Opinion
C. A. 6:21-cv-02158-HMH-KFM
09-08-2021
Shemar Daniel Jackson, Plaintiff, v. Flagstar Bank, Defendant.
REPORT OF MAGISTRATE JUDGE
KEVIN F. MCDONALD, UNITED STATES MAGISTRATE JUDGE
The plaintiff, a non-prisoner proceeding pro se and in forma pauperis, brings this action seeking damages from the defendants. Pursuant to the provisions of 28 U.S.C. § 636(b), and Local Civil Rule 73.02(B)(2) (D.S.C.), this magistrate judge is authorized to review all pretrial matters in this case and submit findings and recommendations to the district court.
The plaintiff's case was entered on the docket on July 16, 2021 (doc. 1). On August 9, 2021, the undersigned issued an order informing the plaintiff that his complaint was subject to dismissal as drafted and providing him with time to file an amended complaint to correct the deficiencies noted in the order (doc. 14). The plaintiff was informed that if he failed to file an amended complaint or otherwise cure the deficiencies outlined in the order, the undersigned would recommend that his case be dismissed (id. at 6). On August 23, 2021, the plaintiff's amended complaint was entered on the docket (doc. 16). However, because the plaintiff's amended complaint likewise fails to state a claim for relief, the undersigned recommends dismissal of the case.
ALLEGATIONS
The plaintiff, in his amended complaint, seeks damages from the defendant pursuant to Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1999), the Truth in Lending Act (“TILA”), and the Fair Debt Collections Practices Act (“FDCPA”) (doc. 16). The plaintiff contends that the defendant has violated 15 U.S.C. §§ 1605(a)(c) , 1611, 1640 (id. at 3-4). The plaintiff alleges that the defendant violated TILA by abusing him and deceiving him (doc. 16-1 at 1-2). The defendant also charged the plaintiff for insurance as part of his finance charges, but violated 15 U.S.C. § 1605(c) by not including the insurance cost in the disclosed finance charges (id. at 1-2). The plaintiff further contends that the defendant is a debt collector under the FDCPA because it attempted to collect a debt from the plaintiff and that the defendant violated the FDCPA (id. at 1-2). For injuries, the plaintiff alleges that he cannot pay his bills and lost a lot of money (doc. 16 at 5). For relief, the plaintiff seeks $663,480.00, to “zero out” his balance with the defendant, and to have the title on his house released to him “lien free” (id.). Attached to his complaint, the plaintiff provided a purported affidavit with some of his allegations (doc. 16-1) as well as a copy of the executed closing disclosure form (“CDF”) from the purchase of his house, with areas circled and labeled as “violations” (doc. 16-2).
This appears to be a typographical error, as the subsection referenced by the plaintiff appears to be § 1605(c) - there is no subsection (c) to subsection (a) in this statute. 15 U.S.C. § 1605. As such, the remainder of this report and recommendation will reference § 1605(c) instead of § 1605(a)(c).
STANDARD OF REVIEW
The plaintiff filed this action pursuant to 28 U.S.C. § 1915, the in forma pauperis statute. This statute authorizes the District Court to dismiss a case if it is satisfied that the action “fails to state a claim on which relief may be granted, ” is “frivolous or malicious, ” or “seeks monetary relief against a Defendant who is immune from such relief.” 28 U.S.C. § 1915(e)(2)(B). As a pro se litigant, the plaintiff's pleadings are accorded liberal construction and held to a less stringent standard than formal pleadings drafted by attorneys. See Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam). The requirement of liberal construction does not mean that the Court can ignore a clear failure in the pleading to allege facts which set forth a claim cognizable in a federal district court. See Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990).
DISCUSSION
As noted above, the plaintiff's amended complaint seeks damages from the defendant for TILA and FDCPA violations. The plaintiff's amended complaint also asserts damages based upon Bivens. However, as an initial matter, the plaintiff's amended complaint (like his original complaint) relies on vague and conclusory-as opposed to specific and factual-allegations. Such pleaded allegations do not give rise to the level of plausibility required under Iqbal and Twombly; thus, the plaintiff's amended complaint is subject to summary dismissal. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (noting that “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.”) (citing Twombly v. Bell Atl. Corp., 550 U.S. 544, 556-57 (2007)). In additional to the foregoing, the undersigned has also addressed specific pleading deficiencies in the plaintiff's Bivens, TILA, and FDCPA claims.
