Fitch et al v. Federal Housing Finance Agency et al

Filing 157

REPORT AND RECOMMENDATIONS re 102 MOTION to Dismiss for Lack of Jurisdiction and/or for Failure to State a Claim filed by Wells Fargo Bank, N.A. Objections to R&R due by 11/4/2021.. I recommend that Wells Fargo& #039;s Motion (ECF No. 102) to Dismiss for Lack of Subject Matter Jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) be GRANTED and that Counts VII through XIII (including both iterations of Count XII) be dismissed without prejudice. If the Court do es not adopt this recommendation, I alternatively recommend that Wells Fargo's Motion to Dismiss these Counts for Failing to State a Plausible Claim pursuant to Fed. R. Civ. P. 12(b)(6) should be GRANTED and that these Counts should be dismissed with prejudice. So Ordered by Magistrate Judge Patricia A. Sullivan on 10/21/2021. (Saucier, Martha)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
KENNETH FITCH, ESTATE OF DIANNE :
L. FITCH,
:
Plaintiffs,
:
:
v.
:
:
FEDERAL HOUSING FINANCE
:
AGENCY, FEDERAL NATIONAL
:
MORTGAGE ASSOCIATION, WELLS
:
FARGO BANK, N.A., HARMON LAW
:
OFFICES, P.C., 266 PUTNAM AVENUE, :
LLC, RUSHMORE LOAN
:
MANAGEMENT SERVICES, LLC,
:
US BANK NATIONAL ASSOCIATION :
AS TRUSTEE FOR RMAC TRUST,
:
SERIES 2016-CTT,
:
Defendants.
:

C.A. No. 18-cv-214JJM

REPORT AND RECOMMENDATION
PATRICIA A. SULLIVAN, United States Magistrate Judge.
Now pending before the Court is the renewed motion to dismiss filed by Defendant Wells
Fargo Bank, N.A. (“Wells Fargo”) for lack of subject matter jurisdiction pursuant to Fed. R. Civ.
P. 12(b)(1) and/or for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). ECF No. 102.
The motion targets all claims against Wells Fargo – Counts VII through XIII1 of the Amended
Complaint,2 which are based on alleged violations by Wells Fargo of the duty of a mortgage
servicer to respond to Notices of Error as required by the Real Estate Settlement Procedures Act,

1

The Amended Complaint has two Counts labeled “Count XII.” ECF No. 60 at 59, 60. The Court refers to the
second of these as “Count XII (second iteration).”
2

The Amended Complaint also mentions Wells Fargo in Counts II, III and VI. At the hearing, Plaintiff clarified that
those Counts do not assert claims against Wells Fargo. See also ECF No. 114-1 at 1 (confirming that claims against
Wells Fargo are Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq., claims in Counts VII through
XIII).

12 U.S.C. §§ 2601, et seq. (“RESPA”) and Regulation X, 12 C.F.R. § 1024.3 ECF No. 60
(“Compl.”). Wells Fargo’s motion is premised on Plaintiff’s failure plausibly4 to allege concrete
injury or cognizable damages. The motion has been referred to me for report and
recommendation. 28 U.S.C. 636(b)(1)(B). For the reasons that follow, I recommend that the
motion be granted and that Counts VII through XIII be dismissed without prejudice based on
lack of subject matter jurisdiction pursuant to TransUnion LLC v. Ramirez, 141 S. Ct. 2190
(2021) and Spokeo, Inc. v. Robins, 578 U.S. 330 (2016). Alternatively, I recommended that the
Court grant Wells Fargo’s motion and dismiss these Counts based on the Amended Complaint’s
failure to state a plausible claim.
I.

BACKGROUND
Until a foreclosure sale on July 28, 2017, Kenneth Fitch and, until her death, Dianne

Fitch (“Plaintiff”)5 owned 73 Kay Street, Cumberland, Rhode Island (“Real Estate”). Compl.
¶¶ 1-4. In 2009, Plaintiff borrowed $96,648 from Wells Fargo secured by a mortgage on the
Real Estate. Id. ¶¶ 66-67, Ex. A. On April 16, 2016, Wells Fargo sent Plaintiff a letter advising
that the loan was in default and that Wells Fargo would accelerate if the arrearage was not cured.
Id. Ex F. On June 22, 2016, a Rhode Island Housing mediation coordinator affirmed that Wells

3

In addition to RESPA/Regulation X, Count VII also mentions the Truth in Lending Act (“TILA”), 15 U.S.C. §§
1601 et seq. At the hearing, Plaintiff confirmed that the only bases for claims against Well Fargo are RESPA and
Regulation X. See also ECF No. 114-1 at 1.
4

During oral argument on the motion, Plaintiff argued that “plausibility” had not been raised by Wells Fargo and
asked for an opportunity to reopen the briefing to allow him to address the applicability of the “plausibility”
standard. The premise for this request is inaccurate in that Wells Fargo’s brief raised plausibility. See ECF No.
102-1 at 5. Mindful that plausibility is a well-established concept in the Fed. R. Civ. P. 12(b) canon, Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009), Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 559 (2007), as well as that Wells
Fargo’s motion was originally filed in June 2020, I declined to permit further delay. ECF No. 81.
5

In using “Plaintiff” to refer collectively to the Fitches and/or singularly to each of them, the Court acknowledges
that it has glossed over the history of who owned the Real Estate, who was the mortgagor or the borrower at various
points in time. These details are not relevant to the instant motion to dismiss.

