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Dejesus v. BAC Home Loans Servicing, LP

United States District Court, E.D. New York

September 26, 2014

JUAN DEJESUS and SANTA DEJESUS, as individuals and on behalf of others similarly situated, Plaintiffs,
v.
BAC HOME LOANS SERVICING, LP, fka COUNTRYWIDE HOME LOANS SERVICING, LP AND FRENKEL, LAMBERT, WEISS, WEISMAN GORDON, LLP, Defendants.

MEMORANDUM AND ORDER

KIYO A. MATSUMOTO, District Judge.

On May 15, 2013, plaintiffs Juan DeJesus and Santa DeJesus ("plaintiffs") filed the instant Complaint against BAC Home Loans Servicing, LP, fka Countrywide Home Loans Servicing, LP ("BAC") and Frenkel, Lambert, Weiss, Weisman & Gordon, LLP ("Frenkel Lambert" and together, "defendants"), on behalf of themselves and others similarly situated, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA") and § 349 of the New York General Business Law ("GBL"). Plaintiffs seek damages for the alleged FDCPA violations by defendants during the course of a pending state foreclosure action against them. Defendants have moved to dismiss the Complaint as time-barred and for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendant Frenkel Lambert has moved in the alternative for pre-answer summary judgment against plaintiffs pursuant to Federal Rule of Civil Procedure 56. For the reasons that follow, defendants' motions to dismiss the Complaint are granted with prejudice, because any amendment by plaintiff would be futile.

BACKGROUND

Plaintiffs' complaint (ECF No. 1, Complaint) contains few factual allegations, which are taken to be true for the purpose of deciding the instant motions and can be summarized as follows. On July 28, 2008, plaintiffs, residents of Kings County, New York, obtained a mortgage loan for $497, 350 from All American Home Mortgage Corp. ("All American"), which was recorded by Mortgage Electronic Registration Systems ("MERS") as nominee for All American. (Compl. ¶¶ 18-19.) On June 15, 2010, defendant Frenkel Lambert filed a foreclosure action on behalf of BAC ( BAC Home Loans Servicing, LP fka Countrywide Home Loans Servicing, LP v. Juan De Jesus, Santa De Jesus, et al., Index No. 15133/2010 (the "Foreclosure Action")) against plaintiffs in the Supreme Court of New York, Kings County. (Compl. ¶ 20.) BAC's complaint (the "Foreclosure Complaint") averred that BAC was the holder of both the note and the mortgage by way of assignment. ( Id. ¶ 21.) The Foreclosure Complaint only attached, however, an assignment of the mortgage and not an assignment of the note. ( Id. ) The Foreclosure Complaint stated that the balance of principal was owed to BAC as the "sole, true and lawful owner of the said note and mortgage securing the same." ( Id. ¶¶ 22-23.) The Foreclosure Complaint further alleged in relevant part:

The note and mortgage were assigned to BAC Home Loans Servicing, LP, fka Countrywide Home Loans Servicing, LP by an assignment which is in the process of being recorded. Plaintiff is also in possession of the original note with a proper endorsement and/or allonge and is therefore, the holder of both the note and mortgage, which passes as incident to the note. A copy of the mortgage and assignment is annexed hereto as Exhibit B.

(ECF No. 18-5, Decl. of Barry Weiss ("Weiss Decl.") Ex. C ¶ 4.)[1] At some point in 2011, BAC sent a letter to plaintiffs informing them that, as of July 1, 2011, the servicing of their mortgage loan was transferred to another entity and BAC would no longer be the loan servicer. ( Id. ¶ 26.) Although this change occurred after the Foreclosure Action had been filed in state court, neither BAC nor Frenkel Lambert notified the state court that BAC was no longer the loan servicer for plaintiffs' mortgage. ( Id. ¶ 27.)

Plaintiffs allege in their complaint in this action, upon information and belief, that both BAC and Frenkel Lambert are "debt collectors" as defined in 15 U.S.C. § 1692a(6) and that they regularly attempt to collect consumer debts alleged to be due to another. ( Id. ¶¶ 10, 13-14.) Plaintiffs allege that it is defendants' policy and practice to collect money from mortgagees by commencing foreclosure proceedings, to communicate false information to New York courts in collecting alleged debts, and to engage in false or misleading collection attempts for the sole purpose of harassing consumers. ( Id. ¶¶ 35-39.) In accordance with those practices, according to plaintiffs, defendants attempted to collect an alleged debt from plaintiffs via the Foreclosure Action. ( See id. ¶ 15.)

