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Jones v. Citimortgage, Inc.

United States District Court, S.D. Georgia, Savannah Division

September 24, 2014

LINDA JONES, Plaintiff,


WILLIAM T. MOORE, Jr., District Judge.

Before the Court is Defendant Citimortgage's ("Citi") Motion to Partially Dismiss Amended Complaint. (Doc. 17.) For the following reasons, Defendant's motion is GRANTED. As a result, Plaintiff's claims for wrongful foreclosure, violation of the Fair Debt Collection Practices Act ("FDCPA"), and violation of United States Housing and Urban Development ("HUD") regulations are DISMISSED. Remaining in this case are Plaintiff's claims for breach of contract and promissory estoppel.


This case stems from Defendant's foreclosure on Plaintiff Linda Jones's home.[1] Plaintiff purchased the home with her now deceased husband in 1977. (Doc. 13 ¶ 2.) In December 2008, Plaintiff refinanced the mortgage through Georgia Heritage FCU ("Georgia Heritage"), executing a security deed in favor of Mortgage Electronic Registration Systems ("MERS"). ( Id. ¶¶ 3-4.) After struggling to pay the mortgage, Plaintiff attempted to negotiate with Defendant for a loan modification. ( Id. ¶ 5.) According to Plaintiff, Defendant agreed to modified payments of $537.44 a month for 4 months. ( Id. ¶ 6.)

Despite making the modified payment for six months, Plaintiff was informed by Defendant that it would not honor her performance. (Id.) In May 2010, Defendant notified Plaintiff that her loan was in default. ( Id. ¶ 7.) In June 2011, Plaintiff received a letter from Defendant informing her that it had denied her loan modification request. ( Id. ¶ 12.) Ultimately, Defendant foreclosed on Plaintiff's home on June 7, 2011. (Id.)

In response, Plaintiff filed a complaint in the State Court of Chatham County. (Doc. 1, Ex. B.) On May 30, 2012, Defendant timely removed the case to this Court based on the presence of a federal question in the underlying State Court action. (Doc. 1.) On June 20, 2012, Plaintiff filed an amended complaint. (Doc. 13.)

In the amended complaint, Plaintiff brings claims for wrongful foreclosure, breach of contract, promissory estoppel, violation of the FDCPA, and "failure to provide FHA pre-foreclosure loss mitigation." (Id.) Plaintiff's wrongful foreclosure claim is based on her allegation that "Citi Mortgage did not possess the original note of indebtedness." ( Id. ¶ 22.) The breach of contract and promissory estoppel claims stem from Defendant's alleged failure to honor an agreement to modify the terms of her mortgage. ( Id. ¶¶ 25-39.) Plaintiff argues that Defendant violated the FDCPA when it attempted to collect Plaintiff's mortgage payments, to which it was not entitled. ( Id. ¶¶ 40-46.) Finally, Plaintiff reasons that Defendant violated various HUD regulations by failing to take certain required actions prior to foreclosing on her home. ( Id. ¶¶ 47-54.)

In its Motion to Partially Dismiss, Defendant seeks to dismiss Plaintiff's claims for wrongful foreclosure, violation of the FDCPA, and violation of HUD regulations. (Doc. 17, Attach. 1 at 2.) First, Defendant argues that it is not required to physically possess or provide the original note prior to foreclosing on a property. ( Id. at 8-11.) Second, Defendant maintains that it is not a debt collector and has not engaged in any debt collection under the FDCPA. ( Id. at 11-16.) Finally, Defendant reasons that the HUD regulations do not provide Plaintiff with any private right of action for the alleged violations. ( Id. at 16-18.)

In response, Plaintiff contends that Defendant cannot be the legal holder of Plaintiff's mortgage absent possession of the original note with an allonge[2] physically attached transferring title to Defendant. (Doc. 20 at 3-4.) In addition, Plaintiff argues that Defendant qualifies as a debt collector attempting to collect a debt because it was attempting to collect a debt that Plaintiff owed to a third-party. ( Id. at 4-6.) Finally, Plaintiff alleges that she was a third-party beneficiary of HUD regulations requiring a face-to-face meeting and exploration of mortgage modification prior to foreclosure. ( Id. at 7-12.)



Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." "[T]he pleading standard Rule 8 announces does not require detailed factual allegations, ' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007)).[3] "A pleading that offers labels and conclusions' or a formulaic recitation of the elements of a cause of action will not do.'" Id . (quoting Twombly , 550 U.S. at 555). "Nor does a complaint suffice if it tenders naked assertion[s]' devoid of further factual enhancement.'" Id . (quoting Twombly , 550 U.S. at 557) (alteration in original).

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.' Id . (quoting Twombly , 550 U.S. at 570). For a claim to have facial plausibility, the plaintiff must plead factual content that "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Sinaltrainal v. Coca-Cola Co. , 578 F.3d 1252, 1261 (11th Cir. 2009) (quoting Iqbal , 556 U.S. at 678). Plausibility does not require probability, "but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal , 556 U.S. at 678. "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Id . (quoting Twombly , 550 U.S. at 557.) Additionally, a complaint is sufficient only if it gives "fair notice of what the claim is and the grounds upon which it rests.'" Sinaltrainal , 578 F.3d at 1268 (quoting Twombly , 550 U.S. at 555).

When the Court considers a motion to dismiss, it accepts the well-pleaded facts in the complaint as true. Sinaltrainal , 578 F.3d 1252 at 1260. However, this Court is "not bound to accept as true a legal conclusion couched as a factual allegation." Iqbal , 556 U.S. at 678. Moreover, "unwarranted deductions of fact in a complaint are not admitted as true for the purpose of testing the sufficiency of plaintiff's allegations." Sinaltrainal , 578 F.3d at 1268. That is, "[t]he rule does not impose a probability requirement at the pleading stage, ' but instead simply calls for enough facts to raise a reasonable expectation that ...

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