2

Fargo had fully complied with the pre-foreclosure mediation requirement in R.I. Gen. Laws §
34-27-3.2. Id. Ex. E at 13.
On March 22, 2017, Wells Fargo assigned the mortgage to Defendant Federal National
Mortgage Association (“FNMA”) but continued to be the servicer on the account. Compl. ¶¶ 69,
254.6 Acting as the servicer for FNMA, Wells Fargo claims that it sent an acceleration letter on
March 31, 2017, and a notice of sale letter on April 20, 2017. Id. Ex. F-1 at 3. After being
advertised between May and July 2017, the foreclosure sale was scheduled for July 28, 2017. Id.
Ex. E at 6. Two days before the foreclosure sale, on July 26, 2017, Defendant Rushmore Loan
Management Service, LLC (“Rushmore”)7 became the owner of the loan, but no assignment of
the mortgage was recorded. Compl. ¶¶ 71-72. The Amended Complaint alleges that FNMA
transferred its interest in the mortgage by an unrecorded assignment on an unknown day prior to
July 26, 2017.8 Id. ¶¶ 71-72. The foreclosure auction was conducted on July 28, 2017, by Wells
Fargo as servicer for FNMA and the Real Estate was conveyed by a foreclosure deed given by
FNMA to Defendant 266 Putnam Ave, LLC (“266 Putnam”) in consideration for payment of
$188,000. Id. ¶¶ 86, 92-93, 236; Ex. E. On October 1, 2017, Wells Fargo ceased to be the
servicer for the account; that responsibility was switched to Rushmore. Id. Ex. F-1 at 2. On
October 20, 2017, 266 Putnam initiated proceedings to evict Plaintiff from the Real Estate. Id. ¶

6

Paragraph 254 appears twice in the complaint. ECF 60 at 37-38. This citation is to the second iteration.

7

The Amended Complaint alleges that the owner of the loan became Defendant U.S. Bank National Association
(“U.S. Bank”). Compl. ¶ 73; see id. ¶ 192 (“[s]ubsequently and prior to the date of the purported foreclosure this
loan was securitized and sold by Rushmore Loan Management Group, resulting in the transfer of the mortgage and
note to US Bank National Association as trustee for an entity known as the RMAC Trust, Series 2016-CTT”). Both
U.S. Bank and Rushmore are joined as defendants.
8

The factual supportability of Plaintiff’s claim that there was an unrecorded assignment of the mortgage and the
legal question whether, if this fact is assumed to be true, it gives Plaintiff the right to rescind the foreclosure are the
subject of a pending (and hotly contested) motion for summary judgment. ECF No. 96.

3

98. Soon after, on October 26, 2017, Plaintiff began to send Wells Fargo the blizzard9 of letters
that are the foundation for Plaintiff’s RESPA/Regulation X claims. That is, all of Plaintiff’s
RESPA/Regulation X letters were written after the Real Estate had been sold at foreclosure and
after Wells Fargo no longer was responsible for servicing or had any other interest in the Real
Estate, the mortgage or the loan.
Six of the first set of letters, all dated October 26, 2017, were Regulation X requests for
information (“October 2017 RFIs”).10 See 12 C.F.R. § 1024.36. The seventh letter,11 also dated
October 26, 2017, is the sole basis for the first and the foundation for the last of the Amended
Complaint’s Counts against Wells Fargo – Counts VII and XIII. Compl. Exs. G, O (“NOE-1”).
NOE-1 was sent to Wells Fargo by Plaintiff’s attorney and was designated as a Notice of Error
“under 12 C.F.R. section 1024.35 of Regulation X of the Mortgage Servicing Act under
RESPA.” Id. According to NOE-1, Wells Fargo had committed servicing errors, see 12 C.F.R.
§ 1024.35(b), in failing to send a default letter and an acceleration letter, in failing to comply
with Rhode Island’s mediation requirement (R.I. Gen. Laws § 34-27-3.2) and in allowing the
foreclosure to proceed on behalf of FNMA after it had “no interest in the note or the mortgage.”
Id. NOE-1 demanded that Wells Fargo correct the errors by removing all legal fees, costs,
charges and expenses arising from the notice of sale and the foreclosure. Id. According to the

9
Dated between October 2017 and August 2018, more than twenty letters invoking RESPA and/or Regulation X
were sent to Wells Fargo by John Ennis, Plaintiff’s attorney of record for this case. These letters are attached to the
Amended Complaint in Exhibits G through O (there is no Exhibit N).
10

Each of the six October 2017 RFIs sought different information as follows: “[a]ll periodic monthly statements”;
all documents conceivably related to legal fees charged to the account; all documents related to fees for property
inspection (and anything remotely related to property inspection); “an exact reproduction of the life of the mortgage
transactional history for this loan”; documentation regarding compliance with R.I. Gen. Laws § 34-27-3.2; and “the
entire mortgage loan servicing file.” See Compl. Ex. H through M.

11

Plaintiff’s confusing presentation of the RESPA/Regulation X letters includes this letter both as Exhibit G and as
part of Exhibit O.

4

Amended Complaint (but not mentioned in NOE-1), to comply with RESPA and Regulation X,
NOE-1 required Wells Fargo to “void the foreclosure.” Compl. ¶ 273. Pursuant to 12 C.F.R. §
1024.35, Wells Fargo’s written response to NOE-1 was due on December 20, 2017. Id. ¶¶ 26768.
On November 15, 2017, Wells Fargo responded to Plaintiff’s October 2017 RFIs by
informing Plaintiff that Wells Fargo was working on gathering the information requested and
advising Plaintiff that the “[s]ervicing and collection notes, inspection and legal fees,
documents” had been sent to Rushmore (the new servicer). Compl. Exs. H, I, K, M. Soon after,
on November 30, 2017, well in advance of the NOE-1 deadline, Wells Fargo responded to NOE1 and further to the October 2017 RFIs with a substantive letter, which provided Plaintiff with a
detailed “Customer Account Activity Statement” and purported to enclose12 a long list of
documents that seemingly correspond to what had been sought by the six RFIs, coupled with the
advisory that Wells Fargo had determined (as permitted by Regulation X, 12 C.F.R. §
1024.36(f)(1)(ii) and (iv)) that, apart from what was being provided, Plaintiff’s letters were
overbroad and sought confidential, privileged and/or proprietary material. Compl. Ex. F-1. This
response appears to address all issues raised in NOE-1, including by supplying copies of the
acceleration and default letter and the mediation compliance materials, as well as by advising
that Wells Fargo had investigated Plaintiff’s claim that FNMA should not have been the
mortgagee at the foreclosure and concluded that the foreclosure had been conducted consistent
with the mortgage and applicable law. Compl. Ex. F-1. The response reminds Plaintiff that
Rushmore had become his loan servicer and supplied contact information for Rushmore. Id. In

