Darlington et al v. Bank of America, N.A. et al

Filing 17

MEMORANDUM OPINION AND ORDER. 1. Federal National Mortgage Association's Motion to Dismiss (Doc. No. 5 ) is GRANTED. 2. Defendant Bank of America, N.A.'s Motion to Dismiss (Doc. No. 8 ) is GRANTED. 3. Plaintiffs' Complaint (Doc. No. 1 , Ex. 1) is DISMISSED WITH PREJUDICE. (Written Opinion). Signed by Judge Donovan W. Frank on 4/30/2013. (BJS)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

James P. Darlington, and
Charlene J. Darlington,

Civil No. 13-65 (DWF/LIB)

Plaintiffs,
v.

MEMORANDUM
OPINION AND ORDER

Bank of America, N.A.;
BAC Home Loans Servicing, LP; and
Federal National Mortgage Association,
Defendants.

Jeffrey R. Vesel, Esq., Jeffrey R. Vesel Law Firm, counsel for Plaintiffs.
Margaret Rudolph, Esq., Sparrowleaf Dilts McGregor, Esq., and Andre T. Hanson, Esq.,
Fulbright & Jaworski LLP, counsel for Defendant Bank of America, N.A.
Christina M. Snow, Esq., and David R. Mortensen, Esq., Wilford, Geske & Cook, PA,
counsel for Defendant Federal National Mortgage Association.

INTRODUCTION
This matter is before the Court on motions to dismiss brought by Defendant
Federal National Mortgage Association (Doc. No. 5) and Defendant Bank of America,
N.A., for itself and as successor by merger with BAC Home Loans Servicing, LP (Doc.
No. 8). For the reasons set forth below, the Court grants Defendants’ motions to dismiss.

BACKGROUND
Plaintiffs James P. Darlington and Charlene J. Darlington (together, “Plaintiffs”)
are loan borrowers who executed a note and mortgage with respect to their home in
St. Cloud, Minnesota (the “Property”). (Doc. No. 1, Ex. 1, Compl. ¶ 1; Doc. No. 11, Ex.
1.) On January 13, 2005, Plaintiffs executed a mortgage in favor of Mortgage Electronic
Registration Systems, Inc. (“MERS”) as nominee for Bremer Bank, National Association.
(Doc. No. 11, Ex. 1.) On October 27, 2010, the mortgage was assigned to BAC Home
Loans Servicing, LP, which later merged with Bank of America, N.A. (together, “BOA”).
(Doc. No. 11, Ex. 2; Compl. ¶ 4.)
Plaintiffs attempted to obtain a loan modification beginning in June 2010 with
BOA. (Compl. ¶ 12.) According to the Complaint, BOA recommended that Plaintiffs
pursue a loan modification instead of attempting to reinstate the loan, and told
Mr. Darlington he would receive a loan modification packet within 10 days. (Id. ¶ 13.)
When he did not receive the packet, Mr. Darlington requested another, which he received
on June 28, 2011. (Id. ¶ 14.) Plaintiffs further allege that a BOA representative reassured
Mr. Darlington that Plaintiffs could “use reinstatement as a last option if the loan
modification did not work out.” (Id. ¶ 15.)
Plaintiffs defaulted on the loan, and were served with the Notice of Mortgage
Foreclosure Sale on December 20, 2011; 1 the sale was initially scheduled for February 9,

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Plaintiffs appear to allege that they received this notice sometime in January 2012.
(Compl. ¶ 17.)

