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Morris v. Ocwen Loan Servicing, LLC

United States District Court, D. South Carolina, Rock Hill Division

March 17, 2017

Richard Morris and Cheryl Morris, Plaintiffs,
v.
Ocwen Loan Servicing, LLC, Defendant.

          ORDER AND OPINION

         Plaintiffs Richard Morris and Cheryl Morris (together “Plaintiffs”) filed the instant action seeking damages for the alleged harassment they suffered as a result of Defendant Ocwen Loan Servicing, LLC's (“Defendant” or “Ocwen”) usage of automated calls, debt collection letters, credit reports, and false credit reporting. (ECF No. 13.) Plaintiffs jointly assert a federal claim for violation of the Fair Debt Collection Practices Act of 1977 (“FDCPA”), 15 U.S.C. §§ 1692-1692p, and state law claims for invasion of privacy, breach of contract, breach of contract accompanied by fraudulent act, intentional infliction of emotional distress, and violation of the South Carolina Unfair Trade Practices Act (“SCUTPA”), SC Code Ann. §§ 39-5-10 to -560 (2014). (ECF No. 13 at 7 ¶ 44-9 ¶ 68 & 11 ¶ 82-13 ¶ 105.) Additionally, Cheryl Morris individually alleges a claim for violation of the Telephone Consumer Protection Act of 1991 (“TCPA”), 47 U.S.C. § 227. (ECF No. 13 at 10 ¶¶ 69-81.)

         This matter is before the court on Defendant's Rule 12(b)(6)[1] Partial Motion to Dismiss Plaintiffs' First Amended Complaint (ECF No. 18) seeking jurisdictional dismissal of all claims as to Richard Morris and general dismissal of Plaintiffs' claims for invasion of privacy, breach of contract accompanied by fraudulent act, intentional infliction of emotional distress, and violation of the SCUTPA. Defendant asserts dismissal is appropriate because (a) Richard Morris lacks standing under Article III of the Constitution due to the absence of plausible “injury in fact”/damages allegations and (b) Plaintiffs' state law claims fail because they do not allege “(1) a breach by Ocwen of any contractual term; (2) the heightened standard to support invasion of privacy and IIED claims; and (3) an ascertainable loss of money or property to support a[] [SC]UTPA claim.” (ECF No. 18 at 1-2.) Plaintiffs oppose the Motion to Dismiss asserting that “their Amended Complaint adequately alleges injuries for Article III standing and states facts sufficient to allege a plausible claim for relief on each challenged cause of action.” (ECF No. 26 at 21.)

         For the reasons set forth below, the court GRANTS IN PART AND DENIES IN PART Defendant's Partial Motion to Dismiss.

         I. RELEVANT BACKGROUND TO PENDING MOTION

         Plaintiffs allege that they acquired an interest in real property (the “Property”) located at 1392 Morris Hinson Road in Lancaster County, South Carolina when they helped their daughter (Sharon Stacks) and her husband (Richard Stacks) purchase it. (ECF No. 13 at 1 ¶ 5.) Richard Morris mortgaged the property to Novastar in or around 2006. (Id. at 2 ¶ 6.) Deustsche Bank National Trust Company (“DBNTC”) eventually acquired the Property's mortgage. (Id. at ¶ 8.)

         In or around 2009, the Stacks defaulted on the Property's mortgage. (Id. at 9.) As a result of the default, DBNTC brought a foreclosure action against Plaintiffs on or about November 11, 2010. (Id. at ¶¶ 10, 14.) While the foreclosure action was pending, Plaintiffs allege that Defendant obtained the servicing rights to the Property's mortgage. (Id. at 11-13.) On or about October 28, 2011, the parties in the foreclosure action entered into a settlement agreement resolving the action. (Id. at 15 (referencing ECF No. 23).)

         Plaintiffs allege that in 2013, Defendant began improperly making debt collection calls and sending letters to them regarding the Property's mortgage. (Id. at 18-20.) Thereafter, in January of 2015, Plaintiffs filed a lawsuit against Defendant in the Lancaster County (South Carolina) Court of Common Pleas alleging violation of the FDCPA, the TCPA, and the Fair Credit Reporting Act, 15 U.S.C. §§ 1681-1681x. (ECF No. 13 at 3 ¶¶ 21-22.) After the case was removed to federal court, the parties settled the matter on September 25, 2015, by entering into a Settlement and Release Agreement (“SRA”). (Id. at ¶¶ 23, 25.) Thereafter, Plaintiffs allege that they started receiving calls again from debt collectors representing Defendant beginning on December 7, 2015, and receiving debt collection letters in or around February 2016. (Id. at 4 ¶ 29 & 6 ¶ 36.) “The correspondence claimed that Richard Morris owed a $20, 613.54 escrow shortfall [], and a total balance of $327, 909.41.” (Id. at ¶ 36.)

         On June 1, 2016, Plaintiffs filed the instant action in this court alleging causes of action against Defendant for invasion of privacy (first cause of action), breach of contract accompanied by fraudulent act (fourth cause of action), intentional infliction of emotional distress (fifth cause of action), and violation of the FDCPA (second cause of action), the TCPA (third cause of action), and SCUTPA (sixth cause of action). (ECF No. 1 at 6-10.) On August 22, 2016, Defendant filed a Motion to Dismiss the Complaint. (ECF No. 7.) Plaintiffs then filed an Amended Complaint on August 3, 2016, pursuant to Rule 15(a)(1)(B). (ECF No. 13.) In the Amended Complaint, Plaintiffs asserted the same claims as they did in the Complaint, but added a claim for breach of contract and made the TCPA claim only applicable to Cheryl Morris. (Id. at 10-11.) Defendant moved to dismiss the Amended Complaint on August 22, 2016. (ECF No. 18.) Plaintiffs filed opposition to Defendant's Motion to Dismiss on September 23, 2016, to which Defendant filed a Reply on September 30, 2016. (ECF Nos. 26, 27.)

         II. JURISDICTION

         The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332(a)(1) based on Plaintiffs' allegations that there is complete diversity of citizenship between Plaintiffs and Defendant, and the amount in controversy herein exceeds the sum of Seventy-Five Thousand ($75, 000.00) Dollars, exclusive of interest and costs. (See ECF No. 1 at 1 ¶¶ 1-2, 4.) Additionally, the court has jurisdiction via 28 U.S.C. § 1331 based on Plaintiffs' claims alleging violation of the FDCPA and the TCPA, laws of the United States.

         III. LEGAL STANDARD

         A motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) . . . does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.”). To be legally sufficient a pleading 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).

         A motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support her claim and would entitle her to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan Labs., Inc., 7 F.3d at 1134. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         IV. ANALYSIS

         A. The ...


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