Roller et al v. Litton Loan Servicing et al
Filing
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OPINION AND ORDER granting 11 Motion for Summary Judgment; denying 19 Motion for Leave to File; denying 23 Motion for Leave to File. Signed by District Judge Sean F. Cox. (JHer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
Otto Roller, and
Carlyn Roller,
Plaintiffs,
v.
Case No.: 10-13847
Litton Loan Servicing, et al.,
Honorable Sean F. Cox
Defendants.
_____________________________________/
OPINION AND ORDER GRANTING DEFENDANTS’ MOTION FOR JUDGMENT ON THE
PLEADINGS AND DENYING PLAINTIFFS’ MOTION FOR LEAVE TO FILE AN
AMENDED COMPLAINT
Plaintiffs Otto Roller and Carlyn Roller (“Plaintiffs”), proceeding pro se, brought this
action against their mortgage loan servicers and lenders, Defendants Litton Loan Servicing
(“Litton”), New Century Mortgage (“New Century”), and Deutsche Bank Trust (“Deutsche”),
alleging violations of RESPA and a number of state law claims. The matter is currently before
the Court on Defendants Litton and Deutsche’s motion to dismiss, pursuant to FED . R. CIV . P.
12(c) and (b)(6). Plaintiffs have failed to respond to Defendants’ motion to dismiss, and instead,
have filed a motion for leave to file an amended complaint. The Court heard oral argument on
both motions on June 9, 2011. For the following reasons, the Court GRANTS Defendants’
motion to dismiss and DENIES Plaintiffs’ motion for leave to file an amended complaint.
BACKGROUND
The following facts are gleaned from Defendants’ motion to dismiss, Plaintiffs’
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complaint, and Plaintiffs’ proposed second amended complaint.1
On May 17, 2004, Plaintiffs, husband and wife, allege that they met with Kenya GrimesBussey,2 a mortgage broker, to discuss refinancing their home located at 19481 Avon Avenue,
Detroit, Michigan 48219 (“the property”). (Prop. Complaint #2 at ¶ 6, Doc. No. 23). According
to Defendants, Plaintiffs executed a mortgage and promissory note with New Century that same
day. (Def. Br. at 1, Doc. No. 11). The loan was in the amount of $101,700.00. Id. On
November 15, 2007, Plaintiffs entered into a loan modification agreement. On November 1,
2004, New Century assigned the servicing rights of Plaintiffs’ loan to Litton, which is the current
servicer of Plaintiffs’ loan. Id. at 2.
Plaintiffs allege that on January 4, 2010, they sent Litton a RESPA qualified written
request (“QWR”) for documents concerning their loan. (Prop. Complaint at ¶ 8; Def. Br. at 2,
Ex. D). On February 5, 2010, Litton responded to Plaintiffs’ request and provided Plaintiffs with
multiple documents related to their loan servicing. (Prop. Complaint at ¶ 9; Def. Br. at 2, Ex. F).
Plaintiffs sent another RESPA QWR to Litton on February 17, 2010 and on April 6, 2010, Litton
again responded to Plaintiffs with another correspondence. (Prop. Complaint at ¶ 10; Def. Br. at
2, Ex. I).
Plaintiffs filed their original “Complaint to Quiet Title” on September 27, 2010, claiming
that they never entered into a mortgage agreement in 2004 and that many of the loan documents
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On March 21, 2011, Plaintiffs filed a Motion for Leave to File First Amended
Complaint (Doc. No. 19). On April 25, 2011, Plaintiffs also filed a Motion for Leave to File
Correction to First Amended Complaint (Doc. No. 23). The Court has construed Plaintiffs’ April
25, 2011 motion as a motion for leave to file a second amended complaint.
2
Kenya Grimes-Bussey is not a defendant in this lawsuit. Plaintiffs do not allege whether
Grimes-Bussey was an employee or agent for New Century.
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provided by Litton in response to Plaintiffs’ QWRs have been forged. Plaintiffs allege that they
only signed four documents at the “closing” of their mortgage loan. (Complaint at ¶ 7).
Defendants filed a Motion for Judgment on the Pleadings on February 15, 2011. (Def. Mtn.,
Doc. No. 11). Rather than file a response to the motion, Plaintiffs filed a motion for leave to file
a first amended complaint on March 21, 2011. Defendants responded to Plaintiff’s motion for
leave to amend on April 7, 2011 (Amend. Resp., Doc. No. 20). On April 25, 2011, Plaintiffs
filed a reply brief to Defendants’ response and also filed their second motion for leave to amend
their complaint. Defendants filed a response to Plaintiffs’ second motion for leave to amend as
well. (Amend Resp. #2, Doc. No. 26).
