ZVI Kurtzman v. Nationstar Mortgage LLC ( 2017 )


Menu:
  •            Case: 16-17236   Date Filed: 10/10/2017   Page: 1 of 10
    [DO NOT PUBLISH]
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE ELEVENTH CIRCUIT
    ________________________
    No. 16-17236
    Non-Argument Calendar
    ________________________
    D.C. Docket No. 1:16-cv-01371-RWS
    ZVI KURTZMAN,
    Plaintiff - Appellant,
    versus
    NATIONSTAR MORTGAGE LLC,
    HSBC BANK USA, N.A., et al.,
    Defendants - Appellees.
    ________________________
    Appeal from the United States District Court
    for the Northern District of Georgia
    ________________________
    (October 10, 2017)
    Before TJOFLAT, MARCUS, and FAY, Circuit Judges.
    PER CURIAM:
    Case: 16-17236       Date Filed: 10/10/2017      Page: 2 of 10
    This appeal arises from an attempt by Nationstar Mortgage LLC
    (“Nationstar”) to enforce a security deed against Zvi Kurtzman (“Kurtzman”) by
    non-judicial foreclosure sale. In response, Kurtzman sued under the Fair Debt
    Collection Practices Act 1 (the “FDCPA”) and sought other declaratory relief
    regarding Nationstar’s compliance with Georgia law controlling non-judicial
    foreclosure sales and the requirements of the Power of Sale contained in the
    security deed. Nationstar filed a motion to dismiss under Federal Rule of Civil
    Procedure 12(b)(6), arguing that Kurtzman’s complaint failed to identify it as a
    debt collector subject to the FDCPA and that no legal basis existed to grant
    declaratory relief. The District Court granted the motion and dismissed
    Kurtzman’s complaint. Kurtzman appealed. After review, we affirm.
    I.
    Kurtzman obtained a residential mortgage loan from Countrywide Home
    Loans, Inc. (“Countrywide”) on or about December 7, 2005. He executed an
    interest-only adjustable rate promissory note in favor of Countrywide for
    $1,720,000. A security deed securing the loan transaction was issued to Mortgage
    Electronic Registration Systems, Inc. (“MERS”) as the nominee for Countrywide.
    1
    Fair Debt Collection Practices Act, 
    15 U.S.C. §§ 1692
    –92p (2012).
    2
    Case: 16-17236      Date Filed: 10/10/2017   Page: 3 of 10
    This security deed was properly recorded in the property records of the Superior
    Court of Fulton County, Georgia.2 Nationstar acted as the loan servicer.
    Kurtzman defaulted on the loan. On March 23, 2016, a law firm acting on
    behalf of Nationstar sent Kurtzman written notice of a pending non-judicial
    foreclosure sale for the property, scheduled for May 3, 2016. Pursuant to Georgia
    law, 3 this notice provided Kurtzman with “the name, address, and telephone
    number of the individual or entity having authority to negotiate, amend and modify
    the terms of the mortgage loan with the debtor” and also contained a copy of the
    Notice of Sale Under Power submitted for publication in a local newspaper.
    Kurtzman filed this action on April 27, 2016 and also sought a stay to halt
    foreclosure proceedings. The District Court rejected his request in a summary
    order on May 9, 2016 and assigned the case to a magistrate judge. Nationstar then
    filed a motion to dismiss Kurtzman’s complaint, primarily arguing the complaint
    could not state a claim because Kurtzman did not adequately allege that Nationstar
    was a debt collector subject to the FDCPA. Nationstar also argued that its notice
    of sale did not violate Georgia law and that Kurtzman lacked standing to challenge
    the assignment that authorized Nationstar to foreclose on Kurtzman’s loan. On
    August 24, 2016, the Magistrate Judge issued a final report and recommendation
    2
    On July 11, 2005, MERS assigned the security deed to HSBC Bank USA, National
    Association as Trustee for Merrill Lynch Mortgage Investors, Inc., Mortgage Pass-Through
    Certificates, MLMI 2006-A1 (the “Trustee”). This assignment was also properly recorded.
    3
    O.C.G.A. § 44-14-162.2.
    3
    Case: 16-17236     Date Filed: 10/10/2017    Page: 4 of 10
    that Kurtzman’s complaint should be dismissed for failure to state a claim. The
    District Court adopted this final report and recommendation in its entirety and
    dismissed Kurtzman’s suit on September 26, 2016. This appeal follows.
    II.
    “We review de novo the district court’s grant of a motion to dismiss for
    failure to state a claim under Fed. R. Civ. P. 12(b)(6), accepting the allegations in
    the complaint as true and construing them in the light most favorable to the
    plaintiff.” Timson v. Sampson, 
    518 F.3d 870
    , 872 (11th Cir. 2008) (per curiam).
    To survive a motion to dismiss, the complaint must contain sufficient facts to
    “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
    
    550 U.S. 544
    , 570, 
    127 S. Ct. 1955
    , 1974 (2007). A complaint is plausible on its
    face 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, 
    129 S. Ct. 1937
    , 1949 (2009). While the
    complaint does not need to include detailed factual allegations, it must provide
    “more than labels and conclusions, and a formulaic recitation of the elements of a
    cause of action will not do.” Twombly, 
    550 U.S. at 555
    , 
    127 S. Ct. at 1965
    .
