Bracco v. PNC Mortgage
Filing
23
ORDER: Defendant PNC Mortgage's Motion to Dismiss Plaintiff's Amended Complaint (Doc. # 15 ) is GRANTED. Plaintiff may file an amended complaint on or before September 23, 2016, failing which, the Court will close the case. Signed by Judge Virginia M. Hernandez Covington on 8/29/2016. (DMD)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
XAVIER A. BRACCO,
Plaintiff,
v.
Case No. 8:16-cv-1640-T-33TBM
PNC MORTGAGE,
Defendant.
_____________________________/
ORDER
This matter comes before the Court in consideration of
Defendant
Amended
PNC
Mortgage’s
Complaint
(Doc.
Motion
#
to
15),
filed
Dismiss
on
Plaintiff’s
July
7,
2016.
Plaintiff Xavier A. Bracco filed a response in opposition on
July 22, 2016. (Doc. # 20). The Motion is ripe for review
and, for the reasons stated below, the Court grants the
Motion.
I.
Background
This action arises from an alleged violation of the Real
Estate Settlement Procedures Act, 12 U.S.C. §§ 2601, et seq.
(RESPA)
and
its
implementing
regulation,
Regulation
X.
Specifically, Bracco alleges that PNC Mortgage violated §
2605(k) of RESPA and § 1024.36 of Regulation X by failing to
timely
acknowledge
receipt
of
1
Bracco’s
request
for
information (RFI). Regulation X dictates that “[w]ithin five
days
(excluding
legal
public
holidays,
Saturdays,
and
Sundays) of a servicer receiving an information request from
a borrower, the servicer shall provide to the borrower a
written response acknowledging receipt of the information
request.” 12 C.F.R. § 1024.36(c).
According to the Amended Complaint, Bracco, through his
counsel, Korte and Wortman, P.A., mailed to PNC Mortgage a
written RFI pursuant to Regulation X. (Doc. # 2-1). Bracco
attaches a USPS Product & Tracking Information page and a
certified mail receipt, which Bracco alleges “confirm[s] the
date the written request was received.” (Doc. # 2 at ¶ 15).
The RFI was delivered to PNC Mortgage on October 26, 2015,
making the response acknowledging receipt due November 2,
2015. (Id.). Bracco alleges that he did not receive a written
acknowledgment within the statutory deadline. (Id. at 16).
Subsequently, through Korte and Wortman, P.A., Bracco sent
PNC Mortgage a follow up Notice of Error (NOE) letter. (Id.
at ¶ 16).
Bracco’s damages are based on PNC Mortgage’s failure to
comply with Regulation X. Specifically, Bracco alleges he
incurred damages of “less than $100.00 for mailing the NOE”
and “attorney’s fees and costs” because PNC Mortgage did not
2
send the written acknowledgment of the RFI during the five
business days. (Id. at ¶ 27).
PNC
Mortgage’s
Motion
provides
a
more
detailed
description of the parties’ interaction. On January 31, 2013,
a Foreclosure Action was filed against Bracco’s property,
which
resulted
in
the
issuance
of
a
Final
Judgment
of
Foreclosure in favor of PNC Mortgage on March 10, 2015. (Doc.
# 15 at 3-4). A short sale followed, leading PNC Mortgage to
record a Satisfaction of Mortgage on April 30, 2015. (Id. at
4). Six months later, on October 26, 2015, PNC received
Bracco’s purported RFI. (Id.). PNC Mortgage asserts that it
acknowledged
Bracco’s
RFI
on
November
3,
2015,
and
substantively responded to the RFI on December 9, 2015. (Id.).
On April 11, 2016, four months after PNC Mortgage provided a
substantive response to Bracco’s RFI, Bracco’s counsel mailed
the NOE. (Id.).
On May 10, 2016, Bracco filed a Complaint in County Court
for the Sixth Judicial Circuit, in and for Pinellas County,
Florida, which was amended on June 3, 2016. (Doc. # 2). PNC
Mortgage timely removed the action to this Court, which has
federal question jurisdiction pursuant to 28 U.S.C. § 1331.
