Opinion
Civil Action No. 18-1401
08-28-2019
RACHEL L. MCBRIDE aka RACHEL STRADER, and AARON STRADER, Plaintiffs, v. PHH MORTGAGE CORPORATION, et al., Defendants.
REPORT AND RECOMMENDATION
I. RECOMMENDATION
It is respectfully recommended that Defendants' motions to dismiss (ECF Nos. 9, 14, 19, 35) be GRANTED.
II. REPORT
A. INTRODUCTION
In the aftermath of state foreclosure proceedings, pro se plaintiffs Rachel McBride, aka Rachel Strader ("McBride"), and Aaron Strader ("Strader") (collectively, "Plaintiffs") filed this lawsuit in which they named the following defendants: PHH Mortgage Corporation ("PHH"); Keithea Dennis and Salissa Smith, both of whom are alleged to be employees of PHH; Mortgage Electronic Registration Systems, Inc., and Merscorp Holdings, Inc., (collectively, "MERS"); Barbara Halin; Phelan Hallinan Diamond & Jones, LLP, Jeremy J. Kobeski, Elizabeth M. Bennett, and Robert P. Wendt, the law firm and attorneys who represented PHH in the state foreclosure proceedings (collectively, "Law Firm Defendants"); the Court of Common Pleas of Allegheny County ("Court of Common Pleas"), two Court of Common Pleas judges in their individual capacities, i.e., John T. McVay, Jr. ("Judge McVay") and Joseph M. James ("Judge James") (collectively "Judicial Defendants"); and the Allegheny County Sheriff's Office ("Sheriff's Office") (all of whom are sometimes collectively referred to as "Defendants"). Presently pending before the Court are motions to dismiss Plaintiffs' Amended Complaint which have been asserted by all Defendants. (ECF Nos. 9, 14, 19, 35). Because the Court lacks subject-matter jurisdiction over certain claims asserted by Plaintiffs and the remainder of the claims in the Amended Complaint are subject to dismissal for failure to state a claim, it is recommended that Defendants' motions be granted.
Plaintiffs have not effected proper service upon three of the defendants, i.e., Keithea Dennis, Salissa Smith, and Barbara Halin. (ECF Nos. 42, 48, 51). The Court has issued a separate Report and Recommendation which recommends dismissal without prejudice of Plaintiffs' claims against these defendants. (ECF No. 53).
Because Plaintiffs are proceeding pro se, the Court has liberally construed their Amended Complaint and employed less stringent standards than when judging the work product of an attorney. Erickson v. Pardus, 551 U.S. 89, 94 (2007).
According to the Amended Complaint, McBride signed a mortgage contract with lender InstaMortgage.com and purchased real property located at 1220 Robina Drive, Pittsburgh PA 15221 ("the Property"). (ECF Nos. 5 ¶ 22; 14-3 at 20-36). In that transaction, MERS acted as a nominee for InstaMortgage.com. (ECF No. 14-3 at 20). MERS later assigned the mortgage to PHH. (ECF Nos. 5 ¶ 28; 14-3 at 47). Plaintiffs allege that InstaMortgage.com and PHH are the same entity. (ECF No. 5 ¶ 28). McBride later signed a loan modification agreement with PHH. (ECF Nos. 5 ¶ 37; 14-3 at 50-56). Strader is not a party to these agreements and did not sign any of the operative documents. (ECF No. 14-3 at 20-56). The Amended Complaint further alleges that both Plaintiffs made payments on the loan over the next two years, but then stopped making payments when they became aware of PHH's "illegal behavior and misconduct." (ECF No. 5 ¶¶ 41, 42). PHH subsequently initiated foreclosure proceedings against McBride only in the Court of Common Pleas. (Id. ¶ 44).
While Plaintiffs did not attach any of the operative documents to the Amended Complaint, the Law Firm Defendants have provided copies of these documents with their motion to dismiss. (ECF No. 14-3 at 20-56). These documents are also a matter of public record in connection with the foreclosure action. (Ct. Com. Pl. Allegheny Cnty., case no. MG-17-001633 ("County Court Docket"), No. 9.). The Court can take judicial notice of the filings in the foreclosure action. See Southern Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Group Ltd., 181 F.3d 410, 426 (3d Cir. 1999) ("[A] court may properly look at public records, including judicial proceedings, in addition to the allegations in the complaint" in deciding a motion to dismiss.); Hartig Drug Co. v. Senju Pharm. Co., 836 F.3d 261, 268 (3d Cir. 2016) ("In deciding a Rule 12(b)(6) motion, a court . . . consider[s] only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents.").
In the Answer and Affirmative Defenses filed by McBride in the state court foreclosure action, she alleged, among other things, that PHH, Phelan, Hallinan, Diamond & Jones, LLP, the Court of Common Pleas and the Allegheny County Sheriff and its deputies are debt collectors who violated the Fair Debt Collection Practices Act. (County Court Docket No. 3). McBride also alleged that she does not owe any debt to PHH; that PHH failed to respond to her request for debt verification, a copy of which is attached as an exhibit to her Answer; that PHH did not have standing to foreclose on her property; that the mortgage was satisfied at closing; that the operative paperwork was forged; and that there was no consideration. (Id.). In the two exhibits attached to the Answer, both of which she appears to have authored, McBride reiterates these allegations in additional detail. (Id.). In a subsequent "Motion to Strike, Motion to Dismiss," McBride again repeats many of the same allegations and argues that: she rescinded the mortgage; PHH has engaged in "active concealment;" documents were altered; and fraud was committed. (County Court Docket No. 8).
PHH subsequently moved for summary judgment in the state court action and McBride filed a response in opposition. (County Court Docket Nos. 9, 13). In this response, McBride asserts, among other things, that the Court of Common Pleas lacked jurisdiction; that she never received certain documents; that the Law Firm Defendants are debt collectors; that PHH engaged in fraud; that the loan was rescinded due to fraud and "willful noncompliance"; and that her signature was forged. (County Court Docket No. 13).