    III.
    Kurtzman’s appeal is essentially on two grounds: that the District Court
    erred in dismissing his FDCPA claim and that it erred in dismissing his claim for
    4
    Case: 16-17236        Date Filed: 10/10/2017       Page: 5 of 10
    declaratory judgment. 4 All of his arguments, on both grounds, are unavailing. We
    discuss each ground in turn.
    A.
    The FDCPA is a consumer protection statute intended to “‘eliminate abusive
    debt collection practices,’ to ensure that ‘debt collectors who refrain from using
    abusive debt collection practices are not competitively disadvantaged,’ and ‘to
    promote consistent state action in protecting consumers against debt collection
    abuses.’” Davidson v. Capital One Bank (USA), N.A., 
    797 F.3d 1309
    , 1312–13
    (11th Cir. 2015) (quoting 
    15 U.S.C. § 1692
    (e)). It “regulates the conduct of debt-
    collectors” in part by granting “consumers . . . a private right of action to enforce
    the provisions of the FDCPA against debt collectors[.]” Crawford v. LVNV
    Funding, LLC, 
    758 F.3d 1254
    , 1258 (11th Cir. 2014) (quoting Jeter v. Credit
    Bureau, Inc., 
    760 F.2d 1168
    , 1174 n.5 (11th Cir. 1985)). The requirements of the
    FDCPA apply “only to professional debt-collectors[.]” Id. at n.3; see also Harris v.
    Liberty Cmty. Mgmnt., Inc., 
    702 F.3d 1298
    , 1302 (11th Cir. 2012) (explaining that
    the FDCPA’s “restrictions apply only to ‘debt collectors’”).
    4
    Kurtzman’s claimed grounds for his appeal are scattered. The final report and
    recommendation adopted by the District Court construed the claims in his complaint, “to the
    extent [they] can be ascertained,” essentially in this same two-claim framework. (It also noted
    his request for injunctive relief, but that issue is not before us here.) Because Kurtzman’s appeal
    appears to raise numerous issues concerning both of those two claims as construed by the
    District Court, we will construe his appeal as fully challenging both of these grounds of
    dismissal.
    5
    Case: 16-17236       Date Filed: 10/10/2017       Page: 6 of 10
    The FDCPA defines “debt collector” as “any person who uses any
    instrumentality of interstate commerce or the mails in any business the principal
    purpose of which is the collection of any debts, or who regularly collects or
    attempts to collect, directly or indirectly, debts owed or due or asserted to be owed
    or due another.” 15 U.S.C. § 1692a(6). 5 To state an FDCPA claim, Kurtzman
    must plausibly allege sufficient factual content to enable the court to draw a
    reasonable inference that Nationstar meets the FDCPA’s definition of “debt
    collector” and is thus subject to the Act.
    But Kurtzman’s complaint totally omits any factual content that would
    enable us to infer that Nationstar qualifies as a debt collector. The complaint is
    silent regarding whether the principal purpose of Nationstar’s business is collecting
    debts, and it only generally asserts that Nationstar “regularly attempts to collect
    debts not owed to [it].” This is a conclusory, formulaic recitation of the statutory
    language, and we need not assume it is true. See Chaparro v. Carnival Corp., 
    693 F.3d 1333
    , 1337 (11th Cir. 2012); Twombly, 
    550 U.S. at 555
    , 
    127 S. Ct. at
    1965
    5
    The definition of “debt collector” also includes “any person who uses any
    instrumentality of interstate commerce or the mails in any business the principal purpose of
    which is the enforcement of security interests” for the purpose of 15 U.S.C. § 1692f(6), an unfair
    practices subsection. Kurtzman’s laundry list of alleged FDCPA violations committed by
    Nationstar includes this subsection and potentially implicates this broader definition of “debt
    collector.” Kurtzman’s complaint, however, fails to adequately allege that Nationstar meets this
    more expansive definition for the same reasons enumerated here.
    6
    Case: 16-17236    Date Filed: 10/10/2017    Page: 7 of 10
    (noting that “labels and conclusions” are insufficient to survive a 12(b)(6) motion
    to dismiss).
    The sole factual allegation in Kurtzman’s complaint that might have
    supported Nationstar’s status as a debt collector is that the debt at issue was
    already in default when Nationstar acquired it. But it is the law of this Circuit that
    “a non-originating debt holder [does not qualify as] a ‘debt collector’ for purposes
    of the FDCPA solely because the debt was in default at the time it was acquired.”
    Davidson, 797 F.3d at 1316. The Supreme Court has recently confirmed a similar
    principle regarding owned debt. See Henson v. Santander Consumer USA Inc.,
    ____ U.S. ____, ____, 
    137 S. Ct. 1718
    , 1721–22 (2017) (“[A] debt purchaser . . .
    may indeed collect debts for its own account without triggering the [FDCPA.]”)
