Figueroa v. HSBC Bank USA,N.A. et al

Filing 29

MEMORANDUM-DECISION AND ORDERED, that the HSBC Motion (Dkt. No. 9) and PHH Motion (Dkt. No. 20) are GRANTED; and it is further ORDERED, that PHHs original motion to dismiss (Dkt. No. 15) and Defendants Letter Motions (Dkt Nos. 25, 27) are DENIED as m oot; and it is further ORDERED, that Figueroas Complaint (Dkt. No. 1) is DISMISSED for failure to state a claim; and it is further ORDERED, that, if Figueroa wishes to further pursue her claims, she mustin accordance with Local Rule 7.1(a)(4) and wit hin thirty (30) days from the date of this Memorandum-Decision and Ordermove to amend her Complaint to address the deficiencies identified in this Memorandum-Decision and Order; and it is furtherORDERED, that, if Figueroa does not move to amend her C omplaint within thirty (30) days from the date of this Memorandum-Decision and Order, the Clerk of the Court shall close this case without further order of the Court. Signed by Senior Judge Lawrence E. Kahn on March 29, 2017. (Copy served via regular and certified mail)(sas)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
BETSY FIGUEROA,
Plaintiff,
-against-

1:16-CV-0893 (LEK/TWD)

HSBC BANK USA, N.A., et al.,
Defendants.

MEMORANDUM-DECISION AND ORDER
I.

INTRODUCTION
Pro se plaintiff Betsy Figueroa sued Defendants HSBC Bank USA, N.A., PHH Mortgage,

and Mortgage Electronic Registration Systems, Inc. (“MERS”), alleging several violations of
federal law and a state-law fraud claim, all stemming from a mortgage on Figueroa’s home. Dkt.
No. 1 (“Complaint”) ¶¶ 1–2, 15–18, 37–83. Defendants responded to the Complaint by moving
to dismiss, both for lack of subject matter jurisdiction and for failure to state a claim. Dkt. Nos. 9
(“HSBC Motion”),1 20 (“PHH Motion”);2 see also Dkt. Nos. 9-10 (“HSBC Memorandum”), 22
(“PHH Memorandum”). Figueroa did not respond to the motions. Docket; see also Dkt. Nos. 25,
27 (collectively, the “Letter Motions”) (requesting dismissal of this case due to Figueroa’s failure

1

A single motion was filed on behalf of both HSBC and MERS, who are represented by
the same counsel in this case. HSBC Mot.
2

PHH’s Motion is actually an amended version of its original motion to dismiss. Dkt.
No. 15. The differences appear to come from a factual mistake made by PHH in its original
supporting affidavit. Compare Dkt. No. 16, ¶ 2 (“[T]he letter was demonstrably never sent to
PHH.”), with Dkt. No. 21, ¶ 2 (“[T]he letter was demonstrably never sent to the proper address
designated by PHH . . . .”). Because Figueroa has failed to respond or object in any way, and
because this change has no impact on the resolution of these motions, the Court will consider the
amended motion.

to respond). For the following reasons, Defendants’ motions are granted and Figueroa’s
Complaint is dismissed, but she may move to amend her Complaint in accordance with this
Memorandum-Decision and Order.
II.

BACKGROUND
Figueroa’s Complaint concerns a parcel of property located in Albany, New York.

Compl. ¶¶ 1–2. In 2006, Figueroa took out a mortgage on the property from HSBC (or more
specifically, its predecessor, HSBC Mortgage Corporation). Id. ¶¶ 15, 18. In 2013, HSBC
initiated foreclosure proceedings against Figueroa in New York state court, which granted
summary judgment for HSBC. Id. ¶¶ 19–20.3 According to Figueroa, this foreclosure action was
“faulty,” id. ¶ 19, presumably because of Defendants’ improper behavior, see, e.g., id. ¶¶ 73–74
(“Defendant HSBC made a false representation . . . . Plaintiff was never notified of a change in
the Loan, and operated under the premise . . . that her Loan and Mortgage remained vested within
HSBC and would not be subject to a PHH serving agreement.”).
On July 20, 2016, Figueroa filed her Complaint in this Court. Compl. While she claims
federal jurisdiction due to diversity of citizenship, id. ¶ 11 (citing 28 U.S.C. § 1332),4 it is clear
from the face of the Complaint that federal question jurisdiction exists in this case, see id.