On October 23, 2018, Judge James granted summary judgment in favor of PHH and against McBride. (ECF No. 5 ¶ 64). The Court of Common Pleas then ordered a sheriff's sale on the Property. (Id. ¶ 72). The Court of Common Pleas docket reflects that a sheriff's sale took place on February 4, 2019, and that McBride no longer owns the Property. (County Court Docket No. 34).
In their Amended Complaint, Plaintiffs allege that PHH and the Law Firm Defendants collaborated with MERS, the Judicial Defendants, and the Sheriff's Office to foreclose on the Property. (ECF No. 5 ¶¶ 17, 21, 62). Plaintiffs claim that it was the Federal Reserve—not Instamortgage.com or PHH—that funded their mortgage. (Id. ¶¶ 23, 24, 25). MERS' subsequent assignment of the mortgage to PHH was wrongful, Plaintiffs contend, because it was without McBride's consent and there was no consideration for the assignment. (Id. ¶¶ 28, 29). Plaintiffs maintain that PHH deceived them into believing that it was a lender, as opposed to a debt collector, and that upon discovering PHH's deception, McBride lawfully rescinded the mortgage under the Truth in Lending Act. (Id. ¶¶ 37, 41, 42, 112, 113, 130, 153, 154). Plaintiffs also assert that PHH is in possession of a false loan modification agreement and that the Law Firm Defendants relied on counterfeit documents to establish that PHH had standing to foreclose on the Property. (Id. ¶¶ 17, 38, 49, 54).
The Amended Complaint further alleges that the Court of Common Pleas allowed the litigation to continue even though PHH did not have standing to bring the foreclosure action, and that the Court of Common Pleas lacked subject-matter jurisdiction over the foreclosure proceedings. (Id. ¶¶ 49, 51, 53, 54, 59, 61). Plaintiffs also assert that Judge McVay did not allow McBride to amend her preliminary objections and failed to act impartially throughout the foreclosure proceedings. (Id. at 59, 157). According to Plaintiffs, Judge James granted summary judgment in favor of PHH without considering McBride's arguments. (Id. ¶¶ 64, 123). Plaintiffs also allege that Judge James ordered an armed sheriff to be present at the summary judgment hearing to instill fear in Plaintiffs and that an agent of the Sheriff's Office publicly defamed Plaintiffs by posting a sheriff's sale on the Property. (Id. ¶¶ 69, 75).
C. PROCEDURAL HISTORY
Plaintiffs commenced this civil action on October 23, 2018, and subsequently filed an Amended Complaint in December of 2018. (ECF Nos. 1, 5). In their Amended Complaint, one or both of the Plaintiffs assert the following causes of action:
1. Unfair and Deceptive Consumer Practices regarding Loan Servicing and Foreclosure Processing, in violation of unspecified consumer protection laws, asserted by both Plaintiffs against PHH, Dennis, Smith, and the Law Firm Defendants (Counts 1 and 2);
2. Violation of the Consumer Financial Protection Act ("CFPA") regarding Loan Servicing and Foreclosure Processing, brought by both Plaintiffs against PHH, Dennis, Smith and the Law Firm Defendants (Counts 3 and 4);
3. Violation of the Fair Debt Collection Practices Act ("FDCPA"), a claim asserted by both Plaintiffs against all Defendants (Count 5);
4. Fraudulent Concealment, brought by McBride only against all Defendants (Count 6);
5. Violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), a cause of action asserted by both Plaintiffs against all Defendants (Count 7);
6. Violation of the Truth in Lending Act ("TILA"), brought by McBride only against PHH (Count 8);
7. Violation of the Due Process Clause of the Fifth and Fourteenth Amendments to the U.S. Constitution, and Section 1983 of the Civil Rights Act of 1871 ("Section 1983"); alleged by McBride only against the Judicial Defendants (Count 9);
8. Fraud, asserted by McBride only against PHH, Dennis, Smith, and the Law Firm Defendants (Count 10); and
9. Breach of Contract brought by McBride only against PHH, Dennis, Smith, and the Law Firm Defendants (Count 11).
The Court will construe this claim as arising under the Civil Rights Act of 1964, not the Civil Rights Act of 1871, the latter of which is inapplicable to Plaintiffs' claims.
All of the Defendants seek dismissal of the Amended Complaint on multiple grounds. (ECF Nos. 9, 14, 19, 35). Defendants' motions have been fully briefed by all parties (ECF Nos. 10, 15, 20, 32, 33, 34, 35 and 36). Accordingly, the matter is ripe for consideration.
D. STANDARD OF REVIEW
1. Rule 12(b)(1)
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1) challenges the subject-matter jurisdiction of the court to address the merits of plaintiff's suit. Fed. R. Civ. P. 12(b)(1). Under Rule 12(b)(1), "a court must grant a motion to dismiss if it lacks subject-matter jurisdiction to hear a claim." In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012); see Fed. R. Civ. P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.").
The first step in analyzing jurisdictional challenges under a Rule 12(b)(1) motion to dismiss is to determine whether the "motion presents a 'facial' attack or a 'factual' attack on the claim at issue, because that distinction determines how the pleading must be reviewed." Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357-58 (3d Cir. 2014) (quoting In re Schering Plough, 678 F.3d at 243). "A facial 12(b)(1) challenge, which attacks the complaint on its face without contesting its alleged facts, is like a 12(b)(6) motion in requiring the court to 'consider the allegations of the complaint as true.'" Hartig Drug Co. Inc. v. Senju Pharm. Co., 836 F.3d 261, 268 (3d Cir. 2016) (quoting Petruska v. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006)). "But a factual 12(b)(1) challenge attacks allegations underlying the assertion of jurisdiction in the complaint, and it allows the defendant to present competing facts." Id. (citing Constitution Party of Pa., 757 F.3d at 358).
