Fitch et al v. Federal Housing Finance Agency et al

Filing 190

REPORT AND RECOMMENDATIONS re 160 MOTION for Summary Judgment With Supporting Memorandum filed by Kenneth Fitch, Estate of Dianne L. Fitch, 172 Cross MOTION for Summary Judgment filed by Federal National Mortgage Associa tion Objections to R&R due by 4/28/2022.. I recommend that the motion for partial summary judgment (ECF No. 172) of Defendant Federal National Mortgage Association be GRANTED and that Plaintiff's motion for partial summa ry judgment (ECF No. 160) be DENIED. I further recommend that the Court enter final judgment against Plaintiff and in favor of all remaining Defendants (Federal National Mortgage Association, Federal Housing Finance Agency, Rushmore Loan Management Services, LLC, and U.S. Bank National Association as Trustee for RMAC Trust Series 2016-CTT) on all remaining Counts (II through VI) in the Amended Complaint, terminating this action. So Ordered by Magistrate Judge Patricia A. Sullivan on 4/14/2022. (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., 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. 18-214JJM

REPORT AND RECOMMENDATION
PATRICIA A. SULLIVAN, United States Magistrate Judge.
Now pending before the Court are two partial motions for summary judgment, one filed
by Plaintiff 1 (Kenneth Fitch and the Estate of Dianne L. Fitch) (ECF No. 160) and the other a
cross-motion for summary judgment filed by Defendant Federal National Mortgage Association
(“Fannie Mae”) (ECF No. 172). These motions follow closely the Court’s granting of analogous
motions for summary judgment brought by Defendant 266 Putnam Avenue, LLC (“Putnam”); in
the decision on the Putnam motions, the Court rejected as a matter of law Plaintiff’s claim that
the foreclosure of his residence is void or violated his right to due process of law. Fitch v Fed.
Hous. Fin. Agency, C.A. No. 18-214JJM, 2022 WL 684083 (D.R.I. Mar. 8, 2022), adopted, 2022
WL 980743 (D.R.I. Mar. 31, 2022) (“Fitch I”). Both of the latest motions have been referred to
me for report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). Based on Fitch I and
In using “Plaintiff” to refer collectively to the Fitches and/or singularly to each of them, the Court adopts a
convention it has used previously in this case.

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the following analysis, I recommend that Plaintiff’s motion be denied and Fannie Mae’s motion
be granted. If adopted, these recommendations terminate all remaining issues for trial, ending
this case.
I.

BACKGROUND, LAW AND ANALYSIS
Plaintiff’s motion asks the Court to enter judgment in his favor against Defendants

Fannie Mae, Rushmore Loan Management Services, LLC (“Rushmore”), and U.S. Bank
National Association as Trustee for RMAC Trust Series 2016-CTT (“U.S. Bank”). 2 ECF No.
160. Plaintiff contends that application of the law to the undisputed facts establishes that the
July 28, 2017, foreclosure sale of the Fitch residence at 73 Kay Street, Cumberland, Rhode
Island (“Real Estate”), by Fannie Mae to Putnam is void because (a) the default notice and the
acceleration notice both failed strictly to comply with Paragraph 22 of the mortgage; (b) the
notice of foreclosure was sent prematurely; (c) the various notices (including the notice of
mediation required by R.I. Gen. Laws § 34-27-3.2) were sent to Diane Fitch/Dianne L. Fitch,
who had died, and therefore were not directed to a properly named mortgagor/borrower; and (d)
Fannie Mae was not the mortgagee at the time of the foreclosure because the associated loan had
been sold prior to the foreclosure and there might have been an unrecorded assignment of the
mortgage. ECF No. 160-1.
Fannie Mae’s cross motion addresses the same issues, but it argues that application of the
law to the undisputed facts compels the opposite conclusion – that the foreclosure is not void –

Fannie Mae and Putnam both filed oppositions to Plaintiff’s motion for summary judgment. ECF Nos. 172, 175.
Rushmore and U.S. Bank did not. However, Plaintiff’s claims against Rushmore and U.S. Bank are derivative of
the allegations in Counts II, IV and V, each of which asserts that the foreclosure is void; among other remedies,
Plaintiff seeks an order directing Rushmore and/or U.S. Bank to return to Putnam the consideration that it paid
($188,000) to purchase the Real Estate following the foreclosure sale. ECF No. 60. To the extent that the
substantive allegation that the foreclosure is void fails as a matter of law, as the Court has already held as to Putnam,
Fitch I, at *5-17, and as I now recommend it should hold as to Fannie Mae, Plaintiff’s claims against Rushmore and
U.S. Bank also fail as a matter of law.
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and requires that judgment should enter in its favor on Counts II through V. ECF No. 173 at 2
n.1. Fannie Mae further contends that it is entitled to judgment as a matter of law on Plaintiff’s
claims arising under the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq., in Count VI
because Plaintiff lacks Article III standing due to his failure to establish concrete injury as
required by Spokeo, Inc. v. Robins, 578 U.S. 330 (2016), and confirmed by TransUnion LLC v.
Ramirez, 141 S. Ct. 2190 (2021). ECF No. 173 at 16-17.
Plaintiff filed no objection to Fannie Mae’s motion for summary judgment. Mindful of
the Court’s obligation to inquire, even when the motion is unopposed, whether the moving party
has met its burden to demonstrate undisputed facts entitling it to summary judgment as a matter
of law, Airway Leasing, LLC v. MTGLQ Invs., L.P., C.A. No. 18-516JJM, 2021 WL 1166517,
at *2 (D.R.I. Mar. 26, 2021), adopted, 2021 WL 1910811 (D.R.I. May 12, 2021), I have
considered Plaintiff’s argument in support of his own motion as if asserted as an opposition to
Fannie Mae’s motion.
A.

