BELLO v. BAYVIEW LOAN SERVICES, LLC et al
OPINION. Signed by Chief Judge Jose L. Linares on 09/13/2018. (ek)
NOT FOR PUBLICATION
U1ITED STATES DISTRICT COURT
DISTRICT Of NEW JERSEY
CIVIL ACTION NO. 17-13700 (JLL)
BAYVIEW LOAN SERVICING, LLC,
LINARES, Chief District Judge
The sole remaining defendant, Bayview Loan Servicing, LLC (hereinafter,
“Bayview”), moves pursuant to Federal Rule of Civil Procedure (hereinafter, “Rule”)
12(b)(6) to dismiss the claims that have been asserted against it in this action by the
plaintiff, Gilda Bello. (ECF No. 10 through ECf No. 10-5.) Bello has not filed
opposition to Bayview’s motion, even though the Court granted her two extensions in
which to file such opposition. (ECf Nos. 14, 16.)
The Court resolves Bayview’s motion to dismiss upon a review of the papers and
without oral argument. See L. Civ. R. 78.1(b). For the following reasons, the Court
grants Bayview’s motion to dismiss.
Bello alleges that Bayview, which is the servicer of her home loan, failed to abide
by the provisions of the Real Estate Settlement Procedures Act (hereinafter, “RESPA”)
when it: (1) denied her application for a loan modification (hereinafter, “Application”);
and (2) then continued to move forward with the foreclosure proceedings that had been
previously instituted in state court after that denial. (ECF No. 1.) In particular, Bello
alleges that Bayview failed to consider her argument that Bayview had underestimated
her income in the Application process. (Id.) As a result, Bello alleges that she is entitled
to damages pursuant to the RESPA provisions found under 12 U.S.C.
§ 2605(f) and
C.F.R. part 1024. (ECF No. 1.) Bello also alleges that she is entitled to damages under a
theory of negligence and under the New Jersey Consumer Fraud Act (hereinafter, “the
NJCFA”) based upon the purported underlying RESPA violations. (Id.)
Bello initially submitted her Application to Bayview on April 4, 2017, and
submitted further documentation in support of the Application on May 17, 2017. (Id. at
5; see also ECf Nos. 1-1, 1-2.) On May 24, 2017, Bayview denied the Application
because it deemed Bello to have insufficient income. (ECF No. 1-3 at 4—7.)
On June 1, 2017, Bello sent correspondence (hereinafter, “the June 2017
Correspondence”) to Bayview to challenge the denial of her Application. (Id. at 9—15.)
On June 13, 2017, Bayview advised Bello that it had received the June 2017
Correspondence on June 8, 2017, and that it would resolve her concerns shortly. (ECF
No. 1-3 at 17.) On July 21, 2017, Bayview notified Bello that it had decided to affirm its
previous denial of the Application. (ECF No. 1-3 at 19—20.)
As of the date when Bello filed the complaint in this action, i.e., December 27,
2017, a foreclosure sale had yet to occur. (ECF No. 1 at 9 (Bello alleging that there is an
“imminent foreclosure sale”).)
The Court is guided by the following standards in resolving Bayview’s motion to
It is not necessary for the Court to restate the standard for resolving a motion to
dismiss a complaint that is made pursuant to Rule 12(b)(6), because that standard has
already been enunciated. See Falakovic v. Wetzel, $54 F.3d 209, 2 19—20 (3d Cir. 2017)
(setting forth the standard, and explaining Bell Atl. Corp. v. Twombty, 550 U.S. 544 (2007),
and Ashcroft v. Iqbal, 556 U.S. 662 (2009)); see also fowler v. UFMC Shadyside, 57$ F.3d
203, 209—12 (3d Cir. 2009) (setting forth the standard, and explaining Iqbal and Twombly).
Unopposed Motions To Dismiss
The deadline for Bello to oppose Bayview’s motion to dismiss has elapsed, and
Bello has failed to file any opposition thereto. Nevertheless, the Court is required to
address Bayview’s motion to dismiss onthe merits even if it is unopposed by Bello. See
Jones v. Unemployment Comp. Bd. of Review, 3$1 F. App’x l$7, 1$9 (3d Cir. 2010)
(holding that “a Rule 12(b)(6) motion should not be granted without an analysis of the
merits of the underlying complaint”); Stackhottse v. Mazurldewicz, 951 F.2d 29, 30 (3d
Cir. 1991) (holding the same).
Bayview’s Motion To Dismiss
RE SPA Claim
Bayview argues that contrary to Bello’s allegations in the complaint, it did not
violate RESPA simply by denying Bello’s Application. (ECF No. 10-2.) Bayview’s
unopposed argument is correct. Under the provisions of RESPA, Bayview was not
required to grant Bello’s Application merely because she filed one. See 12 C.F.R.
