Mathieson v. Wells Fargo Bank

SCOTT MATHIESON and TRUDY MATHIESON, and all others similarly situated, Plaintiffs, v. WELLS FARGO BANK, N.A., as Trustee for the Pooling and Servicing Agreement Dated as of June 1, 2006 Securitized Asset Backed Receivables LLC Trust 2006-FR2 Mortgage Pass-Through Certificates, Series 2006-FRS, LLC; PHH MORTGAGE CORPORATION; and ROBERTSON, ANSCHUTZ & SCHNEID, PL, Defendants.

No. 8:20-cv-2728-WFJ-SPF

United States District Court, M.D. Florida, Tampa Division

September 8, 2021

ORDER

WILLIAM F. JUNG UNITED STATES DISTRICT JUDGE

Before the Court is the motion to dismiss filed by Wells Fargo Bank N.A., etc. (“Wells Fargo”)^[1] and PHH Mortgage Corporation (“PHH”) (Dkt. 40), the response (Dkt 43), and the reply (Dkt. 44).^[2] After careful consideration of the allegations of the second amended complaint and attachments (Dkt. 35), the submissions of the parties, and the applicable law, the Court grants the motion.

ALLEGATIONS

In the second amended complaint, Plaintiffs Scott and Trudy Mathieson bring two counts against both Defendants Wells Fargo and PHH: (1) violations of the Florida Consumer Collection Practices Act (“FCCPA”), Fla. Stat § 559 et seq. (Count I); and (2) violations of the Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C. § 1692 et seq. (Count II). The second amended complaint adds more detail surrounding the allegedly violative communications, as well as the default status of the loan during the relevant times Ocwen Loan Servicing, LLC (“Ocwen”) and PHH, respectively, were servicing the loan. The allegations and various exhibits describe the following scenario.^[3] See Dkts. 35, 35-1, 35-2, 35-3, 35-4.

Events Leading to the Foreclosure

The Mathiesons purchased a home in Pasco County, Florida, in January 2006. Dkt. 35-1 ¶ 4. Mr. Mathieson executed a promissory note on January 6, 2006. Dkt. 35-1 ¶ 3 & at 8-13. A mortgage to secure the loan was recorded on January 18, 2006. Dkt. 35-1 ¶ 4 & at 14-37. The loan was modified effective April 1, 2016. Dkt. 35-1 ¶ 4 & at 39.

Mr. Mathieson signed the April 2016 modification agreement on February 10, 2016, and Ocwen signed on behalf of Wells Fargo on March 14, 2016. Dkt. 35-1 at 42-43; Dkt. 35 ¶ 9. The modification agreement names the servicer at the time as Ocwen. Dkt. 35-1 at 38.

In this action, the Mathiesons allege that as part of the April 2016 modification agreement, the parties “stipulated that the loan was in default at the time the modification was extended and that there was no sufficient income to make monthly mortgage payments.” Dkt. 35 ¶ 10; Dkt. 35-1 at 39. The modification agreement itself supports this allegation, as it contains the borrower's representation that the loan was in default: “I am in default under the Loan Documents.” Dkt. 35-1 at 38, 42. The modification agreement further provides that if the borrowers “do not comply with the terms of the Loan Documents, as modified by this Agreement, ” then the borrowers “will be in default.” Dkt. 35-1 at 39.

The Foreclosure

In April 2017, Wells Fargo filed a foreclosure action against the Mathiesons. Dkt. 35-1. Ocwen was the servicer of the loan when the foreclosure action was filed, as is indicated by Ocwen's verification of the foreclosure complaint in March 2017. Dkt. 35 ¶ 9 at 2; Dkt. 35-1 at 7. The state foreclosure complaint alleged that the Mathiesons were in default on the “Note and Mortgage by failing to pay the payment due as of May 1, 2016.” Dkt. 35-1 at 3. The May 2016 default date, however, derives from the payments due under the loan modification.

Wells Fargo sought a deficiency judgment as part of the “wherefore” clause at the end of the one-count complaint for foreclosure in the event “the proceeds of the sale are insufficient.” Dkt. 35-1 at 5. According to Wells Fargo's counsel, though, a deficiency judgment was never sought. Dkt. 40 at 11 (citing the docket of the foreclosure action at Dkt. 30-1).

During the pendency of the foreclosure action, Defendant PHH became the new servicer on the loan on June 1, 2019. Dkt. 35-2; Dkt. 35 ¶ 6. The June 4 loan transfer notice recites the following “mini-Miranda” language at the bottom of each page:

This communication is from a debt collector attempting to collect a debt; any information obtained will be used for that purpose. However, if the debt is in active bankruptcy or has been discharged through bankruptcy, this communication is provided purely for informational purposes only with regard to our secured lien on the above referenced property. It is not intended as an attempt to collect a debt from you personally.

Dkt. 35-2 at 1-8.

