United States District Court, D. Maine
JAMES F. MILLER, Individually and on Behalf of Himself and Others Similarly Situated, Plaintiff,
CARRINGTON MORTGAGE SERVICES, LLC, Defendant.
ORDER ON CARRINGTON MORTGAGE SERVICES, LLC'S
MOTION TO DISMISS
LEVY, CHIEF U.S. DISTRICT JUDGE.
F. Miller brings this putative class action against
Carrington Mortgage Services, LLC (“Carrington
Mortgage”), alleging that various communications he
received from Carrington Mortgage after his bankruptcy
discharge violated the Fair Debt Collection Practices Act
(FDCPA), 15 U.S.C.A. § 1692 et seq. (West
2019), and the Maine Fair Debt Collection Practices Act
(MFDCPA), 32 M.R.S.A. § 11001 et seq. (Westlaw
through Ch. 313 of 1st Reg. Sess. of 129th Leg.).
See ECF No. 1 ¶ 1. Carrington Mortgage moves to
dismiss the complaint (ECF No. 13). For the reasons stated
below, I grant in part and deny in part the motion to
complaint alleges the following facts, which I treat as true
for the purpose of evaluating the motion to dismiss.
21, 2008, Miller and his then-wife executed a promissory note
and mortgage in favor of Countrywide Bank, FSB, in the amount
of $64, 980 to finance the purchase of their home in
Washburn, Maine. In 2010, Miller and his wife separated, and
they started to fall behind on the loan. The loan has been in
arrears ever since. In October 2011, Miller and his wife
divorced, and she conveyed her interest in the property to
Miller. Miller continued living at the Washburn property for
a short time, but he was unable to keep up with the loan
payments and fell further behind. Miller then moved to Gray,
Maine, in February 2012.
November 2012, Miller filed for Chapter 7 Bankruptcy in the
U.S. Bankruptcy Court for the District of Maine. By that
time, the mortgage had been assigned to Bank of America,
which had begun servicing the loan. Bank of America received
notice of the bankruptcy filing and all subsequent filings
and orders in the bankruptcy case. As part of his Chapter 7
Individual Debtor's Statement of Intention in the
bankruptcy case, Miller stated that he would surrender the
Washburn property. Miller received his bankruptcy discharge
in February 2013, which resulted in the discharge of any
personal obligation that Miller had on the mortgage loan.
Miller has not made a payment on the mortgage loan since
before he filed for bankruptcy.
Mortgage began servicing Miller's loan in September 2016
and at that time received from Bank of America the
documentation of Miller's bankruptcy case and discharge.
From late 2016 until early 2018, a Carrington Mortgage
representative called Miller every couple of months about
resolving the amounts he purportedly owed on the loan. Each
time the representative called, Miller informed them that he
had moved out of and surrendered the Washburn property, and
that he had received a bankruptcy discharge. During the same
time period, Carrington Mortgage also mailed a notice
regarding debt relief and several notices regarding the
purchase of force-placed hazard insurance for the Washburn
property to Miller, but they were sent to an incorrect
address in Gray and Miller did not receive them. In July
2017, the loan was assigned to Wilmington Savings Fund
Society, FSB (“Wilmington Savings”), as trustee
for Sandwich Mortgage Loan Trust. Carrington Mortgage
continued to service the loan.
9, 2018, Miller was served with a summons and foreclosure
complaint for a state foreclosure action for the Washburn
property, which was brought by Wilmington Savings. The
original foreclosure complaint alleged that only Miller's
ex-wife was in default on the note and in breach of the
mortgage, but Wilmington Savings later filed an amended
complaint that sought to hold Miller liable for any
deficiency balance remaining due after the sale of the
property and application of the proceeds of the sale. With
the help of an attorney, Miller alerted Wilmington
Savings' counsel to the fact that he was not personally
liable for any deficiency balance on the loan because of his
bankruptcy discharge. Wilmington Savings amended the
foreclosure complaint again to remove the request for a
deficiency from Miller.
the foreclosure case was pending, Carrington Mortgage sent
Miller a series of mortgage statements, as well as letters
notifying him that a hazard insurance policy had been
purchased for which Miller would be required to pay, each of
which Miller alleges violate the FDCPA and the MFDCPA. The
complaint alleges that the mortgage statements, the insurance
letters, and the foreclosure complaint seeking a deficiency
judgment against Miller caused Miller “severe emotional
distress and anxiety” and led him to worry that
“he would never be free from demands for payment of the
Loan and also that somehow Carrington might have found a way
of getting around the bankruptcy discharge
protections.” Id. ¶ 61.
complaint asserts violations of four provisions of the FDCPA
and the MFDCPA. Specifically, the complaint alleges that
through the telephone calls, forced-placed hazard insurance
letters, foreclosure complaint, and monthly mortgage
statements, Carrington Mortgage: (1) falsely represented the
character, amount, and legal status of the loan debt; (2)
used false representations and deceptive means to collect on
the loan debt; (3) engaged in conduct the natural consequence
of which was to harass, oppress, or abuse Miller in
connection with the mortgage debt by attempting to collect
the debt despite knowing of the bankruptcy discharge, and (4)
used unfair or unconscionable means to collect or attempt to
collect on the mortgage loan. ECF No. 1 ¶ 82.
