Crenshaw v. Specialized Loan Servicing LLC
Filing
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ORDER granting in part and denying in part 11 Motion to Dismiss 1 Notice of Removal (State Court Complaint) for Failure to State a Claim; Dismissing Plaintiff's Complaint; Closing Case. Signed by Judge Beth Bloom on 8/23/2016. (ls)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 16-cv-81215-BLOOM/Valle
ROBERT CRENSHAW,
Plaintiff,
v.
SPECIALIZED LOAN SERVICING, LLC,
Defendant.
_____________________________________/
ORDER ON MOTION TO DISMISS
THIS CAUSE is before the Court upon Defendant Specialized Loan Servicing LLC’s
(“Defendant”) Motion to Dismiss, ECF No. [11], Plaintiff Robert Crenshaw’s (“Plaintiff”)
Complaint, ECF No. [1]. The Court has carefully reviewed the record, the parties’ briefs, and the
applicable law. For the reasons set forth below, the Motion is granted.
I. BACKGROUND
Plaintiff initially filed this action on June 9, 2016 in the Fifteenth Judicial Circuit in and
for Palm Beach County, Florida, 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”). See Compl. ¶¶ 1-2. Specifically, Plaintiff
seeks remedies for Defendant’s alleged failure to comply with § 2605(k) of RESPA and §
1024.36 of Regulation X. See id. ¶ 3. Defendant timely removed the matter to this Court, and
now moves to dismiss the Complaint with prejudice.
Plaintiff alleges that he mailed a written Request for Information (“RFI”) to Defendant
pursuant to Regulation X. Id. ¶ 14; Ex. A, ECF No. [1-1] at 16 (the “RFI”). Plaintiff sent his RFI
Case No. 16-cv-81215-BLOOM/Valle
by certified mail, which Plaintiff and his counsel tracked through the certified mailing tracking
number. See Compl. ¶ 15. The RFI was delivered to Defendant on January 14, 2016 and the
certified return receipt (the “Certified Receipt”) was signed by Defendant’s agent on January 15,
2016. See Certified Receipt, Ex. B, ECF No. [1-1] at 20. Plaintiff alleges that he did not receive a
sufficient written response to the RFI within the required timeframe, and therefore sent a
follow-up Notice of Error letter (“NOE”) to Defendant. Compl. ¶ 17.
Plaintiff brings two counts against Defendant for its alleged violation of 12 U.S.C.
§ 2605(k). In Count I, Plaintiff alleges that Defendant violated RESPA § 2605(k) through its
violation of Regulation X, 12 C.F.R. § 1024.36(d), by failing to provide a sufficient written
acknowledgment to the RFI within the required timeframe. See Compl. ¶¶ 25-26. In Count II,
Plaintiff alleges that “[t]hrough its own conduct and the conduct of its designated counsel[,]
Defendant has shown a pattern of disregard to the requirements imposed upon Defendants” by
Regulation X. Id. ¶ 34. As to damages, Plaintiff claims that as a “direct and proximate result of
Defendant’s failure to comply with Regulation X and RESPA,” Plaintiff has “incurred actual
damages in certified postage costs of less than $100.00 for mailing the RFI and NOE, and
attorney’s fees and costs.” Id. ¶¶ 28. Plaintiff also claims that he is entitled to statutory damages
for Defendant’s violation as alleged in Count II. See id. ¶¶ 35-36. Defendant filed the instant
Motion to Dismiss on July 14, 2016, asserting that venue is improper here and that Plaintiff has
failed to state a claim. Plaintiff’s Response and Defendant’s Reply timely followed. See ECF
Nos. [14], [19].
II. LEGAL STANDARD
A. 12(b)(3) Venue
“On a motion to dismiss based on improper venue, the plaintiff has the burden of
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showing that venue in the forum is proper.” Wai v. Rainbow Holdings, 315 F. Supp. 2d 1261,
1268 (S.D. Fla. 2004) (citing Interlease Aviation Investors II (Aloha) L.L.C. v. Vanguard
Airlines, Inc., 262 F.Supp.2d 898, 913 (N.D. Ill. 2003); Indymac Mortgage Holdings, Inc. v.