Because Plaintiffs have filed a second motion for leave to amend their complaint before
the Court has had an opportunity to decide Plaintiffs’ first motion for leave to amend, the Court
has proceeded on the assumption that Plaintiffs’ second proposed amended complaint is the
complaint on which they seek to move forward.
STANDARD OF REVIEW
Defendants bring their motion pursuant to Federal Rule of Civil Procedure 12(b)(6). In
assessing a motion to dismiss for failure to state a claim under Rule 12(b)(6), the Court must
treat all well-pleaded allegations in the complaint as true. Kostrzewa v. City of Troy, 247 F.3d
633, 638 (6th Cir. 2001). In order for a complaint to survive a motion to dismiss for failure to
state a claim under Rule 12(b)(6), “[f]actual allegations must be enough to raise a right of relief
above the speculative level, on the assumption that all the allegations in the complaint are true
(even if doubtful in fact).” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). “While
legal conclusions can provide the framework of a complaint, they must be supported by factual
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allegations.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009). Dismissal is only proper if, based
upon the pleadings, the plaintiff does not have a “reasonably founded hope” of making his or her
case. Twombly, 550 U.S. at 555.
ANALYSIS
Plaintiffs original complaint alleges the following counts: “Allegations Concerning The
Authenticity of the Note and Signature” (Count I), “Allegations of Breach of Contract Under
RESPA Against Litton” (Count II), “Lack of Mutuality” (Count III), “Breach of UCC § 1-203"
(Count IV), “Detrimental Reliance” (Count V), “Violation of M.C.L. § 750.251" (Count VI),
“Violation of M.C.L. § 750.252" (Count VII), and “UCC 3-308. Proof of Signatures” (Count
VIII).
I.
The Documents At Issue May Be Introduced By Defendants As Part Of The
Pleadings.
As discussed above, Plaintiffs allege a number of claims related to their mortgage loan,
note, loan modification, correspondences with Litton, and other documents provided by Litton in
response to Plaintiffs’ RESPA QWRs. Defendants have attached copies of all of these relevant
documents to their motion to dismiss.
As Defendants state in their motion, the Sixth Circuit has held:
[A] document that is not formally incorporated by reference or
attached to a complaint may still be considered part of the pleadings.
. . This occurs when ‘a document is referred to in the complaint and
is central to the plaintiff’s claim....’ In such event, ‘the defendant may
submit an authentic copy to the court to be considered on a motion to
dismiss, and the court’s consideration of the document does not
require conversion of the motion to one for summary judgment.
Greenberg v. Life Ins. Co. Of Va., 177 F.3d 507, 514 (6th Cir. 1999) (internal citations omitted).
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“Otherwise, a plaintiff with a legally deficient claim could survive a motion to dismiss simply by
failing to attach a dispositive document upon which it relied.” Weiner, D.P.M., v. Klais and Co.,
Inc., 108 F.3d 86, 89 (6th Cir. 1997).
Because the mortgage, note, modification agreement, Plaintiffs’ QWR, and Litton’s
responses to the QWR are central to Plaintiffs’ claims and are referenced in Plaintiffs’ complaint,
they may be treated as part of Plaintiffs’ pleadings for the purposes of this motion to dismiss
even though it was Defendants who submitted these documents as exhibits.
III.
Plaintiffs’ RESPA Claim
Plaintiffs’ Count II is titled “Allegations of Breach of Contract Under RESPA Against
Litton.” Plaintiffs allege that Litton violated RESPA by responding to Plaintffs’ QWR with
forged documents and by failing to adequately “provide answer to the inquiries of plaintiff via
the QWR requests.” (Complaint at ¶ 24).
Defendants allege that Plaintiffs’ RESPA claim fails because Plaintiffs’ correspondence
did not qualify as a proper “qualified written request” under RESPA, and even if they did,
Litton’s responses to the correspondence were not in violation of RESPA. Additionally,
Defendants contend that Plaintiffs’ RESPA claim fails because they do not allege any actual
damages as a result of Litton’s alleged RESPA violations.
QWRs under RESPA are governed by 12 U.S.C. § 2605(e), which is titled “Duty of loan
servicer to respond to borrower inquiries,” and provides:
(1) Notice of receipt of inquiry
(A) In general
If any servicer of a federally related mortgage loan receives a
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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 20 days
(excluding legal public holidays, Saturdays, and Sundays)
unless the action requested is taken within such period.