12

Except for the detailed account history, which Plaintiff included in Exhibit K, but omitted from all other iterations
of Wells Fargo’s response letter, Plaintiff did not include Wells Fargo’s enclosures in the Exhibits to the Amended
Complaint. However, he has not alleged that the enclosures were omitted from what Wells Fargo supplied.

5

addition to providing this substantive information, all of Wells Fargo’s response letters comply
with RESPA’s requirement that they include a name and contact information for a person
designated to help if Plaintiff had questions. 12 U.S.C. § 2605(e)(2)(B)(ii), Compl. Exs. F-1, H
through O.
Ignoring Wells Fargo’s substantive response to NOE-1, Count VII alleges that Wells
Fargo violated RESPA/Regulation X in that it “did not address any of the issues raised in the
[NOE-1]” and that “[i]t refused to correct the error,” refused to “remove any fees for the
purported foreclosure” and “refused to void the foreclosure sale and remove any mortgage loans
from the mortgage loan account.” Id. ¶¶ 272-73 (emphasis added). These conclusory allegations
are contradicted by Exhibit F-1, which Plaintiff attached to the Amended Complaint and which
specifically addresses every issue raised in NOE-1. For damages, the Amended Complaint
alleges that this supposed violation harmed Plaintiff in that it required him to drive to visit his
attorney at least five times (spending money for gasoline); to talk to his attorney by cell phone
(spending electricity); to spend unspecified time away from work and other activities; to incur
postage and copying costs in transmitting NOE-1; and to incur attorney’s fees and costs “for the
prosecution of this action.”13 Compl. ¶ 276.
Almost five months after receiving Wells Fargo’s facially complete response, Plaintiff
filed this case (on April 19, 2018). ECF No. 1. The original complaint accused Wells Fargo of
violating RESPA solely because of Plaintiff's dissatisfaction with its response to NOE-1. It also
asserted claims against FNMA, the Federal Housing Finance Agency, and 266 Putnam
13

During the hearing, Plaintiff purported to supplement his pleading of damages caused by Wells Fargo’s alleged
failure to respond to NOE-1 with the argument that Wells Fargo violated RESPA by failing to rescind the
foreclosure, so that Plaintiff was damaged by the loss of his home. This element of damage is missing from the
damages listed in ¶¶ 276 and 444 of the Amended Complaint. It also is not cognizable under RESPA. Caldwell v
Nationstar Mortg., 857 F. App’x 478, 482 (11th Cir. 2021) (per curiam) (“Rescinding a foreclosure sale is not an
authorized ‘action’” under RESPA).

6

challenging the foreclosure, arguing that FNMA was constitutionally barred from using Rhode
Island’s non-judicial foreclosure procedure and seeking damages and injunctive relief because
FNMA did not comply with Rhode Island’s mediation requirement, had breached Paragraph 22
of the mortgage, and was not authorized to foreclose because it had executed an unrecorded
assignment of the mortgage before the foreclosure. Plaintiff did not name Wells Fargo as a party
to any of the claims for relief arising from the foreclosure.
After initiating the case, Plaintiff resumed sending RESPA/Regulation X letters to Wells
Fargo. The second wave of letters, dated June 15, 2018, are premised on Wells Fargo’s alleged
failure to respond to NOE-1 and the six October 2017 RFIs (“June 2018 NOEs”). Largely
ignoring Wells Fargo’s facially complete response sent six months before, the seven June 2018
NOEs invoke 12 C.F.R. § 1024.35 and duplicate the substantive content of NOE-1 and the six
October 2017 RFIs. With one exception,14 they allege as “error” that Wells Fargo’s “refus[al] to
respond” to NOE-1 and the October 2017 RFIs because it had invoked the “confidential,
privileged and/or proprietary” character of the requested materials and otherwise supplied
nothing. Compl. Exs. H, I, J, L, M, O; Id. ¶¶ 287, 302 (second iteration), 328, 353, 380, 404. As
the Exhibits to the Amended Complaint make clear, this assertion also is simply untrue. In fact,
Wells Fargo’s actual response provided detailed information and enclosed a long list of
documents, all of which was ignored by the June 2018 NOEs. By way of just one example, in
14

Buried in the June wave of NOEs is an exception; the June 2018 NOE in Exhibit K complains that the spreadsheet
Wells Fargo sent (providing three years of detailed account information) is missing unspecified information and did
not go back to December 31, 2009. Compl. Ex. K. This NOE ignores Wells Fargo’s permissible assertion of the
overbreadth of the request and makes no attempt to explain why such additional information is needed. 12 C.F.R. §
1024.36(f)(iv). Ironically, Plaintiff’s NOE includes what appears to be a link to the “Official Bureau
Interpretations” of RESPA/Regulation X, Compl. Ex. K at 11, see 12 C.F.R. Pt. 1024, Supp. I, ¶ 36(f)(i)(iv), which
makes clear that Wells Fargo’s overbreadth assertion is entirely appropriate. See
https://files.consumerfinance.gov/f/201301_cfpb_final-rule_servicing-respa-interpretations.pdf, at 18-19
(“[E]xamples of requests for information that are overbroad . . .: [r]equests for information that seek documents
relating to substantially all aspects of . . . mortgage servicing . . .; [r]equests for information that purport to require
information in specific formats . . . ; and [r]equests for information that are not reasonably likely to assist a borrower
with the borrower’s account.”).

