Ruckman v. PHH Mortg. Corp.

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ANGELA L. RUCKMAN, Plaintiff, v. PHH MORTGAGE CORPORATION d/b/a PHH MORTGAGE SERVICING, and CLUNK, HOOSE CO., L.P.A., Defendants.

No. 5:21-cv-00923

United States District Court, N.D. Ohio, Eastern Division

October 19, 2022

MEMORANDUM OPINION AND ORDER

BRIDGET MEEHAN BRENNAN, UNITED STATES DISTRICT JUDGE.

Plaintiff Angela L. Ruckman (“Ruckman”) filed this action against the servicer of her residential mortgage loan, PHH Mortgage Corporation d/b/a PHH Mortgage Servicing (“PHH”), under 12 C.F.R. § 1024.1 et seq. (known as “Regulation X”), which implements the federal Real Estate Settlement Procedures Act 12 U.S.C. §§ 2601 et seq. (“RESPA”), and under the Ohio Residential Mortgage Lending Act, R.C. 1322.01 et seq. (“RMLA”). (Doc. No. 1 at PageID# 14-16 &amp 17-19, Counts I and III.)

Also named as a defendant is the law firm of Clunk, Hoose Co. L.P.A. (“Clunk”). Ruckman seeks relief against Clunk under the federal Fair Debt Collection Practices Act 15 U.S.C. § 1692 et seq. (“FDCPA”). (Id. at PageID# 16, Count II.) Clunk answered the Complaint and listed several affirmative defenses. (Doc. No. 10.)

Clunk has moved pursuant to Fed. R. Civ. Pro. 12(c) for judgment on the pleadings on the FDCPA claim in Count II. (Doc. Nos. 22 & 29.)^[1] Ruckman has responded in opposition. (Doc. No. 28). For the reasons stated herein, Clunk's motion for judgment on the pleadings is DENIED.

I. Facts

The facts below are taken from the pleadings, which include: Ruckman's Complaint (Doc. No. 1);^[2] Clunk's Answer (Doc. No. 10); and PHH's Answer (Doc. No. 12).

A. The Parties

Ruckman owns a home in Mansfield, Ohio (the “Property”), subject to a mortgage with a monthly payment obligation. (Doc. No. 1 at ¶¶ 1-3, 39; Doc. No. 10 at ¶ 2; Doc. No. 12 at ¶ 2.) Exhibit 1 to the Complaint contains correct copies of a promissory note and mortgage signed by Ruckman on August 24, 2005, when she purchased the Property. (Doc. No. 1 at ¶ 4; Doc. No. 11; Doc. No. 10 at ¶ 4; Doc. No. 12 at ¶ 4.) Ruckman's note and mortgage are referred to collectively herein as the “Home Loan.” (Doc. No. 1-1.)

At all times relevant to this dispute, PHH serviced the Home Loan. PHH serviced the Home Loan on behalf of HSBC Bank USA, N.A. (“HSBC”). HSBC is an assignee of the original mortgage lender and trustee for certain mortgage-backed securities. (Doc. No. 1 at ¶¶ 67; Doc. No. 10 at ¶¶ 6-7; Doc. No. 12 at ¶¶ 6-7.) HSBC was neither named nor joined in this case.

By early 2020, Ruckman fell behind on her payments and was delinquent under the terms of the Home Loan. (Doc. No. 1 at ¶ 31; Doc. No. 10 at ¶ 31; Doc. No. 12 at ¶ 31.) On March 5, 2020, HSBC (represented by Clunk) filed a foreclosure action against Ruckman in state court in Richland County, Ohio, Case No. 2020 CV 0169. (Doc. No. 1 at ¶¶ 8, 32; Doc. No. 10 at ¶¶ 8, 32; Doc. No. 12 at ¶¶ 8, 32.)

B. Loss Mitigation & Home Loan Modification^[3]

“In July 2020, Ruckman submitted a loss mitigation application to PHH through Clunk.” (Doc. No. 1 at ¶ 33; Doc. No. 10 at ¶ 33; Doc. No. 12 at ¶ 33.) On August 4, 2020, PHH acknowledged that Ruckman's application had been received and was complete. (Doc. No. 1 at ¶ 35; Doc. No. 1-2 at PageID# 47, ¶ 5; Doc. No. 10 at ¶ 35; Doc. No. 12 at ¶ 35.)

A Loss Mitigation Department Coordinator at Clunk named Diane Bennett (“Bennett”) communicated directly with Ruckman multiple times in 2020 and 2021 regarding her delinquency on the Home Loan, the status of loan payments, and loan modification options and issues. (See Doc. No. 1 at ¶¶ 46-56; Doc. No. 22 at PageID# 278, 279, 280; Doc. 40; e.g., Doc. No. 1-2 at ¶¶ 21, 23-38, Exs. G, I, J, K, & L; cf. Doc. No. 10 at ¶¶ 46-56.)

PHH offered Ruckman a trial loan modification, which would require her to make three payments of $469.15 for September, October, and November 2020. (Doc. No. 1 at ¶ 36; Doc. No. 1-2 at PageID# 47 ¶¶ 5-7; Doc. No. 10 at ¶ 36; Doc. No. 12 at ¶ 36.) Ruckman made all three trial payments as required. (Doc. No. 1 at ¶ 37; Doc. No. 10 at ¶ 37; Doc. No. 12 at ¶ 37.)

PHH sent Ruckman a document dated November 6, 2020 and titled “Approval for Permanent Modification.” (See Doc. No. 1 at ¶ 38; Doc. No. 10 at ¶ 38; Doc. No. 12 at ¶ 38; Doc. No. 1-2 at Ex. A.) That loan modification document indicated a November 24, 2020 deadline to be executed and returned. (Doc. No. 1-2 at Ex. A.) The deadline was extended by PHH and Ruckman by agreement to December 31, 2020. (Doc. No. 1 at ¶ 40; Doc. No. 12 at ¶ 40; Doc. No. 10 at ¶ 40.)