3

HSBC notes in its brief that the state court actually granted default judgment against
Figueroa, HSBC Mem. at 6; Dkt. No. 9-9 (“Exhibit D”), but this distinction has no bearing on
Defendants’ motions.
4

Figueroa’s allegations concerning the diversity citizenship of defendants reflect some
confusion about the tests for determining the citizenships of national banking associations and
corporations. Compl. ¶¶ 3–10; see 28 U.S.C. §§ 1332(c)(1), 1348 (defining citizenship rules for
corporations and national banks); Hertz Corp. v. Friend, 559 U.S. 77, 92–93 (2010) (interpreting
the rule for corporations); Wachovia Bank v. Schmidt, 546 U.S. 303, 318 (2006) (interpreting the
rule for national banks).
2

¶¶ 37–64 (alleging violations of the Truth in Lending Act (“TILA”), 15 U.S.C. §§ 1601 et seq.,
and the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §§ 2601 et seq.); 28
U.S.C. § 1331 (“The district courts shall have original jurisdiction of all civil actions arising
under the Constitution, laws, or treaties of the United States.”).
Figueroa’s first claim is that HSBC violated TILA by failing to disclose information
concerning her mortgage. Compl. ¶¶ 37–42. According to Figueroa, HSBC “failed to include and
disclose certain charges” in its disclosures, id. ¶ 37, causing the settlement statement to “list[]
[an] amount financed which is different from the sum listed in the original Note,” id. ¶ 38.
Figueroa also claims that the loan’s annual percentage rate (or APR) was “based upon improperly
calculated and disclosed amounts.” Id. ¶ 39. As a consequence, Figueroa claims a violation of
TILA and its implementing regulation, and seeks both damages from HSBC and the rescission of
her mortgage transaction. Id. ¶ 40; id. at 12. Also, because Figueroa first learned of these issues
in February 2016, she claims that “[a]ny applicable statute of limitations should run from this
date.” Id. ¶ 42.
Figueroa’s second claim accuses PHH of violating RESPA, both concerning the amount
it charged her in connection with the origination of her mortgage, and for failing to respond to a
qualified written request (“QWR”) for information concerning her loan. Id. ¶¶ 44, 47–48. As to
the first issue, Figueroa alleges that “PHH accepted charges for the rendering of real estate
services which were in fact charges for other than services actually performed,” which in turn
entitles her to treble damages. Id. ¶¶ 44–45 (citing 12 U.S.C. § 2607(d)(2)). On the second issue,
Figueroa claims she “submitted a timely Qualified Written Request” to PHH—the servicer of her
loan—“on or about March 31, 2016.” Id. ¶ 47. The QWR was not acknowledged within the time
3

permitted by law, id. ¶¶ 48–50, entitling Figueroa to actual damages, statutory damages, and
other recovery, id. ¶¶ 51, 56–58. Figueroa also claims that the statute of limitations should run
only from April 2016, the date she “first learned of the actions of Defendants.” Id. ¶ 64. The
Complaint, however, does not include any further details about the QWR or any allegations
concerning PHH’s broader QWR practices. Id. ¶¶ 43–64.
Finally, Figueroa alleges a state law claim for fraudulent misrepresentation against all
Defendants. Id. ¶¶ 65–83. Reading the Complaint liberally, it seems to allege a fraud based on
HSBC’s failure to disclose that the loan would be serviced by PHH. Id. ¶¶ 73–74. As a
consequence, Figueroa “was never notified of a change in the Loan,” and was accordingly forced
“to make payments to a non-party to the Mortgage.” Id. ¶ 77. Though the connection is unclear,
Figueroa alleges that this fraud led to the “entry of judgment . . . against her in the State Court
proceedings,” in turn causing the imminent loss of her home. Id. ¶ 78. She also “was further
harmed in having to defend the State Court action,” including legal and other costs. Id. ¶ 80.
Before the Court now are Defendants’ motions to dismiss. HSBC Mot.; PHH Mot. Both
motions argue that Figueroa’s claims (or at least some of them) are barred by the RookerFeldman doctrine, which prohibits state-court losers from challenging the judgments against
them in federal court. HSBC Mem. at 4–7; PHH Mem. at 5–7. Both also argue that Figueroa’s
claims are time barred or that her Complaint otherwise fails to state a claim under Rule 12(b)(6).
HSBC Mem. at 11–19; PHH Mem. at 8–15. HSBC further argues that Figueroa’s claims are
barred by claim preclusion from the state-court foreclosure action, as well as by her execution of
a modification to her loan. HSBC Mem. at 7–10.

