Williams v. Litton Loan Servicing et al
Filing
16
Chief Judge Mark L. Wolf: MEMORANDUM AND ORDER entered granting in part and denying in part 4 Motion to Dismiss. In view of the foregoing, it is hereby ORDERED that: 1. Litton's Motion to Dismiss (Docket No. 4) is ALLOWED to the extent that Counts IV and V are dismissed. It is DENIED without prejudice in all other respects. 2. This case is REMANDED to Suffolk Superior Court. (Hohler, Daniel)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
FLOYD A. WILLIAMS,
Plaintiff,
)
)
)
v.
)
)
LITTON LOAN SERVICING,
)
POPULAR MORTGAGE SERVICING, INC., )
and EQUITY ONE,
)
Defendants.
)
C.A. No. 10-11866-MLW
MEMORANDUM AND ORDER
WOLF, D.J.
I.
August 15, 2011
INTRODUCTION
On October 5, 2010, plaintiff Floyd Williams ("Williams")
filed a five-count complaint in Suffolk Superior Court against
defendants Litton Loan Servicing ("Litton"), Popular Mortgage
Servicing, Inc. ("Popular"), and Equity One. On November 1, 2010,
Litton timely removed this case pursuant to 28 U.S.C. §§1441 and
1446. Neither Popular nor Equity One has been served by Williams.
Litton now is moving to dismiss the complaint pursuant to Federal
Rule of Civil Procedure 12(b)(6). For the reasons described below,
Litton's motion to dismiss is being allowed concerning Williams's
federal claims and denied without prejudice concerning Williams's
state law claims, which are being remanded.
II.
THE MOTION TO DISMISS
A.
Legal Standard
In considering a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6), the court must "take all factual allegations as
true and . . . draw all reasonable inferences in favor of the
plaintiff." Rodriguez-Ortiz v. Margo Caribe, Inc., 490 F.3d 92, 96
(1st Cir. 2007); see also Maldonado v. Fontanes, 568 F.3d 263, 266
(1st Cir. 2009). A motion to dismiss should be denied if a
plaintiff has shown "a plausible entitlement to relief." Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 559 (2007).
A complaint must include a "short and plain statement of the
claim showing that the pleader is entitled to relief." Fed.R.Civ.P.
8(a)(2). This pleading standard does not require "detailed factual
allegations," but does require "more than labels and conclusions
. . . and a formulaic recitation of the elements of a cause of
action will not do . . . ." Twombly, 550 U.S. at 555; see also
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1953 (2009) (holding Twombly
standard to apply to all civil actions). A court may disregard
"bald
assertions,
unsupportable
conclusions,
and
opprobrious
epithets." In re Citigroup, Inc., 535 F.3d 45, 52 (1st Cir. 2008).
"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." Iqbal, 129 S.Ct. at 1949.
"The
plausibility
standard
is
not
akin
to
a
'probability
requirement,' but it asks for more than a sheer possibility that a
defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at
556). "Where a complaint pleads facts that are 'merely consistent
with' a defendant's liability, it 'stops short of the line between
possibility
and
plausibility
of
2
entitlement
to
relief.'"
Id.
(quoting Twombly, 550 U.S. at 557).
B.
Discussion
In considering Litton's motion to dismiss, the court takes as
true all factual allegations in the complaint and draws all
reasonable inferences in Williams's favor. See Rodriguez-Ortiz, 490
F.3d at 96.
On September 23, 2003, Equity One issued to Williams a
$433,500 loan secured by a mortgage on property located at 490
Columbia Road, Dorchester, Massachusetts. The mortgage agreement
included a clause entitling Equity One to collect payments for
property taxes from Williams. If Equity One waived its right to do
so, Williams was responsible for paying any such taxes directly. If
Williams failed to make timely payments, Equity One could make the
payments and recover from Williams.
