Broitman et al v. Ocwen Loan Servicing, Llc et al

Second MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

E.D. Pa.June 5, 2017

2 DM1\7855589.1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ERIC BROITMAN AND DEBRA BROITMAN, Plaintiffs, -vs- OCWEN LOAN SERVICING, LLC, DEUTSCHE BANK NATIONAL TRUST COMPANY, IN ITS CAPACITY AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC. TRUST 2005-HE7, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE7 AND UDREN LAW OFFICES, P.C. Defendants. § § § § § § § § § § § § DOCKET NO.: 2:17-CV-01997-GAM DEFENDANTS OCWEN LOAN SERVICING, LLC AND DEUTSCHE BANK NATIONAL TRUST COMPANY, IN ITS CAPACITY AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC. TRUST 2005-HE7, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE7’S MOTION TO DISMISS PLAINTIFFS ‘AMENDED COMPLAINT Defendants Ocwen Loan Servicing, LLC and Deutsche Bank National Trust Company, in its capacity as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2005-HE7, Mortgage Pass- Through Certificates, Series 2005-HE7 (collectively “Defendants”) move to dismiss Plaintiffs’ Amended Complaint for the reasons set forth in Defendants’ Memorandum of Law in Support of their Motion to Dismiss, which is incorporated by reference. Dated: Philadelphia, Pennsylvania June 5, 2017 DUANE MORRIS LLP 30 South 17th Street Philadelphia, PA 19103 215.979.1000 (telephone) 215.979.1020 (facsimile) Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 1 of 16 3 DM1\7855589.1 By:__/s/ Kassia Fialkoff__________________ Brett L. Messinger (63020) Kassia Fialkoff (310530) 30 South 17th Street, 12th Floor Philadelphia, PA 19103 215.979.1508 / 1134 tel. 215.979.1020 fax Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 2 of 16 4 DM1\7855589.1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ERIC BROITMAN AND DEBRA BROITMAN, Plaintiffs, -vs- OCWEN LOAN SERVICING, LLC, DEUTSCHE BANK NATIONAL TRUST COMPANY, IN ITS CAPACITY AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC. TRUST 2005-HE7, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE7 AND UDREN LAW OFFICES, P.C. Defendants. § § § § § § § § § § § § DOCKET NO.: 2:17-CV-01997-GAM MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS OCWEN LOAN SERVICING, LLC AND DEUTSCHE BANK NATIONAL TRUST COMPANY, IN ITS CAPACITY AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC. TRUST 2005-HE7, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE7’S MOTION TO DISMISS PLAINTIFFS’ AMENDED COMPLAINT Defendants Ocwen Loan Servicing, LLC (“Ocwen”) and Deutsche Bank National Trust Company, in its capacity as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2005-HE7, Mortgage Pass-Through Certificates, Series 2005-HE7 (“Deutsche Bank”) (collectively “Defendants”) hereby file the following memorandum of law in support of its Motion to Dismiss the Amended Complaint filed by Plaintiffs Eric Broitman and Debra Broitman (“Plaintiffs”). The Amended Complaint should be dismissed because: First, all of Plaintiffs’ claims are barred by the doctrine of res judicata as they seek to invalidate the Final Judgment entered in the foreclosure action; Second, the Amended Complaint fails to allege a violation of the FDCPA as Plaintiffs do not allege how Ocwen is a “debt collector”; Third, the Amended Complaint fails to allege a violation of the FDCPA as the payoff statement did not include “misleading, unfair and unconscionable” language; Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 3 of 16 5 DM1\7855589.1 Fourth, in as much as the FECUA claims are premised on violations of the FDCPA, they too must also be dismissed; Fifth, the Amended Complaint fails to allege a violation of Act 6 as Plaintiffs have not incurred any damages; Sixth, the Amended Complaint fails to allege a violation of TILA as Plaintiffs have not incurred any damages; Seventh, the Amended Complaint fails to allege a breach of contract claim as Plaintiffs do not allege a breach nor damages; Eighth, paragraphs 9 through 18 of the Amended Complaint should be stricken as they are immaterial and impertinent to Plaintiffs’ claims and serve only to harass Ocwen. I. FACTS On August 24, 2005, Plaintiffs borrowed the original principal amount of $315,000.00 (the “loan”). Doc. No. 10 at ¶ 20 and 23. The loan was evidenced by a Promissory Note dated August 24, 2005 (the “Note”). Doc. No. 10 at ¶ 20-21. The Note was secured by a Mortgage on the Plaintiffs’ property located at 33 Copperleaf Drive, Newton, PA 18940 (the “Property”), recorded in the Office of the Recorder of