4

III.

LEGAL STANDARD
A. Subject Matter Jurisdiction
A fundamental predicate to judgment in the federal courts is the existence of subject

matter jurisdiction. “Dismissal of a case for lack of subject matter jurisdiction . . . is proper
‘when the district court lacks the statutory or constitutional power to adjudicate it.’” Ford v. D.C.
37 Union Local 1549, 579 F.3d 187, 188 (2d Cir. 2009) (per curiam) (quoting Makarova v.
United States, 201 F.3d 110, 113 (2d Cir. 2000)). A lack of subject matter jurisdiction cannot be
waived, and may be raised by motion or sua sponte at any time. E.g., Transatlantic Marine
Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 107 (2d Cir. 1997); see also Fed. R.
Civ. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the
court must dismiss the action.”). The party asserting subject matter jurisdiction carries the burden
of proving its existence by a preponderance of the evidence. E.g., Makarova, 201 F.3d at 113;
Augienello v. FDIC, 310 F. Supp. 2d 582, 587–88 (S.D.N.Y. 2004).
B. Failure to State a Claim
To survive a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure, a “complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court must accept as
true the factual allegations contained in a complaint and draw all inferences in favor of the
plaintiff. Allaire Corp. v. Okumus, 433 F.3d 248, 249–50 (2d Cir. 2006). Plausibility, however,
requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of
[the alleged misconduct].” Twombly, 550 U.S. at 556. The plausibility standard “asks for more
5

than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citing
Twombly, 550 U.S. at 556). “[T]he pleading standard Rule 8 announces does not require
‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Id. (quoting Twombly, 550 U.S. at 555). Where a court is unable to infer
more than the mere possibility of the alleged misconduct based on the pleaded facts, the pleader
has not demonstrated that she is entitled to relief and the action is subject to dismissal. Id. at
678–79.
IV.

DISCUSSION
A. The Rooker-Feldman Doctrine
The Rooker-Feldman doctrine is a narrow exception to the normal subject-matter

jurisdiction of federal district courts. Named after the two Supreme Court cases that applied the
principle, Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of
Appeals v. Feldman, 460 U.S. 462 (1983), the doctrine prohibits losers in a state-court lawsuit
from bringing a new action in federal court complaining of injuries caused by the state-court
judgment itself, e.g., Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284, 291–92
(2005). Rooker-Feldman recognizes that district courts are courts of original jurisdiction, but a
challenge to a state-court judgment is effectively an appeal, which only the Supreme Court has
appellate jurisdiction over within the federal system. E.g., id. at 292; Hoblock v. Albany Cty. Bd.
of Elections, 422 F.3d 77, 83–84 (2d Cir. 2005) (citing Rooker, 263 U.S. at 416).
Because Rooker-Feldman is a narrow exception, there are four requirements that must be
met before jurisdiction is divested from the district court.