(Doc. # 1). Thereafter, PNC Mortgage filed its Motion to
Dismiss Plaintiff’s Amended Complaint with prejudice pursuant
3
to Federal Rule of Civil P. 12(b)(6) on July 7, 2016. (Doc.
# 15). Bracco responded to the Motion on July 22, 2016. (Doc.
# 20). On August 3, 2016, PNC Mortgage filed a Notice of
Supplemental Authority regarding its Motion. (Doc. # 21). The
Motion is ripe for adjudication.
II.
Legal Standard
On a motion to dismiss, this Court accepts as true all
the allegations in the complaint and construes them in the
light most favorable to the plaintiff. Jackson v. Bellsouth
Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004). Further,
this
Court
favors
the
plaintiff
with
all
reasonable
inferences from the allegations in the complaint. Stephens v.
Dep’t of Health & Human Servs., 901 F.2d 1571, 1573 (11th
Cir. 1990) (stating “[o]n a motion to dismiss, the facts
stated
in
[the]
complaint
and
all
reasonable
inferences
therefrom are taken as true”). However:
[w]hile a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide
the grounds of his entitlement to relief requires
more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action
will not do. Factual allegations must be enough to
raise a right to relief above the speculative
level.
Bell Atl. Corp v. Twombly, 550 U.S. 544, 555 (2007) (internal
citations omitted). Courts are not “bound to accept as true
4
a legal conclusion couched as a factual allegation.” Papasan
v. Allain, 478 U.S. 265, 286 (1986).
Furthermore, “[t]he scope of review must be limited to
the four corners of the complaint.” St. George v. Pinellas
Cty., 285 F.3d 1334, 1337 (11th Cir. 2002). A “court may
consider a document attached to a motion to dismiss without
converting the motion into one for summary judgment if the
attached document is (1) central to the plaintiff’s claim and
(2) undisputed. In this context, ‘undisputed’ means that the
authenticity of the document is not challenged.” Day v.
Taylor,
400
F.3d
1272,
1276
(11th
Cir.
2005)(internal
citation omitted).
III. Analysis
Enacted as a consumer protection statute, RESPA provides
a
mechanism
process,
for
placing
regulating
the
requirements
real
on
estate
entities
settlement
or
persons
responsible for servicing federally related mortgage loans.
McLean v. GMAC Mortg. Corp., 398 F. App'x 467, 471 (11th Cir.
2010)(per curiam). RESPA is to be construed liberally to best
serve Congress's intent. Id. To state a RESPA claim for
failure to respond to a qualified written request (QWR), a
plaintiff must allege: “(1) defendant is a loan servicer under
the statute; (2) defendant received a QWR from plaintiff; (3)
5
the
QWR
relates
to
servicing
of
[a]
mortgage
loan;
(4)
defendant failed to respond adequately; and (5) plaintiff is
entitled to actual or statutory damages.” Porciello v. Bank
of Am., N.A., No. 8:14-cv-1511-T-17AEP, 2015 WL 899942, at *3
(M.D. Fla. Mar. 3, 2015); see also Correa v. BAC Home Loans
Servicing LP, No. 6:11-cv-1197-ORL-22, 2012 WL 1176701, at *6
(M.D. Fla. Apr. 9, 2012).
Only the first element is undisputed. Because the Court
finds that Bracco has failed to plead that the RFI is a
qualified written request related to the servicing of a
mortgage loan, discussion of the fourth and fifth elements is
unnecessary.
A.
Qualified Written Request
For the purposes of Regulation X § 1024.36, a “qualified
written request (QWR) that requests information relating to
the
servicing
of
the
mortgage
loan
is
a
request
for
information.” 12 C.F.R. § 1024.36(a); see also Hudgins v.
Seterus, Inc., No. 16-cv-80338-BLOOM/Valle, 2016 WL 3636859,
at *3 (S.D. Fla. June 29, 2016)(“An RFI can qualify as a
QWR.”).
