Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_06-cv-00799/USCOURTS-alsd-1_06-cv-00799-3/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 15:1601 Truth in Lending

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1 The appellation given this Motion is somewhat confusing. As to defendant

Saxon, it is a renewed motion, inasmuch as Saxon previously filed a Motion for Judgment on the

Pleadings (doc. 93) that was granted in part and denied in part. Defendant Deutsche had never

appeared in this action prior to the filing of the instant Motion, however, so it is certainly not a

“renewed” Motion with respect to that defendant.

2 More specifically, plaintiffs contend that the loan originated with defendant

Homeowners Loan Corporation (“HLC”) and that HLC actually committed the statutory

violations underlying plaintiffs’ claims herein. However, plaintiffs also contend that “Saxon and

Deutsche are assignees of the Plaintiffs’ loan within the meaning of 15 U.S.C. § 1641 and are

liable for damages and other remedies, including rescission pursuant [sic] 15 U.S.C. § 1641(d)(1)

and other applicable law.” (Third Amended Complaint, ¶ 25.)

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

JEROME WILLIAMS, et al., )

 )

Plaintiffs, )

 )

v. ) CIVIL ACTION 06-0799-WS-B

 )

SAXON MORTGAGE SERVICES, )

INC., et al., )

 )

Defendants. )

ORDER

This matter comes before the undersigned on Saxon Mortgage Services, Inc. and

Deutsche Bank National Trust Company’s Renewed Motion for Judgment on the Pleadings (doc.

113).1

 The Motion has been briefed and is ripe for disposition at this time.

I. Background.

The Court has extensively recounted the factual and procedural history of this action in

its previous rulings, and will not reiterate it here. In brief, this action arises from a residential

real estate transaction involving plaintiffs and defendants Saxon Mortgage Services, Inc.

(“Saxon”) and Deutsche Bank National Trust Company (“Deutsche”), among others.2 The Third

Amended Complaint (doc. 104) filed on September 2, 2007 includes claims against Saxon and

Deutsche under the Truth in Lending Act, 15 U.S.C. §§ 1601 et seq. (“TILA”) and the Home

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3 In briefing its Motion for Judgment on the Pleadings as to the Second Amended

Complaint, Saxon improperly waited until its reply brief to assert the loan servicer argument for

the first time. The Court refused to consider that argument on grounds that it was raised in a

procedurally improper fashion. (September 27 Order, at 10-11.) Ordinarily, a movant would not

be given a second bite at the apple to raise and brief an issue that could and should have been

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Ownership and Equity Protection Act, 15 U.S.C. §§ 1602(aa) and 1639 (“HOEPA”). The

gravamen of the TILA claim is that disclosures made in connection with the closing understated

the finance charge by omitting certain fees, while the HOEPA claim is predicated on the notion

that defendants failed to provide certain required disclosures for high-rate mortgages and

wrongfully imposed pre-payment penalties and a due-on-demand clause. In both of these claims,

plaintiffs seek damages, rescission of the mortgage transaction, and other relief.

Ruling on Rule 12(c) motions filed by Saxon and other defendants (although not

Deutsche, which was first named as a defendant in the Third Amended Complaint) relating to

plaintiffs’ Second Amended Complaint (doc. 61), the Court entered an Order (doc. 114) on

September 27, 2007 that, inter alia, concluded that plaintiffs’ TILA and HOEPA claims for

money damages were barred by the governing one-year statute of limitations. In so concluding,

the Court found that the doctrine of equitable tolling was inapplicable because, under welldeveloped case law, the fraudulent acts providing the factual predicate for a TILA claim cannot

also satisfy the factual predicate for equitable tolling, else the limitations period established by

Congress would be meaningless. That said, the September 27 Order provided that plaintiffs’

rescission claims under TILA and HOEPA were not time-barred because the one-year limitations

period for those claims runs from 20 days after plaintiffs gave notice of rescission. That date of

notice occurred on December 29, 2006 with respect to Saxon and on either that date or August 8,

2007 with respect to Deutsche. (Third Amended Complaint (doc. 104), at ¶ 39.) As such, the

rescission claims are plainly timely, and defendants have never maintained otherwise.

Defendants Saxon and Deutsche now seek judgment on the pleadings with respect to the

TILA and HOEPA claims asserted against them in the Third Amended Complaint pursuant to

the following arguments: (1) Deutsche is entitled to dismissal of the damages claims on

limitations grounds, to the same extent that Saxon is; and (2) Saxon can have no liability under

TILA because it is a mere loan servicer.3

 As the Court reads the Motion, Deutsche does not seek

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presented earlier; however, the Court will permit Saxon to do so here because Saxon’s prior Rule

12(c) Motion related to the Second Amended Complaint while the currently pending Motion

relates specifically to the Third Amended Complaint.