6

First, the federal-court plaintiff must have lost in state court. Second,
the plaintiff must “complain[] of injuries caused by [a] state-court
judgment[.]” Third, the plaintiff must “invit[e] district court review
and rejection of [that] judgment[].” Fourth, the state-court judgment
must have been “rendered before the district court proceedings
commenced”—i.e., Rooker-Feldman has no application to
federal-court suits proceeding in parallel with ongoing state-court
litigation.
Hoblock, 422 F.3d at 85 (alterations in original) (footnote omitted) (quoting Exxon, 544 U.S.
at 284).
Figueroa’s theory of the claim is that she “was severely damage[d] by having an entry of
judgment entered against her in the State Court proceedings.” Compl. ¶ 78. At first glance, this
seems to fit within the confines of the Rooker-Feldman doctrine. After all, Figueroa clearly is
complaining of injuries caused by the state-court judgment. But the Second Circuit has held that
“[t]he Rooker-Feldman doctrine does not prevent a district court from reviewing a claim for
damages stemming from an allegedly fraudulent foreclosure judgment, because the district court
can determine damages liability without reviewing the propriety of the state court judgment.”
Worthy-Pugh v. Deutsche Bank Nat’l Tr. Co., 664 F. App’x 20, 21 (2d Cir. 2016) (per curiam)
(citing Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423, 427–28 (2d Cir. 2014)).
While a lawsuit seeking to vacate or otherwise undo a state-court foreclosure judgment—even
one predicated on fraud—would be prohibited by Rooker-Feldman, see, e.g., Russo v. GMAC
Mortg., LLC, 549 F. App’x 8, 10 (2d Cir. 2013) (applying Rooker-Feldman where the plaintiff
sought “a court order prohibiting [the mortgagee] from taking possession of, or foreclosing on,
[the mortgagor’s] property”); Dunn v. Deutsche Bank Nat’l Tr. Co., No. 11-CV-712, 2011 WL
4809954, at *1 (N.D.N.Y. Oct. 11, 2011) (Kahn, J.) (applying the doctrine when the mortgagor

7

sought an injunction barring foreclosure and eviction, and vacating the state-court judgment,
because the apparent mortgagee “lacked standing to bring a foreclosure action . . . in New York
state court”), the Second Circuit has distinguished cases in which separate monetary damages are
sought, even if they stem from the state-court judgment, Worthy-Pugh, 664 F. App’x at 21. Since
Figueroa’s requested relief falls into the second of these categories, the Court has subject matter
jurisdiction over Figueroa’s claims.
B. The Fraudulent Misrepresentation Claim
While HSBC also argues that Figueroa’s fraudulent misrepresentation claim should be
dismissed under the doctrine of claim preclusion, HSBC Mem. at 7–9, the Court does not need to
reach this issue. This is because, even if Figueroa’s claim isn’t barred by the state-court
foreclosure judgment, she has still failed to state a claim for which relief may be granted.
Under New York law, a plaintiff must show five elements to prevail on a claim for fraud:
“(1) a material misrepresentation or omission of fact (2) made by [the] defendant with knowledge
of its falsity (3) and intent to defraud; (4) reasonable reliance on the part of the plaintiff; and
(5) resulting damage to the plaintiff.” Crigger v. Fahnestock & Co., 443 F.3d 230, 234 (2d Cir.
2006); accord Bank of Am., N.A. v. Bear Stearns Asset Mgmt., 969 F. Supp. 2d 339, 351
(S.D.N.Y. 2013); Eurycleia Partners, LP v. Seward & Kissel, LLP, 910 N.E.2d 976, 979 (N.Y.
2009). Additionally, when bringing a fraud claim in federal court, these elements must be
pleaded with the heightened particularity required by Rule 9(b). E.g., Loreley Fin. (Jersey) No. 3
Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 171 (2d Cir. 2015); see also Fed. R. Civ. P. 9(b) (“
In alleging fraud or mistake, a party must state with particularity the circumstances constituting
fraud or mistake.”). To meet this heightened standard, “the complaint must ‘(1) detail the
8