7

two of the June 2018 NOEs (ECF No. 60-14 at 9; ECF No. 60-16 at 9), Plaintiff asserts as error
Wells Fargo’s supposed failure to comply with Rhode Island’s mediation statute and its refusal
to supply documents related to mediation compliance. Compl. ¶¶ 379-380. In fact, Wells
Fargo’s November 30, 2017, response specifically addressed compliance with the mediation
statute, stating, “[p]lease find enclosed the requested mediation letters and or documents with the
Rhode Island Housing.” Id. Ex. F-1. That each of Wells Fargo’s substantive response letters
also appropriately declined to provide more material based on the evident overbreadth of the
requests and the confidential, privileged and/or proprietary nature of unproduced material is
permissible pursuant to Regulation X and does not amount to an across-the-board refusal to
respond. See 12 C.F.R. § 1024.36(f)(1)(ii, iv).
Instead of asserting that the June 2018 NOEs were duplicative,15 Wells Fargo responded
to them with a letter dated July 20, 2017, advising that it would not respond further because the
“account is in active litigation.”16 Compl. Ex. F-2. Plaintiff fired back with a third set of seven
NOE letters dated August 7, 2018 (“August 2018 NOEs”), again duplicating the same requests
and the same alleged errors, but now adding a new claim of error based on Wells Fargo’s refusal
to respond further based on “active litigation.” Id. Exs. H though O.

15

Regulation X permits a servicer to protect itself from duplicative requests, which (except for Ex. K, see n.14
supra) Plaintiff’s June 2018 NOEs clearly are. See 12 C.F.R. §§ 1024.35(g)(1)(i), 1024.36(f)(1)(i) (if notice of error
or request for information is “[d]uplicative” or “substantially the same” as what servicer had already provided,
servicer is not required to comply with Regulation X).
16

Regulation X does not specify that “active litigation” is a reason justifying a servicer’s failure to respond; at least
two courts in other circuits were skeptical that such a reason is compliant with RESPA. See Izmirligil v. Select
Portfolio Serv. Inc., 18-CV-7043 (PKC)(LB), 2020 WL 1941319, at *6 (E.D.N.Y. April 22, 2020) (RESPA does not
contain pending litigation exception); Schmidt v. Wells Fargo Bank, N.A., 2:17-cv-01708, 2019 WL 4943756, at *2
(D.N.J. Oct. 8, 2019) (active litigation is not listed in Regulation X as justification for servicer failing to respond to
RESPA request). I assume without deciding that the invocation of “active litigation” is a technical
RESPA/Regulation X violation.

8

As far as the Amended Complaint tells the tale, the trail ends there. Wells Fargo’s
invocation of “active litigation” in response to the seven largely duplicative June 2018 NOEs,
followed by its failure to respond at all to the seven August 2018 NOEs, forms the basis for
Counts VIII, IX, X, XI, XII, XII (second iteration) and XIII of the Complaint. During oral
argument on the motion, in response to the Court’s expression of concern that the final set of
NOE letters seem to have been sent for the strategic purpose of drawing Wells Fargo into an
unambiguous RESPA/Regulation X violation, and not for the purpose of gathering information
from his former servicer, Plaintiff argued that the motivation of the sender of an NOE is not
material to whether a pleading plausibly states a RESPA violation.
In reliance on the sheer number (alleged to be nine, but actually seven) of unresponded-to
NOEs, the Amended Complaint alleges that Wells Fargo’s conduct is part of a “pattern and
practice” in failing to correct the error. E.g., Compl. ¶ 277. For damages, Plaintiff contends that
Well Fargo’s failure to respond appropriately to each of the August 2018 NOEs inflicted actual
injury in that each failure required him to drive to visit his attorney at least five times (spending
money for gasoline); to talk to his attorney by cell phone (spending electricity); to spend
unspecified time away from work and other activities; to incur postage and copying costs in
transmitting the NOE; and to incur attorney’s fees and costs “for the prosecution of this action.”
Compl. ¶¶ 300, 317, 342, 368, 395, 419, 444.
II.

APPLICABLE LAW – RESPA AND REGULATION X
RESPA sets forth specific procedures that a mortgage loan servicer must follow in

responding to a borrower’s request for information. 12 U.S.C. § 2605; Diedrich v. Ocwen Loan
Servicing, LLC, 839 F.3d 583, 586 (7th Cir. 2016). As set forth in 12 U.S.C. § 2605(e),
RESPA’s purpose is to promote transparency and communication between borrowers and

9

servicers of mortgage loans by requiring that servicers must respond to certain types of written
inquiries from borrowers regarding the servicing of their loans within a set amount of time. Id.
To comply with a REPSA request from a borrower who has provided a statement of reasons for
his belief that the account is in error, the servicer must either correct the error or provide a
statement of reasons why the account is correct. Id.; see McGahey v. Fed. Nat’l Mortg. Ass’n,
266 F. Supp. 3d 421, 438 (D. Me. 2017). That is, RESPA requires that servicers provide
borrowers with information, not that they necessarily accept a borrower’s assertion of error and
correct it. McGahey, 266 F. Supp, 3d at 442.
To establish the right to recover for a RESPA violation, the borrower must show that that
servicer failed to comply with these requirements and that the borrower suffered actual damages
caused by the violation. 12 U.S.C. § 2605(f); see O’Connor v. Nantucket Bank, 992 F. Supp. 2d
24, 35 (D. Mass. 2014). As long as there are actual damages caused by a failure to comply with
RESPA, the injured borrower may also seek to recover statutory damages if the borrower
establishes a “pattern or practice of noncompliance with the requirements of this section.” 12
U.S.C. § 2605(f)(1)(B). Actual damages must arise “as a result of” the servicer’s alleged
violation. 12 U.S.C. § 2605(f)(1)(A). That is, there must be a “causal link” between the alleged
violation and the damages. Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1246 (11th Cir.
2016) (internal quotation marks omitted); see Wadsworth v. Kross, Lieberman & Stone, Inc., 124
F.4th 665, 668 (7th Cir. Aug. 31, 2021) (plaintiff has concrete injury only if defendant’s breach
of statutory rights causes real harm, such as paying money not properly owed). It is the
plaintiff’s burden to establish that a claimed injury was proximately caused by a RESPA
violation. In re Jackson, 622 B.R. 321, 327 (Bankr. D. Mass. 2020). An injury concocted to
support a damage claim by continuing to send RESPA requests after a technical or unspecified

