ZAYCHICK v. Bank of America N.A.

Filing 32

ORDER granting 27 Second Motion to Dismiss 26 Amended Complaint for Failure to State a Claim; Dismissing Amended Complaint with prejudice; Closing Case. Signed by Judge Robin L. Rosenberg on 11/12/2015. (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. 9:15-CV-80336-ROSENBERG/BRANNON
ELINA ZAYCHICK,
Plaintiff,
v.
BANK OF AMERICA, N.A.,
Defendant.
______________________________/
ORDER GRANTING DEFENDANT’S SECOND MOTION TO DISMISS
This matter is before the Court on Defendant’s Second Motion to Dismiss [DE 27].
Plaintiff filed a Response to the Motion. [DE 30]. Defendant failed to file a Reply; the time period
for a reply has passed. This matter is adequately briefed for the Court’s disposition. The Court has
reviewed the documents in the case file and is fully advised in the premises. For the reasons set
forth below, Defendant’s Motion is granted and Plaintiff’s Amended Complaint is dismissed with
prejudice on various grounds, including the Court’s lack of subject matter jurisdiction over
Plaintiff’s claim.
I.

BACKGROUND

Plaintiff is a former homeowner whose home mortgage was serviced by Defendant.
Plaintiff defaulted on her loan and foreclosure proceedings were initiated in March of 2012. In
January of 2014 Plaintiff filed a loss-mitigation application in an attempt to save her home. Her
application was denied on May 9, 2014 because she “did not show sufficient evidence of
impending hardship.” Plaintiff appealed the denial. Plaintiff’s appeal was unsuccessful.

Thereafter, a final judgment of foreclosure was entered in state court and Plaintiff’s home
was sold at auction on October 3, 2014. Eviction proceedings were initiated against Plaintiff.
Eviction proceedings remain ongoing. After Plaintiff’s home was sold at auction, Plaintiff
(through counsel) sent a letter on November 3, 2014 to Defendant seeking more specific
information as to why her loss-mitigation application had been denied in May of 2014. Defendant
responded; however, Plaintiff asserts that Defendant’s response did not satisfy Defendant’s
obligations under the Real Estate Settlement Procedures Act. This lawsuit followed.
On July 27, 2015, the Court dismissed Plaintiff’s Complaint without prejudice due to
Plaintiff’s failure to plausibly plead a causal connection between her alleged damages and
Defendant’s alleged wrongdoing. Plaintiff filed an Amended Complaint and Defendant’s Second
Motion to Dismiss is the matter presently before the Court.
II.

LEGAL STANDARD

In considering a motion to dismiss, the Court must accept the allegations in a complaint as
true and construe them in a light most favorable to the plaintiffs. See Resnick v. AvMed, Inc., 693
F.3d 1317, 1321 (11th Cir. 2012). At the pleading stage, the Complaint need only contain a “short
and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
8(a)(2). All that is required is that there are “enough facts to state a claim to relief that is plausible
on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007).
III.

ANALYSIS AND DISCUSSION

Plaintiff has brought a single claim against Defendant under the Real Estate Settlement
Procedures Act, RESPA. See 12 U.S.C § 2605. This claim is premised upon three separate
grounds. The first two grounds pertain to “Regulation X” requirements to consider loss-mitigation

