Court Opinion

ID: 2659426
Source: CourtListenerOpinion
Date Created: 2014-04-03 02:35:32.838716+00
Date Added: 2024-06-11T12:38:18.521435
License: Public Domain

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

JANICE A. EDWARDS, )
)
Plaintiff, )
)
v. ) case No. 13-cv-709 (RJL)
)
OCWEN LOAN SERVICING, LLC and )   as § §
OCWEN FINANCIAL CORPORATION,) "
) MAR 0 5 2014
Defendants. ) g
t;iett<;, U.S. Dlstrict §§ Bankruptcy
j Gourts for the District tit columbia
MEMORANDUM OPINION

(March _/_, 2014) [Dkt. #l()]

Plaintiff Janice Edwards ("plaintifF’ or "Edwards") is suing Ocwen Loan
Servicing, LLC and Ocwen Financial Corporation (collectively "defendants" or
"Ocwen") for various wrongs allegedly committed while servicing plaintiff` s mortgage.
See generally Compl. [Dkt. # l]. Defendants move to dismiss under Federal Rule of Civil
Procedure l2(b)(6) on the basis that plaintiff has failed to state a claim. See Defs.’ Mot.
to Dismiss [Dkt. #l()]. Upon consideration of the parties’ pleadings, relevant law, and the
entire record therein, the motion is GRANTED in part and DENIED in part.l

BACKGROUND

Plaintiff’ s complaint alleges the following facts, which I accept as true and

' Plaintiff defines "Defendants" to include both Ocwen Loan Servicing, LLC and Ocwen Financial
Corporation, see Compl. at p. l, and l see no basis for distinguishing between the two at this stage. l reject
Ocwen’s invitation to make factual findings about each entity’s role in servicing Edwards’ loan. See
Defs.’ Mem. of Law in Supp. of Mot. to Dismiss ("Defs.’ l\/Iem.") at 19-20 [Dkt. #lO-l].

construe in the light most favorable to her.z On February 18, 2003, Edwards closed on a
$64,000 mortgage from SouthStar Funding, LLC ("SouthStar"), which was to be used to
refinance debt on a home that plaintiff was not occupying, and did not intend to occupy,
as a primary residence. See Compl. 1[ 20 & Exs. A, D [Dkt. ##lO-l, lO-4]. SouthStar
later assigned its servicing rights to Litton Loan Servicing, LP ("Litton"). See z'd. ll 22.

Although Edwards made her monthly escrow and mortgage payments and was not
in default on the loan, Litton failed to remit tax payments for 20()9, and the property was
sold in a January 20ll public tax sale. See id. W 24-25. In mid-201 l, Ocwen acquired
Litton. See id. il 27. In late-201 l, the purchaser of the property initiated foreclosure
proceedings; however, Ocwen redeemed the property, and the Complaint to Foreclose the
Right of Redemption was dismissed in mid-2012 See z`d. w 30-33.

Defendants then force-placed hazard insurance on the property and told Edwards
that she owed a total of $42,100.03, of which $7,813.76 was in default. See z`d. \l‘ll 35-38.
Her monthly payment ballooned from $509.22 to $4,278.84. See z'a’. il 39. To avoid
defaulting, plaintiff sold the property in March 2013 for $150,000, and defendants
retained $106,939.05 of the proceeds. See z'd. 111 44, 47.

Plaintiff now claims that Ocwen "engaged in illegal, unfair and unlawful predatory

mortgage servicing practices," entitling her to actual, statutory, and punitive damages,

2 See Spa)'roit’ v. UniledAir Lz'nes, ]nc., 2l 6 F.3d l l l l, l l l3 (D.C. Cir. 2000). lam also considering
those documents that are "lncorporated in the complaint,” E.E.O.C. v. St. Francz's Xavier Parochz`a/ Sch.,
l 17 F.3d 62l, 624 (D.C. Cir. 1997), and those "upon which the plaintiff’s complaint necessarily relies,"
Hz'nton v. Corrections Corp. ofAm., 624 F. Supp. 2d 45, 46 (D.D.C. 2009) (internal quotation marks
omitted).
2

costs and attomey’s fees, and pre- and post-judgment interest, all totaling $25,000,000.
See z`d. jj 49 & p. 19. Her complaint pleads eleven causes of action_two under federal
statutes, one under a D.C. statute, and eight sounding in common law tort and contract.3

