United States District Court, W.D. Arkansas, Fayetteville Division
OPINION AND ORDER
TIMOTHY L. BROOKS, UNITED STATES DISTRICT JUDGE
before the Court is Defendant PHH Mortgage Corporation's
("PHH") Motion for Partial Dismissal or, in the
Alternative, for More Definite Statement (Doc. 14). The
Motion asks the Court to dismiss Counts Two and Three of
Plaintiffs Britt and Amanda Silbersteins' (collectively,
"the Silbersteins") Amended Complaint (Doc. 6)
pursuant to Federal Rule of Civil procedure 12(b)(6). In the
alternative, the Motion asks the Court to order the
Silbersteins to make a more definite statement as to Count
Two, pursuant to Rule 12(e). The Silbersteins filed an
abbreviated and non-substantive Response (Doc. 17) on
December 21, 2016. Then, on January 16, 2017, the
Silbersteins filed a Motion for Partial Dismissal (Doc. 22)
as to certain of their own causes of action. For the reasons
discussed below, PHH's Motion (Doc. 14) is GRANTED, and
the Silbersteins' Motion (Doc. 22) is MOOT.
following facts are recited in the light most favorable to
the Silbersteins, the non-moving party. On September 16,
2005, the Silbersteins executed a promissory note and
mortgage with PHH to facilitate their purchase of real
property located at 1623 Theodore Drive, Springdale,
Arkansas. On August 26, 2013, the Silbersteins entered into a
loan modification agreement with PHH. Pursuant to the loan
modification agreement, the Silbersteins remitted payment to
PHH for the months of September, October, and November of
2013. However, when the Silbersteins attempted to make
payment for the month of December, PHH declined receipt of
the payment, and denied the validity of the loan modification
agreement. On April 8, 2014, May 15, 2014, and May 27, 2014,
the Silbersteins sent letters to PHH requesting certain
information about their account, and requesting a response
from PHH. The Silbersteins allege that PHH failed to respond
to any of these letters, other than one response stating that
the May 15, 2014 letter was not a "qualified written
request" as defined by 12 U.S.C. § 2605.
point after that time, PHH transferred or assigned the
Silbersteins' mortgage and note to Defendant Federal
National Mortgage Association ("Fannie Mae"). Then,
on September 2, 2016, Fannie Mae-through trustee Wilson &
Associates, PLLC-issued a Notice of Default and Intention to
Sell (Doc. 6-1) listing a sale date of November 7, 2016.
Before the foreclosure sale could proceed, on November 3,
2016, the Silbersteins filed a Petition for Temporary
Restraining Order and Preliminary Injunction in the Circuit
Court of Washington County, Arkansas. The Circuit Court
granted the TRO and scheduled a hearing for November 17,
2016. On November 16, 2016, however, the Circuit Court
dismissed Wilson & Associates, PLLC-an entity with its
principal place of business in Arkansas-as a defendant in the
case, creating complete diversity amongst the parties. PHH
accordingly removed the case to this Court on November 17,
next day, the Silbersteins filed their First Amended Petition
for Temporary Restraining Order and Preliminary Injunction
and Complaint for Breach of Contract (Doc. 6). The Court
granted the Silbersteins a TRO and deferred ruling on their
request for a preliminary injunction until a hearing on the
matter could be set. Before the scheduled hearing date, the
parties entered an agreement whereby the Silbersteins would
deposit with the Court the sum of $775.65 every month during
the pendency of this action and Fannie Mae would be enjoined
from foreclosing on their property until the final
disposition of the case.
December 16, 2016, PHH filed the instant Motion, arguing that
Counts Two and Three of the Silbersteins' Amended
Complaint fail to state a claim against them, and that
alternatively, the Silbersteins should be ordered to produce
a more definite statement as to Count Two. Count Two
(¶¶ 16-18) of the Complaint claims that PHH
violated the Real Estate Settlement Procedures Act
("RESPA"), 12 U.S.C. § 2605, by failing to
respond to the Silbersteins' letters. Count Three (¶
19) alleges that PHH violated the Arkansas Fair Debt
Collection Practices Act ("AFDCPA"), Ark. Code Ann.
