Basora v. JPMorgan Chase Bank, N.A.

Filing 18

ORDER ON DEFENDANT'S MOTION TO DISMISS granting 7 Motion to Dismiss with prejudice. Closing Case. Motions Terminated: 7 Defendant's MOTION to Dismiss the State Court Complaint contained within the Notice of Removal 1 Notic e of Removal (State Court Complaint) filed by JPMorgan Chase Bank, N.A.. Signed by Judge Marcia G. Cooke on 7/29/2016. (tm) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-civ-60999-COOKE/TORRES
RICARDO BASORA,
Plaintiff,
vs.
JPMORGAN CHASE BANK, N.A.,
Defendant.
___________________________________/
ORDER ON DEFENDANT’S MOTION TO DISMISS
Plaintiff Ricardo Basora (“Plaintiff”) initiated this action against Defendant
JPMorgan Chase Bank, N.A. (“Defendant” or “Chase”). Defendant filed a Motion to
Dismiss Complaint (ECF No. 7), arguing that Plaintiff has failed to state a claim upon
which relief can be granted. Plaintiff filed his Response to Defendant’s Motion to Dismiss
(ECF No. 11), to which Defendant filed its Reply in Support of Motion to Dismiss
Complaint (ECF No. 27). After reviewing Defendant’s Motion to Dismiss, the Response
and Reply thereto, the record, and relevant legal authorities, Defendant’s Motion to Dismiss
Complaint is granted.
I. BACKGROUND
Plaintiff alleges that Chase violated the Real Estate Settlement Procedures Act, 12
U.S.C. § 2601 et seq (“RESPA”) and its implementing regulations, 12 C.F.R §1024
(“Regulation X”). See generally, Compl., ECF No. 1-1. On January 22, 2016, Plaintiff,
through counsel, sent a Qualified Written Request (“QWR”) containing both a Notice of
Error and Request for Information to Chase.

Id. at ¶ 7.

However, Chase failed to

acknowledge receipt of Plaintiff’s QWR. Id. Plaintiff, through counsel, then sent a second
QWR to Chase on March 18, 2016. Id. at ¶ 12. Chase again failed to respond. Id. Thus,
Plaintiff alleges that Chase violated its obligations under RESPA by continually failing to
respond to Plaintiff’s correspondence. Id. at ¶ 13.
In response, Chase argues that this case must be dismissed for failure to state a claim
because Plaintiff failed to send his QWRs to the specific address Chase designated to receive

such requests. See ECF No. 7. Chase designated P.O. Box 183166, Columbus, OH 432183166 as the address to which borrowers must send any QWRs. Chase published this address
on its website. However, Plaintiff sent his QWRs to a different address, P.O. Box 24696,
Columbus, OH 43224-0696.
II. LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(6), a complaint may be dismissed for
“failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In
order to state a claim, Federal Rule of Civil Procedure 8(a)(2) requires “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
The complaint must “give the defendant fair notice of what the [ ] claim is and the grounds
upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007) (citations omitted).
“While 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 ‘entitle[ment] to
relief’ requires more than labels and conclusions, and a formulaic recitation of the elements
of a cause of action will not do.” Id. “To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662 (2009) (quoting Twombly, 550 U.S. at 570).
At this stage in the litigation, the Court must consider the factual allegations in the
Complaint as true and accept all reasonable inferences therefrom. Jackson v. Okaloosa Cnty.,
Fla., 21 F.3d 1531, 1534 (11th Cir. 1994). Nevertheless, the Court may grant a motion to
dismiss when, “on the basis of a dispositive issue of law, no construction of the factual
allegations will support the cause of action.” Marshall Cnty. Bd. of Educ. v. Marshall Cnty. Gas
Dist., 992 F.2d 1171, 1174 (11th Cir. 1993).
III.

