Fox v. America's Servicing Company, et al., No. 2:2015cv02776 - Document 19 (W.D. Tenn. 2016)

Court Description: ORDER granting 10 Motion to Dismiss; granting 12 Motion to Dismiss; adopting 17 Report and Recommendations. Signed by Judge Samuel H. Mays, Jr on 6/16/2016. (Mays, Samuel)

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Fox v. America's Servicing Company, et al. Doc. 19 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TENNESSEE WESTERN DIVISION DRESSELS D. FOX, Plaintiff, v. AMERICA’S SERVICING COMPANY; WELLS FARGO BANK, N.A. on behalf of U.S. BANK, N.A.; U.S. BANK, N.A. individually and U.S. BANK, N.A., as TRUSTEE FOR SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2006-NC1, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2006-NC1; SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2006-NC1, MORTGAGE PASS THROUGH CERTIFICATES, SERIES 2006-NC1; and WILSON & ASSOCIATES, PLLC, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) No. 15-02776 ORDER ADOPTING MAGISTRATE JUDGE’S REPORT AND RECOMMENDATION Before the Court is the Magistrate Judge’s April 14, 2016 Report and Recommendation (the “Report”) recommending that the Court grant Defendant Wilson & Associates, P.L.L.C.’s (“W&A”) February 29, 2016 Motion to Dismiss and Defendants America’s Servicing Fargo”), Company and U.S. Motion to Dismiss. (“ASC”), Bank, Wells N.A.’s Fargo (“U.S. Bank, Bank”) N.A. March (“Wells 7, 2016 (Mot., ECF No. 11; Mot., ECF No. 12; Report, Dockets.Justia.com ECF No. 17.) Plaintiff Dressels D. Fox (“Fox”) filed an Objection to the Report on April 29, 2016 (the “Objection”). (Obj., ECF No. 18.) to do so has passed. Defendants have not responded and the time For the following reasons, the Magistrate Judge’s Report is ADOPTED and the case is DISMISSED. I. Background This case arises from Defendants’ allegedly illegal debt collection trust. activity and an improper assignment of a deed of On September 14, 2005, Fox executed a promissory note (the “Note”) payable to New Century Mortgage Corporation (“New Century”) in the principal amount of $128,720.00, secured by a Deed of Trust, which granted and conveyed to New Century the residential property at 8212 Creekside Circle North in Cordova, Tennessee (“the Property”). 1 On December 24, 2012, New Century executed a Corporate Assignment of Deed of Trust to U.S. Bank. (Corporate Assignment, ECF No. 9-1.) On March 16, 2015, Fox received a dunning letter from W&A, which was retained by U.S. Bank as trustee under the Deed of Trust. (Letter, ECF No. 9-3.) On April 23, 2015, Fox sent a letter to ASC, seeking validation of the debt. 1 (Letter, ECF No. The court may consider “‘matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint,’” without converting the motion to one for summary judgment. Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001) (quoting Nieman v. NLO, Inc., 108 F.3d 1546, 1554 (6th Cir. 1997)); see also Rondigo, L.L.C. v. Twp. of Richmond, 641 F.3d 673, 680-81 (6th Cir. 2011) (quoting Bassett v. Nat. Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008)). The Deed of Trust was recorded with the Shelby County Register of Deeds on January 3, 2013, as Instrument No. 05153836. 2 9-5.) On May 15, 2015, the Property was sold at a non-judicial foreclosure sale to U.S. Bank. 2 On December 24, 2015, Fox mailed a notice of dispute of debt and intent to litigate to U.S. Bank. 3.) (Letter, ECF No. 9- On January 11, 2016, ASC responded to Fox’s December 24, 2015 letter stating that it had received a similar request from Fox and had sent a response on August 19, 2015. No. 9-4.) (Letter, ECF ASC stated that it was unable to provide further information because Fox’s request was too broad. (Id.) On January 13, 2016, ASC sent a second letter to Fox informing him that it would complete its research and respond by January 28, 2016. (Letter, ECF No. 9-6.) Based on these transactions, Fox claims that Defendants have “failed to validate and obtain verification of the alleged debt” pursuant to the Fair (“FDCPA”), 15 U.S.C. § 1692. Debt Collection Practices (Am. Compl., ECF No. 9.) Act Fox also claims that the assignment of the Deed of Trust violates the FDCPA, under 15 U.S.C. §§ 1692b, 1692c, 1692c(b), 1692g(a), and 1692g(b). (Id. at 9-10.) He claims, without elaboration, that Defendants’ conduct violates the Tennessee Consumer Protection Act (“TCPA”), Tenn. Code Ann. §§ 47-18-101, et seq. 2 (Id.) The Trustee’s Deed is recorded with the Shelby County Register of Deeds as Instrument No. 15054761. 