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Barilla v. Seterus, Inc

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

December 4, 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's (collectively, “Defendants”)[2] Motion to Dismiss the Third Amended Complaint (Doc. 49) and Plaintiffs Nicole Barilla, Louis Kerr, and Charles McDonald's Response in Opposition. (Doc. 54). For the following reasons, the Motion is granted in part and denied in part.


         This case is about debt collection letters Defendants sent to Plaintiffs. The Court recounts the factual background as pled in Plaintiffs' Third Amended Complaint (Doc. 48), 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, and Defendants sent them letters (Doc. 48-1; Doc. 48-2) demanding that they get current, referred to as the “Florida Final Letters.” The letters each listed the default amount, provided a deadline to cure the default, and specified consequences for failure to cure. The letters warned:

[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. 48 at 7-8; Doc. 48-1 at 2; Doc. 48-2 at 2). Immediately following that sentence, the letters stated:

[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. 48 at 8; Doc. 48-1 at 2; Doc. 48-2 at 2).

         Contrasting with these threats of foreclosure, the letters also stated that “FORECLOSURE PROCEEDINGS WILL NOT BE COMMENCED UNLESS AND UNTIL ALLOWED BY APPLICABLE LAW.” (Doc. 48-1 at 3; see Doc. 48 at 8 (alleging that all Florida Final Letters sent to all borrowers in Florida who became 45 days delinquent were “substantially the same”)). The letters further advised that Plaintiffs “ha[d] the right to reinstate [their] loan after acceleration” after which “the loan no longer [would] be immediately due in full.” (Doc. 48-1 at 3).

         However, Plaintiffs did not realize that 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 filed in North Carolina. (Doc. 48 at 8-9). Under this policy, Defendants would not accelerate defaulted loans that are less than 45 days delinquent. This 45-day clock would reset whenever debtors made any payment - partial or full - preventing acceleration each time. Thus, Plaintiffs allege that Defendants created a false sense of urgency by threatening to accelerate the entire indebtedness of a consumer's loan if “full payment of the default amount is not received. . . on or before the Expiration Date.”

         Further, Seterus could not “immediately” foreclose a loan upon the expiration date because the original contracts and the Real Estate Settlement Procedures Act, 12 U.S.C. § 1024.41(f)(1), required at least 120 days delinquency before initiating foreclosure. Thus, the letters' threats to accelerate if Plaintiffs sent anything less than full payment before the deadline were untrue and unfair. And because Plaintiffs were coerced into paying what they owed and deprived “of information that would be important . . . in responding to Seterus' debt collection attempts, ” Defendants violated federal and Florida debt collection laws (Counts I-V).


         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). 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.


         In Counts I-III, Plaintiffs allege the letters violate the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692e generally and subsections (5) and (10) individually. In Count IV, Plaintiffs allege the letters violate 15 U.S.C. § 1692f generally. In Count V, Plaintiffs allege that the letters violate the Florida Consumer Protection Act, Fla. Stat. § 559.72(9). Defendants dispute all five counts, arguing that Plaintiffs mischaracterize the applicable law, ...

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