Deeds in and for Bucks County on September 15, 2005 in Book 4630, Page 474 (the “Mortgage”). Doc. No. 10 at ¶ 22. A copy of the Mortgage is attached hereto as Exhibit A. The Mortgage was subsequently assigned to Deutsche Bank Doc. No. 10 at ¶ 24. Plaintiffs defaulted on the Mortgage. Doc. No. 10 at ¶ 25. . As a result of the default, a foreclosure action was filed on May 16, 2014, in the Court of Common Pleas of Bucks County, Pennsylvania (the “foreclosure action”). Doc. No. 10 at ¶ 33. The parties then partook in the County’s mandatory foreclosure diversion program, with the first conference held on June 30, 2014. Doc. No. 10 at ¶ 35. Defendants were eventually denied for a loan modification and the case was removed from the County’s mandatory foreclosure diversion program on December 19, 2014. Doc. No. 10 at ¶ 45. Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 4 of 16 6 DM1\7855589.1 Deutsche Bank filed a Motion for Summary Judgment on December 15, 2015 (the “Motion for Summary Judgment”). Doc. No. 10 at ¶ 47. The Motion for Summary Judgment provided that the amount due as of November 11, 2015 was $463,424.38, which amount was supported by the Affidavit of Kimberly Brown of Ocwen Loan Servicing, LLC, as servicer for Deutsche Bank. Doc. No. 10 at ¶ 49. On March 23, 2016, the Honorable James M. McMaster entered an Order granting summary judgment, in rem, in favor of Deutsche Bank and against the Broitmans “in the amount of $463,424.38, together with ongoing per diem interest, escrow advances, and any additional recoverable costs to the date of Sheriff’s sale” (the “Judgment”). A true and correct copy of the Judgment is attached hereto as Exhibit B. Plaintiffs appealed the Judgment to the Superior Court of Pennsylvania, but on April 28, 2017, the Superior Court issued an Order and Opinion affirming the Judgment (the “Superior Court Order”). A true and correct copy of the Superior Court Order is attached hereto as Exhibit C. Plaintiffs filed this action on April 10, 2017 and Defendants removed the action to federal court on May 2, 2017 and moved to dismiss the Complaint. Doc. No. 1. On May 30, 2017, Plaintiffs filed an Amended Complaint, asserting claims for (i) violation of the Fair Credit Extension Uniformity Act as to Ocwen (Count I); (ii) violation of the Fair Credit Extension Uniformity Act as to Deutsche Bank (Count II); (iii) violation of the Fair Debt Collection Practices Act (Count III); violation of Act 6 (Count IV); violation of the Truth in Lending Act and Regulation Z (Count V); and breach of contract (Count VI). Doc. No. 10. II. ARGUMENT A. Standard A motion to dismiss under Rule 12(b)(6) must be granted if a complaint fails to allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 5 of 16 7 DM1\7855589.1 550 U.S. 544, 570 (2007). The “facial plausibility” standard requires allegations showing “more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While a district court must accept all of a complaint’s well-pleaded facts as true, it need not credit either “bald assertions” or “legal conclusions” in a complaint when deciding a motion to dismiss. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir. 1997). “[A] plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555; see Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Courts reviewing a motion under Rule 12(b)(6) may consider “the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim.’” Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d Cir. 2004) (citations omitted). B. Plaintiffs’ Claims Are Barred By The Doctrine of Res Judicata Plaintiffs’ claims are barred by Pennsylvania’s doctrine of res judicata because it is an improper attempt to invalidate the Judgment. “Congress has specifically required all federal courts to give preclusive effect to state-court judgments whenever the courts of the State from which the judgments emerged would do so.” Allen v. McCurry, 449 U.S. 90, 96 (1980). It is “well settled” that an effort to use the federal courts to invalidate, challenge or [R]elitigate [a state] foreclosure action, . . . , is prohibited by Pennsylvania's preclusion doctrine. Federal courts are required to give state court judgments the same preclusive effect that the issuing state courts would give them. See Rycoline Prods., Inc. v. C & W Unlimited, 109 F.3d 883, 887 (3d Cir.1997). Under Pennsylvania law, claim preclusion is a doctrine by which a former adjudication bars a later action on all or part of the claim which was the subject of the first action. Any