4 Movants’ Motion and brief are not entirely clear as to what relief they seek;

however, the Court takes its cues from the closing paragraph of their brief, wherein Saxon and

Deutsche state as follows: “In summary, Saxon, as servicer is entitled to judgment on the

pleadings for all claims as a servicer has no liability under TILA. Deutsche, as assignee, is

entitled to judgment on the pleadings with regard to the TILA and HOEPA claims for statutory

and actual damages.” (Movants’ Brief (doc. 112), at 5-6.)

5 Indeed, movants have specifically argued that the limitations analysis should be

identical for Deutsche as for Saxon and HLC. And plaintiffs acknowledged that “Defendants’

motion is similar to the motion filed by HLC which this Court granted in its order dated

September 27, 2007” (Plaintiffs’ Brief (doc. 116), at 4), without offering any basis for

distinguishing the analysis as to Deutsche.

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judgment on the pleadings with respect to either the TILA or the HOEPA rescission claims;

therefore, the Court need not consider plaintiffs’ arguments that any such judgment on the

pleadings would be unwarranted.4

II. Analysis.

As noted supra, the Court has previously found that plaintiffs’ TILA and HOEPA claims

for damages are time-barred with respect to defendant Saxon. In the interest of affording all

parties a fair opportunity to be heard, the Court ordered briefing on the question of whether

Deutsche’s statute of limitations argument was analytically distinct from those interposed by

Saxon and HLC. (See doc. 115.) In response, the parties have not identified any respect in

which the limitations issue as to Deutsche differs from that decided as to Saxon and HLC in the

Court’s previous Order.5

 Accordingly, Deutsche’s Motion for Judgment on the Pleadings is

granted as to the TILA and HOEPA claims for statutory and actual damages, and those claims

are dismissed for the reasons set forth in the September 27 Order; provided, however, that

plaintiffs may proceed against Deutsche on their TILA and HOEPA causes of action for

rescission of the underlying transaction.

Saxon also argues that it is entitled to judgment on the pleadings because it is exempt

from TILA and HOEPA liability in that “Saxon is not an assignee, but only a loan servicer.” 

(Motion (doc. 113), at 2.) It is certainly a correct statement of law that loan servicers are

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6 Similarly, in its Answer (doc. 78) to the Second Amended Complaint, Saxon

stated as its sixth defense “that it is an assignee and an assignee has no liability for any alleged

violations not apparent on the face of the disclosure documents.” (Id. at 2.)

7 Saxon’s present position is also directly contrary to the representations it made to

plaintiffs prior to the outset of this action, wherein Saxon informed plaintiffs’ counsel in writing

that Saxon “is the current holder of the note to this loan” and that Saxon “purchased the loan

from Countrywide Home loans on October 21, 2005.” (Doc. 116, at Exh. B.) Thus, not only is

Saxon’s present stance in conflict with its prior representations to this Court, but it also directly

contradicts its prior statements to opposing counsel. These circumstances demonstrate a clear

factual question as to whether Saxon is or is not a loan servicer, and suggest that Saxon should

closely scrutinize the evidence on its loan servicer argument to satisfy itself that it has a good

faith basis for pursuing that argument any further in this litigation.

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generally not liable under TILA and HOEPA. See, e.g., 15 U.S.C. § 1641(f)(1) (“A servicer of a

consumer obligation arising from a consumer credit transaction shall not be treated as an

assignee of such obligation for purposes of this section unless the servicer is or was the owner of

the obligation.”); In re Hopkins, 372 B.R. 734, 740 n.1 (Bankr. E.D. Pa. 2007) (“in general,

TILA claims would not yield any relief against loan servicers”); Pierce v. Ocwen Loan

Servicing, 2006 WL 1994571, *4 (M.D.N.C. July 14, 2006) (“as a loan servicer, and not a

lender, Defendant is excepted from liability under TILA”). Saxon’s problem is twofold. First,

Saxon has previously held itself out in this very litigation as “an assignee of HLC.” (Saxon

Motion for Judgment on the Pleadings (doc. 93), at 1-2.)6

 Saxon offers no explanation

whatsoever for the position it now takes in its Motion for Judgment on the Pleadings, which

controverts previous representations it has made to this Court herein. See generally United

States v. Campa, 459 F.3d 1121, 1152 (11th Cir. 2006) (observing that doctrine of judicial

estoppel “is designed to prevent parties from making a mockery of justice by inconsistent

pleadings”) (citation omitted).7

Second, even if Saxon could overcome the defect of its inconsistent position, its

argument would nonetheless founder at this Rule 12(c) stage. “Judgment on the pleadings under

Rule 12(c) is appropriate when there are no material facts in dispute, and judgment may be

rendered by considering the substance of the pleadings and any judicially noticed facts.” 

