Hudgins v. Seterus, Inc.

192 F.Supp.3d 1343

Thomas HUDGINS, Plaintiff,

v.SETERUS, INC., Defendant.

Case No. 16-cv-80338-BLOOM/Valle

United States District Court, S.D. Florida.

Signed June 28, 2016

Entered June 29, 2016

Brian Keith Korte, Korte and Wortman PA, West Palm Beach, FL, for Plaintiff.

Nicholas Steven Agnello, Burr & Forman LLP, Fort Lauderdale, FL, for Defendant.

ORDER ON MOTION TO DISMISS

BETH BLOOM, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendant Seterus Inc.'s ("Defendant") Motion to Dismiss, ECF No. [7] (the "Motion"), seeking dismissal of Plaintiff Thomas Hudgins's ("Plaintiff" or "Mr. Hudgins") Complaint, ECF No. [1]. The Court has carefully reviewed the record, the parties' briefs, and the applicable law. For the reasons that follow, the Motion is granted.

I. BACKGROUND

Plaintiff initially filed suit in the County Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, seeking relief for Defendant's alleged violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq. ("RESPA"), and its implementing regulation, 12 C.F.R. § 1024 et seq. ("Regulation X"). ECF No. [1], Exh. A ("Complaint"). Specifically, Plaintiff seeks remedies for Defendant's alleged failure to comply with § 2605(k) of RESPA and § 1024.36 of Regulation X. See id. ¶ 3. Defendant timely removed the matter to this Court, and now moves to dismiss the Complaint. See ECF No. [7].

As with many RESPA claims, Plaintiff's begins, simply, with the mailing of a letter. As early as September 15, 2015, Plaintiff's attorney "caused to be mailed to Defendant a written request for information pursuant to Regulation X (the "RFI")." Complaint ¶¶ 10-11; see id. , Attachment A. Defendant appears to have received the RFI on October 12, 2015. See id. , Attachment B. While Plaintiff concedes that Defendant replied, "said response failed to address the areas of concern set forth in the RFI" in violation of 12 C.F.R. § 1024.36(d)(2)(i)(B). Id. ¶ 17. "Having not received a written acknowledgment to Plaintiff's RFI within the required time frame," Plaintiff sent Defendant a follow up Notice of Error letter (the "NOE"), "which outlined the Defendant's specific failures." Id. ¶ 12; see id. , Attachment C. Plaintiff claims that Defendant "did not provide ... written receipt" to the RFI "within the time period provided by 12 C.F.R. § 1026.36(c)(3)," and did not respond to the NOE. Id. ¶¶ 18, 22. As such, Plaintiff claims that Defendant "failed or refused to comply with 12 C.F.R. § 1024.36(d)(2)(i)(B)," and brings a single cause of action for Defendant's alleged violation of 12 U.S.C. § 2605(k)(1)(E). Id. ¶¶ 22, 23. As to damages, Plaintiff alleges that he incurred "photocopying costs [and] postage costs ... less than $100.00 for mailing the RFI and NOE ... and attorney's fees and costs, in an amount to be proven at trial." Id. ¶¶ 24, 25.

Defendant moves the Court to dismiss the Complaint, telling a more thorough story of the parties' ill-fated correspondence. See ECF No. [7]. Defendant states that on September 9, 2014, a final judgment of foreclosure was entered against Plaintiff's home in the Sixth Judicial Circuit in and for Pinellas County, Florida (Case Number 12-CA-004887). See ECF No. [1] ¶¶ 1-2 ("Notice of Removal"). On December 14, 2015, Plaintiff served a different lawsuit upon Defendant (the "First Lawsuit"), alleging the same cause of action, namely, that Defendant violated RESPA, 12 U.S.C. 2601, et seq ., by failing to properly respond to Plaintiff's September 15, 2015 RFI. See ECF No. [7] ¶ 6. After removing proceedings to this Court, Defendant moved to dismiss the suit for, among other reasons, Plaintiff's failure to properly allege actual damages, and on January 21, 2016, Plaintiff voluntarily dismissed the First Lawsuit. See id. ¶¶ 8, 10. Three days after the Court's order of dismissal, Plaintiff's counsel sent the NOE to Defendant (and not to Defendant's attorney), reminding Defendant that it had failed to adequately respond to the RFI mailed by Plaintiff four months prior. See id. ¶ 12; see also Complaint, Attachment C. Defendant argues that the Court must dismiss the instant suit for Plaintiff's failure to state a claim. Plaintiff's Response, and Defendant's Reply, timely followed. ECF Nos. [13], [17].