statements (or omissions) that the plaintiff contends are fraudulent, (2) identify the speaker,
(3) state where and when the statements (or omissions) were made, and (4) explain why the
statements (or omissions) are fraudulent.’” Loreley, 797 F.3d at 171 (quoting Eternity Glob.
Master Fund Ltd. v. Morgan Guar. Tr. Co. of N.Y., 375 F.3d 168, 187 (2d Cir. 2004)).
At the outset, Figueroa’s Complaint fails to show the connection between Defendants’
alleged fraud and the foreclosure on her home, running afoul of New York’s materiality and
causation requirements. Figueroa makes general allegations about things Defendants allegedly
didn’t tell her, such as her eligibility for loan modification under various government programs
and that her loan would be serviced by a third party. Compl. ¶¶ 68–75. But nowhere does she
explain how this led to the foreclosure of her mortgage, or how these misrepresentations were
material in her decision to initially finance her home. Such a causal connection—both in
inducing Figueroa to sign the mortgage and in causing the loss she ultimately complains of—is
necessary to state a claim for fraud. E.g., Meyercord v. Curry, 832 N.Y.S.2d 29, 30–31 (App.
Div. 2007); Water St. Leasehold LLC v. Deloitte & Touche LLP, 796 N.Y.S.2d 598, 599–600
(App. Div. 2005); see also Small v. Lorillard Tobacco Co., 720 N.E.2d 892, 898 (N.Y. 1999)
(“[A]n act of deception, entirely independent or separate from any injury, is not sufficient to state
a cause of action under a theory of fraudulent concealment.”).
Furthermore, the Complaint does not allege facts that allow an inference of Defendants’
fraudulent intent. Rule 12(b)(6) “requires assertions of facts supporting a plausible inference of
fraud.” Cohen v. S.A.C. Trading Corp., 711 F.3d 360 (2d Cir. 2013); see also Loreley, 797 F.3d
at 171 (“[T]hough mental states may be pleaded ‘generally,’ Plaintiffs must nonetheless allege
facts ‘that give rise to a strong inference of fraudulent intent.’” (quoting Lerner v. Fleet Bank,
9

N.A., 459 F.3d 273, 290–91 (2d Cir. 2006))). The only allegations concerning HSBC’s
fraudulent intent are that “HSBC knew” the loan would be serviced by PHH, and that it
“intended to induce Plaintiff on the misrepresentation by forcing her to make payments to a nonparty to the Mortgage.” Compl. ¶¶ 75, 77. These conclusory allegations cannot by themselves
support an inference of fraudulent intent. The claims against MERS and PHH are even weaker:
Figueroa makes no allegations concerning their involvement in the fraud at all, except that PHH
was a party to the loan servicing agreement. Id. ¶ 74. For all of these reasons, Figueroa’s
fraudulent misrepresentation claim is dismissed.
C. TILA Claim Against HSBC
In addition to her fraud claim, Figueroa alleges that HSBC violated the Truth in Lending
Act by failing to provide required disclosures when she entered into the mortgage. Id. ¶¶ 37–42.
Designed to increase transparency in loan provisions and to help consumers make informed
decisions when taking on debt, TILA “requires creditors to provide borrowers with clear and
accurate disclosures of terms dealing with things like finance charges, annual percentage rates of
interest, and the borrower’s rights.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998).
Failure to provide the required disclosures can open a lender to civil liability, and may also be
used as a defense in an action against the borrower to collect on the debt. Id.
While HSBC argues that Figueroa’s TILA claim fails in substance and should be
dismissed on the merits, they also assert that the claim must be dismissed as untimely. HSBC
Mem. at 12–14. This is because claims for damages under TILA are limited to one year after the
date of the alleged violations. Id. at 12 (citing 15 U.S.C. § 1640(e)). While Figueroa did not
respond to HSBC’s motion, in her Complaint, she claims that she first learned of the alleged
10

violation in February 2016, and thus, “[a]ny applicable statute of limitations should run from this
date”—a principle known as the discovery rule. Compl. ¶ 42; see also Discovery Rule, Black’s
Law Dictionary (10th ed. 2014) (defining the discovery rule as “[t]he rule that a limitations
period does not begin to run until the plaintiff discovers (or reasonably should have discovered)
the injury giving rise to the claim”).
Earlier this year, Judge D’Agostino explained TILA’s statute of limitations in the
mortgage context, including the inapplicability of the discovery rule:
The statute of limitations for filing a private action for monetary
damages under TILA is one year. Moreover, “it is well settled that, in
the context of TILA claims, the ‘discovery rule’ that [P]laintiff[]
urge[s] this Court to adopt is applied solely to claims arising from
‘open-end’ credit transactions, rather than . . . ‘closed end’
transactions.” “A mortgage transaction—such as that at issue here—is
a ‘closed-end credit’ transaction.” Thus, . . . “the date of the
occurrence of violation is no later than the date the plaintiff enters the
loan agreement or, possibly, when defendant performs by transmitting
the funds to plaintiffs.”
Kelmetis v. Fed. Nat’l Morg. Ass’n, No. 16-CV-246, 2017 WL 395120, at *6 (N.D.N.Y. Jan. 27,
2017) (first four alterations in original) (citations omitted) (first quoting Murphy v. Flagstar
Bank, FSB, No. 10-CV-645, 2012 WL 2571250, at *2 n.1 (N.D.N.Y. July 3, 2012) (Kahn, J.);
and then quoting McLean-Laprade v. HSBC, No. 12-CV-1774, 2013 WL 3930565, at *3
(N.D.N.Y. July 30, 2013) (Kahn, J.)).
Figueroa notes that the mortgage was executed in 2006, Compl. ¶ 15, and her Complaint
in this case was filed over ten years later, Compl. This gap clearly exceeds the one-year
limitations period established by TILA, and renders Figueroa’s claim untimely. Accordingly,
Figueroa’s TILA claim against HSBC must be dismissed for failure to state a claim.