RESPA
written
provides
request”
definitions
and
for
“servicing.”
request” is
6
the
A
terms
“qualified
“qualified
written
a written correspondence, other than notice on a
payment coupon or other payment medium supplied by
the servicer, that—
(i) includes, or otherwise enables the servicer to
identify, the name and account of the borrower; and
(ii) includes a statement of the reasons for the
belief of the borrower, to the extent applicable,
that the account is in error or provides sufficient
detail to the servicer regarding other information
sought by the borrower.
12 U.S.C. § 2605(e)(1)(B).
RESPA defines “servicing” as “receiving any scheduled
periodic payments from a borrower pursuant to the terms of
any loan” and “making the payments of principal and interest
and such other payments with respect to the amounts received
from the borrower as may be required pursuant to the terms of
the loan.” 12 U.S.C. § 2605(i)(3). For Bracco’s RFI to sustain
a Regulation X § 1024.36(c) claim, at least one of the RFI’s
requests must fit within these definitions.
Bracco’s RFI to PNC Mortgage includes the following
seven requests,
Specifically, I am requesting the following
information for the period beginning January 10,
2014, until your receipt of this request (the
‘applicable period’):
1. All
correspondence
between
your
company,
subsidiaries, [and] servicers attached to this
loan that were sent to the borrower from January
10, 2014, through to the present; and proof of
mailing, including but not limited to fed ex
7
tracking numbers, certified mail receipts,
and/or a letter log showing the date the letter
was sent.
2. All five (5) day letters between your company,
subsidiaries, [and] servicers following any loss
mitigation applications/submissions to this loan
that were sent to the borrower from January 10,
2014, through to the present; and proof of
mailing, including but not limited to fed ex
tracking numbers, certified mail receipts, and/or
a letter log showing the date the letter was sent.
3. All thirty (30) day letters between your company,
subsidiaries, [and] servicers following any loss
mitigation applications/submissions to this loan
that were sent to the borrower from January 10,
2014, through to the present; and proof of
mailing, including but not limited to fed ex
tracking numbers, certified mail receipts, and/or
a letter log showing the date the letter was sent.
4. All letter [sic] explaining the right to appeal
the denial of the modification (if applicable)
between
your
company,
subsidiaries,
[and]
servicers
following
any
loss
mitigation
applications/ submissions to this loan that were
sent to the borrower from January 10, 2014,
through to the present; and proof of mailing,
including but not limited to fed ex tracking
numbers, certified mail receipts, and/or a letter
log showing the date the letter was sent.
5. All
the
all
10,
system notes/logs that show the receipt of
loss mitigation submission and that reflect
responses sent to the borrower from January
2014, through to the present.
6. A current pay off statement.
7. Copies of all Notice of Service transfers that
were sent to the borrower and proof of mailing,
including but not limited to fed ex tracking
numbers, certified mail receipts, and/or a letter
log showing the date the notice was sent.
8
(Doc. # 2-1).
PNC Mortgage contends that none of the above seven
requests
qualify
Bracco’s
RFI
as
a
QWR
related
to
the
“servicing” of a loan. In support, PNC Mortgage calls on
Hudgins v. Seterus, Inc., in which the district court held
that none of the seven requests in an identical RFI related
to loan servicing. Hudgins v. Seterus, Inc., No. 16-cv-80338BLOOM/Valle, 2016 WL 3636859 (S.D. Fla. June 29, 2016). The
Court finds the reasoning of Hudgins persuasive and will
discuss each request in turn.
The parties agree that the second through fifth requests
in the RFI relate to loan modification. (Doc. # 20 at 2). The
distinction between “servicing” a loan and “modifying” a loan
is an important one because “[c]ourts routinely interpret
section 2605 as requiring a QWR to relate to the servicing of
a loan, rather than the creation or modification of a loan.”
Sirote v. BBVA Compass Bank, 857 F. Supp. 2d 1213, 1221-22
(N.D.
Ala.
2010),
aff’d,
462
F.
App’x
888
(11th
Cir.
2012)(emphasis in the original)(internal citations omitted).