The other relevant facts in this case, also the subject of the still-pending Foreclosure Action, are taken from the parties' statements pursuant to Local Civil Rule 56.1 and the admissible evidence contained in the exhibits cited and annexed to the parties' motion papers, and are undisputed unless otherwise indicated. The court views the facts in the light most favorable to the nonmoving party with respect to each motion.

Prior to filing the Foreclosure Action, Frenkel Lambert gained physical possession of the original note signed by plaintiffs and note allonge, which had been endorsed to Countrywide Bank, FSB and then endorsed by Countrywide Bank, FSB in blank. (ECF No. 18-2, Weiss Decl ¶ 5); see also ECF No. 18-4, Weiss Decl. Ex. B at 2-5.) Frenkel Lambert had also received a copy of the plaintiffs' mortgage and an assignment of the mortgage to BAC dated May 21, 2010. (Weiss Decl. ¶ 5; see also Weiss Decl. Ex. B at 6-17.) Plaintiffs contend that they are "without knowledge as to whether [the submitted copies of the note, note allonge, mortgage, and mortgage assignment] are true and correct' copies of those documents."[2] (ECF No. 19, Counterstatement of Material Facts ("Pls.'s Stmt.").)

The Foreclosure Complaint alleged that plaintiffs failed to make mortgage payments due on June 1, 2009 and their default continued for a period in excess of 15 days. (Weiss Decl. Ex. C ¶ 8). The Foreclosure Action was filed approximately one year later on June 18, 2010, and a default was entered against plaintiffs after they failed to answer the Foreclosure Complaint. (Weiss Decl. ¶ 6, Ex. C.) Plaintiffs, through their counsel, Abel Pierre, Esq., who also represents them in this case, moved to vacate their default in answering the Foreclosure Complaint on March 10, 2011. (Weiss Decl. ¶ 7; see also ECF No. 18-6, Weiss Decl. Ex. D, Mot. to Vacate Default.) Frenkel Lambert, as counsel for BAC, filed an affirmation in opposition to the motion to vacate on April 29, 2011, and Mr. Pierre submitted a reply affirmation on May 14, 2013. (Weiss Decl. ¶¶ 8-9.) The fully-briefed motion was submitted to the Honorable Kenneth Sherman of the Supreme Court of New York, Kings Country on May 22, 2013, [3] and is still pending as of the date of this Memorandum and Order. ( Id. ¶ 10.)

After filing their motion to vacate their default in the Foreclosure Action, plaintiffs were notified by BAC that it would no longer be the servicer for plaintiffs' mortgage. On July 1, 2011, BAC advised plaintiffs that it had merged with and into Bank of America, N.A., which took over servicing plaintiffs' loan. (Compl. ¶ 26; ECF No. 23, Magaddino Decl. ¶ 8; see also Magaddino Decl. Ex. C.) Plaintiffs state that, after receiving the letter from BAC, they did not know what entity held their loan and to whom they should make payments. (ECF No. 19-2, Aff. of Juan DeJesus in Opp. to [Frenkel Lambert's] Mot. to Dismiss ¶ 6; ECF No. 19-2, Aff. of Santa DeJesus in Opp. to [Frenkel Lambert's] Mot. to Dismiss ¶ 6.) Plaintiffs also allege that defendants never informed the state court that BAC was no longer servicing the loan. (Compl. ¶ 27.)

Plaintiffs filed the instant action on May 15, 2013, one day after Mr. Pierre submitted a reply affirmation in support of plaintiffs' motion to vacate the default in the Foreclosure Action. On September 27, 2013, defendant BAC served a motion to dismiss the complaint and defendant Frenkel Lambert served a motion to dismiss and motion for summary judgment on plaintiffs. Plaintiffs served their opposition papers on November 4, 2013, and defendants replied and filed the fully-briefed motions on November 18, 2013.

DISCUSSION

I. Standard of ...


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