Opinion
Civil Action 4:20-cv-4252-SAL-TER
11-30-2021
CHARLES RAY THOMAS, II, Plaintiff, v. LAKEVIEW LOANCARE, LLC; SANTANDER CONSUMER USA; and BBVA USA; Defendants.
REPORT AND RECOMMENDATION
Thomas E. Rogers, III United States Magistrate Judge.
I. INTRODUCTION
Plaintiff, who is proceeding pro se, brings this action pursuant to the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692a et seq. and the Consumer Credit Protection Act, 15 U.S.C. § 1681 as to Credit Reporting Agencies, also known as Fair Credit Reporting Act (FCRA). Plaintiff's claims pursuant to the FCRA have been dismissed and the only claims remaining in this action are those asserted pursuant to the FDCPA. Each Defendant has filed a Motion to Dismiss (ECF Nos. 30, 37, 49) and Plaintiff has filed a Motion for Summary Judgment (ECF No. 35). Because he is proceeding pro se, Plaintiff was advised pursuant to Roseboro v. Garrison, 528 F.3d 309 (4th Cir. 1975), that a failure to respond to Defendants' Motions could result in dismissal of his Complaint. Plaintiff filed Responses (ECF Nos. 48, 53, 54) to Defendants' Motions, and Defendants filed Responses (ECF Nos. 45, 46, 47) to Plaintiff's Motion. All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Rule 73.02(B)(2)(d), DSC.
II. FACTUAL ALLEGATIONS
A. Defendant Lakeview Loancare LLC
On or about March 29, 2019, Plaintiff was loaned the sum of $79,000.00 by Fairway Independent Mortgage Corporation, which was evidenced by a promissory note (Note). See Note (ECF No. 49-2). The Note was secured by a mortgage on the real property owned by Plaintiff commonly known as 1308 Harmony Street in Florence, South Carolina (Mortgage), signed by Plaintiff on March 29, 2019 (the Note and Mortgage shall hereinafter be referred to as collectively the “Loan”). See Mortgage (ECF No. 49-3). The Mortgage was recorded on April 3, 2019 in the Florence County, South Carolina county public records as Instrument No. 2019-00004153 in Book 790, Page 1111.
A “court may consider documents incorporated into a complaint by reference or attached to a motion to dismiss, provided they are integral to the plaintiff's claims and authentic, without converting the motion into one for summary judgment.” Loftus v. F.D.I.C., 989 F.Supp.2d 483, 490 (D.S.C. 2013).
The first payment under the Loan was due on May 1, 2019. See Note at ¶ 3 (“I will make my monthly payments on the 1st day of each month beginning on May 1, 2019”). Additionally, under the terms of the Note, Plaintiff had a fifteen calendar day grace period from the date each payment was due in order to make his payment. See Note at ¶ 6(A) (“If the Note Holder has not received the full amount of any monthly payment by the end of 15 calendar days after the date it is due...”).
On April 18, 2019, before any payments were due on the Loan, Plaintiff was notified that the Loan had been transferred to Lakeview and that LoanCare was servicing the Loan on Lakeview's behalf. See Transfer Notice (ECF No. 49-4). The Loan was current when it transferred to Lakeview and LoanCare became loan servicer. See Transfer Notice.
Defendant “Lakeview Loancare” indicates that the Complaint incorrectly identifies Lakeview and LoanCare as “Lakeview Loancare LLC.” Compl. (ECF No. 1). The Summons lists the Defendant as Loancare LLC. Summons (ECF No. 25). It is unclear from the Complaint which entity Plaintiff intended to name as a defendant in this action or whether Plaintiff intended to name both entities. Defendant asserts there is no such entity as “Lakeview LoanCare, LLC” but, for the avoidance of any doubt, the motion is filed on behalf of both entities.
On May 6, 2019, five days after his first payment was due on the Loan and before the grace period expired, Plaintiff allegedly sent a letter to “Lakeview/LoanCare” requesting they “send [Plaintiff] valid proof of claim that [he is] legally obligated to pay [them].” Compl. p. 12. On May 16, 2019, Plaintiff allegedly sent another letter to “Lakeview/LoanCare, ” titled “Notice of Fault and Opportunity to Cure and to Contest Acceptance.” The alleged correspondence purportedly stated Lakeview/LoanCare “failed to perform by providing the requested and necessary PROOFS OF CLAIM after receiving the said Debt Validation Letter from the undersigned.” Compl. p. 13. On April 14, 2020, Plaintiff allegedly sent subsequent correspondence which included an invoice claiming he was owed “$36,000.00 plus additional amount in 12 U.S. 1692h.” Compl. pp. 17-19.
