Kulikova v. NewRez LLC

Background

Monika Kulikova asserted claims against Old Republic Title Company; NewRez LLC, doing business as Shellpoint Mortgage Servicing; Caliber Home Loans, Inc.; Mortgage Electronic Registration Systems, Inc.; Nationwide Title Clearing, LLC; and National Default Servicing Corporation. The claims arose from a loan used to purchase property in Richmond, California, alleged loan servicing conduct, and a foreclosure that Kulikova described as wrongful. She alleged that she had paid the loan in full using an instrument for $499,511.11 drawn on an account identified as “UST” at the address of the United States Treasury.

The defendants filed three motions to dismiss under Federal Rule of Civil Procedure 12(b)(6). That rule allows dismissal when a complaint lacks a legally recognized claim or does not allege enough facts to make a claim plausible.

Old Republic

Kulikova asserted one claim against Old Republic: the Fourth Claim, under section 1692g of the Fair Debt Collection Practices Act. The court held that she did not allege facts showing that Old Republic was a “debt collector,” as that term is defined by the Act. The court therefore dismissed the Fourth Claim to the extent it was asserted against Old Republic.

Shellpoint, Caliber, MERS, and Nationwide

The court granted the motion filed by Shellpoint, Caliber, MERS, and Nationwide.

For the Second Claim, Kulikova alleged that Shellpoint violated section 1692e of the Fair Debt Collection Practices Act by making false statements connected to debt collection. The court held that this type of claim was not available against entities acting as “security interest enforcers,” including entities servicing a home loan.

For the Third Claim, Kulikova alleged that Shellpoint and Caliber increased the principal and interest owed after she had allegedly paid the loan in full. The court treated the claim as one under the Fair Debt Collection Practices Act provision addressing certain actions to take possession of collateral when there is no present right to do so. The court held that Kulikova did not allege that Caliber initiated or threatened foreclosure. As to Shellpoint, the court held that she did not sufficiently allege that the instrument she sent could be negotiated or exchanged for funds, and she did not otherwise allege that she made payments on the loan. The court therefore found that she had not adequately alleged that the lender lacked a right to possess the property.

For the Fourth Claim, under section 1692g, the court found that Kulikova alleged no facts showing what role MERS or Nationwide played in the loan. It also held that the Fair Debt Collection Practices Act did not support the claim against the alleged loan servicers under the circumstances described.

For the Fifth Claim, Kulikova alleged that Shellpoint violated the Fair Credit Reporting Act by failing to report that the account had been paid in full. The court stated that the complaint did not adequately allege that she had actually paid the amounts due under the loan.

For the Seventh Claim, Kulikova alleged that Shellpoint, Caliber, and National Default Servicing Corporation violated the federal mail-fraud statute. The court held that the statute does not create a private right to sue. It also held that the claim was inadequately supported because Kulikova had not sufficiently alleged that statements about the loan not being paid in full were false.

For the Eighth Claim, Kulikova alleged that Shellpoint and Caliber violated the Racketeer Influenced and Corrupt Organizations Act by concealing that she had paid the loan in full. The court held that she did not allege sufficient facts showing that she made such a payment.

National Default Servicing Corporation

The court granted NDSC’s motion to dismiss all claims asserted against it.

For the First Claim, Kulikova alleged that NDSC violated the Consumer Financial Protection Act through a deceptive foreclosure. The court held that the Act does not provide a private right of action for an individual plaintiff and also found that Kulikova had not adequately alleged that she paid the loan in full.

For the Second Claim, the court held that the section 1692e claim was not cognizable against NDSC as a foreclosure trustee or other security-interest enforcer. For the Third Claim, the court held that Kulikova had not adequately alleged a violation of the provision governing certain actions to dispossess a person of property. The court dismissed the Fourth and Seventh Claims against NDSC for the reasons stated in its discussion of those claims against the other defendants.

Disposition

The court ordered that the motions to dismiss were granted. It gave Kulikova permission to file a First Amended Complaint by December 13, 2024. It also continued the case-management conference from December 13, 2024, to February 28, 2025, and required a joint case-management statement by February 21, 2025. The opinion did not specify that the dismissals were with or without prejudice.