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Lupo v. JPMorgan Chase Bank, N.A.

United States District Court, D. Maryland

June 24, 2016

LOUIS M. LUPO
v.
JPMORGAN CHASE BANK, N.A., et al.

          MEMORANDUM OPINION

          DEBORAH K. CHASANOW United States District Judge.

         Presently pending and ready for resolution in this case is a motion for summary judgment filed by Defendant Specialized Loan Servicing, LLC ("SLS"). (ECF No. 46). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, SLS's motion for summary judgment will be granted.

         I. Background

         A. Factual Background[1]

         Plaintiff Louis M. Lupo ("Plaintiff") formerly owned a home located at 7908 Hunter Lane, North Richland Hills, Texas 76180 (the "Property"). On December 20, 2007, Plaintiff executed a 30-year fixed-rate promissory note (the "Note") for $173, 850.00 at a 6.0% annual interest rate payable to the lender, JPMorgan Chase Bank, N.A. ("Chase"), in monthly installments of $1, 551.24. The Note was secured by the Deed of Trust (the "DOT") recorded in Tarrant County, Texas. (ECF No. 46-2). The parties agree that Plaintiff made timely mortgage loan (the "Loan") payments until November 2012.

         Prior to the transfer of loan servicing to SLS, Plaintiff disputed his Loan payments with Chase. According to Plaintiff, Chase "miscalculated and overcharged for escrow" on his account every year since the inception of the Loan. (ECF No. 18 ¶ 38). Plaintiff contends that Chase made an error in 2013 that he has not been able to resolve. The alleged error stemmed from an increase in Plaintiff's property taxes from 2010 to 2011, which prompted Chase to recalculate the amount that Plaintiff was required to pay into escrow. According to SLS, the increase in property taxes was accompanied by an increase in the cost of hazard insurance, causing a corresponding rise in Plaintiff's monthly obligation. (ECF No. 46-11, at 2).

         Chase allegedly mailed a "Notice of Assignment, Sale, or Transfer of Servicing Rights" to Plaintiff, informing him that Chase could no longer accept payments on the Loan and that servicing of the Loan had been transferred to SLS with an effective date of June 17, 2013. (ECF No. 18 ¶ 121). At the time servicing rights were transferred to SLS, the Loan was in default. (ECF No. 46-1 ¶ 5).

         SLS also notified Plaintiff of the transfer and requested that all Loan payments be sent to SLS rather than to Chase. (ECF No. 46-3). Plaintiff contends that the payment instructions provided by SLS on June 20 were illegible. (ECF No. 18 ¶¶ 131, 134). On or about June 24, Plaintiff contacted SLS by telephone to make an electronic payment. The SLS representative informed Plaintiff that the Loan was in default and it would not accept his automated clearing house ("ACH") payment. (Id. ¶¶ 135-36). Plaintiff explained to SLS that his mortgage loan account was current and sought an investigation. When he called thereafter, Plaintiff alleges, he was told that the investigation was ongoing. (Id. ¶¶ 137-40). On July 1, Plaintiff called again and learned that he could not make his monthly ACH payment because his account was in default. He was informed that, if he provided proof of prior payment, SLS would then accept his ACH payment. (Id. ¶¶ 141-42).

         Plaintiff sent two fax transmissions to SLS on July 1 purporting to detail proof of his payment history. (ECF No. 46-4). The faxes, addressed to "Portia, " contain Plaintiff's partial payment history with Chase. Plaintiff wrote on the cover sheet for each fax transmission: "Rejected [ACH] due to inaccurate payment history. Proof of Payments & ACH enclosed past 20 months." (Id. at 1, 3). Subsequently, on August 21, Plaintiff sent another fax transmission, this time to SLS executives:

This is my third "qualified written request" [("QWR")] under Section 6 of the Real Estate Settlement Procedures Act [("RESPA")]. I am writing once again [to] request account reconciliation of my mortgage, an audit trail for the amount of money claimed owed by [SLS], and repair of my erroneously damaged credit report.
Although I faxed the required documents to you in June 2013[2] demonstrating that I was current in my payments, and despite my multiple telephone conversations with Customer Care and Executive Services in July, my ACH payments continue to be refused for my home mortgage.

