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Henry v. Ocwen Loan Servicing, LLC

United States District Court, S.D. West Virginia, Huntington Division

November 16, 2017

KIMBERLY HENRY, Plaintiff,
v.
OCWEN LOAN SERVICING, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          ROBERT C. CHAMBERS UNITED STATES DISTRICT JUDGE

         Pending before the Court is Plaintiff Kimberly Henry's Motion to Amend Complaint. ECF No. 31. For the following reasons, the Court GRANTS the motion.

         I.

         FACTUAL BACKGROUND

         Plaintiff filed this action against Defendant Ocwen Loan Servicing, LLC on March 10, 2017. In her Complaint, Plaintiff alleges that her house was totally destroyed by a fire in May of 2014. Despite the house being a complete loss with no change in equity, Plaintiff states that Defendant refused to give her insurance company a payoff quote until Defendant received a property appraisal.[1] In August 2014, Plaintiff's insurer sent Defendant a check for the total amount due on Plaintiff's monthly statements. Defendant acknowledged receipt of the funds on August 23, 2014. Nevertheless, Plaintiff alleges that Defendant did not apply the insurance proceeds to the loan balance, and it began collection efforts against Plaintiff.

         In October 2014, Plaintiff states she retained counsel, and her counsel repeatedly contacted Defendant and requested the insurance proceeds be applied to the loan and collection efforts cease. According to Plaintiff, Defendant nevertheless did not apply the proceeds to the loan and added fees and interest, threatened to evict her, claimed she owed additional funds, and reported she was delinquent to credit reporting agencies. As a result, Plaintiff filed this action, alleging violations of the West Virginia Consumer Credit and Protection Act (WVCCPA) (Count I), Outrage (Count II), Common Law Invasion of Privacy (Count III), Failure to Investigate (Count IV), and Conversion (Count V).

         Soon after discovery commenced, Defendant produced a “Payoff Quote” dated September 4, 2014. This document provides, in part, for a “Satisfaction Cost, ” and that, “[i]f the account is past due, collection expenses and legal fees may be accruing.” Payoff Quote, at 1 & 2 ¶8, in part, ECF No. 31-2. Plaintiff asserts this language is an unlawful threat under the WVCCPA.

         Therefore, Plaintiff filed the current motion to bring a claim for additional violations of the WVCCPA on her own behalf and on behalf of a class. Plaintiff filed the motion on August 4, 2017, which was the deadline this Court established for amendments of pleadings in the Scheduling Order entered on June 16, 2017. Defendant objects to the motion.

         II.

         DISCUSSION

         After a responsive pleading has been filed, Rule 15(a)(2) of the Federal Rules of Civil Procedure permits amendment of a complaint by leave of the court, and “[t]he court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). “This liberal rule gives effect to the federal policy in favor of resolving cases on their merits instead of disposing of them on technicalities.” Laber v. Harvey, 438 F.3d 404, 426 (4th Cir. 2006) (citations omitted).

         Nevertheless, it is well established that a court may deny a motion to amend if the proposed amendment would be futile. Id. “An amendment is futile if the amended claim would fail to survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).” Hall v. Greystar Mgmt. Servs., L.P., 637 Fed.Appx. 93, 97 (4th Cir. 2016) (citation omitted). In this case, Defendant contends Plaintiff's motion should be denied as futile for two reasons.

         First, Defendant argues Plaintiff's motion is improper because she failed to fulfill the statutory prerequisites for filing an action against a creditor under the WVCCPA. Specifically, West Virginia Code § 46A-5-108(a) states, in relevant part, that:

[n]o action may be brought . . . until the consumer has informed the creditor or debt collector . . . of the alleged violation and the factual basis for the violation and provide the creditor or debt collector . . . twenty days in the case a cause of action has already been filed to make a cure offer . . .: Provided, That the consumer shall have twenty days ...

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