Whitehead et al v. Ocwen Financial Corp. et alMOTION to Dismiss for Failure to State a ClaimN.D. Okla.September 26, 2016IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA ZACHARY WHITEHEAD and BILLIE WHITEHEAD, Plaintiffs, vs. OCWEN FINANCIAL CORP., OCWEN LOAN SERVICING, LLC, and WELLS FARGO BANK, N.A. Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 4:16-cv-00536-GKF-FHM DEFENDANTS OCWEN LOAN SERVICING, LLC AND WELLS FARGO BANK, N.A.’S RULE 12(B)(6) MOTION TO DISMISS AND INCORPORATED MEMORANDUM IN SUPPORT Defendants Ocwen Loan Servicing, LLC (“OLS”) and Wells Fargo Bank, N.A. (“Wells Fargo”) move to dismiss plaintiffs Zachary and Billie Whitehead’s petition under Federal Rule of Civil Procedure 12(b)(6) and submit their incorporated memorandum in support thereof. OCWEN LOAN SERVICING, LLC AND WELLS FARGO BANK, N.A. By: /s/ Brian J. Rayment One of its Attorneys Brian J. Rayment, OBA #7441 Triad Center, Ste. 550 7666 E. 61st Street Tulsa, OK 74133 Telephone: 918-254-7915 Email: brayment@kivell.com P. Russell Perdew (admitted pro hac vice) rperdew@lockelord.com Chethan G. Shetty (admitted hac vice) cshetty@lockelord.com LOCKE LORD LLP 111 South Wacker Drive Chicago, Illinois 60606 312-443-1887 Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 1 of 23 i TABLE OF CONTENTS Introduction......................................................................................................................................1 Background ......................................................................................................................................1 Legal Standard .................................................................................................................................3 Argument .........................................................................................................................................4 I. The Whiteheads Assert No Allegations That Could Give Rise To Liability Against Wells Fargo In Its Individual Capacity ..........................................................................................4 II. The Petition Does Not Sufficiently Allege That OLS Used An ATDS...............................6 III. No Facts Are Set Forth With Sufficient Particularity To Plead A Fraud Claim..................9 IV. The Whiteheads’ Malicious Prosecution Claim Fails For Several Reasons......................11 V. Count VI Alleging Abuse Of Process Is Without Merit And Should Be Dismissed.........13 Conclusion .....................................................................................................................................16 Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 2 of 23 ii TABLE OF AUTHORITIES Page(s) Cases Abbas v. Selling Source, LLC, No. 09 CV 3413, 2009 WL 4884471 (N.D. Ill. Dec. 14, 2009) ................................................9 Ashcroft v. Iqbal, 556 U.S. 662 (2009)......................................................................................................... passim Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)......................................................................................................... passim Bivins v. Oklahoma, No. 13-CV-0802-CVE-PJC, 2014 WL 1976463 (N.D Okla. May 15, 2014)....................11, 13 Bradley v. Wells Fargo Bank, N.A., No. 12-cv-127-PB, 2013 WL 6681610 (D.N.H. Dec. 18, 2013) ..............................................5 Briscoe v. Deutsche Bank Nat’l Trust Co., No. 08 C 1279, 2008 WL 4852977 (N.D. Ill. Nov. 7, 2008).....................................................5 Cowdrey v. Allen, No. 05-CV-461-TCK-PJC, 2006 WL 3241381 (N.D. Okla. Nov. 7, 2006) ............................13 Flores v. Adir Int’l, LLC, No. 2:15-cv-00076-AB-PLA, 2015 WL 4340020 (C.D. Cal. July 15, 2015)............................9 Forbes v. Wells Fargo Bank, N.A., No. 2:14-CV-317, 2015 WL 419623 (S.D. Tex. Jan. 29, 2015)................................................5 Freidman v. Massage Envy Franchising, LLC, No. 3:12-cv-02962, 2013 WL 3026641 (S.D. Cal. June 13, 2013) ...........................................9 GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381 (10th Cir. 1997) .................................................................................................2 Gragg v. Orange Cab Co., Inc., No. C12-0576RSL, 2013 WL 195466 (W.D. Wash. Jan. 17, 2013) .........................................7 Greenberg v. Wolfberg, 890 P.2d 895 (Okla. 1994).....................................................................................12, 13, 14, 15 Hetronic Intern., Inc. v. Rempe, 99 F. Supp. 3d 1341 (W.D Okla. 2015) ...................................................................................14 Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 3 of 23 iii Houghton v. Foremost Fin. Servs. Corp., 724 F.2d 112 (10th Cir. 1983) .................................................................................................14 Johansen v. Vivant, Inc., No. 12 C 7159, 2012 WL 6590551 (N.D. Ill. Dec. 18, 2012) ...........................................7, 8, 9 King & King Enterprises v. Champlin Petroleum Co., No. 75-276-C, 1976 WL 1330 (E.D. Okla. Sept. 30, 1976) ....................................................13 Knutson v. ReplyA, Inc., No. 10-CV-1267, 2011 WL 291076 (S.D. Cal. Jan. 27, 2011)..................................................9 Koch v. Koch Indus., 203 F. 3d 1202 (10th Cir. 2000) ................................................................................................9 