         (ECF No. 46-5, at 2). SLS responded on September 6, advising Plaintiff that his prior fax transmissions were not QWRs under RESPA. (ECF No. 46-6, at 1 ("After our review of the loan, we have confirmed that our office has not received a [QWR] prior to your letter dated August 21, 2013.")). In its correspondence, SLS also briefly summarized Plaintiff's payment history:

The prior servicer, [Chase], responded to your concerns with a letter dated April 17, 2013. In the response, [Chase] indicates that you continued to send the same monthly payment amount of $1, 501.58 after an escrow analysis statement dated February 24, 2012 reflected an increase to the monthly mortgage payment amount. The new monthly mortgage payment was increased to $2, 020.80 effective May 1, 2012. As a courtesy, [Chase] applied the May and June 2012 payments based on the old payment amount.
A new escrow analysis statement was generated on February 4, 2013 by the prior servicer with a new mortgage payment in the amount of $1, 635.67 effective May 1, 2013. Our records indicate that we are adhering to the February 4, 2013 escrow analysis statement. Please note, the account is currently due for the April 2013 payment which reflects the $2, 020.80 amount as the newer analysis is effective with the May payment. If a change to the property taxes and/or home owner's insurance has occurred, please supply us with the appropriate information so that we may review this matter further.
The payments made in June and July 2013 in the amount of $1, 501.58 each were transferred to SLS from the prior servicer and combined to post the April 2013 mortgage payment. This left a balance in the unapplied/suspense account in the amount of $982.36. On July 10, 2013, SLS received a stop payment confirmation for the July 2013 payment that was initially issued to [Chase]. As such the April 2013 payment was reversed and the funds remaining for the June 2013 payment were placed into the unapplied/suspense account.
At this time, the [Loan] is currently delinquent. The [Loan] is due for the April 1, 2013 payment in the amount of $2, 020.80. There is a balance of $1, 501.58 in the unapplied/suspense account.
We are unable to set up ACH on the [Loan] as the [Loan] is delinquent. Once the [Loan] has been brought current, please resubmit your request. We have enclosed a reinstatement quote for your convenience.

         (ECF No. 46-6, at 1-2). According to SLS, Plaintiff has not made any payments on the Loan since the July 2013 payment that was transferred to SLS from Chase. Plaintiff has not made any payments directly to SLS, nor has Plaintiff attempted to bring the Loan current. (ECF No. 46-1 ¶¶ 5-6, 11-12).

         Furthermore, on July 11, SLS sent Plaintiff a "Notice of Default and Notice of Intent to Accelerate, " stating that he was in default as he had failed to make full payments on the Loan. (ECF No. 46-9). On July 11 and December 31, SLS provided Plaintiff the opportunity to begin a trial mortgage modification under the Home Affordable Modification Program ("HAMP"). (ECF Nos. 46-7; 46-8). Plaintiff did not advise SLS that he had accepted either of the trial loan modification offers. (ECF No. 46-1 ¶¶ 13-16). SLS did not make any report to the credit bureaus concerning the Loan in June 2013; since then, however, it has reported to the credit bureaus on a monthly basis that the Loan was in default. (Id. ¶ 19).

         SLS retained the services of Hughes, Watters & Askanase, L.L.P. ("HWA") to provide pre-foreclosure notice and to conduct foreclosure proceedings. On December 2, 2014, HWA sent to Plaintiff by first class mail and certified mail a "Notice of Maturity/Acceleration of Texas Recourse Loan and Enclosing Notice of Substitute Trustee's Sale" (the "Sales Notices"). (ECF Nos. 57-2; 57-3; 57-4; 57-5). Copies of the Sales Notice were also posted on the door of the Tarrant County Courthouse and filed with the Tarrant County Clerk prior to December 16, 2014. (ECF No. 57-1 ¶¶ 5-6). The Federal Home Loan Mortgage Corporation ("Freddie Mac") purchased the Property at foreclosure auction and has since taken possession through judicial process in Tarrant County, Texas. (See ECF No. 46-10).

         B. Procedural History

         Plaintiff, proceeding pro se, filed his original complaint against Defendants Chase and SLS on February 19, 2014. (ECF No. 1). SLS first moved to dismiss on March 13, 2014 (ECF No. 7), and Plaintiff filed his opposition (ECF No. 15). Plaintiff subsequently filed a twenty-eight count amended complaint alleging multiple violations of RESPA, 12 U.S.C. § 2601, et seq.; the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq.; the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, et seq.; and various Maryland consumer protection and mortgage fraud statutes, as well as claims for breach of contract, breach of the duty of good faith and fair dealing, defamation, tortious interference with economic relations, and unjust enrichment. (ECF No. 18, at 17-31). Plaintiff requests declaratory relief, injunctive relief, damages, and costs. (Id. at 31-32).

         On April 16, 2014, SLS moved to dismiss this action pursuant to Fed.R.Civ.P. 12(b)(6) or 12(b)(3), or to transfer this action to the United States District Court for the Northern District of Texas for forum non conveniens. (ECF No. 19). The court denied SLS's Rule 12(b)(3) and transfer motions but reserved judgment on the Rule 12(b)(6) motion. (ECF No. 31, at 6 n.3).

