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Shelley v. Select Portfolio Servicing, Inc.

United States District Court, E.D. Louisiana

April 2, 2018


         SECTION: A (4)



         Before the Court is a Rule 12(b)(6) Motion to Dismiss (Rec. Doc. 5) filed by Defendant Select Portfolio Servicing, Inc. Plaintiff Michael Shelley has not filed an opposition to the motion. The motion, set for submission on January 17, 2018 is before the court on the briefs without oral argument. Having considered the motion and memoranda of counsel, the record, and the applicable law, the Court finds that the motion should be GRANTED for the reasons set forth below.

         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 recorded in the Jefferson Parish, 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. 5-2). U.S. Bank, N.A. is the current holder and possessor of the Note. Defendant Select Portfolio Servicing, Inc. has been the loan servicer since July 1, 2012. Plaintiff allegedly defaulted on 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 defect, the loan was accelerated and the entire unpaid balance, together with interest, and allowable fees, are now allegedly due, owing, and unpaid. (Rec. Doc. 5-1).

         On or about August 9, 2016, U.S. Bank filed suit 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. In response to the lawsuit filed by U.S. Bank, Plaintiff filed a civil action on October 11, 2016 against Defendant in the Second Justice of the Peace Court for the Parish of Jefferson. Defendant timely removed that state court action to this Court on October 28, 2016. The Court then dismissed Plaintiff's lawsuit with prejudice on April 13, 2017.

         Plaintiff then filed the instant lawsuit on or about November 21, 2017, which is virtually identical to Plaintiff's previous October 11, 2016 civil action. Plaintiff once again filed his suit in the Second Justice of the Peace Court for the Parish of Jefferson before Defendant again removed the action to this Court on December 19, 2017. On or about December 6, 2017, the Property was sold at a Sheriff's foreclosure sale. (Rec. Doc. 5-2).

         Defendant now brings the instant motion seeking to dismiss Plaintiff's claims on the following grounds: (1) Plaintiff's claims are barred by res judicata; (2) Plaintiff waived presentment by the clear and unambiguous terms set out in the Note, and was not entitled to request that the Note be exhibited to him; (3) Defendant is not a debt collector under the FDCPA, and cannot be held liable for a violation of the FDCPA; (4) to the extent that Plaintiff makes a claim under the Fair Credit Reporting Act for improper reporting, Plaintiff has no right of action, and failed to comply with the statutory requirements for asserting such a claim; (5) Plaintiff's injunction request is moot because the foreclosure sale has been completed; and (6) Plaintiff's request for injunctive relief does not fall within one of the statutory exceptions in the Anti-Injunction Act.

         II. Legal Standard

         Under well-settled standards governing Rule 12(b)(6) motions to dismiss, a claim may not be dismissed unless it appears certain that the plaintiff cannot prove any set of facts that would entitle him to legal relief. In re Supreme Beef Processors, Inc., 468 F.3d 248, 251 (5th Cir. 2006) (citing Benton v. United States, 960 F.2d 19 (5th Cir. 1992)). 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A court must accept all well-pleaded facts as true and must draw all reasonable inferences in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 239 (5th Cir. 2009). But the Court is not bound to accept as true legal conclusions couched as factual allegations. Iqbal, 556 U.S. at 678.

         A legally sufficient complaint need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Id. In other words, the face of the complaint must contain enough factual matter to raise a reasonable expectation that discovery will reveal evidence of each element of the plaintiff's claim. Lormand, 565 F.3d at 257. If there are insufficient factual allegations to raise a right to relief above the speculation level, or if it is apparent from the face of the complaint that there is an insuperable bar to relief, the claim must be dismissed. Twombly, 550 U.S. at 555.

         III. Law and Analysis

         Defendant is entitled to dismissal of Plaintiff's claims because the claims are barred by res judicata. Res judicata functions as claim preclusion. Wild Well Control, Inc. v. SeabrightInsurance Company, No. 16-7113, 2017 WL 3849320, at *3 (E.D. La. 2017). Federal res judicata rules govern the preclusive effect of ...

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