Thus, a request for information regarding loan modification
is not related to the servicing of a loan. See Smallwood v.
Bank of Am., N.A., No. 1:15-cv-336, 2015 WL 7736876, at *6
9
(S.D. Ohio Dec. 1, 2015)(“The plain language of the statute
supports Defendant’s position that a request relating to loan
modification does not relate to scheduled payments, principal
and interest, or other payments received pursuant to the terms
of the [loan].”); Bullock v. Ocwen Loan Serv., LLC, No. 143836, 2015 WL 5008773, at *10-11 (D. Md. Aug. 20, 2015)(“a
request for information about loan modification does not
constitute a QWR”); Mbakpuo v. Civil Wells Fargo Bank, N.A.,
No. RWT-13-2213, 2015 WL 4485504, at *8 (D. Md. July 21,
2015)(finding that “requests for a loan modification did not
relate to the servicing of a loan because they did not relate
to Wells Fargo ‘receiving any scheduled periodic payments
from a borrower pursuant to the terms of a loan.’”).
Bracco
cites
three
cases
purportedly
supporting
his
proposition that loan modification does fall under the ambit
of “servicing.” See Wilson v. Bank of Am., N.A., 48 F. Supp.
3d 787, 805-07 (E.D. Pa. 2014)(denying motion to dismiss a
Regulation
X
§
1024.36(c)
claim
where
requests
included
“documents submitted by plaintiff in support of her request
for loan modification”); Bennett v. Bank of Am., N.A., 126 F.
Supp. 3d 871 (E.D. Ky. 2015)(finding “allegations . . . [the
servicer] provided inaccurate or incomplete information, and
. . . failed to perform an adequate investigation to obtain
10
the requested information” sufficient to state a claim under
RESPA § 2605); Paz v. Seterus, Inc., No. 14-62513-CIV, 2015
WL 4389521 (S.D. Fla. July 16, 2015)(denying motion to dismiss
plaintiff’s claim for failure to timely respond to
modification
However,
none
application
of
under
these
cases
Regulation
explicitly
X
§
hold
a loan
1024.41).
that
loan
modification inquiries relate to the servicing of a loan.
Both Bennett and Paz are distinguishable because they
each included a claim under the loss mitigation provision of
Regulation X at 12 C.F.R. § 1024.41, rather than a sole claim
under 12 C.F.R. § 1024.36 as in the instant case. Section
1024.36 governs RFIs by setting requirements and deadlines
for a servicer’s response and defining an RFI as a “[QWR]
that requests information relating to the servicing of the
mortgage loan.” 12 C.F.R. § 1024.36. Section 1024.41 sets
different
response
reference
requirements
to
to
and
applications
QWRs
or
deadlines
for
loan
servicing.
for
a
servicer’s
modification
12
C.F.R.
§
without
1024.41.
Furthermore, § 1024.41 does “not expand the definition of
‘servicing’ as used in § 2605” of RESPA and incorporated into
§ 1024.36 of Regulation X. Hudgins, 2016 WL 3636859, at *5
(citing Smallwood, 2015 WL 7736876, at *7 n.13). Although
Bracco may be correct that “there is no one else but a
11
servicer to direct inquiries about how badly botched an
attempted loan modification was,” Regulation X’s requirements
governing
a
servicer’s
response
to
loss
mitigation
applications are found in § 1024.41, not in § 1024.36(c) under
which Bracco has filed this action. (Doc. # 20 at 3).
The plaintiff in Wilson brought his failure to respond
claim under Regulation X § 1024.36, the same section at issue
in this case. Wilson, 48 F. Supp. 3d at 805. However, Wilson
is distinguishable because the district court did not address
whether the specific request for loan modification documents
was related to “servicing” of a loan. Rather, the court held
that
plaintiff
requested
had
documents
sufficiently
were
pled
available
that
and
“many
were
of
the
within
the
categories of documents that a servicer should provide.” Id.
at 806-07 (denying motion to dismiss where loan modification
information was one of numerous items requested, including
“copies of the servicing logs related to contacts between
Plaintiff and Defendant,...audio files of telephone calls
with Plaintiff,...property inspection reports, and invoices
from
Defendant's
foreclosure
firm”).
