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O'Connell v. Bayview Loan Servicing, LLC

United States District Court, E.D. Wisconsin

March 17, 2016

JAMES O’CONNELL, Plaintiff,
v.
BAYVIEW LOAN SERVICING, LLC, Defendant.

DECISION AND ORDER

WILLIAM E. DUFFIN/ U.S. Magistrate Judge.

I. Facts and Procedural History

James O’Connell filed the present action as a proposed class action on November 10, 2015, alleging that Bayview Loan Servicing, LLC violated the Fair Debt Collection Practices Act (FDCPA). (ECF No. 1.) According to the complaint, O’Connell defaulted on a mortgage loan and the holder of that loan foreclosed upon the property. (ECF No. 1, ¶¶ 7-12.) The mortgagee waived any deficiency judgment and the redemption period expired on October 27, 2015. (ECF No. 1, ¶¶ 13-15.) On that day, Bayview took over servicing the loan. (ECF No. 1-1 at 3.) On November 3, 2015 Bayview mailed O’Connell certain documents that O’Connell contends were communications in connection with the collection of a debt. (ECF No. 1-1.) O’Connell contends that Bayview violated the FDCPA when it failed to timely provide him with certain information required by the F DC PA.

Bayview moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6). (ECF Nos. 12, 13.) O’Connell responded (ECF No. 14) and Bayview replied (ECF No. 15). All parties consented to the full jurisdiction of a magistrate judge. (ECF Nos. 3, 8.) Bayview’s motion to dismiss is now ready for resolution.

II. Motion to Dismiss Standard

“To state a claim, a complaint must first provide ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’” Bonnstetter v. City of Chi., 811 F.3d 969,, 2016 U.S. App. LEXIS 1795, 7 (7th Cir. Feb. 3, 2016) (quoting Fed.R.Civ.P. 8(a)(2)). “A pleader’s responsibility is to state a claim for relief that is plausible on its face.” Huri v. Office of the Chief Judge of the Circuit Court of Cook Cnty., 804 F.3d 826, 832-33 (7th Cir. 2015). In deciding a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim the court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Id.

III. Analysis

“Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall” provide the consumer with a written notice stating the amount of the debt, the name of the creditor, that the consumer has 30 days to dispute the debt, the consumer’s right to demand verification of the debt, and the consumer’s right to learn the identity of the original creditor. 15 U.S.C. § 1692g(a). The complaint alleges that Bayview failed to provide this required information after its initial communication with O’Connell dated November 3, 2015.

Bayview contends that it was not required to provide the information set forth in 15 U.S.C. § 1692g(a) because the letter it sent to O’Connell was not an “initial communication with a consumer in connection with the collection of any debt.” Rather, it was a “hello letter” sent to comply with the servicing transfer notification requirements of the Real Estate Settlement Procedures Act (RESPA), see 12 U.S.C. § 2605.

The text of 15 U.S.C. § 1692g(a) makes clear that the communication need not itself be an attempt to collect a debt but rather need only be “in connection with” an attempt to collect a debt. See Grden v. Leikin Ingber & Winters PC, 643 F.3d 169, 173 (6th Cir. 2011). But not every communication from a debt collector to a consumer is a “communication with a consumer in connection with the collection of any debt.” Gburek v. Litton Loan Servicing LP, 614 F.3d 380, 384-85 (7th Cir. 2010). Although there is no bright-line rule for determining when a communication is made in connection with the collection of a debt so as to come within the scope of the F D C PA, the Court of Appeals for the Seventh Circuit has identified three factors relevant to making that determination: (1) whether the communication demanded payment; (2) the nature of the parties’ relationship; and (3) the objective purpose and context of the communication. Id. at 385. “[W]hether a communication was sent ‘in connection with’ an attempt to collect a debt is a question of objective fact, to be proven like any other fact.” Id. at 386 (quoting Ruth v. Triumph Partnerships, 577 F.3d 790, 798 (7th Cir. 2009)).

The correspondence at issue here was attached to the complaint. As such, the court may consider it in assessing the sufficiency of the complaint for purposes of a motion to dismiss under Rule 12(b)(6). See Fed. R. Civ. P. 10(c). The arguments that O’Connell presents in response to the motion to dismiss focus exclusively on the two page letter contained within Exhibit A to the complaint. (ECF No. 1-1 at 3-4.) Thus, this court’s analysis is similarly limited to whether that letter was a communication in connection with an attempt to collect a debt.

The letter, addressed, “Dear Customer, ” states that “Bayview Loan Servicing, LLC would like to take this opportunity to say ‘welcome.’” (ECF No. 1-1 at 3.) It proceeds to state that the loan that had been serviced by Wells Fargo Home Mortgage was transferred to Bayview as of October 27, 2015. (ECF No. 1-1 at 3.) The letter then states, “Bayview Loan Servicing, LLC will start accepting mortgage payments on 10/27/2015. As of that date, all payments and correspondence should be addressed to Bayview Loan Servicing, LLC.” (ECF No. 1-1 at 3.) The second page of the letter provides various other information, including the availability of “Automatic Pay, Pay by Phone, and other fee-based payment options, ” and states, “We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report.” (ECF No. 1-1 at 4.)

With respect to payments, the letter states, “Should you not receive a billing statement prior to the due date, please mail your payment without the coupon to the address above (be sure to write the new loan number on the check).” (ECF No. 1-1 at 4.) The letter also notes, “This transfer does not affect the status of any pending Bankruptcy, or Foreclosure proceedings.” (ECF No. 1-1 at 3.) Finally, the letter concludes:

Bayview Loan Servicing, LLC, is a debt collector. This letter is an attempt to collect a debt, and any information obtained will be used for that purpose. To the extent that your obligation has been discharged or is subject to an automatic stay in bankruptcy this notice is for information purposes only and ...

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