Mussell et al v. Mortgage Electronic Registration Systems, Inc. (MERS) et al

Filing 30

MEMORANDUM DECISION AND ORDER. IT IS ORDERED: The Report and Recommendation entered on May 14, 2014 22 shall be, and is hereby, INCORPORATED by reference and ADOPTED in its entirety. Defendants' Motion to Strike or, in the Alternative, Motio n to Dismiss 13 is GRANTED. Defendants' Motion to Stay Discovery 17 is DEEMED MOOT. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
TIM MUSSELL and CAROL
MUSSELL,

Case No. 1:13-cv-00188-BLW
MEMORANDUM DECISION AND
ORDER

Plaintiffs,
v.
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
METLIFE HOME LOANS, A
DIVISION OF METLIFE BANK, N.A.
FIRST HORIZON HOME LOAN
CORPORATION,
Defendants.

INTRODUCTION
On May 14, 2014, United States Magistrate Judge Ronald E. Bush issued a Report
and Recommendation (Dkt. 22), recommending that Defendants’ Motion to Dismiss
(Dkt. 13) be granted, and that Defendants’ Motion to Stay Discovery be deemed moot.
Any party may challenge a magistrate judge’s proposed recommendation by filing
written objections within fourteen days after being served with a copy of the Magistrate
Judge’s Report and Recommendation. See 28 U.S.C. § 636(b)(1)(C). The district court
must then “make a de novo determination of those portions of the report or specified
proposed findings or recommendations to which objection is made.” Id. The district court

MEMORANDUM DECISION AND ORDER - 1

may accept, reject, or modify in whole or in part, the findings and recommendations
made by the Magistrate Judge. Id.; see also Fed. R. Civ. P. 72(b).
Plaintiffs filed an objection challenging Judge Bush’s recommendation that the
defendants’ motion to dismiss be granted. After considering the plaintiffs’ arguments and
conducting a de novo review of the record, the Court finds that Judge Bush correctly
recommended that the motion to dismiss be granted.
DISCUSSION
Plaintiffs’ objection is not altogether easy to follow. Suffice it to say that plaintiffs
dispute Judge Bush’s decision. However, a review of the record supports Judge Bush’s
analysis and conclusion.
Judge Bush accurately explained why Plaintiffs’ Real Estate Settlement
Procedures Act (“RESPA”) fails. Judge Bush noted that to the extent it provides a private
cause of action, RESPA requires “loan servicers” to respond to certain borrower inquiries
regarding the servicing of a loan, including that the loan servicer respond to a “qualified
written request,” (known as a “QWR”) within 60 days. 12 U.S.C. § 2605(e). Although
Plaintiffs assert that they made such a request, as pointed out by Judge Bush, the Ninth
Circuit has ruled that a demand for access to the original promissory note is not a written
request for information relating to the servicing of a home loan. Williams v. Wells Fargo,
N.A., 2010 WL 1463521 at *3 (N.D. Cal April 13 2010). And according to Medrano v.
Flagstar Bank, FSB, 704 F.3d 661 (9th Cir. 2012), information regarding “servicing” of

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the loan does not include information about the transactions and circumstances
surrounding a loan’s origination.
As noted by Judge Bush, Plaintiffs’ letters to MetLife did not allege any errors
with the loan account nor did they contain any indication that Plaintiffs sought
information relating to the servicing of the loan. Accordingly, Plaintiffs’ letters were not
QWRs, and they did not meet the § 2605(e)(1)(A) requirement that the QWR contain a
request for information related to the servicing of the loan.
Likewise, Judge Bush correctly noted that Plaintiffs’ RESPA claim failed to allege
any actual damages. Section 2605 provides: “Whoever fails to comply with this section
shall be liable to the borrower . . . for any actual damages to the borrower as a result of
the failure . . . .” 12 U.S.C. § 2605(f)(1)(A). “[A]lleging a breach of RESPA duties alone
does not state a claim under RESPA. Plaintiffs must, at a minimum, also allege that the
breach resulted in actual damages.” Swanson v. EMC Mortgage Corp., 2009 WL
3627925, *7 (E.D. Cal. 2009).
Regarding Plaintiffs’ Truth In Lending Act (“TILA”) claim, Judge Bush correctly
noted that actions under TILA must be brought within one year of the violation. 15
U.S.C. § 1640(e). Here, the deed of trust assignment to MetLife was recorded November
21, 2011, indicating Plaintiffs should have been notified by December 21, 2011. Thus,
Plaintiffs had until December 21, 2012 to file their TILA claim, but did not do so until
March 13, 2013. Therefore, the TILA claim is time-barred.

MEMORANDUM DECISION AND ORDER - 3

Plaintiffs’ Fair Debt Collection Practices Act (“FDCPA”) claim also fails.
Plaintiffs argue that MetLife violated the FDCPA by not responding to their inquiries
about the loan and then foreclosing upon their property. But actions related to foreclosure
proceedings are not covered by the provisions of the FDCPA. Cherian v. Countrywide
Home Loans, Inc., 2012 WL 5879281, at *4 (D. Idaho Nov. 20, 2012). Lenders and
mortgage companies taking steps involved in foreclosures are not “debt collectors”
within the meaning of the FDCPA. Ines v. Countrywide Home Loans, Inc., 2008 WL
2795875, *3 (S.D. Cal. July 18, 2008) (citing Williams v. Countrywide, 504 F. Supp. 2d
176, 190 (S.D. Tex. 2007).
Finally, Plaintiffs’ claim for separation of note and deed of trust also fails.
Plaintiffs contend that the Uniform Commercial Code requires that Defendants prove
they are entitled to enforce the note. This is known as the “show me the note”
theory. This argument has been rejected by the Supreme Court of Idaho as a tactic to
avoid an otherwise legal non-judicial foreclosure in Idaho. See e.g., Trotter v. Bank of
N.Y. Mellon et al., 275 P.3d 857, 862 (Idaho 2012); see also Meyer v. Bank of America,
N.A., 2011 WL 458762, *3 (D. Idaho 2011). Judge Bush properly explained that the
power to conduct a trustee’s sale granted by the Deed of Trust is not equivalent to
enforcing an instrument under the Uniform Commercial Code. There is no requirement
under Idaho law for the production of the note prior to foreclosing upon the property, a
rule that holds in other jurisdictions as well. See, e.g., Diessner v. MERS, 618 F. Supp. 2d

MEMORANDUM DECISION AND ORDER - 4

1184, 1187 (D. Ariz. 2009); see also Wayne v. HomEq Servicing, Inc., 2008 WL
4642595, *3 (D. Nev. Oct. 16, 2008). Accordingly, Plaintiffs’ claim that Defendants
were not entitled to enforce the Note because they did not comply with the Uniform
Commercial Code fails.
ORDER
IT IS ORDERED:
1. The Report and Recommendation entered on May 14, 2014 (Dkt. 22) shall
be, and is hereby, INCORPORATED by reference and ADOPTED in its
entirety.
2. Defendants’ Motion to Strike or, in the Alternative, Motion to Dismiss
(Dkt. 13) is GRANTED.
3. Defendants’ Motion to Stay Discovery (Dkt. 17) is DEEMED MOOT.
4. The Court will enter a separate judgment in accordance with Federal Rule
of Civil Procedure 58.

DATED: September 25, 2014

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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