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MaChles v. McCabe, Weisberg & Conway, P.C.

United States District Court, E.D. Pennsylvania

November 8, 2017



          Wendy Beetlestone, J.

         This case arises out of a foreclosure action involving a reverse mortgage on a property in Clifton Heights, Pennsylvania (“the Property”) that became due on the death of the borrower. Plaintiff, who is the executor of the borrower's estate, claims that the Defendants, the bank that purports to hold the note and mortgage as well as the law firm hired by the bank to pursue the foreclosure action in state court, made false or misleading misrepresentations and used unfair practices. Both Defendants have filed a motion to dismiss. For the reasons outlined herein, CIT Bank N.A.'s (“CIT”) motion will be granted in its entirety, and McCabe, Weisberg & Conway, P.C.'s motion will be denied.


         On November 30, 2015, Financial Freedom, a division of CIT, sent Plaintiff a notice of intent to foreclose on the Property. The notice refers to a mortgage on the Property “held by CIT Bank, N.A. and serviced by Financial Freedom” and states that due to the death of the borrower, the mortgage was in in default in the amount of $161, 545.23. The default, according to the notice, could not be cured “however, foreclosure can be avoided by repaying the loan balance or selling the property for at least 95% of the appraised value.” The notice represented that the property had an appraised value of $170, 000.

         According to Plaintiff, CIT was not the successor in interest to the note and was, thus, not entitled to foreclose on it. Furthermore, the appraised value of the Property at the time the notice was sent was $67, 000, not $170, 000.

         These misrepresentations, claims Plaintiff, were compounded in filings made on behalf of CIT's attorneys - Defendant McCabe, Weisberg & Conway, P.C. (“McCabe”) - in the mortgage foreclosure action they filed in the court of Common Pleas of Delaware County. Specifically, the pleadings include statements that CIT was the assignee of the mortgage and note - which Plaintiff contends it was not - as well as an assertion that CIT had “complied with all notice requirements as prescribed by 41 P.S. § 101, et seq. (“Act 6”) . . .” which Plaintiff says it had not. Plaintiff also contends that a denial that CIT had violated the National Housing Act was also a misrepresentation.

         Plaintiff's claims are that these representations - in the notice and in the state court pleadings - were made in violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692e-1692f, the Pennsylvania Fair Credit Extension Uniformity Act (“FCEUA”), 73 P.S. §§ 2270.4(a)-(b), 2270.5, and the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. § 201-3.


         Defendants move to dismiss Plaintiff's claims under Federal Rules of Civil Procedure Rule 12(b)(6) for failure to state a claim. “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.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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. “Threadbare” recitations of the elements of a claim supported only by “conclusory statements” will not suffice. Id. at 683. Rather, a plaintiff must allege some facts to raise the allegation above the level of mere speculation. Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 176 (3d Cir. 2010) (citing Twombly, 550 U.S. at 555).

         In analyzing a motion to dismiss legal conclusions are disregarded, well-pleaded factual allegations are taken as true, and a determination is made whether those facts state a “plausible claim for relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Generally that determination is made upon a review of the allegations contained in the complaint, exhibits attached appropriately to the complaint and matters of public record. Pension Benefit Guar. Corp. v. White Consol. Indus., Inc. 998 F.2d 1192, 1996 (3d Cir. 1993). Here, where Defendants have attached to their motion to dismiss various pleadings in the state court proceedings, those may properly be considered as well. See S. Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Ground Ltd., 181 F.3d 410, 426 (3d Cir. 1999).[1] Furthermore, a court may grant a motion to dismiss under Rule 12(b)(6) if there is a dispositive issue of law. Neitzke v. Williams, 490 U.S. 319, 326-27 (1989).


         a. FDCPA

         Plaintiff alleges that the Defendants made false or misleading representations “in connection with the collection of [a] debt.” 15 U.S.C. § 1692e. More specifically, he contends that the Defendants violated multiple provisions of the FDCPA regarding the prohibition from “falsely represent[ing] the character and/or legal status of a debt, . . . represent[ing] and/or impl[ying] that nonpayment of a debt would result in the seizure, garnishment, attachment, or sale of property, when such action was unlawful, . . . [or] us[ing] a false representation or deceptive means to attempt to collect a debt.”[2] 15 U.S.C. §§ 1692e(2), 1692e(4), 1692e(10). Given that the FDCPA is designed “to eliminate abusive debt collection practices by debt collectors, ” its language is construed broadly to give full effect to those purposes. See 15 U.S.C. § 1692(e); Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 148 (3d Cir. 2013); Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227, 232 (3d Cir. 2005).

         To state a FDCPA claim, a plaintiff must allege that: (1) he is a consumer; (2) the defendant is a debt collector; (3) the challenged practice involves an attempt to collect a “debt” as the FDCPA defines it; and (4) the defendant has violated a provision of the FDCPA in attempting to collect a debt. Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014).

         In this case, Defendants do not challenge Plaintiff's status as a consumer or that the notice and the lawsuit were attempts to collect a debt. Neither does McCabe contest that it is a “debt collector” within the meaning of the FDCPA. However CIT does seek to refute that label and both CIT and McCabe argue that neither of them has violated a provision of the FDCPA.

         A. Any Alleged Misrepresentations Made Before March 7, 2016 are ...

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