United States District Court, N.D. West Virginia
PATRICK RUSSELL, on behalf of himself and all others similarly situated, Plaintiff,
SN SERVICING CORPORATION AND NPML MORTGAGE ACQUISITIONS, LLC, Defendants.
MEMORANDUM OPINION AND ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS' MOTION TO DISMISS
PLAINTIFF'S FIRST AMENDED CLASS ACTION COMPLAINT [DKT.
M. KEELEY UNITED STATES DISTRICT JUDGE.
before the Court is the motion to dismiss filed by
defendants, SN Servicing Corporation (“SN
Servicing”) and NPML Mortgage Acquisitions, LLC
(“NPML”) (collectively “defendants”),
seeking to dismiss the plaintiff's first amended class
action complaint. For the reasons that follow, the Court
GRANTS in PART and DENIES in PART the defendants' motion.
(Dkt. No. 27).
plaintiff, Patrick Russell (“Russell”), secured a
$20, 000 home equity loan from Equity South Mortgage on
December 20, 1999. That loan had a maturity date of January
1, 2015, and required Russell to make monthly payments
towards principal and interest until either the loan was paid
off or the maturity date, whichever occurred first. As of May
2015, Russell had not made a payment on the loan in over
after Russell's default, NPML purchased the loan and
retained SN Servicing to undertake collection efforts. On May
28, 2015, SN Servicing sent two letters to Russell. The
first, entitled “Notice of Assignment, ” informed
Russell that NPML had assigned the loan for servicing, that
is, for collection efforts, to SN Servicing (“May 28
Assignment Letter”). (Dkt. No. 22-2). The second was a
notice pursuant to the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et
seq., informing Russell that SN Servicing was attempting
to collect a debt for NPML (“May 28 Collection
Letter”). (Dkt. No. 22-3). The May 28 Collection Letter
also informed Russell that, upon request made within thirty
days, SN Servicing would provide him with the name and
address of the original lender.
complaint alleges that both letters violated the FDCPA. The
May 28 Collection Letter allegedly failed to inform Russell
specifically that he must make the request for the original
lender's name and address in writing. Further, neither
letter indicated that the statute of limitations had expired
and the terms of the loan therefore were no longer
Servicing sent a third letter to Russell on September 2, 2015
(“September 2 Letter”), warning him that
“[i]t is imperative that you contact the office within
15 days from the date of this letter (09/17/2015) or we will
have no alternative but to initiate legal action as allowed
by your state.” (Dkt. No. 22-4). This letter failed to
note that the statute of limitation on the loan had expired.
Moreover, despite the letter's warning, SN Servicing did
not initiate any legal action. In his amended complaint,
Russell alleges that SN Servicing's warning that it
intended to take legal action was false, misleading, or
deceptive because SN Servicing knew at the time that it could
not take any action on the stale debt.
SN Servicing sent Russell two bills, on October 7, 2015, and
January 6, 2016, stating that the loan was delinquent by 4,
449 days and 4, 541 days, respectively. A payment ticket was
attached to each bill indicating that the amount due for the
outstanding August 1, 2003 payment was $218.90, and that, as
of January 6, 2016, the total payment due was $33, 053.90.
amended complaint alleges seven violations of the FDCPA and
the West Virginia Consumer Credit Protection Act
(“WVCCPA”) based on false, deceptive, or
misleading business practices. (Dkt. No. 22). Counts I, II,
III, IV, VI, VII allege that the defendants engaged in
deceptive business practices when they “threatened to
file legal action against Plaintiff, when no such action
could be taken because the debt was time-barred by the
statute of limitations.” Counts II and III further
allege that the defendants threatened litigation even though
they never intended to take such action. Finally, Count V
alleges that the defendants failed to include statutorily
mandated information in their initial May 28 Collection
Letter, by failing to notify Russell that he must request
information about the original creditor in writing.
STANDARD OF REVIEW
assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6) of the Federal Rules of Civil Procedure,
a court must accept all well-pled facts contained in the
complaint as true and construe those facts in the light most
favorable to the plaintiff. Nemet Chevrolet, Ltd v.
Consumeraffairs.com, Inc, 591 F.3d 250, 255 (4th Cir.
2009). However, “legal conclusions, elements of a cause
of action, and bare assertions devoid of further factual
enhancement fail to constitute well-pled facts for Rule
12(b)(6) purposes.” Id. (citing Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009)). In deciding on the
motion, the court may consider “documents incorporated
into the complaint by reference, and matters of which a court
may take judicial notice.” Tellabs, Inc. v. Makor
Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). The
court “may also consider documents attached to the
motion to dismiss, so long as they are integral to the
complaint and authentic.” Philips v. Pitt Cty.
Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009)
(citing Blankenship v. Manchin, 471 F.3d 523, 526
n.1 (4th Cir. 2006)).
complaint should be dismissed “if it does not allege
‘enough facts to state a claim to relief that is
plausible on its face.'” Giarratano v.
Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). “Facial plausibility is established once the
factual content of a complaint ‘allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.'” Nemet
Chevrolet, 591 F.3d at 256. Detailed factual allegations
are not required, but the facts alleged must be sufficient
“to raise a right to relief above the speculative
level.” Twombly, 550 U.S. at 555.
defendants first argue that the Court should dismiss NPML as
a defendant because it is not a “debt collector”
as defined under the FDCPA. (Dkt. No. 28 at 7). Next, they
argue that Counts I, II, III, IV, VI, and VII must be
dismissed because the debt is in fact not time-barred and
remains subject to collection. They further contend that
those counts must be dismissed because Russell failed to
allege sufficiently that SN Servicing threatened an action it
did not intend to take.
defendants also maintain that the Court should dismiss Count
V of the amended complaint because it does not relate back to
the original complaint and, consequently, was not pled within
the applicable limitations period. Finally, they argue that
the September 2 Letter was not a communication intended to
collect a debt and therefore is not actionable under the
FDCPA. The Court will address each of these arguments in
NPML is Not a Debt Collector Under the FDCPA
defendants seek to dismiss NPML on all counts because it is
not a “debt collector, ” which the FDCPA defines
as “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). On the other hand,
it defines a “creditor” as “any person who
offers or extends credit creating a debt or to whom a debt is
owed.” 15 U.S.C. § 1692a(4).
a debt collector is an entity that “collects debt on
behalf of a creditor, ” while a creditor is one
“to whom the debt is owed.” Henson v.
Santander Consumer USA, Inc., 817 F.3d 131, 135 (4th
Cir. 2016), cert. granted, 137 S.Ct. 810 (mem) (U.S.
Jan. 13, 2017) (No. 16-349). Notably, “when a creditor
collects its debt for its own account, it is not generally
acting as a debt collector.” Id. at 135-36.
is, however, an exception to this rule when the
“principal purpose of a person's business is to
collect debt.” Id. at 135-36. In
Henson, the Fourth Circuit determined that §
1692a(6) defines a debt collector as “(1) a person
whose principal purpose is to collect debts; (2) a person who
regularly collects debts owed to another; or (3) a person ...