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Whitacre v. Nations Lending Corp.

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

July 31, 2019

JASON A. WHITACRE, Plaintiff,
v.
NATIONS LENDING CORPORATION, et al., Defendants.

          MEMORANDUM OF OPINION AND ORDER [RESOLVING ECF NO. 8]

          BENITA Y. PEARSON UNITED STATES DISTRICT JUDGE

         This action was removed to this Court from the Summit County, Ohio, Court of Common Pleas on April 11, 2019, on the basis of federal-question jurisdiction pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction pursuant to 28 U.S.C. § 1367. ECF No. 1. Following removal, Plaintiff filed an amended complaint (ECF No. 4), to which Defendants filed a motion to dismiss for failure to state a claim on which relief can be granted. ECF No. 8. Plaintiff responded (ECF No. 15), and Defendants replied (ECF No. 16). For the reasons stated in this Order, Defendants' motion to dismiss is granted in part. Count Eleven as to Defendant LoanCare, Count One as to Defendant Nations Lending, and Count Five as to Defendants LoanCare and Nations Lending remain. All other claims alleged in the Amended Complaint are dismissed.

         I. Background

         In March 2015, Plaintiff purchased a house. ECF No. 4 at PageID #: 52. To pay for the house, Plaintiff obtained a mortgage through Defendant Nations Lending Corporation (“Nations Lending”). Id. Defendant LoanCare, LLC (“LoanCare”) serviced the loan on behalf of Nations Lending. Id. Plaintiff alleges an agency-principal relationship exists between Nations Lending and LoanCare. Id. at PageID #: 53. The mortgage loan is insured by the Federal Housing Authority. Id.

         In December 2017, Plaintiff was separated from his employment. Id. at PageID #: 54. He alleges that he immediately notified LoanCare of this. Id. He also applied for complete forbearance of his loan. Id. LoanCare advised Plaintiff that he would be eligible for a forbearance because of his unemployment. Id. at PageID #: 55. He avers that LoanCare did not respond to his application for several weeks, then admitted to losing his application package. Id. LoanCare instructed Plaintiff to submit a new application package, and Plaintiff complied. Id.

         Plaintiff secured employment in April 2018. Id. LoanCare allegedly determined that, because Plaintiff was now employed, he was no longer eligible for forbearance. Id. at PageID #: 56.

         Plaintiff “eventually did fall behind on the payments.” Id. He claims that, during a conversation with LoanCare staff, he was instructed to pay $5, 864.95 to bring the account current. Id. Plaintiff made the payment. Id. Instead of bringing his account current, however, LoanCare allegedly applied only a single mortgage payment to Plaintiff's account. Id. Plaintiff claims that LoanCare waited three days before applying the second monthly payment to Plaintiff's account. Id. at PageID #: 57. Plaintiff also avers that, instead of applying the balance of the monies to Plaintiff's third monthly payment, LoanCare applied this amount to “other items, including but not limited to the escrow account, a ‘Suspense Sweep,' and alleged ‘Late Charges.'” Id.

         LoanCare determined that Plaintiff's account was delinquent. Id. Accordingly, LoanCare reported to credit reporting agencies that Plaintiff was late on his mortgage payments. Id. LoanCare demanded an additional $5, 905.50 from Plaintiff to bring his account up to date. Id. at PageID #: 58. Plaintiff claims he unsuccessfully attempted to call LoanCare to discuss the status of his account. Id.

         Plaintiff also claims that LoanCare calls him six days a week through an automated voice messaging system. Id. at PageID #: 58-59. He avers that he never consented to these calls, and, alternatively, revoked any consent to these calls. Id. at PageID #: 58-59. He additionally alleges that LoanCare has, on multiple occasions, sent a representative to Plaintiff's home to collect the balance allegedly due on his loan. Id.

         II. Legal Standard

         In deciding a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the Court must take all well pleaded allegations in the complaint as true and construe those allegations in a light most favorable to the plaintiff. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations omitted). A cause of action fails to state a claim upon which relief may be granted when it lacks “plausibility in th[e] complaint.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 564 (2007). A pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (quoting Fed.R.Civ.P. 8(a)(2)). Plaintiff is not required to include detailed factual allegations, but must provide more than “an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at 678. A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555. Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.” Id. at 557. It must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Id. at 570.

         “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.” Iqbal, 556 U.S. at 678. The plausibility standard is not akin to a “probability requirement, ” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Twombly, 550 U.S. at 556. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.'” Id. at 557 (brackets omitted). “[When] 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.'” Iqbal, 556 U.S. at 679 (quoting Rule 8(a)(2)). The Court “need not accept as true a legal conclusion couched as a factual allegation or an unwarranted factual inference.” Handy-Clay v. City of Memphis, Tenn., 695 F.3d 531, 539 (6th Cir. 2012) (citations and internal quotation marks omitted).