Lee v. Enterprise Fin. Group, No. CIV-08-1221-M, 2009 WL 1362605 (W.D. Okla. May 14, 2009)...................................11 Lewis v. Crystal Gas Co., 532 P.2d 431 (Okla. 1975).......................................................................................................12 Lillard v. Stockton, 267 F. Supp. 2d 1081 (N.D. Okla. 2003)...........................................................................10, 11 McGinnity v. Kirk, 362 P.3d 186 (Okla. 2015).......................................................................................................15 Meyers v. Ideal Basic Indus., Inc., 940 F.2d 1379 (10th Cir. 1991) ...............................................................................................12 Miller v. Cain, No. 14-2613, 2015 WL 222434 (W.D. La. Jan. 14, 2015) ................................................7, 8, 9 Oliver v. DirecTV, LLC, No. 14-cv-7794, 2015 WL 1727251 (N.D. Ill. Apr. 13, 2015)..................................................8 Salmon v. CRST Expedited, Inc., No. 14-CV-265-CVE-TLW, 2014 WL 4656499 (N.D. Okla. Sept. 17, 2014)..........................6 U.S. ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702 (10th Cir. 2006) .................................................................................................10 St. Louis Baptist Temple, Inc. v. FDIC, 605 F.2d 1169 (10th Cir. 1979) .................................................................................................2 Tal v. Hogan, 453 F.3d 1244 (10th Cir. 2006) .................................................................................................2 Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 4 of 23 iv Thornton v. Ford Motor Co., 297 P.3d 413 (Okla. Civ. App. 2012) ......................................................................................16 TKO Energy Services, LLC v. M-I L.L.C., No. 12-cv-108-GFK-PJC, 2013 WL 789458 (N.D. Okla. Mar. 4, 2013) ................................10 Statutes 12 O.S. § 1031 ...............................................................................................................................14 12 O.S. § 1033 ...............................................................................................................................14 12 O.S. § 1038 ...............................................................................................................................14 12 U.S.C. § 92a(a)............................................................................................................................4 47 U.S.C. § 227(a)(1).......................................................................................................................7 47 U.S.C. § 227(b)(1)(A).................................................................................................................6 Other Authorities 12 C.F.R. Parts 9, 12 ........................................................................................................................4 Federal Rule of Civil Procedure 8(a)(2) ..........................................................................................3 Federal Rule of Civil Procedure Rule 9(b) ......................................................................1, 9, 10, 11 Federal Rule of Civil Procedure Rule 12(b)(6)......................................................................1, 2, 16 Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 5 of 23 1 INTRODUCTION The petition should be dismissed in its entirety as to Wells Fargo because the allegations concern Wells Fargo’s conduct as the trustee of a trust, but Wells Fargo has been named in this action in its individual, rather than representative, capacity. Courts routinely dismiss national banks under similar circumstances where they are sued in their individual capacities for conduct relating to mortgages owned by trusts for which the banks serve as trustees. Counts III through VI asserting a violation of the Oklahoma Consumer Protection Act (“OCPA”), fraud, malicious prosecution, and abuse of process should be dismissed with prejudice. Counts II and IV through VI should also be dismissed as to OLS. There are no specific facts asserted in the petition against OLS. Rather, OLS is grouped together with co-defendant Ocwen Financial Corporation and the petition simply refers to them both as “Ocwen” without any further detail as to which entity was involved in which conduct. There are no allegations that OLS dialed Mr. Whitehead using an automatic telephone dialing system (“ATDS”) as defined in the Telephone Consumer Protection Act (“TCPA”). Nor are there any allegations consistent with Rule 9(b) sufficient to attribute any fraudulent misrepresentations to OLS. The malicious prosecution claim fails because that tort relates to the initiation of lawsuits rather than the filing of discrete motions. And, the Whiteheads’ abuse of process claim fails because they do not contend that lawful process was improperly used. Thus, under Rule 12(b)(6), all claims against Wells Fargo should be dismissed with prejudice and Counts II and IV through VI against OLS should be dismissed with prejudice. BACKGROUND The petition alleges that after the Whiteheads defaulted on their payments under a mortgage and note on or before June 1, 2009, “servicing of the note was transferred to Defendant Ocwen Financial Corporation and Defendant Ocwen Loan Servicing, LLC.” (Petition ¶¶ 7-8.) Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 6 of 23 2 The petition groups Ocwen Financial Corporation (“Ocwen Financial”) and OLS together, collectively refers to them as “Ocwen” and never sets forth any particular allegations of conduct by either Ocwen Financial or OLS. The Whiteheads allege that the collective “Ocwen was acting on behalf of and as loan servicers and agents of Wells Fargo.” (Id. ¶ 8.) “Upon information and belief, Ocwen, acting in Wells Fargo’s name and as its servicer and agent, prosecuted [a] foreclosure action” against the Whiteheads. (Id. ¶ 11.) A copy of the December 16, 2009 foreclosure petition, filed in McIntosh County, Oklahoma, is attached here as Exhibit 1.1 The plaintiff in the foreclosure action was Wells Fargo Bank, National Association as Trustee for Securitized Asset Backed Receivables LLC 2005-OP2 Mortgage Pass-Through Certificates, Series 2005-OP2. (Ex. 1.) A judgment was entered against the Whiteheads on February 18, 2010. (Petition ¶ 13.) A Sheriff’s Deed conveying the property to Wells Fargo Bank, National Association as Trustee for Securitized Asset Backed Receivables LLC 2005-OP2 Mortgage Pass-Through Certificates, Series 2005-OP2 was recorded on December 20, 2010. A copy of the Sheriff’s Deed is attached here as Exhibit 2. On December 4, 2014, “Ocwen, acting as Wells Fargo’s agent and in its name, moved the court to vacate the February 18, 2010 judgment, the October 19, 2010 Sheriff’s sale, the November 23, 2010 Order Confirming Sale and the December 20, 2010 Sheriff’s Deed transferring title to the property to Wells Fargo …” (Petition ¶ 21.) A copy of the December 4, 1 The Court may consider the foreclosure petition (Ex. 1) on a Rule 12(b)(6) motion to dismiss without converting the motion to a Rule 56 motion for summary judgment because the document is referenced in the petition and is central to the Whiteheads’ claims. GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). And, “facts subject to judicial notice may be considered in a Rule 12(b)(6) motion without converting the motion to dismiss into a motion for summary judgment.” Tal v. Hogan, 453 F.3d 1244, 1264 n.24 (10th Cir. 2006). Under Tenth Circuit precedent, the Court may take judicial notice of “facts which are part of its public records” and “matters that are verifiable with certainty.” St. Louis Baptist Temple, Inc. v. FDIC, 605 F.2d 1169, 1172 (10th Cir. 1979). The Court may take judicial notice of the foreclosure petition because it is a matter of public record and is verifiable with certainty. For these same reasons, the Court may also consider Exhibit 2, a publicly recorded Sheriff’s Deed, and Exhibits 3-4, filings from the state court foreclosure action. Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 7 of 23 3 2014 Application to Vacate Journal Entry, Sheriff’s Sale, Order Confirming Sheriff’s Sale and Void the Sheriff’s Deed is attached here as Exhibit 3. The motion states that it was filed “in order to name and serve additional parties of interest.” (Ex. 3.) The motion was granted the same day it was filed. (Petition ¶ 23.) Wells Fargo Bank, National Association as Trustee for Securitized Asset Backed Receivables LLC 2005-OP2 Mortgage Pass-Through Certificates, Series 2005-OP2 filed a First Amendment to Petition on January 5, 2015. A copy of the First Amendment to Petition is attached here as Exhibit 4. The First Amendment to Petition states that it realleges and restates all allegations stated in the Petition except that it is adding Sand Canyon Corporation, who may claim an interest in the subject property, as a defendant. (Ex. 4.) A default judgment was entered against the Whiteheads on March 3, 2015. (Petition ¶ 24.) In March of 2015, “Ocwen began calling and sending letters [to the Whiteheads] in an effort to collect on the debt.” (Id. ¶ 25.) Based on the alleged conduct in the foreclosure case and subsequent debt collection efforts, the Whiteheads assert claims against “Ocwen” under the FDCPA, TCPA, OCPA, and assert claims for fraud, malicious prosecution, and abuse of process. The OCPA, fraud, malicious prosecution, and abuse of process claims are also asserted against Wells Fargo in its individual capacity. LEGAL STANDARD Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The U.S. Supreme Court has held that, under the pleading standard set by Rule 8, “[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Nor does a complaint suffice if it merely offers “naked assertion[s]” devoid of “further Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 8 of 23 4 factual enhancement.” Id. Factual allegations must be sufficient to raise a right to relief above the speculative level. Twombly, 550 U.S. at 555. To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim for relief that is plausible on its face.” Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 570. 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. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 556. The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555. Thus, threadbare recitals of the elements of a cause of action supported by nothing more than mere conclusory statements do not suffice. Id. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. Iqbal, 556 U.S. at 679. Furthermore, and particularly relevant here, “a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.” Twombly, 550 U.S. at 558. ARGUMENT I. The Whiteheads Assert No Allegations That Could Give Rise To Liability Against Wells Fargo In Its Individual Capacity. The petition should be dismissed with prejudice as to Wells Fargo because a national bank cannot, while acting as a trustee of a trust, be individually liable for conduct undertaken solely in its capacity as trustee. Federal law distinguishes between the conduct of a national bank acting in an individual capacity and conduct undertaken in a limited capacity as trustee of a securitized trust. See 12 U.S.C. § 92a(a) (providing for national banks to act as trustees); 12 C.F.R. Parts 9, 12 (setting forth the standards applied to fiduciary activities of national banks in connection with securities transactions). Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 9 of 23 5 Accordingly, courts routinely dismiss national banks from lawsuits in which they are named in their individual capacities but where the alleged conduct relates to their roles as trustees. For example, in Bradley v. Wells Fargo Bank, N.A., the plaintiff named as defendants Wells Fargo Bank, N.A., Wells Fargo Bank, N.A. as trustee for an unnamed trust (“Wells Fargo Trustee”), and Wells Fargo Bank, N.A. as Trustee for a trust created pursuant to a Pooling and Servicing Agreement (“Wells Fargo PSA Trustee”). No. 12-cv-127-PB, 2013 WL 6681610, at *2 (D.N.H. Dec. 18, 2013). Noting that the plaintiff had “increased the complexity of the case by suing Wells Fargo as distinct defendants in its corporate capacity, as trustee of an unnamed trust, and as Wells Fargo PSA Trustee,” the Court dismissed Wells Fargo Bank, N.A. and Wells Fargo Trustee because the plaintiff’s claims focused on the foreclosure of his mortgage and his eviction following the foreclosure. Id. Wells Fargo PSA Trustee was the “proper target for these claims” because it was “the entity that allegedly oversaw the foreclosure and eviction” and the remaining Wells Fargo entities were dismissed because the “amended complaint does not allege that any of the other defendants had any involvement in either the foreclosure or the eviction.” Id. See also Forbes v. Wells Fargo Bank, N.A., No. 2:14-CV-317, 2015 WL 419623, at *4 (S.D. Tex. Jan. 29, 2015) (granting motion to dismiss Wells Fargo Bank, N.A. because it was incorrectly named in its individual capacity rather than in its representative capacity as a trustee); Briscoe v. Deutsche Bank Nat’l Trust Co., No. 08 C 1279, 2008 WL 4852977, at *5 (N.D. Ill. Nov. 7, 2008) (dismissing claims against Deutsche Bank in its individual capacity where the claims were based on Deutsche Bank’s alleged conduct as trustee of the trust that owned plaintiff’s mortgage loan). The Whiteheads’ petition is devoid of any allegation of any conduct undertaken by Wells Fargo in its individual capacity. The basis for the Whiteheads’ claims against Wells Fargo is the filing of the motion to vacate in the foreclosure action. (Petition ¶¶ 21, 26.) But the motion Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 10 of 23 6 demonstrates that the plaintiff in the foreclosure, and the party that filed the motion to vacate, was Wells Fargo acting as trustee of a trust-not in its individual capacity. (See Exs. 1, 3.) In the absence of any allegation that Wells Fargo engaged in any conduct in its individual capacity, Counts III-VI against Wells Fargo should be dismissed with prejudice. II. The Petition Does Not Sufficiently Allege That OLS Used An ATDS. Count II should be dismissed because it relies on the improper legal conclusion that “Ocwen” violated the TCPA by calling Mr. Whitehead’s cellular phone without his consent using an ATDS. (Petition ¶¶ 35-36, 54.) The TCPA prohibits certain calls made using an ATDS or an “artificial or prerecorded voice.” 47 U.S.C. § 227(b)(1)(A). For purposes of the TCPA, an ATDS is “equipment which has the capacity-(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Id. at § 227(a)(1). To state a claim under the TCPA, a plaintiff must allege that: (1) a call was made to a cellular or wireless phone, (2) using an ATDS or an artificial or prerecorded voice, and (3) without prior express consent of the called party. 47 U.S.C. § 227(b)(1)(A); Salmon v. CRST Expedited, Inc., No. 14-CV-265-CVE-TLW, 2014 WL 4656499, at *2 (N.D. Okla. Sept. 17, 2014) (quoting Meyer v. Portfolio Recovery Associates, LLC, 707 F.3d 1036, 1043 (9th Cir. 2012)). The Whiteheads fail to satisfy the second element of a TCPA claim-they allege no facts to suggest any call was placed using an ATDS and do not contend that Mr. Whitehead was contacted through an “artificial or prerecorded voice.” Rather, the petition merely alleges that “Ocwen”-without specifying either Ocwen Financial or OLS-called Mr. Whitehead “using an Automated Telephone Dialing System (“ATDS”) with the capacity to store telephone numbers as that term is used in the TCPA.” (Petition ¶ 35.) The Whiteheads also apparently contend that “equipment with the capacity to store phone numbers” constitutes “an automatic dialer as Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 11 of 23 7 defined by the TCPA.” (Id. ¶ 54.) These wholly conclusory allegations simply echo a portion of the TCPA’s language and ignore the complete definition of an ATDS. The Whiteheads never allege that OLS’s dialing equipment uses a random or sequential number generator or that it has the capacity to dial numbers it stores or produces using a random or sequential number generator. See 47 U.S.C. § 227(a)(1). But even if the Whiteheads had parroted the entire definition of an ATDS, they have provided no basis for their conclusion that the alleged calls were made with equipment satisfying