Ruckman alleges that she executed the loan modification agreement and mailed it to PHH in December 2020. (Doc. No. 1 at ¶ 42.) But PHH and Clunk allege that Ruckman did not return the loan modification agreement by December 30, 2020. (Doc. No. 10 at ¶ 42; Doc. No. 12 at ¶ 42.)^[4]

PHH and Clunk admit, however, that Ruckman did timely pay the amount due as prescribed in the loan modification agreement. (Doc. No. 1 at ¶ 41; Doc. No. 10 at ¶ 41; Doc. No. 12 at ¶ 41.) The loan modification papers provided to Ruckman directed that the first modified monthly payment due date would be December 1, 2020. (Doc. No. 1-2 at Ex. A.) The monthly amount due would be $469.12. (Id.) All parties agree and admit:

On November 30, 2020, Ruckman timely remitted a payment in the amount of $470.00 in satisfaction of the payment due under the Modification for December 1, 2020 via money order in compliance with PHH's express written instructions for the same.

(Doc. No. 1 at ¶ 41; Doc. No. 10 at ¶ 41; Doc. No. 12 at ¶ 41.) Ruckman made this payment at a Kroger supermarket store in Mansfield, Ohio, her receipt indicates. (Doc. No. 1-2 at Ex. C.)

The Complaint includes receipts showing three more subsequent payments of $470.00 dated January 4, February 11, and February 22, 2021 - each made at a Kroger supermarket store in Mansfield, Ohio. (Doc. No. 1-2 at Exs D, E, & F.)

PHH and Clunk both admit that Ruckman's January 4th payment was received and accepted. (Doc. No. 1 at ¶ 44; Doc. No. 10 at ¶ 44; Doc. No. 12 at ¶ 44.) However, PHH apparently refused to accept Ruckman's February 11, 2021 payment. PHH and Clunk both affirmatively aver that this payment was rejected because the loan modification purportedly had been denied on January 14, 2021. (See Doc. No. 1 at ¶¶ 43-45; Doc. No. 10 at ¶¶ 43-45; Doc. No. 12 at ¶¶ 43-45; Doc. No. 22 at PageID# 280.) Because Defendants aver that the February 11, 2021 payment was purposefully rejected, it follows necessarily that: (i) Ruckman must have tendered such payment; and (ii) PHH must have received notification that Ruckman tendered the payment.

PHH's refusal to accept Ruckman's payment(s) was a short-lived stance. On March 3, 2021, Clunk, through Bennett, emailed urging that Ruckman “will need to make the February and March payments immediately.” (Doc. No. 1-2 at Ex. G; Doc. No. 1 at ¶¶ 46-47; Doc. No. 10 at ¶¶ 46-47; Doc. No. 12 at ¶¶ 46-47.) On March 8, 2021, Clunk, again through Bennett, emailed Ruckman asserting the following:

Our client has advised that you are due for the February and March payments, for a total of $873.93. If you want the modification to go through, that payment needs to be made immediately. Our client's modification team has confirmed they will accept that amount and then reverse the denial.

(Doc. No. 1-2 at Ex. G PageID# 81.) On March 19, 2021, Clunk, through Bennett, emailed Ruckman asserting the following: “The following amount [$873.93] is due before the end of March or the modification is denied.” (Doc. No. 1-2 at Ex. K PageID# 94.)^[5]

C. Activity in the State Court Foreclosure Action

Before the end of March, on March 29, 2021, Clunk filed a motion for summary judgment against Ruckman in the pending state court foreclosure action in Richland County, Ohio. (Doc. No. 1 at ¶ 61; Doc. No. 10 at ¶ 61; Doc. No. 12 at ¶ 61; Doc. No. 1-2 at p. 9 ¶ 50.)

On August 30, 2021, the foreclosure case was dismissed voluntarily by settlement, according to the publicly accessible online docket for the clerk of the Richland County Court of Common Pleas. Ruckman continued to reside at the Property (and apparently still does of the parties' latest filings). (See Doc. No. 1 at ¶ 3.)

II. Law and Analysis

“In the context of a Rule 12(c) motion, the burden is on the moving party to show it is entitled to judgment as a matter of law.” Kenyon v. Union Home Mortg. Corp., 581 F.Supp.3d 951, 959 (N.D. Ohio 2022); see also Jenkins v. Livonia Police Dep't, No. 13-14489, 2016 WL 759338, at *2 (E.D. Mich. Feb. 26, 2016) (“Judgment may be granted under Rule 12(c) where the movants clearly establish that no material issue of fact remains to be resolved and that they are entitled to judgment as a matter of law.” (emphasis added)); Mining Mach., Inc. v. Copley, 145 Fed.Appx. 149, 152 (6th Cir. 2005) (“The moving party bears the initial burden of informing the court of the basis for its motion and identifying those portions of the record that establish the absence of a genuine issue of material fact.”).

Clunk has not carried its burden as movant, and so the motion must be denied.

A. Standard of Review

“The standard of review for a Rule 12(c) motion is the same as for a motion under Rule 12(b)(6) for failure to state a claim upon which relief can be granted.” Fritz v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010). “[T]he inquiry on a motion to dismiss is not whether Plaintiff will be successful on the merits, but simply whether her pleadings are sufficient to state a claim upon which relief can be granted.” Id. at 726. “To state a valid claim, a complaint must contain direct or inferential allegations respecting all the material elements under some viable legal theory.” Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 336 (6th Cir. 2007).

“For...