MD Class Action | ADEMILUYI v. PennyMAC MORTGAGE INVESTMENT TRUST HOLDINGS - FDCPA claims survive M-T-D with additional "leave to amend"


MD Class Action | ADEMILUYI v. PennyMAC MORTGAGE INVESTMENT TRUST HOLDINGS – FDCPA claims survive M-T-D with additional “leave to amend”

MD Class Action | ADEMILUYI v. PennyMAC MORTGAGE INVESTMENT TRUST HOLDINGS – FDCPA claims survive M-T-D with additional “leave to amend”


CHRISTIE ADEMILUYI, Plaintiff, on behalf of herself and 

others similarly situated,



LLC, et al., Defendants.

Civil Action No. ELH-12-0752.
United States District Court, D. Maryland.
March 11, 2013.



The centerpiece of plaintiff’s claims is the allegation that the PennyMac defendants engaged in debt collection activity without the requisite State of Maryland license. Nonetheless, because the MCALA does not provide a private right of action, plaintiff cannot obtain relief directly under that statute. See B.R. § 7-401; Fontell, 870 F. Supp. 2d at 410. Rather, plaintiff claims that, because defendants engaged in unlicensed debt collection activity in violation of Maryland law, they also violated the FDCPA; that defendants’ unlicensed debt collection activities constituted mortgage fraud; and that defendants were unjustly enriched as a result of their unlawful activity.

In response, defendants offer a number of contentions. First, defendants argue that, for plaintiff to prevail as to any cause of action against PennyMac Trust, she must establish a basis to pierce the corporate veil. In their view, the Complaint does not allege facts sufficient to do so in this case. Second, defendants maintain that the PennyMac defendants are not collection agencies under the MCALA. And third, defendants contend that the Complaint fails to state a claim for relief under the FDCPA, or for mortgage fraud, unjust enrichment, or declaratory and injunctive relief.

b. The Fair Debt Collection Practices Act

ii. Activity prohibited by 15 U.S.C. §§ 1692e(5) & 1692f of the FDCPA

Whether the Notice itself was sent to collect the debt is not at issue. As noted, 15 U.S.C. § 1692e and § 1692f apply to unfair or deceptive communications “in connection with” the collection of any debt. Thus, even accepting defendants’ assertion that the Notice was not sent to collect a debt, the allegations are sufficient to show that it was sent “in connection with” the collection of a debt, which is all that the FDCPA requires. See, e.g., Wilson, 443 F.3d at 376 (holding that debt collector’s “actions surrounding the foreclosure proceeding were attempts to collect a debt”) (emphasis added).
[. . . ]
Defendants fare no better in connection with alleged indirect debt collection activities. Plaintiff concedes that PennyMac Holdings did not directly undertake to service the debt itself, but claims that the FDCPA applies to debt collectors that collect debts both directly and indirectly. 15 U.S.C. § 1692a(6). Plaintiff’s theory of liability under 15 U.S.C. §§ 1692e and 1692f is that PennyMac Holdings engaged in debt collection activity indirectly, through PennyMac Services and Citi as its servicing agents. SeeOpp. at 24, 28-32.

For the reasons discussed earlier, I agree with plaintiff. A debt collector is not immunized from liability for collection activities merely because such actions are undertaken indirectly through an agent. 

[ . . . ]
Finally, I am not convinced that, as defendants argue, PennyMac Services’s direct affiliation with PennyMac Holdings distinguishes this case from instances in which a debt collector engaged in debt collection activity through an unaffiliated third party, as in Bradshaw. So far as the Court is aware, the text of the FDCPA does not differentiate between a debt collector acting through affiliated and unaffiliated third-party intermediaries. Furthermore, as plaintiff aptly notes, permitting a corporate entity to evade liability for indirect collection activity undertaken through a corporate affiliate would allow corporate entities to circumvent the FDCPA by relying on affiliated entities, as opposed to third parties. Such a result contradicts this Court’s obligation to construe broadly the FDCPA to effectuate its remedial purpose. Glover v. F.D.I.C., 698 F.3d 139, 149 (3d Cir. 2012).In sum, I conclude that it is appropriate to permit plaintiff’s FDCPA claims to proceed on both direct and indirect collection theories, under both 15 U.S.C. § 1692e(5) and § 1692f.
[ . . . ]

V. Remedies disputed by Defendants

First, relying on case law governing claims for intentional inflication of emotional distress, defendants contend that plaintiff is not entitled to damages for emotional distress.[20] Defendants’ position is incorrect. Courts have found that damages for emotional distress are available as actual damages under the FDCPA. See, e.g.,McCullough v. Johnson, Rodenburgh & Lauinger, LLC, 637 F.3d 939, 957-58 (9th Cir. 2011) (upholding jury award of damages for emotional distress under FDCPA). Damages awarded under the FDCPA for emotional distress may be slight, but they are nonetheless viable. See, e.g., Ford v. Consigned Debts & Collections, Inc., Civ. No. 09-3102 (NLH) (AMD), 2010 WL 5392643, at *5 (D.N.J. Dec. 21, 2010) (collecting cases and stating that “awards for actual damages are minimal for emotional distress absent any indication that mental health treatment has been obtained or that the emotional distress has concretely affected a plaintiff’s personal or professional life”).

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