United States District Court, W.D. Virginia, Harrisonburg Division
JAMES A. HEGEDUS, et al., Plaintiffs,
NATIONSTAR MORTGAGE, LLC, Defendant.
Michael F. Urbanski, United States District Judge.
a mortgage servicing dispute. Pro se plaintiffs
James and Virginia Hegedus ("plaintiffs") allege
defendant Nationstar Mortgage, LLC ("Nationstar")
violated various federal and state laws in its capacity as
the servicer of a mortgage on a Delaware residence owned by
plaintiffs. Plaintiffs cite a range of wrongdoing by
Nationstar, centering on multiple alleged misrepresentations
about the mortgage's status, failure to respond to
plaintiffs' written requests for information, mishandling
of payments, and wrongful assessments of fees and charges.
Nationstar moved to dismiss, ECF No. 9, plaintiffs filed
several motions to strike Nationstar's evidence and legal
arguments, ECF Nos. 15, 16, and this matter was referred to
United States Magistrate Judge Joel C. Hoppe for report and
recommendation, pursuant to 28 U.S.C. § 636(b)(1)(B).
report and recommendation issued on June 15, 2016, the
magistrate judge recommended that the court grant
Nationstar's motion to dismiss. ECF No. 26. The report
gave notice to the parties that they had fourteen days within
which to file any objections. The same day, the magistrate
judge filed an order disposing of plaintiffs' motions to
strike.ECF No. 27. On June 23, 2016, plaintiffs
filed a motion for extension of time to respond to the report
and recommendation. ECF No. 28. By order entered the same
date, the magistrate judge extended the time for objections
until July 15, 2016. ECF No. 29. Plaintiffs thereafter timely
filed objections to the report,  ECF No. 30, and Nationstar
responded on July 29, 2016, ECF No. 31. For the reasons
stated below, the court will OVERRULE plaintiffs'
objections, ADOPT the report and recommendation in its
entirety, and DISMISS this case.
72(a) of the Federal Rules of Civil Procedure permits a
magistrate judge to issue a written order on a matter
"not dispositive of a party's claim or
defense." Fed.R.Civ.P. 72(a); see 28 U.S.C. §
636(b)(1)(A). When such an order is objected to, the district
judge should modify or set aside the order only if it
"is clearly erroneous or is contrary to law." Fed.
R Civ. P. 72(a). Under this standard, the reviewing court
should not "decide factual issues de novo"
but, rather, should decline to act unless the court "on
the entire evidence is left with the definite and firm
conviction that a mistake has been committed."
Anderson v. City of Bessemer City, 470 U.S. 564, 573
(1985) (internal quotation marks omitted) (citing Zenith
Radio Corp. v. Hazeltine Research. Inc.. 395 U.S. 100,
123 (1969), and United States v. United States Gypsum
Co.. 333 U.S. 364, 395 (1948)). If the order is
"plausible in light of the record, " it should not
be disturbed, even if the reviewing court "would have
weighed the evidence differendy." Id. at 574.
Rule 72(b), the magistrate judge issues a report and
recommendation on dispositive matters to the district court.
A party may then "serve and file specific, written
objections" to a magistrate judge's proposed
findings and recommendations within fourteen days of being
served with a copy of the report. Fed.R.Civ.P. 72(b); see
also 28 U.S.C. § 636(b)(1). The Fourth Circuit has
held that an objecting party must do so "with sufficient
specificity so as reasonably to alert the district court of
the true ground for the objection." United States v.
Midgette, 478 F.3d 616, 622 (4th Cir.), cert
denied. 127 S.Ct. 3032 (2007).
To conclude otherwise would defeat the purpose of requiring
objections. We would be permitting a party to appeal any
issue that was before the magistrate judge, regardless of the
nature and scope of objections made to the magistrate
judge's report. Either the district court would then have
to review every issue in the magistrate judge's proposed
findings and recommendations or courts of appeals would be
required to review issues that the district court never
considered. In either case, judicial resources would be
wasted and the district court's effectiveness based on
help from magistrate judges would be undermined.
district court must determine de novo any portion of
the magistrate judge's report and recommendation to which
a proper objection has been made. "The district court
may accept, reject, or modify the recommended disposition;
receive further evidence; or return the matter to the
magistrate judge with instructions." Fed.R.Civ.P.
