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Cigler v. Ocwen Loan Servicing LLC

United States District Court, N.D. Indiana, Hammond Division

May 9, 2014

Joseph A. Cigler, Plaintiff,
Ocwen Loan Servicing LLC, Defendant.



A. Introduction

Plaintiff Cigler filed an action against Defendant Ocwen Loan Servicing LLC alleging violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692g, for failure to send required notices within five days after Defendant first communicated with Plaintiff in connection with his home mortgage. Before the Court is Defendant's motion to dismiss the case in its entirety for failure to state a claim (DE 15).

B. Background

According to the facts taken from the Complaint (DE 1) and its attached exhibits, Plaintiff's home loan was transferred from State Bridge to Defendant. On May 9, 2013, Defendant sent Plaintiff a service-transfer notice pursuant to Section 6 of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2650c. (Ex. A, DE 1.) The letter, titled "Notice of Assignment, Sale or Transfer of Servicing Rights" begins with a welcome message: "Ocwen Loan Servicing, LLC ("Ocwen") would like to welcome you as a new customer." The letter then indicates Defendant's contact information, how and where Plaintiff should make payments, disclosures under RESPA, and a disclosure of credit reporting for delinquent payments. A payment coupon is also attached to the last page of the letter. The payment coupon shows the account number, Plaintiff's name, the return address, and an empty box labeled "amount due."

A document with frequently asked questions also came with the letter. The document, among other things, confirmed that Ocwen is a debt collector:

Ocwen Loan Servicing, LLC is a debt collector attempting to collect a debt, any information obtained will be used for that purpose. However, if the debt is in active bankruptcy or has been discharged through bankruptcy, this communication is not intended as and does not constitute an attempt to collect a debt.

One day later, Defendant sent an account statement to Plaintiff. (Ex. B, DE 1.) The account statement contains Plaintiff's account and balance information, such as outstanding balance, interest rate, past dues, late charges, and service fees.

On May 18, 2013, Ocwen sent Plaintiff another letter. (Ex. C, DE 1.) This letter states that Plaintiff's hazard insurance on his home has expired and that the loan agreement requires Plaintiff to maintain such insurance.

Plaintiff filed this action on October 1, 2013. Plaintiff alleged in the Complaint that "at no time did [the] defendant provide [the] plaintiff with the disclosures" required by the FDCPA.

On December 6, 2013, Defendant filed a motion to dismiss. Defendant argues that Plaintiff's allegation is solely based on the communication in Exhibit A. Since the letter is not "a communication in connection with the collection of any debts" under the FDCPA, the Court should dismiss the entire case under Rule 12(b)(6).

C. Standard of Review

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim is to test the sufficiency of the pleading, not to decide the merits of the case. See Gibson v. City of Chi., 910 F.2d 1510, 1520 (7th Cir. 1990). Federal Rule of Civil Procedure Rule 8(a)(2) provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." However, "recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 661, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007))[1]. As the Supreme Court has stated, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id. Rather, "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). A complaint is facially plausible if a court can reasonably infer from factual content in the pleading that the defendant is liable for the alleged wrongdoing. Id. (citing Twombly, 550 U.S. at 570). The Seventh Circuit has synthesized the standard into three requirements. See Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). "First, a plaintiff must provide notice to defendants of her claims. Second, courts must accept a plaintiff's ...

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