United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION AND ORDER
MADELINE HUGHES HAIKALA, UNITED STATES DISTRICT JUDGE
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). 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.
RULE 12(b)(6) STANDARD
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).
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.
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).
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, ¶
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.
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).
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.
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.
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.
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).
Ocwen's motion to dismiss
1. Whether Ocwen is a debt collector
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,
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).
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.” 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