Landau v. Roundpoint Mortgage Servicing Corporation

Filing 28

ORDER granting 18 Motion to Dismiss 1 Complaint for Failure to State a Claim. Dismissing Complaint with prejudice; Closing Case. Signed by Judge Beth Bloom on 3/13/2017. (ls) 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-cv-62795-BLOOM/Valle

RACHEL LANDAU,
Plaintiff,
v.
ROUNDPOINT MORTGAGE SERVICING
CORPORATION,
Defendant.
_____________________________________/
ORDER ON MOTION TO DISMISS
THIS CAUSE is before the Court upon Defendant RoundPoint Mortgage Servicing
Corporation’s (“Defendant” or “RoundPoint”) Motion to Dismiss, ECF No. [18] (the “Motion”),
seeking dismissal of Plaintiff Rachel Landau’s (“Plaintiff”) Complaint, ECF No. [1] (the
“Complaint”).

The Court has carefully reviewed the record, the parties’ briefs, and the

applicable law. For the reasons that follow, the Motion is granted and this matter is dismissed
with prejudice.
I.

Background
Plaintiff filed this action seeking relief for Defendant’s alleged violation of the Real

Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq. (“RESPA”), and its implementing
regulation, 12 C.F.R. § 1024, et seq. (“Regulation X”), and the Fair Debt Collection Practices
Act, 15 U.S.C. § 1692, et seq. (“FDCPA”). See Complaint ¶¶ 1-4. Specifically, Plaintiff seeks
remedies for Defendant’s alleged failure to comply with § 2605(k) of RESPA and § 1024.41(g)
of Regulation X, and based upon that failure, for the violation of the FDCPA, 15 U.S.C. §
1692(e). See id. ¶¶ 37, 62.

Case No. 16-cv-62795-BLOOM/Valle
Plaintiff’s claim begins with a foreclosure action filed against her in Broward County, by
Random Properties Acquisition Corporation (“Random”), on June 23, 2014. Id. ¶ 21. Despite
attempting to engage in loss mitigation negotiations with Random, a final summary judgment of
foreclosure (“Foreclosure Judgment”) was entered in favor of Random on February 3, 2016. Id.
¶¶ 24-26. The foreclosure sale was set for October 5, 2016. Id. ¶¶ 27, 36. Following the entry
of the Foreclosure Judgment, Plaintiff’s loan was transferred to RoundPoint for servicing. Id. ¶
29. On September 6, 2016, Plaintiff received a trial period plan offer, setting forth a schedule of
payments, which Plaintiff accepted. Id. ¶¶ 30, 35. On September 22, 2016, Random filed a
Motion to Cancel the October 5, 2016 Foreclosure Sale and Reschedule Foreclosure Sale, ECF
No. [1-4] (“Motion to Cancel Sale”), in the underlying foreclosure proceeding.1 See id. ¶ 41. In
the Motion to Cancel Sale, Random requested that the foreclosure sale be rescheduled because
“the Borrower [Plaintiff] is in active loss mitigation.” Motion to Cancel Sale at 2; see also
Complaint ¶ 42. As a result, Plaintiff contends that she was forced to file her own motion to
cancel the sale—which she did on September 26, 2016—specifically requesting that the sale not
be reset.

Complaint ¶ 45; see also ECF No. [1-5] (“Plaintiff’s Motion to Cancel Sale”).

Following a hearing, the Broward County court granted Plaintiff’s Motion to Cancel Sale. See
ECF No. [1-6]; Complaint ¶ 49.

Thereafter, Plaintiff sent a Notice of Error (“NOE”) to

RoundPoint regarding the alleged violation of Regulation X, receipt of which RoundPoint
acknowledged. See ECF Nos. [1-7], [1-8].

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Plaintiff asserts that the Motion to Cancel Sale was filed by “Defendant’s foreclosure counsel.”
Complaint ¶ 41. However, in the Motion, RoundPoint points out that although it was the
servicer for Plaintiff’s loan, the Foreclosure Judgment was obtained, and the Motion to Cancel
Sale was filed, in the underlying foreclosure proceeding by Random. Motion at 4 n.1. Plaintiff
has not responded in substance to this key observation and the Complaint is silent as to the
relationship between Random and RoundPoint.
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Case No. 16-cv-62795-BLOOM/Valle
Plaintiff asserts two counts against Defendant.

