Mellentine v. Ameriquest Mortgage Company | 6th Circuit - The lawfirm of ORLANS ASSOCIATES P.C. is liable under FDCPA in Michigan

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Mellentine v. Ameriquest Mortgage Company | 6th Circuit – The lawfirm of ORLANS ASSOCIATES P.C. is liable under FDCPA in Michigan

Mellentine v. Ameriquest Mortgage Company | 6th Circuit – The lawfirm of ORLANS ASSOCIATES P.C. is liable under FDCPA in Michigan

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

ANDREW MELLENTINE; DEBRA MELLENTINE,
Plaintiffs-Appellants,

v.

AMERIQUEST MORTGAGE COMPANY; WM
SPECIALTY MORTGAGE LLC, Without Recourse;
CITI RESIDENTIAL LENDING, INC.; MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INC.;
CHASE HOME FINANCE, LLC; JP MORGAN
CHASE BANK NA; ORLANS ASSOCIATES P.C.;
UNKNOWN LENDERS;
Defendants-Appellees.

ON APPEAL FROM THE
UNITED STATES DISTRICT
COURT FOR THE EASTERN
DISTRICT OF MICHIGAN

BEFORE: MOORE and COLE, Circuit Judges; ROSE, District Judge.*
COLE, Circuit Judge. Plaintiffs-Appellants Andrew and Debra Mellentine filed suit against
a number of defendants who, among other things, hold or service a mortgage on their residential
property. In district court, the case was narrowed to claims under two federal statutes, the Fair Debt
Collection Practices Act (“FDCPA”) and the Real Estate Settlement and Procedures Act (“RESPA”).
The Mellentines now appeal the district court’s grant of Defendants’ motions to dismiss under
Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be
granted and Rule 12(c) for judgment on the pleadings. For the following reasons, we REVERSE and
REMAND in part and AFFIRM in part.

[…]

In early May 2011, Orlans, Ameriquest, and CitiRL all filed separate motions to dismiss for
failure to state a claim under Rule 12(b)(6). The Mellentines filed a single response on May 24,
2011. Chase, JP Morgan, MERS, and WM subsequently filed a combined motion for judgment on
the pleadings under Rule 12(c). The Mellentines then filed a response to the Rule 12(c) motion and
also moved for judgment on the pleadings themselves. In their response to the motion to dismiss,
the Mellentines withdrew their TILA and HOEPA claims, leaving only their RESPA and FDCPA
claims at issue.

[…]

II. Standard of Review

Whether the district court properly dismissed a complaint pursuant to Rule 12(b)(6) is a
question of law subject to review de novo. Kottmyer v. Maas, 436 F.3d 684, 688 (6th Cir. 2006).
The court must construe the complaint in a light most favorable to the plaintiff and accept all factual
allegations as true. Kottmyer, 436 F.3d at 688. The factual allegations must “raise a right to relief
above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In other words,
the Rule 12(b)(6) standard requires that a plaintiff provide “enough facts to state a claim to relief that
is plausible on its face.” Id. at 569.

“While legal conclusions can provide the framework of a complaint, they must be supported
by factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Bare allegations without a
factual context do not create a plausible claim. Ctr. for Bio-Ethical Reform, Inc. v. Napolitano, 648
F.3d 365, 374 (6th Cir. 2011). A complaint must “contain[] direct or inferential allegations
respecting all the material elements under some viable legal theory.” Mezibov v. Allen, 411 F.3d
712, 716 (6th Cir. 2005). The bare assertion of legal conclusions is not enough to constitute a claim
for relief. Id. at 716.

A ruling on a motion for judgment on the pleadings under Rule 12(c) is generally reviewed
under the same standard as a Rule 12(b)(6) motion. EEOC v. J.H. Routh Packing Co., 246 F.3d 850,
851 (6th Cir. 2001).

III. FDCPA Claims

The purpose of the FDCPA is to “eliminate abusive debt collection practices by debt
collectors, to insure that those debt collectors who refrain from using abusive collection practices
are not competitively disadvantaged and to promote consistent State action to protect consumers
against debt collection abuses.” 15 U.S.C. § 1692(e). Liability under the FDCPA can only attach to
those who meet the statutory definition of a “debt collector.”

A. Claim Against Orlans

The Mellentines seek relief against Orlans under the FDCPA. The district court held that a
law firm enforcing a security interest in a mortgage could not meet the definition of a “debt
collector” under the FDCPA. Since the district court ruled in the instant case, this Court has ruled
to the contrary. Glazer v. Chase Home Finance LLC, No. 10-3416, 2013 WL 141699, at *5-9 (6th
Cir. Jan. 14, 2013). In Glazer we held that “mortgage foreclosure is debt collection under the Act.
Lawyers who meet the general definition of a ‘debt collector’ must comply with the FDCPA when
engaged in a mortgage foreclosure. And a lawyer can satisfy that definition if his principal business
purpose is mortgage foreclosure or if he ‘regularly’ performs this function.” Id. at *9. In light of
Glazer, we are left only to determine if the Mellentines’ complaint is sufficient to allege that Orlans
is a debt collector under the FDCPA.

[…]

B. Claim Against Chase

The Mellentines appeal the RESPA claim against Chase. The district court dismissed this
claim pursuant to Chase’s Rule 12(c) motion to dismiss. The court held that the Mellentines failed
to plead either actual damages or a pattern or practice of noncompliance as is required to recover
under RESPA § 2605(f). We find that the complaint pleads sufficient facts to state a claim under
REPSA.

A ruling on a motion for judgment on the pleadings under Rule 12(c) is generally reviewed
under the same standard as a Rule 12(b)(6) motion. J.H. Routh Packing Co., 246 F.3d at 851. “[A]
complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations,”
however, it must assert sufficient facts to provide the defendant with “fair notice of what the . . .
claim is and the ground upon which it rests.” Twombly, 550 U.S. at 555 (internal quotation marks
and citations omitted) (second alteration in original). In assessing a motion to dismiss, a Court
evaluates whether “the plaintiff plead[ed] factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “If a
reasonable court can draw the necessary inference from the factual material stated in the complaint,
the plausibility standard has been satisfied.” Keys v. Humana, Inc., 684 F.3d 605, 610 (6th Cir.
2012).

The Mellentines have met this standard. They have alleged in their complaint that Chase
“sen[t] a signed response that [was] 10 days late” to their QWR. They furthermore alleged “damages
in an amount not yet ascertained, to be proven at trial.” Section 2605(e) of RESPA sets the response
time within which loan servicers must respond to QWRs—60 days at the time the Mellentines are
alleged to have sent their request. Because the complaint alleges that Chase submitted its response
to the QWR after the statutory time period, the Mellentines’ claim sufficiently sets forth facts upon
which relief can be granted.

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