Court Opinion

ID: 3212576
Source: CourtListenerOpinion
Date Created: 2016-06-13 17:00:34.309168+00
Date Added: 2024-06-11T09:36:26.116467
License: Public Domain

NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 ___________

                                       No. 15-2785
                                       ___________

                                DENNIS KEITH DIXON,

                                                  Appellant

                                             v.

                STERN & EISENBURG, PC and Employees; DOES 1-50
                    ____________________________________

                    On Appeal from the United States District Court
                         for the Eastern District of Pennsylvania
                         (D.C. Civil Action No. 5:14-cv-04551)
                   District Judge: Honorable Joseph F. Leeson, Junior
                      ____________________________________

                    Submitted Pursuant to Third Circuit LAR 34.1(a)
                                     June 8, 2016
               Before: FISHER, SHWARTZ and COWEN, Circuit Judges

                              (Opinion filed: June 13, 2016)
                                     ___________

                                        OPINION*
                                       ___________

PER CURIAM

       Dennis Dixon appeals pro se from an order of the District Court granting summary

judgment in favor of the defendants. We will affirm.

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
       On behalf of its client, Wells Fargo Bank, NA, Appellee Stern & Eisenberg PC

mailed a series of notices to Dixon and his spouse, captioned as “Combined Notice Under

Act 6 and Act 91 – Take Action to Save Your Home From Foreclosure.” The notices

stated that Dixon’s mortgage on his home was in default, and described Dixon’s rights as

homeowner in addition to setting out avenues for repayment assistance. The notices

identified the property address, the loan account number, the Original Lender (as “Option

One Mortgage Corporation, a California Corporation”), and the Current Lender/Servicer

(as “Wells Fargo Bank, National Association as Trustee for ABFC 2006-OPT1 Trust,

Asset Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT1[;] By

its Servicer, Ocwen Loan Servicing, LLC”). The notices set out the total amount past due

and provided Ocwen’s mailing address for the submission of any payment to cure the

default. Dixon sued.

       Dixon’s complaint, filed in the District Court on July 31, 2014, alleged that Stern

& Eisenberg PC and fifty unnamed employees violated the Fair Debt Collections

Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. After Dixon amended his complaint

and the defendants moved to dismiss the case for the failure to state a claim, the District

Court notified the parties that it intended to convert the dismissal motion to a motion for

summary judgment, and provided the parties time to submit any additional materials.

The District Court thereafter granted summary judgment in favor of the defendants. This

appeal followed.

                                             2
       We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review

over a district court’s grant of summary judgment, applying the same standard that the

district court used. Jensen v. Pressler & Pressler, 791 F.3d 413, 416-17 (3d Cir. 2015).

Summary judgment is appropriate when “the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a).

       The FDCPA prohibits a debt collector from conduct that harasses, oppresses, or

abuses a person. 15 U.S.C. § 1692d. A debt collector also may not “use any false,

deceptive, or misleading representation or means in connection with the collection of any

debt.” 15 U.S.C. § 1692e. The FDCPA further prohibits debt collectors from using

unfair or unconscionable means of collecting a debt. 15 U.S.C. § 1692f. And, the

FDCPA sets requirements for notice to consumers and rules for the validation of debts

that consumers dispute in writing. 15 U.S.C. § 1692g. The statute also restricts the use

of forms that create the false impression that a person or entity other than the debtor is

involved with the collection of a debt. 15 U.S.C. § 1692j. Dixon’s complaint invokes all

of these subsections.

       Notwithstanding that scattershot approach to Dixon’s attempt to invoke the

FDCPA, Dixon’s case primarily concerns § 1692e, which prohibits the use of “use any

false, deceptive, or misleading representation or means[.]” Dixon argues that the notices

that he received were deceptive. In essence, Dixon believes that Stern & Eisenberg PC

violated the FDCPA because there were purported defects in the way that his mortgage
                                              3
was conveyed to Wells Fargo from the original lender. Although Dixon spins this

argument thread into a tapestry of FDCPA allegations, the key question is whether there

is a genuine issue of material fact as to whether Stern & Eisenberg PC was deceptive

when it listed Wells Fargo as the “Current Lender” on the notices it sent. There is not.

       We consider whether the least sophisticated debtor would find a debt collector’s

statement deceptive or misleading, applying an objective standard. Jensen, 791 F.3d at

419-20. The standard is lower than that of a “reasonable debtor,” id. at 418, and it

“prevents liability for bizarre or idiosyncratic interpretations of collection notices by

preserving a quotient of reasonableness and presuming a basic level of understanding and

willingness to read with care.” Lesher v. Law Offices of Mitchell N. Kay, PC, 650 F.3d
993, 997 (3d Cir. 2011) (internal quotation marks omitted). Also, “[a] debtor simply

cannot be confused, deceived, or misled by an incorrect statement unless it is material.”