11

D. RESPA Claims Against PHH
Figueroa’s remaining claims are based on PHH’s alleged violations of the Real Estate
Settlement Procedures Act. Id. ¶¶ 43–64. While both fall under RESPA, Figueroa makes two
distinct claims against PHH: (1) that it accepted inappropriate charges in connection with
“settlement services” performed for the mortgage, id. ¶¶ 44–45, and (2) that it failed to respond
to a qualified written request for information as required by RESPA, id. ¶¶ 47–50. For the
following reasons, both of these claims must be dismissed.
1. Prohibition Against Unearned Fees
Among other things, RESPA prohibits splitting and distributing fees “for the rendering of
a real estate settlement service in connection with a transaction involving a federally related
mortgage loan other than for services actually performed.” 12 U.S.C. § 2607(b). This provision
outlaws several forms of financial misconduct, such as where “[t]wo or more persons split a fee
for settlement services, any portion of which is unearned.” Cohen v. JP Morgan Chase & Co.,
498 F.3d 111, 114 (2d Cir. 2007) (alteration in original) (quoting Real Estate Settlement
Procedures Act Statement of Policy 2001-1, 66 Fed. Reg. 53,052, 53,059 (Oct. 18, 2001)),
abrogated by Freeman v. Quicken Loans, Inc., 566 U.S. 624 (2012); see also Gorbaty v. Wells
Fargo Bank, N.A., No. 10-CV-3291, 2012 WL 1372260, at *6 (E.D.N.Y. Apr. 18, 2012)
(discussing the requirements to state a plausible claim under § 2607(b)).
Similar to Figueroa’s TILA claim, her RESPA unearned-fees claim against PHH is time
barred. Claims under § 2607 must be brought within one year “from the date of the occurrence of
the violation.” 12 U.S.C. § 1614. The date of the violation in a RESPA claim is the date that the
allegedly unlawful payment was made, namely the closing date of the transaction. E.g., Garcia v.
12

Lasalle Bank NA, No. 16-CV-3485, 2017 WL 253070, at *6 (S.D.N.Y. Jan. 19, 2017); Gorbaty
v. Wells Fargo Bank, N.A., No. 10-CV-3291, 2014 WL 4742509, at *10 (E.D.N.Y. Sept. 23,
2014); accord Cunningham v. M&T Bank Corp., 814 F.3d 156, 160 (3d Cir. 2016); see also
Gorbaty, 2014 WL 4742509, at *10 n.14 (noting the rejection of the discovery rule in RESPA
claims by the “bulk of authority”); Macauley v. Estate of Nicholas, 7 F. Supp. 3d 468, 487 n.16
(E.D. Pa. 2014) (“[C]ourts across the country have refused to apply the discovery rule to RESPA
claims.”). As noted above, Figueroa’s mortgage was consummated in 2006. Compl. ¶ 15. The
limitations period for her unearned-fees claim has long since passed, and so it must be dismissed.
2. QWR Requirements
Under RESPA, loan servicers are also required to quickly respond to written requests for
information concerning the accuracy of a borrower’s account. 12 U.S.C. § 2605(e). When such a
request meets the requirements of RESPA, it is called a qualified written request, or QWR. Id. If
a servicer fails to respond to a QWR within thirty days (excluding weekends and holidays), it can
be subject to civil liability. Id. § 2605(e)(2), (f).
Figueroa claims she submitted a QWR to PHH “on or about March 31, 2016,” but that
PHH did not acknowledge receipt of or substantively respond to the QWR within the time
required. Compl. ¶¶ 47–49. In response, PHH provided the Court with what it claims to be the
alleged QWR, though this letter is dated February 12, 2016. Dkt. No. 21-2 (“Exhibit B”). Relying
on the letter, which it says the Court should consider as integral to the Complaint or as
incorporated by reference, PHH Mem. at 5, PHH argues that the letter in question does not
qualify as a QWR, id. at 12–13. This is both because the letter was sent to the wrong address, and
because the letter does not indicate a belief that Figueroa’s “account is in error.” Id.
13