Equity One waived its right to collect tax payments from
Williams, and Williams began making those payments directly to the
City of Boston. However, on November 4, 2004, Equity One learned
from the City of Boston that Williams had defaulted on his tax
payments. Equity One paid the balance and charged Williams for the
amount paid, interest, servicing costs, and late fees. A portion of
Williams's subsequent mortgage payments was applied by Equity One
to those charges. However, Williams also renewed his tax payments,
causing the City of Boston to be overpaid.
Williams never pursued a refund from the City of Boston but,
3
in December, 2005, brought the property tax overpayment to the
attention of Popular, the original servicer of his loan. Popular
took no action and, in October, 2008, transferred Williams's loan
to
Litton.
On
November
25,
2008,
Litton
mailed
Williams
a
"Validation of Debt Notice" stating that Williams owed $429,557.72.
The chronology laid out in the complaint and accompanying documents
is unclear, but it appears that Williams mailed Litton a dispute
letter on November 25, 2008, and then again on January 6, 2009.
(The dates of those letters also may have been December 2, 2008,
and December 9, 2008.) Litton acknowledged receipt of at least one
of those letters but, on either December 22, 2008, or January 21,
2009,
mailed
Williams
a
"Notice
of
Default
and
Intent
to
Accelerate." That notice informed Williams that his loan would be
accelerated unless he paid $18,000 by March 9, 2009; in Williams's
view, the notice "end[ed] negotations." Compl. at 2.
On
February
20,
2009,
Williams
notified
Litton
that
he
intended to file a complaint. On February 23, 2009, Williams
received a telephone call from Litton requesting that he postpone
filing a complaint until Litton had an opportunity to resolve the
disputed charges. On December 16, 2009, Litton notified Williams by
letter that the disputed charges would not be removed from his
account and that his escrow balance of $18,591.84 was due.
Williams has asserted two federal claims and three state law
claims against Litton. The federal claims allege violations of the
4
Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§1692 et
seq., and the Real Estate Settlement Procedures Act ("RESPA"), 12
U.S.C. §§2601 et seq. The state law claims allege breach of
contract, breach of implied covenant of good faith and fair
dealing, and violation of Chapter 93A. Both of Williams's federal
claims are being dismissed. Accordingly, Williams's three state law
claims are being remanded for lack of jurisdiction.
1.
The FDCPA Claim
Williams's FDCPA claim is time barred. Pursuant to the FDCPA,
if a consumer notifies a debt collector in writing that a debt is
disputed, the debt collector must cease collection of the debt
until verification of the debt is mailed to the consumer. See 15
U.S.C.
§1692g(b).
Any
action
to
enforce
a
debt
collector's
liability for violating the FDCPA must be brought "within one year
from the date on which the violation occurs." 15 U.S.C. §1692k(d);
see also Harrington v. CACV of Colorado, LLC, 508 F. Supp. 2d 128,
131-32 (D. Mass. 2007).
Williams alleges that Litton violated the FDCPA by failing to
cease collection after receiving his letters disputing his debt. As
noted above, those letters were mailed either November 25, 2008,
and January 6, 2009, or December 2, 2008, and December 9, 2008. On
either December 22, 2008, or January 21, 2009, Litton mailed
Williams a "Notice of Default and Intent to Accelerate," informing
him that his loan would be accelerated unless he paid $18,000. Even
5
assuming that this notice constituted a violation of the FDCPA,
Williams had until January 21, 2010, at the latest, to file this
action. Because he delayed until October 5, 2010, his FDCPA claim
is time-barred. Accordingly, it must be dismissed. See Oyegbola v.
Advantage Assets, Inc., No. 09-cv-10418-NG, 2009 WL 4738074, at *4
(D. Mass. Dec. 7, 2009) (dismissing FDCPA claim as barred by
statute of limitations); Crooker v. Wachovia Bank, N.A., No. 0810227-RGS, 2008 WL 2066943, at *1 (D. Mass. May 14, 2008) (same).
