Kloth-Zanard v. Bank of America et al

Filing 74

ORDER. For the reasons set out in the attached, (i) the 26 motion to dismiss is granted with respect to the claims against Mortgage Electronic Registration Services, Inc., and The Bank of New York Mellon; (ii) the motion is granted in part and den ied in part with respect to Specialized Loan Services, LLC. All of Plaintiff's claims against Specialized Loan Services, LLC are dismissed except for her Telephone Consumer Protection Act ("TCPA") and Connecticut Creditors Collection Practices Act ("CCPA") claims. Now that the Court has ruled on the pending motions to dismiss, it will consider appointing counsel for Plaintiff. (See ECF No. 61). If Plaintiff continues to seek the appointment of counsel to litigate her TCPA and CCPA claims, she should file a statement on the docket so indicating within seven (7) days of this order. Signed by Judge Michael P. Shea on 10/31/2017. (Self, A.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
JOAN T. KLOTH-ZANARD,
No. 3:15-cv-1208 (MPS)
Plaintiff,
v.
BANK OF AMERICA, ET. AL.
Defendants.

RULING ON MOTION TO DISMISS
Pro se Plaintiff, Joan T. Kloth-Zanard, has sued Bank of America, N.A. (“Bank of
America”), Specialized Loan Services, LLC (“SLS”), Wells Fargo/Northwest Bank Minnesota,
Mortgage Electronic Registration Services, Inc. (“MERS”), and The Bank of New York Mellon
(“BONY”). She alleges defendants violated: (i) Title II of the Americans with Disabilities Act
(“ADA”) and Section 504 of the Rehabilitation Act (“Rehabilitation Act”) (count one); (ii) the
Telephone Consumer Protection Act, 47 U.S.C. § 227 et. seq. (“TCPA”) (count two); (iii) the
Connecticut Creditors Collection Practices Act, Conn. Gen. Stat. § 36a-645 et. seq. (“CCPA”)
(count three); (iv) 18 U.S.C. § 242 (count four); (v) the covenant of good faith and fair dealing
(count five); and (iv) 18 U.S.C. §§ 471-74 (count six). A motion to dismiss filed by defendants
Bank of America and Wells Fargo was granted in part and denied in part. (See ECF No. 70).
Defendants BONY, MERS, and SLS also jointly move to dismiss Plaintiff’s complaint. For the
reasons set forth below, (i) the motion to dismiss is granted with respect to the claims against
MERS and BONY; (ii) the motion is granted in part and denied in part with respect to SLS. All
of Plaintiff’s claims against SLS are dismissed except for her TCPA and CCPA claims.
1

I.

Factual Allegations
Plaintiff makes the following factual allegations, which I assume to be true.1
Countrywide Home Loans provided an adjustable rate, subprime mortgage loan to the

Plaintiff secured by her home in Southbury, Connecticut. (ECF No. 17 at 7); (ECF No. 49-2 at
2).2 The mortgage was transferred several times, with MERS serving as a facilitator, before
eventually ending up with Bank of America in 2008. (ECF. No. 17 at 6). In 2008, Bank of
America approved Plaintiff for a loan modification, which provided for a 1.5% interest rate for
five years. (Id.). Bank of America failed to disclose to Plaintiff that the interest rate would
return to an adjustable rate after the five-year term expired. (Id.).
In 2008, plaintiff became disabled and confined to a wheelchair. (Id. at 9). Plaintiff
contacted Bank of America in April of 2010 to inform it that she was legally disabled and that
she would only be able to afford the 1.5% modified rate going forward. (Id.). Despite this
knowledge, Bank of America “refused to work with [the Plaintiff]” in modifying the terms of her
loan. (Id. at 10). As Plaintiff attempted to engage with Bank of America to modify the terms of
the mortgage, it and SLS “repeatedly called to harass the Plaintiff.” (Id.). Bank of America and
SLS called the Plaintiff’s cellular and home telephone “no less than 104 times from February,
2014, [through] April 2015” using an automated dialing system. (Id. at 11). In July of 2015,
“SLS sent a strange man onto [Plaintiff’s] property armed with a camera.” (Id.).

