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Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 19-1754

__________

DANIEL L. TABB, JR.,

Appellant

v.

OCWEN LOAN SERVICING, LLC.

____________________________________

On Appeal from the United States District Court

for the District of Delaware

(D.C. Civil Action No. 1-17-cv-01124)

District Judge: Honorable Colm F. Connolly

____________________________________

Submitted Pursuant to Third Circuit LAR 34.1(a)

October 8, 2019

Before: GREENAWAY, Jr., RESTREPO, and FUENTES, Circuit Judges

(Opinion filed: January 10, 2020)

___________

OPINION*

___________

PER CURIAM

Daniel Tabb appeals from the District Court’s order dismissing his complaint 

alleging claims under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 

 * This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent.

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et seq. For the following reasons, we will affirm in part, vacate in part, and remand for 

further proceedings. 

In 2014, the United States Bankruptcy Court for the District of Delaware granted 

Tabb and his wife a discharge from their personal debts, including a mortgage loan on 

their Delaware home, pursuant to Chapter 7 of the Bankruptcy Code. See 11 U.S.C. § 

727.1 In 2017, Tabb filed a complaint against Ocwen Loan Servicing, LLC, the servicer 

of his mortgage, alleging that, in an attempt to collect on the discharged mortgage debt, it 

sent five separate communications to him in 2016 which were false and misleading, and 

violative of the FDCPA.2

 The communications included a notice of “Payoff Quote,” a 

“Response Letter – Loss Mitigation Option(s) are Enclosed,” two “Mortgage Account 

Statement[s]” and a “Verification of Mortgage Account.” 

 1 The bankruptcy trustee had abandoned the Tabbs’ property that was encumbered by the 

mortgage debt. The bankruptcy discharge did not prevent the mortgage holder, The Bank 

of New York (BONY), from enforcing its mortgage lien through foreclosure. See

Johnson v. Home State Bank, 501 U.S. 78, 83 (1991) (stating that a discharge under 

Chapter 7 “extinguishes only ‘the personal liability of the debtor,’” and that the 

Bankruptcy Code “provides that a creditor’s right to foreclose on the mortgage survives 

or passes through the bankruptcy” (quoting 11 U.S.C. § 524(a)(1) and citing 11 U.S.C. § 

522(c)(2))). 

2 Tabb alleged that the communications violated various provisions of the FDCPA, 

including 15 U.S.C. § 1692e(2)(A) which prohibits “the false representation of” either 

“the character, amount, or legal status of any debt;” 15 U.S.C. § 1692e(5), which 

prohibits “[t]he threat to take any action that cannot legally be taken or that is not 

intended to be taken; and 15 U.S.C. § 1692e(10), which prohibits “the use of any false 

representation or deceptive means to collect or attempt to collect any debt or to obtain 

information concerning a consumer.”

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The District Court determined that the complaint was subject to dismissal for 

failure to state a claim. It dismissed the complaint with prejudice after determining that 

leave to amend would be futile. This appeal ensued. 

The District Court had jurisdiction under 28 U.S.C. § 1331, and we have 

jurisdiction under 28 U.S.C. § 1291. We exercise plenary review over the dismissal of a 

complaint for failure to state a claim, see Allah v. Seiverling, 229 F.3d 220, 223 (3d Cir. 

2000). To survive dismissal, a complaint must “state a claim to relief that is plausible on 

its face” by including facts which “permit the court to infer more than the mere 

possibility of misconduct.” Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). 

The FDCPA is a consumer protection statute that “imposes open-ended 

prohibitions on, inter alia, false, deceptive or unfair” debt-collection practices. Jerman v. 

Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 587 (2010) (quotation 

marks and citation omitted). To state a claim under the statute, a plaintiff must establish 

that “(1) she is a consumer; (2) the defendant is a debt collector, (3) the defendant’s 

challenged practice involves an attempt to collect a ‘debt’ as the Act defines it, and (4) 

the defendant has violated a provision of the FDCPA in attempting to collect the debt.” 

Jensen v. Pressler & Pressler, 791 F.3d 413, 417 (3d Cir. 2015) (quoting Douglass v. 

Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014)). Although the FDCPA does 

not define “debt collection,” we have recognized that its substantive provisions “make 

clear that it covers conduct ‘taken in connection with the collection of any debt.’” 

McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240, 245 (3d Cir. 2014) 

(citation omitted). This includes any “activity undertaken for the general purpose of 

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inducing payment.” Id. The demand for payment need not be explicit; “communications 

that include discussions of the status of payment, offers of alternatives to default, and 

request for financial information” may constitute debt collection activity. Id. at 245-46.

Generally, we employ an objective standard in determining whether the “least 

sophisticated debtor” would be misled by the communication. Rosenau v. Unifund 

Corp., 539 F.3d 218, 221 (3d Cir. 2008). This standard is “lower than the standard of a 

reasonable debtor” but “preserv[es] a quotient of reasonableness and presume[es] a basic 

level of understanding and willingness to read with care.” Id. (citation omitted).

The District Court dismissed the complaint after determining that Ocwen was a 

“debt collector” within the meaning of the FDCPA, but that the communications were 

sent for informational purposes only and “not in connection with the collection of any 

debt.” In reaching the latter conclusion, the Court principally relied on the fact that each 

communication contained the following disclaimer – a debt collection notice followed by 

a bankruptcy disclosure:

This communication is from a debt collector attempting to 

collect a debt; any information obtained will be used for that 

purpose. However, if the debt is in active bankruptcy or has 

been discharged through bankruptcy, this communication is 

purely provided to you for informational purposes only with 

regard to our secured lien on the above referenced property. 

It is not intended as an attempt to collect a debt from you 

personally. 

This disclaimer, however, does not automatically insulate the communication from 

liability under the FDCPA. Rather, the District Court was required to consider the 

context of the disclaimer, including its placement within, and the content of, the 

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communication, which is critical to determining whether the claim comes within the 

scope of the FDCPA. See Gburek v. Litton Loan Servicing LP, 614 F.3d 380, 386 & n.3 

(7th Cir. 2010); Gonzalez v. Kay, 577 F.3d 600, 607 (5th Cir. 2009). When so 

considered, not all of the claims are subject to dismissal.

In Count I of the complaint, Tabb alleges that a communication sent on September 

2, 2016, titled a “Payoff Quote,” misrepresented the character, status, and amount of his 

debt, threatened to take legal action that Ocwen did not intend to take, and used false 

misrepresentations and deceptive means in an attempt to collect a debt in violation of 15 

U.S.C. §§ 1692(2)(A), 1692e(5) and 1692e(10). In deciding whether Tabb stated a claim 

for relief, the District Court properly considered the “Payoff Quote” document. See In re: 

Rockefeller Center Properties, Inc. Securities Litig., 184 F.3d 280, 287 (3d Cir. 1999) (on 

motion to dismiss, court may consider certain narrowly defined types of material 

including items that are integral to or explicitly relied upon in the complaint). The Court

determined that it was not sent in connection with the collection of a debt because the 

debt collection/bankruptcy disclosure disclaimer was included on the bottom of each 

page, making clear that it was sent for informational purposes only. However, the copy 

of the “Payoff Quote” submitted in support of the complaint is faint and illegible; it 

therefore cannot be discerned whether the document, when read as a whole, would 

support Tabb’s claim. At the motion-to-dismiss stage, the District Court must accept the 

facts as alleged as true. See Phillips v. Cty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 

2008). Even assuming that, without the document, the complaint did not allege sufficient

facts to state a claim for relief, the District Court should have dismissed the claim without 

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prejudice and allow leave to amend. See Grayson v. Mayview State Hosp., 293 F.3d 103, 

114 (3d Cir. 2002) (noting that a court should not dismiss pro se complaints without 

granting leave to amend unless “amendment would be inequitable or futile”).

Counts III and IV of the complaint allege that two mortgage statements sent by 

Ocwen violated §§ 1692(2)(A), 1692e(5) and 1692e(10). The District Court concluded, 

and Ocwen contends on appeal, that it did not violate FCDPA because, as servicer of the 

mortgage lien, it was required to provide mortgage statements to Tabb. See 15 U.S.C. § 

1638(f); 12 C.F.R. § 1026.41(1)(2). Although the Truth in Lending Act generally 

requires creditors to send periodic statements to mortgage debtors for each billing cycle, 

the Consumer Financial Protection Bureau (CFPB) has clarified that periodic statements 

are not required if the borrower’s mortgage debt has been discharged in bankruptcy. See

Amendments to the 2013 Mortgage Rules Under the Real Estate Settlement Procedures 

Act (Regulation X) and the Truth in Lending Act (Regulation Z), 78 FR 62993-01. 

