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Blake v. Seterus, Inc.

United States District Court, S.D. Florida, Miami Division

February 9, 2017

GEOFFREY BLAKE, on behalf of himself and all others similarly situated, Plaintiff,
SETERUS, INC., Defendant.



         THIS CAUSE comes before the Court upon Defendant SETERUS, INC.'s Motion to Dismiss (DE 23), filed on October 20, 2016. The Court has considered Plaintiffs Response (DE 30), filed on November 17, 2016, as well as Defendant's Reply thereto (DE 31), filed on December 1, 2016. After careful review, the Court grants dismissal as to Count I of the complaint, and denies dismissal as to Counts II and III.


         This putative class action arises from a dispute between a Plaintiff mortgagor and his Defendant loan servicer. The Plaintiff, Geoffrey Blake, executed a promissory note and mortgage for $333, 750 in August 2007. DE 26-1 at 2-3. Plaintiff alleges that he defaulted on his loan in October 2010, and foreclosure proceedings were initiated on June 28, 2012. DE 26 at 7. In June 2014, Plaintiff, through his foreclosure attorney, wrote a letter to Defendant inquiring as to the amount of money required to reinstate his loan. Id. On June 30, Defendant wrote Plaintiff a response letter stating that the reinstatement loan amount was $92, 938.74 if received by June 30, 2014, or $94, 895.49 if received by July 18, 2014. Id. at 7-8. Defendant's letter contained an itemized list of charges, including $28, 695 in estimated costs for inspections, attorney's fees, broker fees, and "other costs." DE 26-3. On July 10, 2014, Defendant sent Plaintiff a nearly identical letter, the only difference being that the reinstatement amount was decreased to $86, 975 if paid by July 17, 2014, and the updated estimated charges decreased to $20, 760. See DE 26-4.

         Plaintiff alleges that Defendant was not authorized to include estimated fees and costs in the reinstatement amount. Accordingly, on March 7, 2016, Plaintiff sent a cure letter to Defendant. When Defendant failed to remove the estimated charges, Plaintiff filed the instant lawsuit. DE 26 at ll.[1]

         As to damages, Plaintiff alleges that had Defendant not included estimated fees in the loan reinstatement charges, Plaintiff could have and would have initially paid the full reinstatement amount.[2] Plaintiff additionally seeks damages for the costs and fees he has incurred as a result of litigation, the interest incurred on his loan, the $106, 277 increase of his principal balance on the loan, and the emotional distress he has suffered.

         With that, Plaintiffs Amended Complaint alleges that by tacking estimated fees onto the reinstatement amount, Defendant knowingly violated the federal Real Estate Settlement Procedures Act (RESPA), the Florida Deceptive and Unfair Trade Practices Act (FDUPTA), and the Florida Consumer Collection Practices Act (FCCPA). Defendant has moved to dismiss the Amended Complaint, asserting that 1) Plaintiff failed to plead that Defendant had the requisite actual knowledge of its FCCPA violation, 2) the state claims are barred by Florida's litigation privilege, and 3) reinstatement letters are not protected by RESPA, or alternatively, the reinstatement letters satisfied RESPA's requirements. The Court has considered the motion and the responses thereto, making this matter fully ripe for this Court's review.


         Defendant's Motion to Dismiss alleges that the Complaint fails federal pleading standards and should be dismissed, under Rule 12 of the Federal Rules of Civil Procedure, for failure to state a claim upon which relief can be granted. Fed.R.Civ.P. 12. Rule 8 requires that a complaint include a "short and plain statement" demonstrating that the claimant is entitled to relief. Fed R. Civ. P. 8. To survive a Rule 12(b)(6) motion, a complaint must include "enough facts to state a claim to relief that is plausible on its face, " Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). As a corollary, allegations absent supporting facts are not entitled to this presumption of veracity. Id. at 681.

         When evaluating a motion to dismiss, the Court must take all of the well-pled factual allegations as true. Id. at 664. However, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 663. And, the Court's duty to accept the factual allegations in the complaint as true does not require it to ignore specific factual details "in favor of general or conclusory allegations." Griffin Indus., Inc. v. Irvin, 496 F.3d 1189, 1205-06 (11th Cir. 2007). The Court must dismiss a complaint that does not present a plausible claim demonstrating entitlement to relief.


         1. FDUPTA

         Plaintiff first alleges that, by including unincurred estimated fees in the reinstatement letters, Defendant violated the Florida Deceptive and Unfair Trade Practices Act (FDUPTA).

         To state a claim under FDUTPA, a plaintiff must allege that a deceptive or unfair practice occurred in the course of trade or commerce. Benjamin v. CitiMortgage, Inc., No. 12-62291-CIV, 2013 WL 1891284, at *4 (S.D. Fla. May 6, 2013) (citing Rollins, Inc. v. Butland,951 So.2d 860, 869 (Fla. 2d DCA 2006)). FDUPTA defines trade or commerce as "advertising, soliciting, providing, offering, or distributing, whether by sale, rental, or otherwise, of any good or service, or any property, whether tangible or intangible, or any other article, commodity, or thing of value, wherever situated." Fla. Stat. Ann. § 501.203(8) (2016). An FDUPTA claim cannot be asserted against a defendant who is simply collecting a debt. Williams v. Nationwide Credit, Inc.,890 F.Supp.2d 1319, 1321 (S.D. Fla. 2012) ("Several courts have held that debt collection activities are not "trade or commerce" for FDUTPA purposes.") (citing State v. Shapiro & Fishman, LLP,59 So.3d 353, 355-57 (Fla. 4th DCA 2011); Law Office of David J. Stern, P.A. v. State,83 So.3d 847, 849-50 (Fla. 4th DCA 2011); Kelly v. Palmer, Reifler & Assocs., P.A.,681 F.Supp.2d 1356, 1371-77 (S.D.Fla.2010); Trent v. Mortgage Electronic Registration Sys., Inc.,618 F.Supp.2d 1356, 1365 n. 12 (M.D.Fla.2007)). Courts have thus repeatedly found that "the 'trade and commerce' requirement is often not met in cases dealing with borrowers alleging FDUPTA claims against their mortgage servicers." Bank of ...

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