DISCUSSION

“A plaintiff states a cause of action under RESPA if the plaintiff alleges that he or she
sent a ‘qualified written request’ to a mortgage servicer and the mortgage servicer failed to
take proper action in response to the request as specified under the Act.” Rodriguez v.
Seterus, Inc., 2015 WL 5677182, at *5 (S.D. Fla. Sept. 28, 2015); see 12 U.S.C. § 2605(e).
Two regulatory provisions, 12 C.F.R. §§ 1024.35(c) and 1024.36(b), specifically govern
QWRs. “Section 1024.35(c) governs QWRs by borrowers seeking to assert errors with their
mortgage and § 1024.36(b) governs QWRs by borrowers seeking information on their
2

mortgage.” Best v. Ocwen Loan Servicing, LLC, 2016 WL 125875, at *2 (E.D. Mich. 2016).
More specifically, section 1024.35(c) provides:
A servicer may, by written notice provided to a borrower,
establish an address that a borrower must use to submit a notice
of error in accordance with the procedures in this section. The
notice shall include a statement that the borrower must use the
established address to assert an error. If a servicer designates a
specific address for receiving notices of error, the servicer shall
designate the same address for receiving information requests
pursuant to § 1024.36(b).
12 C.F.R. § 1024.35(c).
The abovementioned regulations set out strict guidelines that borrowers must adhere
to. “If a servicer establishes a QWR mailing address and provides it to a borrower by
written notice, ‘a borrower must use’ the designated address to submit a QWR.” Best, 2016
WL 125875, at *2. Consequently, “[f]ailure to send the QWR to the designated address ‘for
receipt and handling of [QWRs]’ does not trigger the servicer's duties under RESPA.” Id.
(quoting Berneike v. CitiMortgage, Inc., 708 F.3d 1141, 1149 (10th Cir. 2013) (applying a prior
version of Regulation X promulgated by the Department of Housing and Urban
Development (“HUD”)).
Plaintiff first argues that Chase relied upon an outdated version of Regulation X,
promulgated by HUD and codified as 24 C.F.R. § 3500, in support of its argument that’s its
response obligations were never triggered since Plaintiff sent his QWRs to the incorrect
address. Originally, the task of promulgating RESPA regulations fell to HUD. Under 24
C.F.R. § 3500.21(e)(1), a loan servicer, “[b]y notice either included in the Notice of Transfer
or separately delivered by first class mail,” was allowed to “establish a separate and
exclusive office and address for the receipt and handling of qualified written requests.” 24
C.F.R. § 3500.21(e)(1). In June 2014, administration of RESPA regulations, including the
regulation allowing a “separate and exclusive office and address,” was transferred from
HUD to the Consumer Financial Protection Bureau (“CFPB”) following the passage of
Dodd-Frank. 79 Fed. Reg. 115,34224 (June 16, 2014). The successor to 24 C.F.R. §
3500.21(e)(1) is 12 C.F.R. § 1024.35(c), which now provides that “[a] servicer may, by
written notice provided to a borrower, establish an address that a borrower must use to
submit a notice of error.” 12 C.F.R. § 1024.35(c).
3

