United States District Court, N.D. Illinois, Eastern Division
SCOTT R. FOSTER Plaintiff,
PHH MORTGAGE, Defendant.
MEMORANDUM OPINION AND ORDER
Virginia M. Kendall, Judge
Scott R. Foster brought this action against Defendant PHH
Mortgage as the result of a mortgage dispute. Foster alleges
that PHH has breached its obligations under the Fair Debt
Collection Practices Act ("FDCPA"), 15 U.S.C.
§ 1692, et seq.. PHH moves to dismiss the
Complaint under Federal Rule of Civil Procedure 12(b)(6)
arguing that it fails to state a claim upon which relief can
be granted. (Dkt. No. 38.) For the reasons stated below, the
Court grants PHH's motion to dismiss and denies its
motion to dismiss.
Court takes the following allegations from the Second Amended
Complaint and treats them as true for the purposes of
evaluating Defendant's motion. See Gillard v. Proven
Methods Seminars, LLC, 388 F.App'x 549, 550 (7th
Scott R. Foster, and his late wife purchased a condo, located
at 1212 West Sherwin, Chicago, Illinois 60626, and secured by
a mortgage loan from Defendant, PHH Mortgage
Company. (Amended Complaint at ¶¶ 1, 3,
7). Around March 2010, Foster called PHH to discuss
forbearance options on the remaining balance of his mortgage.
Each of the five times that he called PHH between March 2010
to September 2010, he was connected to a call center in
India. (Id. at ¶¶ H, 14)- During one of
these phone calls, he was told to "get behind and stay
behind on his mortgage in order to get six months forbearance
on his loan." (Id. at ¶ 11). Each time he
spoke to PHH, "[h]e was always told that his
forebearance confirmation was in process." (Id.
at ¶ 13). After being told this statement, Foster
stopped making payments from March 2010 to August 2010. At
some point during September 2010, Foster called PHH and the
operator identified himself as being from PHH in New Jersey,
and told Foster that PHH no longer offered a mortgage
forbearance program. (Id. at ¶ 15). Prior to
March 2010, Foster had not missed any mortgage payments.
(Id. at ¶ 6).
November 8, 2010, PHH sued Foster for foreclosure.
(Id. at ¶18; Id. at Exhibit 1, PHH
v. Foster, 10 CH 48036). Foster maintains that he was
victim of a program where PHH was motivated to induce
homeowners to enter "dual tracking" programs in
which homeowners believe they have been granted a forbearance
period, but PHH simultaneously has filed for foreclosure on
supports his allegation that PHH is involved in this dual
tracking program by citing to two Cook County foreclosure
proceedings filed against Foster's property by PHH's
attorney, Shapiro Kresiman & Associates, LLC f/k/a Fisher
and Shapiro, LLC where a Cook County Judge, suspended the
foreclosure proceedings due to the affidavits filed in them
that were inconcistent and because PHH and Shapiro have a
document history of robo signers. (Id. at ¶36).
August 31, 2015, Foster filed his pro se complaint against
PHH alleging violations under the Dodd Frank Act. Foster
originally moved to proceed in forma pauperis but the Court
found his salary of over $170, 000 could not constitute
poverty and he was ordered to pay the filing fee by October
9, 2016. Foster did not do so at that time and his case could
have been dismissed on that day. Instead, he waited two
months more to pay the fee and then sought leave of Court to
keep the case open. The Court granted his oral request.
Foster then filed an Amended Complaint, withdrew the Dodd
Frank claim, and instead pursued two counts, one under the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.
§ § 1961, et seq. ("RICO") and
one under the Fair Debt Collection Practices Act
("FDCPA"), 15 U.S.C. § 1692, et seq..
(Dkt. No. at p. 34). During the discovery process, Foster has
failed to comply with various deadlines and the Court granted
a motion to compel discovery due to his failures. Foster was
warned that his case could be dismissed for want of
prosecution for his delays and lack of cooperation.
Meanwhile, PHH now moved to dismiss the Amended Complaint.
(Dkt. No. 38). In Response to PHH's Motion to Dismiss,
Foster withdrew the RICO claim. (Dkt. No. 41 at p. 7). The
Court grants Foster's voluntary withdrawal of the RICO
claim, and now grants PHH's Motion to Dismiss on the
remaining FDCPA claim.
stated in this Court's order on May 10, 2016 denying
PHH's initial motion to dismiss, a complaint must contain
sufficient factual matter to state a claim to relief that is
plausible on its face to survive a 12(b)(6) challenge.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In
making the plausibility determination, the Court relies on
its "judicial experience and common sense."
McCauley v. City of Chicago, 671 F.3d 611, 616 (7th
Cir. 2011) (quoting Iqbal, 556 U.S. at 678). For a
complaint to survive a 12(b)(6) challenge, the plaintiff must
give the defendant fair notice of what the claim is and the
grounds upon which it rests. See Huri v. Office of the
Chief Judge of the Cir. Ct. of Cook County, 804 F.3d
826, 832 (7th Cir. 2015). Federal Rule of Civil Procedure
8(a)(2) requires "a short and plain statement of the
claim showing that the pleader is entitled to relief[.]"
Rule 8(a)(2) does not require detailed factual allegations,
"but it demands more than an unadorned,
Iqbal, 556 U.S. at 678 (citing Bell Ail. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)). "Neither
conclusory legal statements nor abstract recitations of the
elements of a cause of action add to the notice that Rule 8
demands, so they do not help a complaint survive a Rule
12(b)(6) motion." Id. For purposes of this
motion, this Court accepts all well-pleaded allegations in
the Complaint as true and draws all reasonable inferences in
the non-movant's favor. See Yeftich v. Navistar,
Inc., 722 F.3d 911, 915 (7th Cir. 2013).
enacted the FDCPA to protect debtors from "abusive debt
collection practices by debt collectors...." 15 U.S.C.
1692(e). The FDCPA "regulates interactions between
consumer debtors and 'debt collectors].'"
Jerman v. Carlisle, McNellie, Rini, Kramer & Urlich
LPA, 559 U.S. 573, 576 (2010). To state a claim under
the FDCPA, Plaintiff must allege that: (1) defendant
qualifies as a debt collector as defined in § 1692a(6);
(2) the actions of which plaintiff complains were taken in
connection with the collection of any debt; and (3) the
actions violated one of the FDCPA's substantive
provisions. See Gburek v. Litton Loan Servicing LP,
614 F.3d 380, 384 (7th Cir. 2010); see also, e.g., Kabir
v. Freedman Anselmo LindbergLLC, No. 14 C 1131, 2015 WL
4730053, at *2 (N.D. 111. Aug. 10, 2015).
alleges that the affidavits filed in the Cook County court
proceedings, and that include inconsistent preacceleration
charges, violated § 1692e's proscription of
"false, deceptive, or misleading" statements in
connection with debt collection activities, including the
false representation of "the character, amount, or legal
status of any debt." 15 U.S.C. § 1692e(2). (Am.
Compl. at ¶¶ 65-67). PHH contends that it is not a
"debt collector" under the FDCPA. (Dkt.No.
38 at p. 7.)
claim to proceed, Foster first must show that PHH owed Foster
a duty as a "debt collector" under the FDCPA. A
"debt collector" is "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'' 15 U.S.C. §
1692a(6)(emphasis added). "An entity that tries to
collect money owed to itself is outside the FDCPA."
Carter v. AMC, LLC,645 F.3d 840, 842 (7th Cir.
2011). If the Court holds that PHH is a creditor, then it
cannot also be the debt collector. See Schlosser v.
Fairbanks Capital Corp.,323 F.3d 534, ...