HERRERA et al v. CENTRAL LOAN ADMINISTRATION & REPORTING
OPINION. Signed by Chief Judge Jose L. Linares on 10/12/17. (DD, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MARIA HERRERA and BIANFI HERRERA,
Civil Action No.: 17-4774 (JLL)
CENTRAL LOAN ADMINISTRATION &
LINARES, Chief District Judge.
This matter comes before the Court by way of Defendant Central Loan Administration and
Reporting’s (“Defendant”) Motion to Dismiss Plaintiffs Maria Heirera and Bianfi Heirera’s
(“Plaintiffs”) Complaint pursuant to Rule 1 2(b)(6) of the Federal Rules of Civil Procedure. (ECF
No. 4). Plaintiffs have submitted opposition to Defendant’s motion, (ECF No. 7), and Defendant
submitted a reply brief, (ECF No. 8). The Court has considered the parties’ submissions and
decides this matter without oral argument pursuant to Rule 78 of the Federal Rules of Civil
Procedure. For the reasons set forth below, the Court denies Defendant’s Motion to Dismiss.
Plaintiffs were the owners and residents of the real property located at 695 Raritan Avenue,
Perth Amboy, NJ 08861 until it was sold at a foreclosure sale. (ECF No. 1 (“Compl.”) ¶ 5). Prior
to the foreclosure sale, Plaintiffs submitted complete loss mitigation paperwork to Defendant, who
serviced the mortgage loan prior to the foreclosure, but Plaintiffs did not retain a copy of the
Over the next several months, Defendant sent incomplete or contradictory
documents to Plaintiffs regarding their loss mitigation application. (Id.
7). Plaintiffs made
several attempts to obtain their servicing files from Defendant, including one letter in August 2015
and another in January 2016, with no success. (Id.
10, 14). Eventually, Defendant denied
Plaintiffs’ application and the house was sold at foreclosure on September 2$, 2016. (Id.
On September 29, 2016, a day afier the foreclosure sale, Plaintiffs served Defendant a
request for information related to the servicing of Plaintiffs’ mortgage loan in order to determine
the validity of the loss mitigation application denial and assess their rights. (Id.
did not respond, and on March 29, 2017, Plaintiffs served Defendant with a Notice of Error. (Id.
¶112). Defendant responded to the Notice of ElTor on May 2, 2017, acknowledging its failure to
timely respond and indicating that a full response was made to Plaintiffs’ August 2015 and January
2016 letters. (Id.
Defendant attached a copy of the responses to the two previous letters
denying the loss mitigation application, but did not include the rest of the loss mitigation file that
the response letters listed as attached. (Id.
14—16). On May 8, 2017, Plaintiffs’ counsel wrote
a letter to Defendant, explaining that they had not received the full file on the denial of Plaintiffs’
loss mitigation application as they originally requested. (Id.
this letter. (Id.
16). Defendant has not replied to
17). Accordingly, Plaintiffs brought this action to compel Defendant to comply
with the Real Estate Settlement Procedures Act (“RESPA”), and disclose the requested
To withstand a motion to dismiss for failure to state a claim, “a complaint must contain
sufficient factual matter. accepted as true, to ‘state a claim to relief that is plausible on its face.”
Ashcroflv. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d $68 (2009) (quoting Bell At!.
Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). “A claim has
facial plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 672 (citing
Twombly, 550 U.S. at 556). “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).
To determine the sufficiency of a complaint under Twombly and Iqbat in the Third Circuit,
the Court must take three steps. “First, it must ‘tak[eJ note of the elements a plaintiff must plead
to state a claim.’ Second, it should identify allegations that, ‘because they are no more than
conclusions, are not entitled to the assumption of truth.’ Finally, ‘[w]hen there are well-pleaded
factual allegations, a court should assume their veracity and then determine whether they plausibly
give rise to an entitlement for relief.” See Connelly
Lane Constr. Coip., 809 F.3d 780, 787 (3d
Cir. 2016) (quoting Iqbal, 556 U.S. at 675, 679) (citations omitted). “In deciding a Rule l2(b)(6)
motion, a court must consider only the complaint, exhibits attached to the complaint, matters of
public record, as well as undisputedly authentic documents if the complainant’s claims are based
upon these documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010).