I cite Plaintiff’s amended complaint by ECF page number because of duplicative
paragraphs in the amended complaint.
1

2

I may consider the mortgage documents because Plaintiff relies on them in her
complaint. See Cortec Industries, Inc. v. Sum Holdings, L.P., 949 F.2d 42, 48 (2d Cir.
1991)(“Where Plaintiff has actual notice of all the information in a movant’s papers and has
relied upon these documents in framing the complaint the necessity of translating a Rule 12(b)(6)
motion into one under Rule 56 is largely dissipated.”)(internal quotation marks and citations
omitted).
2

In April of 2014, Bank of America and SLS “transferred the mortgage to SLS,” at which
point “the Plaintiff told SLS [that] they could not call her home or mobile numbers anymore
because of abuse of the privilege.” (Id.). In May of 2015, Bank of America and SLS contacted
the Plaintiff “for Investor Information pertaining to her supposed mortgage debt.” (Id. at 10).
After Bank of America and SLS sent Plaintiff a collection notice, she “called to discuss this
matter and sent a timely written dispute within [thirty] days of this notice requesting validation
of the debt, name and address of the original creditor on June 15, 2015.” (Id.). Neither Bank of
America nor SLS responded to Plaintiff’s request. (Id.). Plaintiff resent her request along with
“another request disputing the debt and requesting original creditor [information] on June 15,
2015.” (Id. at 11). Neither party responded. (Id.). Instead, SLS sent Plaintiff a “harassing
letter” claiming that it and Bank of America were closing her case due to her purported failure to
provide information that Plaintiff had already provided numerous times. (Id.).

In August of

2015, Plaintiff received a harassing email from SLS threatening her with foreclosure and asking
for her to supply documents that she had already provided. (Id. at 12). Plaintiff received a
delinquency notice in November of 2015. (Id.).
II.

Legal Standard
Under Fed. R. Civ. P. 12(b)(6), the Court must determine whether plaintiffs have alleged

“enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007). Under Twombly, the Court accepts as true all of the complaint’s
factual allegations – but not conclusory allegations – when evaluating a motion to dismiss. Id. at
572. The Court must “draw all reasonable inferences in favor of the non-moving party.”
Vietnam Ass’n for Victims of Agent Orange v. Dow Chem. Co., 517 F.3d 104, 115 (2d Cir. 2008).
“When a complaint is based solely on wholly conclusory allegations and provides no factual

3

support for such claims, it is appropriate to grant defendants[’] motion to dismiss.” Scott v.
Town of Monroe, 306 F. Supp. 2d 191, 198 (D. Conn. 2004). For a complaint to survive a
motion to dismiss, “[a]fter the court strips away conclusory allegations, there must remain
sufficient well-pleaded factual allegations to nudge plaintiff’s claims across the line from
conceivable to plausible.” In re Fosamax Products Liab. Litig., No. 09-cv-1412, 2010 WL
1654156, at *1 (S.D.N.Y. Apr. 9, 2010). In cases with a pro se plaintiff, “the complaint,
however, inartfully pleaded, must be held to less stringent standards than formal pleadings
drafted by lawyers.” Boykin v. Keycorp, 521 F.3d 202, 214 (2d Cir. 2008), quoting Erickson v.
Pardus, 551 U.S. 89, 94 (2007). A pro se plaintiff, however, still must meet the standard of
facial plausibility. See Hogan v. Fischer, 738 F.3d 509, 515 (2d Cir. 2013) (“[A] pro se
complaint must state a plausible claim for relief.”) (internal quotation marks and citations
omitted).
III.

Discussion
Prior to addressing Plaintiff’s counts, I note that the amended complaint does not make

any substantive allegations against BONY or MERS. Plaintiff mentions BONY only once in her
complaint, noting the following in the “Land Record History” section: “March 31, 2015,
Mortgage Transferred (sic) from MERS to [BONY].” (ECF No. 17 at 6). This passage cannot
plausibly be construed to allege actionable conduct. Plaintiff mentions MERS several times in
her complaint but does not allege that it engaged in any actionable malfeasance.3 The only part
of Plaintiff’s complaint which could be construed to allege wrongdoing on the part of MERS
avers that the company “illegally listed themselves (sic) as a holder of the Plaintiffs (sic)
mortgage prior to and on June 6, 2006.” (Id. at 2). Yet Plaintiff does not mention this purported
3

