Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

McWhorter v. Ocwen Loan Servicing, LLC

United States District Court, N.D. Alabama, Southern Division

August 3, 2017

HAROLD McWHORTER and ROBERT FIELDER, Plaintiff,
v.
OCWEN LOAN SERVICING, LLC and WESTERN UNION BUSINESS SOLUTIONS USA, LLC, Defendants.

          MEMORANDUM OPINION AND ORDER

          MADELINE HUGHES HAIKALA, UNITED STATES DISTRICT JUDGE

         In this putative nationwide class action, plaintiffs Harold McWhorter and Robert Fielder allege that defendants Ocwen Loan Servicing, LLC and Western Union Business Solutions (USA), LLC violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692f(1), by charging customers a convenience fee to make loan payments online and over the telephone. (Doc. 2, ¶¶ 1-2, 9, 11-12). Pursuant to Federal Rule of Civil Procedure 12(b)(6), the defendants ask the Court to dismiss the plaintiffs' amended complaint. (Docs. 9, 11).[1] For the reasons stated below, the Court grants Western Union's motion to dismiss (Doc. 11), denies Ocwen's motion to dismiss with respect to Mr. Fielder (Doc. 9), and defers ruling on Ocwen's motion to dismiss with respect to Mr. McWhorter (Doc. 9) pending a period of limited discovery.

         I. RULE 12(b)(6) STANDARD

         Under Rule 12(b)(6), a defendant may move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” See Fed.R.Civ.P. 12(b)(6). To survive a Rule 12(b)(6) motion to dismiss, a complaint-or in this case, an amended complaint-must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). In considering a defendant's motion to dismiss a complaint, a district court generally accepts the plaintiff's allegations as true and asks whether the plaintiff alleges facts that allow the district court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Aschcroft v. Iqbal, 556 U.S. 662, 678 (2009); see Maledy v. City of Enter., 2012 WL 1028176, at *1 (M.D. Ala. Mar. 26, 2012). A district court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678; Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted).

         In its motion to dismiss, Ocwen challenges the merits of some of the factual allegations in the plaintiffs' amended complaint. In doing so, Ocwen relies on documents that are central to the plaintiffs' claims. In resolving the motions to dismiss, the Court may consider these documents without converting Ocwen's motion to dismiss into a motion for summary judgment because the documents are central to the plaintiffs' claims, and no party challenges the authenticity of the documents. See Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1053 n. 12 (11th Cir. 2015).

         II. BACKGROUND

         Mr. McWhorter and Mr. Fielder purchased homes using consumer loans. (Doc. 2, ¶ 7). Ocwen eventually acquired servicing rights to the loans. (Doc. 2, ¶ 8). Mr. Fielder's loan was in default when Ocwen acquired it. (Doc. 2, ¶ 8). Mr. McWhorter alleges that his loan was in default when Ocwen acquired it, but Ocwen challenges the allegation. (See Doc. 2, ¶ 8; Doc. 16, p. 3).

         When Mr. McWhorter and Mr. Fielder made loan payments to Ocwen online and over the telephone, Ocwen and Western Union charged convenience fees, or “Speedpay” fees, to process those payments. (Doc. 2, ¶¶ 9, 11). Western Union collected the fees from Mr. McWhorter and Mr. Fielder and remitted a portion of the fees to Ocwen. (Doc. 2, ¶ 11).

         Mr. McWhorter and Mr. Fielder assert that the defendants' imposition of the Speedpay fees and Western Union's remittance of a portion of those fees to Ocwen violate the FDCPA. (Doc. 2, ¶¶ 20, 22, 33, 35). Mr. McWhorter and Mr. Fielder seek class certification for their FDCPA claims, declaratory and injunctive relief, statutory damages, and attorney's fees and costs. (Doc. 2, p. 9).[2]

         III. DISCUSSION

         Mr. McWhorter and Mr. Fielder allege that Ocwen and Western Union violated the FDCPA by charging them a Speedpay fee to pay their loans online and over the telephone. (Doc. 2, ¶¶ 20, 22, 33, 35). Ocwen and Western Union argue that because the FDCPA applies only to debt collectors and because neither of them is a debt collector with respect to the plaintiffs, the Court should dismiss this action. (Docs. 9, 11). Ocwen also argues that, even if it is a debt collector, the Court should dismiss the plaintiffs' claims because, as a matter of law, Speedpay fees do not violate the FDCPA. (Doc. 9).

