Sutton et al v. OCWEN Loan Servicing, LLC
Filing
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ORDER granting 8 Motion to Dismiss. The Complaint is DISMISSED WITH PREJUDICE. Closing Case. Signed by Judge Beth Bloom on 8/18/2016. (pes) 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-81234-BLOOM/Valle
RODERICK SUTTON and
JACQUELINE PETERSON,
Plaintiffs,
v.
OCWEN LOAN SERVICING, LLC,
Defendant.
_____________________________________/
ORDER ON MOTION TO DISMISS
THIS CAUSE is before the Court upon Defendant Ocwen Loan Servicing, LLC’s
(“Defendant”) Motion to Dismiss, ECF No. [8], Plaintiffs Roderick Sutton and Jacqueline
Peterson’s (collectively, “Plaintiffs”) Complaint, ECF No. [1-1] at 8. 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
Plaintiffs initially filed this action on June 17, 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, Plaintiffs
seek 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.
Case No. 16-cv-81234-BLOOM/Valle
Plaintiffs allege that they mailed a written Request for Information (“RFI”) to Defendant
pursuant to Regulation X. Id. ¶ 14; Ex. A, ECF No. [1-1] at 17 (the “RFI”). Plaintiffs sent their
RFI by certified mail, which Plaintiffs and their counsel tracked through the certified mailing
tracking number. See id. ¶ 15. The RFI was delivered to Defendant on February 13, 2016 and the
certified return receipt (the “Certified Receipt”) was signed by Defendant’s agent that same day.1
See Certified Receipt, Ex. B, ECF No. [1-1] at 23-24. Plaintiffs allege that they did not receive a
written acknowledgment to Plaintiffs’ RFI within the required timeframe and, therefore, sent a
follow-up Notice of Error letter (“NOE”) to Defendant. Compl. ¶ 16.
Plaintiffs bring two counts against Defendant for its alleged violation of 12 U.S.C.
§ 2605(k). In Count I, Plaintiffs allege that Defendant violated RESPA § 2605(k) through its
violation of Regulation X, 12 C.F.R. § 1024.36(c), by failing to acknowledge receipt of the RFI
within five days. See Compl. ¶¶ 25-26. In Count II, Plaintiffs allege that “[t]hrough its own
conduct, Defendant has shown a pattern of disregard to the requirements imposed upon
Defendants” by Regulation X. Id. ¶ 33. As to damages, Plaintiffs claim that as a “direct and
proximate cause of Defendant’s failure to comply with Regulation X and RESPA,” Plaintiffs
have “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. Plaintiffs also claim that they are entitled to
statutory damages for Defendant’s violation as alleged in Count II. See id. ¶¶ 34-35. Defendant
filed the instant Motion to Dismiss on July 15, 2016. Plaintiffs’ Response and Defendant’s Reply
timely followed. See ECF Nos. [11], [15].
II. LEGAL STANDARD
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
1
Defendant asserts that it received the RFI letter on February 17, 2016. See Mot. at 2.
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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-unlawfullyharmed-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 the Complaint on a number of grounds, including: (1)
Defendant did indeed send an acknowledgment letter two days after receipt of the RFI, a fact
omitted from the Complaint; (2) Plaintiffs failed to comply with paragraph 20 of Plaintiffs’
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mortgage, which requires Plaintiffs to provide reasonable opportunity to cure an alleged breach;
and (3) the Complaint fails to allege any facts that would constitute a pattern or practice of
RESPA violations.
A.
Count I – Violation of 12 U.S.C. § 2605(k)
Plaintiffs claim that Defendant violated RESPA § 2605(k) through its violation of
Regulation X. See Amended Complaint ¶¶ 22-23.2 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
[(“BCFP”)], 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 1024.36(c) of Regulation X, under the title
“Acknowledgment of receipt,” provides that
Within five days (excluding legal public holidays, Saturdays, and Sundays) of a
servicer receiving an information request from a borrower, the servicer shall
provide to the borrower a written response acknowledging receipt of the
information request.