If the defendant challenges jurisdiction in its Rule 12(b)(1) motion before answering the complaint or "otherwise present[ing] competing facts," the Rule 12(b)(1) motion is, "by definition, a facial attack." Constitution Party of Pa., 757 F.3d at 358 (citing Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 892 n.17 (3d Cir. 1977)). When analyzing a facial attack on subject-matter jurisdiction, "the court must only consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff." In re Schering Plough, 678 F.3d at 243 (quoting Gould Elecs. Inc., v. United States, 220 F.3d 169, 176 (3d Cir. 2000)). "The person asserting jurisdiction bears the burden of showing that the case is properly before the court at all stages of the litigation." Packard v. Provident Nat'l Bank, 994 F.2d 1039, 1045 (3d Cir. 1993) (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936)).
A valid complaint requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In deciding a Rule 12(b)(6) motion, the court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). While "accept[ing] all of the complaint's well-pleaded facts as true," the court "may disregard any legal conclusions." Id. at 210-11.
To survive the motion, the plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Though 'detailed factual allegations' are not required, a complaint must do more than simply provide 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action.'" Davis v. Abington Mem'l Hosp., 765 F.3d 236, 241 (3d Cir. 2014) (quoting Twombly, 550 U.S. at 555). In sum, the plaintiff "must plead facts sufficient to show that her claim has substantive plausibility." Johnson v. City of Shelby, Miss., 574 U.S. 10 (2014).
To assess the sufficiency of a complaint under Twombly and Iqbal, a court must take three steps: (1) outline the elements the plaintiff must plead to state a claim for relief; (2) peel away those allegations that are no more than conclusions and thus not entitled to the assumption of truth; (3) look for well-pled factual allegations, assume their veracity, and then determine whether they plausibly give rise to an entitlement to relief. Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012). The court's plausibility determination is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679.
In ruling on a Rule 12(b)(6) motion, courts generally consider only the complaint, exhibits, and matters of public record. Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014). A court may also consider "items subject to judicial notice," without converting the motion to dismiss into one for summary judgment. Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006) (quoting 5B Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure § 1357 (2004)).
E. DISCUSSION
All of the Defendants assert that the Court is without subject-matter jurisdiction over Plaintiffs' claims. They alternatively argue that the Amended Complaint fails to state any claim upon which relief may be granted. As explained below, the Court lacks subject-matter jurisdiction over certain claims asserted in the Amended Complaint and the remaining claims are subject to dismissal for failure to state a claim upon which relief may be granted.
1. The Court Lacks Subject-Matter Jurisdiction Over Certain Claims
Challenges to the Court's subject-matter jurisdiction are analyzed under Rule 12(b)(1). Fed. R. Civ. P. 12(b)(1). The starting point of a Rule 12(b)(1) analysis is to ascertain whether Defendants are asserting a facial or factual attack on the Amended Complaint. Here, Defendants mount their jurisdictional challenge based upon the allegations in the Amended Complaint before answering or otherwise presenting competing facts. These challenges are facial attacks on the Amended Complaint, therefore the Court will apply the Rule 12(b)(6) standard of review, i.e., it will consider the allegations of the Amended Complaint as true and construe them in the light most favorable to Plaintiffs.
a) Strader Lacks Standing to Assert Claims Premised on the Mortgage-Related Transactions
As an initial matter, the Court notes that while Defendants have not asserted that Strader lacks standing to pursue claims premised on the mortgage related transactions, "[s]tanding is a jurisdictional matter." Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016). The Court "ha[s] an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party." Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) (citing Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999)). "Absent Article III standing, a federal court does not have subject matter jurisdiction to address a plaintiff's claims, and they must be dismissed." Davis, 824 F.3d at 346 (quoting Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006).
"In essence the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues." Warth v. Seldin, 422 U.S. 490, 498 (1975). To establish standing, Strader "must allege facts demonstrating that he suffered (1) an injury-in-fact; (2) that is fairly traceable to defendant's challenged conduct; and (3) that is likely to be redressed by a favorable judicial decision." St. Pierre v. Retrieval-Masters Creditors Bureau, Inc., 898 F.3d 351, 356 (3d Cir. 2018) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 590 (1992)).
The allegations in the Amended Complaint fail to establish that Strader sustained an injury-in-fact, i.e., a concrete and particularized invasion of a legally protected interest in connection with the mortgage related transactions that form the basis of this action. Lujan, 504 U.S. at 560. As the Amended Complaint and County Court Docket entries confirm, McBride, not Strader, signed the mortgage contract, the note, and the loan modification agreement. Moreover, Strader was not a party to the foreclosure action. Thus, Strader has not, and cannot, allege facts demonstrating that he sustained a legally cognizable injury independent from that alleged to have been suffered by McBride in reference to those transactions. Accordingly, the Court recommends dismissal of all claims asserted by Strader that are based upon events arising from the loan, the underlying loan documents, the loan servicing, and the foreclosure proceedings because the Court is without subject-matter jurisdiction over those claims. Therefore, with the exception of the FDCPA claim asserted in Count 5, Strader lacks standing with respect to all other causes of action that he has asserted in the Amended Complaint, that is, Counts 1 through 4 and 7.
In Count 5 of the Amended Complaint Plaintiffs allege various violations of the FDCPA. Based on the mortgage related transactions, McBride qualifies as a "consumer," which the FDCPA defines as "any natural person obligated or allegedly obligated to pay any debt." 15 U.S.C § 1692a(3). Some of the allegations in the Amended Complaint, however, implicate section 1692c of the FDCPA. (ECF No. 5 ¶¶ 103-105). Section 1692c broadens the definition of "consumer" to include the "consumer's spouse." 15 U.S.C § 1692c(d). Plaintiffs have alleged that McBride is Strader's spouse. (ECF No. 5 ¶ 68). Therefore, Strader has standing to assert the FDCPA claim.
