BOWEN v. DITECH FINANCIAL LLC et al

Filing 114

ORDER granting in part and denying in part 66 Motion to Dismiss for Failure to State a Claim. By JUDGE JOHN A. WOODCOCK, JR. (MFS)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
MARK A. BOWEN,
Plaintiff,
v.
DITECH FINANCIAL LLC, f/d/b/a/
GREEN TREE SERVICING LLC,
and FEDERAL NATIONAL
MORTGAGE ASSOCIATION,
Defendants.

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2:16-cv-00195-JAW

ORDER ON MOTION TO DISMISS
The plaintiff brings this action against the owner of his loan and the loan
servicer for unfair and misleading debt collection attempts in violation of statutory
and common law. The defendants moved to dismiss the complaint and, in support of
their motion, they have attached several documents.

The Court grants in part and

denies in part the defendants’ motion to dismiss (ECF No. 66).
I.

PROCEDURAL BACKGROUND
On April 5, 2016, Mark A. Bowen filed a complaint against Ditech Financial

LLC (Ditech), f/d/b/a Green Tree Servicing LLC (Green Tree), and the Federal
National Mortgage Association (Fannie Mae) alleging common law and statutory
violations for “repeated coercive and harassing attempts to collect on monies not owed
by [him].” Compl. at 1 (ECF No. 1). Ditech and Fannie Mae answered on June 3,
2016. Defs.’ Answer and Affirmative Defenses (ECF No. 11).

On November 18, 2016, Mr. Bowen filed a motion for leave to amend his
Complaint due to newly discovered facts and evidence, Pl.’s Mot. for Leave to Amend
Compl. at 1 (ECF No. 25), which the Court granted without objection on December
13, 2016. Order (ECF No. 28). Mr. Bowen filed the First Amended Complaint on
December 14, 2016. First Am. Compl. (ECF No. 29) (Am. Compl.). The Amended
Complaint contains six counts: Count I—Fraud and Fraudulent Misrepresentation;
Count II—violations of the Maine Unfair Trade Practices Act (MUTPA), 5 M.R.S. §§
205-A et seq.; Count III—violations of the Maine Fair Debt Collection Practices Act
(MFDCPA), 32 M.R.S. §§ 11001 et seq.; Count IV—violations of the Fair Debt
Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seq.; Count V—violations of
the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. §§ 2601 et seq.; and
Count VI—Breach of Fiduciary Duty. Id. The Amended Complaint contains thirtythree exhibits as attachments. Id. Attachs. 1–33.
On January 13, 2017, the Defendants moved to dismiss Mr. Bowen’s First
Amended Complaint. Mot. to Dismiss First Am. Compl. (ECF No. 48). Four days
later, both parties notified the Court of their intent to file summary judgment
motions. Ditech Financial LLC f/d/b/a Green Tree Servicing LLC and Federal
National Mortgage Association Pre-Conference Filing (ECF No. 49); Pl.’s Pre-Filing
Conference Mem. (ECF No. 50). At the Rule 56(h) pre-filing conference on January
30, 2017, the Court suggested that instead of briefing three separate dispositive
motions, the parties submit the case to the Court on a stipulated record. Procedural
Order at 1–2 (ECF No. 59). Counsel initially agreed, pending approval from their

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clients, and so the Court dismissed without prejudice the Defendants’ Motion to
Dismiss the First Amended Complaint. Id. at 2–3. However, after consulting with
their clients, the parties informed the Court during a teleconference on February 7,
2017 that they preferred to proceed with traditional dispositive motions, and the
Court vacated its earlier procedural order. Further Procedural Order (ECF No. 63).
On February 8, 2017, the Defendants refiled the motion to dismiss, including
eight exhibits, and requested oral argument. Mot. to Dismiss First Am. Compl. (ECF
No. 66) (Defs.’ Mot.); Mot. for Oral Arg./Hr’g (ECF No. 67). Neither these eight
exhibits nor the exhibits attached to the Amended Complaint included a document
the Defendants relied upon in their motion to dismiss—namely, the parties’ April 24,
2015 confidential settlement agreement and release with regard to the Defendants’
foreclosure action, captioned Green Tree Servicing LLC v. Mark A. Bowen, et al., No.
AUSBSC RE 2014-00044 (State of Maine Superior Court, Androscoggin). See Defs.’
Mot. Attachs. 1–8. On March 10, 2017, Mr. Bowen objected to the motion to dismiss.
Pl. Mark A. Bowen’s Opp’n to Defs.’ Mot. to Dismiss (ECF No. 82) (Pl.’s Opp’n).1
II.

THE FACTUAL ALLEGATIONS
A.

Background

On December 20, 2005, Mr. Bowen and his now-ex-wife, Nancy E. Bowen,
executed and delivered to Bank of America, N.A. (BOA) a promissory note in the
amount of $204,422.00. Am. Compl. ¶ 20. To secure the promissory note, Mr. Bowen

After some discussion at oral argument, Mr. Bowen’s counsel agreed to withdraw the motion
to exclude or convert motion to dismiss (ECF No. 68). The oral withdrawal is docketed at ECF Number
113.
1

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and Nancy Bowen executed a mortgage deed in favor of BOA securing the property
located at 17 Orchard Lane, Minot, Maine 04258. Id. ¶ 21. As a part of the mortgage,
BOA created an escrow account to pay real estate taxes and hazard insurance on the
property, and BOA used a portion of Mr. Bowen’s monthly payment to fund the escrow
account. Id. ¶¶ 22–23.
B.

Loan Modification Agreement

In 2012, Mr. Bowen fell behind on the loan due to his divorce from Nancy
Bowen, and he applied for a loan modification through BOA. Id. ¶¶ 26–27. Mr.
Bowen received a Fannie Mae Trial Period Plan in February 2013, which required
three payments of $928.24 due on March 1, April 1, and May 1, 2013. Id. ¶¶ 27–28.
The Plan stated that if Mr. Bowen made the trial plan payments on time and
continued to meet all of the eligibility requirements of the modification program, his
mortgage would be permanently modified. Id. ¶ 29. Mr. Bowen accepted the Trial
Period Plan offer and made all three payments to BOA on time. Id. ¶ 30.
On May 30, 2013, BOA sent Mr. Bowen a permanent Fannie Mae Loan
Modification Agreement with an effective date of July 1, 2013. Id. ¶ 31. Under the
Modification Agreement and Clarity Commitment, the new monthly payment on the
loan would be $930.67 and would include principal, interest, taxes, and insurance.
Id. Additionally, according to the terms of the Modification Agreement, $38,495.97
would be capitalized into the loan for a new modified principal balance of $217,698.97
to bring the loan current. Id. ¶ 32. The modification allowed for $65,309.66 of the
new principal balance to be deferred, interest free. Id. The Modification Agreement

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stated that of the $38,495.97 capitalized amount, $8,202.81 would be applied to past
due interest, $26,662.46 would be applied to servicing expenses, and $3,630.70 would
be applied to taxes and insurance that had been advanced by BOA. Id. ¶ 33.
Mr. Bowen signed and returned the Modification Agreement to BOA in a
timely manner. Id. ¶ 34.
C.

Transfer of Loan Servicing

BOA transferred servicing of the loan to Green Tree effective June 1, 2013,
and the mortgage deed was eventually assigned to Green Tree on June 18, 2013. Id.
¶¶ 25, 35. Green Tree was responsible for servicing the loan on behalf of and under
the authority and direction of Fannie Mae. Id. ¶ 36. Green Tree was obligated to
follow the Fannie Mae Single Family Servicing Guide in servicing Mr. Bowen’s loan.
Id. ¶ 37. Additionally, Green Tree was responsible for the handling and maintenance
of the escrow account on the loan. Id. ¶ 38.
D.