3 On December 22, 2015, Fox filed a Motion for Voluntary Dismissal of his claims against Defendants ASC, Wells Fargo, and U.S. Bank, which the Court granted without prejudice on December 22, 2015. his (Mot., ECF No. 7; Order, ECF No. 8.) Amended against all Complaint on Defendants, February 4, including (Am. Compl., ECF No. 9.) 2016, those When Fox filed he raised previously claims dismissed. W&A filed a Motion to Dismiss on February 29, 2016, and the previously-dismissed Defendants filed a Motion to Dismiss on March 7, 2016. (Mot., ECF No. 11; Mot., ECF No. 12.) This is the second of two suits Fox has filed arising from Defendants’ allegedly illegal debt collection activity. See Fox v. America’s Servicing Company, 2015 WL 7444646 (W.D. Tenn. Nov. 23, 2015). foreclosure mortgage Fox’s sale of payments. first the In suit arose, Property that in after Fox’s complaint, Fox part, from default set the on his forth the following claims: (1) “accounting”; (2) violations of the FDCPA; (3) violations of the Tennessee Collection Service Act (“TCSA”), 3 Tenn. Code Ann. §§ 62-20-101, et seq., and the TCPA; (4) violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681; and (5) invasion of privacy. (Compl., ECF No. 1 at 13- 20 in Case No. 15-02414.) 3 Fox refers to the TCSA as the “Tennessee Fair Debt Collection Practices Act.” (Compl., ECF No. 1 at 17 in Case No. 15-02414.) 4 In the first suit, Defendants also moved for dismissal for failure to state a claim. (Mot., ECF No. 12 in Case No. 15- 02414.) Over Fox’s Objection, the Court adopted the Magistrate Judge’s Report and Recommendation recommending dismissal. (Order, ECF No. 26 in Case No. 15-02414; Report, ECF No. 27 in Case No. 15-02414.) Judgment was entered on November 23, 2015. (Judgment, ECF No. 30 in Case No. 15-02414.) current suit only nine days later, on Fox initiated the December 2, 2015. (Compl., ECF No. 1.) In its current Motion to Dismiss, W&A argues that this suit advances the same claims that were dismissed in the first suit and again fails to state a claim on which relief may be granted. (Mot., ECF No. 11.) ASC, U.S. Bank, Wells Fargo, and the Trust argue in their Motion to Dismiss that the current suit is barred by the doctrine of res judicata. II. (Mot., ECF No. 12.) Standard of Review Congress enacted 28 U.S.C. § 636 to relieve the burden on the federal judiciary by permitting the assignment of district court duties to magistrate judges. 237 F.3d States, 598, 490 602 U.S. (6th 858, Cir. See United States v. Curtis, 2001) 869-70 (citing (1989)); see Gomez v. also Peterson, 67 F. App’x 308, 310 (6th Cir. 2003). United Baker v. “A district judge must determine de novo any part of a magistrate judge’s disposition that has been properly objected to.” 5 Fed. R. Civ. P. 72(b); 28 U.S.C. § 636(b)(1)(C). After reviewing the evidence, the court is free to accept, reject, or modify the proposed findings or recommendations of the magistrate judge. 28 U.S.C. § 636(b)(1)(C). The district court is not required to review — under a de novo or any other standard — those aspects of the report and recommendation to which no objection is made. Thomas v. Arn, 474 U.S. 140, 150 (1985). The district court should adopt the findings and rulings of the magistrate judge to which no specific objection is filed. “The does not tantamount filing meet to of the a vague, general, requirement complete Id. at 151. of failure or conclusory specific to objections objections object.” Cason, 354 F. App’x 228, 230 (6th Cir. 2009). and is Zimmerman v. Parties cannot validly object to a magistrate’s report without explaining the source of the error. Howard v. Sec’y of Health & Human Servs., 932 F.2d 505, 509 (6th Cir. 1991). Pleadings and documents filed by pro se litigants are to be “liberally construed,” and a “pro se complaint, however inartfully pleaded, must be held to a less stringent standard than formal pleadings drafted by lawyers.” 551 U.S. 89, 93 (2007). However, “the Erickson v. Pardus, lenient generally accorded to pro se litigants has limits.” treatment Pilgrim v. Littlefield, 92 F.3d 413, 416 (6th Cir. 1996) (citing Jourdan v. Jabe, 951 F.2d 108, 110 (6th Cir. 1991)). 6 The basic pleading essentials are not abrogated in pro se cases. 891 F.2d 591, 594 (6th Cir. 1989). Wells v. Brown, A pro se complaint must still “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Barnett v. Luttrell, 414 Fed. App’x 784, 786 (6th Cir. 2011) (quoting Ashcroft v. quotations Iqbal, and 556 emphasis U.S. 662, omitted). 