The heading for Count 6 is ambiguous and the relief sought is by McBride only. If, in fact, Strader is asserting a claim for "fraudulent concealment," he lacks standing to proceed with this claim based upon the same analysis.
b) The Rooker-Feldman Doctrine Bars Certain Claims
Defendants assert that the Court is divested of subject-matter jurisdiction under the Rooker-Feldman doctrine. Under that doctrine, a non-prevailing state-court party is "barred from seeking what in substance would be appellate review of the state judgment in a United States district court, based on [a] claim that the state judgment itself violates the loser's federal rights." Johnson v. De Grandy, 512 U.S. 997, 1005-06 (1994). Four requirements must be met for the doctrine to apply in this case: (1) Plaintiffs lost in the Court of Common Pleas; (2) Plaintiffs complain of injury caused by the Court of Common Pleas judgment; (3) the Court of Common Pleas judgment was rendered before the federal suit was filed; and (4) Plaintiffs invite the district court to review and reject the Court of Common Pleas judgment. Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 166 (3d Cir. 2010).
"The doctrine takes its name from the only two cases in which the Supreme Court has applied it to defeat federal subject-matter jurisdiction: Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983)." Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 164 (3d Cir. 2010).
Undoubtedly, the first three requirements are satisfied here with respect to certain causes of action in the Amended Complaint. The Court of Common Pleas granted summary judgment in favor of PHH and against McBride in the state foreclosure proceedings. In addition, Plaintiffs complain of injury caused by that judgment, i.e., the foreclosure of the Property. (ECF No. 5 ¶¶ 17, 21, 62, 94, 97, 130, 141, 147). Finally, the foreclosure judgment was rendered before Plaintiffs commenced this action on October 23, 2018.
The final requirement warrants a further look because it "concerns whether the federal court must conduct 'prohibited appellate review' of state-court decisions." In re Philadelphia Entm't & Dev. Partners, 879 F.3d 492, 500 (3d Cir. 2018) (quoting Great Western, 615 F.3d at 169). "'Prohibited appellate review' means 'a review of the proceedings already conducted by the lower tribunal to determine whether it reached its result in accordance with law.'" Id. (quoting Great Western, 615 F.3d at 169). As explained below, the Court finds that this final requirement is met with respect to the claims asserted in Counts 6 through 8.
In Count 6 of the Amended Complaint, a claim for "fraudulent concealment," McBride alleges that PHH and the Law Firm Defendants withheld information regarding "the real lender" and worked in collusion with the Judicial Defendants to conceal "important facts" about the loan and ignored McBride's claims. (ECF No. 5 ¶¶ 144, 145). She further claims that the Judicial Defendants allowed PHH and the Law Firm Defendants to bring false claims and base their conclusions on "paperwork" which culminated in an "unlawful taking" of the Property. (Id. ¶¶ 146, 147).
Similarly, in advancing the RICO claim in Count 7, McBride and Strader assert that Defendants fraudulently colluded in the "unlawful" foreclosure based upon counterfeit documents, forgery, perjury and deprivation of constitutional rights, and that the Sheriff's Office was used as a "hired gun" during court proceedings and by posting a sheriff's sale sign on the Property. (Id. ¶¶ 149, 151).
The TILA claim asserted in Count 8 is premised on allegations that McBride's claim that she lawfully rescinded the loan but PHH failed to respond. (Id. ¶ 153).
In essence, the basis for each of these claims is that the foreclosure process, court proceedings and ultimate judgment were unlawful. Adjudication in this action of Plaintiffs' contentions that the loan agreements at issue were "unlawful" and were either lawfully rescinded, or should be rescinded "would amount to finding that no valid mortgage existed, which would negate the foreclosure judgment, as a mortgage foreclosure action depends upon the existence of a valid mortgage." In re Madera, 586 F.3d 228, 232 (3d Cir. 2009).
In short, McBride is "complaining of legal injury caused by a [Court of Common Pleas] judgment because of a legal error committed by the [Court of Common Pleas]." In re Philadelphia, 879 F.3d at 500 (quoting Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005)). Adjudicating these claims would require the Court to engage in prohibited appellate review of the Court of Common Pleas' foreclosure proceedings and judgment and whether it reached its decision in accordance with the law. See, e.g., Laychock v. Wells Fargo Home Mortg., 399 F. App'x 716, 718 (3d Cir. 2010) ("[R]elief from a wrongful foreclosure . . . would have required the District Court to determine that the Court of Common Pleas erroneously entered judgment."); Manu v. Nat'l City Bank of Indiana, 471 F. App'x 101, 103 (3d Cir. 2012) ("[A]llegations that various statutes and rights were violated because the defendants threatened, and followed through with, foreclosure when they had no right to do so is nothing more than an attack on the Court of Common Pleas judgment."); Gage v. Wells Fargo Bank, NA AS, 521 F. App'x 49, 51 (3d Cir. 2013) ("[T]hat the bank had no right to foreclose on the property . . . [is] in essence an attack on the Court of Common Pleas judgment of foreclosure.").
Accordingly, pursuant to the Rooker-Feldman doctrine, the Court recommends dismissal of Counts 6 through 8 because the Court lacks subject-matter jurisdiction over these claims.
As previously discussed, Strader lacks standing to assert the RICO claim in Count 7. Even if it was determined that Strader had standing, however, the Rooker-Feldman doctrine would bar his claim as well.
c) McBride Lacks Standing to Bring Claims Under the CFPA
In Counts 3 and 4 of the Amended Complaint, McBride alleges that PHH, Dennis, Smith, and the Law Firm Defendants engaged in unfair and deceptive acts or practices with respect to loan servicing and foreclosure processing in violation of the CFPA. In so alleging, McBride relies on two sections of the CFPA, i.e., 12 U.S.C. §§ 5531(a) and 5536. (ECF No. 5 ¶¶ 99, 101). There is no private right of action for any alleged unfair and deceptive acts or practices under the CFPA, however.
Section 5531 of the CFPA authorizes the Consumer Financial Protection Bureau ("CFPB") to prevent "unfair, deceptive, or abusive act[s] or practice[s] . . . in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service." 12 U.S.C. § 5531(a). Section 5536 makes it unlawful for a "covered person or service provider . . . to engage in unfair, deceptive, or abusive act[s] or practice[s]." 12 U.S.C. § 5536(a)(1)(B). The authority to litigate violations of the consumer protection provisions of the CFPA is within the exclusive province of the CFPB, 12 U.S.C § 5564(a), and McBride fails to cite any authority to the contrary. Therefore, because McBride lacks standing to bring an CFPA claim, it is recommended that Counts 3 and 4 be dismissed based upon lack of subject-matter jurisdiction.