Reyad, 167 F .Supp. 2d 222, 237 (D. Conn. 2001); U.S. Envtl. Prot. Agency v. Port Auth. of New
York & New Jersey, 162 F. Supp. 2d 173, 183 (S.D.N.Y. 2001); McCracken v. Automobile Club
of So. Calif., Inc., 891 F. Supp. 559, 560 (D. Kan. 1995)). “In considering a motion under Rule
12(b)(3), a court must accept the facts in a plaintiff’s complaint as true.” Walker v. Hallmark
Bank & Trust, Ltd., 707 F. Supp. 2d 1322, 1325 (S.D. Fla. 2010); Hannes v. Conference on
Jewish Material Claims against Germany, Inc., 2012 WL 3814254, at *2 (S.D. Fla. Sept. 4,
2012) (same). A court may also “consider matters outside the pleadings if presented in proper
form by the parties.” MGC Commc’ns, Inc. v. BellSouth Telecomms., Inc., 146 F .Supp. 2d 1344,
1349 (S.D. Fla. 2001); see also Webb v. Ginn Fin. Servs., 500 F. App’x 851, 854 (11th Cir.
2012) (consideration of evidence outside the pleading appropriate on Rule 12(b)(3) motion).
However, “[w]here conflicts exist between allegations in the complaint and evidence outside the
pleadings, the court must draw all reasonable inferences and resolve all factual conflicts in favor
of the plaintiff.” Malik v. Hood, 2012 WL 1906306, at *1 (S.D. Fla. May 25, 2012).
B. 12(b)(6) Failure to State a Claim
A pleading in a civil action must 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-
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harmed-me accusation”). Nor can a complaint 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)). “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.’” Id. (quoting Twombly,
550 U.S. at 570).
When reviewing a motion to dismiss, 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 Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012); Miccosukee
Tribe of Indians of Fla. v. S. Everglades Restoration Alliance, 304 F.3d 1076, 1084 (11th Cir.
2002). Although the Court is required to accept all of the allegations contained in the complaint
and exhibits attached to the pleadings as true, this tenet is inapplicable to legal
conclusions. Iqbal, 556 U.S. at 678; Thaeter v. Palm Beach Cty. Sheriff’s Office, 449 F.3d 1342,
1352 (11th Cir. 2006) (“When considering a motion to dismiss . . . the court limits its
consideration to the pleadings and all exhibits attached thereto.”) (internal quotation marks
omitted).
III. DISCUSSION
Defendant moves to dismiss on numerous grounds, including: (1) improper venue; (2)
Plaintiff has failed to set forth sufficient facts regarding Defendant’s failure to adequately
respond to the RFI; and (3) Plaintiff has failed to set forth any facts regarding a pattern or
practice of violating RESPA. Because the issue of venue would preclude the Court’s decision as
to the remaining arguments, the Court will first address whether Plaintiff can satisfy RESPA’s
venue provision.
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Under RESPA, venue is proper “in the United States district court or in any other court of
competent jurisdiction, for the district in which the property involved is located, or where the
violation is alleged to have occurred.” 12 U.S.C. § 2614.1 In asserting that venue is indeed
proper, Plaintiff cites to a range of venue statutes, concepts, and associated legal theories—
including Florida’s venue statute and an argument against forum non conveniens, which has not
been raised by Defendant. See Resp., ECF No. [14] at 2, 5-8; Compl. ¶¶ 6, 7. Unfortunately for
Plaintiff, however, none of this figurative mud has any application. Further, and more
egregiously, Plaintiff misrepresents and improperly quotes section 2614, incorrectly asserting
that venue is proper “where a ‘substantial part of the events of omissions giving rise to the claim
occurred.’” Compl. ¶ 5 (purportedly quoting 12 U.S.C. § 2614). However, this language is found
nowhere in section 2614, which, again, provides only that venue is proper in the district “in
which the property involved is located, or where the violation is alleged to have occurred.” 12
U.S.C. § 2614.
The parties do not dispute that the property involved is located in Roundrock, Texas. See
RFI (stating that the letter is a request for information for the property located in Roundrock,
Texas). Therefore, one of the proper districts to bring this action would have been the Western
District of Texas. Under RESPA, the only remaining proper venue is therefore where the
violation occurred.