the statutory requirements of an ATDS. This is precisely the sort of defective pleading that constitutes nothing more than “a formulaic recitation of the elements of a cause of action.” See Iqbal, 556 U.S. at 678-679; Twombly, 550 U.S. at 555. Federal courts throughout the country have held that while a TCPA plaintiff need not allege “specific technical details” regarding a defendant’s ATDS use, he must, at a minimum, describe in laymen’s terms, the facts about the calls “or provide the circumstances surrounding them to establish his belief that” they were made using an ATDS. Johansen v. Vivant, Inc., No. 12 C 7159, 2012 WL 6590551, at *3 (N.D. Ill. Dec. 18, 2012); Miller v. Cain, No. 14-2613, 2015 WL 222434, at *9 (W.D. La. Jan. 14, 2015) (“Courts rely on facts that permit an inference that the calls were made using an ATDS ‘such as the content of the message, the context in which it was received, and the existence of similar messages.’”) (citations omitted). For instance, in Vivant and Cain, the courts observed that a plaintiff can plausibly suggest the use of an ATDS by describing the robotic sound of the voice on the other line, the lack of human response when he attempted to have a conversation with the “person” calling him, the generic content of the messages received, or anything else about the circumstances of a call or message contributing to his belief it was pre-recorded or delivered via an ATDS. Vivant, 2012 WL 6590551 at *3; Cain, 2015 WL 222434 at *9; Gragg v. Orange Cab Co., Inc., No. C12-0576RSL, 2013 WL 195466, Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 12 of 23 8 at *2 (W.D. Wash. Jan. 17, 2013) (granting motion for judgment on the pleadings where plaintiff’s contention that “the message he received was sent by means of an ATDS” was possible, but did “not appear plausible” because where only one text message was at issue, “Plaintiff’s allegations regarding the frequency with which this message has been sent and the use of an ATDS to send them are unsupported by any specific facts and appear less likely than the alternate inference, namely that plaintiff received a customer-specific text … through human agency, rather than an ATDS”). The plaintiff’s TCPA claim was dismissed in Vivant because he “provide[d] no information about the two messages he allegedly received from [defendant] other than stating that [defendant] left pre-recorded messages on his cellular phone using an ATDS.” Vivant, 2012 WL 6590551 at *3. The court held that “[w]ithout enhancing his complaint with anything more than the language already available in the statute, Plaintiff provides only a threadbare, ‘formulaic recitation of the elements’ of a TCPA cause of action, which is not entitled to an assumption of truth.” Id. (quoting Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555; Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009)). And in Cain, where the plaintiff made no allegations regarding the circumstance of the alleged call, the court noted that “the vast majority of courts to have considered the issue have found that ‘[a] bare allegation that defendant[] used an ATDS is not enough.’” 2015 WL 222434 at *8 (quoting Baranski v. NCO Fin. Sys., Inc., No. 13 CV 6349, 2014 WL 1155304, at *6 (E.D.N.Y. Mar. 21, 2014) (“Plaintiff must do more than simply parrot the statutory language … they must at least describe, in laymen’s terms, the facts about the calls or the circumstances surrounding the calls that make it plausible that they were made using an ATDS.”)).2 2 See also Oliver v. DirecTV, LLC, No. 14-cv-7794, 2015 WL 1727251, at *3 (N.D. Ill. Apr. 13, 2015) (“While Plaintiffs’ allegations are consistent with Defendant having used an ATDS, to wit, Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 13 of 23 9 As with the deficiently pled claims in Vivant and Cain, the Whiteheads’ claim likewise fails because they have alleged zero facts that would make plausible their claim that Mr. Whitehead was called by OLS via an ATDS. Rather, they simply parrot some of the language of the TCPA and fail to allege who-Ocwen Financial or OLS-made the calls. The Whiteheads further allege that “Ocwen uses ATDS, including ones that are also capable of being an Automatic Dial Announcing Device (“ADAD”). (Petition ¶ 36.) But the petition never explains how or why an ADAD would constitute an ATDS under the TCPA, or whether Mr. Whitehead was ever even called by OLS through an ADAD. The Whiteheads’ pleading is plainly improper under the ironclad requirements of Iqbal and Twombly and the relevant TCPA authorities discussed above. Accordingly, the Count II should be dismissed. III. No Facts Are Set Forth With Sufficient Particularity To Plead A Fraud Claim. Count IV alleging fraud against “Defendants” should be dismissed as to OLS and Wells Fargo because the petition falls far short of the heightened pleading requirements of Rule 9(b). “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “Rule 9(b)’s purpose “is to afford defendant fair notice of plaintiff’s claims and the factual background upon which [they] are based.” Koch v. were possibly made with an ATDS, these alleged facts do not suggest beyond the ‘speculative level’ that Defendant actually used an ATDS and is liable under the TCPA.”) (emphasis in original); Freidman v. Massage Envy Franchising, LLC, No. 3:12-cv-02962, 2013 WL 3026641, at *2 (S.D. Cal. June 13, 2013) (dismissing TCPA claim where the “text messages are generic and impersonal … but that is not enough to make the