PHH and the Law Firm Defendants seek dismissal of CFPA claims under Rule 12(b)(6) for failure to state a claim. (ECF Nos. 15 at 5-6; 36 at 9-10). But "whether the plaintiff is the right party to bring particular claims . . . ." is the focal point of a standing analysis. Davis, 824 F.3d at 338. Therefore, the Court finds the CFPA claims are not subject a Rule 12(b)(6) dismissal. Rather, the Court cannot entertain those claims because McBride does not have standing to assert them.
This analysis applies equally to Strader.
d) Claims against the Judicial Defendants are barred under Eleventh Amendment and Absolute Judicial Immunity
In Count 9 of the Amended Complaint, McBride advances a Section 1983 claim against the Judicial Defendants for alleged due process violations. The allegations against the Judicial Defendants arise out of events that transpired during the foreclosure proceedings. In moving to dismiss, the Judicial Defendants correctly argue that McBride's Section 1983 claim is barred both by Eleventh Amendment immunity and under absolute judicial immunity.
i. Eleventh Amendment Immunity
"[T]he Eleventh Amendment is ajurisdictional bar which deprives federal courts of subject matter jurisdiction." Blanciak v. Allegheny Ludlum Corp., 77 F.3d 690, 693 n.2 (3d Cir. 1996) (citing Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 98-100. (1984)). Accordingly, the Court finds it appropriate to address the immunity bars under the Court's subject-matter jurisdiction analysis pursuant to Rule 12(b)(1).
The Eleventh Amendment protects States and their agencies and departments from suit in federal court. See Pennhurst, 465 U.S. at 100 ("[I]n the absence of consent a suit in which the State or one of its agencies or departments is named as the defendant is proscribed by the Eleventh Amendment."); Estate of Logano v. Bergen Co. Prosecutor's Office, 769 F.3d. 850, 857 (3d Cir. 2014) ("Sovereign immunity extends to state agencies and state officers, 'as long as the state is the real party in interest.'") (quoting Fitchik v. N.J. Transit Rail Operations, 873 F.2d 655, 659 (3d Cir. 1989)). A suit against a state official in his or her official capacity is deemed a suit against the state because the state is the real party in interest. See Hafer v. Melo, 502 U.S. 21, 25 (1991). The Eleventh Amendment, therefore, bars Section 1983 suits against state officials in their official capacities. Will v. Michigan Dep't. of State Police, 491 U.S. 58, 71 (1989).
Pennsylvania's Courts of Common Pleas are entitled to Eleventh Amendment immunity because they "are part of the Commonwealth government[.]" Haybarger v. Lawrence Cnty. Adult Prob. and Parole, 551 F.3d 193, 198 (3d Cir. 2008) (citing Benn v. First Judicial Dist. of Pa., 426 F.3d 233, 240-41 (3d Cir. 2005)). The Court of Common Pleas is part of the Unified Judicial System of Pennsylvania. 42 Pa. C.S. § 301(4). As part of the Commonwealth of Pennsylvania's government, the Court of Common Pleas is immune from suit under the Eleventh Amendment. Similarly, Judge McVay and Judge James are judicial officers of the Court of Common Pleas and are, therefore, immune from suit as well.
Additionally, the Judicial Defendants do not fall under any of the three exceptions to Eleventh Amendment immunity—i.e., "(1) congressional abrogation, (2) waiver by the state, and (3) suits against individual state officers for prospective injunctive and declaratory relief to end an ongoing violation of federal law." Pennsylvania Federation of Sportsmen's Clubs, Inc. v. Hess, 297 F.3d 310, 323 (3d Cir. 2002) (citation omitted). First, Pennsylvania has not consented to waive its Eleventh Amendment immunity to being sued in federal court. 1 Pa. C.S. § 2310; 42 Pa. C.S. § 8521(b); Chittister v. Department of Cmty. & Econ. Dev., 226 F.3d 223, 227 (3d Cir. 2000). Second, the Supreme Court has held that Section 1983 does not abrogate states' sovereign immunity. Quern v. Jordan, 440 U.S. 332, 339-46 (1979). Finally, McBride alleges no claims for injunctive relief against the individual state officers, i.e., Judge McVay and Judge James.
McBride's request to stop forthcoming sheriff's sale is not a claim of injunctive relief against Judge McVay and Judge James individually. (ECF No. 5 ¶ 169). Moreover, a sheriff's sale has already occurred and McBride no longer owns the Property.
Therefore, the Court recommends dismissing McBride's Section 1983 claim against the Judicial Defendants in their official capacities pursuant to Eleventh Amendment immunity.
ii. Absolute Judicial Immunity
"A judicial officer in the performance of his duties has absolute immunity from suit and will not be liable for his judicial acts." Azubuko v. Royal, 443 F.3d 302, 303 (3d Cir. 2006). "A judge will not be deprived of immunity because the action he took was in error, was done maliciously, or was in excess of his authority; rather, he will be subject to liability only when he has acted 'in the clear absence of all jurisdiction.'" Id. (quoting Stump v. Sparkman, 435 U.S. 349, 356-57 (1978)). Here, all of the allegations against Judge McVay and Judge James are premised on actions they took as judges. Accordingly, McBride's Section 1983 claim against Judge McVay and Judge James, in their individual capacities, must also be dismissed.
In sum, Count 9 must be dismissed because the Judicial Defendants are immune from suit in their official capacities by Eleventh Amendment immunity and in their individual capacities under the doctrine of absolute judicial immunity.
