A federal judge in Florida dismissed the Consumer Financial Protection Bureau's lawsuit against Ocwen Financial Services, stating the agency improperly asserted an excessive number of claims without specifying the particular count to which they applied.
Ocwen's motion for dismissal noted the CFPB made what is known as a shotgun pleading, where the agency broadly incorporated 220 factual allegations into the 14 causes of action instead of breaking out facts for each individual claim.
Judge Kenneth Marra agreed, citing precedent regarding shotgun pleadings from the Eleventh Circuit Court of Appeals, which covers federal courts in Florida, Georgia and Alabama.
The CFPB complaint against Ocwen was "92 pages long and incorporates all 220 paragraphs of allegations into each of the 14 counts, regardless of whether the factual allegations pertain to the cause of action. The Court concludes this constitutes improper shotgun pleading," Judge Marra wrote in his decision.
However, Judge Marra dismissed the case without prejudice, which allows the CFPB to refile the complaint by Sept. 27 after separating out the factual allegations that apply to each count.
The CFPB filed the case against Ocwen over its mortgage servicing practices
"We are pleased that the district court has decided to dismiss the CFPB's complaint without prejudice," Ocwen said in a statement. "Ocwen will continue to vigorously defend itself should the CFPB refile and continue to pursue its claims. We are committed to our mission of creating positive outcomes for homeowners and communities, and we believe that Ocwen's servicing practices have and continue to result in substantial benefits to consumers."
Judge Marra also dismissed without prejudice two counts of the CFPB complaint pertaining to whether or not Ocwen qualified as a debt collector.
When it refiles the complaint, the CFPB needs to "allege facts to support the contention that one or all of the Ocwen defendants is a 'debt collector,'" Judge Marra said.
Another count of the complaint dealing with loss mitigation applications was dismissed, but once again, if the CFPB refiles the case, it "must allege that the completed loss mitigation applications were filed more than 37 days before the first sale was scheduled and that the alleged applications were the first or only application filed by the borrower," the judge ruled.
Otherwise, Judge Marra ruled the CFPB "stated a viable claim for relief" under the Consumer Financial Protection Act, the Truth-in-Lending Act, the Real Estate Settlement Procedures Act and the Homeowners Protection Act, if it chooses to refile. That included denying Ocwen's motion regarding the CFPB's constitutionality, citing the Ninth Circuit opinion in the PHH case issued in May.
The CFPB has not yet returned a request for comment.