Bivens Claim
In Bivens, the Supreme Court established a direct cause of action under the Constitution of the United States against federal officials for violations of federal constitutional rights. Bivens, 403 U.S. at 388. A Bivens claim is analogous to a claim under 42 U.S.C. § 1983; federal officials cannot be sued under § 1983, however, because they do not act under color of state law. Harlow v. Fitzgerald, 457 U.S. 800, 814-20 (1982). Case law involving § 1983 claims is applicable in Bivens actions and vice versa. See Farmer v. Brennan, 511 U.S. 825, 839 (1994); Mitchell v. Forsyth, 472 U.S. 511, 530 (1985). To state a claim under Bivens, a plaintiff must plausibly allege two elements: (1) the defendant deprived the plaintiff of a right secured by the Constitution and laws of the United States and (2) the defendant did so under color of federal law. See Mentavlos v. Anderson, 249 F.3d 301, 310 (4th Cir. 2001) (citation and internal quotation marks omitted) (setting forth requirements for a § 1983 claim under color of state law); see also Bivens, 403 U.S. at 389 (“In [a previous case], we reserved the question whether violation of [the Constitution] by a federal agent acting under color of his authority gives rise to a cause of action for damages consequent upon his unconstitutional conduct. Today we hold that it does.”). Here, the plaintiff's amended complaint indicates that he seeks relief under Bivens based upon the defendant's violation of 15 U.S.C. §§ 1605(c), 1611, 1640 (doc. 16 at 3-4). However, the defendant is not a federal actor and the plaintiff has made no allegations that the defendant has a sufficiently close relationship with government actors such that the Court could find that the defendant is engaged in the government's actions. See DeBauche v. Trani, 191 F.3d 499, 506-07 (4th Cir. 1999); see also Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 50-51 (1999) (noting that private conduct, no matter how discriminatory or wrongful, is not covered under § 1983). As such, the plaintiff's Bivens claim is subject to summary dismissal.
Truth in Lending Act
The plaintiff also alleges that the defendant violated TILA by deceiving him and by charging him illegal finance charges (and failing to include insurance charges as a disclosed finance charge) (docs. 16; 16-1; 16-2). As an initial matter, as outlined above, other than providing a copy of his CDF highlighted with “violations, ” the plaintiff's amended complaint contains no factual allegations setting forth the alleged TILA violations - beyond asserting that insurance should have been included as a disclosed finance charge (see docs. 16; 16-1). TILA was enacted to “‘assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.'” Mourning v. Fam. Publ'ns Serv., Inc., 411 U.S. 356, 364-65 (1973) (quoting 15 U.S.C. § 1601(a)). The statute “requires creditors to provide borrowers with clear and accurate disclosures of terms, ” and imposes criminal penalties and civil liability on creditors who fail to do so. Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998) (citing 15 U.S.C. § 1640(a)). The Federal Reserve Board, the agency charged with administering the statute, promulgated Regulation Z to implement TILA's mandates and methods of disclosure. 15 U.S.C. § 1604; 12 C.F.R. §§ 226.1, et seq. (2008); see Tripp v. Charlie Falk's Auto Wholesale Inc., 290 Fed.Appx. 622, 626 (4th Cir. 2008). Among other required material disclosures, TILA and Regulation Z require lenders to disclose the finance charge, the amount financed, and the annual percentage rate. See 15 U.S.C. § 1638(a); 12 C.F.R. § 226.18. The “finance charge” refers to the “sum of all charges, payable directly or indirectly by the person to whom the credit is extended, and imposed directly or indirectly by the creditor as an incident to the extension of credit.” 15 U.S.C. § 1605(a); see 12 C.F.R. § 226.4(a).
Here, the plaintiff's vague and conclusory allegations fail to allege a cause of action under TILA. As noted above, the plaintiff's complaint conclusorily asserts that the defendant failed to include insurance costs in the cost of the financing; however, the fees and charges circled on the CDF attached to the plaintiff's amended complaint appear to represent the required disclosures under TILA (docs. 16-1 at 1-2; 16-2). Indeed, the plaintiff's own exhibit reveals that the CDF disclosed that the plaintiff's loan required private mortgage insurance (“PMI”) as well as the amount the PMI would cost each month (see doc. 16-2 at 1). “TILA is only a disclosure statute and does not substantively regulate consumer credit but rather requires disclosure of certain terms and conditions of credit before consummation of a consumer credit transaction.” Willis v. Bank of Am. Corp., et al., C/A No. ELH-13-02615, 2014 WL 3829520, at *17 (D. Md. Aug. 1, 2014) (quoting Hauk v. J.P. Morgan Chase Bank USA, 552 F.3d 1114, 1120 (9th Cir.2009)) (internal quotation marks omitted); see Coulibaly v. J.P. Morgan Chase Bank, N.A., et al., C/A No. DKC 10-3517, 2011 WL 3476994, at *10 (D. Md. Aug. 8, 2011), aff'd 526 Fed.Appx. 255 (4th Cir. 2013) (“TILA does not prevent a lender from charging a higher rate of interest; it simply requires lenders to disclose accurately the actual rate of interest charged.”). As such, based upon the foregoing, the plaintiff's TILA claim is subject to summary dismissal.