Defendants now contend that "[p]laintiff` uses her [complaint] as a soap box," but
"when all of the venomous rhetoric is scrubbed from [it], what remains is a Complaint in
which [p]laintiff fails to state a claim." See Defs.’ Mem at l. I mostly agree, but find that
plaintiff has stated a viable claim for breach of an escrow agent’s fiduciary duty.

LEGAL STANDARD

To survive a motion to dismiss under Rule l2(b)(6), a complaint "must contain
sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its
face." Ashcrofl v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).
"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." Ia’. "While a complaint attacked by a Rule l2(b)(6) motion to dismiss does not
need detailed factual allegations, a plaintiffs obligation to provide the grounds of his
entitle[ment] to relief requires more than labels and conclusions, and a forrnulaic

recitation of the elements of a cause of action will not do." Bell Atl. Corp, v. Twombly,

3 Claims one and two are under the Fair Debt Collection Practices Act, l5 U.S.C. § l692 et seq., and the
Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. See Compl. {Hl 62-83. Claims three
through ten are for breach ofcontract, unjust enrichment, breach of the implied covenant of good faith and
fair dealing, breach of fiduciary duty, conversion, wrongful foreclosure, negligent servicing, and
intentional infliction of emotional distress. See z'd. ‘{Hl 84~120. The eleventh claim is under the D.C.
Consumer Protection Procedures Act, D.C. Code § 28-3904 et seq. See ia’. 111 l2l-l27.

3

550 U.S. 544, 555 (2007) (citations and internal quotation marks omitted); see id. (facts
alleged "must be enough to raise a right to relief above the speculative level").

"[W]here the well-pleaded facts do not permit the court to infer more than the
mere possibility of misconduct, the complaint has alleged_but it has not ‘show[n]’~
‘that the pleader is entitled to relief."’ Iqbal, 556 U.S. at 679 (quoting FED. R. CIV. P.
8(a)(2)). I must "treat the complaint’s factual allegations as true" and "grant plaintiff the
benefit of all inferences that can be derived from the facts alleged." Sparrow, 216 F.Bd at
l l 13 (citation and internal quotation marks omitted). But l "need not accept inferences
drawn by plaintiff[] if such inferences are unsupported by the facts set out in the
complaint. Nor must the court accept legal conclusions cast in the form of factual
allegations." Kowal v. MCI Commc’ns Corp., 16 F.3d l27l, 1276 (D.C. Cir. l994).

ANALYSIS
A. Statut0ry Claims

Plaintiff’ s claims under the Fair Debt Collection Practices Act ("FDCPA"), Real
Estate Settlement Procedures Act ("RESPA"), and D.C.’s Consumer Protection
Procedures Act ("CPPA") must be dismissed because her mortgage loan does not fall
within the scope of those statutes. The FDCPA provisions on which plaintiff relies, 15
U.S.C. §§ l692d and l692e, apply only to the collection of"debt[s]," which are defined
as "any obligation . . . to pay money arising out of a transaction in which the money,

property, insurance, or services which are the subject of the transaction are primarily for

personal, family, or household purposes," § l692a(5) (emphasis added). Plaintiff has
failed to plead facts sufficient to establish that her mortgage was a "debt" under the
FDCPA. Although she states that the loan "was for personal, family or household
purposes,” Compl. j 2, she puts no factual meat on that bare bone of statutory language.
Moreover, it is clear from an exhibit attached to plaintiffs complaint that she did not
reside at the subject address nor did she intend to do so when she refinanced the debt on
that property, leaving me to speculate about what "personal, fami1y, or household
purposes" the property possibly could have served. See Compl., Ex. D [Dkt, #l-4].4
Plaintiff maintains that a debt’s "purpose" is determined by looking at the owner’s
intent at time the collateral was purchased, not her intent at the time of refinancing. See
Pl.’s Opp’n to Mot. to Dismiss ("Pl.’s Opp’n") at 7 [Dkt. #13]. But even ifthat is true-
and even if contemporaneous occupancy in the home is not required for a mortgage to be
for personal, family, or household purposes-I am still left with no factual averments
whatsoever about how plaintiff ever intended to use this property or loan.§ Plaintiff’s

repeated recitations ofthe statutory language, see Compl. 112; Pl.’s Opp’n at 7, 8, 23, 24,

