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SHOUP vs. McCurdy & CANDLER, LLC | 11th Cir. Court of Appeals “MERS is NOT a CREDITOR, The complaint states a plausible claim for relief under the FDCPA”

SHOUP vs. McCurdy & CANDLER, LLC | 11th Cir. Court of Appeals “MERS is NOT a CREDITOR, The complaint states a plausible claim for relief under the FDCPA”


IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_________________________
No. 10-14619
__________________________
D.C. Docket No. 1:09-cv-02598-JEC

JONI LEE SHOUP,
on behalf of herself and all others similarly situated,
Plaintiff – Appellant,

versus

MCCURDY & CANDLER, LLC,
Respondent – Appellee.
__________________________
Appeal from the United States District Court
for the Northern District of Georgia

___________________________
(March 30, 2012)

Before DUBINA, Chief Judge, CARNES, Circuit Judge, and FORRESTER,*
District Judge.

*Honorable J. Owen Forrester, United States District Judge for the Northern District of
Georgia, sitting by designation.

PER CURIAM:

Joni Shoup filed a lawsuit against McCurdy & Candler, LLC alleging a
violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e. The
district court dismissed her complaint for failure to state a claim under Federal
Rule of Civil Procedure 12(b)(6), and Shoup appeals, contending that her
complaint stated a valid claim for statutory damages under the FDCPA because
McCurdy & Candler’s initial communication letter falsely said that its client,
Mortgage Electronic Registration Systems, Inc. (MERS), was Shoup’s “creditor.”

I.

Shoup bought a home in Georgia in 2003. To finance her new home, she
entered into a mortgage contract with America Wholesale Lender. The contract
stated that America Wholesale Lender was the “Lender,” but it also described
MERS as “the grantee under” the mortgage contract and as “a separate corporation
that is acting solely as a nominee for Lender and Lender’s successors and assigns.”
Shoup defaulted on her mortgage, and MERS’ law firm, McCurdy &
Candler, sent Shoup an initial communication letter. That letter was entitled,
“NOTICE PURSUANT TO FAIR DEBT COLLECTION PRACTICES ACT 15
USC 1692,” and stated that its purpose was “an attempt to collect a debt.” The
letter identified MERS as “the creditor on the above referenced loan.” (Emphasis
added.)

Soon after receiving that letter, Shoup filed a complaint against McCurdy &
Candler under the FDCPA. She alleged that MERS is not a “creditor” as defined
in the FDCPA because it did not offer or extend credit to Shoup and she does not
owe MERS a debt. Instead, according to the complaint, MERS is “a company that
tracks, for its clients, the sale of promissory notes and servicing rights.” Shoup,
therefore, alleged that McCurdy & Candler violated the FDCPA by falsely stating
in the initial communication letter that MERS was Shoup’s “creditor.”1
McCurdy & Candler filed a motion to dismiss under Rule 12(b)(6), which
the district court granted. Finding that MERS was a “creditor” under the FDCPA,
the court concluded that Shoup’s complaint did not state a claim for statutory
damages under the FDCPA. The court also concluded that, even if MERS was not
a “creditor,” calling MERS one was harmless. This is Shoup’s appeal.

II.

We review de novo the grant of a motion to dismiss under Rule 12(b)(6) for
failure to state a claim, “accepting the allegations in the complaint as true and
construing them in the light most favorable to the plaintiff.” Belanger v. Salvation
Army, 556 F.3d 1153, 1155 (11th Cir. 2009). “A complaint must state a plausible
claim for relief, and ‘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.’” Sinaltraninal v. Coca-Cola Co.,
578 F.3d 1252, 1261 (11th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662,
129 S.Ct. 1937, 1949 (2009)) (alteration omitted). We also review de novo
matters of statutory interpretation. Belanger, 556 F.3d at 1155.