Horsley v. Rivera, 292 F.3d 695, 700 (11th Cir. 2002) (citation omitted); see also Andrx

Pharmaceuticals, Inc. v. Elan Corp., PLC, 421 F.3d 1227, 1232 (11th Cir. 2005). In that context,

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8 To the extent that Saxon or Deutsche might have intended to raise as a separate

ground that it is entitled to judgment on the pleadings as to the HOEPA claims pursuant to 15

U.S.C. § 1641(d)(1), the Court likewise rejects that contention. Section 1641(d)(1) provides that

for HOEPA loans assignees are liable for all claims to the same extent as the creditor of the

mortgage unless they demonstrate “by a preponderance of the evidence, that a reasonable person

exercising ordinary due diligence, could not determine ... that the mortgage was a mortgage

referred to in section 1602(aa) of this title.” 15 U.S.C. § 1641(d)(1); see also Cooper v. First

Gov’t Mortg. & Investors Corp., 238 F. Supp.2d 50, 55 (D.D.C. 2002) (“Courts have interpreted

section 1641(d)(1)’s due diligence requirement as placing the burden on an assignee to prove, by

a preponderance of the evidence, that the assignee could not reasonably determine, could not

determine, or did not know that the loan was a HOEPA loan.”). Movants’ position is that the

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the Court “must accept the facts alleged in the complaint as true and view them in the light most

favorable to the nonmoving party.” Cannon v. City of West Palm Beach, 250 F.3d 1299, 1301

(11th Cir. 2001); King v. American Airlines, Inc., 284 F.3d 352, 356 (2d Cir. 2002) (likening Rule

12(c) standard to that used in reviewing Rule 12(b) motions, and imposing on trial court the

responsibility to accept all allegations of complaint as true and draw all reasonable inferences in

favor of the nonmovant). Dismissal pursuant to Rule 12(c) is proper only where after reviewing

the pleadings “it is clear that the plaintiff would not be entitled to relief under any set of facts

that could be proved consistent with the allegations” therein. Horsley, 292 F.3d at 700. 

Here, the Third Amended Complaint specifically alleges that “Saxon and Deutsche are

assignees of the Plaintiffs’ loan.” (Third Amended Complaint, ¶ 25.) The Third Amended

Complaint further alleges that plaintiffs’ loan was “subsequently assigned to Defendant Saxon,

which currently holds and services the loan.” (Id., ¶ 7.) Yet Saxon would have the Court ignore

these factual allegations on its Rule 12(c) motion, but instead accept on the mere say-so of

Saxon’s counsel (with no supporting evidence of any kind) that it is properly classified as a loan

servicer and not as an assignee. This the Court cannot do at the Rule 12(c) stage, and Saxon

concedes as much by acknowledging in an untimely reply brief that “there may be an issue not

resolved by the pleadings as to whether or not Saxon is a servicer only and not an assignee.” 

(Doc. 117, at 2.) Accepting the facts alleged in the Third Amended Complaint as true and

viewing them in the light most favorable to plaintiffs, Saxon is the current holder of the loan, is

an assignee of the loan, and therefore does not qualify as a mere “loan servicer” within the

meaning of TILA. The Motion for Judgment on the Pleadings is denied on this point.8

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mere failure to provide assignee notices (as alleged in Paragraph 44 of the Third Amended

Complaint) is sufficient to satisfy their burden because in the absence of those notices, “there

was no way for an assignee to know that the loan was subject to HOEPA.” (Movants’ Brief, at

5.) This argument is incorrect as a matter of law, inasmuch as there are myriad ways an assignee

could reasonably determine in ordinary diligence from documents provided that a loan was a

HOEPA loan, even in the absence of assignee notices. At this early stage, the undersigned

cannot discount the possibility that movants could reasonably have determined upon the exercise

of due diligence that plaintiffs’ loan was a HOEPA loan, much less hold that movants have

satisfied their burden of proving otherwise. This argument is, at best, premature.

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III. Conclusion.

For all of the foregoing reasons, Saxon Mortgage Services, Inc. and Deutsche Bank

National Trust Company’s Renewed Motion for Judgment on the Pleadings (doc. 113) is

granted in part, and denied in part. The Motion is granted insofar as it seeks dismissal of the

TILA and HOEPA claims for damages (and not rescission) against Deutsche, and those claims

are dismissed as untimely. In all other respects, the Motion is denied.

DONE and ORDERED this 25th day of October, 2007.

s/ WILLIAM H. STEELE 

UNITED STATES DISTRICT JUDGE

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