United States District Court, E.D. Pennsylvania
MARK CAPOZIO, et al. Plaintiffs
JP MORGAN CHASE BANK, NA Defendant
I. QUIÑONES ALEJANDRO, U.S.D.C. J.
before this Court is the motion to dismiss filed by
Defendant JP Morgan Chase Bank, NA (“Defendant”
or “Chase”), pursuant to Federal Rule of Civil
Procedure (“Rule”) 12(b)(6), in which Defendant
seeks the dismissal of all of the federal and state claims
asserted against it by Plaintiffs Mark Capozio and Linda
Capozio (“Plaintiffs”). [ECF 13]. Plaintiffs have
opposed the motion. [ECF 16]. The issues raised in the motion
to dismiss have been fully briefed and are now ripe for
disposition. For the reasons stated herein, Defendant's
motion to dismiss is granted, in part, and denied,
December 27, 2016, Plaintiffs filed an amended class action
complaint against Defendant essentially claiming that
Defendant has uniformly engaged in illegal and deceptive
business practices in violation of the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. §1692,
et seq., the Pennsylvania Unfair Trade Practices and
Consumer Protection Laws Act (“UTPCPL”), 73 Pa.
Cons. Stat. §201-1, et seq., the Fair Credit
Extension Uniformity Act (“FCEUA”), 73 Pa. Cons.
Stat. §2270.1, et seq., (collectively,
“Pennsylvania's Consumer Protection Laws”),
the Real Estate Settlement Procedures Act
(“RESPA”), 12 U.S.C. §2605, et
seq., and Section 524 of the United States
Bankruptcy Code, specifically the discharge
injunction. [ECF 9]. In essence, Plaintiffs contend
that Defendant failed to honor the parties' negotiated
agreement that Plaintiffs' future mortgage and escrow
payments would not include a sum for insurance premiums, and
as a consequence, Defendant misapplied Plaintiffs'
monthly mortgage payments resulting in the incurrence of late
fees and other penalties.
filed the underlying motion to dismiss and argues that
Plaintiffs have failed to allege facts sufficient to sustain
their pleading burden for each of their claims. [ECF 13].
When ruling on Defendant's motion to dismiss, this Court
must accept, as true, all relevant and pertinent factual
allegations in the amended complaint and construe these facts
in the light most favorable to Plaintiffs. See Fowler v.
UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). The
salient allegations of the amended complaint are summarized
On January 23, 2008, Plaintiffs filed for Chapter 13
bankruptcy protection. (Am. Compl. at ¶10). On December
26, 2009, Citi Residential Lending, Inc., sold
Plaintiffs' mortgage, note, and service rights to
Defendant. (Id. at ¶11(d)-(e)). When the loan
was transferred to Defendant, the loan was in default.
(Id. at ¶91). On March 13, 2013,
Plaintiffs' bankruptcy trustee sent Defendant a Notice of
Cure Payment, “proclaiming that, unless Chase . . .
challenged the discharge, the mortgage arrears would be
deemed ‘cured, ' and, therefore, current.”
(Id. at ¶18). Defendant did not respond to the
notice. (Id.). Plaintiffs were discharged from
bankruptcy on October 24, 2013. (Id. at ¶10).
By letter dated December 28, 2015, Defendant transmitted to
Plaintiffs a separate loan modification agreement (the
“Loan Modification”), which was subsequently
edited by the parties, with such edits initialed.
(Id. at ¶27, Exs. F-1 and F-3). The Loan
Modification with the initialed edits was signed by the
parties on December 30, 2015. (Id. at Ex. F-3).
Plaintiffs contend that these documents evidence and/or
memorialize the parties' agreement that Plaintiffs'
future mortgage payments were not to include sums for
insurance premiums to be escrowed.
On April 1, 2016, and thereafter, Plaintiffs made monthly
mortgage payments which did not include an amount for
insurance premiums escrow. (Am. Compl. at ¶¶49-63).
Defendant placed what it deemed to be the insufficient
payments in “suspense” account, resulting in
Plaintiffs' mortgage account to be, in effect, a month
late. (Id. at ¶¶52-53). Defendant
subsequently applied late charges to Plaintiffs' mortgage
account. (Id. at ¶¶57, 59, 61, 63).