Green Tree’s Underfunding of the Escrow Account

Green Tree did not implement the loan modification and treated Mr. Bowen’s
loan as if it were in default when it began servicing the loan. Id. ¶ 39. On or around
the end of January 2014, Green Tree did capitalize at least $38,495.97 in interest,
servicing expense, and escrow advances to the unpaid principal balance of the loan.
Id. ¶ 40. However, in this process, Green Tree failed to properly apply the correct
amounts per the Clarity Commitment and Loan Modification Agreement to the
escrow account. Id. ¶ 41. Mr. Bowen alleges, upon information and belief, that more
servicing fees had accrued than were accounted for on the Clarity Commitment and

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that Green Tree made the unilateral decision to pay themselves back about
$27,521.86 in servicing fees and then allocate the remaining $2,384.66 to the escrow
account. Id. ¶¶ 42, 43. This decision contradicted the agreed-upon terms of the
Clarity Commitment and was done without Mr. Bowen’s consent or knowledge. Id. ¶
44. The amount allocated to the escrow account was short of the $3,630.70 the Clarity
Commitment stated would be allocated to the escrow account, and the account was
underfunded by $1,246.04. Id. ¶ 45.
Per the terms of Mr. Bowen’s mortgage, monthly payments are to be applied
in the following order: interest, then principal, then escrow. Id. ¶ 46. If the payment
is not enough to cover all three, it is placed in unapplied funds until another payment
makes up the difference. Id. Because the monthly payment is not applied to the
month in which it is received, the loan is considered past due and eventually in
default. Id. By disregarding the Clarity Commitment and Loan Modification and
“secretly applying the capitalized funds to their own questionable servicing fees first,”
Ditech thereby left a deficiency in the escrow account that, two years later, it would
seek to recoup as part of an increased monthly payment. Id. ¶ 47. In doing so, Ditech
put Mr. Bowen’s loan at risk of default. Id. Because this was not disclosed to Mr.
Bowen, he was not able to dispute any of the extra undisclosed servicing fees. Id. ¶
48.
E.

Foreclosure Action & Settlement Agreement

On March 10, 2014, Green Tree initiated a foreclosure action captioned Green
Tree Servicing LLC v. Mark A. Bowen, et al., No. AUSBSC RE 2014-00044 (State of

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Maine Superior Court, Androscoggin) (foreclosure action) that should not have been
initiated due to the permanent loan modification. Id. ¶ 49. Mr. Bowen amended his
answer to the foreclosure action and added counterclaims on January 5, 2015. Id. ¶
50. As alleged in Mr. Bowen’s counterclaims in the foreclosure action, including
claims for fraud and negligent misrepresentations and violations of the MFDCPA,
FDCPA, RESPA, and MUTPA, Green Tree failed to properly implement the
permanent modification that brought the loan current, and Green Tree continued to
attempt to collect on the pre-modified terms of the loan and monies not owed by Mr.
Bowen. Id. ¶ 50.
The foreclosure action was transferred to the Maine Business and Consumer
Court on January 22, 2015, and the docket number changed to BCD-RE-15-01. Id. ¶
51. On April 17, 2015, the parties entered into a confidential settlement agreement
and release. Id. ¶ 52. The parties filed a Stipulation of Dismissal of the foreclosure
action dated April 30, 2015, stating that “[e]ach party shall bear its own costs and
attorneys’ fees.” Id. ¶ 53.
F.

Reinstatement Quote & Green Tree’s Improper Fee Collection

After the effective date of the settlement, Green Tree, through their attorneys
at Shapiro and Morley, provided Mr. Bowen a reinstatement quote of $21,056.30 good
through May 12, 2015 to reinstate the loan per the terms of the permanent loan
modification. Id. ¶ 54. The loan was considered in foreclosure status at the time the
reinstatement quote was issued. Id. ¶ 55.

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The itemization of the reinstatement amount included (a) twenty-three past
due payments, including principal, interest, and escrow amounts for taxes and
insurance, from July 1, 2013 through May 1, 2015 per the terms of the loan
modification, (b) late fees of $37.53, and (c) unpaid amounts in the loan’s suspense
account of $386.64. Id. ¶ 56. The reinstatement quote did not include any funds
allegedly owed for any additional advanced escrow amounts or make any reference to
any escrow deficiency. Id. ¶ 57. Green Tree failed to provide a history of the escrow
account within ninety days of the reinstatement. Id. ¶ 60.
On May 8, 2015, Mr. Bowen hand-delivered a check in the amount of
$21,056.30 to counsel for Green Tree to effectuate the reinstatement. Id. ¶ 58. In a
mortgage statement dated June 14, 2015, Green Tree acknowledged receipt of the
$21,056.30 payment and reflected the terms of the loan modification in the regular
monthly payment due of $930.67 for principal, interest, and escrow. Id. ¶ 59. In
addition, Green Tree attempted to collect $35.70 in “Total Fees and Charges Due” for
a grand total of $966.37. Id. Mr. Bowen made a payment of $966.37 to Green Tree
on or around June 25, 2015 for July to cover the additional $35.70 charge. Id. ¶ 61.
In a mortgage statement dated July 14, 2015, Green Tree again attempted to
collect $35.70 in “Total Fees and Charges Due.” Id. ¶ 62. Mr. Bowen made a payment
of $966.37 to Green Tree on or around July 28, 2015 for August. Id. ¶ 63.
Mr. Bowen contacted Green Tree to dispute the $35.70 charge several times by
phone, explaining that the fees were part of a settlement and he should not have to
pay them. Id. ¶ 64. In a letter dated July 28, 2015, Green Tree claimed the $35.70

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was a proper fee on the account. Id. ¶ 65. When Green Tree failed to correct the
error, Mr. Bowen retained counsel to assist him with his dispute. Id. ¶ 66.
Through counsel, on August 3, 2015, Mr. Bowen delivered a Qualified Written
Request (QWR), including a Notice of Error (NOE) and Request for Information (RFI),
to Green Tree explaining that Mr. Bowen did not owe the fees and charges Green
Tree was attempting to collect. Id. ¶ 67. Green Tree received the letter on August
10, 2015. Id.
In a mortgage statement dated August 14, 2015, Green Tree again attempted
to collect $35.70 in “Total Fees and Charges Due.” Id. ¶ 68. However, in a letter
dated August 20, 2015, Green Tree stated that it had determined that the additional
monthly fee of $35.70 was improper and would be removed from the loan. Id. ¶ 69.
Enclosed with the letter was a document entitled “Advances,” which showed a series
of amounts paid from the account that include attorney’s fees, legal costs, filing fees,
and foreclosure costs. Id.
Even though it had determined that the fee was improper, in a letter dated
August 26, 2015, Green Tree stated that it would take out a payment from Mr.
Bowen’s bank account that included the $35.70 fee. Id. ¶ 70. Green Tree did take
this money from Mr. Bowen’s account. Id. ¶ 71.
G.

Ditech Continues to Collect Improper Fee

On or around August 27, 2015, Green Tree delivered a notice to Mr. Bowen
about their “new name.” Id. ¶ 72. The letter stated that as of August 31, 2015, Green
Tree and Ditech Mortgage Corp. would be known as Ditech. Id.