2. Plaintiffs' Remaining Claims Must be Dismissed Pursuant to Rule 12(b)(6)
a) Certain Causes of Action Are Barred by Pennsylvania's Claim Preclusion Doctrine
The United States Court of Appeals for the Third Circuit has explained that "[w]hen the plaintiff attempts to litigate previously litigated matters, the federal court has jurisdiction 'as long as the federal plaintiff presents some independent claim, even if that claim denies a legal conclusion reached by [the Court of Common Pleas.]'" In re Philadelphia, 879 F.3d at 500 (quoting Great Western, 615 F.3d at169). Therefore, to the extent that McBride has alleged independent claims not barred by the Rooker-Feldman doctrine, the Court is not without jurisdiction but. "state law determines whether . . . [D]efendant[s] prevail[] under principles of preclusion." Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005). Under Pennsylvania's claim preclusion doctrine:
Any final, valid judgment on the merits by a court of competent jurisdiction precludes any future suit between the parties or their privies on the same cause of action. [Claim preclusion] applies not only to claims actually litigated, but also to claims which could have been litigated during the first proceeding if they were part of the same cause of action.R & J Holding Co. v. Redevelopment Auth. of Cty. of Montgomery, 670 F.3d 420, 427 (3d Cir. 2011) (quoting Balent v. City of Wilkes-Barre, 669 A.2d 309, 313 (Pa. 1995).
In Counts 1 and 2 of the Amended Complaint, McBride alleges unfair and deceptive consumer practices against PHH, Dennis, Smith and the Law Firm Defendants with respect to loan servicing (Count 1) and foreclosure processing (Count 2) in violation of vague and unspecified consumer protection laws. McBride claims that the unlawful conduct of PHH, Dennis, Smith, and the Law Firm Defendants caused her to sustain "improper fees and charges, misapplication of payments" and "improper, unlawful, or undocumented" foreclosure. (ECF No. 5 ¶¶ 94, 97). In Count 10, McBride alleges a claim for "Common Law Fraud" premised on the fact that PHH, Dennis, Smith, and the Law Firm Defendants "intentionally and knowingly made material false statements in court or on various paper work through their debt collecting actions, to gain profit by means of unjust enrichment." (Id. ¶ 171). And in Count 11, McBride advances a breach of contract claim against PHH, Dennis, Smith, and the Law Firm Defendants and alleges that she neither received a notice of assignment nor a notice of acceleration before the foreclosure proceedings. (Id. ¶¶ 177, 178).
The specific allegations in the lengthy 179-paragraph Amended Complaint on which McBride attempts to rely in support of these claims is unclear because she incorporates the entire complaint into each count. Most broadly construed, the crux of these claims appears to be that PHH deceived McBride into thinking that it was a lender; the mortgage assignment was improper; PHH is in possession of counterfeit loan documents; and neither PHH nor the Law Firm Defendants provided her with the required notice before commencing foreclosure proceedings. However, a review of the allegations in the Amended Complaint reveals that McBride was aware of all of the facts giving rise to these claims either prior to the inception of or during the pendency of foreclosure proceedings. Additionally, all of these claims are premised on transactions which were integral to the foreclosure action. In fact, they were raised by McBride in the Court of Common Pleas during the foreclosure proceedings.
In his opinion granting summary judgment in favor of PHH, Judge James addressed and resolved these issues, finding that: PHH held the original note and was entitled to enforce it; that McBride executed a loan modification; that she admitted the existence of the mortgage and the execution of the note and knew that she would be responsible for payments; that after she defaulted, PHH mailed a notice to her of its intention to foreclose; that PHH had standing; and that McBride did not provide a material defense to the foreclosure action. (County Court Docket No. 28.)
In short, these are not independent claims; the issues raised in each of these claims were adjudicated and resolved in state court.
It is well established that claim preclusion bars claims that "arise[] from the same set of facts as a claim adjudicated on the merits in the earlier litigation." Davis, 824 F.3d at 342 (quoting Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 277 (3d Cir. 2014)). The claims asserted by McBride in Counts 1, 2, 10, and 11 all relate to the underlying validity of the loan, loan processing and the foreclosure action. McBride had the opportunity to raise and litigate all of these issues but either failed to do so or these issues were raised and resolved. Thus, these claims are precluded.
It is therefore recommended that Counts 1, 2, 10, and 11 be dismissed because they arise out of the foreclosure action and McBride either raised the issues that form the basis for these causes of action as affirmative defenses and in motions practice, or could have brought these claims in the foreclosure proceedings.
Alternatively, even if it could be argued that the Rooker-Feldman doctrine does not apply to Counts 6, 7, and 8, these claims were or could have been raised as defenses in the foreclosure proceeding, and therefore, should be dismissed under the claim preclusion doctrine.
b) Plaintiffs' FDCPA Claim Fails Because They Do Not Plausibly Allege That Defendants Are Debt Collectors
While the heading of Count 5 states that Plaintiffs are asserting a FDCPA claim, the allegations in this cause of action go well beyond the elements of such a claim. Among those allegations are that the Court of Common Pleas: allowed the filing and continuance of the foreclosure action (ECF No. 5 ¶ 120); issued an "unlawful order" by granting summary judgment in favor of PHH (id. ¶ 123); colluded with the other defendants by allowing them to make statements and briefs in connection with the motion for summary judgment (id. ¶ 124); attempted to block McBride from having a "fair trial" or a jury trial (id. ¶ 131); acted "nonjudicially" (id. 130-132, 136, 137, 138); and forced Plaintiffs into an "administrative nonjudicial bench trial while under duress by an armed Sheriff." (Id. ¶ 131). These allegations, which have no relevance to the statutory rights and remedies under the FDCPA, actually appear to be related to McBride's Section 1983 claim asserted against the Judicial Defendants in Count 9 of the Amended Complaint. However, as previously reviewed, the Judicial Defendants are entitled to dismissal of that count pursuant to Eleventh Amendment and absolute judicial immunity. These additional allegations do not alter the Court's analysis.