That Williams postponed filing suit upon Litton's request does
not alter this conclusion. The circumstances in which equitable
tolling of a statute of limitations are appropriate are extremely
limited. See Wallace v. Kato, 549 U.S. 384, 396 (2007) ("Equitable
tolling is a rare remedy to be applied in unusual circumstances,
not a cure-all for an entirely common state of affairs."); Irwin v.
Dep't of Veterans Affairs, 498 U.S. 89, 96 (1990) ("Federal courts
have typically extended equitable relief only sparingly."); Neves
v. Holder, 613 F.3d 30, 36 (1st Cir. 2010). "[A] litigant seeking
equitable tolling bears the burden of establishing two elements:
(1) that he has been pursuing his rights diligently, and (2) that
some
extraordinary
circumstances
stood
in
his
way."
Pace
v.
DiGuglielmo, 544 U.S. 408, 418 (2005). The general rule is that a
showing of fraud or affirmative misrepresentation is required. See
Irwin, 498 U.S. at 96; Gonzalez v. United States, 284 F.3d 281, 292
(1st Cir. 2002); Jensen v. Frank, 912 F.2d 517, 521 (1st Cir. 1990)
6
(requiring "active misleading"); Oyegbola, 2009 WL 4738074, at *3
(requiring plaintiff to show "(1) that defendants deliberately
concealed material facts related to the alleged deceptive conduct;
and (2) that [plaintiff] exercised due diligence in attempting to
uncover the fraud"); Jonker v. Kelly, 268 F. Supp. 2d 81, 86 (D.
Mass. 2003). This rule is no different in FDCPA cases. See, e.g.,
Michaels v. NCO Fin. Sys., Inc., No. 10-207 Erie, 2011 WL 2600723,
at *2 (W.D. Pa. June 29, 2011) (requiring active misleading by
artifice); Byrd v. Law Offices of John D. Clunk, Co., No. 1:09-cv076, 2010 WL 816932, at *4 (S.D. Ohio Mar. 8, 2010) (requiring a
showing of fraudulent misrepresentation or concealment).
Here, Williams cannot show either that he pursued his FDCPA
claim
diligently
or
that
Litton
engaged
in
fraudulent
misrepresentation. As described above, Williams's claim accrued, at
the latest, on January 21, 2009. On February 23, 2009, Litton
requested that he postpone filing a complaint until Litton had an
opportunity to resolve the disputed charges; Williams was under no
obligation to acquiesce to Litton's request. On December 16, 2009,
Litton notified Williams that the disputed charges would not be
removed from his account. At that time, Williams still had over one
month to file an FDCPA claim within the statute of limitations. He
elected not to do so and, indeed, waited nearly nine months before
eventually filing a complaint on October 5, 2010. He offers no
explanation for this delay. In addition, there is no allegation
7
that Williams was tricked or pressured into allowing the filing
deadline to pass or that Litton affirmatively misrepresented either
its intentions or Williams's legal rights. These circumstances - in
which Williams was on notice of Litton's alleged FDCPA violation
during the statutory limitations period and voluntarily elected to
defer
pursuing
his
claim
-
do
not
warrant
exercising
the
exceptional remedy of equitable tolling.
2.
The RESPA Claim
Williams's RESPA claim is not actionable. Pursuant to the
RESPA, a mortgage loan servicer has 20 days to acknowledge receipt
of a borrower's qualified written request ("QWR") for information
relating to the servicing of the loan, and 60 days to either make
appropriate corrections to the borrower's account or provide a
written explanation why the servicer believes the account is
correct. See 12 U.S.C. §2605(e); McLean v. GMAC Mortg. Corp., 398
F. App'x 467, 471 (11th Cir. 2010). If the servicer fails to comply
with either provision, a borrower may recover any "actual damages"
caused by that failure. 12 U.S.C. §2605(f); McLean, 398 F. App'x at
471. Thus, "[t]o state a claim under RESPA, many courts have read
§ 2605 to require a showing of pecuniary damages." Durland v.