4 Edwards says in her complaint that she "was at all times mentioned herein" living on the property.
Compl. 11 l. That statement, however, is thoroughly contradicted by at least six exhibits that plaintiff
attached to her complaint, which show that she resided and received mail in Greenbelt, Maryland in 2005,
2007, and 2009-2012, see id., Exs. B, D, E, G, H, J [Dkt. ##1-2, l-4, l-5, 1-7, l-8, 1-l0]. "[W]here a
conclusory allegation in the complaint is contradicted by a document attached to the complaint, the
document controls and the allegation is not accepted as true." Amz'dax Trading Grp. v. S. W.I.F. T. SCRL,
671 F.3d 140, 147 (2d Cir. 201 1); see also Thompson v. Ill. Dept. ofProf’l Regulatt`on, 300 F.3d 750, 754
(7th Cir. 2002); ALA, ]nc. v. CCA]R, ]nc., 29 F.3d 855, 859 n.8 (3d Cir. l994).

5 Plaintiff does not dispute that loans for rental and investment properties are not FDCPA "debts." See,

e_g., Klahrz v. Clackamas Cnly. Bank, No. 3:13cv62l, 2013 WL 3834709, at *4 (D. Or. July 24, 2013);

Hara’rick v. Canter, No. 1 lcv3032, 2012 WL 5409739, at *3 (D. l\/ld. Nov. 5, 2012); Sparlirt v. Select
5

without more, are insufficient to allege that her mortgage loan meets the FDCPA’s
definition ofa "debt." See Hardy v. N. Least`rzg Sys., Inc., --- F. Supp. 2d ----, 2013 WL
3488489, at *5 (D.D.C. 2013) ("[N]otwithstanding the plaintiffs unsupported assertion
that ‘said equipment, if used, was for personal use only[,]’ . . . she fails to establish that
the underlying debt was a consumer debt primarily for personal, family, or household
purposes." (citation omitted; quoting Am. Compl.)); see also Twombly, 550 U.S. at 555.
Plaintiff"s RESPA and CPPA claims fail for the same reason. The RESPA "does
not apply to credit transactions involving extensions of credit . . . primarily for business,
commercial, or agricultural purposes," 12 U.S.C. § 2606(a), including mortgage loans on
non-owner-occupied rental properties, see, e.g., Hertok v. Clzase Home Fz'n., LLC, 947
F. Supp. 2d 6, 2013 WL 2352104, at *l (D.D.C. 2013). And the CPPA "protects only
consumers," which our Circuit Court defines as persons "who receive[] or demand[]
goods or services that are primarily for personal, household, or family use." Shaw v.
Marriott lnt’l, lrtc., 605 F.3d 1039, 1043 (D.C. Cir. 2010) (citing Forcl v. ClzartOne, lrzc.,
908 A.2d 72, 81 (D.C. 2006), and D.C. Code § 28-3901(a)(2)). Thus, plaintiffhas not

pleaded facts sufficient to support a plausible claim under the RESPA or the CPPA.é

Portfolio Servz`cz'ng, lrtc., No. 1lcv240, 2012 WL 527486, at *10 (D. Ariz. Feb. 17, 201 2).