In Count 5 of the Amended Complaint, Plaintiffs allege various violations of the FDCPA against Defendants. To state a claim under FDCPA, Plaintiffs must plausibly allege that (1) they are consumers; (2) Defendants are debt collectors; (3) Defendants' challenged practice involves an attempt to collect a debt as defined by the FDCPA; and (4) Defendants violated a provision of the FDCPA in attempting to collect the debt. St. Pierre v. Retrieval-Masters Creditors Bureau, Inc., 898 F.3d 351, 358 (3d Cir. 2018). As explained below, Plaintiffs fail to plausibly allege that Defendants are debt collectors.
FDCPA defines a debt collector as "any person: (1) 'who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts' (the 'principal purpose' definition); or (2) 'who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another' (the 'regularly collects for another,' or 'regularly collects,' definition)." Tepper v. Amos Fin., LLC, 898 F.3d 364, 366 (3d Cir. 2018) (quoting 15 § U.S.C. 1692(a)(6)). The Amended Complaint, however, does not even identify MERS as a debt collector, let alone allege that MERS meets the statutory definition of a debt collector. And although the remaining Defendants are labeled as debt collectors, Plaintiffs do not allege any facts that would bring these Defendants within the ambit of either the "principal purpose" or the "regularly collect" definition of a debt collector.
With respect to PHH, Plaintiffs allege that Insta.mortgage.com—the lender with whom McBride signed the mortgage contract—and PHH are the same entity. This allegation makes PHH a creditor and "[c]reditors . . . generally are not subject to [FDCPA]." Id. (quoting Pollice v. Nat'l Tax Funding, L.P., 225 F.3d 379, 403 (3d Cir. 2000)). FDCPA defines a creditor as "any person: (1) 'who offers or extends credit creating a debt[;] or' (2) 'to whom a debt is owed' . . . [unless] he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.'" Id. (quoting 15 U.S.C. § 1692a(4)). Plaintiffs do not, because they cannot, allege that McBride's loan was assigned to PHH to collect for Insta.mortgage.com. Therefore, as alleged, PHH is a creditor not a debt collector under the FDCPA.
McBride also alleged in the state court foreclosure action that PHH was a debt collector.
Similarly, the allegations related to the Law Firm Defendants and the Judicial Defendants focus on their conduct during the foreclosure proceeding but fail to establish that they are "debt collectors" as defined by the FDCPA.
Finally, the Court notes that specifically excluded from the definition of "debt collector" under the FDCPA is "any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt[.]" 15 U.S.C. § 1692a(6)(D). Therefore, the Sheriff's Office, while executing Court of Common Pleas' foreclosure judgment, cannot be held liable under the FDCPA.
In sum, the Court concludes that Plaintiffs' FDCPA claim cannot be sustained because they fail to plausibly allege that Defendants are "debt collectors" as defined by the FDCPA. Accordingly, Count 5 should be dismissed.
c) Plaintiffs Fail to State a Claim Against MERS
The sole factual allegations against MERS, other than the headings to the various causes of action in the Amended Complaint, are that an employee of PHH was acting as a MERS vice president (ECF No. 5 ¶ 28); that MERS illegally assigned the mortgage from Insta.mortgage.com to PHH (Plaintiffs also alleged that these entities are the same entity) (id.); that MERS "bifurcated" the mortgage from the promissory note (id. ¶ 30); and that the "MERS website confirms that Fannie Mae Investors have the mortgage in a MBS." (Id. ¶ 31). While Counts 5, 6 and 7 of the Amended Complaint are pursued against all Defendants, the Amended Complaint fails to set forth any facts that could form a basis for liability against MERS. Therefore, for this reason as well as the other reasons outlined herein with respect to Counts 5 through 7 against all Defendants, it is recommended that Plaintiffs' claims against MERS be dismissed.
d) Alternatively , the RICO Claim Fails to State a Claim Upon Which Relief May be Granted
In their RICO claim, asserted in Count 7, Plaintiffs allege that all Defendants colluded in "unlawful" foreclosure action through a series of actions that include counterfeit documents, forgery, perjury, violation of constitutional rights and fraud. (ECF No. 5 ¶ 149). This was accomplished, according to the Amended Complaint, by use of the U.S. mail and through violation of mail and wire fraud statutes. (Id. ¶ 150). As previously discussed, even if these allegations are accepted as true for purposes of the motions to dismiss, these underlying allegations were raised in the state court proceedings. Even if it could be argued otherwise, however, Plaintiffs' claim is legally deficient.
The RICO statute provides that:
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.18 U.S.C. § 1962(c). It is also unlawful for anyone to conspire to violate See 18 U.S.C. § 1962(d).
The Amended Complaint fails to plead the requisite elements of a RICO cause of action, even when reviewed most liberally. First, Plaintiffs fail to cite the section or sections of § 1962 which they claim that the Defendants violated. As the Third Circuit has explained:
The RICO statute authorizes civil suits by "[a]ny person injured in his business or property by reason of a violation of [18 U.S.C. § 1962]." 18 U.S.C. § 1964(c) (1988). Section 1962 contains four separate subsections, each addressing a different problem. Section
1962(a) prohibits "any person who has received any income derived . . . from a pattern of racketeering activity" from using that money to acquire, establish or operate any enterprise that affects interstate commerce. Section 1962(b) prohibits any person from acquiring or maintaining an interest in, or controlling any such enterprise "through a pattern of racketeering activity." Section 1962(c) prohibits any person employed by or associated with an enterprise affecting interstate commerce from "conduct[ing] or participat[ing] . . . in the conduct of such enterprise's affairs through a pattern of racketeering activity." Finally, section 1962(d) prohibits any person from "conspir[ing] to violate any of the provisions of subsections (a), (b), or (c)."Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1411 (3d Cir. 1991).
The fact that Plaintiffs failed to identify the RICO subsection(s) relevant to Defendants' allegedly improper conduct does not end the analysis, however. Even assuming that Plaintiffs are asserting claims under some or even all of these subsections, they have failed to meet the basic pleading requirements to support a RICO claim. In order to sufficiently plead a RICO violation, Plaintiffs must allege "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Sedima, S.P.R.L. vs. Imrex Co., 473 U.S. 479, 496 (1985). "A pattern of racketeering activity requires at least two predicate acts of racketeering . . . [which] may include, inter alia, federal mail fraud under 18 U.S.C. § 1341 or federal wire fraud under 18 U.S.C. § 1343.". Lum v. Bank of Am., 361 F.3d 217, 223 (3d Cir. 2004) (citations omitted).