72(b)(3); accord 28 U.S.C. § 636(b)(1).
"General objections that merely reiterate arguments
presented to the magistrate judge lack the specificity
required under Rule 72, and have the same effect as a failure
to object, or as a waiver of such objection." Moon
v. BWX Techs.. Inc., 742 F.Supp.2d 827, 829 (W.D. Va.
2010) (citing Veney v. Astrue, 539 F.Supp.2d 841,
845 (W.D. Va. 2008)), affd. 498 F.App'x 268 (4th
Cir. 2012); see also Thomas v. Am. 474 U.S. 140, 154
(1985) ("[T]he statute does not require the judge to
review an issue de novo if no objections are filed .
. . .").
survive a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), a complaint need only contain sufficient
factual matter which, if accepted as true, "state[s] 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 complaint is "facially plausible" when
the facts alleged "allowQ the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged." Id. This "standard is
not akin to a 'probability requirement, ' but it asks
for more than a sheer possibility that a defendant has acted
unlawfully." IcL When ruling on a motion to dismiss, the
court must "accept the well-pled allegations of the
complaint as true" and "construe the facts and
reasonable inferences derived therefrom in the light most
favorable to the plaintiff." Ibarra v. United
States, 120 F.3d 472, 474 (4th Cir. 1997).
the court must accept as true all well-pled factual
allegations, the same is not true for legal conclusions.
"Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice." Iqbal, 556 U.S. at 678; see also
Wag More Dogs. LLC v. Cozart. 680 F.3d 359, 365 (4th
Cir. 2012) ("Although we are constrained to take the
facts in the light most favorable to the plaintiff, we need
not accept legal conclusions couched as facts or unwarranted
inferences, unreasonable conclusions, or arguments."
(internal quotation marks omitted)). To be sure, a plaintiff
proceeding pro se is held to "less stringent
standards" than counseled plaintiffs, and the court must
construe his claims liberally. Erickson v. Pardus.
551 U.S. 89, 94 (2007). However, the court need not ignore a
clear failure to allege facts that set forth a cognizable
claim. Weller v. Dep't of Soc. Servs., 901 F.2d
387, 391 (4th Cir. 1990). Nor is a court required to
recognize "obscure or extravagant claims defying the
most concerted efforts to unravel them." Beaudett v.
City of Hampton, 775 F.2d 1274, 1277 (4th Cir.
1985), cert, denied. 475 U.S. 1088 (1986).
considering a motion to dismiss, the court is "generally
limited to a review of the allegations of the complaint
itself." Goines v. Valley Cmty. Servs.
Bd.? 822 F.3d 159, 165-66 (4th
Cir. 2016). However, other evidence may sometimes be
[The court] also considers documents that are explicitly
incorporated into the complaint by reference, Tellabs,
Inc. v. Makor Issues & Rights. Ltd.. 551 U.S. 308,
322 (2007), and those attached to the complaint as exhibits,
see Fed.R.Civ.P. 10(c). And . . . [the court] may consider a
document submitted by the movant that was not attached to or
expressly incorporated in a complaint, so long as the
document was integral to the complaint and there is no
dispute about the document's authenticity. [Sec'y
of State for Defence v.] Trimble [Nav. Ltd.]. 484 F.3d
, 705 [(4th Cir. 2007)]; Am. Chiropractic Ass'n
v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir.
2004); Phillips v. LCI Int'l. Inc.. 190 F.3d
609, 618 (4th Cir. 1999).
Id at 166.
allege that they entered a mortgage loan agreement with First
Horizon Home Loans in 2006, for which they began making
payments to Nationstar in 2011. ECF No. 1, ¶ 5.
Thereafter, according to plaintiffs, "Nationstar
immediately engaged in deceptive and unfair practices."
Id. These practices include failure to provide
required disclosures, failure to respond satisfactorily to
correspondence, and a host of fraudulent accounting
practices. Id. ¶¶ 5, 7-9, 14, 18, 23-26.