6 See, e.g., Hardy, 2013 WL 3488489, at *6 (dismissing CPPA claim where complaint offered no facts to
support statement that property was for personal use); Al)els v. Bank of Arn., N.A., No. 2:l lcv2904, 2013
WL 1163753, at *8 (E.D. Cal. Mar. 20, 2013) (dismissing RESPA claim in part because "it is unclear from
plaintiffs amended complaint whether plaintiffs loan qualifies as a personal loan, as opposed to a
business loan"); Golindo v. Fz'rzarzco Fin., Inc., No. 07cv3991, 2008 WL 4452344, at *4 (N.D. Cal. Oct. 3,
2008) (dismissing RESPA claim where plaintiff"contends that there is no way to tell whether or not the
loan was made for a business or personal purpose because she has not alleged any facts one way or the

6

B. Contract and Tort Claims

l. Breach of Contracl and Implied Covenant of Good Faith and F air Dealing.
To state a claim for breach of contract or breach of the implied covenant of good faith and
fair dealing, a plaintiff must first and foremost allege that there was "a valid contract
between the parties." Tsz`ntolas Realty Co. v. Merzdez, 984 A.2d 181, 187 (D.C. 2009);
see Brown v. Dz`strz`ct ofColumbz'a, 919 F. Supp. 2d 105, 113 & n.5 (D.D.C. 20l3).
Edwards dutifully recites this element in her third and fifth claims for relief, see Compl.
1111 85, 95, but she does not plead facts in support. lnstead, she alleges that Ocwen’s
acquisition of Litton (which years earlier had been assigned SouthStar’s servicing rights)
"created privity of contract between Edwards and the [d]efendants, as agents for Litton."
lo’. 1111 22-29. Judges around the country_including at least two of my colleagues-have
held that a loan servicer, as a lender’s agent, has no contractual relationship or privity
with the borrower and therefore cannot be sued for breach of contract. See, e.g., Petty v.
Cotmtrywz`o’e Home Loans, lnc., No. 3:12cv6677, 2013 WL 1837932, at *10 (S.D. W.Va.,
May 1, 2013) (collecting cases); Rol)inson v. Deutsclze Bcmk Nat’l Trust Co., 932 F. Supp.
2d 95, 109 (D.D.C. 2013); Eclmond v. Am, Ecluc. Servs., No. 10cv0578, 2010 WL
4269129, at *2 (D.D.C. Oct. 28, 2010). As a matter oflaw, then, plaintiff cannot proceed

on a theory that Ocwen is liable as the agent of either Litton or SouthStar.7

other in the complaint"); Atualzene v. Sears Mortg. Corp., No. 98cv930, 2000 WL 134326, at *5 (E.D. Pa.
Feb. 4, 2000) (dismissing RESPA claim where "plaintiff fails to show that the primary purpose of his
property was for something other than a commercial or business purpose").

7 Defendants also cannot be held liable under the theory that "Ocwen was a party to the agreement because
7

l\/loreover, even if Ocwen can be held liable as the successor to assignee-Litton’s
servicing rights, see Compl. ll 22,8 plaintiff does not state such a claim merely by alleging
that SouthStar assigned undefined "servicing rights" to Litton and that Ocwen then

9 Rather, she must plead

breached some unidentified, un-cited, un-quoted contract terrns.
facts linking Ocwen to the specific contractual terms that form the basis of her claim-
z`,e., she must "point to which provisions of the [contract] . . . . imposed the obligations
that defendants allegedly breached." Rol)inson, 932 F. Supp. 2d at 109; Batler v.
Fairbanks Capz`tal, No. 04cv367, 2005 WL 5108537, at *7 (D.D.C. Jan. 3, 2005)
("requir[ing] the plaintiff to amend her complaint to plead with more specificity the

contract and provisions thereof that the defendant allegedly breached"). Plaintiff has not

pleaded these necessary facts. Accordingly, her claims for breach of contract and breach