Under the FDCPA, “[a] debt collector may not use any false, deceptive, or
misleading representation or means in connection with the collection of any debt,”
15 U.S.C. § 1692e, which includes “[t]he use of any false representation or
deceptive means to collect or attempt to collect any debt or to obtain information
concerning a consumer,” id. § 1692e(10). The statute defines “creditor” as “any
person who offers or extends credit creating a debt or to whom a debt is owed, but
such term does not include any person to the extent that he receives an assignment
or transfer of a debt in default solely for the purpose of facilitating collection of
such debt for another.” Id. § 1692a(4). And “[t]he FDCPA provides that ‘any
debt collector who fails to comply with any provision of this subchapter with
respect to any person is liable to such person’ for [actual and statutory] damages
and costs.” Bourff v. Lublin, __ F.3d __, slip op. at 6, No. 10-14618 (11th Cir.
Mar. 15, 2012) (quoting 15 U.S.C. § 1692k(a)).

Our decision in this case is controlled by our recent decision in Bourff. In
that case a law firm sent a letter to the plaintiff in “AN ATTEMPT TO COLLECT
A DEBT.” Id. at __, slip op. at 3 (quotation marks omitted). That letter identified
a loan servicer as “the creditor on the above-referenced loan.” Id. at __, slip op. at
3 (quotation marks omitted). The plaintiff’s complaint alleged that the loan
servicer was not a “creditor” under the FDCPA, id., and that the law firm violated
the FDCPA’s “prohibition on false, deceptive or misleading representations by
falsely stating in its collection notice that [the servicer] was the ‘creditor’ on [the
plaintiff’s] loan,” id. at __, slip op. at 5 (some quotation marks omitted). The
allegation that the loan servicer was not a “creditor” was enough to state a
plausible claim for relief under the FDCPA. Id. at __, slip op. at 6–7.

Here, viewing the allegations in the complaint in the light most favorable to
Shoup, she has alleged that MERS did not offer or extend credit to her and that she
does not owe a debt to MERS. Because the FDCPA defines a “creditor” as “any
person who offers or extends credit creating a debt or to whom a debt is owed,” 15
U.S.C. § 1692a(4), Shoup has alleged that MERS is not a “creditor” under the
FDCPA. Finally, because the complaint alleges that McCurdy & Candler’s initial
communication letter falsely identified MERS as her “creditor,” the complaint
states a plausible claim for relief under the FDCPA. See Bourff, __ F.3d at __,
slip op. at 6–7. And because the FDCPA provides a claim for statutory damages
based on any violation of the statute, see 15 U.S.C. § 1692k(a)(2), McCurdy &
Candler’s alleged violation of the FDCPA is not harmless. See Muha v. Encore
Receivable Mgmt., Inc., 558 F.3d 623, 629 (7th Cir. 2009) (“Were the plaintiffs
seeking actual damages rather than just statutory damages, they would have to
present some evidence that they were misled to their detriment.”); Baker v. G.C.
Servs. Corp., 677 F.2d 775, 780 (9th Cir. 1982) (“The statute clearly specifies the
total damage award as the sum of the separate amounts of actual damages,
statutory damages and attorney fees. There is no indication in the statute that
award of statutory damages must be based on proof of actual damages.”). The
district court erred in dismissing Shoup’s complaint under Rule 12(b)(6).

REVERSED AND REMANDED.

footnote:

1 Shoup also brought her claim on behalf of a putative class and sought class certification.
The district court did not rule on that issue, so it is not before us on appeal.

