoting Iqbal, 556 U.S. at 675, 679). "This means that our inquiry is normally broken into three parts: (1) identifying the elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).

         A complaint must do more than allege a plaintiff's entitlement to relief, it must "show" such an entitlement with its facts. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (citing Phillips v. Cnty. of Allegheny. 515 F.3d 224, 234-35 (3d Cir. 2008)). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not 'shown' - 'that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679. The "plausibility" determination is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

         Pleadings submitted by pro se litigants are generally held "to less stringent standards than formal pleadings drafted by lawyers." Haines v. Kerner, 404 U.S. 519, 520 (1972). However, a pro se Plaintiff's complaint must do more than allege his entitlement to relief, it must "show" such an entitlement with its facts. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009) (citing Phillips v. Ctv. of Allegheny, 515 F.3d 224, 234-35 (3d Cir. 2008)). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not 'shown' - 'that the pleader is entitled to relief" Iqbal, 556 U.S. at 679. The "plausibility" determination is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.

         IV. ANALYSIS

         Plaintiff initiated this action pro se against Defendant SN Servicing Corporation alleging that it violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.. in its attempts to collect the outstanding debt owed when Plaintiff defaulted on his mortgage payments. (Doc. No. 14.) Plaintiff contends that Defendant's correspondence violated provisions of the FDCPA, including Sections 1692g, 1692d, 1692e, 1692f, and 1692j.[4] (Id.) But in viewing the Amended Complaint in the light most favorable to Plaintiff, the Court finds that Plaintiff has failed to plausibly allege that such violations occurred.

         A. Plaintiff Has Not Plausibly Alleged a Violation of 15 U.S.C. § 1692g

         Plaintiff's main contention is that Defendant violated Section 1692g when it mailed Plaintiff a letter verifying the debt, which included copies of the original note and mortgage on the property, and a payoff statement for the outstanding obligation. (Id. at ¶¶ 1, 34.)

         Congress enacted the Fair Debt Collection Practices Act to provide a remedy for victims of abusive, deceptive, and unfair collection practices by debt collectors. Lesher v. Law Offices of Mitchell N. Kay. PC, 650 F.3d 993, 996-97 (3d Cir. 2011). To this end, Congress adopted "the debt validation provisions of section 1692g" to guarantee that consumers would receive "adequate notice" of their rights under the FDCPA. Caprio v. Healthcare Recovery Group, LLC, 709 F.3d 142, 148 (3d Cir. 2013). Provisions of the FDCPA must be broadly construed to give full effect to this intention.[5]

         To provide consumers with "adequate notice" of their rights under Section 1692g(a), a debt collector must include the following information in its initial communication to a debtor, or in a communication to be sent within five days after the initial communication:

(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

15 U.S.C. § 1692g(a). If a debtor disputes the debt contained in the initial communication, Section 1692g(b) establishes that the debt collector must cease all collection efforts until it mails to the debtor the debt verification. Wilson, 225 F.3d at 354. Section 1692g(b) states as follows:

If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) of this section unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor.

15 U.S.C. § 1692g(b). The statute does not specify what the process of "verification" requires.

         Id. Courts have found, however, that providing an itemized accounting of the disputed debt or explaining the nature of the transaction that led to incurring the debt sufficiently informs the debtor of his obligation. See Graziano v. Harrison. 950 F.2d 107, 111 (3d Cir. 1991) (holding that a "bill and computer printout" adequately verified the debt because the documents provided to the debtor "were sufficient to inform him of the amount of his debts, the services provided, and the dates on which the debts were incurred."); see also Dixon v. Stern & Eisenberg, PC, 652 F.App'x 128, 133 (3d Cir. 2016) (citation omitted) (noting that "verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt."); Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, 758 F.3d 777, 785-85 (6th Cir. 2014) (finding that the verification should include "the date and nature of the transaction that led to the debt"); Jarzyna v. Home Properties, L.P., 114 F.Supp.3d 243, 263 (E.D. Pa. 2015) (finding that the debt collector sufficiently informed the debtor of his obligations by mailing a "Statement of Deposit, " which "itemized the charges that made up the total payment demand.").

         Here, Plaintiff argues that SN Servicing Corporation did not adequately verify the debt as required in Section 1692g(b). (Doc. No. 14 at ¶¶ 1, 34.) However, Plaintiff has not pled plausible facts in the Amended Complaint showing that Defendant's letter did not adequately verify the debt. As previously noted, on January 27, 2016, Defendant mailed an initial notice to Plaintiff stating that he had defaulted on his mortgage payments. (Doc. No. 14, Ex. 1.) This notice contained a list of each monthly payment Plaintiff failed to make. (Id.') In response, Plaintiff mailed a notice of dispute to Defendant. (Doc. No. 14, Ex. 2.) On March 10, 2016, SN Servicing Corporation mailed Plaintiff a letter to verify the debt. (Doc. No. 15, Ex. A.) The letter identified U.S. Bank, as Trustee of the Security National Mortgage Loan Trust 2004-2, and SN Servicing Corporation as the creditor and servicer of the mortgage. (Id.) It also included copies of the original adjustable rate note and mortgage. (Id.) Importantly, it contained a payoff statement, identifying the principal balance owed, the interest accrued, and the total payoff amount. (Id.)

         Thus, through its correspondence with Plaintiff, Defendant provided copies of the original note and mortgage, evidencing the transaction that led to incurring the debt. Defendant also provided a detailed payoff statement, which accounted for the amount Plaintiff currently owed. Defendant's correspondence, therefore, adequately verified ...


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