B. Defendant Santander Consumer USA
On or about April 13, 2019, Plaintiff obtained an automobile loan from Santander to fund the purchase of a 2019 Chevrolet Silverado. Silverado Retail Installment Sale Contract (Silverado Contract) (ECF No. 1, p. 30). The Silverado Contract was immediately assigned to Santander. Compl. p. 33. One month later, Plaintiff sent Santander a “request for validation made pursuant to the FDCPA laws.” Compl. p. 22. In June 2019, Plaintiff sent Santander a “Notice of Fault and Opportunity to Cure and to Contest Acceptance, ” stating that “[y]ou failed to perform after receiving these presentments from Charles Ray Thomas II, and you failed to perform by providing the requested and necessary PROOFS OF CLAIM after receiving the said Debt Validation Letter from the undersigned.” Compl. p. 24. In April 2020, Plaintiff sent Santander a “Cease and Desist Collection Activities Prior to Validation of Purported Debt.” Compl. p. 27. Plaintiff also attached to his Complaint an “Invoice” to Santander stating that Santander owes him “$4,000.00 plus additional amount in 15 U.S. 1692h.” Compl. p. 29.
In his “Statement of Claim” against Santander, Plaintiff alleges that Santander defaulted on June 17, 2019. Compl. p. 7. Thomas also alleges that Santander “was told to cease and desist all collection activity” but that Santander “declined the consumers request to do so.” Compl. p. 7. Plaintiff alleges other misconduct against Santander, from failing to return title to Plaintiff, to “illegally the plaintiff's copyrighted name.” Compl. p. 7.
C. Defendant BBVA USA
On April 24, 2019, Plaintiff bought a 2019 Chevrolet Impala, and he entered into a Retail Installment Contract to fund his purchase. See Impala Retail Installment Contract (Impala Contract) (ECF No. 30-2). The Impala Contract was immediately assigned to BBVA. Impala Contract. Less than one month later, Plaintiff sent BBVA a “request for validation made pursuant to the FDCPA laws.” Compl. p 34. In June 2019, Plaintiff sent BBVA a “Notice of Fault and Opportunity to Cure and to Contest Acceptance, ” stating that “[y]ou failed to perform after receiving these presentments from Charles Ray Thomas II, and you failed to perform by providing the requested and necessary PROOFS OF CLAIM after receiving the said Debt Validation Letter from the undersigned.” Compl. p. 36. Plaintiff also attached to his Complaint an “Invoice” to BBVA stating that BBVA owes him “$73,5330.00 [sic] plus additional amount in 15 U.S. 1692h.” Compl. p. 42.
In his “Statement of Claim” against BBVA, Plaintiff alleges that BBVA defaulted on June 17, 2019. Compl. p. 8. Plaintiff also alleges that BBVA “was told to cease and desist all collection efforts” but that BBVA “refuse to do so.” Compl. p. 8. Plaintiff alleges other misconduct against BBVA, from “[f]alse claiming on documents” to “illegally using my copyrighted name.” Compl. p. 8.
III. STANDARD OF REVIEW
Defendants move for dismissal pursuant to Fed.R.Civ.P. 12(b)(6). A Rule 12(b)(6) motion examines whether Plaintiff has stated a claim upon which relief can be granted. The United States Supreme Court has made clear that, under Rule 8 of the Federal Rules of Civil Procedure, the complaint must contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The reviewing court need only accept as true the complaint's factual allegations, not its legal conclusions. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555.
Expounding on its decision in Twombly, the United States Supreme Court stated in Iqbal:
[T]he pleading standard Rule 8 announces does not require “detailed factual allegations, ” but it demands more than an unadorned, the defendant-unlawfully-harmed-me accusation. A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.”
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” 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 677-78 (quoting Twombly, 550 U.S. at 555, 556, 557, 570) (citations omitted); see also Bass v. Dupont, 324 F.3d 761, 765 (4th Cir.2003). The court may consider documents attached to a complaint or motion to dismiss “so long as they are integral to the complaint and authentic.” Philips v. Pitt Cty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir.2009) (citing Blankenship v. Manchin, 471 F.3d 523, 526 n. 1 (4th Cir.2006)).
IV. DISCUSSION
A. Plaintiff's Motion for Summary Judgment
Plaintiff moves for summary judgment as to Defendants Santander and Lakeview Loancare because he argues that they failed to timely file an answer or otherwise respond to Plaintiff's Complaint. The record reflects that all Defendants were served with the Summons and Complaint on February 25, 2021, making a response due by March 18, 2021. See Fed.R.Civ.P. 12(a)(1)(A)(I) (providing that a responsive pleading is due “within 21 days after being served with the summons and complaint”). Defendant Santander filed its Motion to Dismiss (ECF No. 37) on March 18, 2021. Defendant Lakeview Loancare filed a Motion for Extension of Time (ECF No. 39) on March 18, 2021, seeking an extension to file an Answer or otherwise plead until April 8, 2021, which was granted. See Text Order (ECF No. 56). Thus, neither of their of their responses were untimely.
In addition, Plaintiff seeks summary judgment as to all Defendants for various reasons under the FCDPA. However, as discussed in detail below, the FDCPA is inapplicable to these Defendants. Therefore, it is recommended that Plaintiff's Motion for Summary Judgment be denied.