In
contrast,
PNC
Mortgage correctly points out that the majority of Bracco’s
RFI refers to loan modification and urges the Court to address
the
distinction
between
loan
12
modification
and
servicing.
Therefore,
the
Court
finds
that
the
loan
modification
requests in Bracco’s RFI do not relate to the “servicing” of
a loan.
The
request
for
a
current
payoff
statement
cannot
transform Bracco’s RFI into a QWR related to “servicing” of
a loan. The Truth in Lending Act (TILA), rather than RESPA,
imposes the requirement on servicers of home loans to provide
payoff
statements
to
borrowers.
15
U.S.C
§
1639(g).
“A
creditor or servicer of a home loan shall send an accurate
payoff balance within a reasonable time, but in no case more
than 7 business days, after the receipt of a written request
for such balance from or on behalf of the borrower.” Id. There
is no similar inclusion of payoff statements in RESPA.
Even assuming that the payoff statement was governed by
RESPA § 2605, the request for a current payoff statement of
Bracco’s loan still does not relate to the “servicing” of a
loan. See Hudgins, 2016 WL 3636859, at *6 (finding that an
identical request did not relate to servicing); Sirote, 857
F. Supp. 2d at 1222 (“A simple inquiry into payments made,
without more, cannot be interpreted as either a ‘statement of
the reasons for the belief of the borrower, to the extent
applicable, that the account is in error,’ or, ‘providing
sufficient detail to the servicer regarding other information
13
sought by the borrower,’ as required by RESPA”)(quoting Gates
v. Wachovia Mortg., FSB, No. 2:09-cv-02464-FCDEFB, 2010 WL
2606511, at *3 (E.D. Cal. June 28, 2010)).
Therefore, Bracco’s claim may only survive if the RFI’s
first and seventh requests qualify as a QWR related to the
servicing of a loan — meaning that they include a statement
of the purported servicing error or provide sufficient detail
regarding other information relating to payments made by
Bracco.
See
12
U.S.C.
§
2605(e)(1)(B),
(i)(3)(defining
“qualified written request” and “servicing”). However, these
requests also do not constitute a QWR related to the servicing
of Bracco’s loan. See Hudgins, 2016 WL 3636859, at *6 (finding
that identical requests did not relate to servicing).
The first and seventh requests encompass the entire
correspondence history between Bracco and PNC Mortgage and
proof of mailing for that correspondence. In Sirote, the
district court held that a similar request for “[c]opies of
any and all correspondence, interoffice memorandums, emails
or the like pertaining to me or any of my accounts . . .” did
not qualify as a QWR related to loan servicing because it did
not report any servicing error. 857 F. Supp. 2d at 1220. Thus,
requests one and seven do not provide “a statement of the
reasons
for
the
belief
of
the
14
borrower,
to
the
extent
applicable,
that
the
account
is
in
error.”
12
U.S.C.
§
2605(e)(1)(B)(ii).
Nor do the first and seventh requests provide sufficient
detail to PNC Mortgage regarding information sought by Bracco
under 12 U.S.C. § 2605(e)(1)(B)(ii). In another RESPA case,
a
broad
request
for
information
posing
“discovery-style
document demands” was not a QWR because it lacked clarity
regarding the information related to servicing sought by the
plaintiff. Hopson v. Chase Home Fin. LLC, 14 F. Supp. 3d 774,
786-87 (S.D. Miss. 2014), aff'd sub nom, Hopson v. Chase Home
Fin., L.L.C., 605 F. App'x 267 (5th Cir. 2015). The district
court wrote that
Given the breadth of plaintiffs' putative QWR, it
is possible that one or more of their 192 requests
for information may have touched on Chase's
servicing practices; but in the court's opinion, it
cannot fairly be said that the letter sought
information
relating
to
the
servicing
of
plaintiffs' loan. Certainly, plaintiffs did not
make a sufficiently clear request for information
relating to the servicing of their loan to require
a response by Chase.