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In a mortgage statement dated September 7, 2015, Ditech listed only the
principal, interest, and escrow payment of $930.67 due and omitted the disputed
$37.50 fee. Id. ¶ 73. However, in a mortgage statement dated October 7, 2015, Ditech
again attempted to collect $35.70 in “Total Fees and Charges Due.” Id. ¶ 74. Mr.
Bowen made a payment of $966.37 to Ditech on or around November 2, 2015. Id. ¶
75. Mr. Bowen contacted Ditech directly to dispute the fees again. Id. ¶ 76.
Mr. Bowen paid his counsel $50.00 to send another QWR, RFI, and NOE to try
and resolve the problem. Id. ¶ 77. On November 3, 2015, through counsel, Mr. Bowen
delivered a second QWR with NOE and RFI to Ditech outlining why Mr. Bowen did
not owe the alleged fees and costs and demanding that Ditech adjust the account
accordingly. Id. ¶ 78. Ditech received the letter on November 6, 2015. Id. Also on
November 3, 2015, Mr. Bowen, through counsel, delivered a demand letter to Ditech
pursuant to MUTPA outlining Ditech’s failure to properly maintain Mr. Bowen’s loan
account and unfair conduct of attempting to collect amounts not owed. Id. ¶ 79.
Ditech received the demand letter on November 9, 2015. Id.
In a mortgage stated dated November 7, 2015, Ditech again attempted to
collect $35.70 in “Total Fees and Charges Due.” Id. ¶ 80. Mr. Bowen made a payment
of $966.37 to Ditech on or around December 21, 2015. Id. ¶ 81.
On December 4, 2015, Mr. Bowen’s online Ditech account showed that his
payments were being unapplied. Id. ¶ 82. Ditech also misstated that the next
payment amount due was $823.57. Id.

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Mr. Bowen paid at least $142.80 in fees he did not owe and should not have
been billed by Ditech. Id. ¶ 83. On December 9, 2015, Ditech delivered to Mr. Bowen,
care of his counsel, a letter explaining that the advances that had been applied to the
escrow account before the modification took place were waived and there was a zero
balance owed. Id. ¶ 84. Ditech promised to remove the fees and refund $142.80 to
the account. Id. The $142.80 was never refunded in cash or check to Mr. Bowen. Id.
¶ 85. This was money he never should have had to pay to Ditech. Id.
H.

Improper Fees Charged for Escrow Shortage & Deficiency

In an Annual Escrow Disclosure Statement dated January 25, 2016, Ditech
alleged that Mr. Bowen had an escrow shortage of -$1,109.22 and escrow deficiency
of -$1,702.16. Id. ¶ 86. It stated that the alleged amounts owed would be charged
over a 36-month period beginning March 1, 2016: $30.87 per month extra for the
shortage and $47.28 per month extra for the alleged deficiency, making Mr. Bowen’s
new monthly payment $992.28. Id. ¶ 86. Ditech included a payment coupon for
$2,811.38 for the alleged amounts due to escrow. Id. This is the first escrow analysis
Ditech performed on the loan and delivered to Mr. Bowen. Id. ¶ 87.
The escrow deficiency of -$1,702.16 alleged in the Escrow Disclosure Statement
was comprised in part of the underfunded $1,246.04 that should have been applied
to the escrow account per the terms of the Clarity Commitment and Loan
Modification but were “unilaterally and secretly applied and capitalized as part of
Ditech’s servicing fees instead.” Id. ¶ 88. Ditech “line[d its] own pockets” by paying
servicing fees first thus causing the escrow account to be underfunded, and it now is
trying to collect on that underfunded amount as an escrow deficiency over thirty-six
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months.

Id. ¶ 89.

This money should never have been treated as an escrow

deficiency—Ditech should have fulfilled its fiduciary duty and funded the escrow
account first and then its own pockets second. Id. ¶ 90. A deficiency in servicing fees
does not carry the same consequences as a deficiency in an escrow account. Id. ¶ 91.
Per the mortgage, a loan payment is not placed in unapplied funds solely because
there are outstanding servicing fees due. Id. However, if a payment is short due to
increased escrow amounts, it gets placed in unapplied funds until another payment
comes in the next month to make up the difference, at which time it is applied to the
previous month causing the borrower to be past due and at risk of default. Id.
Had Ditech applied the $1,246.04 to the escrow account per the agreements,
Mr. Bowen’s escrow deficiency would not have been nearly what was alleged and
Ditech would not be trying to collect an extra $47.28 per month over thirty-six
months. Id. ¶ 92. Even if the $1,246.04 is found to be money technically owed on the
loan, per the Loan Modification, it should not be owed as an escrow amount and
definitely is not owed over a thirty-six-month period. Id. ¶ 93. It should have been
added to the deferred principal of the loan to be paid at the end of the forty-year loan
term in 2053. Id. Yet Ditech has now demanded these amounts be paid as escrow
over thirty-six months and has actually placed the loan in default, and in jeopardy of
foreclosure, for Mr. Bowen’s failure to pay the full overstated monthly payment of
$992.28 for March through June 2016. Id. ¶ 94. Because of Ditech’s continuous
threats of default and foreclosure, Mr. Bowen did start paying the inflated $992.28
per month in July 2016 and has paid this amount each month. Id. ¶ 95. The total

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payments made by Mr. Bowen since March 2016 to the present should have been
more than sufficient to keep the loan current. Id. ¶ 96.
Ditech had many chances to correct their misapplication of the capitalized
amounts by performing an escrow analysis at the time the loan modification was
booked to capture and capitalize the funds, at the time of the reinstatement to include
any escrow advances in the quote, and shortly after the reinstatement, but it did not.
Id. ¶ 97. No alleged escrow advances that would have equaled the escrow deficiency
of -$1,702.16 were included in the May 2015 reinstatement quote in violation of
Ditech’s policies and Fannie Mae’s Servicing Guide, section E-3.2-08. Id. ¶ 98. When
Ditech finally did perform an escrow analysis and discovered a deficiency, it did not
investigate the cause of the deficiency. Id. ¶ 99.
I.

Ditech’s Continued Treatment of Loan as if in Default

On February 10, 2016, through counsel, Mr. Bowen sent a settlement demand
letter to Ditech per MUTPA explaining the unfair and deceptive trade practices of
the extra payments charged to and taken from Mr. Bowen’s account in the amount of
$35.70 each month and the inaccurate escrow deficiency.

Id. ¶ 100.

Ditech

acknowledged receipt of the demand letter in a letter dated February 22, 2016. Id. ¶
101.
Ditech failed to apply Mr. Bowen’s February payment for March in the amount
of $930.67 to the loan and instead placed it in suspense because it allegedly did not
constitute a “full payment.” Id. ¶ 102. Ditech reported a monthly payment due on
March 1, 2016 of $992.28 on Mr. Bowen’s online account. Id. ¶ 103. In a monthly
billing statement dated March 7, 2016, Ditech alleged an amount due of $1,984.56
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which included current and alleged past due payments due in the inflated monthly
amounts of $992.28. Id. ¶ 104.
Mr. Bowen has made every payment due on time in the amount of at least
$930.67 per the terms of the Loan Modification Agreement since reinstating his loan.
Id. ¶ 105. In a letter dated March 17, 2016, Ditech stated that all maintenance has
been completed on the loan to credit the overpayments and the escrow analysis was
correct, including the alleged shortage and deficiency. Id. ¶ 106. Ditech stated that
the final calculations determining the escrow shortage and deficiency were correct
and that Mr. Bowen would owe an additional $47.28 per month for the alleged
deficiency and $30.81 per month extra for the escrow shortage. Id.
On April 5, 2016, Mr. Bowen filed this current action.

Id. ¶ 107.