         III. Analysis

         Plaintiff alleges sixteen counts in his Amended Complaint against Defendants Nations Lending and LoanCare. Six of his claims arise under federal law. Count Nine alleges violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. ECF No. 4 at PageID #: 66-67. Counts Eleven, Twelve, Thirteen, Fourteen, and Fifteen allege violations of federal regulations promulgated by the Consumer Finance Protection Bureau (“CFPB”). Id. at PageID #: 67-71. Plaintiff's remaining ten counts arise under state law. Defendants move to dismiss all of Plaintiff's claims under Fed.R.Civ.P. 12(b)(6) for failure to state a claim on which relief can be granted.

         A. Telephone Consumer Protection Act (Count Nine)

         To succeed on his TCPA claim, Plaintiff must demonstrate that: “(1) a call was placed to a cell or wireless phone, (2) by the use of any automatic dialing system and/or leaving an artificial or prerecorded message, and (3) without prior [express] consent of the recipient.” Rodriguez v. Premier Bankcard, LLC, 2018 WL 4184742, at *3 (N.D. Ohio Aug. 31, 2018) (quoting Brown v. Hosto & Buchan, PLLC, 748 F.Supp.2d 847, 859 (W.D. Tenn. 2010) (alteration in original)).

         Defendants argue that Plaintiff's TCPA claim (Count Nine) must be dismissed because its factual allegations are insufficient as a matter of law. Plaintiff pleads:

127. Defendants have made repeated calls to Plaintiff's cellular phone without his authorization using an automated machine dialer.
128. Those calls ring to Plaintiff's cell phone without a live person on Defendants' end.
129. Plaintiff expressed his lack of consent to automated calls, but Defendants refused to stop the automated calls.

         ECF No. 4 at PageID #: 66. Plaintiff does not describe how he “expressed his lack of consent, ” nor does he give any other details about the prerecorded phone calls.

         The Sixth Circuit, quoting the Federal Communications Commission, has ruled, “[A] creditor doesn't violate the [TCPA] when it calls a debtor who has ‘provided [his number] in connection with an existing debt.” Hill v. Homeward Residential, Inc., 799 F.3d 544, 551 (6th Cir. 2015) (quoting In the Matter of Rules and Regulations Implementing the Tel. Consumer Prot. Act of 1991, 23 F.C.C. Rcd. 559, 564 (2008) (latter alteration in original)). Plaintiff concedes that LoanCare services his existing debt on behalf of Nations Lending. ECF No. 4 at PageID #: 52.

         Moreover, “persons who knowingly release their phone numbers have in effect given their invitation or permission to be called and the number which they have given, absent instructions to the contrary.” Baisden v. Credit Adjustments, Inc., 813 F.3d 338, 342 (6th Cir. 2016) (quoting 7 F.C.C. Rcd. 8752, 8769 (1992)). “Debtors ‘typically give their cell phone number as part of a credit application . . . .'” Rodriguez, 2018 WL 4184742, at *5 (quoting Hill, 799 F.3d at 551) (alterations omitted). Plaintiff makes no suggestion in his Amended Complaint that he did not provide this routine datum to Defendants. Even if he did not, however, Plaintiff acknowledges that he voluntarily contacted LoanCare in December 2017 to request a forbearance in loan payment obligations. ECF No. 4 at PageID #: 54. Plaintiff does not allege, and it is implausible to infer, that he did not surrender his phone number to LoanCare or Nations Lending during one or both of those interactions.

         In conclusory fashion, Plaintiff states that he “expressed his lack of consent to automated calls . . . .” ECF No. 4 at PageID #: 66. But a pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action” does not suffice to state a claim. Twombly, 550 U.S. at 555. Nor may a pleading offer “naked assertion[s]” devoid of “further factual enhancement.” Id. at 557.

         Accordingly, the Court grants Defendants' motion to dismiss Plaintiff's claim under the TCPA.

         B. Claims Under Consumer Finance Protection Bureau Regulations

         Plaintiffs alleges five causes of action under CFPB federal regulations. His claims under 12 C.F.R. §§ 1024.39, 1024.40, and 1024.41 arise from the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. His claims under 12 C.F.R. §§ 1026.36 and 1026.41 arise from the Truth in Lending Act, 15 U.S.C. § 1601 et seq.

         1. 12 C.F.R. § 1026.36 (Count Eleven)

         A loan servicer is generally prohibited from “fail[ing] to credit a periodic payment to the consumer's loan account as of the date of receipt.” 12 C.F.R. § 1026.36(c)(1)(i). A period payment is “an amount sufficient to cover principal, interest, and escrow (if applicable) for a given billing cycle.” Id.

         Plaintiff alleges that LoanCare instructed him to pay $5, 864.95 in order to bring his account current. ECF No. 4 at PageID #: 56. He claims that he made this payment in full, but that the final period payment was “applied to other items, including but not limited to the escrow account, a ‘Suspense Sweep,' and alleged ‘Late Charges.'” Id. at PageID #: 57. Taken as true, these allegations indicate that Plaintiff made the applicable period payments, but that the final period payment was not ...


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