Bowen v. Select Portfolio Servicing, Inc.

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JAMES BOWEN and LISA BOWEN, Individually and On Behalf of All Others Similarly Situated, Plaintiffs, v. SELECT PORTFOLIO SERVICING, INC., Defendant.

Civil Action No. 1:23-cv-11231-IT

United States District Court, D. Massachusetts

July 26, 2024

MEMORANDUM & ORDER

TALWANI, D.J.

Plaintiffs James Bowen and Lisa Bowen bring this purported class action against Defendant Select Portfolio Servicing, Inc. (“SPS”) for alleged violations of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C §§ 2601, et seq., and Regulation X, 12 C.F.R. § 1024. Am. Compl. 1-2 [Doc. No. 14]. Pending before the court is Defendant's Motion for Judgment on the Pleadings [Doc. No. 20] (the “Motion”). For the reasons set forth below, Defendant's Motion [Doc. No. 20] is GRANTED.

I. Standard of Review

Under Federal Rule of Civil Procedure 12(c), a party may move for judgment on the pleadings at any time “[a]fter the pleadings are closed-but early enough not to delay trial.” Fed.R.Civ.P. 12(c). Where “a motion for judgment on the pleadings ‘is employed as a vehicle to test the plausibility of a complaint, it must be evaluated as if it were a motion to dismiss.'” Shay v. Walters, 702 F.3d 76, 82 (1st Cir. 2012). The court therefore assumes “the truth of all well-pleaded facts” and draws “all reasonable inferences in the [nonmovant's] favor.” Nisselson v. Lernout, 469 F.3d 143, 150 (1st Cir. 2006). To survive a motion for judgment on the pleadings, the nonmovant must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “While a complaint [. . .] does not need detailed factual allegations . . . [f]actual allegations must be enough to raise a right to relief above the speculative level . . . .” Id. at 555 (internal citations omitted). “A claim has facial plausibility when the plaintiffs pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Ordinarily, courts are “forbidden” from considering any documents “not attached to the complaint, or not expressly therein” when adjudicating a motion for judgment on the pleadings. Cf. Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) (stating this principle when adjudicating a motion to dismiss). However, courts make “narrow exceptions for documents the authenticity of which are not disputed by the parties; . . . for documents central to plaintiffs' claim; or for documents sufficiently referred to in the complaint.” Id.

II. Background

A. Statutory Background

Under RESPA, servicers of federally related mortgage loans must respond to “qualified written request[s]” from borrowers “for information relating to the servicing” of their loan. 12 U.S.C. § 2605(e)(1)(a). In response to a request, the servicer is required to “conduct[] an investigation” and either “provide the borrower with . . . [the] information requested” or “provide the borrower with a written explanation . . . of why the information requested is unavailable or cannot be obtained by the servicer.” Id. § 2605(e)(2)(C).

If a servicer fails to comply with these provisions, a borrower may sue individually for “an amount equal to the sum of-(A) any actual damages to the borrowers as a result of the failure; and (B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $2,000[,]” and on behalf of a class in “an amount equal to the sum of-(A) any actual damages to each of the borrower in the class as a result of the failure; and (B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not greater than $2,000 for each member of the class” (with an aggregate limit not relevant here). 12 U.S.C. § 2605(f)(2) (emphases added); see also Regulation X, 12 C.F.R. §§ 1024.35, 1024.36 (implementing RESPA).

B. Factual Background (as Alleged in the Pleadings and Submitted Documents)^[1]

On July 27 2022, Plaintiffs mailed the Defendant a Qualified Written Request (“QWR”) asking for several documents including “[a] copy of any and all recordings . . . [and a] copy of any and all transcripts of conversations with [Plaintiffs] or any other person concerning [Plaintiffs'] account[,]” pursuant to RESPA and Regulation X. Id. ¶ 24; see also First QWR, Pls.' Opp. to Def.'s Mot., Ex. A [Doc. No. 25-1]. Defendant responded with some documents but did not provide the requested telephone recordings or transcripts in its response. Id. ¶ 24; see also First QWR Resp., Pls.' Opp. to Def.'s Mot., Ex. B [Doc. No. 25-2].

On November 29, 2022, Plaintiffs mailed the Defendant a second QWR reiterating their request for a copy of all call recordings and transcripts. Am. Compl. ¶ 26 [Doc. No. 14]; Second QWR, Pls.' Opp. to Def.'s Mot., Ex. C [Doc. No. 25-3]. That letter was delivered to Defendant on December 28, 2022. Am. Compl. ¶ 26 [Doc. No. 14].

