Buyea v. Select Portfolio Servicing, Inc.

Filing 41

ORDER denying 22 Defendant's Motion to Dismiss. Answer due by 10/14/2016. Signed by Judge Robin L. Rosenberg on 10/11/2016. (nkl)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 9:16-CV-80347-ROSENBERG/HOPKINS
THOMAS BUYEA,
Plaintiff,
v.
SELECT PORTFOLIO SERVICING, INC.,
Defendant.
____________________________________/
ORDER DENYING DEFENDANT’S MOTION TO DISMISS
THIS CAUSE is before the Court on Defendant’s Motion to Dismiss Plaintiff’s Amended
Complaint and Incorporated Memorandum of Law [DE 22]. The Court has reviewed
Defendant’s Motion, Plaintiff’s Response thereto [DE 25], and Defendant’s Reply [DE 27], and
is otherwise fully advised in the premises. For the reasons set forth below, Defendant’s Motion is
DENIED.
I.

BACKGROUND 1

This is an action for violation of 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”). On December 21, 2015, Plaintiff Thomas Buyea (“Plaintiff”) delivered a written request for
information (“RFI”) to Defendant Select Portfolio Servicing, Inc. (“Defendant”), the servicer of
Plaintiff’s mortgage loan. See DE 19 ¶¶ 11, 14–15. In his RFI, Plaintiff requested inter alia
“[t]he identity, address and telephone number of the current owner or assignee of [Plaintiff’s]
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The background facts set forth herein are drawn from Plaintiff’s Amended Complaint [DE 19]. For the purposes of
this Order, the Court views the Amended Complaint in the light most favorable to Plaintiff and accepts all of
Plaintiff’s well-pleaded facts as true. See Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1066 (11th Cir. 2007)
(citing St. Joseph’s Hosp. v. Hospital Corp. of America, 795 F.2d at 954 (11th Cir. 1986)).

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Loan.” See id. at 9. According to Plaintiff, Defendant’s response to the RFI was both insufficient
and untimely under 12 C.F.R. § 1024.36(d). See id. ¶¶ 18–25. Plaintiff seeks damages incurred
as a result, including photocopying costs, postage costs, and reasonable attorney’s fees in
connection with reviewing Defendant’s insufficient response and drafting a Notice of Error
(“NOE”). See id. ¶¶ 16, 26–30. In the Motion presently before the Court, Defendant seeks
dismissal of Plaintiff’s Amended Complaint with prejudice for failure to state a claim.
II.

LEGAL STANDARD

To adequately plead a claim for relief, Rule 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). Under Rule
12(b)(6), a motion to dismiss should be granted only if the plaintiff is unable to articulate
“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). “A claim has facial plausibility when the pleaded factual content
allows the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (citing Twombly, 550 U.S. at 556). When
determining whether a claim has facial plausibility, “a court must view a complaint in the light
most favorable to the plaintiff and accept all of the plaintiff’s well-pleaded facts as true.”
Martinez, 480 F.3d at 1066.
III.

ANALYSIS AND DISCUSSION

Defendant argues that Plaintiff’s Amended Complaint should be dismissed on two
grounds: (1) Defendant was not a “servicer” as defined under RESPA and Regulation X in
December of 2015 and therefore was not required to respond to Plaintiff’s RFI in compliance
with RESPA and Regulation X; and (2) alternatively, Defendant’s response to Plaintiff’s RFI
was both sufficient and timely as a matter of law. Defendant further contends that the Court may

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consider Defendant’s response—a copy of which is attached to Defendant’s Motion but not to
Plaintiff’s Complaint—in ruling on Defendant’s Motion.
1. The Court may consider Defendant’s response to Plaintiff’s RFI without
converting Defendant’s Motion to a motion for summary judgment.
“A court is generally limited to reviewing what is within the four corners of the
complaint on a motion to dismiss.” Austin v. Modern Woodman of Am., 275 F. App’x 925, 926
(11th Cir. 2008) (quoting Bickley v. Caremark RX Inc., 461 F.3d 1325, 1329 n.7 (11th Cir.
2006)). “[A] document attached to a motion to dismiss may be considered by the court without
converting the motion into one for summary judgment only if the attached document is: (1)
central to the plaintiff’s claim and (2) undisputed.” Miranda v. Ocwen Loan Servicing, LLC, 148
F. Supp. 3d 1349, 1353 (S.D. Fla. 2015) (quoting Horsley v. Feldt, 304 F.3d 1125, 1134 (11th
Cir. 2002)). “In this context, ‘undisputed’ means that the authenticity of the document is not
challenged.” Id. (quoting Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir.2005)). “In determining
whether a document is central to the plaintiff’s case, the court asks ‘whether the plaintiff would
have to offer the document to prove his case.’” Id. (quoting Lockwood v. Beasley, 211 F. App’x
873, 877 (11th Cir. 2006)).
Here, the Court may consider the documents attached to Defendant’s Motion without
converting the Motion to a motion for summary judgment. Plaintiff asserts in his Amended
Complaint that Defendant’s response to his RFI was insufficient and untimely. To prove these
claims, Plaintiff would have to offer the documents comprising Defendant’s allegedly
insufficient and untimely response. Defendant’s response to Plaintiff’s RFI is therefore central to
Plaintiff’s claims. Additionally, Plaintiff does not appear to challenge the authenticity of the
documents attached to Defendant’s Motion, with the sole exception of referring to these
documents once in passing as “the many letters that [Defendant] claims it sent.” See DE 25 at 9