final, valid judgment on the merits by a court of competent jurisdiction precludes any future suit between the parties or their privies on the same cause of action. [Claim preclusion] applies not only to claims actually litigated, but also to claims which could have been litigated during the first Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 6 of 16 8 DM1\7855589.1 proceeding if they were part of the same cause of action. Balent v. City of Wilkes- Barre, 542 Pa. 555, 669 A.2d 309, 313 (1995) (internal citations omitted). Moncrief v. Chase Manhattan Mortg. Corp., 275 F. App’x 149, 153 (3d Cir. 2008). Here, the claims set forth in Plaintiffs’ Amended Complaint are predicated on Plaintiffs’ challenge to the amount of the Judgment. By example, Plaintiffs’ complain that they did not receive a modification after taking part in the county’s mandatory foreclosure diversion program, and that the affidavit submitted in support of the Motion for Summary Judgment included amounts which were “misleading,” “inaccurate” and not based on “personal knowledge.” Doc. No. 10 at Ex. A at ¶ 26-49. The allegations that form the basis of their claims are is a direct attack on the validity of the Judgment and have already been litigated. Plaintiffs, therefore, are precluded from re-litigating the issue here. See Manu v. Nat’l City Bank of Ind., 471 F. App’x 101, 104 (3d Cir. 2012) (“Any claim that was, or could have been, litigated in state court is barred by res judicata and subject to dismissal.”). This is true even though the theory under which recovery is sought in this case is different than that which Plaintiffs could have pleaded in the foreclosure action. See id. at 106 (“Asserting different theories of recovery in a second lawsuit will not defeat the application of res judicata where the events underlying the two actions are essentially similar.”). Thus, the Amended Complaint explicitly invites the federal court to set aside the prior foreclosure judgment entered by the state court. These issues have been preclusively determined by the prior state litigation, and so, in this setting, res judicata forbids the court from re-visiting this question at this late date. Accordingly, the Amended Complaint should be dismissed. C. Plaintifs’ Fair Debt Collection Practices Act (“FDCPA”) Claims Should Be Dismissed as Plaintiffs Do Not Allege Ocwen is a Debt Collector. In Count II of the Amended Complaint, Plaintiffs assert an FDCPA claim against Ocwen. Plaintiffs, however, do not allege facts which, if proven, would establish that Ocwen is a debt Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 7 of 16 9 DM1\7855589.1 collector under the FDCPA. To state a claim under the FDCPA, a plaintiff must plead, inter alia, that “the defendant collecting the debt is a ‘debt collector’” as defined by the statute. Berk v. JPMorgan Chase Bank, N.A., No. 11-2715, 2011 U.S. Dist. LEXIS 109626, *8 (E.D. Pa. Sept. 26, 2011). “The FDCPA’s provisions generally apply only to ‘debt collectors.’ Creditors—as opposed to ‘debt collectors’—generally are not subject to the FDCPA.” Pollice v. National Tax Funding, LP, 225 F.3d 379, 403 (3d Cir. 2000) (citation omitted). Mortgage loan servicers like Ocwen are not necessarily “debt collectors” under the FDCPA, depending upon the status of the debt when the servicer took over servicing the obligation. Id. at 403-04 (“an assignee of an obligation is not a ‘debt collector’ if the obligation is not in default at the time of the assignment”). Here, the Amended Complaint is devoid of any facts to support that Ocwen is a debt collector. In fact, the Amended Complaint provides that Ocwen began servicing the loan in October of 2009 (Doc. No. 10 at ¶ 31) and the loan was due for the March 2011 payment (Doc. No. 10 at Exhibit A at ¶ 5). Thus, Ocwen was servicing the loan prior to the “default” and was not a debt collector as conclusorily alleged by Plaintiffs. The court need not credit such conclusory allegations when deciding a motion to dismiss. Burlington Coat Factory, 114 F.3d at 1429-30; see Franklin v. GMAC Mortg., 523 F. App’x 172, 173 (3d Cir. 2013) (affirming dismissal of FDCPA claim because plaintiff’s pleading “failed to establish or provide any factual support for his conclusory allegation that GMAC is a ‘debt collector’ within the meaning of the FDCPA”); Platek v. Safeguard Props., No. 12-1607, 2013 U.S. Dist. LEXIS 137175, *2 (W.D. Pa. Sept. 25, 2013) (“The Court agrees with Defendants that Plaintiff’s conclusory allegations regarding their purported debt collector-status are insufficient under Rule 12(b)(6)[.]”); Garland v. Enterprise Leasing Co., No. 99-CV-4013, 1999 U.S. Dist. LEXIS 18116, *3 (E.D. Pa. Nov. Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 8 of 16 10 DM1\7855589.1 24, 1999) (“Garland alleges that Enterprise is a debt collector, but the Court is only required to accept Garland’s pleaded facts, not her conclusions of law.”). In the absence of any other facts, Plaintiffs have failed to plausibly allege that the conduct complained of is covered by the FDCPA, and Count III should be dismissed. Perry v. Oxford Law, LLC, No. 12-3312, 2012 U.S. Dist. LEXIS 122784, *14 (E.D. Pa. Aug. 29, 2012) (dismissing FDCPA claim because “Perry’s complaint contains insufficient factual allegations to establish the third element of a claim under the FDCPA—namely, that Cuzco is a ‘debt collector.’”). Accordingly, Count III should be dismissed in its entirety. D. Plaintiffs’ FDCPA Claim Should Be Dismissed as Plaintiffs Do Not Allege Misleading, Unfair and Unconscionable Debt Collection Practices. Plaintiffs FDCPA claim also fails because the inclusion of fees and costs clearly marked “anticipated” do not constitute “misleading, unfair and unconscionable debt collection practices” in violation of the FDCPA. The Third Circuit has held that the inclusion of estimated fees and costs in correspondence does not violate the Fair Debt Collection Practices Act (FDCPA), provided the communication or filing conspicuously identifies those estimated fees and costs as not yet having been actually incurred as of the date of the correspondence or filing. See Kaymark v. Bank of America, N.A., 783 F.3d 168, 175 (3d. Cir. 2015) (holding that inclusion in verified foreclosure complaint of estimated fees and costs, which had not yet been incurred by law firm as of the date complaint was filed, violated FDCPA, but noting that complaint “did not convey that the disputed fees were estimates or imprecise amounts”); McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240 (3d. Cir. 2014) (correspondence from law firm to debtor violated FDCPA where attorneys’ fees and costs included in amount claimed to be due and owing from debtor had not yet been incurred, and where such fees and costs were not identified in correspondence as being estimated); Stuart v. Udren Law Offices, P.C., 25 F. Supp. 3d 504, Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 9 of 16 11 DM1\7855589.1 511 (M.D. Pa. 2014) (inclusion of estimated attorneys’ fees and costs in payoff statement sent by law firm to borrower did not violate 15 U.S.C. § 1692e, where such fees were clearly marked in correspondence as being “anticipated” and where payoff statement notified borrower that such anticipated fees and costs were “not yet due, but may become due during the time period set forth in [the payoff statement].” Here, the payoff statement provided to Plaintiffs included a cover letter explaining that “[t]he first statement contains the amount needed to pay off the loan by April 20, 2016 and a second statement includes fees and costs that have NOT been incurred at this time, but may be incurred on or before April 29, 2016. This second form is supplied in the event you need additional time to tender funds.” Doc. No. 10 at Ex. B. The Second statement is clearly marked “ANTICIPATED PAYOFF AMOUNT GOOD THROUGH APRIL 29, 2016” in bold capital letters and itemizes the anticipated levy by the Sheriff’s Office is the sale is stayed (2% of $482,403.51) in the amount of $9,648.07 and anticipated accrued interest. Id. Finally, the statement remarks in bold capital letters “ANY ITEM MARKED “ANTICIPATED” IS NOT YET DUE, BUT MAY BE COME DUE DURING THE TIME PERIOD SET FORTH IN THIS STATEMENT.” Id. This clear and express language in the Payoff Statement conspicuously identified what charges were anticipated and not yet incurred. And, Plaintiffs do not allege they were misled or confused by the charges. The language is therefore not “misleading, unfair and unconscionable debt collection practices” within the meaning of the FDCPA. Accordingly, the claim should be dismissed. E. Plaintiffs’ Fair Credit Extension Uniformity Act (“FCEUA”) Claim Should Be Dismissed. Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 10 of 16 12 DM1\7855589.1 Even if Plaintiffs’ FCEUA claim, which is entirely predicated on the Foreclosure Action is somehow not barred by the doctrine of res judiciata, it should also be dismissed just like Plaintiffs’ FDCPA claim. Fashioned after the FDCPA, Pennsylvania's FCEUA prohibits "unfair methods of competition and unfair or deceptive acts or practices with regard to the collection of debts." 