The opinion of the court was delivered by: Judge Ronald A. Guzman
MEMORANDUM OPINION AND ORDER
Plaintiffs Modupe and Anthony DaSilva brought suit against CitiMortgage, Inc., Citibank, Mortgage Electronic Registration Systems, Inc., ("MERS") and the Law Office of Ira T. Nevel, LLC ("Defendants") alleging various claims related to the defendants' purported conduct in pursuing amounts owed by Plaintiffs on their mortgage. Plaintiffs seek leave to file a second amended complaint ("SAC"), which CitiMortgage, CitiBank, and MERS oppose.*fn1 For the reasons set forth below, the motion is denied in part and granted in part.
On or about April 28, 2009, Plaintiffs executed a promissory note for the purchase of real property located at 24379 Liberty Street, Crete, Illinois 60417. (Defs.' Resp., Dkt. # 70 at 2; id. Exs. A, B.) The promissory note was secured by a mortgage naming CitiMortgage as the lender and MERS as the nominee for CitiMortgage. (Defs.' Resp., Dkt. # 70 at 2; id. Exs. A, B.) In December of 2009 Plaintiffs defaulted on the loan. (Defs.' Resp., Dkt. # 70 at 2; id. Ex. C.) CitiMortgage commenced a foreclosure lawsuit against Plaintiffs on February 3, 2010 and a judgment of foreclosure was entered against them on December 1, 2011. (Defs.' Resp., Dkt. # 70 at 2; id. Ex. C.) The Court may take judicial notice of these prior proceedings and related court documents attached to Defendants' response because Plaintiffs raised the issues in their complaint and they are central to Plaintiffs' claims. Pugh v. Tribune Co., 521 F.3d 686, 691, n.2 (7th Cir. 2008) (court is permitted to take judicial notice of documents in public record without converting the motion into one for summary judgment); Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993).
The following facts are taken from the proposed SAC. In July of 2011, prior to the entry of the judgment of foreclosure in state court, Plaintiffs sent a letter to CitiMortgage, Citibank, and MERS requesting verification and validation of their debt along with a Qualified Written Request ("QWR") pursuant to the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §2605(e). (Pl. Prop. SAC, Dkt. # 67-1, ¶ 6.) CitiMortgage, CitiBank and MERS and their agents continued to call Plaintiffs regarding their debt. (Id. ¶ 7.) On August 26, 2011 and in September 2011, Plaintiffs sent letters to Defendants (the proposed SAC uses the collective term here) informing them that Plaintiffs' debt had not been validated and verified pursuant to the Fair Debt Collection Practices Act ("FDCPA") and RESPA. (Id. ¶ 8.) On October 7, 2011, Plaintiffs sent a QWR for validation and verification of the debt to the Law Office of Ira T. Nevel and CitiMortgage. (Id. ¶ 9.) They did not validate or verify the debt. (Id.) At some time in October 2011, CitiBank, CitiMortgage and MERS sent a letter to Plaintiffs demanding a deed in lieu of foreclosure without validating or verifying the debt. (Id. ¶ 10.) After Plaintiffs sent the letter requesting validation and verification of the debt, Defendants "continued collection activity." (Id. ¶ 11.)
On January 3, 2012, Plaintiffs, acting pro se, brought suit against CitiMortgage, MERS, Citibank, Ira T. Nevel and the Law Office of Ira T. Nevel (counsel for Defendants in the state foreclosure action) for violations of the FDCPA and invasion of privacy.*fn2 (Pl.'s Comp., Dkt. # 1.) Defendants moved to dismiss the complaint for failure to state a claim.(Defs' Mot. Dismiss, Dkt. ## 31, 33.) Plaintiffs retained counsel and responded to the motion to dismiss by filing their first amended complaint ("FAC"). (Pls.' FAC, Dkt. # 48.) On June 4, 2012, CitiMortgage, CitiBank and MERS moved to dismiss the FAC for failure to state a claim. Plaintiffs then filed the SAC on June 29, 2012. On CitiMortgage, CitiBank and MERS's motion, the SAC was struck from the record pursuant to Rule 15(a)(2), which requires the opposing party's consent or court approval before filing subsequent amended complaints. (7/12/12 Order, Dkt. # 66.)