Of note, the plaintiff's amended complaint appears to have abandoned TILA claims with respect to charges excluded from the definition of finance charges in TILA - such as title search fees, title examination fees, title insurance fees, fees for the preparation of loan-related documents, escrows for future payment of taxes and insurance, notary fees, appraisal fees, inspection fees, and credit report fees (docs. 16; 16-1; 16-2). To the extent the plaintiff did not intend to abandon such claims, they are subject to summary dismissal as previously outlined by the court (doc. 14 at 4-5).
Fair Debt Collection Practices Act
The plaintiff also alleges that the defendant has violated his rights pursuant to the FDCPA (doc. 16-1 at 1-2). To state a claim under the FDCPA, a plaintiff must plausibly allege that (1) he was the object of collection activity arising from consumer debt as defined in the FDCPA; (2) the defendant is a debt collector as defined in the FDCPA; and (3) the defendant engaged in an act or omission prohibited by the FDCPA. See e.g., Boosahda v. Providence Dane LLC, 462 Fed.Appx. 331, 333 n.3 (4th Cir. 2012) (per curiam unpublished decision); Johnson v. BAC Home Loans Servicing, LP, 867 F.Supp.2d 766, 776 (E.D. N.C. 2011). Here, the plaintiff's claim fails because the defendant, who appears to be the servicer/assignee of the plaintiff's mortgage, is not a “debt collector” under the FDCPA - and there are no allegations that the plaintiff's mortgage was in default when the defendant became the servicer. See 15 U.S.C. § 1692a(6) (defining debt collector as any person “who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another”); see Ayres v. Ocwen Loan Servicing, LLC, 129 F.Supp.3d 249, 277 (D. Md. 2015) (noting that mortgage servicers are not debt collectors under the FDCPA unless the mortgage is in default when purchased by the servicer); see also Barber v. Rushmore Loan Mgmt. Servs., LLC, C/A No. 3:17-cv-00982-TLW-SVH, 2018 WL 4957409, at *4 (D.S.C. Feb. 21, 2018), Report and Recommendation adopted by 2018 WL 4489290 (D.S.C. Sept. 19, 2018), aff'd 769 Fed.Appx. 106 (4th Cir. 2019) (noting that “creditors collecting their own debts are not ‘debt collectors' for purposes of the FDCPA and are exempt from the FDCPA's provisions” (internal quotation marks and citations omitted)). The plaintiff's amended complaint likewise fails to allege that the defendant has engaged in acts/omissions prohibited by the FDCPA. As such, the plaintiff's FDCPA claims are subject to summary dismissal.
RECOMMENDATION
By order issued August 9, 2021, the undersigned gave the plaintiff an opportunity to correct the defects identified in his complaint and further warned the plaintiff that if he failed to file an amended complaint or failed to cure the identified deficiencies, the undersigned would recommend to the district court that the action be dismissed with prejudice and without leave for further amendment (doc. 14). Despite filing an amended complaint, the plaintiff has not cured the deficiencies identified in the order dated August 9, 2021 (doc. 14). Therefore, the undersigned recommends that the district court decline to give the plaintiff further leave to amend his complaint and dismiss this action with prejudice and without issuance and service of process. See Workman v. Morrison Healthcare, 724 Fed.Appx. 280, 281 (4th Cir. 2018) (in a case where the district court had already afforded the plaintiff an opportunity to amend, the district court was directed on remand to “in its discretion, either afford [the plaintiff] another opportunity to file an amended complaint or dismiss the complaint with prejudice, thereby rendering the dismissal order a final, appealable order”) (citing Goode v. Cent. Va. Legal Aid Soc'y, Inc., 807 F.3d 619, 630 (4th Cir. 2015)); see also Bing v. Brivo Sys., LLC, 959 F.3d 605 (4th Cir. 2020). The attention of the parties is directed to the important notice on the following page.
IT IS SO RECOMMENDED.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committees note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed. R. Civ. P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
250 East North Street, Room 2300
Greenville, South Carolina 29601
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).