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Barilla v. Seterus, Inc.

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

August 28, 2019

NICOLE BARILLA, LOIS KERR and CHARLES MCDONALD, on behalf of themselves and others similarly situated Plaintiffs,

          OPINION AND ORDER [1]


         Before the Court is Defendants Seterus, Inc. and Nationstar Mortgage LLC, as Successor in Interest to Seterus (together, “Defendants”)[2], Motion to Dismiss Second Amended Complaint (Doc. 42) and Plaintiffs Nicole Barilla, Louis Kerr, and Charles McDonald's Response in Opposition. (Doc. 45). For the following reasons, the Motion is granted with leave to amend.


         This case is about debt collection letters Defendants sent to Plaintiffs. Defendants move to dismiss the entirety of the Second Amended Class Action Complaint (Doc. 39) with prejudice for failure to state a claim. The Court recounts the factual background as pled in Plaintiffs' Second Amended Class Action Complaint, which it must accept as true to decide whether Plaintiffs state a plausible claim. See Chandler v. Sec'y Fla. Dep't of Transp., 695 F.3d 1194, 1198-99 (11th Cir. 2012).

         Between early 2018 and early 2019, Plaintiffs fell behind on mortgage payments and defaulted. (Doc. 39 at 4-5). Once Plaintiffs defaulted, Defendants sent them form letters demanding that they get current. (Doc. 39 at 4-5; Doc. 39-1; Doc. 39-2). The letters each listed the default amount, provided a deadline of 36 days to cure the default, and specified consequences for failure to cure (the “Florida Final Letters”).[3] (Doc. 39-1; Doc. 39-2). The letters warned that “[i]f full payment of the default amount is not received [by the deadline], we will accelerate the maturity date of your loan and upon such acceleration the ENTIRE balance of the loan, including principal, accrued interest, and all other sums due thereunder, shall, at once and without further notice, become immediately due and payable.” (Doc. 39 at 6; Doc. 39-1 at 2; Doc. 39-2 at 2). Immediately following that sentence, the letter stated that “[f]ailure to cure the default on or before the Expiration Date may result in acceleration of the sums secured by the Security Instrument, foreclosure by judicial proceeding, and sale of the property. If you only send a partial payment, the loan will still be in default. Additionally, we will keep the payment and may accelerate the maturity date.” (Doc. 39-1 at 2; Doc. 39-2 at 2).

         Unbeknownst to Plaintiffs, however, Defendants had an internal policy of showing mercy to debtors who failed to fully cure their default before the deadline, which was explained by Seterus' 30(b)(6) representative in a similar case. (Doc. 39 at 7-8). Under this policy, Defendants would not accelerate defaulting loans-provided they were not yet 45 days past due. (Doc. 39 at 7-8). This 45-day clock reset whenever debtors made any payment-partial or full-preventing acceleration each time. (Doc. 39 at 7-8). Thus, the letters' threats to accelerate if Plaintiffs sent anything less than full payment before the deadline were untrue. (Doc. 39 at 8). And because Plaintiffs were coerced into paying what they owed and suffered emotional distress from the “false sense of urgency, ” Defendants violated federal and Florida debt collection law and committed negligent misrepresentation (Counts I-III). (Doc. 39 at 12, 20-26).


         When deciding a motion to dismiss under Rule 12(b)(6), a court must accept as true all well-pleaded facts and draw all reasonable inferences in the light most favorable to the non-moving party. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “To survive a motion to dismiss, the plaintiff's pleading must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. A claim is facially plausible when the court can draw a reasonable inference from the facts pled that the opposing party is liable for the alleged misconduct. See id.; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 553 (2007). But “[f]actual allegations that are merely consistent with a defendant's liability fall short of being facially plausible.” Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012) (internal quotations omitted). Thus, the court engages in a twostep approach: “When there are well pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.


         1. The FDCPA Claims (Count I)

         Count I alleges that the letters' empty threats violated 15 U.S.C. §§ 1692e and 1692f of the Fair Debt Collection Practices Act (FDCPA) because they threatened action “not intended to be taken, ” used “false representations . . . to collect a debt, ” and used “unfair or unconscionable means” to collect the debts. (Doc. 39 at 20-22); 15 U.S.C. §§ 1692e(5), (10); 1692f. Defendants argue that they had a legal right to threaten foreclosure, that they did intend to foreclose under some circumstances, that they made no material misrepresentations, and that Plaintiffs fail to differentiate between § 1692e allegations and § 1692f allegations. (Doc. 42 at 7-15). Plaintiffs parry, arguing that the plain language of the letters refutes Defendants' argument, that the misrepresentations were manifestly material, and that the alleged conduct is unfair or unconscionable in addition to being false or misleading. (Doc. 45 at 3-16). Convincing as Plaintiffs' arguments may be, the Court must dismiss Count I because it is a shotgun pleading.

         The Eleventh Circuit requires pleadings to be “seperat[ed] into a different count [for] each cause of action or claim for relief.” Weiland v. Palm Beach Cty. Sheriff's Office, 792 F.3d 1313, 1322-23 (11th Cir. 2015). Instead, Count I generically alleges that Defendants violated the “Fair Debt Collection Practices Act, 15 U.S.C. §1692, et seq., ” raising claims under both §§ 1692e and 1692f. (Doc. 39 at 20, 22). Although the same conduct can violate §§ 1692e and 1692f, these two statutes raise two separate causes of action with separate elements. See Miljkovic v. Shafritz & Dinkin, P.A., 791 F.3d 1291, 1308 (11th Cir. 2015). For this reason, Count I is dismissed as a shotgun pleading. See Garrison v. Caliber Home Loans, Inc., 233 F.Supp. 3d 1282, 1291-92 (M.D. Fla. 2017) (dismissing count which combined multiple sections of § 1692 as a shotgun pleading). Plaintiffs will have an opportunity to amend these deficiencies.

         2. The FCCPA Claims (Count II)

         Count II alleges that Defendants violated the Florida Consumer Collection Practices Act, Fla. Stat. § 559.72 et seq. (FCCPA). (Doc. 39 at 23). This section contains an exhaustive list of nineteen subparts. See§ 559.72. As Defendants note, the Second Amended Complaint does not specify which subparts apply. (Doc. 42 at 17). In response, Plaintiffs argue that paragraphs 155-58 of the Second Amended Complaint “specifically allege that Defendants violated Fla. Stat. 559.72(9) by claiming, attempting, or threatening an action that it did not intend to take.” (Doc. 45 at 17). Although the Second Amended Complaint never “specifically” invokes & ...

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