Fieldstone Mortg. Co., No. 10 CV 125 JLS (CAB), 2010 WL 3489324, at
*3 (S.D. Cal. Sept. 3, 2010). Without such a showing, a RESPA claim
is not actionable. See Claxton v. Orlans Assocs., P.C., No. 1011813,
2010
WL
3385530,
at
*5
8
(E.D.
Mich.
Aug.
26,
2010)
("[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.").
Williams alleges that Litton violated the RESPA by failing to
properly respond to his QWR, by which the court assumes Williams
means his December 9, 2008 letter. Williams does not, however,
allege that Litton's failure to respond resulted in any actual
damages. That allegation is entirely absent from the complaint, as
are any facts tending to support it. Accordingly, Williams's RESPA
claim must be dismissed. See Durland, 2010 WL 3489324, at *4
(dismissing
RESPA
claim
where
"Plaintiff
fail[ed]
to
allege
specific facts sufficient to support how Defendant Litton's alleged
failure to respond to Plaintiff's QWRs resulted in pecuniary
damages"); Claxton, 2010 WL 3385530, at *5 (dismissing RESPA claim
where complaint did not allege plaintiff incurred any actual
damages as a result of defendant's alleged failure to timely or
adequately respond to QWR); Lal v. American Home Servicing, Inc.,
680 F. Supp. 2d 1218, 1223 (E.D. Cal. 2010) (same).
III. JURISDICTION
Because Williams's complaint asserts claims under two federal
statutes, federal question jurisdiction existed over those claims
pursuant
to
28
U.S.C.
§1331
at
the
time
of
removal,
and
supplemental jurisdiction existed over Williams's state law claims
pursuant to 28 U.S.C. §1367(a). See Rhode Island Fishermen's
9
Alliance, Inc. v. Rhode Island Dep't of Envtl. Mgmt., 585 F.3d 42,
48 (1st Cir. 2009). However, as Williams's federal claims are being
dismissed "at an early stage of the litigation," before any
discovery has commenced, it is now appropriate to either remand or
dismiss without prejudice Williams's state law claims unless, as
Litton contends, diversity jurisdiction exists over them. CarnegieMellon Univ. v. Cohill, 484 U.S. 343, 351-53, 357 (1988); 28 U.S.C.
§1367(c)(3).
Diversity jurisdiction exists if a case involves an amount in
controversy greater than $75,000 and pits citizens of different
states against one another. See 28 U.S.C. §1332(a). In a case, such
as this one, which has been removed from state court, it is the
removing defendant's burden to prove that the requirements of 28
U.S.C. §1332(a) are met. See Danca v. Private Health Care Sys.,
Inc., 185 F.3d 1, 4 (1st Cir. 1999). Diversity of citizenship must
be proved by a preponderance of the evidence.
See Francis v.
Goodman, 81 F.3d 5, 6 (1st Cir. 1996). So must the amount in
controversy where it is not clearly specified in the complaint. See
Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009); In re 1994
Exxon Chemical Fire, 558 F.3d 378, 387 (5th Cir. 2009); Lowdermilk
v. U.S. Bank Nat'l Ass'n, 479 F.3d 994, 998 (9th Cir. 2007); Smith
v. Nationwide Prop. & Cas. Ins. Co., 505 F.3d 401, 404-05 (6th Cir.
2007); Miedema v. Maytag Corp., 450 F.3d 1322, 1330 (11th Cir.
2006); Martin v. Franklin Capital Corp., 251 F.3d 1284, 1290 (10th
10
Cir. 2001); Gilman v. BHC Sec., Inc., 104 F.3d 1418, 1421 (2d Cir.
1997); Lowe v. Sears Holding Corp., 545 F. Supp. 2d 195, 196
(D.N.H. 2008); Doughty v. Hyster New England, Inc., 344 F. Supp. 2d
217, 219 (D. Me. 2004).
A.