Both Plaintiffs and Defendant agree that, to state a claim under RESPA, a plaintiff must
identify a violation of one of the statute’s obligations and then assert either actual damages or a
pattern or practice of noncompliance. (ECF No. 4-2, at 6; ECF No. 7, at 9). Defendant raises three
arguments against the allegations alleged in Plaintiffs’ complaint: (1) Plaintiffs’ September 29,
2016 letter was not a qualified written request (“QWR”) as defined by RESPA, and thus did
require a response; (2) Plaintiffs previously received the information requested in the QWR; and
(3) Plaintiffs have not alleged any actual damages, nor any pattern or practice of noncompliance
on the part of Defendant. The Court addresses each of these issues separately below and dismisses
A. Qualified Written Request
Plaintiffs’ September 29, 2016 letter did amount to a QWR. Under
12 U.S.C. §2605(e)(1)(B)(ii), a QWR is a “written correspondence
that includes a statement
of the reasons for the belief ofthe 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.” To
state a claim for failure to respond to an information request, a plaintiff must plead sufficient facts
“support[ing] the reasonable inference that” the plaintiff sent a QWR to the defendant as described
in 12 U.S.C. §2605(e)(1)(B)(ii). Tredo v. Ocwen Loan Servicing, LLC, No. 14-cv-3013, 2014 WL
5092741, at *9 (D.N.J. Oct. 10, 2014).
Defendant argues that Plaintiffs’ September 29, 2016 letter did not amount to a QWR
because it failed to include any reason to believe their account contains an error, thus making this
a baseless request. (ECF No. 4-2, at 10). Plaintiffs respond by pointing out the QWR standard
does not require a “statement of reasons,” it only requests that one be provided to “the extent
applicable.” (ECF No. 7, at 11). The Court agrees that, even if a statement of reasoning is not
included. Plaintiffs can still satisfy the QWR requirement by providing “sufficient detail to the
servicer regarding other information sought.” See Catalan v. GMACMortg. Coip., 629 F.3d 676,
687 (7th Cir. 2011) (“[t]o the extent that a borrower is able to provide reasons for a belief that the
account is in error, the borrower should provide them, but any request for information made with
sufficient detail is enough under RESPA to be a qualified written request and thus to trigger the
servicer’s obligations to respond.”). The plain language of 12 U.S.C. §2605(e)(1)(B)(ii) also
supports the finding that a borrower can provide either a statement of reasons or sufficiently
detailed information regarding the loan sought. Specifically, the fact that the statute uses the words
“if applicable” and
between its description of “statement of reasons” and “sufficient detail to
the servicer” indicates that the Plaintiffs have a choice to include either one of these in its letter to
qualify as a QWR. See 12 U.S.C. §2605(e)(l)(B)(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.”) (emphasis added).
Here, Plaintiffs’ September 29, 2016 letter was three pages long with a detailed, bulleted
list of the information they were seeking. (ECF No. 1-1 at Ex. 2) (requesting (1) the servicing file,
(2) identities of several parties, (3) explanations of all loss mitigation available, (4) the amount
needed to reinstate the loan, and (5) an accounting of all payments received, among other things).
The Court finds Plaintiffs’ September 29, 2016 letter went into sufficient detail about the loan
being sought. and that is enough for the letter to meet the QWR standard. See Catalan, 629 F.3d
at 687 (“RESPA does not require any magic language before a servicer must construe a written
communication from a borrower as a qualified written request and respond accordingly
reasonably stated written request for account information can be a qualified written request.”).