678 (2009)) District (internal Courts “have no obligation to act as counsel or paralegal” to pro se litigants. Pliler v. Ford, 542 U.S. 225, 231 (2004). District Courts are also not “required to create” a pro se litigant’s claim for him. Payne v. Secretary of Treasury, 73 Fed. App’x 836, 837 (6th Cir. 2003). III. Analysis In her Report, the Magistrate Judge recommends that the Motion to Dismiss filed by ASC, Wells Fargo, and U.S. Bank be granted, because those Defendants have already been dismissed and Fox has not articulated any basis for vacating the order under Rule alternative, granted on 59(e). she the (Report, recommends basis of ECF that res No. 17 their at Motion judicata. 8.) to (Id. In Dismiss at 9.) the be The Magistrate Judge recommends that W&A’s Motion to Dismiss also be granted on the basis of res judicata. In his Objection, Fox (Id.) reasserts at length the factual allegations in his Amended Complaint, as well as the economic 7 history of the 2008 home lending bubble. Although the substantive arguments in (Obj., ECF No. 18.) the Objection are not entirely clear, Fox appears to argue that the previous dismissal order under Rule 59(e) should be vacated based on clear errors of law and that res judicata should not apply to his claims because they arise, in part, conclusion of the first suit. from correspondence (Id. at 7, 9.) after the Neither argument is persuasive. A. Rule 59 As the Magistrate Judge observes in her Report, before Fox can assert claims against ASC, Wells Fargo, and U.S. Bank, the Court must set aside and vacate its December 22, 2015 Order of dismissal. (Order, ECF No. 8.) Construing Fox’s Amended Complaint liberally as incorporating a request to vacate that Order, his request is governed by Rule 59(e). Inge v. Rock Fin. Corp., 281 F.3d 613, 617 (6th Cir. 2002); Brown v. Local 58, Int’l Bd. of Elec. Workers, 76 F.3d 762, 768-69 (6th Cir. 1996). Under Rule 59(e), the Court may set aside a prior judgment where there is: “‘(1) a clear error of law; (2) newly discovered evidence; (3) an intervening change in controlling law; or (4) a need to prevent manifest injustice.’” United States v. Ford Motor Co., 532 F.3d 496, 507 (6th Cir. 2008) (quoting Henderson v. Walled Lake Consolidated Schools, 469 F.3d 479, 496 (6th Cir. 2006)). The Magistrate Judge finds that Fox has articulated 8 none of those factors in his Amended Complaint and recommends that the request to vacate be denied. (Report, ECF No. 17 at 8.) Fox argues in his Objection that: [U]nder Rule 59(e) there is a clear error of law if this Court decides to dismiss this case and allow the Defendants to continue with this illegal debt collection in the name of a FORECLOSURE. This is not a FORECLOSURE but an ILLEGAL DEBT COLLECTION. (Obj., ECF No. 18 at 9.) Fox’s argument about the underlying merit of his claims against the previously-dismissed Defendants is not well-taken. The December 22, 2015 Order dismissing ASC, Wells Fargo, and U.S. Bank was based solely on Fox’s Motion for Voluntary Dismissal. has articulated no (Order, ECF No. 8; Mot., ECF No. 7.) error of law in the Order granting Fox that Motion, and he has not alleged newly discovered evidence, an intervening change in controlling law, or a need to prevent manifest injustice. To the extent Fox’s Amended Complaint contains a request under Rule 59(e) to vacate the Order dismissing Fargo, and U.S. Bank, that request is DENIED. is vacated, Defendants. Fox cannot reassert his ASC, Wells Unless the Order claims against those ASC, Wells Fargo, and U.S. Bank’s Motion to Dismiss is GRANTED. 9 B. Res Judicata Under the doctrine of res judicata, “a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action.” Allen v. McCurry, 449 U.S. 90, 94 (1980); Kane v. Magna Mixer Co., 71 F.3d 555, 560 (6th Cir. 1995). For res judicata to apply: (1) the first action must result in a final judgment on the merits by a court of competent jurisdiction; (2) the second action must involve the same parties, or their privies, as the first; (3) the second action must raise an issue actually litigated or that should have been litigated in the first action; and (4) there is an identity of the causes of action between the first and the second actions. Kane, 71 F.3d at 560; see also Bragg v. Flint Bd. of Educ., 570 F.3d 775, 776 (6th Cir. 2009). 