Robey v. JPMorgan Chase Bank, N.A.

343 F.Supp.3d 1304

Daniel ROBEY, et al., Plaintiffs,

v.JPMORGAN CHASE BANK, N.A., et al., Defendants.

Case No. 1:18-cv-21033-UU

United States District Court, S.D. Florida.

Signed December 4, 2018

Joann Marie Hennessey, Civil Justice Advocates, PL, Peter Glen Herman, The Herman Law Group, P.A., Fort Lauderdale, FL, for Plaintiffs.

Benjamin Weinberg, Len Cosgrove LLP, Coral Gables, FL, for Defendants.

ORDER

URSULA UNGARO, UNITED STATES DISTRICT JUDGE

THIS CAUSE came before the Court on Defendant JPMorgan Chase Bank, N.A.'s Motion to Dismiss Plaintiffs' Amended Complaint (D.E. 72) (the "Motion").

THE COURT has considered the Motion, Plaintiffs' Response thereto (D.E. 74) (the "Response"), the movant's Reply in support of the Motion (D.E. 75) (the "Reply"),¹ and the pertinent portions of the record and is otherwise fully advised in the premises.

BACKGROUND

The facts below come from the Amended Complaint (D.E. 68) (the "Complaint") and are construed in the light most favorable to the plaintiffs.

On June 10, 2005, Plaintiffs Daniel Robey ("Mr. Robey") and Pamela Robey ("Mrs. Robey") (collectively, "Plaintiffs" or "the Robeys") purchased a residential lot at 127 Welding Way, Beach Mountain, Watuga County, North Carolina. Compl. ¶ 8.² The Robeys intended to build their home on the lot. Id.

A. The Washington Mutual Loan

Later, in order to refinance the purchase of the home, the Robeys sought to secure a loan from Washington Mutual Bank F.A. ("Washington Mutual"). Id. ¶ 10. The closing documents for the refinance loan (the "Loan") included a promissory note (the "Note") and a deed of trust (the "Deed"), which were sent by Washington Mutual to the Robeys in Miami, Florida for signature. Id. ¶ 11. On or about March 19, 2008, Mr. Robey—but not Mrs. Robey—executed the Note in the principal amount of $417,000.00 in favor of Washington Mutual. Id. ¶ 12 & Ex. A. And on or about that same date, Mr. Robey—but not Mrs. Robey—executed the Deed. Id. ¶ 13 & Ex. B.³ According to Plaintiffs, North Carolina law requires the signatures of both husband and wife on a deed of trust. Id. ¶ 13. The Deed, once signed, purportedly encumbered the Robeys' property and purportedly secured the repayment of the Note. Id.

B. The Loan is Transferred to Chase

After the loan documents were filed, Mr. Robey made his monthly loan payments to Washington Mutual via ACH bank transfers. Id. ¶ 14. Sometime later, Mr. Robey learned on his own, through a website, that the FDIC had taken over Washington Mutual and subsequently sold its assets to JPMorgan Chase Bank, N.A. ("Chase") on September 25, 2008. Id. ¶ 15. Despite Chase's purported acquisition of all of Washington Mutual's assets, notices regarding the Note and Deed were still being sent to the Robeys from an entity called "Washington Mutual." Id. ¶ 16. The Robeys never received any notices concerning the transfer of rights in the Note and Deed of Trust. Id. ¶ 17. However, the Robeys eventually received an invoice from Chase for loan payments at their Miami, Florida address, which invoice referenced the same loan number as the Washington Mutual statements. Id. Thereafter, Mr. Robey began making Loan payments directly to Chase. Id. ¶ 18.

C. Chase Sends False Claims of Tax Nonpayment, Inexplicably Rejects Payments, Impermissibly Charges Late Fees and Collects Escrow Funds, and Misapplies the Escrow Funds

On April 3, 2009—some months after learning that Chase was now the purported holder or servicer of the Loan—Mr. Robey received a letter from "Washington Mutual" falsely accusing Mr. Robey of not paying his 2008 real estate taxes. Id. ¶ 19. While the Deed permitted Chase to escrow funds, Chase (according to Plaintiffs) waived any requirement to escrow funds in connection with the Loan, as initially the monthly Loan payments did not include money for escrows. Id. ¶ 21. In other words, the Robeys were paying taxes and insurance directly. Id. Thus, having received the correspondence falsely accusing Mr. Robey of not paying his taxes, Mr. Robey promptly sent Chase, by certified mail, his paid tax bill from Watauga County for the year 2008. Id. ¶ 22. Notwithstanding Mr. Robey's providing proof of paying the tax bill, and despite Mr. Robey's multiple written communications and phone calls concerning the issue, Chase never responded or otherwise acknowledged the tax payment. Id. ¶¶ 23-24.