Therefore, the Court rejects Defendant’s argument that Plaintiffs did not provide an appropriate
Previous Receipt of Information
The Court is not persuaded by Defendant’s argument that Plaintiffs already received the
requested information. Under RESPA, a defendant has 30 days from the receipt of a borrower’s
QWR to respond to the request, and, if applicable, shall include (1) appropriate corrections in the
borrower’s account; (2) provide a written explanation including a statement of reasons why the
defendant believes the account was correct as determined; and (3) provide a written explanation
including information requested by the borrower or an explanation of why the information
requested was not available. See 12 U.S.C. §2605(e)(2)(A)—(B). Here, the record indicates that
Defendant did not respond to Plaintiffs’ September 29, 2016 letter until May 2, 2017, nearly a year
after the letter was sent. (ECF No. 7, at 6—7; see also ECF No. 1-1, at Ex. A) (“It appears
[Plaintiffs’] requests for infoniiation dated September 29, 2016
on October 11, 2016
were received by [Defendant]
but not forwarded to the appropriate area for response.”).
Despite its delays, Defendant argues that the information Plaintiffs requested was already
provided and thus no violation occurred for the Court to remedy. (ECF No. 4-2,
evidence of Defendant’s claim, Defendant points to its letter indicating Plaintiffs were sent a frill
loan history. a statement of the current holder of the mortgage, the frill aiearages on the account,
and all four denial letters of prior loan modification applications. (Id.; see also ECF No. 1-1, at
Ex. 3) (showing one letter Defendant sent to Plaintiffs responding to their requests and two
forwarded responses to past letters by Plaintiffs, but none of the documents that the letter states
However, Plaintiffs contend that Defendant did not include the entire loss
mitigation file but instead only included two old letters denying Plaintiffs’ application. (ECF No.
7). As evidence of their claim, Plaintiffs point to Defendant’s acknowledgment that it sent “most”
of the requested material in its older letters and not all of it. (ECF No. 7, at 7; ECF No. 1-1, at Ex.
1) (“[Defendant’s] records indicate that we responded to two previous letters from August 19,
2015 and January 4, 2016 which provided most of the information requested.”) (emphasis added).
The May 8, 2017 letter
Plaintiffs’ counsel offers further support that Plaintiffs have not been
provided with all the information they requested because their counsel again asks for the entire file
on the loss mitigation application in comparison to just the two denial letters that Plaintiffs claimed
to receive. (ECF No. 7, at 8; see also ECF No. 1-1 at Ex. 1).
Defendant’s contention that “most” of the information has been provided does not persuade
the Court that Plaintiffs have been provided all the requested information regarding their loss
mitigation application. Plaintiffs have made at least five requests on the t-ecord that seem to have
not been ftiliy met, including otie letter in August 2015 and another in January 2016, (Compl.
14); the September 29, 2016 letter analyzed above, (Compl.
11); the March 29, 2017 Notice of
¶ 12); the May 2, 2017 letter from Plaintiffs’ counsel, (Compi. ¶ 16);
more attempts by Plaintiffs to contact Defendant for the information, (Compi. ¶j 10, 1 8).
Considering Defendant’s Motion to Dismiss is reviewed under a plausibiLity standard, Plaintiffs’
facts need only “plausibly give rise to an entitlement for relief.” See Connelty, 809 F.3d at 787
(quoting Iqbal, 556 U.S. at 675, 679) (citations omitted). Plaintiffs have shown several requests
that indicate Defendant may have violated its
obligation under RESPA by not disclosing
the requested information, and so the Court concludes that Plaintiffs have alleged sufficient facts
to survive Defendant’s Motion to Dismiss regarding the breach of RESPA duties.
The Court finds that Plaintiffs made a sufficient showing of statutory damages to survive
Defendant’s Motion to Dismiss. As Defendant correctly points out, “a breach of RESPA duties
alone is not sufficient to state a claim, a party must also allege damages.” Jobe v. Bctnk ofAm.,
AA., No. lO-cv-1710, 2012 WL 7849939, at *8 (M.D. Pa. Apr. 5,2013)
Thttchinson v. Del.