Plaintiffs filed a motion for leave to file a SAC on July 16, 2012, seeking to separate the specific statutory violations of the FDCPA into different counts. Specifically, the proposed SAC alleges three counts under the FDCPA: Count I -- violation of 15 U.S.C. § 1692g (a)(1) - (5) (b) and (d) (against all defendants); Count II -- violation of 15 U.S.C. § 1692d(5) (against CitiMortgage, MERS, and CitiBank); Count III -- violation of 15 U.S.C. § 1692e(5) (against CitiMortgage, MERS, and CitiBank).
CitiMortgage, MERS, and CitiBank object to the proposed amendment on the ground that it is futile. Specifically, they contend that the SAC fails to allege facts in support of the conclusion that they are debt collectors under the FDCPA. (Def.'s Resp., Dkt. #70 at 1, 9.)*fn3
Rule 15(a) states that leave to file an amended complaint "shall be freely given." Fed. R. Civ. P. 15(a). The court shall permit a party to amend its complaint in the absence of a clear and compelling reason. Johnson v. Cypress Hill, 641 F.3d 867, 871-72 (7th Cir. 2011). However, the Court has broad discretion to deny leave to amend where there is undue delay, bad faith on the part of the movant, repeated failure to cure deficiencies by way of previous amendments, undue prejudice to the opposing party, or futility of the amendment. Id.
Defendants argue that Plaintiffs' amendment would be futile. An amendment is futile where it would not survive a motion to dismiss pursuant to Rule 12(b)(6). Smart v. Local 702 Int'l Bhd. Of Elec. Workers, 562 F.3d 798, 811 (7th Cir. 2009). In order to survive a motion to dismiss, a complaint must contain sufficient facts, which are assumed to be true, to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). A claim is facially plausible when the court can draw the reasonable inference from the presented facts that the defendant is liable for the alleged wrong. Bell Atl. Co. v. Twombly, 550 U.S. 544, 556 (2007).
Plaintiffs allege in the proposed SAC that "Defendants are 'debt collectors' as the term is defined by 15 U.S.C. §1692a (6), or have retained the services of debt collectors." (Pls.' Prop. SAC, Dkt. # 67-1, ¶ 5.) Defendants contend that Plaintiffs have failed to establish that they are entitled to relief under the FDCPA because they are "debt collectors" as the term is defined in the FDCPA. (Defs.' Resp., Dkt. #70 at 5.)
The FDCPA imposes liability on "any debt collector who fails to comply with any provision of this title with respect to any person." 15 U.S.C. § 1692k(a). The term "debt collector" is defined as "[a]ny person who uses any instrumentality of interstate commerce or 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." 15 U.S.C. §1692a(6).
Plaintiffs havefailed to plead any facts in support of their assertion that Defendants are debt collectors and state only generally that Defendants (as a group) "continued collection activity" after Plaintiffs requested a validation and verification of their debt. These allegations are insufficient to state a claim under the FDCPA. Cocroft v. HSBC Bank USA, No. 10 C 3408, 2012 WL 1378645, at *10 (N.D. Ill. Apr. 20, 2012) (dismissing FDCPA claim against HSBC Bank and MERS, among others, because the "complaint contains no allegations that any of the defendants are in the business of collecting debt, that they regularly collect debts owed to others, or that they used names other than their own in attempting to collect a debt"); Munger v. Deutsche Bank, No. 1:11--CV--00585, 2011 WL 2930907, at *6 (N.D. Ohio Jul. 18, 2011) (concluding that MERS was not a debt collector because complaint contains "no allegation that Defendant MERS was involved in any debt collection activity") (citing Robbins v. MERS, Inc., 2009 WL 3757443, at *5 (E.D. Mich. Nov. 9, 2009) (finding that MERS is not a debt collector and noting ...