Plaintiff’s Claims that the Foreclose is Void

In Fitch I, all the issues related to Plaintiff’s claim that the foreclosure is void have
already been addressed by a report and recommendation that has been adopted by the Court,
albeit in the context of Putnam’s motion for partial summary judgment. Putnam’s motion
asserted essentially the same arguments that Fannie Mae is asserting now in its opposition to
Plaintiff’s motion and in support of its own cross motion. In opposition to Putnam’s motion,
Plaintiff relied on essentially the same facts and made essentially the same arguments that he is
asserting now in support of his motion for summary judgment. Therefore, Fitch I is now the law
of this case and my recommendations are also essentially the same; in the interest of efficiency, I
incorporate into this report and recommendation all the Background, the Standard of Review and

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the Analysis of the motion for partial summary judgment that is set out in Fitch I. See Naser
Jewelers, Inc. v. City of Concord, N.H., 538 F.3d 17, 20 (1st Cir. 2008) (“when a court decides
upon a rule of law, that decision should continue to govern the same issues in subsequent stages
in the same case”) (quoting Arizona v. California, 460 U.S. 605, 618 (1983)); McConaghy v.
Sequa Corp., 294 F. Supp. 2d 151, 160 (D.R.I. 2003) (“legal determinations, or rulings of law,
are properly regarded as law of the case governing the same issue in subsequent proceedings”).
Specifically, I make all the same proposed findings regarding the undisputed facts and the same
recommendations as follows:
First, I find that the Default Notice 3 strictly complied with Paragraph 22 of the Mortgage,
that it was not deficient in any respect and that all of Plaintiff’s claims that the foreclosure is void
because of a deficiency in the Default Notice fail as a matter of law. Fitch I, at *5-8.
Second, I find that Plaintiff has waived his undeveloped argument that the Notice of
Acceleration’s reference to the amount implicated by the right of reinstatement is improper so as
to void the foreclosure. Id. at *6 n.12. Alternatively, I find that nothing in the Mortgage
mandates that a mortgagee must send a separate notice of acceleration that sets out a specific
amount for exercise of the right of reinstatement, that Woel v. Christiana Trust, as Trustee for
Stanwich Mortgage Loan Trust Series 2017-17, 228 A.3d 339 (R.I. 2020), does not hold that a
foreclosure is void if such a notice is not sent and that Plaintiff’s claim that the wording of the
Notice of Acceleration voids the foreclosure fails as a matter of law. Fitch I, at *9.
Third, I find Plaintiff’s contention that this foreclosure is void because it was not
preceded by a sequence of notices punctuated by at least two thirty day waiting periods fails as a

Because I am incorporating into this report and recommendation everything from Fitch I, related to Putnam’s
motion for partial summary judgment, I am using various terms (such as “Note,” “Mortgage,” “Default Notice”) as
they were defined in that decision.
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matter of law because nothing in the Note, the Mortgage, Woel or other applicable law imposes
such a requirement. Id. Plaintiff’s related argument that the two adjournments of the foreclosure
sale were handled incorrectly, thereby voiding the foreclosure, also fails because the undisputed
facts establish that the adjournments were handled consistent with the applicable statutory
requirement. Id. at *9 n.16.
Fourth, I find that the contractually required notices sent pursuant to the Note and the
Mortgage leading up to the foreclosure were appropriately addressed and sent in accordance with
the terms of the applicable documents. Id. at *10-11. Therefore, Plaintiff’s claim that the
foreclosure is void because the contractual notices were not addressed and/or sent separately to
him fails as a matter of law. Id.
Fifth, consistent with the requirements of the mediation statute, R.I. Gen. Laws § 34-273.2, I find that the statutory notice of the mediation conference was appropriately sent and
addressed to Dianne L. Fitch, as “mortgagor,” and that R.I. Gen. Laws § 34-27-3.2(d) does not
require that notice be separately sent to the husband of a mortgagor who signs the instrument as a
“non vested” spouse. Fitch I, at *11-13. I further find that the mediation statute did not require a
second notice of mediation to be sent after the Mortgage was assigned to Fannie Mae. Id. at *13
n.20. Therefore, I find that Plaintiff’s claim that the foreclosure is void because of
noncompliance with the statutory notice requirement in the mediation statute fails as a matter of
law. 4 Id. at *11-13.

