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Velez v. Bank of America, N.A.

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

April 18, 2018

GEORGE VELEZ AND NANCY VELEZ, on behalf of themselves and those similarly situated, Plaintiffs,
v.
BANK OF AMERICA, N.A., and SPECIALIZED LOAN SERVICES, LLC, Defendants.

          ORDER

          RICHARD A. LAZZARA UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT is Defendant Specialized Loan Services, LLC's Motion to Dismiss Plaintiff's Amended Complaint (Dkt. 33), Plaintiff's Response in Opposition (Dkt. 36), Defendant Bank of America, N.A.'s Motion to Dismiss Plaintiff's Amended Complaint (Dkt. 34), and Plaintiff's Response in Opposition (Dkt. 35). After careful consideration of the allegations of the First Amended Complaint (Dkt. 29), the argument of counsel, and the applicable law, the Court concludes the motions should be denied.

         ALLEGATIONS

         The eight-count amended complaint seeks relief for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the FDCPA) and the Florida Consumer Collection Practices Act, § 559.55 et seq., Florida Statutes (the FCCPA), which are divided into four counts brought by George Velez against each Defendant separately and the remaining counts by Nancy Velez against each Defendant separately. In July 2007, Plaintiffs executed a note and mortgage for their home in Tampa. The note was payable to E-Loan, Inc., but the servicing of the loan transferred to Popular Mortgage Servicing, Inc. (Popular) very near the time of closing. Popular serviced the loan from August to October 2007. From October 2007 to December 2007, Popular issued notices stating that no payment had been made for the payment due on October 1, 2007.

         The loan was at some point transferred to Countrywide Home Loans (Countrywide), which Plaintiffs allege became Bank of America, N.A. (BOA). Plaintiffs allege the loan was in default at the time of transfer to Countrywide. Countrywide filed a mortgage foreclosure action in 2008 in which it alleged that the note was in default and also sought a deficiency judgment. BOA alleged in the state foreclosure action that it possesses the enforcement rights. Specialized Loan Services, LLC (SLS) was not involved in that case. The loan was subsequently transferred to SLS at some point after January 2017.

         With respect to violations of the FCCPA, BOA sent Plaintiffs written monthly statements, including one dated January 17, 2017, indicating that their home was placed on the Vacant Property Register on December 22, 2016. The statement charged $1, 675.00 as a vacant property registration fee, in addition to asserting a late fee would be charged if not paid before mid-February 2017. This amount was added to the total indebtedness due. BOA sent inspectors to the property on multiple occasions, “one of which encountered the Plaintiffs at the property where a verbal altercation took place on November 11, 2016.” Plaintiffs allege that this act established “actual knowledge that the property was occupied.” Prior to this incident, on May 29, 2015, in the foreclosure proceedings when they were deposed by BOA, they testified that they lived at the property, which is their home. BOA made these communications to Plaintiffs directly, knowing they were represented by counsel.

         The allegations concerning violations of the FCCPA with respect to SLS establish that SLS sent Plaintiffs written monthly statements, which included the $1, 675.00 vacant property registration fee. Plaintiffs allege that SLS knew “upon boarding the loan” that the property was not vacant, yet still incorporated the fee. SLS sent one statement in July 2017, indicating that fees of $2, 799 for “Fees Billed Attorney Expense-Forecl [sic]” were due. This amount was added to the total indebtedness. SLS communicated directly with Plaintiffs, knowing that they were represented by counsel.

         With respect to the FDCPA, Plaintiffs claim that BOA made phone calls to George Velez and Nancy Velez's phone on March 6 and 7, 2017, after being advised on January 26, 2017, to cease calling in violation of § 1692(d)(5). BOA failed to identify the caller or leave a voice mail identifying same, in violation of § 1692(d)(6). BOA falsely represented “the character, amount, and legal status of the debt [property vacant]” in the statement received in January 2017, in violation of § 1692(e)(2)(a-b). BOA threatened to take action it could not legally take by treating an inhabited property as abandoned and charging late fees on an accelerated debt, in violation of § 1692(e)(5). BOA sought to collect amounts not authorized by the agreements, in violation of § 1692(f).

         The amended complaint alleges that SLS made phone calls to George Velez and Nancy Velez's phone after being advised to cease communications in violation of § 1692(d)(5) of the FDCPA. The calls were made “with the intent to annoy” and SLS requested Plaintiffs call back. SLS failed to identify the caller or leave a voice mail identifying same, in violation of § 1692(d)(6). SLS falsely represented “the character, amount, and legal status of the debt [property vacant]” in the statement received in violation of § 1692(e)(2)(a-b). SLS threatened to take action it could not legally take by treating an inhabited property as abandoned and incorporating the charge into its business records as the correct amount. SLS sought to collect amounts not authorized by the agreements, in violation of § 1692(f).

         BOA seeks to dismiss the amended complaint based on three grounds: 1) the failure to comply with the performance of a condition precedent to the filing of this suit pursuant to the pre-suit notice and cure provisions of the mortgage; 2) the failure to allege violations of the FDCPA or FCCPA, specifically that BOA was not a debt collector and properly sent one mortgage statement showing the vacant property registration fee; and 3) the claim is barred by Florida's litigation immunity. SLS seeks to dismiss the amended complaint on three grounds: 1) the failure to comply with the performance of a condition precedent to the filing of this suit pursuant to the pre-suit notice and cure provisions of the mortgage; 2) the failure to allege violations of the FDCPA or FCCPA, specifically SLS was not a debt collector, was not given sufficient notice that Plaintiffs were represented by counsel, and properly charged a vacant property registration fee and attorneys' fees pursuant to the mortgage; and 3) for all the reasons stated by BOA.

         DISCUSSION

         Applying the Twombly-Iqbal[1] plausibility standard to the allegations of the amended complaint, the Court finds the amended complaint sufficient.

         Notice and Cure under the Mortgage

         The amended complaint alleges that both SLS and BOA took by assignment, perhaps as servicers, a defaulted mortgage. SLS and BOA argue that paragraph 20 of the mortgage requires that Plaintiffs, as the borrowers, give written notice and the opportunity to cure any error before filing a suit. Most of the cases cited by SLS and BOA do not involve violations of the FDCPA or FCCPA, and to the extent they do, involve claims regarding an illegal profit scheme.[2] The heart of Plaintiffs' suit is not the unlawful overcharging of inspection fees, but the wrongful conduct in collecting a debt. Plaintiffs respond that first, the pre-suit notice and cure provision cannot be applied to escape FDCPA or FCCPA liability, and second, SLS and BOA are not lenders but assigns of servicers pursuant to the terms of the mortgage. In the context of a motion to dismiss, this Court will not engage in a fact-finding mission to ...


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