United States District Court, E.D. Pennsylvania
William and Sheila Walker bring this civil action against the
law firm of Phelan Hallinan Diamond & Jones, LLP
("Phelan") pursuant to the Fair Debt Collection
Practices Act ("FDCPA"), for allegedly making
false, deceptive, or misleading representations to collect a
debt. See 15 U.S.C. § 1692(e). Plaintiffs seek
leave to proceed in forma pauperis. The Court will
grant plaintiffs leave to proceed in forma pauperis
and dismiss the complaint.
April of 2014, Phelan initiated a mortgage foreclosure
proceeding against the plaintiffs in state court on behalf of
their client Citimortgage. Phelan also represented
Citimortgage's successors in interest-Bayview Loan
Servicing, LLC and MTGLQ Investors, L.P. According to the
complaint, Phelan obtained a judgment against plaintiff in
August of 2016, and sold and purchased plaintiffs'
property at a sheriffs sale on April 4, 2017. Plaintiffs
allege that Phelan's filing of the foreclosure lawsuit
and any efforts to pursue that lawsuit, including the
sheriffs sale, violated the FDCPA because plaintiffs were
granted a discharge in bankruptcy court in November of 2013.
attached notices and other legal documents to the complaint
that were served on them in connection with the foreclosure
litigation. The Court understands plaintiffs to be alleging
that two notices filed by Phelan in the foreclosure
proceeding-a November 29, 2016 "notice of the date of
continued sheriffs sale" and a February 6, 2017
"notice of the date of continued sheriffs sale"-are
misleading. Plaintiffs suggest that the notices are
misleading because Phelan was not authorized to collect the
debt (presumably because of the bankruptcy discharge) and/or
because Phelan did not adequately represent itself.
Plaintiffs also allege that Phelan engaged in
"deceptive" means of collecting a debt by moving
forward with the April 4, 2017 sheriffs sale even though
plaintiffs had filed a notice to remove the case to federal
STANDARD OF REVIEW
are granted leave to proceed in forma pauperis
because it appears that they are incapable of paying the fees
to commence this civil action. Accordingly, 28 U.S.C. §
1915 (e)(2)(B)(ii) requires the Court to dismiss the
complaint if it fails to state a claim.
survive dismissal a complaint must contain "sufficient
factual matter, accepted as true, to state a claim to relief
that is plausible on its face." Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quotations omitted).
"Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice." Id. The Court may also consider
exhibits attached to the complaint and matters of public
record in determining whether plaintiffs have stated a claim,
see Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256,
260 (3d Cir. 2006), and may address affirmative defenses that
are obvious from the face of the complaint. See Ball v.
Famiglio, 726 F.3d 448, 459 (3d Cir. 2013),
abrogated on other grounds by, Coleman v. Tollefson,
135 S.Ct. 1759, 1763 (2015). As plaintiffs are proceeding
pro se, the Court construes their allegations
liberally. Higgs v. Att'y Gen., 655 F.3d 333,
339 (3d Cir. 2011).
FDCPA prohibits debt collectors from making false, deceptive,
or misleading representations to collect a debt. See
15 U.S.C. § 1692(e). "A claim under the FDCPA
'may be brought... within one year from the date on which
the violation occurs.'" Glover v. F.D.I.C,
698 F.3d 139, 148 (3d Cir. 2012) (quoting 15 U.S.C §
l692k(d)). When a FDCPA claim is based on a defendant's
allegedly improper pursuit of litigation to collect a debt,
the FDCPA's one-year statute of limitations accrues at
the latest when the plaintiff is served with process. See
Schafftiauser v. Citibank (S.D.) N.A., 340 Fed.Appx.
128, 130-31 (3d Cir. 2009) (per curiam); Hua v.
Mortg., No. 14-7821 (JBS/AMD), 2015 WL 5722610, at *3
(D.N.J. Sept. 29, 2015). Here, it is apparent from the
complaint and attached exhibits that plaintiffs were served
more than a year before they initiated this lawsuit.
Accordingly, any claims based on Phelan's initiation or
prosecution of the 2014 foreclosure proceeding are
have also failed to state a claim based on their allegations
that the notices of the sheriffs sale were deceptive. It is
clear from notices attached to the prior federal complaint
filed by plaintiffs, Civ. A. No. 16-2253, which are a matter
of public record, that Phelan clearly identified itself as a
debt collector in connection with the 2014 lawsuit. Documents
attached to the current complaint reflect that an attorney
from Phelan entered his appearance for Citimortgage's
successors in interest, including MTGLQ Investors, L.P.,
which was most recently substituted as the plaintiff in the
foreclosure action against plaintiff. Accordingly, it would
have been obvious to even the least sophisticated debtor
receiving the notices regarding the sheriffs sale that the
attorneys for Phelan represented entities seeking to collect
a debt from plaintiffs via the foreclosure proceeding.
See Simon v. FIA Card Servs. NA, 639 Fed.Appx. 885,
888 (3d Cir. 2016); see also Rhodes v. U.S. Bank
Nat'l Ass'n, __F.Supp.3d__, Civ. A. No. 15-5135,
2017 WL 770941, at *3 (E.D. Pa. Feb. 27, 2017) ("The
communications at issue do not violate the FDCPA as a matter
of law, as all of the communications were sent while the
state court proceedings were pending, and Ms. Rhodes, who
represented herself in that litigation, cannot have been
unaware that U.S. Bank was attempting to collect a debt by
foreclosing on the mortgage and that KML represented U.S.
Bank."); Barrows v. Chase Manhattan Mortg.
Corp., 465 F.Supp.2d 347, 360 (D.N.J. 2006) (holding
that "where a law firm clearly represents a mortgagee in
a foreclosure action against a mortgagor, and has previously
issued the required 'mini-Miranda' warnings in
writing, its subsequent communications with the debtor need
not identify the law firm as a debt collector so long as the
communication clearly and directly relates to the pending
litigation."). To the extent plaintiffs believe the
notices were improper because the underlying litigation
violated the FDCPA, those claims are time-barred as discussed
also allege that Phelan violated the FDCPA by moving forward
with the sheriffs sale after they had filed a notice to
remove the foreclosure case to this Court. See
Citimortgage, Inc. v. Walker, E.D. Pa. Civ. A. No.
17-1493. It is apparent that the Walkers improperly tried to
remove the case, despite knowing from a prior removal attempt
that subject matter jurisdiction was lacking, see
Citimortgage v. Walker, E.D. Pa. Civ. A. No. 14-3881, in
an effort to avoid the sheriffs sale scheduled for the
following day. Indeed, the notice of removal was not even
docketed until the day of the sheriffs sale. The matter was
almost immediately remanded to the Philadelphia Court of
Common Pleas for lack of subject matter jurisdiction.
Id. (Apr. 11, 2017 order). In remanding the case,
the Court noted that it was the Walkers' second
inappropriate attempt to remove their case to federal court.
Id. It is difficult to see how Phelan violated the
FDCPA under such circumstances.
foregoing reasons, the Court will dismiss plaintiffs
complaint. It is apparent that plaintiffs claims based on the
foreclosure proceeding are time-barred and that the remaining
claims are based on matters that are not actionable.
Accordingly, the Court concludes that amendment ...