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BOURFF vs. RUBIN LUBLIN, LLC | GA 11th Cir. Appeals Court “The identity of the “creditor” in these notices is a serious matter, FDCPA”

BOURFF vs. RUBIN LUBLIN, LLC | GA 11th Cir. Appeals Court “The identity of the “creditor” in these notices is a serious matter, FDCPA”


IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

________________________
No. 10-14618
________________________
D.C. Docket No. 1:09-cv-02437-JEC

MICHAEL BOURFF,
Plaintiff – Appellant,

versus

RUBIN LUBLIN, LLC,
Defendant – Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(March 15, 2012)

Before EDMONDSON and PRYOR, Circuit Judges, and BOWDRE,* District
Judge.
*

PER CURIAM:
This appeal involves a Fair Dept Collection Practices Act claim in which a
“false representation” has been alleged. Michael Bourff appeals the district
court’s dismissal of his civil action under 15 U.S.C. §1692, the Fair Debt
Collection Practices Act (“FDCPA”), for failure to state a claim. The district court
concluded that Bourff’s claim was covered by the FDCPA but that Bourff did not
allege acts that violated the FDCPA. We vacate the dismissal and remand the case
for further proceedings.

Background

This case involves a $195,000 loan by America’s Wholesale Lender
(“AWL”) to Michael Bourff. The loan was evidenced by a note, was used to
purchase property in Fulton County, Georgia, and was secured by a deed to the
property purchased.1

The basics of this case are not in dispute. In April 2009 Bourff failed to
make a payment on the loan and caused default under the terms of the note. AWL
later assigned the loan and the security deed to BAC Home Loan Servicing, LP
f/k/a Countrywide Home Loans Servicing, LP (“BAC”) for the purpose of
collecting on the note. BAC in turn hired defendant law firm, Rubin Lublin, LLC
(“Rubin Lublin”), to assist in collection efforts. In late May 2009 Rubin Lublin
sent a notice to Bourff stating that they had been retained to help collect on the
loan. The notice clearly stated that it was being sent as “NOTICE PURSUANT
TO FAIR DEBT COLLECTION PRACTICES ACT 15 U.S.C. § 1692[,]” and that
it was “AN ATTEMPT TO COLLECT A DEBT.” The notice also identified BAC
as “the creditor on the above-referenced loan.” (Compl. Ex. A.)

Shortly after receiving the notice, Bourff filed this civil action against Rubin
Lublin pursuant to the FDCPA. Bourff claimed that the notice sent by Rubin
Lublin violated §1692e of the FDCPA by falsely representing that BAC was the
“creditor” on the loan, despite entities in BAC’s position being specifically
excluded from the definition of “creditor” by the language of the FDCPA. Rubin
Lublin filed a motion to dismiss under Rule 12(b)(6), and the district court
dismissed the action for failure to state a claim under the FDCPA. The district
court concluded that BAC was a “creditor” according to the ordinary meaning of
the term and that, even if BAC was no creditor, the error in listing it as such was a
harmless mistake in the use of the term because BAC had the power to foreclose
on the property or otherwise to act as the creditor on the loan. (Order 11.)

Standard of Review

We review the grant of a motion to dismiss de novo; and in so doing, we
accept the allegations in the complaint as true while construing them in the light
most favorable to the Plaintiff. Powell v. Thomas, 643 F.3d 1300, 1302 (11th Cir.
2011). The interpretation of a statute is likewise reviewed de novo as a purely
legal matter. Belanger v. Salvation Army, 556 F.3d 1153, 1155 (11th Cir. 2009).
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, 129 S.Ct.
1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1974
(2007)). Stating a plausible claim for relief requires pleading “factual content that
allows the court to draw the reasonable inference that the defendant is liable for
the misconduct alleged”: which means “more than a sheer possibility that a
defendant has acted unlawfully.” Id.

DISCUSSION

The FDCPA limits what is acceptable in attempting debt collection. The
FDCPA applies to the notice here in question because the notice was an attempt at
debt collection. The notice stated that Rubin Lublin had been retained to “collect
the loan,” stated in bold capital letters that it was “an attempt to collect a debt,”
and advised Bourff to contact Rubin Lublin to “find out the total current amount
needed to either bring your loan current or to pay off your loan in full.” (Compl.
Ex. A.)

