Wallace v. Washington Mutual Bank, F.A.

Summarized by Dean Langdon , DelCotto Law Group PLLC
13 years 8 months ago

Citation:

Docket No. 10-3694; File Name 12a0197p.06

Tag(s):

Ruling:

Reversing the United States District Court for the Southern District of Ohio, the Sixth Circuit Court of Appeals held that the homeowner's complaint stated a claim for relief under the Fair Debt Collection Practices Act against the law firm which filed a foreclosure action in the name of Washington Mutual Bank prior to the transfer and recordation of the note and mortgage to Washington Mutual.

Procedural context:

Plaintiff filed a complaint under the Fair Debt Collection Practices Act and other Ohio state laws against her mortgage lender and the law firm which initiated a foreclosure action. The district court dismissed the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure and declined to exercise jurisdiction over the state law claims. The Plaintiff timely appealed.

Facts:

Betty Wallace purchased a home in Waynesville, Ohio in 1999 with a mortgage in favor of Norwest Mortgage, which later merged with Wells Fargo. In March or April, 2008, Wells Fargo incorrectly notified Wallace she was delinquent in payments. On July 11, 2008, Lerner, Sampson & Rothfuss filed a foreclosure action against Wallace in state court on behalf of Washington Mutual, asserting it was the holder of the note and mortgage. Transfer of the note and recordation of the mortgage from Wells Fargo to Washington Mutual did not occur until August 14, 2008. Wallace's complaint alleged that the assertions on behalf of Washington Mutual that it was the holder of the note and mortgage were "false, deceptive or misleading," and that in its capacity as a debt collector, Lerner Sampson violated 15 U.S.C. Sec. 1692e when it filed the foreclosure action. In reversing the district court, the Sixth Circuit Court of Appeals specifically held that a false representation as to a creditor's name could be a false representation under the Act, and that such a representation could be materially misleading under the "reasonable unsophisticated consumer" standard.

Judge(s):

Merrit, Moore and Mays, with opinion by Merritt

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