A final judgment of foreclosure was filed and recorded on August 16, 2019. Dkt. 35 ¶ 13; Dkt. 43-2 (judgment). The property was noticed for foreclosure sale to occur on September 17, 2019, and later rescheduled for sale on March 3, 2020, which was the date it sold. Dkt. 35-4 at 2; Dkt. 43-2 at 3.

Post-judgment Events

After the foreclosure judgment but before the March 3 sale Defendants sent the Mathiesons four written communications-three letters and a motion to cancel the sale with affidavit attached. Two of the three letters are not attached to the second amended complaint but are attached to the response to the motion to dismiss.

On January 14, 2020, PHH sent the Mathiesons “an early intervention borrower assistance letter, ” which “referenced foreclosure and that the maturity [date] had been accelerated.” Dkt. 35 ¶ 18. The Mathiesons allege Wells Fargo and PHH “then told the borrowers that reinstatement could occur by paying the past due payments.” Dkt. 35 ¶ 18 (emphasis in original). The January 14 assistance letter, which is not attached to the second amended complaint, states that PHH's “records indicate this account is in foreclosure and its maturity date has been accelerated” and that the “account can be reinstated by paying the past due payment(s).” Dkt. 43-1 at 1 (Jan. 14 letter). The letter separately lists eight “possible options, ” including “Reinstatement: The account can be reinstated by paying the past due amount(s).” Dkt. 43-1 at 3. The following language appears at the bottom of each page of the January 14 letter:

This communication is from a debt collector attempting to collect a debt; any information obtained will be used for that purpose. However, if the debt is in active bankruptcy or has been discharged through bankruptcy, this communication is purely provided to you for informational purposes only with regard to our secured lien on the above referenced property. It is not intended as an attempt to collect a debt from you personally. As may be required by state law, you are hereby notified that a negative credit report reflecting on an accountholder's credit record may be submitted to a credit reporting agency if credit obligation terms are not fulfilled.

Dkt. 43-1 at 1-5.

The Mathiesons allege that “a loss mitigation hold was placed on the borrowers file” on January 29, 2020, which was “35 days prior to the scheduled foreclosure sale and within 2 weeks of the Defendant sending its correspondence.” Dkt. 35 ¶ 21. The January 29 letter, which is not attached to the second amended complaint, states that the application for mortgage assistance was received and that the application was complete as of January 27, 2020. Dkt. 43-1 at 6 (Jan. 29 letter). It further provides: “Any applicable foreclosure actions are on hold. Please be aware that, although the foreclosure actions have begun, no foreclosure sale will occur while we evaluate the complete package and if the account is approved for an assistance option, the accountholder(s) must comply with all requirements of the approved option.” Dkt. 43-1 at 6-7. Each page of the letter contains the same debt collection language found in the January 14 letter. Dkt. 43-1 at 6-7.

On February 10, 2020, PHH wrote Mr. Mathieson that Plaintiffs' account qualified for certain “available options.” Dkt. 35-3 at 1 (Feb. 10 letter). The February 10 letter, which is attached to the second amended complaint, “conditionally approved [Plaintiffs] for a short sale or a deed-in-lieu of foreclosure.” Dkt. 35 ¶ 22. This loss mitigation letter gave the Mathiesons until March 11, 2020, to send PHH four specific documents. Dkt. 35 ¶ 23; Dkt. 35-3 at 5. At the bottom of each page of the February 10 letter appears the same debt collection disclaimer found in the January 14 and 29 letters. Dkt. 35-3 at 1-9.

The Mathiesons allege that they “started submitting the necessary documents” on or around February 25, 2020. Dkt. 35 ¶ 27. Also on February 25, Wells Fargo filed a motion to cancel the sale for the purposes of evaluating the Mathiesons' “eligibility to participate in loss mitigation opportunities” and gave them until March 11, 2020, to submit the requested information. Dkt. 35 ¶¶ 24, 25; Dkt. 35-4 at 2 (Feb. 25 motion). Wells Fargo submitted an affidavit of PHH with an attachment in support of the motion. Dkt. 35 ¶ 26; Dkt. 35-4 at 5-15 (affidavit and attachment). Attached to the affidavit was the February 10 letter of conditional approval with the disclaimer language at the bottom of each page. Dkt. 35-4 at 7-15. On February 28, 2020, the state court denied the motion to cancel the sale. Dkt. 35 ¶ 28; Dkt. 30-1 at 7 (state court docket showing entry of Feb. 28, 2020 order).

The Mathiesons allege that Defendants failed to follow the explicit instructions provided in the judgment denying Defendants' motion to cancel the sale. Dkt. 35 ¶ 13. Specifically, they allege that Defendants should have set the matter for hearing instead of sending only a letter with a proposed order to the court. Dkt. 35 ¶ 28. The Mathiesons also allege that no renewed objection to the sale was made, nor any attempt to rescind the sale. Dkt. 35 ¶ 29. With respect to the sale,...