On or around February 24, 2023, Plaintiffs mailed Defendants their third QWR. Id. ¶ 27; Third QWR, Pls.' Opp. to Def.'s Mot., Ex. E [Doc. No. 25-5]. On or around March 10, 2023, Plaintiffs' counsel received a partial response from the Defendant, in which the Defendant did not provide the requested recordings or transcripts of calls. Am. Compl. ¶ 28 [Doc. No. 14]. In the response, the Defendant stated:

In your inquiry, you requested that we provide all recorded conversations and the conversation log between James P. Bowen and Lisa A. Bowen and [Select Portfolio Servicing]. While we will not provide the recorded messages, we have enclosed a copy of the Account History. [. . .]

If a document was not provided it is because it is privileged or proprietary.

Id. ¶¶ 29-30.

Plaintiffs assert that they “believed there was an error in the amounts Defendant claimed Plaintiffs owed[,]” and SPS breached its statutory duties under RESPA by failing to adequately respond to their inquiries. Am. Compl. ¶¶ 1, 13-14 [Doc. No. 14]. Plaintiffs allege upon information and belief that “Defendant has refused to produce recordings for possibly hundreds if not thousands of consumers that have requested them.” Id. at ¶ 31. Plaintiffs also allege that the Defendant's refusals are a “pattern and practice” of violating RESPA, because their “blanket refusal . . . appears to be a uniform template response sent to many consumers,” and “at least two requests were made . . . for the recordings in question and Defendant failed to produce the recordings in response to each request.” Id. at ¶ 34-35.

III. Discussion

SPS argues that Plaintiffs have not shown any actual damages resulting from SPS's alleged failure to comply with the provisions of RESPA, 12 U.S.C. § 2605; Def.'s Mem. ISO Mot. 4 [Doc. No. 21]. And, per SPS, statutory damages are only available under RESPA as “an additional measure of relief.” Id. at 5 (emphasis in original). SPS therefore argues that because Plaintiffs fail to allege any actual damages in their complaint, they are not entitled to statutory relief under RESPA. See id. at 4-8.

Plaintiffs argue that a plaintiff alleging a RESPA violation need not allege actual damages. Plaintiffs also claim that in any event they have sufficiently alleged actual damages, namely postage charges, incurred when they sent two subsequent letters after the incomplete response to their first QWR. Am. Compl. ¶ 17 [Doc. No. 14].

A. Alleging Damages under RESPA

The First Circuit has not considered whether a plaintiff alleging a RESPA violation must allege actual damages. In interpreting statutory provisions, this court begins “where all such inquiries must begin: with the language of the statute itself.” Republic of Sudan v. Harrison, 587 U.S. 1, 8 (2019) (internal quotation marks and citation omitted).

A borrower alleging a RESPA violation may sue in an individual action for “an amount equal to the sum of-(A) any actual damages to the borrower as a result of the failure; and (B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $2,000[,]” and may sue in a class action in “an amount equal to the sum of-(A) any actual damages to each of the borrower in the class as a result of the failure; and (B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not greater than $2,000 for each member of the class” (with an aggregate limit not relevant here). 12 U.S.C. § 2605(f)(1), (2) (emphases added).

The use of “and” to separate the actual damages and statutory damages provisions, see 12 U.S.C. §§ 2605(f)(1)(A), (2)(A), and the use of the word “additional” to preface the availability of statutory damages, id. §§ 2605(f)(1)(B), (2)(B), supports Defendant's reading that Plaintiffs must plead actual damages before pursuing statutory damages. Two circuits have so concluded, explaining that statutory damages under RESPA are only available after actual damages are sufficiently pled. See Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 719-20 (8th Cir. 2018) (“A borrower cannot recover ‘additional' damages under [12 U.S.C.] § 2605(f)(1)(B) without first recovering actual damages.”); Trichell v. Midland Credit Mgmt., Inc., 964 F.3d 990, 1000 (11th Cir. 2020) (“[T]he use of ‘additional' seems to indicate that a Plaintiffs cannot recover pattern-or-practice damages in the absence of actual damages.”).^[2]

Plaintiffs contend that “the First Circuit and district courts within the First Circuit in sweeping fashion have found that...