the principal was undisclosed in that SouthStar is a revoked corporation." Pl.’s Opp’n at 1 l. Under D.C.
law, "[a]n agent who enters into a contract without disclosing his principal is personally liable on it."
Rosenthal v. Nat’l Proa’uce Co., 573 A.2d 365, 369 (D.C. 1990) (emphasis added; intemal quotation
marks omitted). The February 2003 closing certification identifies SouthStar Funding, LLC as the
counterparty, see Compl., Ex. D, and in her complaint, plaintiff identifies SouthStar as the lender, see ial. ll
20. Litton and Ocwen became involved with the loan only after the contract was already entered. See id.
llll 22, 27. Nowhere in her complaint does plaintiff allege that SouthStar was "undisclosed," either at the
time the contract was entered or any relevant time thereafter. ln a case like this, "[w]here a principal is
disclosed, no liability will fall upon the agent for acts committed by the principal unless he binds himself
for same by definite words or stipulation." Rittenl)erg v. Donohoe Constr. Co., Inc., 426 A.2d 338, 341
(D.C. 1981) (citations omitted). Plaintiff does not identify any "definite words or stipulation" by which
Ocwen bound itselfto the contract.

8 See Kesten v. Ocwen Loan Servicing, LLC, No. llcv698l, 2012 WL 426933, at *7 (N.D. lll. Feb. 9,
2012) (quoting ln re Ocwen Loan Servicing, LLC Mortg. Servicing Litig., 491 F.3d 63 8, 645 (7th Cir.
2007)); cf Manganaro Corp. v. Jej"erson at Penn Quarter, L.P., No. 04cv2l 33, 2005 WL 3273979, at *3
(D.D.C. 2005) ("lt is also well-settled that an assignee ofa contract stands in the shoes ofthe assignor and
acquires the same rights and liabilities as if he had been an original party to the contract.").

9 lt is curious, at best, that the underlying contract is not among plaintiffs twelve exhibits.

8

of the implied covenant of good faith and fair dealing must be dismissed.
2. Unjust Enrichment. Under D.C. law, "‘[u]njust enrichment occurs when a

person retains a benefit (usually money) which in justice and equity belongs to another."’
Movahecli v. U.S. Bank, N.A., 853 F. Supp. 2d 19, 29 (D.D.C. 2012) (quoting 4934, Inc.
v. D.C. Dep ’t of Emp ’t Servs., 605 A.2d 50, 55 (D.C. 1992)). Defendants argue that
Ocwen, as the loan servicer, was not a beneficiary of the note or deed of trust and
therefore retained none of the "wrongful benefit[s]" that plaintiff alleges in her complaint.
See Defs.’ Me1n at 10-1 l; Defs.’ Reply Br. in Supp. ofMot. to Dismiss ("Defs.’ Reply")
at 7~8 [Dkt. #14]. lndeed, plaintiffs complaint is vague at best when it comes to what (if
any) benefit Ocwen, as a loan servicer, inequitably retained. ln fact, plaintiffs unjust
enrichment count simply states that "[d]efendants received a wrongful benefit," z'al. ll 90,
then offers the legal conclusion that "[d]efendants’ wrongful retention of the benefit
makes it inequitable for [d]efendants to retain the benefit without making restitution," ial.
l 92, and then requests restitution in the form of an order "disgorging all profits, benefits
and other compensation obtained by ld]efendants for their wrongful misconduct," ia’.

ll 93. Such general allegations do not state a claim, especially against a loan servicer with
no interest in the loan itself. See Caz`res v. JP Morgan Chase Bank, N.A., 880 F. Supp. 2d
288, 310 (D. Conn. 2012) ("There is insufficient factual content in support ofthis laundry
list of grievances to allow the Court to draw the reasonable inference that [the loan

servicer] was unjustly enriched on the basis of these generalized allegations."`).