4 In her Report, the Magistrate Judge finds that all four requirements are satisfied, so that Fox’s current suit ought to be barred by his prior suit. the Magistrate Judge finds Addressing the first requirement, that the Western District of Tennessee was a court of competent jurisdiction and that the dismissal of the prior suit pursuant to Rule 12(b)(6) was a 4 Although res judicata is an affirmative defense ordinarily pled in the answer, “it is now clearly established that res judicata can also be raised by motion,” including motions to dismiss. Westwood Chem. Co., Inc. v. Kulick, 656 F.2d 1224, 1227 (6th Cir. 1981); see, e.g., Rushford v. Firstar Bank, N.A., 50 Fed. App’x 202, 203 (6th Cir. 2002); Thompson v. U.S. Small Bus. Admin., 8 Fed. App’x 547, 548 (6th Cir. 2001). 10 final judgment on the merits. Pratt v. Ventas, Inc., 365 (Report, ECF No. 17 at 10 (citing F.3d 514, 522 (6th Cir. 2004).) Addressing the second requirement, the Magistrate Judge finds that the parties in the prior suit were identical to the parties in the current suit. Addressing the third and fourth requirements, the Magistrate Judge finds that the current suit “arise[s] out of the same facts and transactions that formed the basis for Fox’s first lawsuit”——the assignment of the Deed of Trust, Fox’s default, and Defendants’ debt collection conduct. (Id. at 12 (citing Holder v. City of Cleveland, 287 Fed. App’x 468, 471 (6th Cir. 2008) (“Where the two causes of action arise from the ‘same transaction, or series of transactions,’ the plaintiff should have litigated both causes in the first action and may not litigate the second issue later.”).) all four recommends requirements that res have been judicata met, applies the to Finding that Magistrate all Judge Defendants, including W&A. In his Objection, Fox argues that res judicata should not apply to his claims in this case because of correspondence that took place after the conclusion of the first suit: FOX alleges because Defendants have not proved a debt due to the failure to reply to the December 24, 2015 for the Current Creditor and the Amount Owing the only thing FOX believe[s] exist[s] is Data. The letter from FOX asked for specific information . . . . Defendants said the request was to[o] broad and therefore failed to answer which is a violation of the 11 FDCPA which pursuant to 15 U.S.C. § 1692(k) comes at least with a statutory damage of up to $1,000.00. (Obj., ECF No. 18 at 7.) That is, “the [t]hird and [f]ourth elements do[] not apply because the letter sent to Defendants w[as] not previously available to could not have been litigated.” the (Id.) parties and therefore Fox does not otherwise object to the Magistrate Judge’s recommended application of res judicata. In Fox’s Amended Complaint, he does not allege that W&A is responsible for the alleged failure to respond adequately to his December 24, 2015 request for validation: Defendants AMERICA’S SERVICING COMPANY, WELLS FARGO BANK, N.A. on behalf of U.S. BANK, N.A., U.S. BANK, N.A. individually and U.S. BANK, N.A., as TRUSTEE for SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2006NCI, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006NCI on or about January 13, 2016 acknowledged receipt of the [December 24, 2015] validation request . . . . Defendants AMERICA’S SERVICING COMPANY, WELLS FARGO BANK, N.A. on behalf of U.S. BANK, N.A., U.S. BANK, N.A. individually and U.S. BANK, N.A., as TRUSTEE for SECURITIZED ASSET BACKED RECEIVABLES LLC TRUST 2006NCI, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006NCI up to the filing of this law[]suit have failed to provide information required by the FDCPA 15 U.S.C. § 1692(g)(a)(1) and 15 U.S.C. § 1692(g)(a)(2). (Am. Compl., ECF No. 9 at 5.) These are the only claims arising out of the letter, and Fox does not include W&A in them (despite naming W&A Complaint). at numerous points (Id. at 2-4, 7.) 12 elsewhere in his Amended The Magistrate Judge’s Report recommending application of res judicata is ADOPTED on all claims not arising out of the December 24, 2015 letter. Based on Fox’s Amended Complaint, the December 24, 2015 letter does not relate to W&A. therefore, no claims remaining against W&A. There are, W&A’s Motion to Dismiss is GRANTED. IV. Conclusion For the foregoing reasons, the Magistrate Judge’s Report is ADOPTED, and the Motions to Dismiss are GRANTED. The case is DISMISSED. So ordered this 16th day of June, 2016. /s/ Samuel H. Mays, Jr._____ SAMUEL H. MAYS, JR. UNITED STATES DISTRICT JUDGE 13

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