claims plausible. It is just as conceivable that the text messages were done by hand, or not using an ATDS.”); Knutson v. ReplyA, Inc., No. 10-CV-1267, 2011 WL 291076, at *2 (S.D. Cal. Jan. 27, 2011) (“[T]he complaint gives no details about the manner of the calls except that they were solicitations about Defendant’s real estate business. There is nothing in the complaint that allows the court to infer the calls were randomly generated or impersonal.”); Abbas v. Selling Source, LLC, No. 09 CV 3413, 2009 WL 4884471, at *3 (N.D. Ill. Dec. 14, 2009) (conclusory allegations regarding the use of an ATDS are “bare legal conclusions entitled to no weight”); Flores v. Adir Int’l, LLC, No. 2:15-cv-00076- AB-PLA, 2015 WL 4340020, at *4 (C.D. Cal. July 15, 2015) (granting motion to dismiss with prejudice where the “[p]laintiff’s TCPA claim rest[ed] solely on his conclusory allegation that Defendant used an ATDS”). Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 14 of 23 10 Koch Indus., 203 F. 3d 1202, 1236 (10th Cir. 2000) (internal quotations and citations omitted). This Court has recognized that the Tenth Circuit “requires a complaint alleging fraud to set forth the time, place and contents of the false statements and the consequences thereof.” TKO Energy Services, LLC v. M-I L.L.C., No. 12-cv-108-GFK-PJC, 2013 WL 789458, at *8 (N.D. Okla. Mar. 4, 2013) (quoting Koch, 203 F. 3d at 1236). “At a minimum, Rule 9(b) requires that a plaintiff set forth the ‘who, what, when, where and how of the alleged fraud, and must set forth the time, place and contents of the false representation, the identity of the party making the false statements and the consequences thereof.” U.S. ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702, 726-27 (10th Cir. 2006). Under Oklahoma law, the elements of actionable fraud are: (1) a false material misrepresentation, (2) made as a positive assertion which is either known to be false or is made recklessly without knowledge of the truth, (3) with the intention that it be acted upon, and (4) which is relied on by the other party to his own detriment. TKO, 2013 WL 789458 at *9. The petition alleges that “Defendants falsely represented that the Whiteheads could still own the property years after the foreclosure and confirmation of sheriff’s sale by entering into an agreement modifying the note and mortgage.” (Petition ¶ 66.) This allegation is insufficient to state a claim under Rule 9(b) because “where fraud is alleged against multiple defendants, blanket allegations of fraud couched in language such as ‘by the defendants’ are insufficient. Instead, the specifics of the alleged fraudulent activity of each defendant must be set forth.” Lillard v. Stockton, 267 F. Supp. 2d 1081, 1094 (N.D. Okla. 2003). The Whiteheads never allege which defendant made the representation that they “could still own the property.” Moreover, the petition fails to set forth when the representation was made, where the representation was made, how the representation was made, or any other Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 15 of 23 11 contents of the representation. (Petition ¶ 66.) Nor does the petition explain why such a representation was false given that the 2010 foreclosure judgment, Sheriff’s sale, order confirming Sheriff’s sale, and the Sheriff’s Deed were vacated-which would have caused ownership of the property to revert to the Whiteheads. (Id. ¶ 21, 23.) Accordingly, Count IV should be dismissed because it sets forth no specifics regarding the conduct of OLS or Wells Fargo. See Lee v. Enterprise Fin. Group, No. CIV-08-1221-M, 2009 WL 1362605, at *4 (W.D. Okla. May 14, 2009) (dismissing fraud claim where “plaintiffs impermissibly lumped all defendants together, rather than setting forth the identity of the party making the fraudulent statements, as well as the time, place and contents of the alleged fraudulent statements”); Stockton, 267 F. Supp. 2d at 1112 (dismissing fraud claim for failure to comply with Rule 9(b)’s particularity requirements). IV. The Whiteheads’ Malicious Prosecution Claim Fails For Several Reasons. The Whiteheads’ claim under Count V for malicious prosecution should be dismissed with prejudice because the Whiteheads cannot establish that OLS or Wells Fargo brought an “original action” upon which this claim is based or that an original action was terminated in the Whiteheads’ favor. Nor can the Whiteheads establish the “probable cause” requirement. Count V alleges that “Defendants instigated an action to vacate the judgment, sale, confirmation and sheriff’s deed” and “did not have probable cause to bring the action …” (Petition ¶¶ 75, 77.) “The essential elements of a state law malicious prosecution are: ‘(1) the bringing of the original action by the defendant; (2) its successful termination in plaintiff’s favor; (3) want of probable cause to join the plaintiff; (4) malice; and (5) damages.’” Bivins v. Oklahoma, No. 13-CV-0802-CVE-PJC, 2014 WL 1976463, at *3 (N.D Okla. May 15, 2014) (quoting Young v. First State Bank, Watonga, 628 P.2d 707, 709 (Okla. 1981)). “Malicious prosecution actions are disfavored by Oklahoma courts, and the elements of the action are Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 16 of 23 12 narrowly construed.” Meyers v. Ideal Basic Indus., Inc., 940 F.2d 1379, 1383 (10th Cir. 1991). First, Count V fails for the threshold reason that claims for malicious prosecution apply only to the initiation of a proceeding-i.e., filing a lawsuit-rather than