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applications, which is codified in pertinent part at 12 C.F.R. § 1024.41 and which is enforced
through RESPA. Plaintiff’s third and final ground is based upon a mortgage servicer’s Regulation
X obligations to provide information, which are also enforced through RESPA. See 12 C.F.R. §
1024.36. The Court first addresses Plaintiff’s grounds premised upon Regulation X requirements
to consider loss-mitigation applications.
1. Plaintiff’s RESPA Claim Premised upon 12 C.F.R. § 1024.41
Regulation X allows for borrowers to submit loss-mitigation applications prior to a final
foreclosure of the borrower’s home. Regulation X requires a loan servicer, upon receipt of a
complete loss-mitigation application,1 to: “Evaluate the borrower for all loss mitigation options
available to the borrower,” and “If a borrower’s complete loss-mitigation application is denied . . .
a servicer shall state in the notice sent to the borrower . . . the specific reason or reasons [for the
denial].” 12 C.F.R. §§ 1024.41(c)(1)(i), (d). Plaintiff alleges that Defendant violated both of these
requirements: that Defendant did not evaluate Plaintiff for all loss-mitigation options available to
Plaintiff and that, upon denial, Defendant did not provide specific reasons for its denial. The Court
lacks subject matter jurisdiction over both of these allegations.
Federal review of state-court judgments may only occur in the United States Supreme
Court. 28 U.S.C. § 1257(a); see also Figueroa v. Merscorp, Inc., 766 F. Supp. 2d 1305 (S.D. Fla.
2011). Therefore, this Court lacks jurisdiction to review final state-court judgments. The
Rooker-Feldman doctrine encapsulates and delineates the rule that district courts may not review
final state-court judgments, and the doctrine precludes review of claims that are “inextricably
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For an unknown reason, Plaintiff has persisted in alleging a loss-mitigation application was submitted, instead of
alleging that a complete loss-mitigation application was submitted. The Court construes this lack of specificity in
Plaintiff’s favor and assumes that Plaintiff submitted a complete loss-mitigation application to Defendant, which is an
inference strengthened by the fact that Defendant’s rejection of the application contained no references to the
application being denied due to a lack of completeness. See DE 26-1.

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intertwined” with state judgments. Casale v. Tillman, 558 F.3d 1258, 1260 (11th Cir. 2009).
However, where a party did not have a “reasonable opportunity to raise [a] federal claim in state
proceedings” the doctrine does not apply. Id. In such a situation, a plaintiff’s claims are not
considered to be inextricably intertwined with the state court judgment. See Powell v. Powell, 80
F.3d 464, 467 (11th Cir. 1996).
Notably, the Eleventh Circuit and many district courts have applied the Rooker-Feldman
doctrine to dismiss actions where a plaintiff was seeking, in reality, to challenge state-court
foreclosure judgments. See, e.g., Parker v. Potter, 368 F. App’x 945, 947-48 (11th Cir. 2010)
(rejecting under Rooker-Feldman a federal claim under the Truth in Lending Act that sought
rescission of a state foreclosure judgment); Velardo v. Fremont Inv. & Loan, 298 F. App’x 890,
892-93 (11th Cir. 2008) (holding that appellants’ federal TILA claims were inextricably
intertwined with a state-court foreclosure judgment and thus barred by Rooker-Feldman); Harper
v. Chase Manhattan Bank, 138 F. App’x 130, 132-33 (11th Cir. 2005) (dismissing federal TILA,
Fair Debt Collection Practices Act, and Equal Credit Opportunity Act claims under
Rooker-Feldman because they were inextricably intertwined with a state-court foreclosure
proceeding); Aboyade Cole Bey v. Bank Atl., No. 09-CV-1572, 2010 WL 3069102, at *2 (M.D.
Fla. 2010) (finding the court had no jurisdiction to hear plaintiff’s case under Rooker-Feldman
because the case was, “at its core,” an attempt to revisit a state-court foreclosure judgment);
Distant v. Bayview Loan Servicing, LLC, No. 09-CV-1572, 2010 WL 1249129, at *3 (S.D. Fla.
2010) (“Although plead as conspiracy claims . . ., Plaintiff is clearly asking this Court to invalidate
the state court action by ruling that the state court foreclosure judgment is somehow void. Under
the Rooker-Feldman doctrine, [defendant] is correct that this Court lacks subject matter