73 Pa. Stat. Ann. § 2270.2; Connolly v. Reliastar Life Ins. Co., Inc., Civil Action No. 03- 5444, 2006 WL 3355184, at *9 (E.D. Pa. Nov. 13, 2006) (Joyner, J.). It is Pennsylvania's counterpart to the FDCPA. Gigli v. Palisades Collection, L.L.C., Civil Action No. 06-1428, 2008 WL 3853295, at *11 (M.D. Pa. Aug. 14, 2008) (Vanaskie, J.). In as much as the Amended Complaint argues that Defendants’ violations of the FDCPA are per se violations of the FECUA, such claims should also be dismissed. F. Plaintiffs’ Act 6 Claim Should Be Dismissed as Plaintiffs Have Not Been Damaged. Count IV for violation of Act 6 must be dismissed because Plaintiffs have not incurred any damages. Section 504 permits individual lawsuits against lenders that violate the provision of Act 6 only where an actual loss of money or property is incurred. Benner v. Bank of America, N.A., 917 F. Supp. 2d 338, 360 (E.D. Pa. 2013) (“[P]laintiff cannot recover under ACT 6 – regardless of whether the property inspection fees were “reasonable costs of proceeding to foreclosure” – because he has not established that he suffered any damages as required by Section 504”). Here, Plaintiffs allege that the attorney’s fees and costs were unlawful under Section 404(b) because they were “unreasonable” and “not actually incurred.” Plaintiffs do not allege, nor can they, that they have paid any of the challenged attorney’s fees. Thus, Plaintiff cannot recover under Act 6 regardless of whether the attorney’s fees were “unreasonable” and “not Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 11 of 16 13 DM1\7855589.1 actually incurred” because they have not established that they suffered any damages as required by Section 504. Accordingly, Count IV should be dismissed. G. Planitiffs’ Claim Under the Truth in Lending Act and Regulation Z Should Be Dismissed. Count IV for violation of the Truth in Lending Act and Regulation Z should also be dismissed for failure to allege damages. As set forth above, Plaintiffs have not incurred any actual damages as a result of the alleged violation. 15 U.S.C. § 1640 provides liability for actual damages sustained by such person because of a failure of any creditor to comply with any requirement imposed under this part. 15 U.S.C. § 1640(a)(1). Here, Plaintiffs did not pay the Judgment or the challenged fees. Accordingly, they have not sustained any actual damages and cannot maintain an action under the Act. Accordingly, Count V should be dismissed. H. The Breach of Contract Claim Should Be Dismissed. Plaintiffs’ Breach of Contract claim fails on a few fronts. To state a cause of action for breach of contract, Plaintiff must establish that (1) there exists a contract, including its essential terms; (2) a breach of a duty imposed by the contract; and (3) resultant damage. CoreStates Bank, N.A. v. Cutillo, 1999 Pa. Super. 14, 723 A.2d 1053, 1058 (Pa. Super. 1999). Here, Plaintiffs allege that Deutsche Bank breached the provision of the Mortgage that states that it “may not charge fees that are expressly prohibited by this Security Instrument or by Applicable Law.” It did so, by charging Plaintiffs for “fees and costs that were unreasonable and/or not actually incurred.” Doc. No. 10 at ¶ 111. Plaintiffs’ claim fails for the following reasons. First, the Mortgage expressly provides that upon default, Deutsche Bank can foreclose and be entitled to collect all expenses incurred in pursuing the remedies in this Section 22, including, but not limited to, attorneys’ fees and costs of title evidence to the extent permitted by Applicable Law. Exhibit A at ¶ 22. Thus, the Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 12 of 16 14 DM1\7855589.1 disputed charges are not prohibited by the Security Instrument. Further, the disputed charges could not possibly be determined to be prohibited by law, as the Court already entered an order granting Deutsche Bank judgment for $463,424.38, together with ongoing per diem interest, escrow advances, and any additional recoverable costs to the date of Sheriff’s sale.” See Exhibit A. Third, the claim also fails because Plaintiffs have not been damaged. The purpose of damages in a breach of contract case is to return the parties to the position they would have been in but for the breach. Birth Center v. St. Paul Companies, Inc., 567 Pa. 386, 787 A.2d 376 (2001). Here, Plaintiffs do not allege, nor can