(B) Qualified written request
For purposes of this subsection, a qualified written request
shall be a written correspondence, other than notice on a
payment coupon or other payment medium supplied by the
servicer, that-(i) includes, or otherwise enables the servicer to
identify, the name and account of the borrower; and
(ii) includes a statement of the reasons for the belief
of the borrower, to the extent applicable, that the
account is in error or provides sufficient detail to the
servicer regarding other information sought by the
borrower.
(2) Action with respect to inquiry
Not later than 60 days (excluding legal public holidays, Saturdays,
and Sundays) after the receipt from any borrower of any qualified
written request under paragraph (1) and, if applicable, before taking
any action with respect to the inquiry of the borrower, the servicer
shall-(A) make appropriate corrections in the account of the
borrower, including the crediting of any late charges or
penalties, and transmit to the borrower a written notification
of such correction (which shall include the name and
telephone number of a representative of the servicer who can
provide assistance to the borrower);
(B) after conducting an investigation, provide the borrower
with a written explanation or clarification that includes-(i) to the extent applicable, a statement of the reasons
for which the servicer believes the account of the
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borrower is correct as determined by the servicer;
and
(ii) the name and telephone number of an individual
employed by, or the office or department of, the
servicer who can provide assistance to the borrower;
or
(C) after conducting an investigation, provide the borrower
with a written explanation or clarification that includes-(i) information requested by the borrower or an
explanation of why the information requested is
unavailable or cannot be obtained by the servicer;
and
(ii) the name and telephone number of an individual
employed by, or the office or department of, the servicer who
can provide assistance to the borrower.
12 U.S.C. § 2605(e) (emphasis added).
A.
Plaintiffs’ Correspondence Qualify As Proper Qualified Written Requests.
In this case, Plaintiffs sent two separate QWRs to Litton. Both QWRs are, at least
partially, proper QWRs under RESPA. Plaintiffs’ first QWR (QWR #1) is dated January 4,
2010. QWR #1, which consists of 18 pages of requests, appears to be a “form” RESPA QWR.
See e.g. Langley v. Chase Home Finance, LLC, 2011 WL 1150772 (W.D. Mich. 2011) (in which
plaintiff’s QWR is almost identical to the QWR in the instant case, including the same series of
almost 190 questions to be answered by the servicer). QWR #1 includes the name and account
of the borrower, a very general statement of the reasons for the belief that Plaintiffs’ account is in
error, and provides sufficient detail to Litton regarding other information sought by Plaintiff, as
required by 12 U.S.C. § 2605(e)(1)(B). Plaintiffs’ QWR #1 states that Plaintiffs are concerned
because Litton has “been accused of engaging in one or more predatory servicing or lending and
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services schemes” and that such abuses are negatively affecting Plaintiffs’ credit score and
mortgage debts. Plaintiffs’ requests in QWR #1 not only pertain to the servicing of Plaintiffs’
mortgage loan, but also question the ownership of the mortgage and note. (Gov. Br., Ex. D).
Plaintiffs’ second QWR (QWR #2), dated February 17, 2010, also lists Plaintiffs’ name,
account number, and a detailed request regarding other information sought by Plaintiff. Thus, in
construing Plaintiffs’ pleadings in a light most favorable to the Plaintiff, as well as considering
Plaintiffs’ pro se status, Plaintiffs’ QWRs are proper qualified written requests under RESPA.
B.
Litton’s Responses To Plaintiffs’ QWRs Were Adequate.
The core of Plaintiffs’ RESPA claim in their original complaint is that Defendants have
“not forwarded the requested information in Plaintiffs’ QWR as mandated by the Act, and has
failed to answer plaintiffs’ questions and concerns.” (Complaint at ¶ 23). Under § 2605, a
servicer is required to respond to information requests relating to the servicing of a borrower’s
loan. 12 U.S.C. § 2605(e)(1)(A). RESPA defines “loan servicing” as “receiving any scheduled
periodic payments from a borrower pursuant to the terms of any loan ... and making the payments
of principle and interest and such other payments with respect to the amounts received from the
borrower as may be required pursuant to the terms of the loan.” 12 U.S.C. § 2605(i)(3).
Plaintiffs, however, have not alleged how Litton failed to provide an adequate response to
Plaintiffs’ QWRs. In order to state a claim for relief under § 2605(e), Plaintiffs must allege more
than conclusory statements that Litton failed to provide the information requested. See Thomas
v. Trott & Trott PC, 2011 WL 576666 at *8 (E.D. Mich. 2011) (Zatkoff, J.); Mekani v.
