Kulikova v. NewRez LLC

Background

Monika Kulikova, who proceeded without a lawyer, asserted claims arising from a foreclosure allegedly initiated by NewRez LLC, doing business as Shellpoint Mortgage Servicing, after Shellpoint determined that she had defaulted on obligations under a promissory note secured by a deed of trust. The other defendants were Caliber Home Loans, Inc. and National Default Servicing Corporation (NDSC), which Kulikova alleged was the foreclosure trustee and Shellpoint’s agent.

The court had previously dismissed Kulikova’s initial complaint for failure to state a legally recognizable claim and allowed her to amend. She filed a First Amended Complaint containing three counts. Shellpoint and Caliber moved to dismiss it, and NDSC filed a notice of joinder that the court construed as a motion to dismiss. The court decided the motions based on the written submissions and vacated the scheduled hearing.

Legal standard

The defendants moved under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Under that rule, a complaint may be dismissed when it lacks a legally cognizable theory or does not allege enough facts to state a plausible claim for relief. The court accepted material factual allegations as true and viewed them favorably to Kulikova, but it was not required to accept legal conclusions presented as factual allegations.

Count I: Fair Debt Collection Practices Act

Kulikova alleged that Shellpoint, Caliber, and NDSC violated three provisions of the Fair Debt Collection Practices Act: 15 U.S.C. §§ 1692e(2), 1692f(1), and 1692g(b). These provisions address false representations about the amount of a debt, collection of unauthorized debts, and collection after a consumer disputes a debt without first obtaining and mailing verification.

The court explained that mortgage servicers generally cannot be held liable under those provisions for servicing home loans. The court stated that mortgage servicers and foreclosure trustees may be treated as debt collectors for the limited purpose of 15 U.S.C. § 1692f(6), which concerns certain foreclosure-related actions. Because Kulikova did not assert a claim under § 1692f(6), the court held that Count I failed to state a legally cognizable claim and dismissed it.

Count II: Fair Credit Reporting Act

Kulikova asserted against Shellpoint a claim under 15 U.S.C. § 1681s-2(b), which requires an entity that reported disputed information to a consumer-reporting agency to investigate the dispute and report the results to that agency.

The court had previously rejected Kulikova’s theory that Shellpoint violated the Act by failing to report that she had paid all amounts due under her loan. In the amended complaint, she relied on the same theory and alleged that she had submitted an instrument supposedly drawn on United States Treasury funds. The court found that she again alleged no facts showing that the instrument was negotiable and stated that she could not do so in light of the authorities discussed in the opinion. The court therefore dismissed Count II.

Count III: Wrongful foreclosure

Kulikova asserted a wrongful-foreclosure claim against all defendants. That claim depended on her assertion that she had fully paid her obligations by submitting the same instrument supposedly payable from United States Treasury funds and that the defendants failed to accept it.

Because Kulikova failed to allege, and could not allege, facts showing that the instrument was negotiable, the court dismissed Count III.

Disposition

The court granted defendants’ motions to dismiss. It dismissed the First Amended Complaint without further leave to amend because further amendment would be futile. The clerk was directed to close the file, and the hearing scheduled for March 7, 2025, was vacated. The opinion did not state that the dismissal was with or without prejudice beyond its express statement that there would be no further leave to amend.