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Spehr v. Seterus, Inc.

United States District Court, E.D. Missouri, Eastern Division

September 6, 2019

MICHAEL SPEHR, on Behalf of Himself and Others Similarly Situated, Plaintiff,
v.
SETERUS, INC., Defendant.

          MEMORANDUM AND ORDER

          RONNIE L. WHITE UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Defendant Seterus, Inc.'s Motion to Dismiss Plaintiffs Complaint. (ECF No. 9) On January 22, 2019, Plaintiff Michael Spehr, on behalf of himself and others similarly situated, filed a First Amended Class Action Complaint. (ECF No. 13) Defendant then filed a Motion to Dismiss Plaintiffs Amended Complaint (ECF No. 14), which is fully briefed and ready for disposition.

         Because Defendant's first Motion to Dismiss Plaintiffs Complaint was directed at the original Class Action Compliant (ECF No. 1) and the First Amended Class Action Complaint is now the operative complaint, the Court denies the first motion to dismiss as moot. After careful consideration, the Court grants Defendant's second motion to dismiss in part and denies it in part.

         BACKGROUND [1]

         Plaintiff Michael Spehr owns a residential home that is secured by a mortgage owned, backed, or controlled by Federal National Mortgage Association ("Fannie Mae") and is serviced by Defendant Seterus, Inc. (ECF No. 13, ¶¶ 16-17) On or about April 8, 2015, Plaintiffs mortgage was transferred to Defendant because Plaintiff allegedly became delinquent in payments such that the mortgage was in a state of default. (Id. at ¶ 36) Plaintiff alleges Defendant sent him numerous form letters (referred to as "Default Letters")[2] that stated he was in default of his mortgages and his failure to immediately make a full and complete payment of all arrearages would result in acceleration of his loan and commencement of foreclosure proceedings. (Id. at ¶¶ 2, 38-39) Specifically, the Default Letters stated:

If full payment of the default amount is not received by us ... on or before [the Expiration Date], we will accelerate the maturity date of your loan and upon such acceleration the ENTIRE balance of the loan, including principal, accrued interest, and all other sums due thereunder, shall, at once and without further notice, become immediately due and payable.

(Id. at ¶ 42) (emphasis added by Pl in First Am. Class Action Compl.) In addition, the letters stated:

If you send only a partial payment, the loan still will be in default ... IF THE DEFAULT IS NOT CURED ON OR BEFORE THE EXPIRATION DATE, THE LOAN OWNER AND WE INTEND TO ENFORCE THE LOAN OWNER'S RIGHTS AND REMEDIES AND MAY PROCEED WITHOUT FURTHER NOTICE TO COMMENCE FORECLOSURE PROCEEDINGS.

(Id. at 43)

         Plaintiff, on behalf of himself and others similarly situated, has filed this putative class action lawsuit against Defendant for alleged violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1962, et seq. He claims Defendant creates a false sense of urgency by threatening to accelerate the entire indebtedness of a consumer's loan if full payment of the default amount is not received on or before the stated expiration date. (Id. at ¶ 46) Plaintiff alleges that, according to the deposition of representative of Defendant taken in a separate case pursuant to Federal Rule of Civil Procedure 30(b)(6), [3] Defendant's actual policy is to not accelerate loans that are less than 45 days delinquent. (Id.) "Put simply, [Defendant] does not customarily accelerate loans under the terms threatened by its [Default Letters] if homeowners make a partial payment sufficient to bring their loan less than 45 days past due." (Id. at ¶ 53)

         Plaintiffs putative class action asserts Defendant violated § 1692(e) of the FDCPA by using false representations and deceptive means to attempt to collect the debt and by threatening action that it could not legally take or did not intend to take. Plaintiff also claims Defendant's actions constituted unfair and unconscionable means in violation of § 1692(f). The amended class action seeks a declaration that Defendant has violated the FDCPA, injunctive relief prohibiting Defendant from further violating the FDCPA, and class statutory damages and fees under the FDCPA.

         In the instant motion, Defendant argues Plaintiffs amended complaint should be dismissed pursuant to Federal Rules of Civil Procedure 12(b)(1) for Plaintiffs failure to sufficiently plead facts establishing standing under Article III of the United States Constitution and Rule 12(b)(6) for failure to stand a claim under the FDCPA.

         DISCUSSION

         I. Plaintiff has sufficiently pleaded facts to establish Article III standing.

         "As an initial matter, a prerequisite to class certification is that 'it must be established that the proposed class representatives have [Article III] standing to pursue the claims as to which classwide relief is sought.'" Chorosevic v. MetLive Choices, No. 4:05-CV-2394 CAS, 2007 WL 2159475, at *3 (E.D. Mo. July 26, 2007) (quoting Wooden v. Bd. of Regents of Univ. Sys. Of Go., 247 F.3d 1262, 1287 (11th Cir. 2001)). "Individual Article III standing is a prerequisite for all actions, including class actions." Id. (citation omitted). A plaintiff has the burden of establishing standing by demonstrating (1) an injury in fact, (2) fairly traceable to the defendant's challenged conduct, and (3) that is likely to be ...


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