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jurisdiction, as Plaintiff seeks a de facto appeal of a previously litigated state court matter.”);
Figuero, 766 F. Supp. at 1320 (collecting and discussing the cases cited above).
Here, Plaintiff’s claims are inextricably intertwined with her final state-court foreclosure
judgment. By Plaintiff’s own admission as alleged in her complaint, Plaintiff brought the issue of
Defendant’s review of her loss-mitigation application to the attention of the state court during her
foreclosure proceedings. More specifically, Plaintiff alleges that her loss-mitigation application to
Defendant (which was rejected) did not consider her for a HAMP loss-mitigation program as
follows:
In order to maximize the likelihood that she would receive a HAMP modification,
Borrower continued to employ and pay a law firm known as “Litigation Law” to assist
her with her loss mitigation application and represent her in the foreclosure lawsuit,
even though she had entered into a stipulation for a consent judgment. Importantly
however, the stipulation noted that there was a pending loss mitigation
application, and contemplated that the sale would not take place for 150 days,
thereby allowing ample time to complete the loss mitigation review process.
After the May 17th correspondence (and therefore after the May 9th denial letter) Bank
of America repeatedly requested documentation supporting Borrower’s loss mitigation
application. Borrower promptly complied each time. Borrower continued to employ
Litigation Law, in large part to assist her with the loss mitigation process and in
complying with Bank of America’s related requests.
On October 22nd, 2014, an attorney associated with Litigation Law and representing
Borrower appeared at hearing [sic] before the state court asking that the sale be
cancelled because Borrower’s loss mitigation application was pending. Counsel
for the foreclosure Plaintiff (who was retained by Bank of America and who reported
to Bank of America) opposed that request and represented that Borrower’s application
had been denied during the month of May.
DE 26 ¶¶ 20-22 (emphasis added). Thus, pursuant to Plaintiff’s allegations: (i) there was a stipulation
for consent judgment in her state court foreclosure proceeding, (ii) that stipulation contained a clause
pertaining to her loss-mitigation application with Defendant, (iii) Plaintiff believed Defendant
essentially was not complying with that clause, (iv) Plaintiff sought relief from the state court to have
the foreclosure sale cancelled, and (v) the state court denied Plaintiff relief.
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It is Plaintiff’s contention that foreclosure was wrongful and that the state court erred by
not cancelling the scheduled foreclosure sale. All of the evidence upon which Plaintiff now relies
to allege that she was not considered for a HAMP loan modification was available to Plaintiff
during the pendency of her foreclosure proceedings.2 See DE 26 ¶¶ 15, 18. Plaintiff had the
opportunity to litigate her claims in state court while her foreclosure case was pending, both with
respect to her allegation that Defendant did not consider her for HAMP modification and her
allegation that Defendant provided insufficient specificity for its denial. Both of these issues were
either before the state court directly or are inextricably intertwined with the state court’s entry of
final judgment of foreclosure.
There are no procedural bars to the application of the Rooker-Feldman doctrine to this case
as this case was filed subsequent to Plaintiff’s final state court judgment. See Exxon Mobile Corp.
v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). Were judgment to be entered in this case in
favor of Plaintiff, it would necessarily follow that the state court foreclosure was in error and, as a
result, this Court cannot grant Plaintiff her requested relief without disturbing the Florida
foreclosure judgment. See, e.g., Swiatkowski v. Citibank, 745 F. Supp. 2d 150 (E.D.N.Y. 2010). It
is for state appellate courts and the United States Supreme Court to tell state courts that they are
wrong. See Figueroa v. Merscorp, Inc., 766 F. Supp. 2d 1305, 1324 (S.D. Fla. 2011). To the
extent Plaintiff seeks monetary damages and does not seek to overturn the state court foreclosure
judgment, this has no bearing on the Court’s decision as damages would only be available where
there was a wrongful foreclosure. See, e.g., Rene v. Citibank, 32 F. Supp. 2d 539, 543 (E.D.N.Y.

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To the extent it could be inferred from Plaintiff’s allegations that Defendant defrauded the state court by falsely
representing to the court that Plaintiff’s loss-mitigation application was denied (as inherent in such a representation
would be that it was denied lawfully after considering Plaintiff for all available programs), that too is a matter directly
related to the validity of the state court’s entry of final judgment.

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1999). Finally, the Court finds that Plaintiff did have a reasonable opportunity to raise her claims
in her state court proceeding. See Casale v. Tillman, 558 F.3d 1258, 1260 (11th Cir. 2009).
2. Plaintiff’s RESPA Claim Premised on 12 C.F.R. § 1024.36
Plaintiff has also brought her RESPA claim on the contention that after her home was sold
at foreclosure, she sent a written request for information to Defendant for information pertaining to
her loss-mitigation application. Plaintiff takes issue with a request she made for “all loss
mitigation options that the owner/investor/holder is participating in.” DE 26 ¶ 29. Plaintiff alleges
that Defendant’s response to this inquiry violated RESPA and Regulation X because Defendant’s
response did not “provide[] any information responsive to the specific request about the
owner/investor/holder’s loss-mitigation alternatives.” Id. ¶ 30. Plaintiff’s request for information
lacked clarity.
Plaintiff’s request was phrased in the present tense:

DE 26-3. At the time this request was made, November 3, 2014, Plaintiff’s home had been sold at
auction and final judgment of foreclosure had been entered. See id; DE 26 ¶ 8. Therefore, to the
extent Plaintiff sought information on the loss-mitigation programs she had been considered for in
the past, this is not what the request asked for—the request was phrased in the present tense. It is
therefore unsurprising that Defendant responded to her request by informing her that the real
property had been sold on October 3, 2015. See DE 26-5. Moreover, Regulation X permits a
servicer to refuse to provide information if the information sought is confidential or privileged
information. 12 C.F.R. § 1024.36(f)(1)(ii). Here, the letter proffered by Plaintiff contains a
signature line for her to authorize the disclosure of her personal information, but the signature line
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was left blank. DE 26-3. It is also unsurprising, and indeed it was proper, that Defendant’s
response to the request for information was to require Plaintiff to authorize the disclosure of her
private information to third parties. DE 26-5. Finally, Defendant was not required to anticipate
that Plaintiff sought information other than what Plaintiff actually asked for. See Whittaker v.
Wells Fargo Bank, N.A., No. 12-CV-98, 2014 WL 5426497, at *8 (M.D. Fla. Oct. 23, 2014)
(“[RESPA] does not require the servicer to provide the resolution or the explanation desired by the
borrower.”).
To the extent that Plaintiff sought information on the loss-mitigation programs that the
owner of Plaintiff’s note offered in the abstract during the time period Plaintiff was the borrower of
record, this is not what the request asked for. See id. (“[RESPA] does not require the servicer to
provide the resolution or the explanation desired by the borrower.”). The request for information
was phrased in the present tense and Plaintiff’s arguments on this point therefore lack relevance.
Alternatively, if Plaintiff sought this type of information (in the abstract and without connection to
her mortgage loan) this is not the type of request that Regulation X authorizes, as more fully
discussed below.
To the extent Plaintiff’s request for information is interpreted literally, Plaintiff sought
information as to what loss-mitigation programs, as of November 3, 2014, the owner of her
(former) home was offering to other borrowers in the present. Plaintiff has provided no authority
that she was entitled to this information, nor has Plaintiff provided authority that such a request
falls within the scope of a proper Regulation X request for information. By contrast, the scope of
Regulation X limits Plaintiff’s requests for information to requests that have some bearing to her
(in this case former) mortgage loan:

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Information request. A servicer shall comply with the requirements of this section
for any written request for information from a borrower that includes the name of
the borrower, information that enables the servicer to identify the borrower’s
mortgage loan account, and states the information the borrower is requesting with
respect to the borrower’s mortgage loan.
12 C.F.R. § 1024.36(a) (emphasis added).

Therefore, to the extent Plaintiff’s request for

information is interpreted literally, Plaintiff’s request for information was an improper Regulation
X request because it did not concern the borrower’s mortgage loan—it sought abstract information
on programs offered to other borrowers, in the present, by the new owner of her home.
In the alternative, Plaintiff’s RESPA claim premised on her request for information must
fail because of a lack of damages. Plaintiff again argues to this Court that the costs incurred in
connection with a RESPA request may serve as RESPA damages. The Court reiterates that the
costs incurred while preparing a written request for information from a servicer cannot serve as a
basis for damages because, at the time those expenses are incurred, there has been no RESPA
violation. See Steele v. Quantum Serv. Corp., 12-CV-2897, 2013 WL 3196544 (N.D. Tex. June
25, 2013). To hold otherwise would mean that every RESPA claim has damages built-in to the
claim. See Lal v. Amer. Home Serv., Inc., 680 F. Supp. 2d 1218, 1223 (E.D. Cal. 2010). Courts
have so held because the wording of the relevant RESPA regulation only provides for “actual
damages to the borrower as a result of the failure” to comply with RESPA. 12 U.S.C. §
2605(f)(1)(A) (emphasis added).

To the extent Plaintiff now argues that her request for

information was a result of Defendant’s earlier violation of RESPA by virtue of its failure to
consider her for all possible loss-mitigation alternatives, this is impermissible for all of the reasons
set forth above—the Rooker-Feldman doctrine precludes the Court’s consideration of those
matters.