The regulations promulgated by the CFPB changed what was once a permissive
requirement to one that was mandatory; if a loan servicer designated an address to receive
QWRs, then a borrower “must use” that address and no others. Therefore, any arguments
Plaintiff has with regard to Chase’s reliance on the outdated HUD-issued regulation are
flawed because, if anything, the mandatory language Chase relies upon in asserting that
Plaintiff’s Complaint must be dismissed is found in the updated CFPB regulation and not
the HUD regulation. Additionally, courts have analyzed the updated regulation, 12 C.F.R.
§ 1024, in the same manner as the previous HUD version, 24 C.F.R. § 3500. As such, recent
decisions interpreting RESPA have continued to rely upon caselaw interpreting the older
HUD version of Regulation X. See, e.g., Eveillard v. Nationstar Mortg. LLC, 2015 WL 1191170
(S.D. Fla. Mar. 16, 2015) (relying upon Roth v. CitiMortgage Inc., 756 F.3d 178 (2d Cir.
2014), which held that where a servicer complies with the notice requirements of 24 C.F.R. §
3500.21 for designating a qualified written response address, a letter sent to a different
address is not a qualified written response for purposes of triggering the servicer's response
obligations); Best, 2016 WL 125875, at *2 (relying on Berneike, 708 F.3d at 1149, to establish
that borrowers must send QWRs to the specific designated address in order to receive
protection under RESPA).
Plaintiff next argues that the language posted on Chase’s website is not in accordance
with 12 C.F.R. § 1024.35(c) because it does not include a statement establishing that the
borrower must use the address designated by Chase to receive QWRs. Plaintiff relies upon
the reasoning in Blanton v. Roundpoint Mortg. Servicing Corp., 2016 WL 3653577, at *7 (N.D.
Ill. July 7, 2016) to support his argument. There, the court found that the defendant’s
statement did not “meet the statutory requirements of notifying the borrower that notices of
error ‘must’ be sent to the designated address.” Id. The defendant, Roundpoint, provided
notice through a mortgage statement which “merely state[d] in the ‘General Information’
section that ‘[t]o provide [Roundpoint] with a Notice of Error about the servicing of your
loan . . . please write to [Roundpoint] at’ the designated address.” Id. Thus, the statement’s
permissive language was more of an “invitation to use the designated address [rather] than a
command,” which the court found to be insufficient in notifying the borrower that notices of
error “must” be sent to the designated address. Id.
However, Blanton is inapposite because the notice here differs materially from the
4

notice in Blanton. Additionally, I respectfully disagree with the interpretation of 12 C.F.R. §
1024.35(c) espoused in Blanton. Chase’s notice states as follows:
You can send us a Notice of Error, Information Request, or
Qualified Written Request as part of the [RESPA] to ask for
information or to dispute errors about the servicing of your
mortgage loans. To do so, send us a separate letter that
describes the issue and include any supporting documents.
Please mail it our exclusive address for the receipt and handling
of these requests: Mail: Chase, P.O. Box 183166, Columbus,
OH 43218-3166.
See ECF No. 7 (emphasis added). By using the word “exclusive,” Chase clearly indicated to
borrowers that all QWRs must be sent to the address designated in its notice; there is only
one address at which Chase will accept notices of error, information requests, or QWRs.
Chase’s notice thus meets the statutory requirements of 12 C.F.R. 1024.35(c) because it
clearly established a designated address for QWRs that “the borrower must use … to assert
an error.”

As one court noted, “‘[i]f the servicer chooses to establish a separate and

exclusive address, borrowers who fail to submit their QWRs to that location do so at their
peril.’” Roth v. PNC Bank, N.A., 2015 WL 5731892, at *3 (N.D. Ill. Sept. 30, 2015) (citing
Catalan v. RBC Mortg. Co., 2008 WL 2741159, at *5 (N.D. Ill. July 8, 2008)). This makes
even more sense when considering the purpose of RESPA and Regulation X. RESPA was
intended to reform the real estate settlement process to give consumers “greater and more
timely information.” Berneike, 708 F.3d at 1149 (internal citation omitted). One way to
accomplish that goal is by allowing loan servicers to designate an exclusive address where
such requests can be handled, which is exactly what Chase did here.
Thus, as Plaintiff admittedly failed to send his correspondence to the designated
address, Chase’s response obligations under RESPA were never “triggered”. Berneike, 708
F.3d at 1149. As such, Plaintiff has failed to state a claim under RESPA, and Defendant’s
Motion to Dismiss the Complaint is granted.
IV. CONCLUSION
For the reasons explained in this Order, Defendant’s Motion to Dismiss Complaint
(ECF No. 7) is GRANTED. Plaintiff’s Complaint (ECF No. 1) is DISMISSED with
prejudice. The Clerk shall CLOSE this case. All pending motions, if any, are DENIED as
moot.
5

DONE and ORDERED in Chambers, at Miami, Florida, this 29th day of July 2016.

Copies furnished to:
Edwin G. Torres, U.S. Magistrate Judge
Counsel of Record

6