ln other sections of the complaint, however, plaintiff does allege that Ocwen
"retat`n[ecl] $106,939.05 from the sale of the [p]roperty." Compl. llll 47, 87, 96, 101, 108
(emphasis added). Plaintiff fails, however, to provide any factual support for her
allegation that the loan servicer-rather than the lender or noteholder_actually retained
the proceeds of the sale. Plaintiff addresses this issue in her opposition brief, but in so
doing, she asserts a factual basis for her "retention" allegation that is legally at odds with
unjust enrichment. According to Edwards, "Ocwen was more than a servicer, but a party
to the agreement because the terms and conditions of the Security Instrument bind the
successors and assigns . . . of the [] principal." Pl.’s Opp’n at 14 (emphasis added).
Unfortunately for Edwards, D.C. law "establishes that ‘there can be no claim for unjust
enrichment when an express contract exists between the parties."’ Phrasavang v.
Deatsche Bank, 656 F. Supp. 2d 196, 207 (D.D.C. 2009) (quoting Schijj"v. Atn. Ass ’n of
Retirea’ Pers., 697 A.2d 1 193, 1 194 n.2 (D.C. 1997)). lndeed, Edwards relies on the
supposed existence of a contract-and Ocwen’s status as a successor and/or assignee of
that contract-as the sole basis for her allegation that Ocwen wrongfully received and
retained benefits. Because her legal theory is irreconcilable with the minimal facts that
she offers in support, plaintiffs unjust enrichment claim must be dismissed.
3. Breach of Fiduciary Duty. To recover damages for breach of fiduciary duty,

Edwards must adequately allege "that a fiduciary duty existed; was violated; and

proximately caused [her] injury." Worla' Class Constr. Mgntt. Grp. v. Baylor, --- F. Supp.

10

2d ----, 2013 WL 4517180, at *3 (D.D.C. 2013) (citing Vicki Bagley Realty, 1nc. v.
Laafer, 482 A.2d 359, 363 (D.C. 1984)). The complaint alleges that Ocwen, "as a
servicing agent," owed fiduciary duties "with respect to Edwards’ monthly payments on
her mortgage, escrow account, and other related obligations." Compl. ll 100. Although
defendants are correct that loan servicers, as such, owe no fiduciary duties to borrowers,m
plaintiff identifies a narrower role that Ocwen allegedly played and that does give rise to
fiduciary duties. See Pl.’s Opp’n at 14 ("A fiduciary duty arises when a servicer acts as
an escrowee for a borrower’s escrow account."); see also Compl, Ex. J (escrow disclosure
statement identifying Ocwen as debt collector at bottom of second page). "[T]he D.C.
Court of Appeals has held that escrow agents indeed have fiduciary duties to those parties
who transfer funds into an escrow as well as those for whom the funds are held."’ Worla’
Class Constr. Mgtnt. Grp., 2013 WL 4517180, at *3 (citing Wagntan v. Lee, 457 A.2d
401, 404-05 (D.C. 1983)). lt also approvingly cited a case from the Arizona Court of
Appeals, which characterizes the escrow relationship as one "of trust and confidence" that
requires the escrow agent to "conduct transaction[s] with scrupulous honesty, skill and
diligence." Wagntan, 457 A.2d at 405 (citing Brean v. N. Catnpbell Prof’l Bla’g., 548
P.2d 1193, 1196 (Az. Ct. App. 1976)); see also Aronoyj’v. Lenkt'n Co., 618 A.2d 669, 687
(D.C. 1992) (escrowee is fiduciary to both parties in transaction); In re Austern, 524 A.2d
680, 684 (D.C. 1987) ("Respondent, as co-escrow agent, owed a fiduciary duty to the

10 See, e.g., Elesh v. Ocwen Loan Servicing, LLC, No. l2cvl0356, 2013 WL 1707934, at *2 (N.D. lll. Apr.
19, 2013); Allen v. Bank ofA)n., N.A., 933 F. Supp. 2d 7l6, 732 (D. Md. 2013).
l 1

client’s purchasers to protect their investment . . . .")."

The complaint frames the fiduciary relationship a bit too broadly_alleging that it
arose from Ocwen’s role as servicer-but it is nevertheless clear that plaintiff accuses
Ocwen of engaging in dishonest, unfair, and unlawful mismanagement of her escrow
account. See Compl. ‘ll 101. Accordingly, 1 will not dismiss plaintiffs fiduciary duty
claim to the extent it alleges breaches of those duties owed by escrow agents.