The Court does not need to consider the letter submitted by PHH or determine whether it
is integral to the Complaint. This is because the Complaint itself does not sufficiently allege that
Figueroa properly submitted a QWR.
“To plead a claim under the RESPA, [the] plaintiff must offer proof either by attaching
the letter or pleading with specificity such facts—such as when the letter was sent and to whom it
was directed, why it was sent, and the contents of the letter—that the Court may determine if the
letter qualifies as a QWR or notice of error.” Kilgore v. Ocwen Loan Servicing, LLC, 89 F. Supp.
3d 526, 538 (E.D.N.Y. 2015); see also, e.g., Miller v. HSBC Bank U.S.A., N.A., No.
13-CV-7500, 2015 WL 585589, at *10 (S.D.N.Y. Feb. 11, 2015) (collecting cases). Here, the
conclusory allegations in Figueroa’s Complaint are almost identical to those dismissed in
Kilgore. Compare Compl. ¶ 47 (“Plaintiff submitted a timely Qualified Written Request . . . on or
about March 31, 2016.”), with Kilgore, 89 F. Supp. 3d at 538 (“Plaintiff simply pleads
conclusorily that he submitted a QWR/notice of error . . . . Such a non-specific allegation is
insufficient to support a plausible claim under the RESPA.”). Without more, the Court cannot
determine whether the document mentioned in Figueroa’s Complaint meets the legal definition
of a QWR, and thus her Complaint fails to plausibly allege a violation of RESPA.
3. Damages
PHH also argues that Figueroa’s QWR claim must be dismissed for failing to adequately
allege damages. PHH Mem. at 14–15. RESPA allows two types of damages for violations related
to QWRs: “any actual damages to the borrower as a result of the failure,” and statutory damages
awarded by the court. 12 U.S.C. § 2605(f)(1). Several courts have held that “proof of actual
damages is mandatory to recover on a § 2605(e) violation, and . . . a § 2605(e) claim cannot stand
14

