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Yarid v. Ocwen Loan Servicing, LLC

United States District Court, E.D. Virginia, Richmond Division

July 31, 2018

OCWEN LOAN SERVICING, LLC, et al., Defendants.


          John A. Gibney, Jr. United States District Judge.

         The pro se plaintiff, George A. Yarid, brings this action arising from the foreclosure of his home. The complaint names as defendants Ocwen Loan Servicing, LLC ("Ocwen"), The Bank of New York Mellon ("BNY")[1], and Equity Trustees, LLC ("Equity Trustees"). Yarid's five counts include: (1) declaratory relief; (2) violation of the Fair Debt Collection Practices Act ("FDCPA"); (3) violation of the Truth in Lending Act ("TILA"); (4) violation of the Real Estate Settlement Procedures Act ("RESPA"); and (5) unjust enrichment. He seeks damages and injunctive relief. The defendants have moved to dismiss the case.

         Yarid's complaint runs into a number of legal problems. The first problem arises under the doctrine of standing-the requirement that the plaintiff show that he has the legal right to seek judicial relief. Yarid filed for bankruptcy before the foreclosure of his home. When he did so, his claims became the property of his trustee in bankruptcy. Therefore, only the trustee-not Yarid-can pursue any claims that arose before or during his bankruptcy; Yarid lacks standing to pursue such claims. Yarid has standing only to sue for claims that arose after his bankruptcy ended. Yarid has not pled facts showing standing to support his claims in part of Count Two and in all of Counts Four and Five. The Court will grant Yarid leave to file an amended complaint within twenty-one days to allege facts establishing his claims arose after his bankruptcy. Since Yarid's complaint shows conclusively that he cannot establish standing to pursue Count Three, the Court will dismiss it without leave to amend.

         Yarid runs into other problems with respect to Count One, his claim for declaratory relief. This claim deals with events that have already happened and cannot be reversed, so the Court will dismiss this claim as moot.[2]

         The Court doubts that Yarid can ultimately establish claims for violations of the FDCPA under Count Two. Nevertheless, construing the complaint liberally, it is conceivable that Yarid has alleged facts amounting to limited violations of the FDCPA, and the Court will allow part of Yarid's FDCPA claims to proceed.

         I. FACTS

         In 2005, Yarid purchased his home (the "Property") with a mortgage from NovaStar Mortgage, Inc. Novastar assigned the Deed of Trust to BNY in 2012, with Ocwen as the loan servicer. BNY appointed Equity Trustees as Substitute Trustee on May 8, 2017.

         Although Yarid claims he had not defaulted "to the point that foreclosure [was] legally authorized" (Compl., Dk. No. 12, at ¶ 11), he does admit that he failed to pay his mortgage under the terms of the note. Yarid fell behind on mortgage payments in 2009, procured a loan modification in 2015, but then fell behind sometime later. Despite his delinquency, Yarid nonetheless says that Ocwen and BNY failed to establish any legal authority to foreclose on his house. He also claims that Ocwen and BNY "falsely threate[ne]d legal action when [they] claimed a right to foreclosure and failed to inform Plaintiff that he was lawful." (Compl., Dk. No. 12, at ¶ 26.) According to the complaint, Ocwen and BNY's representatives also misled Yarid by telling him there was no foreclosure until mere weeks before they sent a foreclosure notice. When Yarid called about the notice, Ocwen and BNY denied "[the foreclosure sale]." (Opp'n, Dk. No. 26, at ¶ 1.) Ocwen and BNY further misled Yarid "for years" by returning his loan payments months after he had sent them, which led Yarid to believe that his loan was in good standing. Additionally, Yarid sent three Qualified Written Requests ("QWRs") to Ocwen in 2013, 2014, and 2015 to identify who owned his loan, but Ocwen never responded. Finally, Yarid says that Ocwen accepted Yarid's partial mortgage payments but failed to apply them to his mortgage account, and also collected fees from his monthly payments that Yarid did not actually owe.

         Yarid filed for bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Virginia on October 13, 2016. (No. 3:16-BK-35047-KRH.) The Bankruptcy Court discharged Yarid's bankruptcy and closed his case on April 10, 2017.

         II. STANDARD

         A Rule 12(b)(6) motion gauges the sufficiency of a complaint without resolving any factual discrepancies or testing the evidentiary merits of the claims. Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). In considering the motion, a court must accept all allegations in the complaint as true and must draw all reasonable inferences in favor of the plaintiff. Nemet Chevrolet, Ltd v., Inc., 591 F.3d 250, 253 (4th Cir. 2009) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999)). The principle that a court must accept all allegations as true, however, does not apply to legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To survive a Rule 12(b)(6) motion to dismiss, a complaint must state facts that, when accepted as true, state a claim to relief that is plausible on its face. Id. "A claim has facial plausibility 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. (citing Bell Atl Corp. v. Twombly, 550 U.S. 544, 556 (2007)).[3]

         Finally, in cases where the plaintiff appears pro se, courts do not expect the plaintiff to frame legal issues with the clarity and precision expected from lawyers. Accordingly, courts construe pro se complaints liberally. Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985). Courts do not, however, need to discern the unexpressed intent of the plaintiff or conjure up issues on the plaintiffs behalf See Laber v. Harvey, 438 F.3d 404, 413 n.3 (4th Cir. 2006); Beaudett, 775 F.2d at 1276.


         A. Standing

         Before addressing the merits of the various counts, the Court will determine Yarid's standing to pursue them.

         Standing "is a threshold jurisdictional question," which ensures that a suit is "appropriate for the exercise of the courts' judicial powers." Pye v. United States,269 F.3d 459, 466 (4th Cir. 2001). If a plaintiff does not have standing, federal courts lack subject matter jurisdiction. AtlantiGas Corp. v. Columbia Gas Transmission Corp.,210 Fed.Appx. 244, 247 (4th Cir. 2006) (unpublished). The plaintiff bears the burden to demonstrate standing. FW/PBS, Inc. v. City of Dallas,493 U.S. 215, 231 (1990). See also Evans v. B.F. Perkins Co.,166 F.3d 642, 647 (4th Cir. 1999) ("The plaintiff has the burden of proving that subject ...

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