In Count I, Plaintiff alleges that

Defendant violated RESPA § 2605(k) through its violation of Regulation X, 12 C.F.R. §
1024.41(g), by requesting that the Broward County court reschedule the foreclosure sale and by
failing to take reasonable steps to avoid a ruling on the order of sale because the Motion to
Cancel Sale did not mention Plaintiff’s modification plan. See Complaint ¶¶ 67-71. In Count II,
Plaintiff alleges that Defendant’s violation of RESPA and Regulation X also constitutes a
violation of the FDCPA, in that Defendant failed to inform the foreclosure court of the “true
status of the loss mitigation process.” Id. ¶¶ 83-84. Defendant seeks to dismiss Plaintiff’s
Complaint for failure to state a cause of action. See generally Motion.
II.

Legal Standard
Rule 8 of the Federal Rules requires that a pleading contain “a short and plain statement

of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Although a
complaint “does not need detailed factual allegations,” it must provide “more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(explaining that Rule 8(a)(2)’s pleading standard “demands more than an unadorned, the
defendant-unlawfully-harmed-me accusation”). In the same vein, a complaint may not rest on
“‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 557 (alteration in original)). “Factual allegations must be enough to raise a
right to relief above the speculative level.” Twombly, 550 U.S. at 555. These elements are
required to survive a motion brought under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, which requests dismissal for “failure to state a claim upon which relief can be
granted.”

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When reviewing a motion under Rule 12(b)(6), a court, as a general rule, must accept the
plaintiff’s allegations as true and evaluate all plausible inferences derived from those facts in
favor of the plaintiff. See Miccosukee Tribe of Indians of Fla. v. S. Everglades Restoration
Alliance, 304 F.3d 1076, 1084 (11th Cir. 2002); AXA Equitable Life Ins. Co. v. Infinity Fin. Grp.,
LLC, 608 F. Supp. 2d 1349, 1353 (S.D. Fla. 2009). However, this tenet does not apply to legal
conclusions, and courts “are not bound to accept as true a legal conclusion couched as a factual
allegation.” Twombly, 550 U.S. at 555; see Iqbal, 556 U.S. at 678; Thaeter v. Palm Beach Cty.
Sheriff’s Office, 449 F.3d 1342, 1352 (11th Cir. 2006). Moreover, “courts may infer from the
factual allegations in the complaint ‘obvious alternative explanations,’ which suggest lawful
conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Am. Dental
Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 682). A
court considering a Rule 12(b) motion is generally limited to the facts contained in the complaint
and attached exhibits, including documents referred to in the complaint that are central to the
claim. See Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009); Maxcess, Inc.
v. Lucent Techs., Inc., 433 F.3d 1337, 1340 (11th Cir. 2005) (“[A] document outside the four
corners of the complaint may still be considered if it is central to the plaintiff’s claims and is
undisputed in terms of authenticity.”) (citing Horsley v. Feldt, 304 F.3d 1125, 1135 (11th Cir.
2002)).
III.

Discussion
RoundPoint moves to dismiss the Complaint on the ground that the order of sale was

obtained by Random in the underlying Foreclosure Judgment months prior to Plaintiff’s
participation in the trial modification. As such, the request to cancel and reschedule the sale was
not a violation of RESPA or Regulation X, because there was a possibility that Plaintiff might

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Case No. 16-cv-62795-BLOOM/Valle
fail to complete the terms of the mitigation plan. Motion at 5-6. Furthermore, Defendant argues
that because it did not violate RESPA or Regulation X, Plaintiff’s FDCPA claim fails. Further,
and in any event, the Motion to Cancel Sale adequately informed the foreclosure court that the
borrower was in active loss mitigation.

Id. at 7.

As the FDCPA claim depends upon

Defendant’s alleged violation of RESPA and Regulation X, the Court considers Defendant’s
argument with respect to Count I first.
Count I – Violation of 12 C.F.R. § 1024.41(g)
Both parties have relied upon the documents attached to the Complaint, and the Court
finds the documents central to Plaintiff’s claim.

Accordingly, the Court will review the

attachments as appropriate in adjudicating the Motion.

See Wilchombe, 555 F.3d at 959;