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(emphasis added). Therefore, the Court may consider the documents comprising Defendant’s
response to Plaintiff’ RFI in evaluating Defendant’s Motion.
2. Defendant is a “servicer” under RESPA and Regulation X.
As defined under RESPA, “[t]he term ‘servicer’ means the person responsible for
servicing of a loan.” 12 U.S.C § 2605(i)(2). “Servicing,” in turn, “means 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);
see also 12 C.F.R. § 1024.2(b).
At the time Plaintiff delivered his RFI to Defendant in December of 2015, Plaintiff had
been in default on his mortgage loan for over a year. Plaintiff’s RFI, a copy of which is attached
to his Amended Complaint, 2 requests “[a] current reinstatement statement.” See DE 19 at 9.
Thus, Plaintiff’s Amended Complaint itself establishes that Plaintiff was in default on his
mortgage loan at the time of his RFI. In addition, Defendant’s response to Plaintiff’s RFI shows
that Plaintiff was 409 days delinquent on his mortgage loan as of December 15, 2015, and that
Plaintiff owed $3,130.54 in past-due payments as of December 23, 2015. See DE 22-1 at 3, 23.
Finally, Plaintiff does not dispute anywhere in his Response to Defendant’s Motion that he was
in default. See DE 25. In other words, at the time Plaintiff delivered his RFI, Defendant was not
receiving any scheduled periodic payments from Plaintiff. Thus, Defendant contends, it was not
a “servicer” and had no obligation to respond to Plaintiff’s RFI under RESPA and Regulation X.
Defendant finds support for this contention among the decisional law of other
jurisdictions. See, e.g., Daw v. Peoples Bank & Trust Co., 5 F. App’x 504, 505 (7th Cir. 2001);

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“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.” Fed. R.
Civ. P. 10(c).

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Toscione v. Wells Fargo Home Mortgage, No. 8:13-CV-02065-T, 2013 WL 10721711, at *1
(M.D. Fla. Sept. 18, 2013). The parties do not cite, and the Court has not found, any opinions
emanating from the Eleventh Circuit Court of Appeals or the Southern District of Florida
addressing this argument. Having considered the decisions in Daw and Toscione, as well as the
language of the statutory definitions of “servicing” and “servicer,” the Court is persuaded that
Defendant was no longer servicing Plaintiff’s loan, but remained a servicer, and was therefore
obligated to respond to Plaintiff’s RFI.
In Daw, the Seventh Circuit Court of Appeals concluded that the defendant-lender
Peoples Bank & Trust Company (“Peoples Bank”) was no longer “servicing” a mortgage loan as
that term is defined under RESPA once the plaintiff-borrower Nancy Daw (“Daw”) had
defaulted on that loan. See Daw, 5 F. App’x at 505. Daw defaulted in October of 1997. Id. Four
months later, Peoples Bank assigned its interest in the loan to Daw’s parents. Id. Daw then sued
Peoples Bank, alleging that it had violated 12 U.S.C. § 2605(b) by failing to provide advance
notice of the assignment. Id. As the Seventh Circuit explained, § 2605(b) requires a “servicer of
any federally regulated mortgage loan [to] notify the borrower in writing of any assignment, sale,
or transfer of the servicing of the loan to any other person.” Id. The Court concluded, however,
that Peoples Bank did not assign, sell, or transfer the servicing of any loan, reasoning:
“Servicing” is defined 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.
Once Daw defaulted, there were no longer any scheduled periodic payments to
make or to collect, and thus there were no servicing rights to assign, sell, or
transfer.”
Id. (internal citations omitted). Peoples Bank therefore had no obligation to provide advance
notice of the assignment under § 2605(b).

