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Smith v. Nationstar Mortgage

United States District Court, N.D. Ohio, Eastern Division

December 21, 2017

PETER L. SMITH, Plaintiffs,
NATIONSTAR MORTGAGE, et al., Defendants.


          Donald C. Nugent, United States District Judge.

         This matter is before the Court on Defendants' Motion to Dismiss Plaintiffs Complaint With Class Action Allegations Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (ECF #8). Plaintiff filed an Opposition Brief, and Defendants filed a Reply in Support of their motion. (ECF #15, 16). After careful consideration ef the briefs and the Complaint, and a review of all relevant authority, Defendant's motion to dismiss is GRANTED in part.


         In evaluating a motion for dismissal under Rule 12(b)(6), the district court must "consider the pleadings and affidavits in a light most favorable to the [non-moving party]." Jones v. City of Carlisle, Ky., 3 F.3d. 945, 947 (6th Cir. 1993) (quoting Welsh v. Gibbs, 631 F.2d 436, 439 (6th Cir. 1980)). However, though construing the complaint in favor of the non-moving party, a trial court will not accept conclusions of law or unwarranted inferences cast in the form of factual allegations. See City of Heath Ohio v. Ashland Oil, Inc., 834 F.Supp. 971, 975 (S.D. Ohio 1993). "A plaintiffs obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell AtV Corp. v. Twombly, 550 U.S. 544, 555 (2007)(quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly at 555. In deciding a Rule 12(b)(6) motion, this Court must determine not whether the complaining party will prevail in the matter but whether it is entitled to offer evidence to support the claims made in its complaint. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).


Plaintiff brought an action alleging nine causes of action, some of which are individual claims, and some which were brought as putative class action claims. The underlying gravamen of the Complaint is Plaintiffs allegation that Nationstar, together with its wholly owned subsidiary Solutionstar, imposed unnecessary, unreasonable, and otherwise improper fees, including inspection fees and late fees, on him and others who are similarly situated, when they fell behind in their mortgage payments. Plaintiff claims that in his case, the amounts he owed were improperly inflated by the addition of inspection and late fees. He argues that the fees assessed by the Defendants were improper and unwarranted, and that their imposition violated several state and federal laws, as well as Ohio common law principles.


         The Court will look first to the federal claims asserted in the Complaint. Count One alleges a claim under the Fair Debt Collection Practices Act ("FDCPA"); Count Three asserts claims under the Fair Credit Reporting Act ("FCRA"); and, Count Six request relief under the Federal RICO statute, 18 U.S.C. § 1961, et seq.

         A. Fair Debt Collection Practices Act

         Plaintiff claims that Nationstar violated 15 U.S.C. §1692e by "falsely representing the character, amount, or legal status of debt, among other things, including, without limitation, attempt to and/or collecting upon an unlawful debt." (Complaint, ¶ 121). He also claims, among other things, that Defendants violated the FDCPA by "continuing to collect a debt or any disputed portion thereof after failure to properly respond to Plaintiffs verification request." (Complaint, 1123(d)).

         The FDCPA expressly states that all claims must be brought "within one year from the date on which the violation occurs." 15 U.S.C. § 1692k. Plaintiff filed this Complaint on June 9, 2017, thus, he is out of time for any violations occurring prior to June 9, 2016. Although this was a re-filed case, having first been filed in the Cuyahoga Court of Common Pleas on February 10, 2016 and dismissed without prejudice on December 27, 2016, the Ohio Savings Statute does not operate to waive or extend the statute of limitations periods for federal claims which have their own statutorily assigned statute of limitations. Ruth v. Unifund CCR Partners, 2009 WL 585847, at *6 (N.D. Ohio 2009); Higginbotham v. Ohio Dep't of Mental Health, 412 F.Supp.2d 806, 811-12 (S.D.Ohio 2005).

         The Complaint cites only three communications, after June 9, 2016, alleged to be part of the factual basis for Plaintiffs claims: (1) Defendant Nationstar sent Plaintiff a notice that his request for loss mitigation assistance was denied because "Offer not accepted by Borrower/Request Withdrawn;" (2) Defendants issued a default notice to Plaintiff advising that he was in default in the amount of $10, 959.01, including late fees, NSF fees, and other fees (which include property inspection fees); and, (3) Defendants sent Plaintiff a mortgage statement that reflected $195.00 in total property inspection fees. (Complaint, ¶ 103-105).

         The FDCPA does not apply to every communication between a debtor and debt collector. Grden v. Leikin Ingber & Winters PC, 643 F.3d 169, 173 (6th Cir. 2011). "For a communication to be in connection with the collection of a debt, an animating purpose of the communication must be to induce payment by the debtor." Id. The communication sent by Nationstar notifying Plaintiff that his request for loss mitigation assistance was denied because it wasn't accepted or was withdrawn, does not fit into the category of communications with the purpose of inducing payment. It appears to be simply a communication noting Nationstar's understanding that Plaintiff did not intend to pursue the loss mitigation options presented to him. Further, Plaintiff does not allege that this communication was false, deceptive or misleading. In fact, in his Opposition to the Defendants' Motion to Dismiss, Plaintiff contends that he had no need such options because he had already entered into a loan modification.

         Plaintiff claims that the other two statements within the statute of limitations constitute unlawful, misleading, and deceptive statements because they seek to collect on a debt that includes some amount of improperly assessed inspection fees. Nowhere in Plaintiffs Complaint does he claim that he was not in default on his mortgage, or that Nationstar's notices of default were incorrect based upon the amount owed if the inspection and late fees were included in the debt's tally. Nor does he dispute that the mortgage contract allowed the imposition of reasonable inspection fees upon default. He also does not dispute ...

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