Mortgage moves to dismiss the complaint arguing that it fails
to state a claim under either the FDCPA or the MFDCPA because
the communications that the complaint describes do not
constitute “debt collection.” See ECF
No. 13 at 7. Therefore, Carrington Mortgage asserts, the
communications are not subject to the protective measures of
the FDCPA or the MFDCPA. Id. at 8. In addition,
Carrington Mortgage raises two other arguments: (1) that to
the extent the claims in the complaint are based on the phone
calls from Carrington Mortgage to Miller, those claims are
time-barred by the FDCPA's and MFDCPA's respective
one-year limitations periods, and (2) that the MFDCPA is
preempted by the Bankruptcy Code and the Real Estate
Settlement Procedures Act (RESPA) and, therefore, the claims
brought under the MFDCPA must be dismissed. Id. at
sole inquiry under Rule 12(b)(6) is whether, construing the
well-pleaded facts of the complaint in the light most
favorable to the plaintiff, the complaint states a claim
for which relief can be granted.”
Ocasio-Hernández v. Fortuño-Burset,
640 F.3d 1, 7 (1st Cir. 2011). When resolving a motion to
dismiss, courts first identify and disregard statements in
the complaint that “merely offer legal
conclusions” and then treat the remaining
non-conclusory factual allegations as true. Id. at
12 (internal quotation marks and alterations omitted).
“The make-or-break standard . . . is that the combined
allegations, taken as true, must state a plausible, not a
merely conceivable, case for relief.” Id.
(quoting Sepúlveda-Villarini v. Dep't of Educ.
of P.R., 628 F.3d 25, 29 (1st Cir. 2010)). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678
address each of Carrington Mortgage's arguments in turn.
Whether Communications Constitute Debt Collection
basic premise of the statutory scheme” of the
FDCPA “is that its prophylaxis applies in
connection with the collection of debts.” Arruda v.
Sears, Roebuck & Co., 310 F.3d 13, 23 (1st Cir.
2002) (citing 15 U.S.C.A. § 1692e). A debt is “any
obligation or alleged obligation of a consumer to pay money
arising out of a transaction in which the money, property,
insurance, or services which are the subject of the
transaction are primarily for personal, family, or household
purposes[.]” 15 U.S.C.A. § 1692a(5). “At a
minimum, therefore, a complaint must allege a scenario
involving the collection (or attempted collection) of a
debt.” Arruda, 310 F.3d at 23. “The
issue at the pleading stage is whether the allegations,
considered alongside the letter[s], ” mortgage
statements, and phone calls, “plausibly state a claim
that one of the animating purposes . . . was to induce
payment by the plaintiff.” Kowalski, 2017 WL
79949, at *12 (internal quotation marks omitted).
“[F]or FDCPA purposes, a collection letter is to be
viewed from the perspective of the hypothetical
unsophisticated consumer.” Pollard v. Law Office of
Mandy L. Spaulding, 766 F.3d 98, 103 (1st Cir. 2014).
The standard is “objective” and “preserves
an element of reasonableness.” Id. at 104.
Thus “[a] debt collector will not be held liable based
on an individual consumer's chimerical or farfetched
reading of a collection letter.” Id.
complaint alleges that Carrington Mortgage sent Miller four
mortgage statements between July and October of 2018, which
violated the FDCPA by attempting to collect on a debt for
which Miller was not personally liable. Each of the four
mortgage statements includes a box on the front page titled
“BANKRUPTCY MESSAGE, ” stating:
Our records show that either you are a debtor in
bankruptcy or you discharged personal liability for your
mortgage loan in bankruptcy.
We are sending this statement to you for information and
compliance purposes only. It is not an attempt to collect a
debt against you.
If you want to stop receiving statements, call us or
write to us at the address listed above.
ECF No. 1-3 at 1 (emphasis in original); see also
ECF No. 1-5 at 1; ECF No. 1-6 at 1; ECF No. 1-8 at 1. In
addition to the bankruptcy disclaimer, the first page of each
mortgage statement also includes an “Explanation of
Amount Due, ” “Payment Amount, ”
“Payment Date, ” “Regular Monthly
Payment” amount, “Total Payment Amount, ”
and a detachable payment coupon with instructions to
“[p]lease detach and return with your payment.”
E.g., ECF No. 1-5 at 1.
third page of each mortgage statement is made up of three
columns of small text with bolded headings. Under the heading
“Important Notices, ” the following statement
Mini Miranda - This communication is from a
debt collector and it is for the purpose of collecting a debt
and any information obtained will be used for that purpose.
This notice is required by the provisions of the Fair Debt
Collection Practices Act and does not imply that we are
attempting to collect money from anyone who has discharged
the debt under the bankruptcy laws of the United States.
ECF No. 1-3 at 3; see also ECF No. 1-5 at 3; ECF No.
1-6 at 3; ECF No. 1-8 at 3. Several paragraphs
later, a bolded paragraph under the heading “Important
Bankruptcy Notice” reads:
If you have been discharged from personal liability
on the mortgage because of bankruptcy proceedings and have
not reaffirmed the mortgage, or if you are the subject of a
pending bankruptcy proceeding, this letter is not an attempt
to collect a debt from you but merely provides informational
notice regarding the status of the loan. . . .
ECF No. 1-3 at 3; see also ECF No. 1-5 at 3; ECF No.
1-6 at 3; ECF No. 1-8 at 3.
the fourth and final page of each mortgage statement is
titled “A GUIDE TO READING YOUR Chapter 7 or 11
Bankruptcy Mortgage Statement.” E.g., ECF No.
1-3 at 4. An image of the first page of the mortgage
statement is reproduced on the right-hand side of the page
with numbers next to certain items. On the left-hand side,
the numbers appear in a list alongside explanations for each
item. The “Guide” pages of the statements Miller
received on July 5 and ...