On March 10, 2016, Plaintiffs sent Defendant what Plaintiffs
contend was a “Qualified Written Request”
(“QWR”) under RESPA, to which Plaintiffs allege
Defendant did not respond fully and timely. (Id. at
¶¶40, 43, Ex. N).
may grant a motion to dismiss an action under Rule 12(b)(6)
if the complaint “fail[s] to state a claim upon which
relief can be granted.” Fed.R.Civ.P. 12(b)(6). When
considering a Rule 12(b)(6) motion to dismiss, a court must
“accept all of the complaint's well-pleaded facts
as true, but may disregard any legal conclusions.”
Fowler, 578 F.3d at 210-11. The court must determine
“whether the facts alleged in the complaint are
sufficient to show that the plaintiff has a ‘plausible
claim for relief.'” Id. at 211 (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). The
complaint must do more than merely allege the plaintiff's
entitlement to relief: it must “show such an
entitlement with its facts.” Id. (citations
determine the sufficiency of a complaint, “a court . .
. must take three steps.” Connelly v. Lane Constr.
Corp., 809 F.3d 780, 787 (3d Cir. 2016). First, a court
must “tak[e] note of the elements a plaintiff must
plead to state a claim.” Id. (quoting
Iqbal, 556 U.S. at 675). Second, the court must
identify allegations that are merely legal conclusions
“because they . . are not entitled to the assumption of
truth.” Id. While a complaint need not assert
detailed factual allegations, “[t]hreadbare recitals of
the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal,
556 U.S. at 678. Third, a court should assume the veracity of
all well-pleaded factual allegations and “then
determine whether they plausibly give rise to an entitlement
to relief.” Connelly, 809 F.3d at 787 (quoting
Iqbal, 556 U.S. at 679).
may determine that a complaint's factual allegations are
plausible if the court is able “to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Iqbal, 556 U.S. at 678 (citing
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007)). “But where 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
‘show[n]'-‘that the pleader is entitled to
relief.'” Id. at 679 (quoting Fed.R.Civ.P.
8(a)) (alterations in original). In other words,
“[f]actual allegations must be enough to raise a right
to relief above the speculative level.”
Twombly, 550 U.S. at 555. Thus, to survive a motion
to dismiss under Rule 12(b)(6), “a plaintiff must
allege facts sufficient to ‘nudge [his] claims across
the line from conceivable to plausible.'”
Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234
(3d Cir. 2008) (quoting Twombly, 550 U.S. at 570).
“Although the plausibility standard ‘does not
impose a probability requirement, ' it does require a
pleading to show ‘more than a sheer possibility that a
defendant has acted unlawfully.'”
Connelly, 809 F.3d at 786 (citations omitted).
Reviewing the plausibility of the complaint is a
“context-specific” inquiry and requires a court
to “draw on its experience and common sense.”
Iqbal, 556 U.S. at 663-64.
noted, Plaintiffs assert that Defendant violated various
federal and state statutes, including the FDCPA, RESPA, and
Pennsylvania's Consumer Protection Laws. In its motion to
dismiss, Defendant argues that each of the claims should be
dismissed because Plaintiffs have failed to allege facts
sufficient to state a claim. Plaintiffs' claims and
Defendant's arguments in opposition thereto are addressed
Count I, Plaintiffs allege that Defendant has violated the
FDCPA by engaging in various prohibited practices as a
“debt collector.” Defendant moves to dismiss this
claim as a matter of law on the basis that it is not a
“debt collector” as the term is defined in the
FDCPA because it is alleged to be the owner of the mortgage
loan at issue and is not “in any business the principal
purpose of which is the collection of any debts.” In
light of the United States Supreme Court's recent
decision in Henson v. Santander Consumer USA Inc.,
137 S.Ct. 1718 (2017), which expressly abrogated the holding
of Federal Trade Commission v. Check Investors,
Inc., 502 F.3d 159 (3d Cir. 2007), this Court agrees
issue in Henson was whether Santander Consumer USA
Inc., (“Santander”), which “purchased the
defaulted loans from CitiFinancial” and then sought to
collect on those loans, was a “debt collector”
for purposes of the FDCPA. 137 S.Ct. at 1720. The Court of
Appeals for the Fourth Circuit had ruled in Santander's
favor, holding that Santander was not seeking to collect on
debts “owed . . . another, ” as required to meet
the statutory definition of a “debt collector, ”
but that Santander “sought instead only to collect
debts that it purchased and owned.” Id. at
1721. At the time, a circuit split existed on the issue,
which included the Third Circuit's contrary decision in
Federal Trade Commission, supra. The Supreme Court
resolved the split ...