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Ashley v. Rushmore Loan Management Services LLC

United States District Court, D. South Carolina, Florence Division

March 27, 2017

Wayne Ashley, Plaintiff,
v.
Rushmore Loan Management Services, LLC and U.S. Bank National Association, Defendants.

          ORDER

          R. Bryan Harwell United States District Judge.

         This matter is before the Court for resolution of Defendants' Joint Motion to Dismiss. See ECF No. 5. The Court denies the motion for the reasons herein.[1]

         Background

         On June 16, 2016, Plaintiff Wayne Ashley filed this action in this Court against Rushmore Loan Management Services, LLC (“Rushmore”) and U.S. Bank National Association (“U.S. Bank”) (collectively, “Defendants”) asserting various claims related to his efforts at loan modification of his residential mortgage. See ECF No. 1. The allegations in Plaintiff's complaint indicate that U.S. Bank is the mortgage holder and that Rushmore acts as the mortgage servicer as well as debt collector. See Id. at ¶¶ 5-9, 11, 21. He alleges Defendants intentionally delayed his requests for a loan modification, never actually intended to provide him an affordable loan modification, wrongfully applied funds from a mortgage assistance program, and never notified him of a pending foreclosure action. Id. at ¶¶ 10-46. Plaintiff asserts two federal causes of action and seven state causes of action, specifically: (1) violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605 and 12 C.F.R. § 1024.41; (2) violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692; (3) violation of the South Carolina Unfair Trade Practices Act, SC Code Ann. §§ 39-5-10 et seq.; (4) fraud; (5) negligence; (6) negligent training and supervision; (7) reckless and wanton training and supervision; (8) breach of contract; and (9) intentional infliction of emotional distress.[2] Id. at ¶¶ 47-104. Significantly, Plaintiff seeks monetary damages, costs, and attorney's fees, but does not seek declaratory, equitable, or other discretionary relief. See Id. at pp. 22-23 (prayer for relief).

         On July 14, 2016, Defendants filed a joint motion to dismiss arguing the Court should abstain from exercising jurisdiction over this action pursuant to both Younger v. Harris, 401 U.S. 37 (1971), and Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976), because there is an ongoing foreclosure proceeding in state court. See ECF No. 5. Defendants have attached various exhibits to their motion to dismiss, including copies of court documents from the state foreclosure proceeding, which was filed prior to the instant federal action. See ECF Nos. 5-2 through 5-17. These documents indicate the following chronology of events:

• December 13, 2013: U.S. Bank filed a foreclosure action[3] against Plaintiff in the Court of Common Pleas for Florence County, South Carolina. See ECF No. 5-4.
• July 10, 2014: After Plaintiff failed to respond, the state court held a foreclosure hearing and entered a judgment of foreclosure and sale. See ECF No. 5-8.
• July 25, 2014: Plaintiff appeared and filed a motion to vacate the judgment of foreclosure and sale.[4] See ECF No. 5-10.
• January 12, 2015: The state court granted Plaintiff's motion to vacate. See ECF No. 5-14.
• February 6, 2015: Plaintiff filed an answer to the foreclosure complaint. See ECF Nos. 5-15 & 8-1.

         Besides reviewing these state court filings attached to Defendants' motion to dismiss, the Court has also reviewed the Florence County Public Index and takes judicial notice[5] that the foreclosure action is still pending in state court.[6]

         Alternatively, if the Court declines to abstain from exercising jurisdiction, Defendants seek dismissal of each of Plaintiff's causes of action under Federal Rule of Civil Procedure 12(b)(6) for failure to state a plausible claim. See ECF No. 5. Plaintiff filed a response in opposition on August 1, 2016, and Defendants filed a reply on August 11, 2016. See ECF Nos. 8 & 9.

         Discussion

         Defendants contend the Court should dismiss this action on abstention grounds under Younger and Colorado River because there is an ongoing foreclosure ...


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