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Borg v. Phelan, Hallinan, Diamond & Jones, PLLC

United States District Court, M.D. Florida, Tampa Division

May 22, 2017

KELLY BORG, on behalf of herself and all other similarly situated individuals, Plaintiff,



         This matter comes before the Court pursuant to Plaintiff Kelly Borg's Motion for Class Certification (Doc. # 52), filed on May 1, 2017. Defendant Phelan, Hallinan, Diamond & Jones, PLLC filed its response on May 15, 2017. (Doc. # 58). Because the Court determines Borg lacks standing, the Motion is denied.

         I. Background

         In 2005, Borg took out a mortgage to purchase a primary residence. (Doc. # 1 at ¶ 10). U.S. Bank National Association, which is the client of the law firm Phelan, later obtained ownership of Borg's mortgage obligation. (Id. at ¶ 11). Wells Fargo Bank, N.A. services the loan. (Id.).

         On February 8, 2016, after Borg allegedly defaulted on the mortgage, Phelan, on behalf of U.S. Bank, filed a foreclosure action in the Thirteenth Judicial Circuit in and for Hillsborough County, Florida, against Borg and “Unknown Tenants.” (Id. at ¶¶ 12-14; Doc. # 52-1). That case is the second foreclosure action filed against Borg. (Doc. # 1 at ¶ 12). However, Borg prevailed in the first foreclosure action. (Id.). The second foreclosure action is ongoing and no judgment has been entered. (Borg Dep. Doc. # 54 at 18:10-13).

         On July 19, 2016, Borg filed her class action Complaint in this Court against Phelan, alleging Phelan violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (FDCPA), during its representation of U.S. Bank in the ongoing foreclosure action. (Doc. # 1 at ¶ 14). Neither U.S. Bank nor Wells Fargo are parties in this case. Rather, Borg alleges only that Phelan violated the FDCPA during the foreclosure action in four ways: (1) “attempting to collect monthly installment payments due beyond Florida's five year statute of limitations”; (2) “assess[ing] charges against borrowers for serving process on ‘unknown tenants'”; (3) “falsely claim[ing] that [Phelan's] client, U.S. Bank, is the ‘holder' of the note at issue and, thus, entitled to sue [Borg] . . .”; and (4) “omitting the fact that [Borg's] home was previously subject to a prior foreclosure lawsuit” and “fail[ing] to [file a second ‘Notice of Intent to Foreclosure' letter] prior to instituting the second state court foreclosure.” (Id. at ¶¶ 15-18). The Complaint alleges Phelan commits similar violations in the many other foreclosure actions it initiates. (Id. at 4-6). Then, on August 16, 2016, Phelan filed a motion to dismiss the Complaint, which the Court denied. (Doc. ## 6, 27). Thereafter, Borg voluntarily dismissed two of the four class allegations in the Complaint. (Doc. # 43).

         On May 1, 2017, Borg filed her Motion for Class Certification. (Doc. # 52). Although there are two remaining class allegations in the Complaint, Borg is only pursuing class certification as to the fees charged by Phelan for service on unknown tenants. (Id. at 1). Borg defines the class as: “All persons in Florida during the 12 months preceding the filing of this lawsuit in which [Phelan] filed a foreclosure action seeking to collect on charges against borrowers for serving process against ‘unknown tenants.'” (Id.). Borg argues it violates Florida law for Phelan to charge her and the other class members for such unknown tenant fees. (Doc. # 52 at 2-3). According to Borg, “service of process on an unknown tenant is as a matter of law a nullity, making these charges improper and, therefore, a violation of the FDCPA.” (Id. at 3).

         Phelan filed its response on May 15, 2017, arguing that Borg lacks standing to bring her claim and thus cannot represent the class. (Doc. # 58). Alternatively, Phelan argues the proposed class lacks commonality and typicality, and Borg would not be an adequate representative of the class.

         II. Legal Standard

         To certify a class action, the moving party must satisfy a number of prerequisites. First, the named plaintiff must demonstrate standing. Vega v. T-Mobile USA, Inc., 564 F.3d 1256, 1265 (11th Cir. 2009). Second, the putative class must meet all four requirements enumerated in Federal Rule of Civil Procedure 23(a). Id. Those four requirements are “numerosity, commonality, typicality, and adequacy of representation.” Id. (quoting Valley Drug Co. v. Geneva Pharm., Inc., 350 F.3d 1181, 1188 (11th Cir. 2003)). Third, the putative class must fit into at least one of the three class types defined by Rule 23(b). Id. Relevant to this case, Rule 23(b)(3) permits certification of a class where (1) common questions of law or fact predominate over questions affecting class members individually, and (2) a class action is the superior method for resolving these common questions. Id. A party moving for certification of a Rule 23(b)(3) class in this Court also faces the added hurdle of proposing a cost-effective means of providing notice to putative class members. M.D. Fla. R. 4.04(b). The party moving to certify any class or subclass ultimately bears the burden of proving that all prerequisites are met. See Brown v. Electrolux Home Prods., Inc., 817 F.3d 1225, 1233- 34 (11th Cir. 2015).

         III. Analysis

         “A plaintiff's standing to bring and maintain her lawsuit is a fundamental component of a federal court's subject matter jurisdiction.” Baez v. LTD Fin. Servs., L.P., No. 6:15-cv-1043-Orl-40TBS, 2016 WL 3189133, at *2 (M.D. Fla. June 8, 2016)(citing Clapper v. Amnesty Int'l USA, 133 S.Ct. 1138, 1146 (2013)). The doctrine of standing “limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016), as revised (May 24, 2016). To establish standing, “[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id. “‘The party invoking federal jurisdiction bears the burden of establishing' standing.” Clapper, 133 S.Ct. at 1148 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)).

         The injury in fact requirement is the most important element. Spokeo, 136 S.Ct. at 1547. An injury in fact is “‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Id. at 1548 (quoting Lujan, 504 U.S. at 560). The injury must be “particularized, ” meaning it “must affect the plaintiff in a personal and individual way.” Spokeo, 136 S.Ct. at 1548 (quoting Lujan, 504 U.S. at 560 n.1). Additionally, the injury must be “concrete, ” meaning “it must actually exist.” Spokeo, 136 S.Ct. at 1548. The Supreme Court in Spokeo emphasized that a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. at 1549.

         Borg insists the $45 service fee that will be added to any judgment entered against her in the foreclosure case is an injury in fact that establishes standing for her and the ...

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