United States District Court, W.D. Arkansas, Fayetteville Division
OPINION & ORDER
TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE.
before the Court is a Partial Motion to Dismiss (Doc. 8)
filed by Defendant Wells Fargo Bank, N.A. ("Wells
Fargo") on March 1, 2017. Plaintiffs Matthew and
Jennifer Vaughn filed their Amended Response (Doc. 13) on
March 22, 2017, and Wells Fargo filed its Reply (Doc. 15) on
March 29, 2017. For the reasons stated herein, the Court
GRANTS Wells Fargo's Partial Motion to Dismiss.
to the Vaughns' Complaint (Doc. 3), they purchased their
home at 1557 East Cortland St. in Fayetteville, Arkansas, in
2002 by executing a promissory note and mortgage that was
subsequently assigned to Wells Fargo. From the time of their
purchase to 2015, the Vaughns did not miss a single mortgage
payment. Unfortunately, on December 22, 2014, Matthew Vaughn
was in a serious car accident, from which he is still
rehabilitating. The medical bills and lost income from this
incident caused the Vaughns to deplete their savings by
September of 2015, leaving them unable to make their mortgage
payments. Accordingly, they began working with Wells Fargo to
modify their loan. Despite their continued participation in
the loan modification process, the Vaughns received a Notice
of Default and Intention to Sell from Wells Fargo's
trustee dated April 6, 2016, listing a sale date of June 13,
2016. (Doc. 3-1, pp. 2-3). They then received Amended Notices
of Default and Intention to Sell dated: (i) July 11, 2016,
postponing the foreclosure sale until August 8, 2016; (ii)
September 12, 2016, postponing the foreclosure sale until
October 17, 2016; (iii) October 11, 2016, postponing the
foreclosure sale until November 14, 2016; and (iv) November
14, 2016, postponing the foreclosure sale until December 12,
2016. (Doc. 3-1). These notices were respectively recorded
with the Washington County Circuit Clerk on April 8, 2016;
July 11, 2016; September 16, 2016; October 17, 2016; and
November 18, 2016. Id.
Vaughns contacted Wells Fargo in response to receiving each
of these notices. On each occasion, Wells Fargo assured the
Vaughns that their house would not be foreclosed upon while
they were in the loan modification process. Despite these
assurances, the Vaughns learned from a friend that their
house was sold at auction on December 12, 2016. This prompted
the Vaughns to file the instant suit in the Circuit Court of
Washington County, Arkansas, which Wells Fargo then removed
to this Court on February 8, 2017. The Vaughns' Complaint
alleges that Wells Fargo violated three provisions of the
Arkansas Statutory Foreclosure Act ("ASFA"),
violated the Arkansas Fair Debt Collection Practices Act
("AFDCPA"), and violated the Arkansas Deceptive
Trade Practices Act; that Wells Fargo committed fraud and
constructive fraud; and that the principles of promissory
estoppel and equitable estoppel invalidate Wells Fargo's
sale of their home.
Fargo filed the instant Partial Motion to Dismiss (Doc. 8)
pursuant to Fed.R.Civ.P. 12(b)(6) on March 1, 2017. The
Motion contends that the Vaughns' AFDCPA claim and one of
their ASFA claims fail to state claims upon which relief may
be granted. Specifically, Wells Fargo argues that the AFDCPA
does not apply to it because it is not a "debt
collector" as defined by that statute. Wells Fargo also
contends that it complied with the ASFA's provisions
concerning the postponement of foreclosure sales. The
Vaughns' response does not address the former argument,
but does take issue with the latter. For the reasons stated
herein, the Court agrees with Wells Fargo's
interpretation of both statutes, and therefore
GRANTS its Motion (Doc. 3).
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 BellAtl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Court
must accept all of the Vaughns' Complaint's factual
allegations as true, and construe them in the light most
favorable to them, drawing all reasonable inferences in their
favor. See Ashley Cnty., Ark. v. Pfizer, Inc., 552
F.3d 659, 665 (8th Cir. 2009).
the Vaughns' 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
Fargo's issue with the Vaughns' AFDCPA claim is
straightforward. That Act imposes civil liability on any
"debt collector" who fails to comply with its
provisions. Ark. Code. Ann. § 17-24-512. The AFDCPA
defines "debt collector" 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.. . debts
owed or due or asserted to be owed or due another." Ark.
Code Ann. § 17-24-502(5)(A). For purposes of Ark. Code
Ann. § 17-24-507(b)(6)-a subsection of the AFDCPA-the
Act also includes in the definition of "debt collector,
" a person "who uses an instrumentality of
interstate commerce or the mails in a business whose
principal purpose is the enforcement of security
interests." Ark. Code. Ann. § 17-24-502(5)(C).
Subsection 507(b)(6) prevents the collection of a debt
through the taking or threatened taking of a non-judicial
action to effect dispossession of property when: (a) no
present right exists to the property claimed as collateral;
(b) the collector has no present intention to take possession
of the property; or (c) the property is exempt by law from
dispossession. See Ark. Code Ann. §
17-24-507(b)(6)(A)-(C). This subsection applies, for example,
a debtor owns two cars, a Ford and a Buick, and a creditor
has a security interest in the Buick but not in the Ford. The
debtor defaults, and the creditor hires [a defendant] to
repossess the Buick. If, in order to put more pressure on the
debtor to pay, [a defendant] repossessed the Ford as well, it
would be violating the statutory provision that [the Court]
ha[s] just [summarized].
Nadalin v. Auto. Recovery Bureau, Inc., 169 F.3d
1084, 1085 (7th Cir. 1999) (Posner, C.J.) (interpreting a
materially identical provision of the federal FDCPA, 15
U.S.C. § 1692a(6)). Because one of the Vaughns'
AFDCPA claims pertains to subsection 507(b)(6), the
definition of "debt collector" from subsection
502(5)(C) is also relevant to Wells Fargo's Motion.
Court has previously addressed the question of whether a
mortgage lender, such as Wells Fargo, fits within the former
definition of "debt collector." In Silberstein
v. Federal National Mortgage ...