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Meney v. Seterus, Inc.

United States District Court, W.D. New York

April 17, 2014

DAPHNE MENEY, Plaintiff,
v.
SETERUS, INC. f/k/a IBM LENDER BUSINESS PROCESS SERVICES, AND FEDERAL NATIONAL MORTGAGE ASSOCIATION, Defendants.

DECISION and ORDER

MICHAEL A. TELESCA, District Judge.

INTRODUCTION

Plaintiff Daphne Meney ("Meney"), brings this action pursuant to the Fair Debt Collection Practices Act, codified at 15 U.S.C. ยง 1692 et seq.; Section 349 of the New York State General Business Law, and New York State common law, claiming that the defendants used unlawful methods in an attempt to collect a debt from her. Specifically, plaintiff alleges that defendant Seterus Inc., which serviced a mortgage loan issued to the plaintiff and held by defendant Federal National Mortgage Association, improperly attempted to collect amounts from her which she did not owe.

Defendants now move to dismiss plaintiff's Amended Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on grounds that plaintiff has failed to state a cause of action. Specifically, the defendants contend that they complied with all laws and regulations in connection with servicing plaintiff's mortgage loan. Defendants contend that upon plaintiff's breach of the loan agreement (which defendants claim occurred when the plaintiff filed for bankruptcy protection in May, 2010) they were entitled to attempt to collect fees and other costs from the plaintiff, and therefore, their attempts to collect such fees and costs, in addition to principal and interest, were lawful.

Because I find that plaintiff has failed to establish that the defendants were not entitled to attempt to collect fees and costs from her upon her breach of her loan agreement, I find that plaintiff has failed to properly allege that the defendants were not authorized to attempt to collect the amounts they sought. I therefore grant defendants' motion to dismiss.

BACKGROUND

According to the Amended Complaint, in 2003, plaintiff Daphne Meney obtained a mortgage loan in the amount of $82, 000.00 which was secured by a Mortgage Note (hereinafter the "Mortgage Agreement" or "original Mortgage"). Although not stated in the Amended Complaint, plaintiff thereafter became delinquent in her mortgage payments. In February 2010, plaintiff entered into a Loan Modification Agreement in which her delinquent amounts were capitalized into a new principal amount, with payments to begin in March 2010.

Plaintiff alleges that although she duly made her payments in full under the terms of the Loan Modification Agreement, she nevertheless received a letter dated July 6, 2010 from defendant Seterus claiming that she was in default on her loan, and owed $3, 494.30 to the defendants. According to Seterus, these amounts, which reflected fees that had accrued under the original mortgage loan, became due when plaintiff breached the Loan Modification Agreement and original Mortgage in May by filing a voluntary petition for bankruptcy in the Bankruptcy Division of this Court. Seterus claims that under Sections 9, 11, and 14 of the original Mortgage, the terms of which were incorporated into plaintiff's Loan Modification Agreement, filing a petition for bankruptcy rendered plaintiff in default under the Mortgage Agreement and Loan Modification Agreement, and upon defaulting, the defendants were entitled to recoup unpaid fees that accrued prior to the signing of the Loan Modification Agreement.

Plaintiff's Amended Complaint makes no mention whatsoever of her having filed for bankruptcy protection in May, 2010. Rather, she claims that she filed for bankruptcy in 2007, and that her bankruptcy was discharged in June of 2010. She therefore claims that her filing for bankruptcy could not have constituted a default under the original Mortgage or the Loan Modification Agreement entered into in March, 2010. Rather, she claims that the defendants had no justification for seeking any past amounts allegedly owed by her under either the original loan or the loan as modified by the Modification Agreement, and therefore, defendants violated the Fair Debt Collection Practices Act and Section 349 of the New York State General Business Law by attempting to collect such amounts, and breached the terms of the original Mortgage and Loan Modification Agreement.

DISCUSSION

I. Standard for Motion to Dismiss

In reviewing a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must "accept... all factual allegations in the complaint and draw... all reasonable inferences in the plaintiff's favor." See Ruotolo v. City of New York , 514 F.3d 184, 188 (2d Cir.2008) (internal quotation marks omitted). In order to withstand dismissal, the complaint must plead "enough facts to state a claim to relief that is plausible on its face." See Bell Atl. Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 1974 (2007) (disavowing the oft-quoted statement from Conley v. Gibson , 355 U.S. 41 (1957), that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief").

"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." See id. at 1965 (internal quotation marks omitted). Moreover, conclusory allegations are not entitled to any assumption of truth, and therefore, will not support a finding that the plaintiff has stated a valid claim. Hayden v. Patterson , 594 F.3d 150, 161 (2nd Circ., 2010). Thus, "at a bare minimum, the operative standard requires the plaintiff [to] provide the grounds upon which his claim rests through factual allegations sufficient to raise a right to relief above the speculative level.'" See Goldstein v. Pataki , 516 F.3d 50, 56-57 (2d Cir.2008) (quoting Twombly , 127 S.Ct. at 1974).

While generally courts are required to accept factual allegations set forth in the Complaint as true, "a court need not accept as true "conflicting pleadings that make no sense... or that are contradicted... by facts of which the court may take judicial notice.'" Coggins v. Cnty. of Nassau, 2013 WL 6224631 at *6 (E.D.N.Y., Dec. 2, 2013) (quoting In re Livent, Inc. Noteholders Sec. Litig. , 151 F.Supp.2d 371, 405-06 (S.D.N.Y., 2001). It is further without question that a court may take judicial notice of prior court proceedings. Harvey v. Chemung Cnty., 2012 WL 729714 at fn. 1 (W.D.N.Y., Mar. 6, 2012) reconsideration denied, 2012 WL 1431228 (W.D.N.Y., Apr. 24, 2012)(citing Infanti v. ...


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