The

implementation of the loan modification, along with the reinstatement payment,
should have brought the loan current. Id. ¶ 108. Any alleged escrow advances should
have either been capitalized into the modification or provided for in the reinstatement
quote. Id. Ditech should have known about and corrected its error in misapplying
the capitalized amounts at the time it calculated the reinstatement quote, at the time
it performed the escrow analysis, and definitely after the demand letter was delivered
in February 2016. Id. ¶ 109. Ditech did not conduct a proper investigation of the
issue and therefore did not determine its error until sometime after the Complaint
was filed in April 2016. Id. ¶ 110. Even upon its knowledge of the mishandling of
the loan and escrow account, it did not correct the error and, to the date of the filing
of the Amended Complaint, had not corrected the error. Id. ¶ 111. Instead, it is

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passing its mistakes on to Mr. Bowen to fix by paying an escrow amount he should
not have to be paying at all, especially over thirty-six months. Id. ¶ 112. Because of
Ditech’s mishandling of the escrow account, it is now billing Mr. Bowen at least an
extra $34.59 per month that he otherwise should not have to pay. Id. ¶ 113. Mr.
Bowen has paid at least $172.95 more than he should have had to pay on the loan
($34.59 x five months) and he continues to pay the $34.59 extra each month because
he is terrified Ditech will again attempt to wrongfully foreclose on his home. Id. ¶
114. Based on his payments from the date of reinstatement to the present, Mr. Bowen
should be considered current on his loan. Id. ¶ 115. Ditech has put all monthly
payments less than $992.28 in suspense and is treating Mr. Bowen’s loan as if in
default. Id. ¶ 116.
Since April, each monthly billing statement has alleged a past due amount on
the account. Id. ¶ 117. In a letter dated April 1, 2016, Ditech offered loss mitigation
assistance to Mr. Bowen, which included “information on avoiding foreclosure.” Id. ¶
118. In a letter to Mr. Bowen dated April 14, 2016, Ditech informed Mr. Bowen of
loss mitigation options as an “alternative to foreclosure.” Id. ¶ 119. In a letter dated
May 2, 2016, Ditech offered loss mitigation assistance to Mr. Bowen which included
“information on avoiding foreclosure.” Id. ¶ 120. In a letter dated July 12, 2016,
Ditech alleged Mr. Bowen was past due $1,984.56 and suggested connection with a
homeownership counselor to explore home retention options. Id. ¶ 121. In a letter
dated September 17, 2016, Ditech alleged Mr. Bowen was “past due.” Id. ¶ 122. In a
letter dated October 18, 2016, Ditech alleged Mr. Bowen was “past due.” Id. ¶ 123.

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All of these letters stated they were from a debt collector and were an attempt to
collect a debt. Id. ¶¶ 118–23.
J.

Emotional Distress

As a result of Ditech’s conduct, Mr. Bowen has experienced severe emotional
distress. Id. ¶ 127. During the conduct alleged in the previous matter against Green
Tree, Mr. Bowen began taking medication to help him sleep and deal with the anxiety
caused by Green Tree’s conduct and the fear that he might lose his home. Id. After
the settlement of the first matter with Green Tree, it took Mr. Bowen some time to
feel relieved and trust that the loan was current. Id. It was not one month after his
reinstatement of the loan that Green Tree started attempting to collect on alleged
fees and charges from Mr. Bowen. Id. When Green Tree eventually admitted its
mistake of attempting to collect the $37.50 each month in August 2015 after Mr.
Bowen and his counsel’s efforts to resolve the issue, Mr. Bowen began to feel relieved
again. Id. He did not refill his prescription for the anti-depressant/sleep medication.
Id.
However, Green Tree and Ditech’s continued collection of fees not owed and
misrepresentations about amounts owed and the status of his loan made Mr. Bowen
anxious and fearful again. Id. He suffered shortness of breath and heart palpitations.
Id. By the end of December into January 2016, Mr. Bowen felt increasingly anxious,
depressed, and worried about his home. Id. He could not sleep and would lay awake
wondering how this could be happening again and if he might really lose his house
this time. Id. He would check his online account in the middle of the night, trying to

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figure out Ditech’s errors. Id. He had to take time off from work and, at times,
struggled to get out of bed. Id. He spent less time with his children and became
irritable and short-tempered. Id. Mr. Bowen became afraid that there would be a
knock on the door from the sheriff with another foreclosure complaint even though
he was making every payment on time each month as agreed. Id. He worried about
his children and losing the home.

Id.

He started on the anti-anxiety, sleep

medication again in February 2016 but still constantly worries about his home. Id.
He checks his account daily and pours over his statements and notices wondering
what went wrong. Id. He has lacked focus at work and with his family because he is
constantly plagued with the thought of losing his home. Id. He just could not believe
that or understand why Ditech was mishandling his loan again. Id.
III.

LEGAL STANDARD
Rule 12(b)(6) requires dismissal of a complaint that “fail[s] to state a claim

upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). Under the general
pleading standards, a complaint 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). In
Ashcroft v. Iqbal, 556 U.S. 662 (2009), the United States Supreme Court elaborated
on this pleading standard in the context of a motion to dismiss: “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.’” 556 U.S. at 678 (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

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The First Circuit explained that “[t]he plausibility inquiry necessitates a twostep pavane.” García–Catalán v. United States, 734 F.3d 100, 103 (1st Cir. 2013)
(citing Rodríguez–Reyes v. Molina–Rodríguez, 711 F.3d 49, 53 (1st Cir. 2013)). “First,
the court must distinguish ‘the complaint’s factual allegations (which must be
accepted as true) from its conclusory legal allegations (which need not be credited).’”
Id. (quoting Morales–Cruz v. Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012)).
“Second, the court must determine whether the factual allegations are sufficient to
support ‘the reasonable inference that the defendant is liable for the misconduct
alleged.’” Id. (quoting Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) (quoting
Iqbal, 556 U.S. at 678)).
IV.

DISCUSSION
A.

Barred Claims

The Defendants claim that the FDCPA, MFDCPA, MUTPA, fraud, and breach
of fiduciary duty claims are barred as a matter of law. Defs.’ Mot. at 2. Specifically,
the Defendants assert that these claims are “based upon pre-settlement conduct and
are, therefore, precluded by the terms of the Settlement Agreement [from the
underlying foreclosure action].”

Id. at 8.

The Defendants contend that “[a]t a

minimum, the claims should have been known to [Mr.] Bowen at the time he executed
the settlement agreement and released all claims” and that “even if the claims or
their factual basis were unknown to [Mr.] Bowen at the time he signed the settlement
agreement, the claims are still barred” due to the broad wording of the release. Id.
at 10. They argue that even if certain of the invoices on which Mr. Bowen relies for

18

his claim were issued after the settlement, the error that serves as the basis of Mr.
Bowen’s claim occurred pre-settlement. Id.
In response, Mr. Bowen asserts that he brings the claims not based upon
mistakes Ditech made pre-settlement but rather based upon Ditech’s attempts from
June 2015 on, after the settlement, to collect on monies it was not owed and for
Ditech’s misrepresentations of an inflated escrow amount arising out of errors in the
May 2015 reinstatement. Pl.’s Opp’n at 2–3. He also argues that the Settlement
Agreement in the foreclosure action only released past and present claims up until
the effective date of the Agreement but not future claims arising out of future
misconduct. Id. at 3. He claims that the cases upon which Ditech relies deal with
pre-existing claims that ripened into causes of action due to events subsequent to the
releases, and distinguishes his claims, arguing that the underlying incidents at issue
here all took place after the date of the release. Id. at 5.
As the Court noted above and pointed out at oral argument, the Defendants
have not placed the Settlement Agreement before the Court for purposes of this
motion. Tr. of Oral Argument at 6–8, Mark A. Bowen v. Ditech Fin. LLC, f/d/b/a
Green Tree Servicing LLC, & Fed. Nat’l Mortg. Ass’n, No. 2:16-cv-00195-JAW (D. Me.
argued Sep. 5, 2017) (Tr. of Oral Argument). As the Defendants acknowledged at oral
argument, because the Defendants’ argument on this issue is premised on “the terms
of the Settlement Agreement”, Defs.’ Mot. at 8, the failure to place the terms of the
Settlement Agreement before the Court precludes the dismissal of any of Mr. Bowen’s
claims solely on the basis that the Settlement Agreement bars such claims. Tr. of

19

Oral Argument at 6–8. Accordingly, the Court dismisses this part of the Defendants’
motion to dismiss without prejudice.
B.