Jensen, 791 F.3d at 421. A statement is material “if it is capable of influencing the

decision of the least sophisticated debtor.” Id.

       Dixon’s arguments focus almost entirely on issues he has with how the mortgage

was assigned to Wells Fargo. But in the notices, Stern & Eisenberg PC did not explicitly

represent anything about any procedures or technicalities of any assignment concerning

the mortgage. The details of the chain of assignment do not appear directly relevant to

any statement in the notices, which focus on disclosing a debtor’s rights and remedies.

Whatever might or might not have occurred concerning the technicalities of the

assignment to Wells Fargo is not material under the circumstances of this case. See id. at
                                              4
420-21; Hahn v. Triumph P’ships LLC, 557 F.3d 755, 758 (7th Cir. 2009) (“A statement

cannot mislead unless it is material, so a false but non-material statement is not

actionable.”). Moreover, as the District Court observed, Dixon has already lost a case

concerning whether it was permissible for his mortgage to be assigned under the terms of

the mortgage and related agreements. See Dixon v. Option One Mortgage Corp., et al.,

No. 5:13-cv-3199, at D. Ct. Doc. No. 17.

       Nor has Dixon shown that the mere act of naming Wells Fargo as the “Current

Lender” is material for purposes of enforcing the FDCPA. Dixon does not state or offer

any evidence that he has attempted to send mortgage payments that he owes to some

other entity, that he was confused about how to cure a default, or that he risked (or feared

that he risked) the prospect of having to satisfy the same debt to multiple parties. Cf.

Rajamin v. Deutsche Bank Nat’l Trust Co., 757 F.3d 79, 85 (2d Cir. 2014) (finding lack

of Article III standing to challenge an assignment when plaintiffs had “not pleaded or

otherwise suggested that they ever paid defendants more than the amounts due [on their

note], or that they ever received a bill or demand from any entity other than defendants,”

or that there was “any threat or institution of foreclosure proceedings . . . by any entity

other than defendants”). In addition, Dixon has never set out how the hypothetical “least

sophisticated debtor” might have had a doubt about how to satisfy its debt obligations,

regardless of whether he was confused himself. See Jensen, 791 F.3d at 419-20 (the

“least sophisticated debtor” is an objective standard).

                                              5
       For its part, Stern & Eisenberg PC has produced the note held by Wells Fargo,

which is a negotiable instrument that is indorsed “in blank” in this case. That means that

the holder in due course of the note is entitled to all rights under the note, including the

right to enforce payment of the debt. See J.P. Morgan Chase Bank v. Murray, 63 A.3d
1258, 1266 (Pa. Super. Ct. 2013) (“[W]e conclude that the Note secured by the Mortgage

in the instant case is a negotiable instrument under the PUCC. As such we find [the

defendant’s] challenges to the chain of possession by which [plaintiff] came to hold the

Note immaterial to its enforceability[.]”). The note is the instrument reflecting Dixon’s

promise to repay the debt, and it is not deceptive to call Wells Fargo the creditor under

these facts. And contrary to Dixon’s argument, it is not material on these facts that the

written assignments that Stern & Eisenberg PC recorded post-date when it sent the

notices. Wells Fargo’s creditor status here is not dependent on a written memorialization

and recordation of an assignment of the mortgage. See 13 Pa. Cons. Stat. § 3205(b) (“an

instrument becomes payable to bearer and may be negotiated by transfer of possession

alone until specially indorsed.”) (emphasis added); Murray, 63 A.3d at 1266.

       Thus, for purposes of Dixon’s claims in this case, there is no genuine issue of

material fact that for Stern & Eisenberg PC to name Wells Fargo as the “Current Lender”

in the notices it sent was truthful, to the extent it was even a material statement for it to

do so. See Powell v. Palisades Acquisition XVI, LLC, 782 F.3d 119, 125 (4th Cir. 2014)

(“[T]he record clearly shows that the judgment against Powell had indeed been assigned

by Platinum Financial to Palisades and that the defendants’ representation of this fact was
                                               6
therefore not false.”); Hahn, 557 F.3d at 757 (“[A]s we have concluded that the statement

is true, the case is over.”).

       Dixon also argues that Stern & Eisenberg PC’s act of recording the mortgage

assignments to Wells Fargo after it had sent the notices was itself a deceptive act that

amounts to a separate and independent FDCPA violation. The FDCPA, however,

prohibits debt collectors from using false or misleading representations “in connection

with the collection of any debt.” 15 U.S.C. § 1692e (emphasis added). Under the

circumstances of this case and viewing the record as a whole, it is evident that recording

those mortgage assignments was not connected to the notices that Stern & Eisenberg PC

sent, and there is nothing in the record showing that the recording was otherwise used in

connection with a further effort to collect on a debt.