II. LEGAL STANDARD

Rule 8 of the Federal Rules requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Although a complaint "does not need detailed factual allegations," it must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; see Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (explaining that Rule 8(a)(2)'s pleading standard "demands more than an unadorned, the defendant-unlawfully-harmed-me accusation"). In the same vein, a complaint may not rest on " ‘naked assertion [s]’ devoid of ‘further factual enhancement.’ " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 557, 127 S.Ct. 1955 (alteration in original)). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. These elements are required to survive a motion brought under Rule 12(b)(6) of the Federal Rules of Civil Procedure, which requests dismissal for "failure to state a claim upon which relief can be granted."

When reviewing a motion under Rule 12(b)(6), a court, as a general rule, must accept the plaintiff's allegations as true and evaluate all plausible inferences derived from those facts in favor of the plaintiff. See Miccosukee Tribe of Indians of Fla. v. S. Everglades Restoration Alliance , 304 F.3d 1076, 1084 (11th Cir.2002) ; AXA Equitable Life Ins. Co. v. Infinity Fin. Grp., LLC , 608 F.Supp.2d 1349, 1353 (S.D.Fla.2009). However, this tenet does not apply to legal conclusions, and courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ; see Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 ; Thaeter v. Palm Beach Cnty. Sheriff's Office , 449 F.3d 1342, 1352 (11th Cir.2006). Moreover, "courts may infer from the factual allegations in the complaint ‘obvious alternative explanations,’ which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer." Am. Dental Ass'n v. Cigna Corp ., 605 F.3d 1283, 1290 (11th Cir.2010) (quoting Iqbal , 556 U.S. at 682, 129 S.Ct. 1937 ). A court considering a Rule 12(b) motion is generally limited to the facts contained in the complaint and attached exhibits, including documents referred to in the complaint that are central to the claim. See Wilchombe v. TeeVee Toons, Inc ., 555 F.3d 949, 959 (11th Cir.2009) ; Maxcess, Inc. v. Lucent Technologies, Inc ., 433 F.3d 1337, 1340 (11th Cir.2005) ("[A] document outside the four corners of the complaint may still be considered if it is central to the plaintiff's claims and is undisputed in terms of authenticity.") (citing Horsley v. Feldt , 304 F.3d 1125, 1135 (11th Cir.2002) ).

III. DISCUSSION

Defendant moves the Court to dismiss the Complaint on a number of grounds. First, Defendant argues that Plaintiff's requests in the RFI do not relate to the "servicing" of Plaintiff's loan, and thus, Defendant had no obligation to respond under RESPA. See ECF No. [7] at 4. Next, Defendant contends that Plaintiff is not afforded a right of action against a servicer like Defendant. Id. at 7. Defendant also claims that Plaintiff has failed to allege actual damages, and that in any regard, Plaintiff's lawsuit is contrary to the intent and purpose of RESPA. See id. at 9-17.

A. The RFI does not request information related to the "servicing" of a loan

Plaintiff claims that Defendant violated 12 U.S.C. § 2605(k)(1)(E) by inadequately responding to the RFI. Section 2605 of RESPA governs the "servicing of mortgage loans and administration of escrow accounts." Section 2605(k)(1)(E) implicates Regulation X by providing in relevant part that "[a] servicer of a federally related mortgage shall not ... fail to comply with any other obligation found by the Bureau of Consumer Financial Protection, by regulation, to be appropriate to carry out the consumer protection purposes of this chapter." Plaintiff claims that Defendant is liable under RESPA for failing or refusing to comply with § 1024.36(d)(2)(i)(B) of Regulation X. See Complaint ¶ 22. Section 1024.36(d)(2)(i)(B) provides, in relevant part, that "[a] servicer must comply with the requirements of paragraph (d)(1)" no later "than 30 days (excluding legal public holidays, Saturdays, and Sundays) after the servicer receives the information request." Section 1024.36(d)(1) requires servicers to respond to a borrower's requests for information by either:

(i) Providing the borrower with the requested information and contact information, including a telephone number, for further assistance in writing; or (ii) Conducting a reasonable search for the requested information and providing the borrower with a written notification that states that the servicer has determined that the requested information is not available to the servicer, provides the basis for the servicer's determination, and provides contact information, including a telephone number, for further assistance.

12 C.F.R. § 1024.36(d)(1). If a loan servicer violations § 2605 of RESPA, an aggrieved party may recover: "(A) any actual damages to the borrower as a result of the failure; and (B) any additional [statutory] 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 $1,000." 12 U.S.C. § 2605(f)(1).

Resolution of the Motion centers on Plaintiff's RFI and NOE, and the parties do not contest the authenticity of...