4. Conversion. Under District of Columbia law, conversion is the "‘unlawful
exercise of ownership, dominion, and control over the personalty of another in denial or
repudiation of his right to such property."’ McNamara v. Picken, --- F.Supp.2d ----, 2013
WL 3119321, at *l (D.D.C. 2013) (quoting Wash. Gas Light Co. v. Pub. Serv. Comtn ’n of
D.C., 61 A.3d 662, 675 (D.C. 2013)). Although this tort typically applies to chattels,
"[m]oney can be the subject of a conversion claim . . , if the plaintiff has the right to a
specific identifiable fund of money." la’. (emphasis added; internal quotation marks
omitted). Plaintiff identifies only one "specific identifiable fund" that she claims C)cwen
converted: "$106,939.05 as part ofthe [p]roperty settlement proceeds." Compl. ll 105.]2

Ocwen points to the payoff quote attached to plaintiff s complaint as evidence that

ll Other courts have recognized that lenders and/or loan servicers owe fiduciary duties when they act as
escrowees. See, e.g., Smith v. GMAC Mortg. Corp., No. 5:06cvl 25-V, 2007 WL 2593 l 48, at *9-10
(W.D.N.C. Sept. 5, 2007); Vt'ct'an v. Wells Fargo Home Mortg., No. 2:05cvl44, 2006 WL 694740, at *7~8
(N.D. lnd. l\/lar. 16, 2006); McDonalal v. Wash. Mut. Bank, FA, No. 99cv6884, 2000 WL 967994, at *5
(N.D. lll. July ll, 2000); White v. Mellon Mortg. Co., 995 S.W.2d 795, 800-01 (Tex. Ct. App. 1999).
Without citing any authority, Ocwen contends that there is a meaningful distinction between cases in
which the lender (as opposed to a non-lender) acts as loan servicer and escrow agent. See Defs.’ Reply at
8. l can find no support for this distinction.

12

Edwards "still owed $58,554.26 on the property at the time of sale," meaning that "at
least some portion of the $106,939.05 that was disbursed by the settlement agent was due
and owing to the lender." Defs.’ Mem. at 13 (citing Compl., Ex. L at 3 [Dkt. #l-12].
Ocwen is correct; plaintiffs own exhibit indicates that she owed more than $58,000 in
principal alone. See Compl., Ex. L at 3. And mortgage and escrow payment documents
attached to the complaint confirm that plaintiff s remaining principal in 2010-seven
years after the loan was taken out and before any of the events giving rise to this
complaint~was still $60,120.16. See Compl., Ex. B at 2. Plaintiffs assertion that
Ocwen "converted the entire $106,939.05," Pl.’s Opp’n at 16 (emphasis added), is thus
flatly contradicted by her own supporting documents, which show that plaintiff had no
legal right to at least some-perhaps most-of that money.

A conversion claim cannot stand where, as here, plaintiff is owed at most some
unspecified, unidentified portion of a larger pool of funds. See Van Dorn Retail Mgmt.,
lnc. v. Sovran Bank/DC Nat’l, lnc., No. 90cv2974, 1991 WL 222061, at *7 (D.D.C. Oct.
9, 1991) ("[E]ven if plaintiff has a right to a portion ofthe proceeds . . . it still does not
follow that plaintiff has a right to the ‘identical,’ ‘specific’ or ‘identifiable’ proceeds.").
lndeed, as one of my colleagues has recognized "fungible cash is precisely the type of
fund that may not underlie a claim for conversion." McNamara, 2013 WL 3119321, at *2

(distinguishing Curaflex Health Servs., lnc. v. Bruni, 877 F. Supp. 30 (D.D.C. 1995),

12 Plaintiff drops an "inter alia" before she identifies the funds allegedly converted. Of course, a vague
reference to "other things" fails to state a claim that requires specificity
13

which involved specific funds held in a "lock box"); cf Busl)y v. Capital One, N.A., 932
F. Supp. 2d 114, 145 n.14 (D.D.C. 2013) (allowing conversion claim where plaintiff
"alleges conversion of all funds" (emphasis added)). 1 will therefore dismiss plaintiffs
conversion claim.