12 C.F.R. § 1024.36(c).
Defendant argues that Plaintiffs’ claim must fail because Defendant indeed timely and
adequately responded to the RFI. According to Defendant, it timely sent an acknowledgment
letter directly to Plaintiffs on February 19, 2016 acknowledging the RFI. This letter is attached to
Defendant’s Motion. See Ex. 2, ECF No. [8-2] (the “Acknowledgment Letter”).3 Plaintiffs
2
Both parties have urged the Court to review the RFI, NOE, and Certified Receipt attached to the
Complaint, and the Court finds the documents central to Plaintiffs’ claim. Accordingly, the Court will
review the attachments as appropriate in adjudicating the Motion. See Wilchombe v. TeeVee Toons, Inc.,
555 F.3d 949, 959 (11th Cir. 2009).
3
“Generally, the district court must convert a motion to dismiss into a motion for summary judgment if it
considers materials outside the complaint. Fed. R. Civ. P. 12(b). A court may, however, consider
documents attached to a motion to dismiss without converting the motion into one for summary judgment
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appear to concede that the Acknowledgment Letter was indeed sent by Defendant, and even that
it was sent within the time required under section 1024.36(c). See Response, ECF No. [11] at 23. Plaintiffs, however, take issue with the fact that the letter was sent directly to Plaintiffs
themselves, rather than to Plaintiffs’ attorneys. Id. The question before the Court, therefore, turns
on whether an acknowledgment of receipt of an RFI may be sent directly to the consumer
ultimately requesting the information, or whether it must be sent to the consumer’s attorney who
has mailed the RFI. The Court finds the former more consistent with a plain reading of the
statute.
Plaintiffs maintain that, construing the statute in favor of Plaintiffs and emphasizing that
the statute is “[f]irst and foremost . . . a consumer protection statute,” Resp. at 2 (citing Bennett v.
Bank of America, N.A., 126 F. Supp. 3d 871, 879 (E.D. Ky. 2015)), the Acknowledgment Letter
was due directly to Plaintiffs’ law firm within five days and not to Plaintiffs themselves.
Plaintiffs argue that unless all responses are given to the consumer’s agent, the law firm cannot
make a determination of what RESPA consumer rights were violated and require a remedy.4
Plaintiffs further argue that determining otherwise would “turn the 12(b)(6) standard on [its]
head.” Resp. at 3. The Court disagrees.
Although the RFI letter requests that all responses to the RFI be forwarded directly to
Korte & Wortman, P.A. and provides a corresponding address, the Court declines to read into the
statute a requirement that an acknowledgment need be sent to a borrower’s attorney in order to
if the documents are (1) central to the plaintiff's claim and (2) undisputed.” Weiss v. 2100 Condo. Ass'n,
Inc. @ Sloan's Curve, No. 12-CV-80065, 2012 WL 8751122, at *1 (S.D. Fla. Oct. 17, 2012) (citing Day
v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005)). The Acknowledgment Letter is undisputed because
Plaintiffs do not challenge its authenticity and the Court finds that it is central to Plaintiffs’ claims.
Accordingly, the Court will consider this Letter without converting the Motion into one for summary
judgment.
4
Defendant contends that this argument “underscores the ‘gotcha’ nature of this lawsuit.” Reply, ECF
No. [15] at 2.
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satisfy the statutory requirements. Indeed, under the plain meaning of 12 C.F.R. § 1024.36(c),
the statute does not contain a requirement with respect to where an acknowledgment should be
sent. Plaintiffs have not cited to—nor has the Court identified—any legal authority stating
otherwise. Because Plaintiffs do not dispute the existence or authenticity of the Acknowledgment
Letter or that it was timely mailed, and because the Court declines to rule that a lender is
required to mail an acknowledgment to a borrower’s agent and not the borrower him or herself,
the Acknowledgment Letter conclusively shows that Count I of the Complaint must fail. As
such, it is dismissed with prejudice.5
B.
Count II – Statutory Damages
For related reasons, the Court must also dismiss Count II, Plaintiffs’ “pattern or practice”
claim for statutory damages. “The following damages are recoverable under RESPA for a section
2605 violation: ‘(A) any actual damages to the borrower as a result of the failure; and (B) any
additional damages, as the court may allow, in the case of a pattern or practice of noncompliance
with the requirements of this section, in an amount not to exceed $1,000.’” McLean v. GMAC
Mortgage Corp., 595 F. Supp. 2d 1360, 1365 (S.D. Fla. 2009), aff’d, 398 F. App’x 467 (11th Cir.