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In connection with the Putnam motion, I alternatively found that Plaintiff’s claim based on an allegedly deficient
mediation notice fails because the failure to provide statutory notice pursuant to R.I. Gen. Laws § 34-27-3.2 renders
a foreclosure voidable, not void; therefore, as to Putnam, an innocent bona fide purchaser, noncompliance with the
notice requirement does not void the foreclosure. Fitch I, at *13. This finding applies uniquely to Putnam and is not
incorporated into this report and recommendation.

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Sixth, I find that the undisputed facts unequivocally establish that, at the time of the
foreclosure, Fannie Mae was the mortgagee of record with standing and the authority under law
and the pertinent documents to proceed with the foreclosure. Id. at *13-15. Plaintiff’s
contention that the foreclosure is void because of a secret assignment fails because it is based on
speculation and, in any event, fails as a matter of law. Id.
In light of these recommendations, I further recommend that the Court enter judgment
against Plaintiff and in favor of Fannie Mae, Rushmore and U.S. Bank on Counts II through V of
the Amended Complaint. If the Court adopts these recommendations all that remains in this
case 5 is Count VI, which is based on the allegation that Fannie Mae violated TILA. I turn to that
claim next.
B.

Plaintiff’s TILA Claim

Pointing to the requirements in Regulation Z, 12 C.F.R. § 1026.41, Plaintiff has asserted
a TILA claim based on the allegation that Fannie Mae was the holder of both the Note and the
Mortgage yet failed to provide monthly statements during the three-month period from April 20,
2017, until July 26, 2017, and/or supplied inaccurate statements by including charges due to the
foreclosure. ECF No. 60, Count VI. In the Amended Complaint, Kenneth Fitch alleged that this
breach caused him actual damages in that he had to take time to review the inaccurate statements
and that they (as well as the missing statements) caused him to drive to see his attorney at least
three times to discuss them, as well as that he incurred the fees and costs to prosecute this case. 6
ECF No. 60 ¶ 245. As this Court has already held at an earlier phase of this case, Fitch v. Fed.
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Fitch I disposed of Count I as to all Defendants. Id. at *17.

Plaintiff also alleges that TILA was violated by the inclusion of fees, costs and expenses associated with the
foreclosure, which were improper because the foreclosure was improper. ECF No. 60 ¶¶ 242-43. Because the Court
has already rejected the proposition that the foreclosure was improper, Fitch I, at *15-17, and consistent with my
recommendation supra regarding Counts II through V, this aspect of his TILA claim fails as a matter of law for this
alternative reason.
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Hous. Fin. Agency, C.A. No. 18-cv-214JJM, 2021 WL 4901909, at *6-9 (D.R.I. Oct. 21, 2021)
(rejecting Plaintiff’s Real Estate Settlement Procedures Act claims, “such alleged damages are
insufficient to support Article III standing”), adopted, 2022 WL 159287 (D.R.I. Jan. 18, 2022), it
is well settled that these damage allegations are insufficient to support Article III standing as
required by Spokeo, 578 U.S. 330, and as reinforced by TransUnion, 141 S. Ct. 2190. Plaintiff’s
TILA claim still rests on nothing more than these legally insufficient allegations – despite being
the party bearing the burden, he has filed nothing in response to Fannie Mae’s challenge to his
TILA claim. See Joseph v. Lincare, Inc., 989 F.3d 147, 157 (1st Cir. 2021) (party opposing
summary judgment bears “the burden of producing specific facts sufficient to deflect the swing
of the summary judgment scythe”) (quoting Mulvihill v. Top-Flite Golf Co., 335 F.3d 15, 19 (1st
Cir. 2003)).
For these reasons, I find that Plaintiff’s TILA claims against Fannie Mae in Count VI
have reached the summary judgment phase, yet he has failed to present specific facts sufficient to
establish Article III standing. Accordingly, I recommend that judgment should enter in favor of
Fannie Mae and against Plaintiff on all TILA claims in Count VI.
II.

CONCLUSION
Based on the foregoing analysis, I recommend that the motion for partial summary

judgment (ECF No. 172) of Defendant Federal National Mortgage Association be GRANTED
and that Plaintiff’s motion for partial summary judgment (ECF No. 160) be DENIED. I further
recommend that the Court enter final judgment against Plaintiff and in favor of all remaining
Defendants (Federal National Mortgage Association, Federal Housing Finance Agency,
Rushmore Loan Management Services, LLC, and U.S. Bank National Association as Trustee for

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RMAC Trust Series 2016-CTT) on all remaining Counts (II through VI) in the Amended
Complaint, terminating this action.
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
April 14, 2022

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