In addtion, Nationstar variously identified itself as to
plaintiffs as debt collector and mortgage servicer, and
appeared as mortgagee on plaintiffs' homeowner's
insurance policy-a "changing [of] positions" that
plaintiffs allege is wrongful. Id. ¶¶
10-13. Finally, plaintiffs complain that their mortgage note
was wrongfully securitized, and that counsel for Nationstar
corresponded with them in a deceptive manner, employing a
"slight [sic] of hand tactic." Id.
¶¶ 13, 16-17 (internal quotation marks omitted).
Plaintiffs allege that these actions violate several federal
statutes: the Truth in Lending Act ("TELA"), 15
U.S.C. §§ 1601-1667f; the Fair Debt Collection
Practices Act ("FDCPA"), 15 U.S.C. §§
1692-1692p; and the Real Estate Settlement Practices Act
("RESPA"), 12 U.S.C. §§ 2601-2610,
2614-2617. In addtion, plaintiffs allege common law
claims of fraud, unjust enrichment, and intentional
infliction of emotional distress. ECF No. 1, at 14.
subsequently brought a motion to dismiss, ECF No. 9, to which
it attached a copy of plaintiffs' mortgage agreement, ECF
No. 9-1. In its brief in support of die motion to dismiss,
Nationstar construed plaintiffs' allegations of
"deceptive trade practices, " see ECF No. 1,
¶¶ 6(b), 6(c), 6(f), 15, as "attempting to
state a claim pursuant to Virginia's Consumer Protection
Act" ("VCPA"), and argued against that claim.
ECF No. 10, at 2. In response, plaintiffs filed motions to
strike both the mortgage document and Nationstar's
interpretation of its deceptive trade practices claim. ECF
Nos. 15, 16.
Nationstar's Motion to Dismiss
report, the magistrate judge recommended that
Nationstar's motion to dismiss be granted in its
entirety. ECF No. 26. First, the report found that plaintiffs
did not have standing to challenge any transfer or assignment
of the note, mortgage or servicing rights, and that
securitization of the mortgage did not relieve plaintiffs of
their debt obligation. Id. at 9.
the report turned to Plaintiffs' federal statutory
claims. It found that all Plaintiffs' claims under TILA,
and all but one under FDCPA, are barred by these
statutes' one-year limitations period, which runs from
the date the alleged violations occurred. Id. at
10. Plaintiffs' remaining FDCPA claim-relating to a July
2015 letter sent by Nationstar's counsel-was found to be
so conclusory and lacking in proof as to fail to state a
claim for relief. Id. The report recognized two
categories of RESPA claims-Nationstar's failure to
produce the original mortgage note, and its failure to
respond to plaintiffs' purported qualified written
requests ("QWRs"). Id. at 11. Neither was
found to have merit: plaintiffs failed to allege why they
were entitled to the original mortgage note (rather than a
photocopy), and, even assuming the one letter plaintiffs
actually produced qualified as a QWR, plaintiffs failed to
allege any pecuniary loss associated with this failure to
respond. Id. at 11-12.
the report turned to plaintiffs' common law claims;
acknowledging that the complaint "is somewhat
confusing" in this area, it nonetheless found that
plaintiffs failed to state adequate grounds for relief.
Id. at 12. All claims regarding misrepresentations
or material omissions failed because plaintiffs did not
allege detrimental reliance, Id. at 12-13; unjust
enrichment was found to be unavailable where, as here,
defendant's actions were taken pursuant to a contract;
and the intentional infliction of emotional distress claim
was completely unsupported by any factual allegations.
Id. at 13.
the report declined to specifically construe plaintiffs'
"unclear" claims regarding institution of a forced
escrow,  but found that, given the fact that the
mortgage document specifically authorized creation of an
escrow account, any such claim would be without merit and
should be dismissed. Id. 12-13.
brought a number of objections to the findings of the
magistrate judge. Many of these objections do not warrant de
novo review: some take issue with the precise
wording of the report, e.g., ECF No. 30, at 14-15 (asserting
that the court erred in using the term "pooled" to
describe plaintiffs allegations of improper securitization),
others imply bias on the part of the magistrate judge,
e.g., Id. at 7, 10 ("[T]he [c]ourt has
aligned itself with the [d]efendant. . . ."), while
still others suggest changes to controlling precedent based
on social trends, e.g., ...