Derrico v. Pennymac Corp. et al

Filing 37

ORDER Granting 8 Motion to Dismiss. Amended Complaint deadline: 8/13/2016. IT IS FURTHER ORDERED that 30 Motion for Summary Judgment is DENIED as moot. Signed by Judge Andrew P. Gordon on 7/14/16. (Copies have been distributed pursuant to the NEF - TR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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DEON DERRICO,

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Case No. 2:15-CV-01165-APG-NJK
Plaintiff,

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v.
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PENNYMACK CORP. and MTC
FINANCIAL CORPORATION d/b/a
TRUSTEE CORPS,

ORDER GRANTING TRUSTEE
CORPS’ MOTION TO DISMISS AND
DENYING MOTION FOR SUMMARY
JUDGMENT
(ECF Nos. 8, 30)

Defendants.

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This case involves an alleged wrongful foreclosure on a property located at 7356

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Savannah Falls Street, Las Vegas, Nevada 89131. Plaintiff Deon Derrico has brought claims for

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(1) wrongful foreclosure, (2) slander of title, (3) request to set aside the foreclosure sale, and (4)

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request to void or cancel the Trustee’s Deed of Sale. According to the complaint, Derrico is

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asserting all four claims under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C.

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§ 2601 et seq. Specifically, the complaint states that all four claims are based on violations of 12

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C.F.R. § 1024.41, RESPA’s regulations concerning loss mitigation applications.1

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Defendant MTC Financial d/b/a/ Trustee Corps moves to dismiss Derrico’s complaint

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with prejudice. Trustee Corps argues, in part, that the obligations of RESPA only apply to loan

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servicers and not foreclosure trustees. It further argues that to the extent Derrico’s complaint is

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based on state law or federal common law, the claims must be dismissed because they fail to state

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a claim under Federal Rule of Civil Procedure 12(b)(6) and because no common law obligations

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can be imposed on a trustee that are not specifically outlined by statute. In response, Derrico

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explicitly states that his claims against Trustee Corps are not based on state or common law, but

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on RESPA.

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The complaint refers to RESPA as 12 U.S.C. § 1024 et seq. However, this appears to be
a typographical error. The United States Code section related to RESPA is 12 U.S.C. § 2601 et
seq. The federal regulations related to RESPA are located at 12 C.F.R. § 1024 et seq. Thus, it
appears that Derrico means to cite to sections of RESPA’s federal regulations which he believes
the defendants have violated.

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The specific RESPA-related federal regulations cited in the complaint are 12 C.F.R.

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§ 1024 et seq., which were promulgated to “increase a loan servicer’s obligations to respond to a

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qualified written request” from a borrower. Guccione v. JPMorgan Chase Bank, N.A., No. 3:14-

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CV-04587-LB, 2015 WL 1968114, at *8 (N.D. Cal. May 1, 2015). RESPA and its corresponding

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regulations apply only to loan servicers. See Green v. Cent. Mortg. Co., No. 3:14-CV-04281-LB,

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2015 WL 7734213, *15 (N.D. Cal. Dec. 1, 2015) (RESPA’s “regulations circumscribe the

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conduct of loan servicers only”). The statute defines a “loan servicer” as a person responsible for

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“receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan.”

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12 U.S.C. § 2605(i)(3). However, Derrico does not allege that Trustee Corps is a loan servicer.

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Rather, he alleges that it is a foreclosure trustee. He also does not allege that Trustee Corps ever

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received or was responsible for receiving periodic payments on the loan. In addition, Derrico

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cites no authority to support his contention that a trustee can be sued under RESPA directly or as

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an agent of a loan servicer.

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I therefore grant Trustee Corps’ motion with prejudice to the extent that Derrico is trying

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to bring claims against Trustee Corps under RESPA because the statute applies only to loan

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servicers and thus amendment would be futile. Because I am dismissing the claims against

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Trustee Corps, I deny as moot Trustee Corps’ later motion for summary judgment. ECF No. 30.

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However, because Derrico has not amended his complaint previously, I will allow him leave to

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amend the complaint to add facts and allegations that would constitute a valid clam or defense

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against Trustee Corps on some basis other than RESPA, if he can do so. I caution Derrico that if

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he chooses to amend the complaint, he must provide a short and plain statement of the claim

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showing that he is entitled to relief and must state a claim to relief that is plausible on its face to

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comport with Rule 12(b)(6)’s requirements.

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IT IS THEREFORE ORDERED that defendant MTC Financial d/b/a/ Trustee Corps’

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motion to dismiss (ECF No. 8) is GRANTED with prejudice as it relates to any claims against

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Trustee Corps under RESPA. Plaintiff Deon Derrico may amend the complaint to add facts and

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allegations that would constitute a valid clam or defense against Trustee Corps on some basis

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other than RESPA, if he can do so. Derrico has 30 days from the date of this order to file an

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amended complaint, should he so choose.

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IT IS FURTHER ORDERED that MTC Financial d/b/a/ Trustee Corps’ motion for
summary judgment (ECF No. 30) is DENIED as moot.
DATED this 14th day July, 2016.

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ANDREW P. GORDON
UNITED STATES DISTRICT JUDGE

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