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Relying in part on Daw, the Middle District of Florida concluded in Toscione that the
defendant Wells Fargo Home Mortgage (“Wells Fargo”) was not “servicing” a loan within the
meaning of 12 U.S.C. § 2605(e)(1). See Toscione, 2013 WL 10721711, at *1. While the factual
background of that case is not discussed in detail, it appears that the plaintiff Doreen Toscione
(“Toscione”) had written a letter requesting information about her mortgage loan. See id. Under
§ 2605(e)(1), a servicer has certain obligations when it receives a qualified written request for
information relating to the servicing of a loan, with which Wells Fargo allegedly had not
complied. See id. At the time Toscione wrote her letter, however, the loan had been foreclosed
and sold at a judicial sale. See id. Citing the statutory definition of “servicing,” and relying on
Daw, the court therefore concluded that Wells Fargo was not servicing the loan. See id. (citing
12 U.S.C. § 2605(i)(3)). Accordingly, the court dismissed Toscione’s complaint with prejudice
for failure to state a claim on which relief may be granted. See id.
Toscione does not stand for the proposition that servicing ends only after foreclosure and
judicial sale, rather than upon default. While the court noted that Toscione’s loan had been
foreclosed and sold at a judicial sale, it cited Daw—in which the borrower had only defaulted on
her loan—as authority for its conclusion that Wells Fargo was no longer servicing the loan. See
id. Describing the holding in Daw, the Toscione court wrote that the Seventh Circuit Court of
Appeals had “conclude[ed] that once the plaintiff defaulted on the loan, the bank was no longer
accepting scheduled period payments and was therefore not a ‘servicer’ of the loan.” See id.
(citing Daw, 5 F. App’x at 505). That Toscione’s loan had gone beyond default to foreclosure
and judicial sale was therefore not critical to the court’s holding in that case.
While this Court agrees that servicing may end prior to foreclosure and judicial sale, the
Court sees an important distinction between the definitions of servicing and servicer that the

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Toscione court appears to have overlooked. In the instant case, Plaintiff was in default at the time
he delivered his RFI to Defendant, and had been for over a year. Defendant therefore was not
“servicing” his loan. However, the fact that Defendant was not servicing the loan does not mean
that Defendant was no longer a servicer. As defined under RESPA, “[t]he term ‘servicer’ means
the person responsible for servicing of a loan.” 12 U.S.C § 2605(i)(2) (emphasis added).
Whether or not Defendant was actively servicing the loan, Defendant remained responsible for
servicing the loan at the time it received Plaintiff’s RFI. Defendant was therefore a servicer and
was obligated to respond to Plaintiff’s RFI.
3. Defendant’s response to Plaintiff’s RFI was insufficient.
Plaintiff’s RFI requested inter alia “[t]he identity, address and telephone number of the
current owner or assignee of [Plaintiff’s] Loan.” See DE 19 at 9. Defendant in turn responded
with only the identity of—and no address, telephone number, or other contact information for—
the owner of the loan. See DE 22-1 at 2. At issue in the instant case is whether Defendant’s
response complied with 12 C.F.R. § 1024.36(d), which requires a servicer who “receives an
information request for the identity of, and address or other relevant contact information for, the
owner or assignee of a mortgage loan” to:
(i) Provid[e] the borrower with the requested information and contact
information, including a telephone number, for further assistance in writing; or
(ii) Conduct[] a reasonable search for the requested information and provid[e] the
borrower with a written notification that states that the servicer has determined
that the requested information is not available to the servicer, provides the basis
for the servicer’s determination, and provides contact information, including a
telephone number, for further assistance.
12 C.F.R § 1024.36(d)(1) (emphasis added).
While Defendant provided Plaintiff with the identity of the owner of the loan, it did not
provide Plaintiff with either “the address or other relevant contact information” for the owner of

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the loan, as requested by Plaintiff. Its response to Plaintiff’s RFI was therefore insufficient under
RESPA and Regulation X. Because Defendant’s response was insufficient, the Court need not
address whether Defendant’s response was timely.
IV.

CONCLUSION

For the foregoing reasons, it is ORDERED AND ADJUDGED as follows:
1. Defendant’s Motion to Dismiss Plaintiff’s Amended Complaint [DE 22] is DENIED.
2. Defendant shall answer Plaintiff’s Amended Complaint no later than October 14,
2016.
DONE AND ORDERED in Chambers, Fort Pierce, Florida, this 11th day of October,
2016.

_______________________________
ROBIN L. ROSENBERG
UNITED STATES DISTRICT JUDGE

Copies furnished to:
Counsel of record

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