While Plaintiffs baldly allege in Count 7 that Defendants engaged in mail and wire fraud, the Amended Complaint does not include any allegations about wire fraud. Moreover, while the Amended Complaint contains conclusory allegations that Plaintiffs were contacted "over 250 times" by "mail, legal proceedings and telephone" since November 30, 2017, (the date that the foreclosure action was filed) and that Defendants attempted to collect an unlawful debt by mail (ECF No. 5 ¶¶ 52, 76, 103, 125), Plaintiffs fail to plead with particularity any predicate acts of fraud that could form the basis for a RICO claim. See Zavala v. Wal-Mart Stores, Inc., 393 F. Supp. 2d 295, 312 (D.N J. 2005), aff'd 691 F.3d 527 (3d Cir. 2012); see also Fed. R. Civ. P. 9(b). Even viewed most liberally, multiple notices by mail after the foreclosure action was filed could not plausibly represent mail fraud; as the Court of Common Pleas ruled, the loan documents were enforceable, PHH had a right to seek foreclosure and after considering the parties' arguments, the Court of Common Pleas concluded that a judgment of foreclosure was warranted. Mailings related to the court proceedings could not plausibly represent fraud.
Moreover, Plaintiffs failed to plead with particularity a pattern of racketeering activity beyond their bare allegation that Defendants colluded in an "unlawful" foreclosure. While Plaintiffs complain of "over 250" contacts after the foreclosure action was brought, the number of alleged predicate acts does not establish a pattern; rather a plaintiff must show also "that the racketeering acts are related, and that they amount to or pose a threat of continued criminal activity." H.J. Inc. v. Northwestern Bell Telephone Co., 492 U.S. 229, 239 (1989). There are no facts in the Amended Complaint that can, or plausibly could, support a conclusion that a pattern of racketeering activity took place or resulted in an unlawful foreclosure. As the County Court Docket reflects, PHH, as the lender on the underlying loan, was represented by the Law Firm Defendants, who pursued legal proceedings on behalf of PHH to foreclose on McBride's Property. As the County Court Docket, pleadings, and the opinion of Judge James confirm, the Court Court of Common Pleas adjudicated the dispute and entered judgment in favor of PHH after considering the law and the evidence. Moreover, based upon the record in the foreclosure proceedings, there is no plausible basis to contend that once PHH brought a foreclosure action, Defendants then engaged in a pattern of racketeering activity for an improper purpose of depriving McBride of the Property. In addition, while Plaintiffs baldly allege that the foreclosure was "criminal" (ECF No. 5 ¶ 76), they have failed to plead any facts that would support such a conclusion.
Thus, not only did Plaintiffs fail to plead their RICO claim with particularity, but in addition, there is no plausible basis for their RICO claim.
Plaintiffs also claim that the Sheriff's Office was used as a "hired gun." (Id. ¶ 151). This claim fails under the doctrine of qualified immunity, which "protects government officials 'from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.'" Pearson v. Callahan, 555 U.S. 223, 231 (2009) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982)). Here, appearing in the courtroom for security purposes and posting the sheriff's sale on the Property did not violate any clearly established rights because the Sheriff's Office acted pursuant to its duties.
Therefore, it is recommended that the RICO claim in Count 7 should be dismissed.
F. FUTILITY OF AMENDMENT
A court should freely give leave to amend a complaint when justice so requires. Fed. R. Civ. P. 15(a)(2). "Leave to amend may be denied, however, if amendment would be futile. An amendment is futile if the amended complaint would not survive a motion to dismiss for failure to state a claim upon which relief could be granted." Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir. 2000) (citation omitted).
Here, permitting leave to amend would be futile. The Court lacks subject-matter jurisdiction over Counts 3, 4, 6, 7, 8 and 9. The causes of action asserted in Counts 1, 2, 10 and 11 are precluded because the underlying facts which could support such claims were resolved against Plaintiffs during the foreclosure action. The Court also lacks subject-matter over all claims asserted by Strader except for Count 5. With respect to Count 5, Plaintiffs cannot plausibly allege that any of the Defendants are debt collectors, which is fatal to their FDCPA claim. Finally, even if it could be argued that Plaintiffs' RICO claim in Count 7 must be resolved under a Rule 12(b)(6) analysis, Plaintiffs cannot replead to overcome the deficiencies of that cause of action because the actions of Defendants with respect to the loan, loan processing, and the foreclosure proceedings do not constitute racketeering activity as a matter of law.
G. CONCLUSION
Based on the foregoing, it is respectfully recommended that Defendants' motions to dismiss (ECF Nos. 9, 14, 19, 35) be GRANTED. With respect to all claims by Plaintiff Strader and with respect to Counts 3, 4, and 6 through 9, it is recommended that dismissal be without prejudice because the Court lacks subject-matter jurisdiction over these claims. It is further recommended that Counts 1, 2, 5, 10 and 11 be dismissed with prejudice.
H. NOTICE
In accordance with the Federal Magistrates Act, 28 U.S.C. § 636(b)(1), and Fed. R. Civ. P. 72(b)(2), the parties are allowed fourteen (14) days from the date of service to file written objections to this report and recommendation. Any party opposing the objections shall have fourteen (14) days from the date of service of objections to respond thereto. Failure to file objections will waive the right to appeal. Brightwell v. Lehman, 637 F. 3d 187, 193 n.7 (3d Cir. 2011).
/s/_________
PATRICIA L. DODGE
United States Magistrate Judge Dated: August 28, 2019
Service by regular U.S. mail upon:
Rachel L. McBride
1220 Robina Drive
Pittsburgh, PA 15221
Aaron Strader
1220 Robina Drive
Pittsburgh, PA 15221