they, that they’ve paid these “fees and costs.” Given these undisputed facts, Plaintiffs cannot establish any damages, and the claim should be dismissed. I. Paragraphs 9-18 of the Amended Complaint Should Be Stricken As Impertinent and Immaterial and Included Only for the Purpose of Harassing Defendant. Rule 12(b)(f) permits the court to strike from a pleading any immaterial, impertinent, or scandalous matter. The court may act on motion either before responding to the pleadings or, if a response is not allowed, within 21 days after being served with the pleading. Id. “Impertinent” matter consists of statements that do not pertain, and are not necessary, to the issues in question. Cech v. Crescent Hills Coal Co., No. Civ.A.96-2185, 2002 WL 31002883, at *28 (W.D. Pa. July 15, 2002). A “scandalous” matter or pleading is one that casts a derogatory light on someone, uses repulsive language, or detracts from the dignity of the court. Carone v. Whalen, 121 F.R.D. 231, 233 (M.D. Pa. July 29, 1988). Here, the Amended Complaints includes allegations regarding Ocwen that are clearly immaterial and impertinent to Plaintiffs and their purported claims. In paragraphs 9 through 18, Plaintiffs go on a diatribe about Ocwen’s “history of mortgage servicing and foreclosure abuses.” Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 13 of 16 15 DM1\7855589.1 Doc. No. 10 at Part II. Plaintiffs allege that Ocwen entered into a Consent Judgment with the CFPB and that a lawsuit was filed by the CFPB in Florida against Ocwen. Doc. No. 10 at ¶ 9- 18. These allegations are simply a pretext for inundating this Court with Plaintiffs’ unfavorable and disparaging portrayal of Ocwen. The allegations are unrelated to Plaintiffs, and Plaintiffs do not make any effort whatsoever to allege that they are a party to any of these matters or connect the relevant of this “history” to Plaintiffs. These allegations have absolutely no connection to Plaintiffs’ claims, which are premised on Plaintiffs’ untimely challenge to the foreclosure judgment and a payoff statement. These allegations have no bearing on any of Plaintiff’s claims and serve only to harass Ocwen. Thus, since it is clear that these allegations are immaterial to the alleged facts and circumstances which underlie Plaintiffs’ claims, they must be stricken. III. CONCLUSION For the reasons set forth above, Defendants respectfully request that the Court dismiss Plaintiffs’ Amended Complaint because: First, all of Plaintiffs’ claims are barred by the doctrine of res judicata as they seek to invalidate the Judgment entered in the foreclosure action; Second, the Amended Complaint fails to allege a violation of the FDCPA as Plaintiffs do not allege how Ocwen is a “debt collector”; Third, the Amended Complaint fails to allege a violation of the FDCPA as the payoff statement did not include “misleading, unfair and unconscionable” language; Fourth, in as much as the FECUA claims are premised on violations of the FDCPA, they too must also be dismissed; Fifth, the Amended Complaint fails to allege a violation of Act 6 as Plaintiffs have not incurred any damages; Sixth, the Amended Complaint fails to allege a violation of TILA as Plaintiffs have not incurred any damages; Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 14 of 16 16 DM1\7855589.1 Seventh, the Amended Complaint fails to allege a breach of contract claim as Plaintiffs do not allege a breach nor damages; Eighth, paragraphs 9 through 18 of the Amended Complaint should be stricken as they are immaterial and impertinent to Plaintiffs’ claims and serve only to harass Ocwen. Dated: Philadelphia, Pennsylvania June 5, 2017 DUANE MORRIS LLP 30 South 17th Street Philadelphia, PA 19103 215.979.1000 (telephone) 215.979.1020 (facsimile) By:_/s/ Kassia Fialkoff______________ By: Brett L. Messinger (63020) Kassia Fialkoff (310530) 30 South 17th Street, 12th Floor Philadelphia, PA 19103 215.979.1508 / 1134 tel. 215.979.1020 fax Attorneys for Defendants Ocwen Loan Servicing, LLC and Deutsche Bank National Trust Company, in its capacity as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2005- HE7, Mortgage Pass-Through Certificates, Series 2005-HE7 Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 15 of 16 17 DM1\7855589.1 CERTIFICATE OF SERVICE I, Kassia Fialkoff, hereby state that a true and correct copy of the foregoing Motion to Dismiss and Memorandum of Law thereto is being filed electronically utilizing the ECF system and that the ECF system will automatically generate and send a