1024.41(a) (providing “[n]othing in tRESPA] imposes a duty on a servicer to provide any
borrower with any specific loss mitigation option”); see ct/so Loconsole v. Wet/s Fargo
Mortg.,No. 17-8362, 2012 WL 3158816, at *8 (D.N.J. June 28, 2018) (dismissing a
borrower’s claim that a loan servicer violated RESPA by miscalculating his income in its
denial of his loan modification application and of his subsequent appeal, because RESPA
“do[es] not require a servicer to offer a loan modification option or to ‘consider’ any of
the borrower’s representations as determinative”).
Bayview also argues that it did not violate RESPA concerning the previouslyinstituted foreclosure proceedings, because RESPA merely baiTed it from actually
seeking to conduct a foreclosure sate while the Application and the resolution of the June
2017 Correspondence were pending. (ECF No. 10-2.) This second unopposed argument
by Bayview also is correct. The RESPA regulations only prevent a loan servicer from
conducting a foreclosure sale while a bo1Towers loan modification application is
pending, and do not require the servicer to completely withdraw any pending foreclosure
proceedings. See 12 C.F.R.
1024.41(g), (h); see also Loconsole, 2018 WL 3158816, at
*6 (holding that RESPA does not bar a loan servicer from seeking a judgment of
foreclosure, but that RESPA’s protections certainly apply “before a foreclosure sale has
taken place”). As Bello herself confirmed in the complaint, the foreclosure sale has yet
to occur. (ECF No. 1 at 9.) Thus, Bayview did not violate RESPA, and Betlo’s RESPA
claim is dismissed for the aforementioned reasons.
Bello’s negligence claim is asserted pursuant to state law and is completely
dependent upon the viability of her RESPA claim. (See, e.g., ECF No. 1 at 11 (alleging
Bayrview “negligently and repeatedly breached all of its duties under RESPA”).) As this
Court is dismissing the RESPA claim, the state negligence claim also must necessarily
fail. See Taggart v. Noni’estliortg. Inc., 539 F. Appx. 42,45 (3d Cir. 2013) (affirming
the district court’s dismissal of “state claims [that] were largely duplicative of the
[plaintiffs RESPA claim],” as the RESPA claim had been dismissed on the merits).
In any event, it appears that any claim asserted by Bello for negligence in this
action is barred by the economic loss doctrine, which prohibits Bello from recovering
under a tort theory for economic losses that flow from a contract. See Perkins v. Wash.
Mttt., fSB. 655 F. Supp. 2d 463, 471 (D.N.J. 2009) (dismissing a borrower’s negligence
claim against a loan servicer that was involved in foreclosure proceedings against the
bolTower based on the economic loss doctrine, because the borrower and the servicer
were parties to a contract, i.e., the mortgage and the note); Skypala v. Mortg. Etec.
Sys., Inc., 655 F. Supp. 2d 451, 460 (D.N.J. 2009) (holding the same). Thus,
Bello’s negligence claim is dismissed for the aforementioned reasons.
Bello alleges that Bayview failed to address the June 2017 Correspondence in a
timely fashion, and that this conduct violated the NJCFA. In support in her complaint,
Bello characterizes the June 2017 Correspondence as a “notice of error,” and alleges that
Bayview “failed to review [the] application within [the] express time provided and then
relied on its own failure as the sole basis to deny the application.” (ECF No. 1 at 12—13.)
Despite Bello’s characterization of the June 2017 ColTespondence as a notice of
Bello was actually asking Bayview to reconsider the denial of her Application.
Thus, the June 2017 Correspondence was more akin to an appeal from the denial of her
Application, because the procedures for submitting a notice of error to a loan servicer
cannot be used to challenge the denial of a loan modification application. See Wiggins v.
Hudson City Say. Bank, No. 15-1938, 2015 WL 4638452, at *8 (Bankr. D.N.J. Aug. 4,
2015) (holding the same in discussing RESPA regulations); see also Nash v. PNC Bank,
NA., No. 16-2910, 2017 WL 1424317, at *6 (D. Md. Apr. 20, 2017) (adopting the
aforementioned reasoning set forth in the Wiggins holding); Mikutski v. Wells Fargo
Bank, NA., No. 17-179, 2017 WL 3701213, at *4 (E.D. Wisc. Aug. 25, 2017) (adopting
the portion of the Nash holding that adopted the reasoning set forth in the Wiggins
Furthermore, Bayview addressed the concerns expressed in Bello’s June 2017
Correspondence within 43 days of its receipt, i.e.,
from June 8, 2017 to July 21, 2017.
This is a reasonable timeframe for Bayview to issue a decision, particularly in view of the
fact that Bayview advised Bello five days after receipt of the June 2017 Correspondence,
i.e., on June 13, 2017, that a response concerning her appeal would be forthcoming.
(ECF No. 1-3 at 17.) Thus, Bello’s NJCFA claim is dismissed.
For the aforementioned reasons, the Court grants Bayview Loan Servicing, LLC’s
motion to dismiss, and dismisses Bello’s claims that are asserted against it. The Court
will enter an appropriate order.
JE L. LINARES
5Ja’(ef Judge, United States District Court
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