Hines v. Regions Bank

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

NORTHEASTERN DIVISION

JAMES L. HINES )

)

Plaintiff, )

)

v. ) Case No.: 5:19-cv-1819-LCB

)

REGIONS BANK, f/k/a UNION )

PLANTERS BANK, N.A., )

)

Defendant.

MEMORANDUM OPINION

The plaintiff, James L. Hines, appearing pro se, filed a complaint on

November 7, 2019 (Doc. 1)1, and an “Amended Complaint and Motion to Set Aside

Foreclosure Sale” on November 19, 2020. (Doc. 3). Although the amended

complaint also purported to be a motion, its contents was solely that of a pleading

under Fed. R. Civ. P. 7. However, in his prayer for relief, the plaintiff did ask the

Court to reverse a foreclosure sale and reinstate property to he and his wife. The

Court will treat that request as a prayer for relief. Before the Court is the defendant’s

motion to dismiss the amended complaint. (Doc. 7).

I. Hines’s Amended Complaint

1 The record does not reflect that Hines served the original complaint on the defendant.

The plaintiff’s amended complaint asserts that the defendant, Regions Bank,

violated the Fair Debt Collections Practices Act (“FDCPA”), by filing “an illegal

foreclosure on Plaintiff’s homestead on, or about, November 5, 2019.” (Doc. 3, p.

1). According to the plaintiff, the defendant’s foreclosure counsel sent a letter to

him on September 17, 2019, explaining that the bank intended to foreclose on his

home and that he had 30 days to dispute the debt. The plaintiff claims that he sent a

written notice disputing the debt, but that he never received a response. The plaintiff

contends that the foreclosure counsel’s failure to mail him verification of the debt

violated the FDCPA.

Although it is unclear from the face of the amended complaint, the plaintiff

appears to concede that the defaulted on his mortgage. He states that his personal

obligation on the loan was discharged in a Chapter 7 bankruptcy proceeding in 2014,

but appears to understand that the defendant still has the right to foreclose on his

property. However, the plaintiff contends that the defendant tried to collect an in

personam debt from him when it contacted him through the foreclosure attorney and

when it published a foreclosure notice in the local newspaper. The plaintiff also

appears to claim that this is a violation of the FDCPA.

The Court notes that this is not the first lawsuit Hines has filed in response to

Regions’s efforts to foreclose on his home. In Hines v. Regions Bank, No. 5:16-cv-

01996-MHH, 2018 WL 905364 (N.D. Ala. Feb. 15, 2018), the plaintiff asserted,

among other claims, a cause of action for a violation of the Real Estate Settlement

Procedures Act (RESPA). The Eleventh Circuit affirmed the district court’s

dismissal with prejudice of that action and the United States Supreme Court denied

certiorari. 782 F. App’x 853 (11th Cir. 2019), cert. denied, No. 19-1139, 2020 WL

2515634 (U.S. May 18, 2020).

II. Regions’s Motion to Dismiss

The defendant argues that the plaintiff’s complaint is due to be dismissed

pursuant to Fed. R. Civ. P. 12(b)(6), which permits a party to move to dismiss a

complaint for “failure to state a claim upon which relief can be granted.” Fed. R.

Civ. P. 12(b)(6). This rule must be read together with Rule 8(a), which requires that

a pleading contain only a “short and plain statement of the claim showing that the

pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). While that pleading standard

does not require “detailed factual allegations,” Bell Atlantic Corp. v. Twombly, 550

U.S. 544, 550 (2007), it does demand “more than an unadorned, the-defendant-

unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(citations omitted). Essentially, a Rule 12(b)(6) motion to dismiss tests the

sufficiency of a complaint against the “liberal pleading standards set forth by Rule

8(a)(2).” Erickson v. Pardus, 551 U.S. 89, 94 (2007). When evaluating a Rule

12(b)(6) motion to dismiss, a district court accepts as true the allegations in the

complaint and construes the allegations in the light most favorable to the plaintiff.

See Brophy v. Jiangbo Pharms. Inc., 781 F.3d 1296, 1301 (11th Cir. 2015).

The defendant correctly asserts that in order “[t]o state a claim under the

FDCPA, a plaintiff must establish, among other things, that the defendant is a ‘debt

collector.”” Prickett v. BAC Home Loans, et al., 946 F. Supp. 2d 1236, 1248 (N.D.

Ala. 2013). “The FDCPA defines the term ‘debt collector’ as ‘[1] 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] [2] who regularly

collects or attempts to collect, directly or indirectly, debts owed or due or asserted

to be owed or due to another …’” Collins v. BSI Fin. Servs., No. 2:16-cv-262-WHA,

2017 WL 1045062, at *4 (M.D. Ala. Mar. 17, 2017) (quoting 15 U.S.C. § 1692a(6)).

A review of the amended complaint reveals that the plaintiff did not

adequately allege that Regions was a debt collector as defined in the FDCPA.