Maxcess, Inc., 433 F.3d at 1340; Horsley, 304 F.3d at 1135. Plaintiff claims that Defendant
violated RESPA § 2605(k) through its violation of Regulation X. See Complaint ¶ 37. Section
2605 of RESPA governs the “servicing of mortgage loans and administration of escrow
accounts,” and implicates Regulation X by providing in relevant part that “[a] servicer of a
federally related mortgage shall not . . . fail to comply with any other obligation found by the
Bureau of Consumer Financial Protection [(“Bureau”)], by regulation, to be appropriate to carry
out the consumer protection purposes of this chapter.” See 12 U.S.C. § 2605(k)(1)(E). Section
1024.41of Regulation X, under the title “Prohibition on foreclosure sale,” provides that
If a borrower submits a complete loss mitigation application after a servicer has
made the first notice or filing required by applicable law for any judicial or nonjudicial foreclosure process but more than 37 days before a foreclosure sale, a
servicer shall not move for foreclosure judgment or order of sale, or conduct a
foreclosure sale . . . .
12 C.F.R. § 1024.41(g).
It is undisputed that the Foreclosure Judgment and concomitant order of sale were
entered in February of 2016, seven months before Plaintiff accepted the trial modification plan
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Case No. 16-cv-62795-BLOOM/Valle
from RoundPoint. It is also undisputed that Random filed a motion to cancel the sale, that the
foreclosure sale did not occur, and was not rescheduled. So, the question before the Court is, do
RESPA and Regulation X prohibit a request that a foreclosure sale be rescheduled while a
borrower is engaged in a modification plan, when the final foreclosure judgment and order of
sale was entered prior to the commencement of the trial modification plan? The Court finds that
they do not.
The Court turns to the plain language of Regulation X in order to determine whether
Plaintiff can state a claim. “The first rule in statutory construction is to determine whether the
language at issue has a plain and unambiguous meaning with regard to the particular dispute. If
the statute’s meaning is plain and unambiguous, there is no need for further inquiry.” U.S. v.
Silva, 443 F.3d 795, 797-98 (11th Cir. 2006) (internal quotations omitted). “This is so because
‘[t]he plain language is presumed to express congressional intent and will control a court’s
interpretation.’” Moss v. GreenTree-Al, LLC, 378 B.R. 655, 658 (S.D. Ala. 2007) (quoting U.S.
v. Fisher, 289 F.3d 1329, 1338 (11th Cir. 2002) (alternations in the original). “A court ‘should
not interpret a statute in a manner inconsistent with the plain language of the statute, unless
doing so would lead to an absurd result.’” Id. (quoting Silva, 443 F.3d at 798). This analysis
applies to review of Regulation X, as “‘[r]egulations, like statutes, are interpreted according to
the cannons of construction.’” O’Shannessy v. Doll, 566 F. Supp. 2d 486, 491 (E.D. Va. 2008)
(quoting Black & Decker Corp. v. Comm’r, 986 F.2d 60, 65 (4th Cir. 1993)).
Section 1024.41(g) of Regulation X provides only that “a servicer shall not move for
foreclosure judgment or order of sale or conduct a foreclosure sale.” 12 C.F.R. § 1024.41(g).
The section is silent as to whether this includes the request to reschedule a sale when a
foreclosure judgment or order of sale has already been obtained. Plaintiff relies upon the Official

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Bureau Interpretations clarification of the language of the final rule implementation of section
1024.41(g) and two cases, Fox v. Manely, Deas, & Kochalski, LLC, 2016 WL 6092638, at *2
(N.D. Ill. Oct. 19, 2016) and Ramos v. Wells Fargo Bank, N.A., 2016 WL 233142, at *7 (S.D.
Fla. Jan. 13, 2016), in support of her position that seeking to reschedule a foreclosure sale for a
future date constitutes a violation of Regulation X. However, Regulation X and the commentary
speak only about filing a dispositive motion that may result in a judgment of foreclosure or an
order of sale, and moving for a foreclosure judgment or order of sale—neither of which
RoundPoint did in this case, as the Foreclosure Judgment was obtained months earlier by
Random. See ECF No. [22] at 4-5. In fact, the Bureau comments specifically reference the
propriety of suspending a sale during a trial modification plan: “Further, the Bureau stated that it
is appropriate to suspend a foreclosure sale when a borrower is performing under an agreement
on a loss mitigation option. [. . .] Additionally, it is already standard industry practice for a
servicer to suspend a foreclosure sale during any period where a borrower is making payments
pursuant to the terms of a trial loan modification.” Mortgage Servicing Rules Under the Real
Estate Settlement Procedures Act (Regulation X), 78 Fed. Reg. 10,696 (Feb. 14, 2013). Here,
Plaintiff’s trial modification plan had barely begun when Random filed its Motion to Cancel
Sale. Plaintiff makes much of the fact that Regulation X refers in the disjunctive to “foreclosure
judgment or order of sale,” and that because the Foreclosure Judgment, ECF No. [18-1],
contemplated a sale only on June 2, 2016, additional motions were required for the eventual
October 5, 2016 sale date to be set, which clearly violated RESPA and Regulation X. However,
the commentary Plaintiff relies upon does not support such a reading, and Plaintiff points to no
authority to support the proposition that the prohibition in section 1042.41(g) applies after the