         A. Western Union's motion to dismiss

          “[W]hether an individual or entity is a ‘debt collector' is determinative of liability under the FDCPA.” Birster v. Am. Home Mortg. Servicing, Inc., 481 Fed.Appx. 579, 581-82 (11th Cir. 2012). Because the plaintiffs' factual allegations, taken as true, do not allow the Court to draw the reasonable inference that Western Union is a debt collector, the plaintiffs have failed to state a claim against Western Union. See p. 2, above.

         The FDCPA defines “debt collector” as one who “regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). In addition, a debt collector is “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts.” Id. In their amended complaint, Mr. McWhorter and Mr. Fielder state that “Western Union regularly collects or attempts to collect, directly or indirectly, debts owed another and it is therefore a debt collector within the meaning of the FDCPA.” (Doc. 2, ¶ 21). The Court does not credit this “formulaic recitation of the elements of a[n FDCPA claim].” Iqbal, 556 U.S. at 678.

         Mr. McWhorter and Mr. Fielder also allege that Western Union acted as Ocwen's “partner . . . in facilitating their debt collection activity” by “demand[ing] an additional payment [from the plaintiffs] in the form of a fee for using Speedpay.” (Doc. 2, ¶¶ 11, 21). According to the plaintiffs, “Western Union collected this money from Plaintiffs and remitted a portion of it back to Ocwen.” (Doc. 2, ¶ 11). These allegations do not support the reasonable inference that Western Union “regularly collects or attempts to collect . . . debts owed or due or asserted to be owed or due another” or that Western Union is a “business the principal purpose of which is the collection of . . . debts.” 15 U.S.C. § 1692a(6).

         Instead, the plaintiffs' allegations indicate that Western Union provided a service to Ocwen and the plaintiffs, and Western Union received payment for that service. As the plaintiffs state in their amended complaint, the money that Western Union allegedly collected “both on its own behalf and on behalf of [Ocwen]” was not debt, but rather “an additional payment.” (Doc. 2, ¶ 11). Accordingly, the plaintiffs have not plausibly alleged that Western Union is a debt collector within the meaning of the FDCPA, and the Court grants Western Union's motion to dismiss the plaintiffs' amended complaint. (Doc. 11).

         B. Ocwen's motion to dismiss

          1. Whether Ocwen is a debt collector

          Ocwen argues that it is not a debt collector with respect to Mr. McWhorter because Mr. McWhorter's loan was not in default when Ocwen acquired servicing rights to it. (Doc. 9, pp. 12-15). With respect to Mr. Fielder, Ocwen argues that it did not act as a debt collector because a bankruptcy court discharged Mr. Fielder's personal debt in 2013. (Doc. 9, pp. 8-12).

         a. Mr. McWhorter

         Under the FDCPA, a person who acquires servicing rights to a debt is not a debt collector for purposes of that debt if the debt “was not in default at the time it was obtained.” 15 U.S.C. § 1692a(6)(F)(iii); see Schlosser v. Fairbanks Capital Corp., 323 F.3d 534, 536 (7th Cir. 2003). The FDCPA does not define default. Instead, “‘the determination of whether a debt is in default is to be made by a court on a case-by-case basis, and . . . applicable contractual or regulatory language defining the point of default may be instructive.'” Church v. Accretive Health, Inc., 2014 WL 7184340, at *3 (S.D. Ala. Dec. 16, 2014) (quoting Kapsis v. Am. Home Mortg. Servicing, Inc., 923 F.Supp.2d 430, 440 (E.D.N.Y. 2013)) (alteration supplied by Church).

         When Ocwen acquired Mr. McWhorter's loan on February 15, 2013, Mr. McWhorter had completed a trial loan modification that he and his prior loan servicer, GMAC Mortgage, LLC, had entered as a prerequisite for Mr. McWhorter's participation in the United States Treasury Department's Home Affordable Modification Program (HAMP). (Doc. 9-1, ¶ 28; Doc. 9-7, pp. 2-3). Under the HAMP guidelines, “[s]uccessful completion [of the trial period] means that the borrower is current (under the MBA delinquency calculation) at the end of the Trial Period.”[3] Ocwen argues that, because Mr. McWhorter's completion of the trial period brought him current on his loan with GMAC, Mr. McWhorter's loan was not in default under the FDCPA when Ocwen acquired it. (See Doc. 18, p. 6). Mr. McWhorter contends that an individual who is “current” under the HAMP guidelines for purposes of the MBA delinquency calculation is ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.