The District Court also determined that the statements were sent merely “to place 

[Tabb] on notice of a potential foreclosure action.” We disagree. The statements listed 

the amount due in red, a due date of “Due Now,” the balances, and interest rates. They 

also provided, on the back, “Payment and Correspondence Addresses,” “[Five] 

Convenient Payment Options,” and payment processing information. At the bottom of 

the pages, both mortgage statements include a section titled “Important News” which 

includes information regarding how payments are to be applied and about changes in the 

monthly payment amounts. In between, it advises that “[o]ur records indicate that your 

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loan is in foreclosure. Accordingly, this statement may be for informational purposes 

only.” The notice continues:

[y]our loan has been accelerated (the past due balance, all 

fees, and your remaining principal balance is now due in 

full). This statement is not considered a payoff quote – you 

are still responsible for any additional fees and expenses that 

post to your account after the statement date. . . . You can still 

reinstate your loan (bring your account to a current status) and 

avoid foreclosure. The amount required to reinstate your loan as 

of the date of this statement is listed above. To reinstate your 

loan, send a CERTIFIED payment (cashier’s check, bank check 

title check, attorney’s escrow check or wire transfer) . . . Our 

records indicate that you have filed for bankruptcy protection. 

This statement applies to our lien on the subject mortgaged 

property and is being provided for informational purposes only. 

If any payments are remitted, please include the coupon below . . .

On the back, the statements include a section titled “Important Information,” the first 

subsection of which, titled “Important Notice,” included the debt collection 

notice/bankruptcy disclosure disclaimer. 

Although the statements include these disclaimers, their placement – on the back 

or buried among boilerplate payment and loan information – mitigates their effectiveness. 

See, e.g., Lesher v. Law Offices of Mitchell N. Kay, PC, 650 F.3d 993, 1003 & n.11 (3d 

Cir. 2011). Because Ocwen was not required to send these statements, Tabb has alleged 

sufficient facts to show that the nature of the statements, when read as a whole, is to 

induce mortgage payments, and that the least sophisticated debtor could plausibly believe 

they were sent “in connection with the collection” of a debt. Because it stated a plausible 

claim for relief under the FDCPA, the claim was wrongfully dismissed. 

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We agree with the District Court that the remaining claims were subject to 

dismissal with prejudice. Count II concerns a communication titled “Response Letter –

Loss Mitigation Option(s) are Enclosed,” which Tabb alleged violated §§ 1692e(5) and 

(10). The letter states that Ocwen “has completed the review of the application for 

assistance and the financial information provided” and is “able to offer the following loss 

mitigation options.” It appears that the District Court determined that the document was 

sent in response to a query by Tabb. However, Tabb specifically alleged in his complaint 

that he “never applied for a loan modification,” nor did he request one. Compl. At ¶ ¶ 

150, 151. The District Court was required to accept that fact as true. Phillips, 515 F.3d 

at 233. Nevertheless, the letter makes no demand for payment, repeatedly makes clear 

that Tabb can avoid foreclosure if he “accepts” the mitigation option, and the debt 

collection/ bankruptcy disclosure disclaimer is set off and displayed at the bottom of 

every page of the 18-page letter. Even the least sophisticated debtor would understand 

that the letter was not sent in connection with the collection of a debt. 

Finally, the document titled “Verification of Mortgage Account” (Count V), dated 

November 8, 2016, was not sent by Ocwen in connection with the collection of a debt. 

The document indicates that it was sent in response to a request for a “Verification of 

Mortgage,” a fact which Tabb has not disputed. Moreover, the document does not 

demand payment; it provides general information regarding the mortgage account, lists a 

due date of May 1, 2014 (which is the same date as the “Last Pay Date”), and includes 

the debt collection notice/bankruptcy disclosure disclaimer, by itself, at the bottom of the 

page. 

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In light of the foregoing, we will affirm the District Court’s order dismissing 

Counts II and V with prejudice, vacate its order dismissing Counts I, III and IV, and 

remand the matter for further proceedings consistent with this opinion. 

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