Debt Collector

The FDCPA2 defines a “debt collector” as “any person who uses any
instrumentality of interstate commerce or the mails in any business the principal
purpose of which is the collection of any debts, or who regularly collects or attempts
to collect, directly or indirectly, debts owed or due or asserted to be owed or due
another.” 15 U.S.C. § 1692a(6). “Creditors collecting on their own accounts are
generally excluded from the statute’s reach.” Chiang v. Verizon New Eng., Inc., 595
F.3d 26, 41 (1st Cir. 2010) (citing 15 U.S.C. § 1692a(6)(F)(ii)). The term also does not
include persons attempting to collect such debts if the “debt was not in default” at the
time it was obtained by such person. 15 U.S.C. § 1692a(6)(F)(iii). In other words,
when a debt is assigned, the FDCPA “treats assignees as debt collectors if the debt
sought to be collected was in default when acquired by the assignee, and as creditors
if it was not.” Napolitano v. Green Tree Servicing, LLC, No. 2:15-cv-00160-JAW, 2016
WL 447451, at *8, 2016 U.S. Dist. LEXIS 14122, at *24 (D. Me. Feb. 4, 2016) (quoting
Schlosser v. Fairbanks Capital Corp., 323 F.3d 534, 536 (7th Cir. 2003)); Beaulieu v.
Bank of Am. N.A., No. 1:14-cv-00023-GZS, 2014 WL 4843809, at *12 (D. Me. Sept. 29,

Mr. Bowen brings claims under both the Federal Fair Debt Collection Practice Act and the
Maine Fair Debt Collection Practices Act. Because the MFDCPA tracks the language of the FDCPA,
the claims are analyzed under the same standard, and the Court refers collectively to the two statutes
as the “FDCPA” unless otherwise noted. See Shapiro v. Haenn, 222 F. Supp. 2d 29, 44 (D. Me. 2002);
Hamilton v. Fed. Home Loan Mortg. Corp., No. 2:13-cv-00414-JAW, 2014 WL 4594733, at *18 (D. Me.
Sept. 15, 2014) (analyzing the federal and state statutes together); In re Martel, 539 B.R. 192, 194 n.4
(Bankr. D. Me. 2015) (“The Maine FDCPA mirrors the federal Act, and therefore, my analysis applies
equally to each”); Bank of Am., N.A. v. Camire, 2017 ME 20, ¶ 13, 155 A.3d 416.
2

20

2014) (collecting cases).

Courts have “look[ed] to any underlying contracts . . .

governing the debt at issue” to determine whether it is in default. Dionne v. Fed.
Nat’l Mortg. Ass’n, No. 15-cv-56-LM, 2016 WL 6892465, at *11 (D.N.H. Nov. 21, 2016)
(quoting De Dios v. Int’l Realty & Invs., 641 F.3d 1071, 1074 (9th Cir. 2016) (internal
citation omitted).
A number of courts have determined Green Tree, during the course of its homeloan servicing activities, to be a debt collector for FDCPA purposes. See, e.g., Ordonez
v. Green Tree Servicing LLC, No. 14-1284, 2016 U.S. Dist. LEXIS 88763, 2016 WL
3658684 (D. Nev. July 7, 2016); Napolitano v. Green Tree Servicing, LLC, No. 150160, 2016 U.S. Dist. LEXIS 14122, 2016 WL 447451 (D. Me. Feb. 4, 2016); Adu v.
Green Tree Servicing, LLC, No. 15-0012, 2015 U.S. Dist. LEXIS 182947, 2015 WL
12777991 (N.D. Ga. Oct. 28, 2015); Geary v. Green Tree Servicing, LLC, No. 14-0522,
2015 U.S. Dist. LEXIS 35059, 2015 WL 1286347 (S.D. Ohio Mar. 20, 2015). Courts
have rejected Green Tree’s arguments to the contrary, including in a circumstance
when the mortgage was not current at the time Green Tree acquired the servicing
rights to the loan from the originator. Grubb v. Green Tree Servicing, LLC, 2017 WL
3191521 at *8 (D.N.J. Jul. 27, 2017) (“Significantly, Green Tree acquired the right to
service Plaintiff's Mortgage after Plaintiff had defaulted on the loan. Indeed, Green
Tree, by its own admission, concedes that ‘Plaintiff was delinquent under the Loan
at the time that Green Tree acquired the servicing rights from Bank of America’ on
May 1, 2013. Therefore, because the Mortgage was not current at the time of transfer,

21

Green Tree cannot claim creditor status simply because it provided Plaintiff with
various loan mitigation options.”) (emphasis in original) (citations omitted).
Ditech argues that it is not a debt collector as a matter of law, and therefore
the FDCPA and MFDCPA claims fail. Defs.’ Mot. at 11–12. It states that the FDCPA
expressly exempts “loan servicers who obtain a debt prior to default” from the
definition of “debt collector.”

Ditech argues that there was a superseding

renegotiated payment plan in the form of the Modification Agreement, and because
Mr. Bowen was not in default based on that agreement at the time of the service
transfer, it is not a debt collector under the statute.
Mr. Bowen disputes Ditech’s contention that the loan was not in default at the
time of the service transfer. Pl.’s Opp’n at 7. He argues that the loan was in default
during the Trial Period Plan and that the Modification Agreement did not become
effective until July 1, 2013, but that servicing transferred to Green Tree, later Ditech,
on June 1, 2013. Id. at 8. Moreover, Mr. Bowen argues that, irrespective of whether
the loan was in default, Ditech treated the loan as if it was in default from the moment
it acquired servicing rights. Id. at 9–10.
The Court agrees with Mr. Bowen. In 2012, Mr. Bowen fell behind on the loan
and applied for a loan modification. Am. Compl. ¶¶ 26–27. BOA offered Mr. Bowen
a Fannie Mae Trial Period Plan, which Mr. Bowen accepted. Id. ¶¶ 27–30. On May
30, 2013, Mr. Bowen received a permanent Fannie Mae Loan Modification
Agreement. Id. ¶ 31. Green Tree began servicing the loan the next day, June 1, 2013.
Pl.’s Opp’n at 8; see also Defs.’ Mot. Attach. 4 Notice of Service Transfer (June 10,

22

2013). At oral argument, Ditech acknowledged that the Trial Period Plan was still in
effect at that time. Tr. of Oral Argument at 22–23. The Defendants are correct that
generally, if a servicer is servicing a loan under a renegotiated plan, and the
payments are timely under that new plan, the loan is not treated as if in default and
the servicer is considered a creditor, exempt from the FDCPA’s reach, rather than a
debt collector. See Bailey v. Sec. Nat’l Servicing Corp., 154 F.3d 384, 387–88 (7th Cir.
1998) (holding that loan servicers were not debt collectors because the debt under
superseding forbearance agreement was not in arrears at the time the servicers
obtained it); Dolan v. Fairbanks Capital Corp., 930 F. Supp. 2d 396, 415–16 (E.D.N.Y.
2013) (same). However, in Mr. Bowen’s case, the Loan Modification Agreement was
not effective until July 1, 2013, after the transfer of service to Green Tree, and
therefore the loan was still in default when Green Tree acquired service of the loan.
See Am. Compl. Attach. 3 Loan Modification Agreement and Clarity Commitment at
4.
In analogizing this case to Bailey, Defendants have also suggested that Mr.
Bowen’s loan was not in default under the Trial Period Plan, Tr. of Oral Argument at
22, and/or that the Trial Period Plan itself suspended the original loan’s default
status. Id. at 28. However, the relationship between the original loan and the
subsequent agreement in Bailey is different than the one in this case. In Bailey, the
“renegotiated payment plan”, specifically by its terms, “superseded” the original note.
154 F.3d at 386-87. By contrast, here, the terms of the Trial Payment Plan entered
into by Mr, Bowen suggest the opposite, noting that, other than the change in

23

monthly payment amount, “all other terms and provisions of your existing mortgage
loan remain in effect and will not change until your loan is permanently modified.”3
Defs.’ Mot. Attach. 1 Trial Period Plan at 2. It goes on to state, “You agree that all
terms and provisions of your current mortgage note and mortgage security
instrument remain in full force and effect and you will comply with those terms; and
that nothing in the Trial Period Plan shall be understood or construed to be a
satisfaction or release in whole or in part of the obligations contained in the loan
documents.”