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To the extent Plaintiff alleges emotional damages 3 that stemmed from Defendant’s
response to her request for information, this too must fail. In a prior order, this Court detailed its
concerns that Plaintiff had alleged emotional damages in a conclusory fashion that did not allow
the Court to plausibly infer a causal connection between Plaintiff’s emotional damages and
Defendant’s alleged RESPA violation. DE 25. Although Plaintiff has now provided greater
clarity with respect to her emotional damages in connection with her RESPA counts premised on
loss-mitigation allegations, Plaintiff has not provided greater clarity with respect to her emotional
damages premised upon her request for information.

Notwithstanding Plaintiff’s repetitive

protestations to the contrary, the Court is not applying a heightened pleading standard on these
matters. The Court applies the same Iqbal standard to Plaintiff’s allegations that the Court applies
to every litigant. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Plaintiff has not pled any plausible
causal connection between her alleged emotional damages and the RESPA violations of
Defendant in connection with her written request for information. Instead, the only plausible
inference that may be derived from Plaintiff’s emotional damages associated with “not knowing”
what loss-mitigation plans Defendant offered, is that Plaintiff’s emotional damages stem from not
knowing whether her foreclosure would have been prevented, had Defendant complied with
applicable law. This is equivalent to emotional damages stemming from the loss of her home.
Those damages are not traceable to Defendant’s alleged RESPA violation pertaining to Plaintiff’s
request for information and are instead traceable to the final state foreclosure judgment that this

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Plaintiff also alleges damages associated with relocation, however, Plaintiff has alleged that she has contested
eviction proceedings for one year and continues to occupy her home. DE 26 ¶ 8. Plaintiff has also failed to link, in any
way, future damages associated with moving (which clearly is a result of her foreclosure) with Defendant’s failure to
provide greater information on its internal loan-review processes.

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Court may not review.4 Furthermore, Plaintiff’s allegations on the issue of damages plainly
demonstrate how Plaintiff’s emotional damages are inextricably intertwined with the state court’s
entry of final judgment:
Bank of America’s failure to consider Borrower for a HAMP modification has
caused borrower to sustain damages. If Borrower were qualified for a HAMP
modification, Borrower would have avoided the emotional distress associated with
losing her home, as well as the costs of relocation. Alternatively, even if she would
not have qualified for a HAMP modification, Borrower went to substantial effort,
and incurred expense including but not limited to expenses associated with
professional assistance with her HAMP application, in order to be considered for a
HAMP modification. As a result of Bank of America’s failure to consider her for
the HAMP program, Borrower’s efforts and expenditures relating to her HAMP
application were wasted.
...
Bank of America’s failure to provide Borrower with the information that she
requested under 12 C.F.R § 1024.36, has caused her to sustain actual damages,
including but not limited to the costs associated with preparing and sending her
Request for Information, and emotional distress.
DE 26 ¶¶ 26, 31.
For all of the foregoing reasons, Defendant’s Second Motion to Dismiss is granted and
Plaintiff’s Amended Complaint is dismissed. Plaintiff has had ample opportunity to amend her
pleading and litigate this case. Further amendments would be futile. See Bryant v. Dupree, 252
F.3d 1161, 1163 (11th Cir. 2001). Accordingly, the Court’s dismissal is with prejudice.
IV.

CONCLUSIONS AND RULING

It is therefore ORDERED AND ADJUDGED that Defendant’s Second Motion to
Dismiss [DE 27] is GRANTED, that Plaintiff’s Amended Complaint is DISMISSED WITH

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Because the Court finds that Plaintiff’s RESPA claim is substantively deficient, the Court declines to hypothetically
consider whether Plaintiff has properly alleged statutory damages by referencing non-parties, in other cases that have
been closed for various reasons, including settlement; Plaintiff has failed to brief that issue with legal authority.

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PREJUDCE, that the Clerk of the Court is directed to CLOSE THIS CASE, and that all other
pending motions are DENIED AS MOOT.
DONE and ORDERED in Chambers, Fort Pierce, Florida, this 12th day of November,
2015.

________________________________
ROBIN L. ROSENBERG
UNITED STATES DISTRICT JUDGE
Copies furnished to Counsel of Record

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