5. Wrongful Foreclosure. "‘[A]n action for wrongful or improper foreclosure
may lie where the property owner sustains damages by reason of a foreclosure executed in
a manner contrary to law.~"’ Rol)inson, 932 F. Supp. 2d 95, 103 (quoting Johnson v.
Fairfax Vill. Conalo. lV Unit Owners Ass’n, 641 A.2d 495, 505 (D.C.l994)). Plaintiff
does not allege that a foreclosure took place, but rather that "[i]n a desperate attempt to
avoid [d]efendants’ alleged mortgage default and wrongful foreclosure, [she] was forced
to sell her home." Compl. ll 44; see also ia’. ll 1 10 ("lf this foreclosure were permitted to
occur, it would be in direct violation of Edwards’ rights."). D.C. law does not recognize
an action for wrongful attempted foreclosure, Busby, 932 F. Supp. 2d at 141~42, so this
claim too must be dismissed.

6. Negligent Servicing. Plaintiff s ninth claim for relief appears under the
heading "negligent servicing," but it alleges that Ocwen breached its duty "to adequately
train and supervise its staff of loan collectors and servicing agents in the proper and legal

servicing ofthe mortgage loan." Compl. ll 1 13.'3 "ln the District of Columbia, liability

13 ln her opposition, plaintiff argues that she "has not alleged negligent hiring or supervision," but rather
"disclosed Ocwen’s compensation structure to point out the perverse financial incentives Ocwen
intentionally creates for its employees." Pl.’s Opp’n at l8. But my understanding of her claim does not
come from the few paragraphs at the beginning of the complaint that discuss employee compensation. See
Compl. llll 17-19. Rather, it comes directly from the text of"negligent servicing" count itself. ld. llll 1 13~
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under a theory of negligent supervision arises ‘when an employer knew or should have
known its employee behaved in a dangerous or otherwise incompetent manner, and that
the employer, armed with that actual or constructive knowledge, failed to adequately
supervise the employee."’ Flythe v. District ofColuml)ia, --- F. Supp. 2d ----, 2013 WL
5964008, at *12 (D.D.C. 2013) (quoting Godfrey v. lverson, 559 F.3d 569, 571 (D.C. Cir.
2009)); see also Brown v. Argenbrz'ght Sec., lnc., 782 A.2d 752, 760 (D.C. 2001). The
complaint does not identify a single Ocwen employee or allege any other specific facts
that might support these elements. Accordingly, this claim must be dismissed. See Clark
v. Compater Sci. Corp., --- F. Supp. 2d ----, 2013 WL 3982719, at *5 (D.D.C. 2013).
7. Intentional Infliction of Emotional Distress. Finally, to state a claim for

intentional infliction of emotional distress, plaintiff must allege that she suffered

9 464
S

emotional distress as a result of Ocwen extreme and outrageous conduct."’ Khan v.
Parsons Glol)al Servs., Ltd., 521 F.3d 421, 428 (D.C. Cir. 2008) (quoting Darrow v.
Dillt`ngltam & Murphy, LLP, 902 A.2d 135, 139 (D.C. 2006)). Unfortunately for plaintiff,
a loan servicer’s mismanagement of funds_even the "improper assessment of escrow
charges and other penalties"-"does not plausibly rises to the level of atrocious conduct
going beyond all bounds of decency as required to support an IIED claim." Busl)y v.

Capital One, N.A,, 772 F. Supp. 2d 268, 285-86 (D.D.C. 2011) (internal quotation marks

omitted). This claim therefore must be dismissed, as well.

1 14. Plaintiff cannot now amend her complaint by reformulating this count in her opposition brief. See
Arl)itraje Casa de Caml)io, S.A. de C, V. v, U.S Postal Serv., 297 F. Supp. 2d 165, 170 (D.D.C. 2003).
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CONCLUSION
For the foregoing reasons, defendants’ l\/lotion to Dismiss [Dkt. #10] will be
GRANTED in part and DENlED in part, and all of plaintiff s claims for relief except the
Sixth (Breach of Fiduciary Duty) will be DlSl\/IISSED. An appropriate order shall

accompany this Memorandum Opinion.

flynn

RICHARD J.LEQ)N
United States District Judge

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