Id. at 5.

The plain language of these terms contradicts Ditech’s

contention at oral argument that the mortgage note was not in effect. Tr. of Oral
Argument at 30 (“[W]e’re arguing that the note, the mortgage was basically not in
effect and you’re in default, they were suspended.”). The Trial Period Plan did not
supersede the original loan. Therefore, if Mr. Bowen was in default under the original
loan, the Trial Period Plan did not change that status. Put differently, at the very
least, the Court may not dismiss the Amended Complaint because there remains a
disputed factual interweaving between the Trial Plan Period and the original loan.
Moreover, Mr. Bowen alleges that, regardless of the actual status of the
mortgage note, Ditech treated the loan as if it was in default from the time it began
servicing the loan. Courts have held that the definition of debt collector extends to
any non-originating debt holder that treats the debt as if it were in default at the

The Trial Payment Plan reaffirms this in its “Frequently Asked Questions” section: “Note: This
is only a temporary Trial Period Plan. Your existing loan requirements remain in effect and
unchanged during the trial period and you will continue to receive monthly statements that will show
the payment amount based on your original home loan agreement.” Defs.’ Mot. Attach. 1 Trial Period
Plan at 3.
3

24

time of acquisition and during the servicing of the loan. Bridge v. Ocwen Fed. Bank,
FSB, 681 F.3d 355, 362–63 (6th Cir. 2012); Schlosser, 323 F.3d at 538–39; Gritters v.
Ocwen Loan Servicing, LLC, No. 14 C 00916, 2014 WL 7451682, at *4–5 (N.D. Ill.
Dec. 31, 2014) (holding servicer was a debt collector because it treated account as if
it was in default for over a year). Here, Mr. Bowen alleges that “Green Tree did not
implement the loan modification and treated Mr. Bowen’s loan as if it were in default
when it began servicing the loan.” Am. Compl. ¶ 39. He alleges that Green Tree did
so by paying its own servicing fees, leaving a deficiency in the escrow account,
initiating foreclosure in March 2014, and then continuing to allege an escrow
deficiency and that the loan was in default two years later. See id. ¶¶ 39–49, 55, 86,
117–23.
Based on these allegations, Mr. Bowen has pleaded sufficient facts to
demonstrate that Ditech is a “debt collector” under the FDCPA and MFDCPA.
C.

Fiduciary Duty

The Maine Supreme Judicial Court has described the elements of a fiduciary
relationship as: (1) “‘the actual placing of trust and confidence in fact by one party in
another,’ and (2) ‘a great disparity of position and influence between the parties’ at
issue.’” Bryan R. v. Watchtower Bible & Tract Soc’y of New York, Inc., 1999 ME 144,
¶ 19, 738 A.2d 839 (quoting Morris v. Resolution Tr. Corp., 622 A.2d 708, 712 (Me.
1993)). To demonstrate the necessary disparity of position and influence in such a
relationship, “a party must demonstrate diminished emotional or physical capacity
or . . . the letting down of all guards and bars.” Camden Nat’l Bank v. Crest Const.,

25

Inc., 2008 ME 113, ¶ 13, 952 A.2d 213 (quoting Stewart v. Machias Sav. Bank, 2000
ME 207, ¶ 11, 762 A.2d 44); see also Reid v. Key Bank of S. Me., Inc., 821 F.2d 9, 18
(1st Cir. 1987).
Standing alone, neither a creditor-debtor relationship nor a mortgageemortgagor relationship in and of itself establishes the existence of a confidential
relationship. Camden Nat’l Bank, 2008 ME 113, ¶ 15; see also Lariviere v. Bank of
N.Y. as Trustee, No. 9-515-P-S, 2010 WL 2399583, at *6 (D. Me. May 7, 2010)
(dismissing claim because plaintiffs made no factual allegations regarding the
placement of trust and confidence in loan servicers), adopted by, 2010 WL 2399556
(D. Me. June 11, 2010). However, as both parties acknowledge, Maine law suggests
that a fiduciary relationship could arise between a creditor-debtor based on the
creation and maintenance of an escrow account. See Progressive Iron Works Realty
Corp. v. E. Milling Co., 150 A.2d 760, 762 (Me. 1959) (“There is a fiduciary
relationship created by and inherent in the nature of an escrow agreement”);
Hamilton v. Fed. Home Loan Mortg. Corp., No. 2:13-cv-00414-JAW, 2015 WL 144562,
at *18 (D. Me. Jan. 12, 2015); Crandall v. Bangor Sav. Bank, No. CV-98-239, 1999
WL 35360329, at *2 (Me. Super. Ct. Nov. 4, 1999).
Although Ditech recognizes that an escrow agreement may give rise to a
fiduciary relationship under Maine law, Defs.’ Mot. at 15–16, it argues that the escrow
agreement in this situation is different because Ditech had no discretion over the
escrow account. Id. at 16–18. Ditech relies on cases from other jurisdictions that
have distinguished general escrow agreements from escrow accounts set up to meet

26

tax and insurance obligations, such as the type of escrow account at issue here. See,
e.g., Telfair v. First Union Mortg. Corp., 216 F.3d 1333, 1341–42 (11th Cir. 2000)
(citing Knight v. First Fed. Sav. & Loan Ass'n, 260 S.E.2d 511, 515 (Ga. Ct. App.
1979)) (holding that, under Georgia law, funds paid by a mortgagor to an escrow
account set up to meet tax and insurance obligations do not constitute trust properties
such that it would render the mortgagee accountable for any earnings or profits from
the funds); Palestini v. Homecomings Fin., LLC, No. 10CV1049-MMA, 2010 WL
3339459, at *5 (S.D. Cal. Aug. 23, 2010) (holding that under California law there is
no fiduciary duty for escrow account when loan servicer is acting in its conventional
role); White v. Mellon Mortg. Co., 995 S.W.2d 795, 801 (Tex. 1999) (“Payment of funds
by the mortgagor into an escrow account for the mortgagee’s use to meet tax and
insurance obligations on the property as they accrue does not create a trust or
fiduciary relationship under Texas law”) (citation omitted).
At the same time, courts in other jurisdictions have determined that escrow
accounts similar to the one in this case do give rise to such a relationship. See, e.g.,
Dolan v. Fairbanks Capital Corp., 930 F. Supp. 2d 396, 421–22 (E.D.N.Y. 2013)
(concluding that contractual language in mortgage requiring holder of note and
mortgage to make specified payments, including tax payments, from the escrow funds
gives rise to a fiduciary duty).
The Court is skeptical that a mortgagee who holds a mortgagor’s money on the
promise to pay those funds to a third entity, whether it be a taxing authority or
insurance company, does not hold the mortgagor’s funds in trust. At least on its face,