Say. Bank f$B, 410 F. Supp. 2d 374, 383 (D.N.J. 2006)). In order to survive a motion to dismiss
on a cause of action under RESPA, a plaintiff must sufficiently allege either (1) actual damages as
the failure to comply with 12 U.S.C.
2605 or (ii) statutory damages in the case of a
pattern or practice of noncompliance with the requirements of 12 U.S.C.
Block v. Seneca
Mortg. Servicing, No. 16-cv-0449, 2016 WL 6434487, at *22 (D.N.J. Oct. 31, 2016) (citing
Giordano v. MGCMortg., Inc., 160 F. Supp. 3d 778, 781 (D.N.J. 2016)). The statute contains an
express requirement that damages accrue “as a result of the failure” to comply with the provisions.
See 12 U.S.C.
§ 2605(f). For actual damages, a causal link must be shown between the defendant’s
violation and the plaintiffs injuries. Giordano, 160 F. Supp. 3d, at 781. For statutory damages, a
pattern or practice of noncompliance requires more than one alleged violation of RESPA. See
Giordano, 160 F. Supp. 3d, at 785 (holding that dismissal was proper when an alleged pattern or
practice was based on only one incident of non-compliance).
Defendant argues that Plaintiffs’ complaint fails to mention any actual harm caused by
Defendant’s delays and nonresponses, so actual damages cannot be shown. (ECF No. 8, at 4).
Furthermore, Defendant claims that its failure to respond to one letter does not qualify as a pattern
or practice of noncompliance. (ECF No. 8, at 3).
Plaintiffs do not respond to the allegation that
no actual damages can be shown, but instead point to the multiple instances in the record of
Defendant either not responding or not giving a full disclosure to Plaintiffs’ requests in order to
prove a pattern or practice of noncompliance. (ECF No. 7, at 14). What Defendant fails to
recognize is that Plaintiffs are not alleging a failure to respond to one letter, but several instances
of noncompliance with Plaintiffs’ requests and letters that occurred over two years and continues
¶5 11—17) (showing Plaintiffs’ continued attempts to contact Defendant and never
receiving the full information that they requested). As of now, the record reflects at least five
letters that went without a timely and fttll response. (Id.). Upon further development of the case,
those alleged violations may be enough to show a “pattern or practice of noncompliance.” See
Kapsis 1’. Am. Home Mortg. Servicing Inc., 923 F. Supp. 2d 430, 448—49 (E.D.N.Y. 2013) (holding
that pattern or practice was shown for nonresponse to Plaintiffs’ information request when Plaintiff
alleged more than two incidents of non-compliance).
In response, Defendant points to the case Cole v. Wells Fargo Ban/c A’A., No. 12-cv-1932,
2016 WL 1242765 (D.N.J. Mar. 30, 2016) to support its argument that its failure to respond to
Plaintiffs’ letters is insufficient for statutory damages. (ECF No. 8, at 5). In Cole, this Court found
no pattern or practice to recover statutory damages when the defendant failed to respond to five
separate letters until six months after the first was sent. Id. at *27. Defendant argues that if five
letters and conclusory statements were not enough to show statutory damages in Cole, then the
five letters in this case are not enough either. (ECF No. 8, at 5). However, Cole is largely
distinguishable from this case, because Cole was decided on summary judgment, after the benefit
of discovery, while this case is at the inotion to dismiss phase. At this juncture, with only the
Plaintiffs’ complaint and a scant record, it would be premature to foreclose Plaintiffs’ statutory
damages claim when they sufficiently alleged a prima fade showing that Defendant may have
committed a pattern or practice of noncompliance. Therefore, the Court finds that Plaintiffs were
able to carry their burden in showing that their statutory damages claim is sufficiently plausible to
survive Defendant’s Motion to Dismiss. Based on these findings, the Court rejects Defendant’s
arguments regarding statutory damages and hereby denies Defendant’s Motion to Dismiss.
For the reasons above, the Court denies Defendant’s Motion to Dismiss. An appropriate
Order accompanies this
Judge, United States District Court
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