Plaintiff only mentions MERS as an intermediary in transferring her mortgage from
party to party (see ECF No. 17 at 6). She does not reference it in the counts of her complaint.
4

illegal transfer of her mortgage in the counts of her complaint. Even if Plaintiff’s fleeting
statement were construed as alleging that MERS improperly held title in facilitating transfer of
Plaintiff’s mortgage to other entities, such a claim would fail in any event. See RMS Residential
Props., LLC v. Miller, 303 Conn. 224, 237-38 (Conn. 2011) (holding mortgage not void “by
virtue of the naming of a nominee of the disclosed lender as mortgagee”); In re Residential
Capital, LLC, No. 12-12020 (MG), 2013 WL 5952004, at *5 (Bankr. S.D.N.Y. Nov. 7, 2013)
(“Connecticut courts have already rejected arguments that MERS lacks authority to act as a
nominee of a lender and transfer mortgages.”). Thus, Plaintiff’s claims against BONY and
MERS are dismissed. I now consider the claims against SLS.
A. The ADA and Rehabilitation Act Claims (count 1)
In count one, Plaintiff invokes Title II of the ADA -- 42 U.S.C. §§ 12131-12134 and 28
C.F.R. §§ 35 --, 29 U.S.C. § 794, and 28 C.F.R. § 36. (ECF No.17 at 12.). Her Title II claim is
unavailing for the same reasons stated in the Court’s prior orders – SLS is not a “public entity,”
and as a private entity, it may be not be sued under Title II. (ECF No. 70 at 4, ECF No. 12 at
11). See Tennessee v. Lane, 541 U.S. 509, 517 (2004) (“Title II . . . prohibits any public entity
from discriminating against ‘qualified’ persons with disabilities in the provision or operation of
public services, programs, or activities. The [ADA] defines the term ‘public entity’ to include
state and local governments, as well as their agencies and instrumentalities.”) (emphasis added);
Positano v. Zimmer, 2013 WL 12084482, at *4 (E.D.N.Y. Dec. 9, 2013)(observing Title II “does
not [apply to] private individuals or private entities”).
Plaintiff’s claim under 29 U.S.C. § 794 suffers from the same flaw, which was also noted
in the Court’s prior orders: she does not allege, as she must, that she was subject to
discrimination under a program or activity receiving Federal financial assistance, and other than

5

her conclusory allegation that she is “legally disabled,” she does not allege that she is a
“qualified individual with a disability.” (ECF No. 12 at 11, ECF No. 70 at 5).
Finally, Plaintiff has failed to state a claim under 28 C.F.R. § 36 for the same reasons
noted in the Court’s prior order. (ECF. No. 70 at 5). First, that regulation implements Title III,
not Title II, of the ADA, and Plaintiff makes no claim under Title III. 28 C.F.R. 36.101 (a)(“The
purpose of this part is to implement subtitle A of title III of the Americans with Disabilities Act
of 1990…”). In any event, that rule applies to “any (1) public accommodation; (2) commercial
facility; or (3) private entity that offers examinations or courses related to applications licensing,
certification, or credentialing for secondary or postsecondary education, professional, or trade
purposes.” Id. at § 36.102. Plaintiff makes no allegation that the regulation applies to SLS (nor
are there factual allegations in the complaint that so suggest).
B. The TCPA Claim (count 2)
Plaintiff has plausibly stated a claim that SLS violated the TCPA. The TCPA bars any
person within the United States from making any call using an “automatic telephone dialing
system . . . to any telephone number assigned to . . . any service for which the called party is
charged for the call . . . .” 47 U.S.C. § 227(b)(1). The TCPA defines “automated telephone
dialing system” as equipment that can place calls to telephone numbers “using a random or
sequential number generator . . . .” Id. at § 227(a)(1). Plaintiff alleges that 104 unwanted calls
were placed to her cellular and home telephones. (ECF No. 17 at 32). Although the majority of
her count focuses on wrongdoing by Bank of America (see id. at 31-32), she notes several times
that the calls in question were placed by Bank of America and SLS. (See id. at 11, 31). She also
contends that she did not consent to the calls. (Id. at 31). As the Court noted in its prior order,

