United States District Court, M.D. Florida, Orlando Division
DEBORAH L. GALLAHER and KEVIN JOHN GALLAHER, Plaintiffs,
DEUTSCHE BANK NATIONAL TRUST COMPANY, ESTATES AT ALOMA WOODS HOMEOWNERS ASSOCIATION, INC, SHELLPOINT MORTGAGE SERVICING and SELECT PORTFOLIO SERVICING INC., Defendants.
REPORT AND RECOMMENDATION
B. SMITH UNITED STATES MAGISTRATE JUDGE
before the Court is the Agreed Motion to Drop Deutsche Bank,
Shellpoint, and SPS with Prejudice (Doc. 85). For the reasons
that follow, I respectfully recommend that the motion be
owned property (“Property”) in Oviedo, Florida
that was encumbered by a mortgage held by Defendant Deutsche
Bank National Trust Company (Doc. 64, ¶
2).Plaintiffs defaulted and Deutsche Bank
filed suit for foreclosure (Id.). Plaintiffs,
Deutsche Bank, and its loan servicers, Defendants Shellpoint
Mortgage Servicing and Select Portfolio Servicing, Inc.,
engaged in a mortgage mitigation process (Id.,
¶¶ 12-17). The mitigation process did not lead to
reinstatement of the loan, and Deutsche Bank completed the
foreclosure (Id., 43). Plaintiffs' objections to
the foreclosure sale were overruled by the trial court and
they appealed to Florida's Fifth District Court of Appeal
(Doc. 38). The appellate court dismissed the appeal on
November 29, 2017 (Id.).
filed this lawsuit in state court, alleging that the
foreclosure was a consequence of Deutsche Bank negligently
delaying Plaintiffs' mitigation plan, misrepresenting the
status of the mitigation plan, negligently training
Shellpoint and Select to participate in the mitigation
process, and negligently supervising Shellpoint and Select in
the mitigation process (Id., ¶¶ 23-51).
Plaintiffs also allege that Deutsche Bank, Shellpoint and
Select's actions during the mitigation process violated
the Real Estate Settlement Procedures Act (Regulation X)
(“RESPA”), 12 U.S.C. § 2605 et
seq., the Florida Consumer Collection Practices Act
(“FCCPA”), Fla. Stat. §§
559.55-559.785, and the [sic] Federal Debt Collection
Practices Act (“FDCPA”) 15 U.S.C. § 1692e
(Id., ¶¶ 52-88). Deutsche Bank,
Shellpoint, and Select removed the case to this Court based
on this Court's original jurisdiction over the RESPA
claims (Doc. 1 at 2-3).
Property is in a development that subject to certain rules
and regulations imposed by Defendant Estates at Aloma Woods
Homeowners Association, Inc. (the “HOA”).
Plaintiffs claim that actions taken by the HOA to collect
payments from them violated the FCCPA and the FDCPA
(Id., ¶¶ 62-88). Plaintiffs are also suing
the HOA for tortious interference and the intentional
infliction of emotional distress (Id., ¶¶
89-107). The HOA has counterclaimed against Plaintiff Kevin
Gallaher for unpaid statutory assessments, interest and
attorney's fees (Doc. 14, ¶¶ 17-28).
April 27, 2018, Plaintiffs, Deutsche Bank, Shellpoint and
Select reached a confidential settlement at mediation (Doc.85
at 1). Part of their agreement is that Deutsche Bank,
Shellpoint and Select will be dismissed from this case with
prejudice (Id.). To that end, Plaintiff and these
Defendants have jointly moved the Court to drop Deutsche
Bank, Shellpoint and Select with prejudice (Id.). If
the motion is granted, the only remaining claims will be
between Plaintiffs and the HOA.
than fourteen days have passed since the motion was filed and
the HOA has not objected. Accordingly, I proceed on the basis
that the motion to drop parties is unopposed.
Rule of Civil Procedure 21 provides in part that, “[o]n
motion or on its own, the court may at any time, on just
terms, add or drop a party.” Fed.R.Civ.P. 21.
“The decision of whether to drop a part from a case
pursuant to Rule 21 ‘is left to the sound discretion of
the trial court.'” Garcia v. Chapman, No.
12-21891-CIV, 911 F.Supp.2d 1222, 1245 (S.D. Fla. Nov. 28,
2012) (quoting Wright v. Burkhead, No.
6:07-cv-2039-Orl-19KRS, 2008 WL 423452, at *4 (M.D. Fla. Feb.
policy favors the negotiated resolution of controversies. In
view of this policy and the Court's discretionary
authority to drop parties at any time, I respectfully
recommend the Court implement the settlement agreement
between Plaintiffs and Defendants Deutsche Bank, Shellpoint
and Select by entering an order dropping them with prejudice.
This will leave for resolution, the dispute Plaintiffs and
the HOA. The Court will still have original jurisdiction over
Plaintiffs' claim that the HOA violated 15 U.S.C. §
1692e, and supplemental jurisdiction over those parties other
respectfully recommend that the motion be GRANTED, and that
the Court drop Defendants Deutsche Bank National Trust
Company, Shellpoint Mortgage Servicing, and Select ...