10

violation is not sufficient. See Lebeau v. U.S. Bank, N.A. as Tr. for Citigroup Mortg. Loan
Trust, Inc., CA No. 17-329-JJM-PAS, 2019 WL 1077285, *4 (D.R.I. Mar. 7, 2019) (case
dismissed for failure plausibly to state claim of RESPA damages where servicer provided
response that did not violate terms or spirit of RESPA, yet borrower’s attorney continued to send
duplicative requests framed as NOEs resulting in costs and fees); Pimental v. Ocwen Loan
Servicing, LLC, Case No. 16-CV-62089-DIMITROULESAS, 2016 WL 6678523, at *3 (S.D.
Fla. Nov. 8, 2016) (case dismissed for failure plausibly to state claim of RESPA damages where
servicer provided response that plaintiff did not identify as inadequate except for timing, yet
borrower’s attorney sent NOE resulting in costs and fees; “the Court does not believe that ‘actual
damages’ may be construed so broadly as to encompass unnecessary costs intentionally incurred
solely for the purpose of bringing a lawsuit”).
To implement RESPA, the Consumer Financial Protection Bureau promulgated a set of
regulations known as “Regulation X.” Benner v. Wells Fargo Bank, N.A., Docket No. 2:16-cv00467-NT, 2018 WL 1548683, at *7 (D. Me. Mar. 29, 2018). As relevant to this case, 12 C.F.R.
§ 1024.35 provides additional details governing error resolution procedures, while 12 C.F.R. §
1024.36 addresses requests for information. The law is unsettled whether there is a private right
of action arising from a violation of Regulation X. Mindful that Wells Fargo has not presented
the lack of a private right of action as a reason to grant its motion, the Court assumes without
deciding that there is such a right. See Lucas v. New Penn Fin., LLC, No. 17-cv-11472-ADB,
2019 WL 404033, at *4 (D. Mass. Jan. 31, 2019) (because 12 U.S.C. § 2605(f) provides private
cause of action, court concludes that Regulation X also supports private right of action).
III.

FED. R. CIV. P. 12(b)(1)
A.

Standard of Review

11

Pursuant to Fed. R. Civ. P. 12(b)(1), Wells Fargo has challenged whether the Court has
subject matter jurisdiction to address this controversy based on Plaintiff’s failure to establish
standing. See TransUnion, 141 S. Ct. 2190; Spokeo, 578 U.S. 330. When considering a motion
to dismiss under Fed. R. Civ. P. 12(b)(1), the Court applies a standard of review similar to that
deployed for consideration of a motion for dismissal for failure to state a claim under Fed. R.
Civ. P. 12(b)(6), which requires the plaintiff to shoulder the burden of plausibly alleging a viable
cause of action. Menge v. N. Am. Specialty Ins. Co., 905 F. Supp. 2d 414, 416 (D.R.I. 2012);
see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555559 (2007). That is, to survive a Fed. R. Civ. P. 12(b)(1) salvo, each element of standing must
be plausibly supported in the same way as any other matter on which the plaintiff bears the
burden of proof. Hochendoner v. Genzyme Corp., 823 F.3d 724, 730 (1st Cir. 2016).
As with a Fed. 12(b)(6) motion, for standing, the Court must “accept as true all wellpleaded factual averments in the plaintiff’s . . . complaint and indulge all reasonable inferences
therefrom in his favor.” Katz v. Pershing, LLC, 672 F.3d 64, 70 (1st Cir. 2012) (internal
quotation marks omitted). Likewise, for standing, the Court may consider exhibits attached to
the complaint, including that such exhibits govern over inconsistent allegations in the pleading to
the extent that they “render [those allegations] utterly implausible.” Colesanti v. Becton
Dickinson, C.A. No. 18-491WES, 2019 WL 4043957, at *9 (D.R.I. July 19, 2019), adopted sub
nom. Colesanti v. Dickinson, 2019 WL 4039529 (D.R.I. Aug. 27, 2019); see Renfroe, 822 F.3d
at 1245 (“[W]hen the exhibits [attached to the complaint] contradict the general and conclusory
allegations of the pleading, the exhibits govern.”) (internal quotation marks omitted). Unlike a
Fed. R. Civ. P. 12(b)(6) motion, a standing motion brought pursuant to Fed. R. Civ. P. 12(b)(1)
permits the Court to consider material outside the pleadings. Gonzalez v. United States, 284

12

F.3d 281, 288 (1st Cir. 2002); see Pemental v. Bank of New York Mellon, C.A. No. 16-483S,
2017 WL 3279015, at *5 (D.R.I. May 10, 2017), adopted, 2017 WL 3278872 (D.R.I. Aug. 1,
2017).
B.