Defendant asserts that this proper venue would be Littleton, Colorado—where Defendant
is located as well as the location where Plaintiff sent his RFI. See RFI (addressing letter to
Specialized Loan Servicing LLC in Littleton, Colorado). Defendant maintains that, based on
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Although the question of whether venue is “wrong” or “improper” is generally governed by 28 U.S.C. §
1391, this statute does not apply where venue is “otherwise provided by law.” 28 U.S.C. § 1391(a).
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Plaintiff’s own allegations, the alleged violation is Defendant’s act of omission in failing to
timely provide an adequate written response to the RFI and, logically, the only location where
Defendant can fail to take an action would be where it is located.
Plaintiff counters that a RESPA violation “technically does not arise until such time as
the borrower’s agent/counsel becomes aware of the unresponsiveness, and then has to assess
where Defendant dropped the ball, and either go through the trouble of generating a Notice of
Error, or filing suit.” Resp. at 4. A plaintiff’s awareness of the breach and correlative damages,
according to Plaintiff, is therefore the last element to determining the existence of a RESPA
violation. Id. at 5. It appears that at least one judge in this District has tentatively contemplated
that Plaintiff’s proposition could be correct. In his unpublished decision in Preller v. Select
Portfolio Servicing, Inc., Judge Middlebrooks dismissed the plaintiff’s complaint for improper
venue pursuant to RESPA. 16-cv-80293-DMM, slip op. (S.D. Fla. May 31, 2016). Judge
Middlebrooks emphasized that the property at issue was located in Maryland and the defendant’s
offices in Utah, but further noted that “[e]ven assuming Plaintiff is correct that the violation was
not complete until Defendant failed to respond—that response was originally directed to
Plaintiff’s attorney’s office in Clearwater, Florida, which is located in the Middle, not Southern
District of Florida.” Id. at * 3 (emphasis added). Judge Middlebrooks concluded, therefore, that
“[w]hile the venue would be proper in Maryland, it might also be proper in Utah, or, possibly,
the Middle District of Florida.” Id. at * 4 (emphasis added). The Court, however, finds Plaintiff’s
argument, and his reliance upon the Preller Court’s tentative language, unpersuasive.
“To state a RESPA claim for failure to respond to a [qualified written request (“QWR”)],
a plaintiff must allege that ‘(1) the defendant is a loan servicer under the statute; (2) the plaintiff
sent a [QWR] consistent with the requirements of the statute; (3) the defendant failed to respond
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adequately within the statutorily required days; and (4) the plaintiff has suffered actual or
statutory damages.’” Graham v. Ocwen Loan Servicing, LLC, No. 16-80011-CIV, 2016 WL
1573177, at *2 (S.D. Fla. Apr. 19, 2016) (quoting 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)). The Court agrees
with Defendant’s assertion that the location where the violation occurred is not the same as
where a plaintiff allegedly incurs damages and the statute specifies only one element of the cause
of action, the violation. The Court declines to read more into the statute than what the plain
meaning provides. Indeed, “[w]hat Congress meant to do in such circumstances is obvious: limit
the districts where claims arising under the pertinent laws could be brought. The Court's function
is to interpret laws, not improve upon them.” Price v. Countrywide Home Loans, Inc., No.
CV205-015, 2005 WL 2354348, at *6 (S.D. Ga. Sept. 26, 2005). The Court agrees with
Defendant that a plaintiff “cannot create venue in a particular jurisdiction by hiring counsel who
happens to have an office located in that jurisdiction.” Mot. at 2.2 Accordingly, the Court finds
that venue is improper in this District.
IV. CONCLUSION
For the reasons stated above, the Court determines that venue is improper. The decision
whether to transfer or dismiss a case for improper venue “is left to the sound discretion of the
district court.” Roofing & Sheet Metal Servs., Inc. v. La Quinta Motor Inns, Inc., 689 F.2d 982,
985 (11th Cir. 1982). Because venue would be proper in either Texas or Colorado, this action is
properly dismissed. Accordingly, it is ORDERED AND ADJUDGED that Defendant’s Motion
to Dismiss, ECF No. [11], is GRANTED IN PART. Plaintiff’s Complaint, ECF No. [1], is
DISMISSED. The Clerk is instructed to CLOSE this case.
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Having determined that venue is improper, the Court does not reach Defendant’s arguments that the
Complaint has failed to state a claim upon which relief can be granted.
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DONE AND ORDERED in Miami, Florida, this 23rd day of August, 2016.
_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record
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