particular motions filed within a proceeding. See Greenberg v. Wolfberg, 890 P.2d 895, 903 (Okla. 1994) (“The essence of malicious prosecution is abuse of judicial process by bringing a civil proceeding with malice.”) (emphasis in original); Lewis v. Crystal Gas Co., 532 P.2d 431, 433 (Okla. 1975) (discussing the initiation of civil proceedings). The Whiteheads seek to recover under a malicious prosecution claim for “Defendants’” alleged conduct of filing the motion to vacate. (Petition ¶ 75.) But a motion is not a proceeding, and the Whiteheads’ characterization of the motion as an “action” does not satisfy the narrowly construed pleading requirements for a malicious prosecution claim. Count V should be dismissed with prejudice for this reason alone. Second, this claim should also be dismissed with prejudice because there was no successful termination of an original action in the Whiteheads’ favor. The petition alleges that the “Whiteheads were successful in overturning this action and the matter was terminated in the Whiteheads favor with the entry of an agreed order.” (Petition ¶ 76.) But the entry of the agreed order that placed the litigation “back to its footing as of December of 2010 (id. ¶ 41) is hardly a termination of the foreclosure in the Whiteheads’ favor. On the contrary, the effect of the agreed order was to reinstate the judgment of foreclosure, Sheriff’s sale, confirmation of sale, and Sheriff’s Deed transferring title to the foreclosure plaintiff. The Whiteheads strangely characterize an agreed order restoring a foreclosure judgment against them as a termination of the foreclosure in their favor. But the Whiteheads lost the foreclosure case, and the agreed order simply reinstated that result. Oklahoma courts narrowly construe the requirement of litigation terminating in the Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 17 of 23 13 plaintiff’s failure. Indeed, even obtaining a dismissal without prejudice falls short of the requirement of a successful termination of the original action. Wolfberg, 890 P.2d at 904 (“For there to be a prevailing party in an action requires that the underlying proceeding not have been dismissed without prejudice. Dismissal without prejudice is not a termination favorable to the malicious-prosecution plaintiff.”) (emphasis in original). Here, the Whiteheads did not succeed in obtaining a dismissal of the foreclosure-with or without prejudice. “Federal courts have repeatedly dismissed malicious prosecution complaints for failure to allege a favorable prior termination.” King & King Enterprises v. Champlin Petroleum Co., No. 75-276-C, 1976 WL 1330, at *4 (E.D. Okla. Sept. 30, 1976). This Court should do the same here and dismiss Count V with prejudice. Bivins, 2014 WL 1976463 at *4 (a criminal case against plaintiff could not “serve as the basis for plaintiff’s state law malicious prosecution claim” because it was dismissed without prejudice). Moreover, the Whiteheads cannot show probable cause, which constitutes a “complete defense” to a malicious prosecution claim, because they do not contend that the foreclosure petition filed in 2009 was filed by the foreclosure plaintiff without probable cause. See Cowdrey v. Allen, No. 05-CV-461-TCK-PJC, 2006 WL 3241381, at *3 (N.D. Okla. Nov. 7, 2006). And, any such contention would be rebutted by the foreclosure court’s granting of a judgment against the Whiteheads on February 18, 2010. See id. (finding of probable cause at preliminary hearing in criminal matter “negates Plaintiff’s ability to meet the third element of her malicious prosecution claim, mandating dismissal of same”). V. Count VI Alleging Abuse Of Process Is Without Merit And Should Be Dismissed. Count VI for abuse of process should be dismissed as to OLS and Wells Fargo because the Whiteheads’ claim amounts to a dispute over the propriety of filing the motion to vacate in Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 18 of 23 14 the first instance rather than a claim that either OLS or Wells Fargo improperly used lawful process. “Abuse of process occurs when legal process is used for an improper purpose, to accomplish an end not lawfully obtainable, or to compel someone to do some collateral thing he could not be legally compelled to do.” Houghton v. Foremost Fin. Servs. Corp., 724 F.2d 112, 116 (10th Cir. 1983). To sufficiently state a claim for abuse of process, a party must plead “(1) the improper use of the court’s process (2) primarily for an ulterior or improper purpose (3) with resulting damage to the plaintiff asserting the misuse.” Wolfberg, 890 P.2d at 905 (emphasis in original). Abuse of process requires the improper use of lawful process. Hetronic Intern., Inc. v. Rempe, 99 F. Supp. 3d 1341, 1351 (W.D Okla. 2015) (“The essence of the tort of abuse of process is ‘not the wrongfulness of the prosecution, but some extortionate perversion of lawfully initiated process to illegitimate ends.’” ) (quoting Heck v. Humphrey, 512 U.S. 477, 485 n. 5, 114 S.Ct. 2364 (1994)); Wolfberg, 890 P.2d at 906 (abuse of process claims are reserved for “perversion of the process after it is issued”) (emphasis in original). Here, the Whiteheads’ abuse of process claim fails because they do not allege any improper use of lawful process. Rather, they claim the motion to vacate was itself improper and unlawful. The Whiteheads complain that the motion was improperly filed without a petition and the issuance of summons as required by 12 O.S. § 1033, and that they did not receive proper service. (Petition ¶¶ 86-88.) They further contend that “Defendants had no legally valid reason” to issue this process as required by 12 O.S. § 1031. (Id. ¶ 89.)3 These allegations amount to a dispute over the propriety of the motion and the foreclosure court’s granting of the motion the same day it was filed. But that is not the purpose of an abuse of process claim. Wolfberg, 890 P.2d at 905 (“The quintessence of abuse of process is ‘not the wrongfulness of the prosecution, 3 The motion also appears to have been untimely under 12 O.S. § 1038. Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 19 of 23 15 but some extortionate perversion of lawfully initiated process to illegitimate ends.’”) (quoting Heck, 114 S.Ct. at 2372). Because there is no allegation that lawfully initiated process was improperly used by OLS or Wells Fargo, Count VI should be dismissed. The claim should be dismissed for the additional reason that the petition does not allege how OLS or Wells Fargo improperly used the foreclosure court’s process primarily for an ulterior or improper purpose. “The significance of [the] word [“primarily”] is that there is no action for abuse of process when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant.” McGinnity v. Kirk, 362 P.3d 186, 204 (Okla. 2015) (quoting Restatement (Second) of Torts § 682 (1977), Comment b). “For abuse of process to occur there must be use of the process for an immediate purpose other than that for which it was designed and intended.” (Id.) (emphasis added). Thus, there is no abuse of process when the process “is used legitimately to its authorized conclusion.” Wolfberg, 890 P.2d at 905. Here, the Whiteheads allege that “Defendants issued process in the form of a motion to vacate” and “Defendants then used this process in attempts to collect” the debt. (Petition ¶¶ 86, 90.) But the petition does not explain how the motion to vacate was improperly used or how its immediate, primary purpose was for “Ocwen” to begin debt collection attempts months later. The Whiteheads ignore that the stated purpose of the motion was to “name and serve additional parties of interest” and that the foreclosure plaintiff filed a First Amendment to Petition on January 5, 2015 for purposes of adding Sand Canyon Corporation as a defendant. Two months later, after the foreclosure plaintiff obtained a judgment against the Whiteheads, “Ocwen” began its alleged debt collection efforts. Thus, the Whiteheads fail to explain how the motion to vacate was not used to accomplish its authorized conclusion; i.e., to vacate the prior foreclosure Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 20 of 23 16 judgment and file an amendment to the foreclosure petition for purposes of naming an additional defendant. And there is no explanation of how, despite all the intervening litigation in the foreclosure action, the immediate purpose of the motion to vacate was to enable “Ocwen” to collect the debt months after the motion was filed. These pleading deficiencies are fatal to the Whiteheads’ claim. And there are no allegations of what Wells Fargo did in order to collect the debt. All the written communications and phone calls to the Whiteheads are alleged to have come from “Ocwen.” While the petition alleges in conclusory fashion that “Ocwen as servicer acted as the agent of Wells Fargo for all action taken in” the foreclosure (Petition ¶ 72), there are no allegations that any subsequent debt collection efforts were on behalf of Wells Fargo and there are no facts to support an agency theory of liability. To establish liability under an “actual authority” theory, the Whiteheads must plead allegations sufficient to show manifestation by the principal that the agent shall act for him and be subject to his control. Thornton v. Ford Motor Co., 297 P.3d 413, 419 (Okla. Civ. App. 2012). To plead apparent authority, the Whiteheads must allege a manifestation by the principal to a third person that another is his agent. Id. at 421. Under Twombly and Iqbal, the Whiteheads’ bare conclusion that “Ocwen” was the agent of Wells Fargo is insufficient. Nowhere in the petition do the Whiteheads assert any facts sufficient to establish that OLS had actual authority or apparent authority as the agent of Wells Fargo in connection with the foreclosure or any debt collection efforts. Count VI should be dismissed for these additional reasons. CONCLUSION For the foregoing reasons, Ocwen Loan Servicing, LLC and Wells Fargo Bank, N.A. respectfully ask this Court to enter an order granting their motion to dismiss under Rule 12(b)(6) and any other relief the Court deems necessary. Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 21 of 23 17 Dated: September 26, 2016 Respectfully Submitted, OCWEN LOAN SERVICING, LLC AND WELLS FARGO BANK, N.A. By: /s/ Brian J. Rayment One of its Attorneys Brian J. Rayment, OBA #7441 Triad Center, Ste. 550 7666 E. 61st Street Tulsa, OK 74133 Telephone: 918-254-7915 Facsimile: 918-254-7915 Email: brayment@kivell.com P. Russell Perdew (admitted pro hac vice) rperdew@lockelord.com Chethan G. Shetty (admitted hac vice) cshetty@lockelord.com LOCKE LORD LLP 111 South Wacker Drive Chicago, Illinois 60606 312-443-1887 Case 4:16-cv-00536-GKF-FHM Document 25 Filed in USDC ND/OK on 09/26/16 Page 22 of 23 18 CERTIFICATE OF SERVICE I hereby certify that on the 26th day of September, 2016, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system. /s/ Brian J. 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