Notice of Electronic Filing to all users associated with the case. If the ECF system indicates that counsel is being served electronically, such service will be deemed to comply with the ECF system. If the ECF system indicates that counsel is not a user of the ECF system, a true and correct copy of this filing will be delivered by United States first class mail, postage prepaid, to any such counsel. /s/ Kassia Fialkoff, Esquire Kassia Fialkoff, Esquire (310530) Dated: June 5, 2017 Case 2:17-cv-01997-GAM Document 12 Filed 06/05/17 Page 16 of 16 R. 51a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 1 of 21 R. 52a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 2 of 21 R. 53a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 3 of 21 R. 54a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 4 of 21 R. 55a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 5 of 21 R. 56a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 6 of 21 R. 57a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 7 of 21 R. 58a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 8 of 21 R. 59a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 9 of 21 R. 60a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 10 of 21 R. 61a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 11 of 21 R. 62a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 12 of 21 R. 63a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 13 of 21 R. 64a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 14 of 21 R. 65a Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 15 of 21 R. 128a EXHIBIT B Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 16 of 21 J-A08045-17 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC. TRUST 2005-HE7, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE7 v. ERIC BROITMAN, ET UX. : : : : : : : : : : : : IN THE SUPERIOR COURT OF PENNSYLVANIA No. 1667 EDA 2016 Appeal from the Order March 24, 2016 In the Court of Common Pleas of Bucks County Civil Division at No(s): 2014-03469 BEFORE: PANELLA, J., LAZARUS, J., and STEVENS, P.J.E.* MEMORANDUM BY STEVENS, P.J.E.: FILED APRIL 28, 2017 Appellants Eric and Debra Broitman appeal the order of the Court of Common Pleas of Bucks County granting summary judgment in favor of Appellee Deutsche Bank National Trust Company. We affirm. On May 16, 2014, Appellee filed a complaint in mortgage foreclosure, alleging that Appellants were in default on their residential mortgage as they had not made a payment since March 2011. Appellee stated in the complaint that the total amount of charges and costs unpaid by Appellants was approximately $412,000. Appellants filed a pro se answer in which they ____________________________________________ * Former Justice specially assigned to the Superior Court. EXHIBIT C Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 17 of 21 J-A08045-17 - 2 - did not dispute the validity of the note or mortgage or the fact that they are in default, but merely claimed they cannot find a loan modification. On December 15, 2015, Appellee filed a motion for summary judgment, which included an updated calculation as to the charges owed by Appellants with interest, resulting in a revised total of approximately $463,000. In support of this calculation, Appellee submitted the notarized affidavit of Kimberly Brown, a contract management coordinator with Ocwen Loan Servicing, LLC, the servicer for Appellee. The affidavit reiterates and attests to the updated calculations included in Appellee’s motion for summary judgment. Appellants did not respond to the summary judgment motion. On March 23, 2016, the lower court found that Appellants failed to make a legal defense to Appellee’s claims, granted Appellee’s summary judgment motion, and entered judgment in favor of Appellee in the amount of $463,424.38. On May 12, 2016, Appellants obtained counsel and filed a motion for leave to file an appeal nunc pro tunc alleging that they had no knowledge that the lower court had entered summary judgment against them as their mailing address had been incorrectly entered into the Prothonotary’s electronic filing system. Appellants admitted receiving Appellee’s complaint and other court filings which were personally served to Appellants’ residence, but denied receiving the order entering summary judgment. On Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 18 of 21 J-A08045-17 - 3 - May 23, 2016, the lower court granted Appellants’ motion to appeal nunc pro tunc.1 This timely appeal followed. Appellants raise the following issues on appeal: 1. Whether a document is an affidavit as defined by Pa.R.C.P. No. 76, when the document is not verified in accordance with Rule 76 and does not contain a notarial certificate that evidences that the document was signed on oath or affirmation? 