§ 17-24-506. In Response (Doc. 17), the Silbersteins
only state that they deny the material allegations of
PHH's Motion, and offer no substantive legal argument on
the merits thereof.
survive a motion to dismiss, a complaint must provide "a
short and plain statement of the claim showing that the
pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2).
The purpose of this requirement is to "give the
defendant fair notice of what the ... claim is and the
grounds upon which it rests." Erickson v.
Pardus, 551 U.S. 89, 93 (2007) (quoting Be/
At/. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
The Court must accept all of the Amended Complaint's
factual allegations as true, and construe them in the light
most favorable to the Silbersteins, drawing all reasonable
inferences in their favor. See Ashley Cnty., Ark. v.
Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).
the Amended Complaint "must contain sufficient factual
matter, accepted as true, to 'state a claim to relief
that is plausible on its face.'" Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570). "A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged."
Id. "A pleading that offers labels and
conclusions' or 'a formulaic recitation of the
elements of a cause of action will not do.' Nor does a
complaint suffice if it tenders 'naked assertion[s]'
devoid of 'further factual enhancement.'"
Id. In other words, while "the pleading
standard that Rule 8 announces does not require 'detailed
factual allegations, ' ... it demands more than an
unadorned, the defendant-unlawfully-harmed-me
Court will begin by addressing PHH's argument respecting
the AFDCPA. Specifically, PHH contends that the AFDCPA's
statute of limitations has run, and alternatively, that it
cannot be liable under the AFDCPA because it is not a
"debt collector" as that statute defines the term.
See Ark. Code Ann. § 17-24-502(5)(A). Pursuant
to the AFDCPA, a person may bring a cause of action against
"a debt collector who fails to comply" with the
statute. Ark. Code Ann. § 17-24-512(a). Such an action
must be brought "in a court of competent jurisdiction
within one (1) year from the date on which the violation
occurs." Ark. Code Ann. § 17-24-512(d).
conduct causing PHH's alleged failure to comply with the
AFDCPA, per the Silbersteins' Amended Complaint, occurred
on December 11, 2013, and January 21, 2014. (Doc. 6,
¶ 19). Accordingly, the one-year
statute of limitations had long expired by the time the
Silbersteins filed their original complaint in state court on
November 3, 2016, and their Amended Complaint in this Court
on November 18, 2016.
had the statute of limitations not expired, moreover, the
Court would find that the Silbersteins' AFDCPA claim
fails as a matter of law because PHH is not a "debt
collector" as defined by that statute. The AFDCPA
defines that term as "a person who uses an
instrumentality of interstate commerce or the mails in a
business whose principal purpose is the collection of debts
or who regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or due
another." Ark. Code Ann. § 17-24-502(5)(A). This
definition is materially identical to the federal Fair Debt
Collection Practices Act's definition of a debt
collector. See In re Humes,496 B.R. 557, 583 n.24
(Bankr. E.D. Ark. 2013); 15 U.S.C. § 1692a(6). And,
"[m]any courts hold that mortgage lenders and servicers
are not 'debt collectors' under the FDCPA in
connection with collecting their own consumer debts as
opposed to claims owned by others." In re
Larkin,553 B.R. 428, 440 (Bankr. D. Kan. 2016). This
includes "FDCPA decisions relating to loan modification
offers." Id. (discussing Thomas v. JPMorgan
Chase & Co., 811 F. Supp. 2d 781
(S.D.N.Y. 2011) and Polidori v. Bank of Am., N.A.,
977 F. Supp. 2d 754 (E.D. Mich. 2013)).
These holdings are consistent with the plain language of the
statute, which requires a "debt collector" to have
as its "principal purpose" the "collection of
debts, " or, that a "debt collector" regularly
attempt to collect "debts owed ... or due
another" Ark. Code Ann. ...