Homecomings Financial, LLC 752 F.Supp. 2d 785, 795 (Borman, J.); Langley v. Chase Home
Finance, LLC, 2011 WL 1150772 (W.D. Mich. 2011). Plaintiffs have not alleged in any detail
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how the responses by Litton are insufficient, and as such, have failed to state a claim under §
2605(e). At a minimum, Plaintiffs have not pleaded the facts necessary, as required by Twombly,
to plausibly suggest that Litton failed to adequately respond to Plaintiffs’ QWRs.
Furthermore, even in treating all well-pleaded allegations in the complaint as true, Litton
has fully complied with § 2605(e). Litton timely responded to both of Plaintiffs’ QWRs and
provided a summary of Plaintiffs’ loan, a statement that Litton believes the account of the
borrower is correct, the name and telephone number of a department that can provide assistance
to Plaintiffs, numerous documents and records related to the servicing of Plaintiffs’ loan,
documents beyond the scope of Litton’s servicing of Plaintiffs’ loan, an explanation of why
much the information requested is unavailable or cannot be obtained by the servicer, and a
statement that Litton could not pinpoint any particular error because Plaintiffs failed to identify a
specific issue. (Def. Mtn., Exs. F, I). Litton included the following documents in response to
Plaintiffs QWRs: Payoff Statement, Payment History, Truth in Lending Act disclosure, HUD-1
Settlement Statement, Detail Transaction History, Good Faith Estimate, Notice of Right to
Cancel, Modification Agreement, Title Policy, Adjustable Rate Note, Deed of Trust, foreclosurerelated correspondence, disclosures, Composite Report, Appraisal Report, and Litton Welcome
Letter.
From these exhibits, which can be viewed as part of the pleadings, Litton appears to have
fully complied with Plaintiffs’ RESPA request. Therefore, in viewing the pleadings in a light
most favorable to Plaintiffs, Litton satisfied the requirements of § 2605(2) of RESPA. Plaintiffs,
in turn, have failed to state a claim of relief under § 2605 of RESPA. Accordingly, the Court
shall grant Defendants’ motion to dismiss Count II of Plaintiffs’ complaint.
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III.
Plaintiffs’ Complaint Is Contradictory And Plaintiffs’ Contractual Allegations Fail
To State A Claim Upon Which Relief Can Be Granted.
The remainder of Plaintiffs’ claims are based upon the allegation that Plaintiffs never
entered into a mortgage agreement in 2004, and that the mortgage documents relied upon by
Defendants are forged documents. Plaintiffs’ complaint (and second amended complaint),
however, alleges materially contradictory facts that cause all Plaintiffs’ other claims to fail on the
pleadings.
Plaintiffs allege they that they never signed the mortgage documents produced by Litton
and only signed 4 documents at their “closing” in 2004. (Complaint at ¶ 7). Plainitffs claim that
the mortgage and note have been forged. Id. at ¶ 17. These allegations, however, are contrary to
the documents incorporated into the pleadings. Defendants have submitted a copy of the
disputed mortgage and note, containing the signatures of both Plaintiffs, witnessed and signed by
a notary public. (Gov. Mtn. Ex. B). After this “closing” in 2004, Plaintiffs proceeded to pay the
mortgage note for three years. Plaintiffs fail to explain why they paid loan payments on a new
mortgage for three years if they never entered into said mortgage.
Furthermore, Plaintiffs admit that they entered into a loan modification agreement in
November of 2007. (Complaint at ¶ 8). As discussed by Defendants in their motion, Plaintiffs
loan modification “expressly references and affirms the validity of the mortgage loan transaction
originated in 2004.” (Gov. Mtn. at 7). The loan modification states, “Lender... amends and
supplements (1) the Mortgage, Deed of Trust, or Security Deed (the ‘Security Instrument’), and
Timely Payment Rewards Rider, if any, dated May 17, 2004.” Id. at Ex. C, p. 1. Plaintiffs again
fail to explain how they were able to modify a mortgage agreement to which they allegedly never
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executed.
Because Plaintiffs have not responded to Defendants’ motion to dismiss, they have not
refuted any of the contentions set forth by Defendants in their motion to dismiss. As a result of
these contradictory allegations, Plaintiffs have no “reasonably founded hope” of making their
case.3 Twombly, 550 U.S. at 555. Accepting all Plaintiffs’ allegations as true, Plaintiffs have
failed to “state a claim to relief that is plausible on its face.” Id. at 570. The court need not
accept as true legal conclusions or unwarranted factual inferences. Morgan v. Church's Fried
Chicken, 829 F.2d 10, 12 (6th Cir.1987). Accordingly, the Court grants Defendants’ motion to
dismiss as to the remainder of Plaintiffs claims.