2010) (quoting 12 U.S.C. § 2605(f)(1)). “[D]amages are an essential element in pleading a
RESPA claim.” Renfroe v. Nationstar Mortgage, LLC, 822 F.3d 1241, 1246 (11th Cir. 2016). In
5
The Court notes that Defendant also timely acknowledged receipt of Plaintiffs’ RFI by signing the
Certified Receipt. This Court has previously held that a certified mail receipt constitutes a “written
response” within the meaning of section 1024.36(c). See Meeks v. Ocwen Loan Servicing LLC, No. 16CV-81003, 2016 WL 3999570, at *6 (S.D. Fla. July 26, 2016). Defendant, however, presents this
argument for the first time in its reply brief. See In re Egidi, 571 F.3d 1156, 1163 (11th Cir. 2009)
(“Arguments not properly presented in a party's initial brief or raised for the first time in the reply brief
are deemed waived.”). Accordingly, the Court’s decision does not rest upon this basis. Further, because
the Court has determined that the Acknowledgment Letter satisfies the requirements under section
1024.36(c), the Court does not reach Defendant’s argument that Plaintiffs failed to provide reasonable
opportunity to cure pursuant to the mortgage agreement.
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Renfroe, the Eleventh Circuit recently “observe[d] without ruling on the question, that the use of
‘additional’” at § 2605(f)(1) “seems to indicate that a plaintiff cannot recover pattern-or-practice
damages in the absence of actual damages.” Id. at 1247 n.4. Shortly thereafter, the Supreme
Court issued its decision in Spokeo, Inc. v. Robins, instructing lower courts as to the standing
requirements necessary for a claim asserting a statutory violation. As the Supreme Court
explained, standing requires a plaintiff to have “(1) suffered an injury in fact, (2) that is fairly
traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a
favorable judicial decision.” Spokeo, Inc., 136 S. Ct. at 1547 (internal citations omitted). “To
establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally
protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural
or hypothetical.’” Id. at 1548 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). “For
an injury to be particularized, it must affect the plaintiff in a personal and individual way.” Id.
(quotations omitted). As to the “concrete” requirement, the Supreme Court explained that
A “concrete” injury must be “de facto”; that is, it must actually exist. See Black’s
Law Dictionary 479 (9th ed. 2009). When we have used the adjective “concrete,”
we have meant to convey the usual meaning of the term—“real,” and not
“abstract.” Webster’s Third New International Dictionary 472 (1971); Random
House Dictionary of the English Language 305 (1967). Concreteness, therefore, is
quite different from particularization.
Id Importantly, “Article III standing requires a concrete injury even in the context of a statutory
violation.” Id. at 1549. Here, and as explained above, Plaintiffs have not suffered a concrete
injury in fact. Therefore, pursuant to the Eleventh Circuit’s persuasive dicta in Renfroe and the
Supreme Court’s guidance in Spokeo, Plaintiffs cannot assert a statutory violation, and Count II
is dismissed.
Moreover, courts have interpreted the term “pattern or practice” in accordance with the
usual meaning of the words, suggesting “a standard or routine way of operating.” McLean, 595
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F. Supp. 2d at 1365 (quoting In re Maxwell, 281 B.R. 101, 123 (Bankr. D. Mass. 2002)). Failure
to respond to one, or even two qualified written requests does not amount to a “pattern or
practice.” See id.; In re Tomasevic, 273 B.R. 682 (Bankr. M.D. Fla. 2002). In Renfroe, the
Eleventh Circuit held that statutory damages may be sufficiently plead where, in addition to the
alleged RESPA violation against a plaintiff, the complaint alleges unrelated RESPA violations.
See 822 F.3d at 1247. While a plaintiff need not plead the “identities of other borrowers, the
dates of the letters, and the specifics of their inquiries” to survive dismissal, Iqbal and Twombly
still require that a plaintiff plead “enough facts to state a claim to relief that is plausible on its
face.” Id. (quoting Twombly, 550 U.S. at 570). In this case, Plaintiffs have alleged merely that
“[t]hrough its own conduct Defendant has shown a pattern of disregard to the requirements
imposed upon Defendants by Federal Reserve Regulation X.” Compl. ¶ 33. This claim fails to
allege an impermissible “standard or routine way of operating,” and Count II is dismissed. See
McLean, 595 F. Supp. 2d at 1365.
III. CONCLUSION
For the reasons stated above, it is ORDERED AND ADJUDGED that Defendant’s
Motion to Dismiss, ECF No. [8], is GRANTED. The Complaint is DISMISSED WITH
PREJUDICE. The Clerk is instructed to CLOSE this case.
DONE AND ORDERED in Miami, Florida, this 18th day of August, 2016.
_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record
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