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Shelley v. Select Portfolio Servicing, Inc.

United States District Court, E.D. Louisiana

April 13, 2017


         SECTION: A (4)



         Before the Court is a Motion for Judgment on the Pleadings (Rec. Doc. 9) filed by Defendant Select Portfolio Servicing, Inc. (“SPS”). Plaintiff has not filed an opposition to the Motion. The Motion, set for submission on January 11, 2017 is before the court on the briefs without oral argument.[1]

         I. Background

         On October 29, 2004, Plaintiff executed a promissory note in favor of Olympus Mortgage Company or “anyone who takes this Note by transfer” in the principal amount of $61, 000.00 (the “Note”). The Note is secured by a mortgage that was signed by Plaintiff on October 29, 2004, and is recorded in the Parish of Jefferson, State of Louisiana as Instrument Number 10466394, Book 4211, Page 910 (the “Mortgage”). The Mortgage encumbers the immovable property located at 457 Sala Avenue, Westwego, Louisiana 70094 (the “Property”).

         The Note was endorsed by Olympus Mortgage Company and made payable to Ameriquest Mortgage Company, which endorsed the Note in blank, rendering the note bearer paper. (Rec. Doc. 9-2). U.S. Bank, N.A. is the current holder and possessor of the Note. Defendant SPS has been the loan servicer since July 1, 2012. Plaintiff allegedly defaulted the Note and Mortgage by failing to remit the November 1, 2015 monthly installment, and all subsequent installments. As a result of Plaintiff's default and his failure to cure the default, the loan was accelerated and the entire unpaid principal balance, together with interest, and allowable fees, are now allegedly due, owing, and unpaid. (Rec. Doc. 9).

         On or about August 9, 2016, U.S. Bank filed the lawsuit against Plaintiff in the Twenty-Fourth Judicial District Court for the Parish of Jefferson to enforce its rights in the Note and Mortgage against Plaintiff. Although it remains unclear, this action appears to have resulted in the Sheriff Sale of the mortgaged property on October 19, 2016. (Rec. Doc. 1-4). In response to the lawsuit, Plaintiff filed a civil action on October 11, 2016 against Defendant in the Second Justice Court for the Parish of Jefferson. (Rec. Doc. 1-4). Defendant timely removed the state court action to this Court. (Rec. Doc. 1).

         II. Analysis

         Plaintiff seeks a $1, 000 penalty under the Federal Debt Collection Practices Act (“FDCPA”), a letter from SPS to “all 3 credit reporting agencies” requesting that negative reporting in connection with the Note be removed under the Fair Credit Reporting Act (“FCRA”), and that the sale ordered in the Foreclosure Action be enjoined pending resolution of this lawsuit. (Rec. Doc. 1-4). Defendant SPS claims that it is entitled to judgment on the pleadings because 1) Plaintiff waived presentment by the clear and unambiguous terms set out in the note, 2) SPS is not a debt collector under the FDCPA, 3) Plaintiff has no right of action, and failed to comply with the statutory requirements for asserting a FCRA claim, and 4) Plaintiff's request for injunctive relief does not fall within one of the statutory exceptions in the Anti-Injunction Act.

         A motion for judgment on the pleadings is subject to the same standard as a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008). When considering a motion to dismiss under Rule 12(b)(6), a court must accept as true all well-pleaded facts and must draw all reasonable inferences from those allegations in the plaintiff's favor. Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996). To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (2007). “Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (parenthetical in original) (quotations, citations, and footnote omitted).

         a. Failure of Presentment

         Plaintiff claims that Defendant's failure to present the note upon demand means that the note is dishonored and that his debts are no longer owed. Defendant asserts that Plaintiff waived his right to presentment, and that failure to present the note does not absolve Plaintiff of his debts.

         The Court finds that Defendant was not required to present the note at Plaintiff's request because Plaintiff waived both his right of presentment and right to notice of his dishonor. (Rec. Doc. 1-1). The Note that Plaintiff signed included the following provision:

Waivers: I and any other person who has obligations under this Note waive the rights of presentment and notice of dishonor. “Presentment” means the right to require the Note Holder to demand payment of amounts due. “Notice of Dishonor” means the right to require the Note ...

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