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2012. (Compl., Ex. 1; Doc. No. 11, Ex. 3.) After receiving the notice, Mr. Darlington
claims he phoned BOA sometime in January 2012 and asked for information about “the
full amount owed and the past due amount for reinstatement.” (Compl. ¶ 18.)
Also in January 2012, BOA allegedly informed Mr. Darlington that Plaintiffs did
not qualify for any loan programs because their paperwork was not received on time. (Id.
¶ 16.) A supervisor then informed Mr. Darlington that BOA had misplaced the loan
paperwork. (Id.) Plaintiffs claim that the supervisor also told Mr. Darlington that
Plaintiffs’ only option was to file an internal appeal to determine whether the paperwork
had been provided in a timely manner. (Id.)
The foreclosure sale ultimately occurred on March 1, 2012, as evidenced by the
Sheriff’s Certificate of Sale. (Doc. No. 11, Ex. 3.) BOA purchased the Property for the
sum of $326,748.11. (Id.)
On March 8, 2012, 2 Mr. Darlington called BOA again and offered to pay the past
due sum in order to reinstate the loan. (Doc. No. 1, Darlington Aff. ¶ 10.) Plaintiffs
claim that BOA refused to accept Plaintiffs’ “tender of full payment ($48,259.46).”
(Compl. ¶ 20.) On the same day, Mr. Darlington phoned BOA’s foreclosure attorneys,
who allegedly “also refused to accept Mr. Darlington’s payment.” (Id. ¶ 21.) Plaintiffs

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Plaintiffs’ Complaint alleges that this call was made on February 8, 2012.
(Compl. ¶ 19.) Mr. Darlington’s sworn affidavit, however, states that he made the call on
March 8, 2012, after having allegedly postponed the sheriff’s sale to March 9, 2012.
(Darlington Aff. ¶¶ 10-11.) Plaintiffs have submitted no responsive memorandum and
have not disputed that the call was in fact placed on March 8, 2012.

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claim that “the law firm told Mr. Darlington that the only way payment could be made
was by mailing to [BOA] and that it was too late to make a payment.” (Id.)
On November 16, 2012, BOA conveyed the Property to Federal National
Mortgage Association (“Fannie Mae”) by virtue of a quit-claim deed. (Doc. No. 11,
Ex. 4.)
Plaintiffs initially filed a Complaint in Stearns County District Court, in which
they assert the following four causes of action: (1) Declaratory Judgment, pursuant to
Minn. Stat. § 555.02; (2) Injunctive Relief; (3) Violation of RESPA, 12 U.S.C. § 2605(e);
and (4) Negligent and/or Fraudulent Misrepresentation. (Compl. ¶¶ 23-46.) BOA
subsequently removed the action to this Court. (Doc. No. 1.)
Defendants now move to dismiss all of Plaintiffs’ claims. Plaintiffs have failed to
respond to Defendants’ motions in any respect. The Court considers the pending motions
below.
DISCUSSION
I.

Legal Standard
In deciding a motion to dismiss pursuant to Rule 12(b)(6), a court assumes all

facts in the complaint to be true and construes all reasonable inferences from those facts
in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th
Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory
allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir.
1999), or legal conclusions drawn by the pleader from the facts alleged. Westcott v. City
of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court may consider the complaint,
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matters of public record, orders, materials embraced by the complaint, and exhibits
attached to the complaint in deciding a motion to dismiss under Rule 12(b)(6). Porous
Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).
To survive a motion to dismiss, a complaint must contain “enough facts to state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
545 (2007). Although a complaint need not contain “detailed factual allegations,” it must
contain facts with enough specificity “to raise a right to relief above the speculative
level.” Id. at 555. As the United States Supreme Court recently reiterated, “[t]hreadbare
recitals of the elements of a cause of action, supported by mere conclusory statements,”
will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise a
reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550
U.S. at 556.
II.

Motions to Dismiss
A.

Payment Refusal

Counts I, II, and IV of Plaintiffs’ Complaint stem from the allegation that
Defendants wrongfully refused to accept payment of the full amount owed on the loan;
therefore the sheriff’s sale and foreclosure are void. Plaintiffs further claim that BOA
and its attorneys misrepresented that they could not accept Plaintiffs’ reinstatement
payments.
There is no dispute that Plaintiffs failed to attempt to reinstate their loan until
March 8, 2012, seven days after the sheriff’s sale of the Property occurred on March 1,
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2012. Nor is there any evidence that Plaintiffs attempted to redeem the Property (or
offered to pay the $326,748.11 sale price) prior to the expiration of the six-month
statutory redemption period. As such, Plaintiffs were not entitled to reinstate their
mortgage as a matter of law pursuant to Minnesota Statute. See Minn. Stat. § 580.03.
Because Counts I, II, and IV all derive from the same operative facts regarding
Defendants’ alleged refusal to accept a partial payment of $48,259.46 after the sale of the
Property, all three Counts are thus properly dismissed.
B.