The FDCPA, among other things, mandates that, as part of noticing a debt, a
“debt collector” must “send the consumer a written notice containing” — along
with other information — “the name of the creditor to whom the debt is owed[.]”
15 U.S.C. §1692g(a)(2). In addition, the Act prohibits a “debt collector” from
using “any false, deceptive, or misleading representation or means in connection
with the collection of any debt.” 15 U.S.C. §1692e. The use of “or” in §1692e
means that, to violate the FDCPA, a representation by a “debt collector” must
merely be false, or deceptive, or misleading. A false representation in connection
with the collection of a debt is sufficient to violate the FDCPA facially, even
where no misleading or deception is claimed.

Plaintiff claims that Rubin Lublin violated the prohibition on “false,
deceptive, or misleading representation[s]” by falsely stating in its collection
notice that BAC was the “creditor” on Bourff’s loan. The identity of the
“creditor” in these notices is a serious matter. For the FDCPA, “creditor” is
defined this way:

“The term ‘creditor’ means any person who offers or extends credit
creating a debt or to whom a debt is owed, but such term does not include
any person to the extent that he receives an assignment or transfer of a debt
in default solely for the purpose of facilitating collection of such debt for
another.” 15 U.S.C. §1692a(4).

Plaintiff’s complaint alleges that Bourff defaulted on the loan in April 2009
by failing to tender the required monthly payment. The complaint further alleges
that BAC “received an assignment of the security deed and debt on June 19, 2009 .
. ., while the Plaintiff’s loan was in default, for the purpose of facilitating
collection of such debt for another, presently unknown, entity.” (Compl. ¶13)
Accepting Plaintiff’s allegations as true and construing them in the light most
favorable to the Plaintiff, the statement on the May 2009 notice that BAC was
Plaintiff’s “creditor” was a false representation and was made by a “debt collector”
as defined in §1692a of the FDCPA.

The FDCPA provides that “any debt collector who fails to comply with any
provision of this subchapter with respect to any person is liable to such person…”
for potential damages and costs. 15 U.S.C. §1692k(a). The complaint on its face,
taken as true and viewed in the light most favorable to Plaintiff, states a claim
upon which relief may be granted under the FDCPA. As such, we vacate the
dismissal and remand this case to the district court for further proceedings.

VACATED and REMANDED.

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11th Circuit Reversed/Remands “the federal court lacked jurisdiction because although the petition referenced federal laws, none of the claims relied on federal law”

11th Circuit Reversed/Remands “the federal court lacked jurisdiction because although the petition referenced federal laws, none of the claims relied on federal law”


IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

WEKESA O. MADZIMOYO,
Plaintiff-Appellant,

versus

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., f.k.a. The Bank of New York Trust Company, N.A.,
JP MORGAN CHASE BANK, N.A.,
GMAC MORTGAGE, LLC,
MCCURDY & CANDLER, LLC,
ANTHONY DEMARLO, Attorney,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(September 7, 2011)

Before TJOFLAT, CARNES and KRAVITCH, Circuit Judges.

PER CURIAM:

Wekesa Madzimoyo, proceeding pro se, appeals the district court’s
judgment on the pleadings in favor of the defendants. Because we conclude that
the district court lacked removal jurisdiction, we vacate and remand.

In July 2009, Madzimoyo filed an emergency petition in state court seeking
a temporary restraining order (TRO) to stop foreclosure proceedings on his home
by defendants Bank of New York Mellon Trust Company, JP Morgan Chase Bank,
McCurdy & Candler, and attorney Anthony DeMarlo. According to the petition,
none of the defendants was the original lender and there was no evidence that the
original lender had transferred its rights to any defendant. In support of his
petition, Madzimoyo submitted correspondence sent to the defendants in which he
sought to verify their rights over the mortgage. Some of the correspondence
referenced the Fair Debt Collection Practice Act (FDCPA) and Regulation Z, the
Truth-in-Lending regulations. The state court issued the TRO and scheduled a
hearing on the petition to stop the foreclosure.