6

Plaintiff did not specifically allege that she was “charge[d] for the call[s]” but such an inference
is reasonable. (ECF No. 70 at 6).4
C. The CCPA Claim (count 3)
Plaintiff pleads sufficient facts in her complaint to set out a plausible claim under the
CCPA against SLS. The CCPA makes it unlawful for a “creditor” to use “any abusive,
harassing, fraudulent, deceptive or misleading representation, device or practice to collect or
attempt to collect any debt.” Conn. Gen. Stat. § 36a-646. A “creditor” means “any person to
whom a debt is owed by a consumer debtor and such debt results from a transaction occurring in
the ordinary course of such person’s business, or . . . any person to whom such debt is assigned.”
Conn. Gen. Stat. § 36A-645(2). This definition does not, however “include a consumer
collection agency, as defined in [Conn. Gen. Stat. § 36A-800(2)]. . . .” Id. A “consumer
collection agency” means “any person . . . engaged as a third party in the business of collecting
or receiving payment for others on any account, bill or other indebtedness from a consumer
debtor. . . .” Conn. Gen. Stat. § 36A-800(2).
The only argument advanced by SLS that the Court did not previously reject in its prior
order5 (see ECF No. 70 at 7) concerns whether SLS counts as a “creditor” or a “consumer
collection agency” under the CCPA. The issue is close. Plaintiff refers several times to “BOA
& SLS or any of the other servicers that BOA has tried to use,” suggesting that SLS was a mere
servicer for BOA. (ECF No. 17 at 8, 31) (emphasis added). Yet Plaintiff’s complaint, construed
liberally, see Erickson v. Pardus, 551 U.S. 89, 94 (2007) (“A document filed pro se is to be
4

SLS advances a number of arguments in response to Plaintiff’s TCPA claim, all of
which the Court addressed in its prior order rejecting Bank of America’s motion to dismiss the
same claim against it. (ECF No. 70 at 6). For the sake of brevity, I do not repeat that analysis
here.
5

I once again omit the Court’s prior analysis for the sake of brevity.
7

liberally construed . . .”) (internal quotation marks omitted), pleads sufficient facts to warrant
labelling SLS as a creditor. First, Plaintiff refers to SLS (and Bank of America) as a “debt
collector” “within the meaning of [Conn. Gen. Stat. § 36A-648]. (ECF No. 17 at 4). Since that
statute only references “creditors,” I presume Plaintiff intended to label SLS as a “creditor”
covered therein. Plaintiff also noted in her complaint that “Defendant BOA & SLS (sic)”
“transferred the mortgage to SLS” in April of 2015. (ECF No. 17 at 11). Plaintiff thus contends
that SLS possessed the mortgage in question, thereby rendering it a “creditor” for the purposes of
the CCPA. For these reasons, the motion to dismiss the CCPA claim against SLS is denied.
D. Breach of Covenant of Good Faith and Fair Dealing (count 5)
Plaintiff’s claim for breach of covenant of good faith and fair dealing is dismissed
because, as noted in the Court’s prior order, she makes no factual allegations under it. (See ECF
No. 17 at 35, ECF No. 70 at 8).
E. Remaining Counts (counts 4 and 6)
Plaintiff’s remaining counts, which claim violations of 18 U.S.C. §§ 242, 471-474, are
criminal statutes and do not provide a private right of action. (See ECF No. 70 at 8).
IV.

Conclusion

For these reasons, (i) the motion to dismiss is granted with respect to the claims against
MERS and BONY; (ii) the motion is granted in part and denied in part with respect to SLS. All
of Plaintiff’s claims against SLS are dismissed except for her TCPA and CCPA claims.
Now that the Court has ruled on the pending motions to dismiss, it will consider appointing
counsel for Plaintiff. (See ECF No. 61). If Plaintiff continues to seek the appointment of
counsel to litigate her TCPA and CCPA claims, she should file a statement on the docket so
indicating within seven (7) days of this order.

8

IT IS SO ORDERED.

/s/
Michael P. Shea, U.S.D.J.
Dated:

Hartford, Connecticut
October 31, 2017

9