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entry of a foreclosure judgment, or that a request to reschedule a sale constitutes an order of sale
covered by the provisions of that section.
Furthermore, the cases cited by Plaintiff are inapposite to the case at bar. In Fox, despite
the borrower’s completing the trial period plan, she did not receive a permanent loan
modification, and the loan servicer did not seek to cancel the sale, but instead published notice of
the scheduled foreclosure, and in fact actively sought to reschedule the sale after the borrower
took unilateral action to prevent the already scheduled sale from going forward. Fox, 2016 WL
6092638, at *2. Here, Plaintiff alleges that she had just accepted the trial modification plan
when Random filed the Motion to Cancel Sale. Notably, Plaintiff does not contend that either
Random or RoundPoint have sought to reschedule the sale following the Broward County court’s
granting Plaintiff’s Motion to Cancel Sale. And while Plaintiff appears to believe that she was
forced to file her own motion to prevent the October 5, 2016 from moving forward, her belief is
belied by the record in this case. According to the allegations in the Complaint, Random duly
filed its Motion to Cancel Sale a little more than a week after Plaintiff obtained clarification of
the terms of the trial modification plan and accepted it. See Complaint ¶¶ 33, 41; see also
Motion to Cancel Sale. Moreover, in Ramos, the claimed violation of Regulation X hinged upon
the timing of the plaintiff’s submission of the complete loss mitigation application, which is not
involved in the case at bar. Ramos, 2016 WL 233142, at *7. Therefore, these cases do not
bolster Plaintiff’s position.
The Court recognizes that “RESPA is a consumer protection statute that regulates the real
estate settlement process,” and that as a “remedial consumer-protection statute . . . RESPA is to
be ‘construed liberally in order to best serve Congress’ intent.’” Hardy v. Regions Mortg., Inc.,
449 F.3d 1357, 1359 (11th Cir. 2006) (citing 12 U.S.C. § 2601(a)); Rawlings v. Dovenmuehle

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Mortg., Inc., 64 F. Supp. 2d 1156, 1165 (M.D. Ala. 1999) (quoting Ellis v. Gen. Motors
Acceptance Corp., 160 F.3d 703, 707 (11th Cir. 1998)). However, as the Court finds that the
plain language of the regulation is dispositive, it need not delve into Congress’s intent. See
Birnholz v. 44 Wall St. Fund, Inc., 880 F.2d 335, 341 (11th Cir. 1989), certified question
answered, 559 So. 2d 1128 (Fla. 1990) (“Thus, the cardinal rule of statutory construction is that
‘[w]hen the language of the statute is clear and unambiguous and conveys a clear and definite
meaning, there is no occasion for resorting to the rules of statutory interpretation and
construction; the statute must be given its plain and obvious meaning.’”) (quoting Streeter v.
Sullivan, 509 So. 2d 268, 271 (Fla. 1987) (quoting A.R. Douglass, Inc. v. McRainey, 102 Fla.
1141, 137 So. 157, 159 (1931))).
Although RESPA is a remedial statute, the Court need not construe it (or its
implementing regulation) so liberally as to create a cause of action where none exists.
RoundPoint did not move for foreclosure judgment or order of sale, or conduct a foreclosure sale
in violation of Regulation X.

Plaintiff’s unsupported argument that the mere request, by

Random, to reschedule the sale violates section 1024.41(g) is an argument based entirely in
semantics that the Court finds unpersuasive.2 Therefore, Count I of the Complaint is dismissed;
and because Plaintiff’s FDCPA claim is premised upon the alleged violation in Count I, it must
also fail. As Plaintiff is represented by counsel and has not requested leave to amend, the claims
are dismissed with prejudice. Meeks v. Ocwen Loan Servicing, LLC, --- F. App’x ----, 2017 WL
782285, at *3 n.4 (11th Cir. Mar. 1, 2017) (citing Wagner v. Daewoo Heavy Indus. Am. Corp.,
314 F.3d 541, 542 (11th Cir. 2002) (“A district court is not required to grant a plaintiff leave to

2

Furthermore, as RoundPoint indicates in the Motion, the Complaint is entirely devoid of any
allegations with respect to the relationship between RoundPoint and Random, or how the actions
of Random in the underlying foreclosure may be attributed to RoundPoint.
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Case No. 16-cv-62795-BLOOM/Valle
amend his complaint sua sponte when the plaintiff, who is represented by counsel, never filed a
motion to amend nor requested leave to amend before the district court.”)).
IV.

Conclusion
For the reasons stated herein, it is ORDERED AND ADJUDGED that Defendant’s

Motion to Dismiss, ECF No. [18], is GRANTED. The Complaint is DISMISSED WITH
PREJUDICE. The Clerk of Court is directed to CLOSE this case.
DONE AND ORDERED in Miami, Florida, this 13th day of March, 2017.

_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record

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