B. Defendants' Motions to Dismiss
As stated above, the only claims remaining in this action are those asserted against Defendants pursuant to the FDCPA. Plaintiff asserts that he asked all the Defendants for validation of his debts under the FDCPA and they did not oblige. He asserts thus Defendants “defaulted” and he told Defendants to stop collection activity and Defendants did not. Congress “enacted the FDCPA with the goal of eliminating abusive, deceptive, and unfair debt collection practices.” Clark v. Absolute Collection Serv., Inc., 741 F.3d 487, 490 (4th Cir. 2014) (citing 15 U.S.C. § 1692). To establish an FDCPA claim, a plaintiff must prove that (1) he has been the object of collection activity arising from consumer debt; (2) the defendant is a debt collector as defined by the FDCPA; and (3) the defendant has engaged in an act or omission prohibited by the FDCPA. Boosahda v. Providence Dane LLC, Case No. 10-1933, 2012 WL 268345, at *1 n.3 (4th Cir. Jan. 31, 2012). Defendants each argue that they are not debt collectors as defined by the FDCPA. This court has held that “creditors collecting their own debts are not ‘debt collectors' for purposes of the FDCPA and are exempt from the FDCPA's provisions.” Barber v. Rushmore Loan Mgmt. Servs., LLC, No. 3:17-cv-982-TLW-SVH, 2018 WL 4957409, at *4 (D.S.C. Feb. 21, 2018), report and recommendation adopted, No. 3:17-982-TLW, 2018 WL 4489290 (D.S.C. Sept. 19, 2018), aff'd, 769 Fed.Appx. 106 (4th Cir. 2019) (citing Glover v. Univ. Motor Co., No. 3:08-2254, 2010 WL 234903, at *3 (D.S.C. Jan. 15, 2010); Serfass v. CIT Group/Consumer Fin., Inc., No. 8:07-90, 2008 WL 351116, at *3 (D.S.C. Feb. 7, 2008) (finding the defendant was not regulated by the FDCPA because the defendant was a creditor collecting its own debts). “Under the FDCPA, ‘debt collectors do not include creditors, mortgagors, mortgage servicing companies, trustees exercising their fiduciary duties, or assignees of debt so long as the debt was not in default at the time it was assigned.'” Id. (citing Patrick v. PHH Mortg. Corp, 937 F.Supp.2d 773, 789-90 (N.D. W.Va. 2013); Stoudemire v. Ray, C/A No. 3:09-2485-CMC-JRM, 2012 WL 762037, at *3 (D.S.C. Feb. 9, 2012) (“creditors, mortgagors, and mortgage servicing companies are not debt collectors under the FDCPA and are therefore exempt from liability under the FDCPA”), adopted by 2012 WL 762021 (D.S.C. Mar. 8, 2012)); see also Perry v. Stewart Title Co., 756 F.2d 1197 (5th Cir.1985), modified on other grounds, 761 F.2d 237 (5th Cir.1985) (Debt collector does not include consumer creditors, mortgage servicing company, or assignee of debt, as long as debt was not in default at time it was assigned).
15 U.S.C. § 1692a(6). “Stated more simply, [15 U.S.C. § 1692a(6)] defines a debt collector as (1) a person whose principal purpose is to collect debts; (2) a person who regularly collects debts owed to another; or (3) a person who collects its own debts, using a name other than its own as if it were a debt collector.” Henson v. Santander Consumer USA, Inc., 817 F.3d 131, 136 (4th Cir. 2016), aff'd, 137 S.Ct. 1718 (U.S. 2017). The term “debt collector” means 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, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts.
Defendants Lakeview, Santander, and BBVA were assigned the loans at issue before they were in default. See Transfer Notice (ECF No. 49-4); Silverado Contract (ECF No. 1, p. 30); Impala Contract (ECF No. 30-2). These Defendants are parties “to whom a debt is owed, ” 15 U.S.C. § 1692a(4), and, therefore, they are “creditors” and not “debt collectors” pursuant to the FDCPA. See Henson, 817 F.3d at 135 (“[T]he FDCPA regulates debt collectors, not creditors, and . . . the two terms, as used in the Act, are mutually exclusive.”). Likewise, LoanCare began servicing the Loan before the Loan was in default. See Transfer Notice (ECF No. 49-4). As stated above, mortgage servicing companies are not “debt collectors” under the FDCPA act either. See Allen v. Bank of Am., N.A., 933 F.Supp.2d 716, 729 (D. Md. 2013) (holding that mortgage servicers are not “debt collectors” under the FDCPA because they are not persons who “attempt to collect debts ‘owed or due or asserted to be owed or due another'”). Because none of the Defendants in this action are “debt collectors” for purposes of the FDCPA, Plaintiff's claims against them fail and dismissal of this action is appropriate.
V. CONCLUSION
For the reasons discussed above, it is recommended that Plaintiff's Motion for Summary Judgment (ECF No. 35) be denied, Defendants' Motions to Dismiss (ECF Nos. 30, 37, 49) be granted, and this case be dismissed in its entirety.
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