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Losch v. Nationstar Mortgage LLC

United States District Court, M.D. Florida, Fort Myers Division

August 20, 2019

HENRY LOSCH a/k/a John Losch, Plaintiff,
v.
NATIONSTAR MORTGAGE LLC and EXPERIAN INFORMATION SOLUTIONS, INC., Defendants.

          OPINION AND ORDER

          JOHN E. STEELE, UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on Defendant Nationstar Mortgage LLC's Motion to Strike Jury Trial Demand from Second Amended Complaint (Doc. #62) and Defendant Experian Information Solutions, Inc.'s Motion to Dismiss (Doc. #63) filed on June 20, 2019. Plaintiff filed Responses in Opposition (Docs. ##64, 65) on July 2, 2019. For the reasons set forth below, the Motion to Strike is granted and the Motion to Dismiss is denied.

         I.

         Plaintiff Henry Losch is currently proceeding on a four-count Second Amended Complaint (Doc. #60) against defendants, alleging violations of the Fair Credit Reporting Act (FCRA) against Experian Information Solutions, Inc. (Experian), and violations of the Fair Debt Collection Practices Act (FDCPA) and the Florida Consumer Collection Practices Act (FCCPA) against Nationstar Mortgage LLC (Nationstar).[1] The claims are based on mortgage statements and delinquency letters that Nationstar sent plaintiff throughout March 2018 to the present, as well as false credit reporting by Experian. Plaintiff alleges the mortgage statements were sent for the improper purpose of collecting on a mortgage debt for which his personal liability had been discharged in bankruptcy. Defendant Nationstar, the servicer for plaintiff's mortgage loan, moves to strike the jury trial demand, arguing that plaintiff waived his right to a jury trial for all claims in any way related to the note and mortgage. Defendant Experian moves to dismiss the FCRA count for failure to state a claim.

         II. Jury Trial Waiver

         In both the initial and Amended Complaints, plaintiff included a demand for jury trial on “all issues so triable.” (Docs. #12, ¶ 106; Doc. #50, p. 17.) Nationstar moves to strike the jury demand on the basis that plaintiff waived his right to a jury trial pursuant to jury-waiver provisions contained in his mortgage contract. Plaintiff opposes the Motion, arguing that the waiver provisions do not survive because the mortgage was discharged through bankruptcy and became unenforceable as a result of the discharge. However, while a bankruptcy discharge extinguishes the personal liability of the debtor, it does not extinguish a creditor's right to foreclose on a valid mortgage on the debtor's property as a mortgage is an interest in real property that secures a creditor's right to repayment. 11 U.S.C. § 524 (a) (1); Johnson v. Home State Bank, 501 U.S. 78, 83 (1991). A creditor's right to foreclose on a mortgage therefore survives and passes through a bankruptcy. Id. at 83. Therefore, the Court is not persuaded by plaintiff's argument that the mortgage and all of its provisions have been wholly “extinguished” by the bankruptcy discharge such that the jury trial wavier is now unenforceable. The parties may dispute whether plaintiff may be liable for the mortgage debt (see Doc. #60, ¶ 48), but the Court cannot say that the mortgage agreement and the jury waiver provision are unenforceable following plaintiff's bankruptcy.

         While a party asserting a claim for a violation of the FDCPA has a right to a trial by jury, see Sibley v. Fulton Dekalb Collection Service, 677 F.2d 830, 834 (11th Cir. 1982), the party may waive its right to a jury trial so long as the waiver is knowing and voluntary, see Bakrac, Inc. v. Villager Franchise Systems, Inc., 164 Fed.Appx. 820, 823 (11th Cir. 2006) (citations omitted). In determining whether a party has knowingly and voluntarily waived its right to a jury trial, “courts consider the conspicuousness of the waiver provision, the parties' relative bargaining power, the sophistication of the party challenging the waiver, and whether the terms of the contract were negotiable.” Id. at 824 (citations omitted).

         Here, there is no information provided from either party that would call into question that the waiver was not knowingly and voluntarily given. The waiver provision is a stand-alone paragraph, the last numbered paragraph, and states clearly that a jury trial is waived.

         Finally, Nationstar argues that plaintiff's claims are within the scope of the jury trial waiver, while plaintiff believes that Nationstar's collection efforts were not sufficiently related to the mortgage to fall within the scope of the waiver provision. The mortgage includes the following jury trial waiver on page 14, just above the plaintiff's initials:

25. Jury Trial Waiver. The Borrower hereby waives any right to a trial by jury in any action, proceeding, claim, or counterclaim, whether in contract or tort, at law or in equity, arising out of or in any way related to this Security Instrument or the Note.

(Doc. #62-1.) The Court agrees with numerous other courts in similar cases (with identical or similar waiver language to what we have here) who found that consumer protection claims sufficiently relate to a mortgage contract to be within the scope of a jury trial waiver.[2] See Barnes v. U.S. Bank National Assoc., 156 F.Supp.3d 1359, 1360-61 (N.D. Fla. 2016) (collecting cases). In those cases, courts found important that the dispute giving rise to plaintiff's claims exist because of a direct relationship with the mortgage and actions the mortgage holder took to collect on a debt in default. As these courts did, the Court finds that the jury trial waiver provision at issue here is broad enough to reach claims arising from defendant's collection efforts.

         Therefore, the Motion to Strike the jury demand is granted at this juncture and this case will be set for a bench trial.

         III. Motion to Dismiss FCRA Claim (Count II)

         Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This obligation “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). To survive dismissal, the factual allegations must be “plausible” and “must be enough to raise a right to relief above the speculative level.” Id. See also Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir. ...


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