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Powell v. Ocwen Loan Servicing, LLC

United States District Court, D. Connecticut

July 29, 2019

GARY POWELL et al., Plaintiffs,
v.
OCWEN LOAN SERVICING, LLC as servicer for Deutsche Bank Nat'l Tr. Co. et al., Defendants.

          ORDER GRANTING MOTION TO DISMISS

          JEFFREY ALKER MEYER UNITED STATES DISTRICT JUDGE.

         Plaintiffs Gary and Gail Powell have filed this pro se lawsuit against two loan servicing companies-defendants Ocwen Loan Servicing, LLC and Litton Loan Servicing LP-in connection with a state court foreclosure of their property in Wallingford, Connecticut. Defendants have moved to dismiss. I conclude that the Powells' state law claims are barred by either the Rooker-Feldman doctrine or res judicata. I further conclude that the Powells' federal law claims fail to state cognizable claims for relief. Accordingly, I will grant defendants' motion to dismiss.

         Background

         I take the facts as stated in the complaint as true for purposes of this ruling and also take judicial notice of the filings in the related foreclosure action in the Superior Court. See Bailey v. Interbay Funding, LLC, 2018 WL 1660553, at *2 & n.2 (D. Conn. 2018).

         In May 2002, the Powells entered into a mortgage loan agreement with Accredited Home Lenders. Doc. #1 at 2 (¶ 8). The Powells signed a promissory note for $445, 000 and issued a mortgage in favor of Accredited. Ibid. Litton would go on to service the loan until 2011, when Litton was bought out by Ocwen. Ibid. (¶ 5).

         The Powells defaulted on the loan and completed a number of trial periods modifying the loan between 2008 and the end of 2011. Ibid. (¶¶ 9-10). They complied with all terms of the modifications and timely paid all the mortgage payments under the trial period modified plans. Id. at 4 (¶ 11). According to the Powells, however, defendants failed to apply their trial period loan payments against their account, and they never received a mortgage interest statement from defendants. Id. at 3 (¶ 10).

         The mortgage was transferred in December 2011, and Ocwen began servicing the mortgage around that time. Id. at 4 (¶ 12). Ocwen did not accept the trial period payments, and began accelerating the mortgage. Ibid. The Powells tried and failed to continue modifying the loan agreement. Ibid. (¶ 13).

         In May 2016, Ocwen filed a foreclosure complaint against the Powells in the Connecticut Superior Court for New Haven. Ibid. (¶ 14); see also Complaint to Deutsche Bank Nat'l Tr. Co. v. Powell, NNH-CV16-6062358-S (Conn. Super. 2016). The parties began mediation in November 2016. Doc. #1 at 4 (¶ 15). In April 2017, they agreed on a modification. Ibid. Gary Powell then sought to clarify whether the modification agreement included certain escrow amounts for taxes and insurance, and counsel for Deutsche Bank (not named as a defendant in this action) informed him that he would a receive a corrected copy of the agreement confirming that was the case. Ibid. But the Powells did not receive those documents, and defendants instead filed a motion for judgment. Ibid. (¶¶16-17). According to the Powells, defendants continued to push for foreclosure instead of honoring the agreement they made during the course of mediation in April 2017. Id. at 4-5 (¶¶ 16-19).

         On October 3, 2017, Deutsche Bank-the named state court foreclosure plaintiff-moved to default the Powells in the foreclosure action for failure to plead. See Doc. #119.00 to Deutsche Bank Nat'l Tr. Co. v. Powell, NNH-CV16-6062358-S (Conn. Super. 2017). The Superior Court granted the default, see Doc. #119.10 to id., but then reopened the case when the Powells filed an answer and several counterclaims. See Docs. ##121.00, 122.10 to id. The Powells' counterclaims named several new defendants to the action including Ocwen, see Doc. #121.00 at 4 (¶ 7) to id., and alleged claims including fraud, quiet title, breach of contract, violation of the federal Real Estate Settlement Procedures Act (RESPA), breach of fiduciary duty, and negligence. See Id. at 5 (¶ 15). Deutsche Bank then successfully moved for summary judgment and to strike the Powells' counterclaims. See Docs. ##124.10, 125.10 to id.

         On July 23, 2018, the Superior Court entered a judgment of foreclosure by sale. Doc. #134.00 to id. The Powells moved to amend the judgment, and the Superior Court entered a modified judgment on August 27, 2018, extending the sale date on the property. Doc. #136.00 to id.

         The Powells then filed this federal lawsuit on November 16, 2018. Doc. #1. Count I of the complaint alleges that Ocwen and Litton violated the federal Fair Debt Collection Practices Act (FDCPA) in multiple ways: by failing to properly apply loan payments to the debt under the modification agreement; by inducing the Powells to enter into a modification without properly applying their trial plan payments; by sending communications to the Powells that falsely represented the character and amount of the debt; and by threatening foreclosure despite the fact that the Powells were current on their payments and making them in accordance with their trial plan. Id. at 5-6 (¶¶ 21-38).

         Count II of the complaint alleges that defendants violated the federal Truth in Lending Act (TILA) by failing to timely credit payments and by charging late fees and penalties in connection with their failure to timely credit payments. Id. at 7 (¶¶ 43-48).

         Count III of the complaint alleges a claim for breach of contract including breach of the duty of good faith and fair dealing. It alleges that the parties had a mortgage contract that defendants did not properly service such that the mortgage contract should be deemed void. Id. at 7-8 (¶¶ 49-55).

         Count IV of the complaint alleges a claim for estoppel and unclean hands. It alleges that defendants have been unjustly enriched through their misrepresentations and that defendants should be estopped ...


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