RESPA

In Count III of Plaintiffs’ Complaint, Plaintiffs allege that Defendants violated
RESPA by failing to properly respond to Plaintiffs’ qualified written request (“QWR”).
In particular, Plaintiffs claim that BOA failed to notify them of any loan modification
programs available to them.
RESPA requires that when a “servicer of a federally related mortgage loan
receives a [QWR] from the borrower . . . for information related to the servicing of such
loan, the servicer shall provide a written response acknowledging receipt of the
correspondence within 20 days . . . unless the action requested is taken within such
period.” 12 U.S.C. § 2605(e)(1)(A). According to Plaintiffs’ Complaint, Plaintiffs sent a
letter to BOA, dated February 8, 2012, which constituted a QWR. (Compl. ¶ 35.) BOA
responded to that letter on February 29, 2012 and on March 8, 2012, but provided no
documents or information regarding loan modification. (Id. ¶¶ 36-37.) BOA disputes
that Plaintiffs’ February 8, 2012 communication constitutes a QWR and denies that it had
an obligation to respond to any modification request raised in the purported QWR.
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A QWR is 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 buyer; 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.
12 U.S.C. § 2605(e)(1)(B). RESPA only obligates loan servicers to respond to requests
for information relating to the servicing of their loans. See, e.g., Yakowicz v. BAC Home
Loans Servicing, LP, Civ. No. 12-1180, 2013 WL 593902, at *5 (D. Minn. Feb. 15,
2013); Hintz v. JP Morgan Chase Bank, N.A., Civ. No. 10-2825, 2011 WL 579339, at *8
(D. Minn. Feb. 8, 2011). “Servicing” means “receiving any scheduled periodic payments
from a borrower pursuant to the terms of any loan, including amounts for escrow
accounts . . . and making the payments of principal 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). Upon receipt of a QWR, a loan servicer
has 20 days to acknowledge its receipt and 60 days to respond. 12 U.S.C.
§ 2605(e)(1)-(2).
Based on the allegations in the Complaint, the Court concludes that Plaintiffs’
letter does not constitute a QWR. Plaintiffs’ February 8, 2012 communication did not
identify any purported errors in Plaintiffs’ account, dispute the debt, or request correction
of the same. Nor did it identify any errors in loan servicing. Instead, Plaintiffs concede
that their letter sought information regarding loan modification, which is unrelated to the
servicing of the loan itself. (Compl. ¶ 35 (“In a letter dated February 8, 2012, the
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Darlingtons submitted a QWR to Bank of America, which sought specific information
regarding what loan modification programs the Darlingtons might be eligible for.”)); see,
e.g., Hintz, Civ. No. 10–2825, 2011 WL 579339, at *8 (noting that courts routinely
interpret section 2605 as requiring a QWR to relate to the servicing of the loan, not the
modification of a loan); Van Egmond v. Wells Fargo Home Mortg., Civ. No. 12-0112,
2012 WL 1033281, at *4 (C.D. Cal. Mar. 21, 2012) (“RESPA, however, only obligates
loan servicers to respond to borrowers’ requests for information relating to the servicing
of their loans, which does not include loan modification information.”). As such, the
Court concludes that Plaintiffs have failed to state a RESPA claim upon which relief can
be granted. The Court therefore dismisses Count III.
Because it is apparent to the Court that there is no legal or factual basis for any
asserted claim against Defendants, the Court grants Defendants’ motions to dismiss. All
Counts of the Complaint are properly dismissed with prejudice.
ORDER
Based upon the foregoing, IT IS HEREBY ORDERED that:
1.

Federal National Mortgage Association’s Motion to Dismiss (Doc. No. [5])

is GRANTED.
2.

Defendant Bank of America, N.A.’s Motion to Dismiss (Doc. No. [8]) is

GRANTED.
3.

Plaintiffs’ Complaint (Doc. No. [1], Ex. 1) is DISMISSED WITH

PREJUDICE.

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LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: April 30, 2013

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

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