    Without this, Kurtzman has no factual allegation to stand on. Because his
    complaint fails to plausibly allege sufficient facts regarding Nationstar’s status as a
    debt collector, his FDCPA claims must be dismissed.
    Even if we assume, however, that Kurtzman’s complaint had adequately
    alleged that Nationstar was a debt collector under the FDCPA, he would still fail to
    plead the existence of a plausible claim. Kurtzman argues that his FDCPA claim is
    premised on “an improper attempt to collect a debt by a debt collector through the
    United States Mail that was out of compliance with Georgia State law, thereby
    violating [the FDCPA].” He claims the Notice of Foreclosure Sale that he received
    7
    Case: 16-17236     Date Filed: 10/10/2017    Page: 8 of 10
    from Nationstar’s counsel was fatally flawed under a Georgia law requiring such
    notices to provide contact information for “the individual or entity who shall have
    full authority to negotiate, amend, and modify all terms of the mortgage with the
    debtor.” O.C.G.A. § 44-14-162.2. Because the notice he received omitted the
    words “full” and “all,” Kurtzman argues it did not comply with the statute.
    But this argument must fail under controlling precedent both in Georgia law
    and in this Court. In 2010, the Georgia Court of Appeals dealt with a nearly
    identical claim involving a challenge to the legal sufficiency of a notice of
    foreclosure sale and flatly held that “OCGA § 44-14-162.2 does not require the
    individual or entity be expressly identified as having ‘full authority to negotiate,
    amend, and modify all terms of the mortgage,’ and we cannot conclude that [the]
    notice was legally deficient for failure to do so.” TKW Partners, LLC v. Archer
    Capital Fund, L.P., 
    691 S.E.2d 300
    , 303 (Ga. Ct. App. 2010). Indeed, it is clear
    that “substantial compliance with the contact information requirement of OCGA §
    44-14-162.2(a) is sufficient.” Stowers v. Branch Banking & Tr. Co., 
    731 S.E.2d 367
    , 370 (Ga. Ct. App. 2012). This principle has already been recognized by this
    Circuit. A panel of this Court has acknowledged “Georgia courts have repeatedly
    held that ‘substantial compliance’ is all that is required” in the O.C.G.A. § 44-14-
    162.2 context. Haynes v. McCalla Raymer, LLC, 
    793 F.3d 1246
    , 1253 (11th Cir.
    8
    Case: 16-17236       Date Filed: 10/10/2017       Page: 9 of 10
    2015) (quoting TKW Partners, 
    691 S.E.2d at 303
    ). Kurtzman’s argument that the
    notice was deficient because it omitted two words is directly foreclosed.
    Kurtzman’s claim fails because it does not adequately allege that Nationstar
    is a debt collector for purposes of the FDCPA. Even if it did, it could not show a
    violation of the Georgia statute that would provide a basis for an FDCPA claim. 6
    Accordingly, the District Court did not err in dismissing this claim.
    B.
    We now turn to Kurtzman’s appeal of the dismissal of his request for
    declaratory judgment. Declaratory relief can be granted “only if there is ‘a
    substantial controversy of sufficient immediacy and reality between parties having
    adverse legal interests.’” Sullivan v. Div. of Elections, 
    718 F.2d 363
    , 365 (11th
    Cir. 1983) (quoting Wolfer v. Thaler, 
    525 F.2d 977
    , 979 (5th Cir. 1976)). A
    district court “may not ‘enjoin conduct which is neither threatened nor imminent.’”
    
    Id.
     (quoting Congress of Racial Equal. v. Douglas, 
    318 F.2d 95
    , 100 (5th Cir.
    1963)). In order “to pursue properly a declaratory judgment under Georgia law[,]
    ‘a party must establish that a declaratory judgment is necessary to relieve himself
    of the risk of taking some future action that, without direction, would jeopardize
    6
    We do not reach the question of whether Kurtzman lacks standing to bring claims
    relating to the assignment of the security deed. Such a lack of standing could impact which, if
    any, claims would be available to him under the FDCPA.
    9
    Case: 16-17236     Date Filed: 10/10/2017      Page: 10 of 10
    his interests.’” Milani v. One West Bank FSB, 491 F. App’x 977, 979 (11th Cir.
    2012) (quoting Porter v. Houghton, 
    542 S.E.2d 491
    , 492 (Ga. 2001)).
    Kurtzman failed to meet both the immediacy and necessity requirements.
    All of his allegations relate to past events, including the mailing of the Notice of
    Foreclosure Sale and the correspondence that followed between counsel for both
    sides. When “all material rights have accrued based on past events and what
    Plaintiff seeks is an advisory opinion on the validity of the future act of another
    party[,]” declaratory relief is unavailable. 
    Id.
     (citing Logan Paving Co. v. Peoples
    Bank & Tr., 
    395 S.E.2d 287
    , 288 (Ga. 1990)). Such is the case here. There is no
    immediate necessity for a court to grant declaratory relief. Accordingly, the
    District Court also did not err in dismissing this claim.
    AFFIRMED.
    10