III.
Plaintiffs’ Second Amended Complaint Is Futile.
Plaintiffs filed their second motion to amend their complaint on April 25, 2011, more
than two months after Defendants filed their motion to dismiss. Plaintiffs’ second amended
complaint includes some additional facts and alleges the following the claims: “Fraudulent
Concealment and/or Fraudulent Misrepresentation” (Count I); “Negligent Misrepresentation”
(Count II); “Intentional Infliction of Emotional Distress” (Count III); “Fraud” (Count VI);
“RESPA Violations” (Count V); and “Civil Conspiracy” (Count VI).
A party may amend its pleadings once as a matter of course within 21 days after service
of a Rule 12(b) motion. FED . R. CIV . P. 15(a)(1). Leave to amend is to be freely given when
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Additionally, Plaintiffs’ Counts VI and VII, “Violation of M.C.L. § 750.251" and
“Violation of M.C.L. § 750.252,” respectively, fail to state claims because they allege violations
of criminal statutes that do not provide for a private right of action. In the remainder of Plaintiffs
claims, Plaintiffs either recite elements of law or make conclusory statements of liability. As
such, Plaintiffs’ have failed to allege the facts necessary to meet the basic pleading requirements
of Iqbal and Twombly, and can be dismissed on these alternative grounds as well.
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justice so requires. FED . R. CIV . P. 15(a)(2). However, a district court may deny leave to amend
a complaint if the Court finds that the amendment would be futile. Yuhasz v. Brush Wellman,
Inc., 341 F.3d 559, 569 (6th Cir. 2003). The Court should consider motions to dismiss in light of
proposed amendments to the complaint and determine whether the deficiencies in the complaint
would have been cured by the proposed amendments. Begala v. PNC Bank, 214 F.3d 776, 784
(6th Cir. 2000).
In this case, Plaintiffs’ second proposed amended complaint does not the cure the
deficiencies in Plaintiffs’ original complaint. Plaintiffs RESPA claim (Count V) is almost
identical to the Plaintiffs’ original RESPA claim and fails for the same reasons stated in Part II,
above. Similarly, the remainder of Plaintiffs’ claims are based upon the allegation that Plaintiffs
never entered into a mortgage agreement in 2004, and that the mortgage documents have been
forged. These claims (Counts I-V and Count VI) fail for the same reason discussed in Part III,
above. Alternatively, Plaintiffs’ claims of fraud, misrepresentation, and civil conspiracy fail
because Plaintiffs’ do not plead their fraud claims with particularity, as required by Fed. R. Civ.
P. 9(b). Harvey v. Ameriquest Mort. Co., 2010 WL 4386976 (E.D. Mich. 2010) (Duggan, J.).
Finally, Plaintiffs’ claim of intentional infliction of emotional distress (Count III) in its
proposed second amended complaint fails because Plaintiffs do not allege any extreme or
outrageous behavior on the part of Defendants. Under Michigan law, the essential elements of a
claim of intentional infliction of emotional distress are: 1) extreme and outrageous conduct, 2)
intent or recklessness, 3) causation, and 4) severe emotional distress. Graham v. Ford, 237
Mich.App. 670, 674 (2000); Webster v. United Auto Workers, Local 51, 394 F.3d 436, 442 (6th
Cir. 2005). In ruling on such a claim, it is initially for the trial court to determine whether the
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defendant’s conduct reasonably may be regarded as so extreme and outrageous to permit
recovery. Webster, 394 F.3d at 442. In this case, the Court cannot find any conduct on the part
of Plaintiffs that can be reasonably considered extreme or outrageous.
Based upon the pleadings, Plaintiffs proposed second amended complaint also fails to
state a claim to relief that is plausible on its face.
CONCLUSION
For the reasons set forth above, the Court GRANTS Defendants’ motion for judgment on
the pleadings on all counts and as to all Defendants (Doc. No. 11).
Accordingly, the Court DENIES both of Plaintiffs’ motions to amend their complaint.
(Doc. Nos. 19 & 23).
IT IS SO ORDERED.
Dated: June 21, 2011
s/ Sean F. Cox
U. S. District Court Judge
I hereby certify that on June 21, 2011, the foregoing document was served upon counsel of record
by electronic means and upon Otto and Carlyn Roller by First Class Mail at the address below:
Otto and Carlyn Roller
19481 Avon
Detroit, MI 48219
Dated: June 21, 2011
s/ Jennifer Hernandez
Case Manager
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