Standing Law and Analysis

The jurisdiction of federal courts is limited to “Cases” and “Controversies” as described
in Article III of the Constitution. TransUnion, 141 S. Ct. at 2203. Because of Article III, injuryin-fact is a bedrock constitutional requirement for federal jurisdiction. Curtis v. Embrace Home
Loans, Inc., C.A. No. 18-057-JJM-PAS, 2020 WL 2115987, at *2–3 (D.R.I. May 4, 2020).
There is no case or controversy if the plaintiff lacks standing to challenge the defendant’s alleged
misconduct. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992); Overton v. Tourruella,
183 F. Supp. 2d 295, 303 (D. Mass. 2001) (unless plaintiff has standing no case or controversy is
presented to the court). In order to have standing, “a plaintiff must show (i) that he suffered an
injury in fact that is concrete, particularized, and actual or imminent, (ii) that the injury was
likely caused by the defendant, and (iii) that the injury would likely be redressed by judicial
relief.” TransUnion, 141 S. Ct. at 2203.
To satisfy Article III, the plaintiff’s injury-in-fact must be “‘concrete’ – that is, ‘real, and
not abstract.’” TransUnion, 141 S. Ct. at 2204 (quoting Spokeo, 578 U.S. at 340). Whether the
claimed harm is monetary, physical or intangible, TransUnion and Spokeo are crystal clear – if a
defendant has transgressed a statutory prohibition, but the conduct has not caused “any physical,
monetary, or cognizable harm traditionally recognized as providing a basis for a lawsuit in
American courts,” the case may not proceed. TransUnion, 141 S. Ct. at 2206; see Spokeo, 578
U.S. at 345 (Thomas, J. concurring). A plaintiff cannot satisfy the demands of Article III by
alleging a “bare procedural violation.” Spokeo, 578 U.S. at 341-343; compare Meeks v. Ocwen

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Loan Servicing LLC, 681 F. App’x 791, 792-93 (11th Cir. 2017) (per curiam) (internal quotation
marks omitted) (where borrower disputed RESPA compliance with servicer’s obligation to
confirm receipt of RFI, but failed to allege plausible injury caused by this “bare procedural
violation,” Spokeo required dismissal for lack of standing), with Diedrich, 839 F.3d at 590-91
(because servicer’s RESPA violation in failing to respond caused borrower to pay more for
modification, Article III standing established).
As applied to RESPA/Regulation X, the standing requirement means that, unless the
plaintiff can sustain his burden of plausibly alleging a concrete injury-in-fact that is fairly
traceable to the violation, the claim must be dismissed. Diedrich, 839 F.3d at 588. Thus,
“[c]osts for a plaintiff’s actions taken prior to a defendant’s RESPA violation will not be
considered actual damages.” Grembowiec v. Select Portfolio Servicing, Inc., Civil Action No.
18-16885, 2019 WL 3183588, at *6 (D.N.J. July 16, 2019). Similarly, since Spokeo, the
RESPA/Regulation X decisions in this District have consistently dismissed claims based on
conclusory claims of inadequate RESPA responses, which are not plausibly linked to any
consequential servicing error, and which result in nothing more than damages based on
conferring with counsel about the NOE, mailing the NOE, and prosecuting the action; such
damage allegations are found to be insufficient to establish a plausibly concrete injury-in-fact
traceable to the alleged RESPA violation. Cordeiro v. Carrington Mortg. Servs., LLC, C.A. No.
19-510 WES, 2020 WL 3404742, at *3-4 (D.R.I. June 19, 2020) (Regulation X claim based on
vague allegation that servicer failed to respond to RFI and failed to respond to NOE alleging
foreclosure error; damage allegation based on “time and money” related to bringing claim
deemed insufficient for standing), judgment withdrawn in part and remanded to state court, 2021
WL 673482 (D.R.I. Feb. 22, 2021); Curtis v. Embrace Home Loans, Inc., C.A. No. 18-057-JJM-

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PAS, 2020 WL 2115987, at *2-3 (D.R.I. May 4, 2020) (RESPA/Regulation X claims dismissed
for lack of standing based on sending RFIs and NOEs to which servicer responded, followed by
five visits to attorney, cell phone calls to and from attorney, postage and paper for mailing
NOEs, fees charged to account, legal fees and costs in prosecuting action and stress about
staying in house). Cases in this District based on analogous statutes have reached the same result
based on a similar analysis. St. Amour v. Fed. Home Loan Mortg. Corp., C.A. No. 18-254WES, 2019 WL 1453055, at *2 (D.R.I. Apr. 2, 2019) (TILA complaint’s sole damages amount
to costs and fees incurred by plaintiffs in meeting and conferring with their attorneys and
bringing case; these are not a substitute for the injury-in-fact required by Spokeo); Pemental,
2017 WL 3279015, at *8 (attorney’s fees and costs incurred in TILA action no substitute for
injury-in-fact requirement because “every TILA complaint requires the expenditure of attorneys’
fees” and to hold otherwise would allow a claim for attorneys’ fees to “subsume the injury-infact requirement”); see Viera v. Bank of New York Mellon as Tr. for Certificate Holders of
Cwalt, Inc., C.A. No. 17-0523-WES-PAS, 2018 WL 4964545, at *4 (D.R.I. Oct. 12, 2018)
(damages consisting of legal fees for allegedly improper foreclosure and costs and attorney’s
fees incurred in prosecuting state law Fair Debt Collection Practices Act claim not sufficiently
concrete to confer Article III standing with no allegation that plaintiff ever paid allegedly
improper charge or why, if paid, charge would be wrongful). On similar facts, the same result
also has obtained when the motion was brought pursuant to Fed. R. Civ. P. 12(b)(6). Lebeau,
2019 WL 1077285, at *3-4 (RESPA claims dismissed because complaint alleging flurry of
RESPA requests followed by NOEs, resulting in visits and calls to attorney, money spent on
postage and photocopies and costs to prosecute action, lacked both plausible allegation of
violation of terms and spirit of RESPA and plausible allegation of damages).