2. Whether an affidavit summarizing the contents of unidentified business records that are not attached to the affidavit can properly serve as the basis for the entry of summary judgment? 3. Whether an affiant possesses the requisite personal knowledge regarding amounts claimed due on a mortgage loan, when the affiant states that her knowledge is solely based on reading certain unidentified business records? 4. Whether summary judgment is properly entered in a mortgage foreclosure action, where the mortgagee does not produce any documentation demonstrating the amounts claimed due and relies instead on a testimonial affidavit? Appellants’ Brief, at 2. Before reaching the merits of this appeal, we note that Appellee has asked that this appeal be dismissed as Appellants failed to file a response to Appellee’s motion for summary judgment. Pennsylvania Rule of Civil Procedure 1035.3(a) provides that the adverse party to a summary ____________________________________________ 1 Both trial courts and our Court have jurisdiction to determine whether an appeal nunc pro tunc should be granted. Pierce v. Penman, 515 A.2d 948 (1986), appeal denied, 515 Pa. 608, 529 A.2d 1082 (1987) (upholding a trial court's decision to grant an appeal nunc pro tunc). Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 19 of 21 J-A08045-17 - 4 - judgment motion “may not rest upon the mere allegations or denials of the pleadings but must file a response within thirty days after service of the motion.” Rule 1035.3(d) allows summary judgment to be entered against a party who does not respond. As Rule 1035.3 plainly required Appellants to respond to Appellee’s motion for summary judgment, we agree that dismissal of this action on this ground is proper. Moreover, we also find all of Appellants’ claims on appeal are waived as Appellants failed to raise these arguments before the lower court. Our rules of appellate procedure provide that “[i]ssues not raised in the lower court are waived and cannot be raised for the first time on appeal.” Pa.R.A.P. 302(a). This Court has further provided: Issue preservation is foundational to proper appellate review....By requiring that an issue be considered waived if raised for the first time on appeal, our courts ensure that the trial court that initially hears a dispute has had an opportunity to consider the issue. This jurisprudential mandate is also grounded upon the principle that a trial court ... must be given the opportunity to correct its errors as early as possible. Related thereto, we have explained in detail the importance of this preservation requirement as it advances the orderly and efficient use of our judicial resources. Finally, concepts of fairness and expense to the parties are implicated as well. Commonwealth v. Miller, 80 A.3d 806, 811 (Pa.Super. 2013) (quoting In re F.C. III, 607 Pa. 45, 2 A.3d 1201, 1212 (2010) (citations omitted)). Based on the foregoing reasons, we affirm the trial court’s grant of summary judgment. Order affirmed. Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 20 of 21 J-A08045-17 - 5 - Judgment Entered. Joseph D. Seletyn, Esq. Prothonotary Date: 4/28/2017 Case 2:17-cv-01997-GAM Document 12-1 Filed 06/05/17 Page 21 of 21 DM1\7855589.1 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA ERIC BROITMAN AND DEBRA BROITMAN, Plaintiffs, -vs- OCWEN LOAN SERVICING, LLC, DEUTSCHE BANK NATIONAL TRUST COMPANY, IN ITS CAPACITY AS TRUSTEE FOR MORGAN STANLEY ABS CAPITAL I INC. TRUST 2005-HE7, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE7 AND UDREN LAW OFFICES, P.C. Defendants. § § § § § § § § § § § § DOCKET NO.: 2:17-CV-01997-GAM ORDER AND NOW, this_________ day of____________________, 2017 upon consideration of Defendants Ocwen Loan Servicing, LLC and Deutsche Bank National Trust Company, in its capacity as Trustee for Morgan Stanley ABS Capital I Inc. Trust 2005-HE7, Mortgage Pass- Through Certificates, Series 2005-HE7 (collectively “Defendants”) Motion to Dismiss Plaintiffs’ Amended Complaint, any response thereto, and any proceedings thereon, it is ORDERED that Plaintiffs’ Amended Complaint is hereby DISMISSED WITH PREJUDICE. BY THE COURT: ______________________________ Case 2:17-cv-01997-GAM Document 12-2 Filed 06/05/17 Page 1 of 1