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Srachta v. Ditech Financial LLC

United States District Court, N.D. Illinois

November 30, 2017

PATRICIA SRACHTA, as appointed administrator of the Estate of Guadalupe M. Spindola, Plaintiff,
v.
DITECH FINANCIAL LLC; MRPIERCE LLC; doing business as McCalla Raymer Pierce - Illinois LLC; PIERCE & ASSOCIATES, P.C., Defendants.

          MEMORANDUM OPINION AND ORDER

          SHARON JOHNSON COLEMAN UNITED STATES DISTRICT COURT JUDGE

         Plaintiffs, Patricia Srachta (“Srachta”), as appointed administrator of the Estate of Guadalupe M. Spindola (“Spindola”), Guadalupe and Juan Francisco Valadez (“Valadez Plaintifs”), and Silvia Srachta (“S. S.”), by and through their attorney, Kenneth M. DucDuong of KMD Law Office, allege that Defendants, MRPierce, LLC (“MRPierce”), a company that collects debts owed to third parties, doing business as McCalla Raymer Pierce - Illinois LLC, and Ditech Financial LLC(“Ditech”), the debt holder, violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §1692 et seq.. Defendants now move this Court to dismiss Plaintiffs' Amended Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, Defendants' Joint Motion to Dismiss [16] is granted.

         Background

         The following allegations from Plaintiffs' Amended Complaint and Defendants' Motion to Dismiss are taken as true for the purpose of ruling on the present motion. In 2006, Spindola and her husband purchased a home using a mortgage from Countrywide Home Loans, Inc.. The debt was eventually purchased by Ditech. The loan contract provided that in the case of “Borrower's breach of any covenant or agreement, ” “Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys' fees and costs of title evidence.” [18] (emphasis added).[1] Spindola's husband died in 2008, and she passed away in 2011. Sometime before April 27, 2016, the mortgage for their home was defaulted.

         Around April 27, 2016, MRPierce-the authorized collections agent for Ditech, sent Spindola a letter stating the cost to reinstate the loan as of when the letter was dated and also stating an estimate of the cost to reinstate the loan thirty days later [25-1]. The letter clarified that the estimate reflected the debt as well as the expenses of ongoing services and fees, and it included an attachment itemizing each part of the total.

         Ditech filed a foreclosure complaint against Spindola and all other owners and nonrecorded claimants on June 24, 2016. On August 15, 2016, Srachta petitioned to open a probate action in the Will County Circuit Court. Plaintiffs' attorney contacted an attorney at MRPierce to inform the company that he represented Spindola's Estate in the foreclosure action two days later. He requested a copy of the payoff letter from MRPierce on September 28, 2016 via email. Having received no response, Plaintiffs' attorney followed up on October 3, 2016 with MRPierce about the payoff letter. The MRPierce's representative asked whether it should be sent to him or the borrower's address. Plaintiffs' attorney requested that MRPierce email the letter directly to him. On October 5, 2016, MRPierce's mediation processor informed Plaintiffs' lawyer that she did not have the authorization to release the payoff letter to him until he provided them with a copy of his appearance. That same day, despite the attorney's request, MRPierce mailed Ditech's payoff statement, which was dated October 3, to Spindola [25-2]. The statement was composed similarly to the reinstatement letter in that it included estimated amounts and detailed break downs of each fee that would be assessed over time.

         Srachta was appointed administrator of Spindola's estate for the probate action on October 20, 2016. Guadalupe Valdez, Silvia Srachta and Francisco Valdez are the children and beneficiaries of Spindola.

         Legal Standard

         A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the complaint, not the merits of the allegations. Gardunio v. Town of Cicero, 674 F.Supp.2d 976, 983 (N.D. Ill. 2009) (Dow, J.). Put differently, “[t]he issue involved is not whether the claimant is entitled to prevail, but whether the claimant is entitled to offer evidence in support of the claims.” Id. (citation omitted).

         When ruling on a motion to dismiss, a court must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in a plaintiff's favor. Park v. Ind. Univ. Sch. of Dentistry, 692 F.3d 828, 830 (7th Cir. 2012). The allegations must contain sufficient factual material to raise a plausible right to relief. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 569 n. 14, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim has facial plausibility when the plaintiff pleads factual content that allows a court to draw the reasonable inference that a defendant is liable for the misconduct alleged. Id.; see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

         Analysis

         1.Count I - Direct communication with a consumer who is represented by an attorney.

         Plaintiffs, Srachta-acting in her capacity as administrator of Spindola's estate, and Spindola's beneficiaries, allege that Defendants violated Section 1692c of the FDCPA by sending a payoff letter for the impending foreclosure debt directly to Spindola instead of her estate's attorney.

         Section “1692c restricts debt collectors' communications with and about consumers and is understood to protect only the consumer-debtors themselves.” Todd v. Collecto, Inc., 731 F.3d 734, 737 (7th Cir. 2013). A debt collector is liable for communicating with a consumer when they had actual knowledge that “the consumer is represented by an attorney with respect to such debt” and access to “such attorney's name ...


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