Rather, he merely asserted that it attempted to collect a debt from him. Courts in

this district routinely reject FDCPA claims where the plaintiff merely labels a

defendant as a “debt collector” without demonstrating that that the defendant meets

one of the two definitions above. Gregory v. Select Portfolio Servicing, Inc., No.

2:15-cv-781-JHE, 2016 WL 4540891, at *19 (N.D. Ala. Aug. 31, 2016) (“Although

[plaintiffs] do clearly assert [defendants] are ‘debt collectors’ under the FDCPA …

they never allege facts to support that legal conclusion.”). Nothing in the complaint

suggests that Regions’s principal purpose is to collect debts or that Regions regularly

attempts to collect debts owed or due to another person or entity. Thus, the plaintiff’s

complaint fails to allege a necessary element of a cause of action under the FDCPA

and is due to be dismissed for that reason.

The Court also notes that allowing the plaintiff to amend his complaint would

be futile. The FDCPA distinguishes between “creditors,” which are not subject to

the FDCPA, and “debt collectors,” which are subject to the FDCPA. Accordingly,

the FDCPA “specifically exempts from its reach ‘any person collecting or

attempting to collect any debt ... to the extent such activity ... concerns a debt which

was originated by such person….’” Helman v. Bank of America, 685 F. App’x 723,

726 (11th Cir. 2017)(citing 15 U.S.C. § 1692a(6)(F))(holding that “[w]e have no

trouble concluding that BANA is not a debt collector as that term is defined by the

FDCPA” because “[a]s the originator of those loans, the Bank is plainly not subject

to the provisions of the FDCPA.”). In the present case, Regions bank is a successor

by merger to Union Planters, the institution who originated the loan in question.

As noted by the defendant, the definition of a “debt collector” also excludes

several categories of entities, including “any person collecting or attempting to

collect any debt . . . to the extent such activity . . . concerns a debt which was not in

default at the time it was obtained by such person.” See 15 U.S.C. § 1692a(6)(F)(iii)

(emphasis added). The plaintiff, by his own prior judicial admission, did not default

on his mortgage loan until December 7, 2014 – nine years after Regions merged with

Union Planters. See Hines v. Regions Bank, No. 5:16-cv-01996-MHH, 2018 WL

905364 (N.D. Ala. Feb. 15, 2018)(Hines “has been in default on his mortgage since

December 7, 2014 (Doc. 1-1, p. 5).”). Moreover, courts have universally held that

where a defendant acquires a debt through its merger with a previous creditor rather

than via a specific assignment or transfer, the debt was not “obtained” while it was

in default; therefore, the defendant is not a “debt collector” under the FDCPA. See

Brown v. Morris, 243 F. App’x 31, 34 (5th Cir. 2007); Fenello v. Bank of Am., N.A.,

926 F. Supp. 2d 1342, 1350 (N.D. Ga. 2013). Accordingly, it is not possible for the

plaintiff to amend his complaint to plausibly allege that Regions is a debt collector

as defined in the FDCPA.

The Court also notes that, in his response to the defendant’s motion to dismiss,

Hines “ACKNOWLEDGES THAT REGIONS BANK IS A ‘CREDITOR’ UNDER

THE RULING OF THE US SUPREME COURT….” (Doc. 12, p. 2)(capitalization

in original). However, he attempts to then claim that Regions’s foreclosure counsel

is the actual debt collector in his situation. See (Doc. 12, p. 3). This fails for two

reasons. First, Regions’s foreclosure counsel is not a defendant, and a party cannot

amend its pleading via brief in response to a motion to dismiss. Moreover, even if

the plaintiff were allowed to join Regions’s foreclosure counsel as a defendant, his

claim would still fail. Regions’s foreclosure counsel was not a “debt collector”

because a person merely enforcing a security interest through foreclosure is not a

“debt collector” under the FDCPA. See Obduskey v. McCarthy & Holthus LLP, 139

S. Ct. 1029, 1035 (2019)(“ (“[T]hose who engage in only nonjudicial foreclosure

proceedings are not debt collectors within the meaning of the Act.”). Regions’s

foreclosure counsel was merely taking the steps necessary for Regions to foreclose

on the plaintiff’s property.

The plaintiff has also filed a motion for permission to file a sur-reply brief in

support of his contention that the motion to dismiss should be denied. In the motion,

the plaintiff essentially restates and elaborates on the arguments he made in his

response brief. He also appears to seek to amend his complaint to add additional

factual allegations. However, as noted above, the plaintiff is unable to allege any

facts that would demonstrate that Regions is a debt collector for purposes of the

FDCPA. Accordingly, the plaintiff’s motion to file a sur-reply brief (Doc. 14) is

DENIED.

For the foregoing reasons, the defendant’s motion to dismiss (Doc. 7) is due

to be GRANTED, and this case DISMISSED WITH PREJUDICE. A separate

order will be entered.

DONE and ORDERED July 28, 2020.

io SZ C Sha

LILES C. BURKE

UNITED STATES DISTRICT JUDGE