On or about April 20, 2009, Chase—still operating under the name "Washington Mutual"—also refused to accept some of Mr. Robey's monthly Loan payments. Id. ¶ 20. Unbeknownst to Plaintiffs, the rejected Loan payments were incurring significant late fees, which—as Plaintiff alleges "upon information and belief"—were improperly added to the Robeys' Loan balance, making it difficult for Mr. Robey to afford the added expenses. Id. ¶ 24. Chase never explained why it refused to accept Mr. Robey's payments and never informed him to what extent they were adding penalty fees, even though these fees were triggered by Chase's refusal to communicate with Mr. Robey. Id. ¶ 25.

Further, despite the fact that Chase was not escrowing funds for the Loan, Chase unilaterally escrowed funds, also causing the Loan balance to grow beyond what it should have been, which in turn made it difficult for Mr. Robey to keep the Loan current under the terms of the Note and Deed. Id. ¶ 26. "Upon information and belief," not only did Chase lack the authority to escrow monies, when it did escrow monies, it did so in a grossly inaccurate fashion. Id. ¶ 27. The Loan payment history provided by Chase to Mr. Robey is not clear as to what the purpose was for the inappropriately escrowed monies, as the escrowed amounts do not correlate with any purported expenses associated with the Loan. Id. ¶¶ 27-28 & Ex. C. Moreover, Chase failed to allocate the escrow money consistent with the priority order set forth in the Deed's express terms. Id. ¶¶ 29-30.

D. The Alleged Loan Default and Pre-Foreclosure Workout Efforts

Due to the misapplication of the escrow funds, the Loan appeared to be in default. Id. ¶ 31. In other words, had the escrow monies been applied correctly, the Loan would not have been in default at the time Chase declared it so. Id.

On September 7, 2010, the Robeys received a letter from Chase claiming that the Loan was in arrears. Id. ¶ 32. In that correspondence, Chase expressly indicated that it was a debt collector attempting to collect a debt. Id.

Only eight days later, on September 15, 2010, Chase delivered a letter notifying the Robeys of Chase's intent to foreclose on the property to recover the balance of the Loan. Id. On October 6, 2010, the Robeys received another letter from Chase, which stated in part: "You have missed more than one monthly payment. You are in danger of damaging your credit and losing your home. We'll try and find an option for getting you back on track." Id. ¶ 34.

On November 10, 2010, Chase sent a letter to the Robeys encouraging them to modify their Loan. Id. ¶ 35. On November 17, 2010, Mr. Robey received another letter from Chase, which stated in part: "Your house is your home we want to keep it that way"; "the longer you delay calling us the fewer chances you may have to save your home"; and "your only chance of saving your home is by calling us immediately." Id. ¶ 36. Also on November 17, 2010, Chase sent another letter to the Robeys, telling them that the Loan may be eligible for a "workout." Id. ¶ 37. On that same date, Chase sent a letter of acceleration and another notice of intent to foreclose. Id.

Having received mixed signals, Mr. Robey responded to the foregoing letters by providing copies of negotiated Loan payment checks. Id. ¶ 38. The Robeys received nothing in response other than letters similar to the ones referenced above. Id. Consequently, on January 26, 2011, Mr. Robey sent a RESPA⁴ Qualified Written Request ("QWR")⁵ to Chase Financial LLC's office in Jacksonville, Florida, requesting a full accounting of his Loan payments. Id. ¶ 38 & Ex. D.⁶ Mr. Robey did not receive a response to his QWR until after Chase commenced foreclosure proceedings. Id. ¶ 40.

E. The Foreclosure Filing and Post-Filing Workout Efforts

On January 20, 2011, Chase commenced an action to foreclose on the property in Watauga County, North Carolina, case number 11 SP 12. Id. ¶¶ 39, 51. "Upon information and belief," the Loan was never in default to justify initiating foreclosure proceedings. Id. ¶ 49.

On February 8, 2011, Chase responded to the QWR only to say that it was "investigating" the request. Id. ¶ 40. Chase also responded to Mr. Robey's request by stating "Chase respectfully declines to release the original loan documents to you." Id. ¶ 41. Chase did not provide the requested accounting information relative to the Loan payments, the escrow funds and their application. Id.

Fearing the loss of his home, Mr. Robey decided to request a loan modification, hoping to also deal with the payment and escrow dispute during that process. Id. ¶ 43. On February 9, 2011, the Robeys received a letter confirming that Chase had initiated a loan modification with Mr. Robey. Id. ¶ 42. During the period of time when Mr. Robey attempted to modify the Loan, he hired at least two local law firms to help him with the process. Id. ¶ 44. While Chase assured Mr. Robey that it was interested in modifying the Loan, despite multiple efforts to do so over a lengthy period of time, Chase never authorized a modification. Id. Instead, Chase continued to send meaningless letters regarding the loan modification. Id. Chase continued to ignore the QWR information requests, all in an intentional effort to seek foreclosure of the property rather than attempting to resolve the various issues with the Loan. Id. ¶¶ 44, 50-51.

On March 9, 2011, Chase again responded to the QWR to say that it was "working" on the requests. Id. ¶ 45. Chase again failed to provide the requested information. Id.

On April 21, 2011, in an untimely manner under RESPA regulations, Chase provided another response to the QWR...