15

In this case, Plaintiff’s Amended Complaint identifies two discrete RESPA/Regulation X
violations. Each requires a separate standing analysis.
First, in Count VII, Plaintiff makes the conclusory assertion that Wells Fargo failed to
“address any of the issues raised in” NOE-1. Compl. ¶ 272. The Amended Complaint does not
plausibly explain what the RESPA/Regulation X violation is, in that the Exhibits contradict its
assertions and reveal that Wells Fargo did respond to NOE-1 with a timely letter that appears
facially to be compliant with RESPA/Regulation X, rendering Plaintiff’s conclusory pleading to
the contrary entirely lacking in plausibility. See Lebeau, 2019 WL 1077285, at *4 (RESPA
complaint based on servicer’s invocation of overbreadth and burden that failed to allege specific
issue of concern fails plausibly to allege violation); Colesanti, 2019 WL 4043957, at *9 (when
exhibits attached to complaint contradict allegations in complaint, exhibits govern).
Nevertheless, even if, for purposes of the standing analysis, the Court assumes that there was a
RESPA/Regulation X violation, fatal to Count VII is that Plaintiff’s alleged damages do not
plausibly flow from it.
For starters, the expenses associated with visiting and talking with his attorney, the
postage, copying and other expenses preparing and mailing NOE-1 and the fees and costs
associated with the foreclosure (including Plaintiff’s loss of his home) are not plausibly traceable
to an assumed RESPA/Regulation X violation because these losses had already been incurred
when Wells Fargo provided its allegedly noncompliant response. Nor does the Amended
Complaint allege any fact permitting the inference of a causal link between these past losses and
a subsequent RESPA/Regulation X violation. See, e.g., Baez v. Specialized Loan Servicing,
LLC, 709 F. App’x 979, 983 (11th Cir 2017) (per curiam) (cost of preparing and mailing initial
RFI not casually connected to subsequent alleged RESPA violation); In re Jackson, 622 B.R. at

16

327-28 (attorney’s fees and postage to prepare initial RESPA inquiry are not damages caused by
subsequent RESPA violation); Cameron v. Ocwen Loan Servicing, LLC, Case No. 2:18-cv-428,
2020 WL 104981, at *3 (S.D. Ohio Jan. 9, 2020), amended on reconsideration, 2020 WL 467686
(S.D. Ohio Jan. 29, 2020) (“[c]ourt sees no basis as to how any fees or costs related to the
Foreclosure Action incurred prior to the deficient Response Letter could morph into damages”);
Pimental, 2016 WL 6678523, at *2 (“costs incurred before the violation occurred, such as the
expenses of preparing an initial RFI” are not causally linked to a RESPA violation). That leaves
only Count VII’s claim of injury from incurring “attorney fees and costs for the prosecution of
this action.” Compl. ¶ 276. This allegation is precisely what has consistently been found
insufficient to support Article III standing in post-Spokeo RESPA cases. In re Jackson, 622 B.R.
at 328 (“attorney’s fees related to litigating a case do not constitute actual damages under
RESPA”); Curtis, 2020 WL 2115987, at *3 (“attorneys’ fees, costs, and expenses in prosecuting”
RESPA claim barred by Spokeo); Cordeiro, 2020 WL 3404742, at *4 (“injury-in-fact
requirement not satisfied by allegations of litigation-related expenses”); Freeman v. Bayview
Loan Servicing, LLC, Case No. 8:16-CV-2038-T-27TGW, 2017 WL 897773, at *5-6 (M.D. Fla.
Mar. 3, 2017) (RESPA injury based on attorney’s fees incurred after incomplete or insufficient
response cannot establish standing). As this Court held in Pemental, the attorney’s fees, costs
and expenses incurred in prosecuting the action “are not a substitute for the injury-in-fact
required by Spokeo. If they were, they would subsume the injury-in-fact requirement.” 2017
WL 3279015, at *8.
Based on the foregoing, I recommend that Count VII should be dismissed for lack of
Article III standing because it does not plausibly establish any injury-in-fact traceable to a
RESPA/Regulation X violation.

17

Plaintiff’s second RESPA/Regulation X violation is the group alleged in Counts VIII
through XIII. Plaintiff claims that Wells Fargo violated RESPA/Regulation X because, having
provided a facially compliant RESPA/Regulation X response after Plaintiff’s first wave of
letters, it failed to respond substantively to Plaintiff’s second wave of duplicate NOEs (invoking
“active litigation”) and failed to respond at all to Plaintiff’s third wave of duplicate NOEs. Thus,
unlike Count VII, these Counts plausibly allege a technical failure to comply with
RESPA/Regulation X in response to the June 2018 and August 2018 NOEs. The question for the
Court is whether Plaintiff’s pleading has plausibly linked this bare procedural violation to an
infliction of “any physical, monetary or cognizable . . . harm.” TransUnion, 141 S. Ct. at 2206;
see also Spokeo, 578 U.S. at 341-343. For actual damages allegedly arising from each of these
technical violations, the Amended Complaint presents a verbatim iteration in each of Counts VIII
through XIII of the same conclusory allegations that Plaintiff relied on to assert damages caused
by Wells Fargo’s response to NOE-1. That is, Plaintiff alleges that, for each unresponded-to
August 2018 NOE, he had to drive to meet his attorney at least five times, called his attorney
using his cell phone, spent time away from other activities, incurred postage and copying costs to
mail the NOE and incurred attorney’s fees in prosecuting this action.
As to the latter allegation (“fees and costs for the prosecution of this action”), such
alleged damages are insufficient to support Article III standing in Counts VIII through XIII for
the same reasons why they fail to support standing in Count VII. Otherwise, however, these
Counts differ from Count VII in that the costs of preparing and sending the third wave of NOEs
came after, not before, Wells Fargo’s assumed17 violation in responding to the second wave of
NOEs by invoking “active litigation.” Nevertheless, despite having long since received Wells

17

See n.16, supra.