27

applying the Maine Supreme Judicial Court’s guidance in Bryan R., the mortgagor
actually places trust and confidence in the mortgagee and there is a great disparity
of position and influence between a residential mortgagor and an institutional or
governmental lender. Bryan R., 1999 ME 144, ¶ 19, 738 A.2d 839. Furthermore, a
mortgagee’s failure to comply with the terms of the escrow agreement by timely
paying the mortgagor’s taxes and insurance, could have a direct and consequential
impact on the mortgagor. But the Court need not resolve the issue.
This is because the Court must apply Maine law in resolving this issue and
Maine law, as it stands, does not distinguish among various types of escrow accounts
in determining whether an escrow agreement gives rise to a fiduciary relationship,
see Progressive Iron Works, 150 A.2d at 762, and “[f]ederal court is not the place to
make new state law.” Town & Country Motors, Inc. v. Bill Dodge Auto. Grp., Inc.,
115 F. Supp. 2d 31, 33 (D. Me. 2000); see also Ramirez v. DeCoster, 194 F.R.D. 348,
360 n.19 (D. Me. 2000) (“[A] federal court is not the forum to develop an extension of
state law.”); Douglas v. York County, 433 F.3d 143, 149 (1st Cir. 2005) (“It is not our
role to expand Maine law; that is left to the courts of Maine.”) Defendants do not
dispute this principle. Tr. of Oral Argument at 32–33.
Furthermore, Ditech’s argument requires a close analysis of the facts
surrounding the escrow agreement and the level of discretion afforded to Ditech,
which is better suited for resolution either at the summary judgment stage or later
by a factfinder. Mr. Bowen has alleged that BOA created an escrow account, which
gave rise to fiduciary obligations, that Ditech assumed responsibility over the escrow

28

account when service was transferred, and that Ditech mismanaged the escrow
account in several respects. Am. Compl. ¶¶ 171–83. Therefore, he has pleaded
sufficient facts to survive the Defendants’ motion to dismiss. The Court denies
Ditech’s motion to dismiss Count VI.
D.

RESPA

Pursuant to RESPA:
If any servicer of a federally related mortgage loan receives a qualified
written request from the borrower (or an agent of the borrower) for
information relating to the servicing of such loan, the servicer shall
provide a written response acknowledging receipt of the correspondence
within 5 days . . . unless the action requested is taken within such
period.
12 U.S.C. § 2605(e)(1)(A). Not later than thirty days after the receipt of the QWR,
the servicer is required to make appropriate corrections in the account, or, after
conducting an investigation, provide a written explanation of why the account is
correct or the requested information is unavailable. Id. § 2605(e)(2). A QWR is
defined as “written correspondence, other than notice on a payment coupon” that
states the name and account number of the borrower and includes a statement of the
reasons that the borrower believes the account is in error. Id. § 2605(e)(1)(B).
Ditech argues that Mr. Bowen’s RESPA claims should be dismissed because
the second QWR was sent to the wrong address and is therefore not actionable. Defs.’
Mot. at 12–14. Alternatively, Ditech argues that Mr. Bowen has failed to allege any
damages causally connected to Ditech’s allegedly inadequate responses to the QWRs.
Id. at 14–15.

Mr. Bowen disagrees, arguing that at least one of the QWRs is

29

actionable and that he has pleaded sufficient facts to support his claim for damages.
Pl.’s Opp’n at 15–17.
1.

Designated Address

Regulation X, RESPA’s implementing regulation, provides that “[a] servicer
may, by written notice provided to a borrower, establish an address that a borrower
must use to submit a notice of error . . . .” 12 C.F.R. § 1024.35(c). Courts are split as
to whether this language adds the additional substantive requirement that a written
request be sent to a designated location before qualifying as a QWR, thereby
triggering the servicer’s obligation to respond. See McMillen v. Resurgent Capital
Servs., L.P., No. 2:13-cv-00738, 2015 WL 5308236, at *6 (S.D. Ohio Sept. 11, 2015)
(providing an overview of the split on this issue). The First Circuit has not addressed
this part of the regulation. However, a majority of federal courts has held that
sending a QWR to an address other than the designated address for receipt and
handling does not trigger the servicer’s duty to respond under RESPA, even if a
servicer does in fact receive the QWR. Roth v. CitiMortgage, Inc., 756 F.3d 178, 182
(2d Cir. 2014); Berneike v. CitiMortgage, Inc., 708 F.3d 1141, 1148–49 (10th Cir.
2013); Warren v. Green Tree Servicing, LLC, No. 14-cv-02241-PAB-CBS, 2015 WL
9259454, at *5 (D. Colo. Dec. 18, 2015); Bally v. Homeside Lending, Inc., No. 02 C
5799, 2005 WL 2250856, at *3 (N.D. Ill. Sept. 8, 2005). These courts reason that the
regulation envisioned that only certain communications would create liability,
Berneike, 708 F.3d at 1149, and they point to the final rulemaking notice for
Regulation X which explained that if a servicer establishes a designated QWR

30

address, “then the borrower must deliver its request to that office in order for the
inquiry to be a ‘qualified written request.’” Roth, 756 F.3d at 181 (quoting Real Estate
Settlement Procedures Act, Section 6, Transfer of Servicing of Mortgage Loans
(Regulation X), 59 Fed. Reg. 65,442, 65,446 (Dec. 19, 1994)).
A minority of courts has held that Regulation X does not require a borrower to
send QWRs to the designated address. These courts instead focus their inquiry on
whether the servicer actually received the borrower’s correspondence. Schatzman v.
Partners for Payment Relief, LLC, No. 1:15-cv-302, 2016 WL 51224, at *5 (S.D. Ohio
Jan. 5, 2016) (“The ‘receipt’ of a QWR, not the address to which it is mailed, triggers
the statutory requirements under RESPA.”); Benner v. Bank of Am., NA, 917 F. Supp.
2d 338, 363–65 (E.D. Pa. 2013); Vought v. Bank of Am., NA, No. 10-2052, 2010 WL
4683599, at *5 (C.D. Ill. Sept. 24, 2010), adopted by, 2010 WL 4683596 (C.D. Ill. Oct.
27, 2010). These courts analyze the plain language of the statute, which indicates
that receipt triggers the servicer’s duty to respond. McMillen, 2015 WL 5308236, at
*6; see also 12 U.S.C. § 2605(e)(1)(A) (“If any servicer of a federally related mortgage
loan receives a qualified written request from the borrower (or an agent of the
borrower) for information relating to the servicing of such loan, the servicer shall
provide a written response acknowledging receipt of the correspondence within 5 days
. . .”) (emphasis added).
The Court need not resolve this issue. Mr. Bowen alleges that he sent two
QWRs: the first one on April 3, 2015 and the second on November 3, 2015. Am.
Compl. ¶¶ 150, 157. It may very well be that Mr. Bowen failed to send the second

31

QWR to the designated address, and therefore Ditech’s duties with respect to that
QWR were never triggered, although the Court is dubious of this argument. See Nash
v. Green Tree Servicing, LLC, 943 F. Supp. 2d 640, 651 (E.D. Va. 2013). In any event,
Mr. Bowen alleges that he sent the first QWR to the designated address and Ditech
did not respond within the statutory period. See Am. Compl. ¶¶ 150–52. As Ditech
acknowledged at oral argument, this allegation alone supports a claim under RESPA.
Tr. of Oral Argument at 37-38.
2.

Damages

Pursuant to RESPA, if a servicer fails to appropriately respond to a QWR, the
borrower may recover (1) actual damages resulting from the servicer’s failure, and (2)
statutory damages in an amount not to exceed $2,000 in the case of a pattern or
practice of noncompliance with the requirements of the law. 12 U.S.C. § 2605(f).
a.