         Chase filed a motion for summary judgment (ECF No. 24), and SLS filed a renewed partial motion to dismiss Plaintiff's amended complaint (ECF No. 33). A memorandum opinion and order granted Chase's motion for summary judgment, and granted SLS's motion to dismiss under Rule 12(b)(6) in part and denied it in part. (ECF Nos. 42; 43). Remaining against SLS are one RESPA count, Counts 14-20 under the FDCPA, and Counts 26-28 alleging violations of Maryland consumer protection and mortgage fraud statutes. SLS filed its answer (ECF No. 44), and the court issued a scheduling order (ECF No. 45).

         On November 3, 2015, SLS moved for summary judgment on the remaining claims. Plaintiff was provided with a Roseboro notice, which advised him of the pendency of the motion for summary judgment and his entitlement to respond within 17 days. (ECF No. 47); see Roseboro v. Garrison, 528 F.2d 309, 310 (4thCir. 1975) (holding that pro se plaintiffs should be advised of their right to file responsive material to a motion for summary judgment). Plaintiff responded in opposition (ECF No. 50), and SLS replied (ECF No. 57).[3] The court stayed the scheduling order pending resolution of SLS's summary judgment motion. (ECF Nos. 58; 60).

         II. Standard of Review

         A motion for summary judgment will be granted only if there exists no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). Summary judgment is inappropriate if any material factual issue "may reasonably be resolved in favor of either party." Liberty Lobby, 477 U.S. at 250; JKC Holding Co. LLC v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001). In undertaking this inquiry, a court must view the facts and the reasonable inferences drawn therefrom "in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir. 2005).

         The moving party bears the burden of showing that there is no genuine dispute as to any material fact. If the nonmoving party fails to make a sufficient showing on an essential element of his or her case as to which he or she would have the burden of proof, then there is no genuine dispute of material fact. Celotex, 477 U.S. at 322-23. Therefore, on those issues on which the nonmoving party has the burden of proof, it is his or her responsibility to confront the summary judgment motion with an "affidavit or other evidentiary showing" demonstrating that there is a genuine issue for trial. See Ross v. Early, 899 F.Supp.2d 415, 420 (D.Md. 2012), aff'd, 746 F.3d 546 (4th Cir. 2014). "A mere scintilla of proof . . . will not suffice to prevent summary judgment." Peters v. Jenney, 327 F.3d 307, 314 (4th Cir. 2003). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Liberty Lobby, 477 U.S. at 249-50 (citations omitted). In other words, a "party cannot create a genuine dispute of material fact through mere speculation or compilation of inferences." Shin v. Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001) (citation omitted); see Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003).

         "Although pro se litigants are to be given some latitude, the above standards apply to everyone. Thus, as courts have recognized repeatedly, even a pro se plaintiff may not avoid summary judgment by relying on bald assertions and speculative arguments." Smith v. Vilsack, 832 F.Supp.2d 573, 580 (D.Md. 2011) (citations omitted).

         III. Analysis

         SLS argues that the statements contained in its communications were accurate and that all delinquencies, defaults, and late charges are attributable to Plaintiff's decision to not pay the full amount of the mortgage payment when due. The amount Plaintiff needed to pay into escrow rose due to a substantial increase in property taxes and a comparatively smaller increase in hazard insurance premiums. At bottom, according to SLS, the Loan fell into default when Plaintiff refused to pay the increased amount. (ECF No. 46-11, at 1).

         A. RESPA

         Plaintiff asserts that SLS violated RESPA by failing to acknowledge receipt of his QWRs. See 12 U.S.C. § 2605(e). Congress enacted RESPA "to insure that consumers . . . are provided with greater and more timely information on the nature and costs of the settlement process" and "to effect certain changes in the settlement process for residential real estate, " such as the reduction of "the amounts home buyers are required to place in escrow accounts established to insure the payment of real estate taxes and insurance." 12 U.S.C. §§ 2601(a), (b)(3). RESPA requires that servicers of a "federally related mortgage loan" take certain actions and provide certain written responses within specified periods of time after receiving a QWR from a borrower. According to § 2605(e)(1)(A): "If any servicer of a federally related mortgage loan receives a [QWR] from the borrower . . . for information relating to the servicing of such loan, the servicer shall provide a written response acknowledging receipt of the correspondence within [20] days (excluding legal public holidays, Saturdays, and Sundays)."[4] Triggering certain duties under RESPA, a QWR is defined in § 2605(e)(1)(B) as:

[A] written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that--
(i) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and
(ii) includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

         Here, the sole remaining RESPA count concerns Plaintiff's July 1, 2013 fax transmissions. (ECF No. 42, at 45; see ECF No. 46-4). SLS argues that "[a]s was the case with the alleged QWRs that Plaintiff claims to have sent to Chase, Plaintiff's fax to SLS was not a QWR because it was not sent to the separate and exclusive address provided for [QWRs]." (ECF No. 46-11, at 5). In other words, according to SLS, Plaintiff's July 1 faxes do not satisfy the statutory QWR definition because "[i]nstead of sending his correspondence via mail to the ...


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