Diversity of Citizenship
In this case, Litton has not proved diversity of citizenship
by a preponderance of the evidence. It is undisputed that Williams
is a citizen of Massachusetts, see Compl. ¶1, but Litton has
offered no proof of either its own citizenship or the citizenship
of Popular or Equity One. Indeed, in its answer to Williams's
complaint, Litton denies the allegation that its usual place of
business is in Utah, notwithstanding that, in its notice of
removal,
Litton
relies
upon
that
allegation
as
a
basis
for
diversity jurisdiction. In light of this apparent contradiction and
Litton's failure to affirmatively establish the citizenship of the
parties, the court cannot conclude that Litton has met its burden.
B.
Amount in Controversy
Litton also has not proved by a preponderance of the evidence
that the amount in controversy exceeds $75,000. In calculating the
amount in controversy, a federal court must examine relevant state
law in determining the nature and extent of the damages which may
be awarded. See Stewart v. Tupperware Corp., 356 F.3d 335, 339 (1st
Cir. 2004); Evans v. Yum Brands, Inc., 326 F. Supp. 2d 214, 220-21
(D.N.H. 2004). For example, "[w]hen a plaintiff makes a claim under
11
a statute including a damage multiplier, a court must apply that
factor in evaluating the amount in controversy." Evans, 326 F.
Supp. 2d at 222. In addition, a court must take into account
attorneys' fees when the award of those fees is statutorily
authorized. See Spielman v. Genzyme Corp., 251 F.3d 1, 6 (1st Cir.
2001). Accordingly, the court's determination of the amount in
controversy
in
this
case
must
account
for
Litton's
alleged
violation of Chapter 93A, which authorizes both treble damages and
attorneys' fees for successful litigants. See Mass. Gen. Laws. ch.
93A, § 9.
Citing Williams's civil action cover sheet, which estimates
the value of Williams's claims at $70,000, Litton contends that
over $75,000 is in controversy in this case, after accounting for
trebling and attorneys' fees. However, Williams's complaint and
subsequent filings appear to cabin his damages to the disputed
$18,000 tax overpayment and associated charges. Although civil
action cover sheets may be considered in determining the amount in
controversy, see, e.g., Salvail v. Relocation Advisors, Inc., C.A.
No. 11-10500-RGS, 2011 WL 1883861, at *1 n.1 (D. Mass. May 17,
2011), the court is aware of no authority for basing an amount in
controversy determination solely on a civil action cover sheet when
it is contradicted, albeit implicitly, by the complaint itself.
Indeed, other courts have held that "reliance solely on the Civil
Cover Sheet as a demonstration of the amount in controversy is not
12
permissible." Baker v. Sears Holding Corp., 557 F. Supp. 2d 1208,
1215 (D. Colo. 2007); see also Morse v. Am. Sec. Ins. Co., No. H10-4606, 2011 WL 332544, at *2 (S.D. Tex. Jan. 28, 2011). As these
courts have recognized, a cover sheet is "simply too imprecise to
make the requisite demonstration of the amount in controversy for
purposes of diversity jurisdiction." Magdaleno v. L.B. Foster Co.,
No. 06-cv-01882-MSK-CBS, 2008 WL 496314, at *6 (D. Colo. Feb. 19,
2008). Indeed, in this case, the $70,000 estimated on Williams's
civil action cover sheet could well represent the sum of his
$18,000 overpayment after trebling and reasonable attorneys' fees.
Litton has offered no evidence to the contrary and, accordingly,
has not met its burden of proving by a preponderance of the
evidence that the amount in controversy requirement of 28 U.S.C.
§1332(a) is satisfied.
C.
Conclusion
Because federal question jurisdiction no longer exists in this
case and Litton has not met its burden of showing the existence of
diversity jurisdiction, Williams's state law claims are being
remanded. See Carnegie-Mellon, 484 U.S. at 357.
IV.
ORDER
In view of the foregoing, it is hereby ORDERED that:
1. Litton's Motion to Dismiss (Docket No. 4) is ALLOWED to the
extent that Counts IV and V are dismissed. It is DENIED without
prejudice in all other respects.
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2. This case is REMANDED to Suffolk Superior Court.
/s/ Mark L. Wolf
UNITED STATES DISTRICT JUDGE
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