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Harris v. Newrez, LLC

United States District Court, W.D. Tennessee, Eastern Division

July 19, 2019

PATTY HARRIS, as Personal Representativ of the Estate of Clint Wallace, Deceased; SHELL YE WALLACE, as Mother and Next Friend of Catherine Jewell Wallace; and LESLIE BERNARD, as Mother and Next Fr Of Jenna Lynn Wallace, Plaintiffs,
v.
NEWREZ, LLC, and RUBIN LUBLIN, TN, PLLC, Defendants.

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS ORDER GRANTING DEFENDANT'S MOTION TO SEVER AND REMAND ORDER FOR PLAINTIFFS TO SHOW CAUSE

          S. THOMAS ANDERSON, CHIEF UNITED STATES DISTRICT JUDGE

         Before the Court is Defendant Rubin Lublin, TN, PLLC's Motion to Dismiss (ECF No. 7) filed on April 11, 2019, and its Motion to Sever and Remand (ECF No. 9) filed on June 13, 2019. Plaintiff Patty Harris, as Personal Representative of the Estate of Clint Wallace, deceased; Shellye Wallace, as mother and next best friend of Catherine Jewell Wallace; and Leslie Bernard, as mother and next best friend of Jenna Lynn Wallace (collectively "the Estate") have not responded to the Motion to Dismiss or the Motion to Sever and Remand, and the deadline to respond has now passed.[1] For the reasons set forth below, Rubin Lublin's Motion to Dismiss and Motion to Sever and Remand are GRANTED.

         BACKGROUND

         This action began as a Suggestion of Insolvency, Petition for Violation of the Fair Debt Collection Practices Act, Issuance of Temporary Restraining Order, and Issuance of Injunction (hereinafter “the Petition”). The Estate filed the Petition in the Probate Court for Dyer County, Tennessee, on March 5, 2019. According to the Petition, the Estate is insolvent for purposes of Tenn. Code Ann. § 30-5-101, et seq. The Petition provides an accounting of the liabilities and assets of the Estate, among which is real property located in Montgomery County, Tennessee, at 2600 Peach Grove Lane, Woodlawn, Tennessee 37191.[2] The Petition states that the property is encumbered by a Deed of Trust securing a promissory note held by NewRez, LLC (“NewRez”). The Estate owes NewRez $134, 437.18.[3]

         The Petition alleges that the Estate had reached an agreement with NewRez in January 2019 to list the property with a real estate agent and that the Estate was in the process of obtaining approval from the Dyer County Probate Court to sell the property. (Pet. ¶ 12.) About a week after reaching its agreement with NewRez, the Estate received notice from Rubin Lublin, TN, PLLC (“Rubin Lublin”) that the firm was retained to conduct a nonjudicial foreclosure of the property. Counsel for the Estate made several attempts by telephone and letter to contact Rubin Lublin and stop the foreclosure sale. Despite these attempts to dispute the indebtedness, the publication of the notice of foreclosure continued. The Petition alleges that NewRez and Rubin Lublin acted in violation of the Fair Debt Collection Practices Act and that any foreclosure on the real property would amount to misappropriation or dissipation of the assets of the insolvent Estate. The Estate seeks temporary and preliminary injunctive relief against NewRez and Rubin Lublin and an award of fees, penalties, and attorney's fees for their violations of the FDCPA.

         On April 11, 2019, one week after removing the case to federal court, Rubin Lublin filed a Motion to Dismiss (ECF No. 7) the FDCPA claim for failure to state the claim under Federal Rule of Civil Procedure 12(b)(6). Rubin Lublin argues that as foreclosure counsel for NewRez, Rubin Lublin does not meet the FDCPA's definition of a “debt collector.” Rubin Lublin also argues that the Petition fails to allege how it violated the FDCPA. In its separately filed Motion to Sever and Remand, Rubin Lublin argues that the Court lacks supplemental jurisdiction over some of Plaintiff's claims for relief. Rubin Lublin construes the Petition to allege the following “counts” under Tennessee law: Notice of Insolvency (“Count I” according the Motion to Sever), Assumption of Jurisdiction over the Decedent's Property (“Count II”), and Misappropriation of the Decedent's Property (“Count IV”). The Court should sever those three counts and then to remand them to state court. The only count that would remain before the Court is the Estate's FDCPA claim (“Count III”). To date the Estate has not responded to either of Rubin Lublin's Motions.