Actual Damages

Although the First Circuit has not addressed the requirements for pleading
actual damages under RESPA, other courts have held that in order to survive a
motion to dismiss, a plaintiff must plead sufficient facts to show that he suffered
actual, demonstrable damages and that the damages occurred as a result of the
specific violation. Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1246 (11th Cir.
2016); Toone v. Wells Fargo Bank, N.A., 716 F.3d 516, 523 (10th Cir. 2013); Hintz v.
JPMorgan Chase Bank, N.A., 686 F.3d 505, 511 (8th Cir. 2012); see also Moore v.
Mortg. Elec. Registration Sys., Inc., 848 F. Supp. 2d 107, 122 (D.N.H. 2012); Okoye v.
Bank of N.Y. Mellon, No. 10-11563-DPW, 2011 WL 3269686, at *17 (D. Mass. July

32

28, 2011). Courts have interpreted the statutory term “actual damages” to include
not only pecuniary losses but also damages for emotional distress, humiliation, or
mental anguish. Catalan v. GMAC Mortg. Corp., 629 F.3d 676, 696 (7th Cir. 2011);
McLean v. GMAC Mortg. Corp., 398 F. App’x 467, 471 (11th Cir. 2010); see also Moore,
848 F. Supp. 2d at 123.
In this case, Mr. Bowen has pleaded sufficient facts to suggest that he has
suffered emotional distress and that his distress was caused by Ditech’s RESPA
violations. He explains that he felt relieved after “his counsel’s efforts to resolve the
issue” and after Ditech eventually admitted to the violations, which the Court infers
refers to the initial QWR sent by his counsel. See Am. Compl. ¶¶ 127, 150–54.
However, Mr. Bowen explains that after Ditech failed to correct the error, continued
to collect fees not owed, and failed to investigate his claims appropriately as it was
required to do under RESPA, he grew anxious and fearful again. See id. ¶ 127. These
facts are sufficient to suggest that his emotional distress was caused by, or was a
result of, Ditech’s RESPA violations.
b.

Statutory Damages

Additionally, Mr. Bowen has pleaded sufficient facts to demonstrate a claim
for statutory damages. Mr. Bowen claims that Ditech violated RESPA by failing to
acknowledge receipt of the first QWR, failing to perform a thorough investigation of
the error, failing to correct the error by continuing to collect improper fee, and failing
to provide an escrow history within ninety days of the loan reinstatement. Am.
Compl. ¶ 168. These allegations are sufficient to demonstrate a pattern or practice

33

of RESPA violations. Compare Long v. Residential Credit Sols., Inc., No. 9:15-cv80590-ROSENBERG, 2015 WL 4983507, at *2 (S.D. Fla. Aug. 21, 2015) (one violation
insufficient); McLean v. GMAC Mortg. Corp., 595 F. Supp. 2d 1360, 1365 (S.D. Fla.
2009) (two violations insufficient), with Ploog v. HomeSide Lending, Inc., 209 F. Supp.
2d 863, 868–69 (N.D. Ill. 2002) (five violations sufficient).
E.

Claims Against Fannie Mae

Finally, Ditech argues that, even assuming that the claims survive against
Ditech, there are no allegations in the Amended Complaint sufficient to support any
of the claims against Fannie Mae. Defs.’ Mot. at 18. It further argues that Mr. Bowen
cannot base his theory of liability for Fannie Mae on vicarious liability under either
the FDCPA or RESPA. Id. at 18–19.
The Court agrees that each of Mr. Bowen’s allegations concerns the direct
conduct of Ditech, not Fannie Mae. Am. Compl. ¶¶ 128–84. However, Mr. Bowen
does allege that Fannie Mae hired Ditech to service the loan and that Fannie Mae
and Ditech had a principal-agent relationship. Id. ¶¶ 11–14. Caselaw in the First
Circuit supports Mr. Bowen’s position. See R.G. Fin. Corp. v. Vergara–Nuñez, 446
F.3d 178, 187 (1st Cir. 2006) (“Typically, a mortgage servicer acts as the agent of the
mortgagee to effect collection of payments on the mortgage loan”). Therefore, as long
as Mr. Bowen’s claims can be supported by principles of agency law or vicarious
liability, they will survive.
At the same time, the law is fairly clear that there is no vicarious liability
under the FDCPA for non-debt collectors. Chiang v. Verizon New Eng., Inc., No. 06-

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cv-12144-DPW, 2009 WL 102707, at *5 (D. Mass. Jan. 13, 2009) (citing Wadlington
v. Credit Acceptance Corp., 76 F.3d 103, 108 (6th Cir. 1996)); see also Doucette v. GE
Capital Retail Bank, No. 14-cv-012-LM, 2014 WL 4562758, at *2–3 (D.N.H. Sept. 15,
2014); Ricciardi v. Serv. Credit Union, No. 06-cv-092-JD, 2006 U.S. Dist. LEXIS
28468, at *6 (D.N.H. May 11, 2006) (“Because the FDCPA applies only to ‘debt
collectors,’ however, courts have consistently rejected attempts to impose FDCPA
liability on a creditor for the actions of those who collect its debts based on respondeat
superior or similar theories”). Because Mr. Bowen agreed at oral argument that there
is no vicarious liability as to Fannie Mae under the FDCPA and MFDCPA, Tr. of Oral
Argument at 39, the Court dismisses Counts III and IV with respect to Fannie Mae.
The law is less clear with respect to vicarious liability under RESPA. RESPA’s
provisions requiring loan servicers to respond to borrower inquiries, under which Mr.
Bowen brings his claims, explicitly apply to “loan servicers.” 12 U.S.C. § 2605(e).
Defendants suggest that this indicates a shield from liability for entities that do not
meet the statute’s definition of “loan servicer,” similar to the FDCPA’s requirement
that an entity must be a “debt collector” in order to be liable. Based on this reasoning,
some courts have dismissed claims against non-loan-servicers under RESPA. See,
e.g., Castrillo v. Am. Home Mortg. Servicing, Inc., No. 09-4369, 2010 WL 1424398, at
*7 (E.D. La. Apr. 5, 2010) (granting summary judgment on RESPA claim against
trustee of loan servicer because it was not itself a loan servicer under the statute).
Other courts have stated that there is no language in RESPA to support a conclusion
that the ordinary rules of vicarious liability do not apply, and they have pointed to

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the fact that RESPA provides that “[w]hoever” violates a statutory requirement may
be held civilly liability. See, e.g., Rouleau v. U.S. Bank N.A., No. 14-cv-568-JL, 2015
WL 1757104, at *6–8 (D.N.H. Apr. 17, 2015); see also 12 U.S.C. § 2605(f). Given the
uncertainty of the law on this issue, the Court concludes that Mr. Bowen has pleaded
a plausible claim for relief against Fannie Mae, and therefore it denies the motion to
dismiss as to the RESPA claim against Fannie Mae.
With respect to the UTPA and common law claims, the Defendants concede
that vicarious liability is possible pursuant to general principles of principal-agent
law. Tr. of Oral Argument at 41. The Court agrees and therefore denies the motion
to dismiss these counts against Fannie Mae. See Advanced Constr. Corp. v. Pilecki,
2006 ME 84, ¶ 16, 901 A.2d 189 (“In an action for tortious conduct of an agent, both
agent and the principal can be held liable. Actions pursuant to the UTPA and actions
for unlawful and deceptive conduct sound in tort.”) (internal citations omitted);
Dupuis v. Fed. Home Loan Mortg. Corp., 879 F. Supp. 139, 143–44 (D. Me. 1995)
(holding that FHLMC is the principal for Fidelity (who serviced the note), and
therefore FHLMC is liable for Fidelity’s wrongdoing in breach of contract claim); see
also In re Hart, 246 B.R. 709, 736 (Bankr. D. Mass. 2000) (holding Fannie Mae
vicariously liable for unfair trade practices that violated Chapter 93A).
V.

CONCLUSION
The Court GRANTS in part and DENIES in part the Defendants’ Motion to

Dismiss First Amended Complaint (ECF No. 66). The Court GRANTS the motion to

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dismiss Counts III and IV with respect to Fannie Mae only. The Court DENIES the
remainder of the motion.
SO ORDERED.
/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
UNITED STATES DISTRICT JUDGE
Dated this 19th day of September, 2017

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