18

Fargo’s facially compliant November 2017 response to NOE-1 and the October 2017 RFIs,
Plaintiff has failed to present any facts permitting even an inference of an explanation for why
Wells Fargo’s November 2017 response was inadequate. Lebeau, 2019 WL 1077285, at *4
(“[n]othing in his later QWRS or NOEs could have demonstrated to Wells Fargo that he was
trying to correct a legitimate servicing error or looking for a specific response from his servicer
about his delinquent account”). Similarly, Plaintiff has failed to plead any plausible facts to
establish that he was actually injured by Wells Fargo’s allegedly noncompliant response to the
June 2018 NOEs. Id. (with no plausible claim that prior response was inadequate, calls and
meetings with counsel, postage and other costs of sending subsequent NOEs insufficient to
establish causal link between violation and injury). Therefore, these damage allegations are
equally insufficient for Article III standing. Sanchez v. Johnson, Blumberg & Assoc., LLC, No.
16-cv-07056, 2018 WL 3861562, at *5 (N.D. Ill. Aug. 14, 2018) (“conclusory statements devoid
of any factual allegations indicating how the plaintiff was damaged by the alleged unlawful
conduct are insufficient” for standing to bring RESPA claim); Chadee v. Ocwen Loan Servicing,
LLC, 243 F. Supp. 3d 1283, 1288-90 (M.D. Fla. 2017) (damages borne of having to file
subsequent NOE with no explanation why the prior response was inadequate or why the NOE
was needed are not causally linked to servicer’s conduct); Pimental, 2016 WL 6678523, at *3
(where only damages claimed are those related to NOE prepared after receiving response that
provided relevant information, and plaintiff failed to identify how it was inadequate other than
untimeliness, not plausible to posit that expenses of preparing and sending subsequent NOE
causally linked to violation). Based on the foregoing, like Count VII, Counts VIII through XIII
also fail because they do not plausibly establish Article III standing as required by TransUnion
and Spokeo.

19

To counter the force of Spokeo as confirmed by TransUnion, Plaintiff relies heavily on
out-of-circuit pre-Spokeo decisions or decisions that do not reference Spokeo, particularly from
the Southern District of Florida. E.g., Kilpatrick v. Ocwen Loan Servicing, LLC, Case No. 1680317-CIV-MARRA, 2017 WL 564376, at *3-4 (S.D. Fla. Feb. 10, 2017); Miranda v. Ocwen
Loan Servicing, LLC, 148 F. Supp. 3d 1349, 1355 (S.D. Fla. 2015); O’Brien v. Seterus, Inc.,
Case No. 9:15-CV-80300-ROSENBERG, 2015 WL 4514512, at *3 (S.D. Fla. July 24, 2015).
These cases are not persuasive. See Freeman, 2017 WL 897773, at *5 n.8 (RESPA decisions
from Southern District of Florida “are essentially conclusory, include little analysis, and cite only
to other district court cases”; their holdings cannot withstand Spokeo scrutiny). Also
unpersuasive is Plaintiff’s contention that TransUnion backtracked from Spokeo by emphasizing
that “monetary” damages may establish Article III standing. What Plaintiff ignores is the
emphatic holding of both TransUnion and Spokeo – no matter what the character of the claimed
injury, Article III requires more than “‘bare procedural violation[s], divorced from any concrete
harm.’” TransUnion, 141 S. Ct. at 2213 (quoting Spokeo, 578 U.S. at 341). When the fog of
confusion arising from the “sound and fury”18 in Plaintiff’s eight Count/200 paragraph RESPA
pleading (supplemented by 124 pages of RESPA Exhibits) is blown away, what remains are bare
procedural violations, divorced from any concrete harm. This is insufficient to sustain Article III
standing.
Based on the foregoing, I find that Plaintiff’s claims against Wells Fargo as pled in
Counts VII through XIII (including both iterations of Count XII) fail to establish Article III
standing. Because the Court therefore lacks subject matter jurisdiction, these Counts should all
be dismissed.

18

In re Brady-Zell, 756 F.,3d 69, 73 (1st Cir. 2014).

20

IV.

FED. R. CIV. P 12(b)(6)
The Court need not linger long over Wells Fargo’s alternative argument for dismissal

based on the failure of each of Counts VII through XIII to state a plausible claim. All of the
same plausibility flaws identified above are equally fatal pursuant to Fed. R. Civ. P. 12(b)(6).
See Lebeau, 2019 WL 1077285, *4. Therefore, I alternatively recommend dismissal of all
claims against Wells Fargo for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).
V.

CONCLUSION
Based on the foregoing analysis, I recommend that Wells Fargo’s Motion (ECF No. 102)

to Dismiss for Lack of Subject Matter Jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) be
GRANTED and that Counts VII through XIII (including both iterations of Count XII) be
dismissed without prejudice. If the Court does not adopt this recommendation, I alternatively
recommend that Wells Fargo’s Motion to Dismiss these Counts for Failing to State a Plausible
Claim pursuant to Fed. R. Civ. P. 12(b)(6) should be GRANTED and that these Counts should be
dismissed with prejudice.
Any objection to this report and recommendation must be specific and must be served
and filed with the Clerk of the Court within fourteen (14) days of its receipt. See Fed. R. Civ. P.
72(b)(2); DRI LR Cv 72(d). Failure to file specific objections in a timely manner constitutes
waiver of the right to review by the district judge and the right to appeal the Court’s decision.
See United States v. Lugo Guerrero, 524 F.3d 5, 14 (1st Cir. 2008); Park Motor Mart, Inc. v.
Ford Motor Co., 616 F.2d 603, 605 (1st Cir. 1980).
/s/ Patricia A. Sullivan
PATRICIA A. SULLIVAN
United States Magistrate Judge
October 21, 2021

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