       Rather, recording the assignments protects the creditor from the circumstance

where a downstream bona fide purchaser obtains the property without notice of the

mortgage, and does not affect the validity of any assignment itself of the right to collect

on the debt that the mortgage secures. See Montgomery County v. MERSCORP Inc.,

795 F.3d 372, 376-77 (3d Cir. 2015) (holding that Pennsylvania law does not create a

duty to record all land conveyances and observing that recording is not necessary to

validly convey property). Section 1692e does not apply to the circumstances presented

here involving Stern & Eisenberg PC’s efforts to later record the mortgage assignment.

       The claims under the other FDCPA provisions that Dixon cites fail as well.

Section 1692d concerns conduct that harasses, oppresses, or abuses a person.
                                              7
Considering Dixon’s allegations and the summary judgment record as a whole, the only

conduct that could even potentially have been thought to harass, oppress, or abuse was

that Stern & Eisenberg PC sent six copies of the notices to Dixon and his spouse, rather

than just one copy. As the defendants noted, however, they sent those notices in order to

comply with state law. See Pennsylvania Loan Interest and Protection Law (“Act 6”), 41

Pa. Stat. Ann. §§ 101 et seq.; Pennsylvania Housing Finance Agency Law (“Act 91”), 35

Pa. Stat. Ann. §§ 1680.401c et seq. The multiple mailings that Dixon received merely

covered the different names and addresses indicated on the mortgage documents, plus the

need to send via both regular and certified mail. Otherwise, there is no evidence in the

record that any defendant wrote again, called, visited, or otherwise contacted Dixon or his

spouse. We conclude that the defendants’ straightforward and one-time effort to comply

with state and federal notice requirements through one round of mailings, with no other

communication set out in the record, does not violate 15 U.S.C. § 1692d.

       Relatedly, sending those required notices to the debtor was not an unfair or

unconscionable means of collecting a debt under the circumstances of this case. See 15

U.S.C. § 1692f. The only potentially “unfair” practice concerned the contention that the

assignment to Wells Fargo was not proper; as discussed above, the evidence of the

possession of the indorsed-in-blank mortgage note precludes that argument.

       The record also shows no genuine issue of material fact concerning whether Stern

& Eisenberg PC complied with § 1692g. That statutory provision concerns procedures

when a consumer disputes a debt. Notably, as the District Court concluded, the provision
                                             8
does not require a debt collector to independently investigate a debt before it begins

collection activities, let alone affirmatively verify every aspect of the chain of assignment

of the right to collect on a debt. See, e.g., Clark v. Capital Credit & Collection Servs.,

Inc., 460 F.3d 1162, 1174 (9th Cir. 2006) (“Within reasonable limits, [debt collectors]

were entitled to rely on their client’s statements to verify the debt. . . . [and] the FDCPA

did not impose upon them any duty to investigate independently the claims presented by

[the creditor].”); Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999) (noting that

verification does not require a debt collector to “vouch for the validity of the underlying

debt”) (internal quotation marks omitted). Rather, that provision requires a debt collector

to seek information about a debt from the creditor once a consumer disputes a debt. See

Graziano v. Harrison, 950 F.2d 107, 113 (3d Cir. 1991) (holding that after verification

was requested, the information provided was “sufficient to inform [the debtor] of the

amounts of his debts, the services provided, and the dates on which the debts were

incurred.”). Nothing in the record shows, and Dixon does not argue, that Dixon sent the

requisite written notice disputing the debt. Claims based on this provision therefore have

no evidentiary support as well.

       Finally, we may easily dispense with the purported violations under 15 U.S.C.

§ 1692j, which bars the use of forms that may create the false impression about who is

involved with collecting a debt. So far as the lenders’ side of things is concerned, the

notices that Stern & Eisenberg PC sent to Dixon do not identify any person or entity other

than Stern & Eisenberg PC, Wells Fargo NA, and Ocwen Loan Servicing, LLC. None of
                                              9
the notices can be read as constituting a “form” that created the impression that any

additional entity was participating in the collection of the debt. And, as discussed above,

Wells Fargo NA was not misrepresented as the “Lender” for purposes of providing notice

to Dixon and his spouse, and Dixon has produced no evidence of—let alone even

named—any other entity that should have been listed so as to avoid creating a false

impression about who was involved in the collection effort. Consequently, there is also

no genuine issue of material fact that the defendants complied with 15 U.S.C. § 1692j.

       The District Court was correct to grant summary judgment in favor of Stern &

Eisenberg, PC and the unnamed defendants. Consequently, we will affirm the District

Court’s judgment.

                                            10