         JURISDICTION

         The Court begins by analyzing its own subject-matter jurisdiction in this case, an obligation the Court has an unflagging duty to discharge even sua sponte. Ft. Bend Cnty., Tex. v. Davis, 139 S.Ct. 1843, 1849 (2019). Rubin Lublin removed this action to federal court on the basis of the Court's original jurisdiction over the Estate's FDCPA claim. The FDCPA, 15 U.S.C. § 1696 et seq., is a law of the United States for purposes of 28 U.S.C. § 1331. As such, the Estate could have originally filed the FDCPA claim in federal court. Paul v. Kaiser Found. Health Plan of Ohio, 701 F.3d 514, 518 (6th Cir. 2012) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)) (“Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant.”). “When a plaintiff files a case in state court that could have been brought in a federal district court, a defendant may invoke the removal statute, 28 U.S.C. § 1441, to secure a federal forum.” Jarrett-Cooper v. United Airlines, Inc., 586 Fed.Appx. 214, 215 (6th Cir. 2014) (quoting Lincoln Prop. Co. v. Roche, 546 U.S. 81, 83 (2005)). The Court concludes then that it has subject-matter jurisdiction over the Estate's FDCPA claim under 28 U.S.C. § 1331, making Rubin Lublin's removal of the claim to federal court proper. The Court considers its jurisdiction over the Petition's other claims for relief as part of its discussion of the Motion to Sever and Remand.

         STANDARD OF REVIEW

         Rubin Lublin argues in its Motion to Dismiss that the Petition fails to state an FDCPA claim against it. A defendant may move to dismiss a claim “for failure to state a claim upon which relief can be granted” under Federal Rule of Civil Procedure 12(b)(6). When considering a Rule 12(b)(6) motion, the Court must treat all of the well-pleaded allegations of the pleadings as true and construe all of the allegations in the light most favorable to the non-moving party. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Saylor v. Parker Seal Co., 975 F.2d 252, 254 (6th Cir. 1992). However, legal conclusions or unwarranted factual inferences need not be accepted as true. Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987). “To avoid dismissal under Rule 12(b)(6), a complaint must contain either direct or inferential allegations with respect to all material elements of the claim.” Wittstock v. Mark a Van Sile, Inc., 330 F.3d 899, 902 (6th Cir. 2003).

         Under Rule 8 of the Federal Rules of Civil Procedure, a complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Although this standard does not require “detailed factual allegations, ” it does require more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Reilly v. Vadlamudi, 680 F.3d 617, 622 (6th Cir. 2012) (quoting Twombly, 550 U.S. at 555). In order to survive a motion to dismiss, the plaintiff must allege facts that, if accepted as true, are sufficient “to raise a right to relief above the speculative level” and to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 555, 570. “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.” Iqbal, 556 U.S. at 678.

         ANALYSIS

         I. FDCPA Claim Against Rubin Lublin

         Congress passed the FDCPA to protect consumers from “abusive, deceptive, and unfair debt collection practices by many debt collectors.” 15 U.S.C. § 1692(a). The FDCPA prohibits the following categories of conduct in connection with the collection of a debt: improper modes of communication with the consumer, 15 U.S.C. § 1692c; “any false, deceptive, or misleading representation, ” § 1692e; and other “unfair or unconscionable means to collect or attempt to collect any debt.” § 1692f. The United States Court of Appeals for the Sixth Circuit has described the FDCPA as “extraordinarily broad, ” enacted to meet the challenge of “what Congress perceived to be a widespread problem.” Hartman v. Great Seneca Fin. Corp., 569 F.3d 606, 611 (6th Cir. 2009) (citing Frey v. Gangwish,970 F.2d 1516, 1521 (6th Cir. 1992)). The Sixth Circuit has identified “two threshold criteria” common to each of the activities prohibited by the Act, both of which “limit its scope”: ...


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