on statutory damages alone.” Bonadio v. PHH Mortg. Corp., No. 12-CV-3421, 2014 WL 522784,
at *5 (S.D.N.Y. Jan. 31, 2014) (quoting Selman v. CitiMortgage, Inc., No. 12-CV-441, 2013 WL
838193, at *9 n.10 (S.D. Ala. Mar. 5, 2013)); accord Kelmetis, 2017 WL 395120, at *8; Dolan v.
Select Portfolio Servicing, No. 03-CV-3285, 2016 WL 4099109, at *5–6 (E.D.N.Y. Aug. 2,
2016). Additionally, statutory damages under RESPA are available only “in the case of a pattern
or practice of noncompliance.” Id. § 2605(f)(1)(B); see also, e.g., Sutton v. CitiMortgage, Inc.,
16-CV-1778, 2017 WL 122989, at *7–8, *17 (S.D.N.Y. Jan. 12, 2017) (dismissing a RESPA
claim for, among other things, failing to show a pattern or practice of violations); Reinhart v.
Citimortgage, Inc., No. 15-CV-109, 2016 WL 1259413, at *4 (N.D.N.Y. Mar. 30, 2016) (same).
In this case, the only damages alleged by Figueroa in connection with her QWR are
statutory. Compl. ¶¶ 56–58. While this alone may be enough to require dismissal, e.g., Bonadio,
2014 WL 522784, at *5, Figueroa has also failed to properly allege statutory damages. The
Complaint does not include any facts suggesting a pattern or practice of PHH concerning
responses to QWRs, Compl. ¶¶ 43–64, and thus, statutory damages under RESPA are
unavailable, e.g., Roth v. CitiMortgage Inc., No. 12-CV-2446, 2013 WL 5205775, at *8
(E.D.N.Y. Sept. 11, 2013) (collecting cases). Since she has not alleged any permitted damages
stemming from PHH’s alleged failure to respond to her QWR, Figueroa’s claim must be
dismissed.
E. Leave to Amend
When a complaint is dismissed for the first time pursuant to Rule 12(b)(6), leave to
amend before reviewing the proposed amended pleading should typically be withheld only if
amendment would be futile—namely, if it is clear from the facts alleged that the events in
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question cannot give rise to liability. Ricciuti v. N.Y.C. Transit Auth., 941 F.2d 119, 123 (2d Cir.
1991); see also, e.g., In re Aluminum Warehousing Antitrust Litig., 833 F.3d 151, 163 (2d Cir.
2016) (discussing affirmance of dismissal without leave to amend due to futility); Orchard Hill
Master Fund Ltd. v. SBA Commc’ns Corp., 830 F.3d 152, 156 (2d. Cir. 2016) (noting that denial
of leave to amend on futility grounds is subject to de novo review); Loreley, 797 F.3d at 191
(holding that, by not allowing plaintiffs to submit a new pleading attempting to correct any
deficiencies, the district court “violated the liberal spirit of Rule 15” (quoting Williams v.
Citigroup, Inc., 659 F.3d 208, 214 (2d Cir. 2011))). Otherwise, leave to amend should freely be
given, especially when the plaintiff is appearing pro se. E.g., Grullon v. City of New Haven, 720
F.3d 133, 140 (2d Cir. 2013); Pangburn v. Culbertson, 200 F.3d 65, 70–71 (2d Cir. 1999).
Here, Figueroa’s TILA claim against HSBC and her RESPA unearned fees claim against
PHH are both dismissed without leave to amend. Since both of these claims are clearly time
barred, any amendment attempting to replead them would be futile. Given Figueroa’s status as a
pro se litigant, however, the Court will permit her to seek amendment of her Complaint in all
other respects. Any such motion to amend must be made within thirty (30) days from the date of
this Memorandum-Decision and Order, must comply with the requirements for motions to amend
in Local Rule 7.1(a)(4), and must address the deficiencies highlighted by the Court in her
fraudulent misrepresentation and RESPA QWR claims if she wishes to pursue them further. Cf.,
e.g., Burrowes v. Combs, 124 F. App’x 70, 71 (2d Cir. 2005) (affirming the district court’s
dismissal without further leave to amend after a previous amendment was unsuccessful).

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V.

CONCLUSION
Accordingly, it is hereby:
ORDERED, that the HSBC Motion (Dkt. No. 9) and PHH Motion (Dkt. No. 20) are

GRANTED; and it is further
ORDERED, that PHH’s original motion to dismiss (Dkt. No. 15) and Defendants’ Letter
Motions (Dkt Nos. 25, 27) are DENIED as moot; and it is further
ORDERED, that Figueroa’s Complaint (Dkt. No. 1) is DISMISSED for failure to state a
claim; and it is further
ORDERED, that, if Figueroa wishes to further pursue her claims, she must—in
accordance with Local Rule 7.1(a)(4) and within thirty (30) days from the date of this
Memorandum-Decision and Order—move to amend her Complaint to address the deficiencies
identified in this Memorandum-Decision and Order; and it is further
ORDERED, that, if Figueroa does not move to amend her Complaint within thirty (30)
days from the date of this Memorandum-Decision and Order, the Clerk of the Court shall close
this case without further order of the Court; and it is further
ORDERED, that the Clerk shall serve copies of this Memorandum-Decision and Order
on all parties in accordance with the Local Rules.
IT IS SO ORDERED.

DATED:

March 29, 2017
Albany, New York

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