Id. Thus, the Court finds that the first and seventh requests,
encompassing
all
correspondence
and
Notice
of
Service
transfers, cannot qualify Bracco’s RFI as a QWR related to
“servicing” of a loan as required by RESPA.
15
Even viewing the Complaint in the light most favorable
to Bracco, the Court finds that Bracco’s RFI is not a QWR
related to the servicing of a loan and the Complaint is
dismissed.
B.
Plaintiff may amend the Complaint
Generally, “[w]here a more carefully drafted complaint
might state a claim, a plaintiff must be given at least one
chance to amend the complaint before the district court
dismisses the action with prejudice.” Bryant v. Dupree, 252
F.3d 1161, 1163 (11th Cir. 2001)(quoting Bank v. Pitt, 928
F.2d 1108, 1112 (11th Cir. 1991)). However, a district court
is not required to allow an amendment where amendment would
be futile. Id. The Court finds that amendment is not futile
because Bracco may be able to state a claim under another
response provision of Regulation X.
Nevertheless, PNC Mortgage urges the Court to dismiss
Bracco’s
claim
under
the
“anti-absurdity
canon,”
which
maintains that federal courts have the power to preserve the
integrity of a statute by preventing an absurd result in its
application. See Merritt v. Dillard Paper Co., 120 F.3d 1181,
1188 (11th Cir. 1997)(“[t]hough venerable, the principle is
rarely applied, because the result produced by the plain
meaning canon must be truly absurd before this principle
16
trumps it. Otherwise, clearly expressed legislative decisions
would be subject to the policy predilections of judges.”);
see also Guillaume v. Fed. Nat. Mortg. Ass'n, 928 F. Supp. 2d
1337,
1341
(S.D.
Fla.
2013)(applying
the
“anti-absurdity
canon” to dismiss with prejudice a response violation claim
under
TILA
because
plaintiff
did
not
“suffer
from
any
meaningful deprivation of information” as a result and the
case was motivated by attorney’s fees). PNC Mortgage argues
that Bracco’s counsel sent the NOE four months after PNC
Mortgage had substantively responded to Bracco’s RFI for the
sole purpose of “manufactur[ing] a claim under RESPA.” (Doc.
# 15 at 15). According to PNC Mortgage, allowing such claims
contravenes
the
intent
of
Congress
and
produces
absurd
results.
As RESPA is a consumer protection statute that places
response requirements on loan servicers, the Court finds
dismissal
with
prejudice
pursuant
to
the
“anti-absurdity
canon” inappropriate in this case. See Manrique v. Wells Fargo
Bank
N.A.,
116
F.
Supp.
3d
1320,
1323
(S.D.
Fla.
2015)(declining to apply the anti-absurdity doctrine because
“the clear meaning of the statute should control before one
attempts to divine congressional intent”)(citation omitted);
see also Gallowitz v. Fed. Home Loan Mortg. Corp., 944 F.
17
Supp. 2d 1265, 1267 (S.D. Fla. 2013)(“If these cases are so
clearly contrary to congressional intent, one would think
that Congress would attempt to rectify erroneous judicial
interpretations.”);.
Accordingly, Bracco may amend his complaint on or before
September 23, 2016.
IV.
Conclusion
The Court finds that Bracco has not sufficiently stated
a claim under RESPA § 2605(k) and Regulation X § 1024.36 and
thus grants PNC Mortgage’s Motion to Dismiss. The Court
dismisses the case without prejudice so that Bracco may have
an opportunity to amend his Amended Complaint to state a
claim, if possible.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)
Defendant PNC Mortgage’s Motion to Dismiss Plaintiff’s
Amended Complaint (Doc. # 15) is GRANTED.
(2)
Plaintiff may file an amended complaint on or before
September 23, 2016, failing which, the Court will close
the case.
18
DONE and ORDERED in Chambers in Tampa, Florida, this
29th day of August, 2016.
19
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