The day before the scheduled hearing in state court, the defendants removed
the petition to federal district court in the Northern District of Georgia, asserting
federal-question jurisdiction because Madzimoyo had alleged violations of the
FDCPA and Regulation Z. Madzimoyo moved to remand to state court, disputing
that he raised any basis for federal jurisdiction.

The magistrate judge denied the motion to remand, finding that
Madzimoyo’s petition raised federal questions under the FDCPA and Regulation
Z. The defendants then moved for judgment on the pleadings. In a brief in
support of the motion, the defendants argued that the FDCPA and Regulation Z
claims failed because Madzimoyo had not alleged any violation of these statutes.
The magistrate judge recommended that the motion for judgment on the
pleadings be granted. The district court adopted the recommendation, over
Madzimoyo’s objections, and granted judgment on the pleadings. This appeal
followed.

On appeal, both parties address the merits of the order granting judgment on
the pleadings, and there is no discussion of the district court’s jurisdiction over
Madzimoyo’s action. Nevertheless, we are “obliged to notice any lack of
jurisdiction regardless of whether the question is raised by the parties themselves.”
Edge v. Sumter Cnty. Sch. Dist., 775 F.2d 1509, 1513 (11th Cir. 1985).

We review questions of subject-matter jurisdiction de novo. Romero v.
Drummond Co., 552 F.3d 1303, 1313 (11th Cir. 2008). We consider sua sponte
whether the district court had removal jurisdiction. Cotton v. Mass. Mut. Life Ins.
Co., 402 F.3d 1267, 1280 (11th Cir. 2005).

Under the removal statute:
Any civil action of which the district courts have original jurisdiction
founded on a claim or right arising under the Constitution, treaties or
laws of the United States shall be removable without regard to the
citizenship or residence of the parties. Any other such action shall be
removable only if none of the parties in interest properly joined and
served as defendants is a citizen of the State in which such action is
brought.

28 U.S.C. § 1441(b). In other words, to be removable on federal-question
jurisdiction grounds, the case must arise under federal law. See Merrell Dow
Pharm. Inc. v. Thompson, 478 U.S. 804, 807-08 (1986). The “well-pleaded
complaint” rule instructs that a case does not arise under federal law unless a
federal question is presented on the face of the plaintiff’s complaint. Id. at 808;
Kemp v. Int’l Bus. Mach. Corp., 109 F.3d 708, 712 (11th Cir. 1997) (citing
Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 11 (1983)).

A federal question is presented by the complaint when the suit relies on a
federal cause of action or where “the vindication of a right under state law
necessarily turned on some construction of federal law.” See Merrell Dow, 478
U.S. at 808. Under this latter analysis, federal question jurisdiction should be
narrowly construed. See id. at 810-14. “[T]he mere presence of a federal issue in
a state cause of action does not automatically confer federal-question jurisdiction,”
even where the interpretation of federal law may constitute an element of the state
cause of action. Id. at 813. More recently, the Supreme Court fashioned another
test for deciding whether federal courts should exercise federal question
jurisdiction over removed state court proceedings: “does a state-law claim
necessarily raise a stated federal issue, actually disputed and substantial, which a
federal forum may entertain without disturbing any congressionally approved
balance of federal and state judicial responsibilities.” Grable & Sons Metal
Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 314 (2005). “If the plaintiff
elects to bring only state law causes of action in state court, no federal question
will appear in the complaint that could satisfy the well-pleaded complaint rule, and
the case may not be removed to federal court.” Kemp, 109 F.3d at 712.

Upon review of the record, we conclude that the district court should not
have exercised federal-question jurisdiction upon the removal of this case.
Although Madzimoyo’s petition referenced federal laws in passing, none of his
causes of action relied on even the interpretation of federal law. Rather,
Madzimoyo merely asserted that he requested his loan information from the
mortgage companies in accordance with federal law to show that he had acted
diligently and merited state relief. Accordingly, we vacate the judgment of the
district court and remand with instructions that the district court remand the
proceeding to the state court.

VACATED AND REMANDED.

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