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Rupli v. Ocwen Loan Servicing, LLC

United States District Court, D. Maryland

August 4, 2016


          Ann R. Rupli, Plaintiff, represented by Gerard P. Uehlinger, Law Office of Gerard Uehlinger.

          Ocwen Loan Servicing, LLC, Defendant, represented by James Robert Billings Kang, Blank Rome LLP.


          DEBORAH K. CHASANOW, District Judge.

         Presently pending and ready for resolution in this consumer lending case is a motion to dismiss filed by Defendant Ocwen Loan Servicing, LLC ("Defendant"). (ECF No. 12). The issues have been fully briefed, and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Defendant's motion to dismiss will be granted.

         I. Background

         A. Factual Background[1]

         In December 2006, Plaintiff Ann Rupli ("Plaintiff") entered into a mortgage loan agreement (the "Loan") from American Brokers Conduit in the amount of $579, 500.00. The adjustable rate note (the "Note") was secured by a deed of trust (the "Deed of Trust") on the residential real property located at 1914 Elkhart Street, Silver Spring, Maryland 20910 (the "Property"). (ECF No. 2 ¶¶ 52-53; see ECF Nos. 12-2; 12-3).[2] Defendant served as the loan servicer.

         Plaintiff asserts that she submitted a qualified written request ("QWR") under the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601, et seq., on May 12, 2014. She further asserts that she sent a Validation of Debt letter to Defendant on May 15, "disputing the alleged debt claimed by [] Defendant in its letter dated April 27" and requesting validation under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692g. (ECF No. 2 ¶¶ 54, 74; see ECF No. 12-9). Defendant received Plaintiff's letter on May 19 and acknowledged receipt on May 23. ( See ECF No. 12-9, at 5, 6). Defendant responded substantively to Plaintiff's QWR on June 3. (ECF Nos. 12-10; 12-11).[3] Defendant's response stated that the owner or investor of the Loan was Residential Asset Securities Corporation, Home Equity Mortgage Asset-Backed Pass-Through Certificates, Series 2007-KS3. (ECF No. 2 ¶¶ 54, 75).

         On August 14, 2014, Defendant allegedly issued to Plaintiff a Notice of Intent to Foreclose on the Property, which listed the owner or investor of the Loan as Deutsche Bank National Trust Company, as Trustee for American Home Mortgage Asset Trust 2007-2. ( Id. ¶ 55). In April 2015, a letter from Defendant to Plaintiff noted that the owner or investor of the Loan was Deutsche Bank National Trust Company, as Trustee for New Century Home Loan Trust, Series 2005-D, Asset Backed Pass-Through Certificates. ( Id. ¶ 56). Plaintiff asserts that she "received no... disclosure in writing regarding the sale of [the Loan] from the first, to the second, and then to the third owner Defendant alleged, but only documents provided by Defendant reflecting the varying names of the owner/investor." ( Id. ¶ 57).

         Meanwhile, Plaintiff applied for a loan modification in August 2014. Defendant acknowledged Plaintiff's request and offered her a Home Affordable Modification Program ("HAMP") trial period plan ("TPP"). (ECF No. 12-5). She asserts that the TPP offer "letter contained conflicting and confusing information by stating Plaintiff had 14 days from the date of the letter to remit the first payment... [and] reflecting a first payment date of October 1, 2014." (ECF No. 2 ¶ 58).[4] In a letter dated September 11, Plaintiff requested additional information regarding the TPP because Defendant "failed to enclose with its offer the HAMP-required language that must include both the proposed interest rate and income figures prefiguring a qualification for HAMP loan modification." ( Id. ¶ 59). There is no allegation that Plaintiff accepted the proposed TPP, and Defendant asserts that she did not. ( See ECF No. 12-1, at 14). Defendant did not respond to Plaintiff's letter, instead issuing a mortgage statement on September 17: "[Plaintiff's] trial installment [is due by] 10/01/2014 in the amount of $1, 354.44." (ECF No. 2 ¶ 60). Plaintiff alleges that she promptly paid that amount. Defendant issued a mortgage statement on October 17 reflecting an amount due of $3, 910.08. Shortly thereafter, Defendant issued to Plaintiff a check for $1, 354.44 referencing an "Escrow Disbursement Account." ( Id. ¶ 62). The mortgage statement dated November 11 reflected a total amount due of $767, 368.59, and Defendant sent Plaintiff a letter dated November 14 confirming that she did not make the initial TPP payments within the required timeframe and, accordingly, her application for a loan modification was denied. ( Id. ¶¶ 63-64; see ECF No. 12-8). Defendant provided the Loan transaction history by letter on April 20, 2015, noting a balance of $637, 078.88. (ECF No. 2 ¶ 78). Plaintiff asserts that, as a result of Defendant's failure to comply with governing federal statutes, she "has been assessed additional fees and costs including an interest per day assessment." ( Id. ¶ 66).

         B. Procedural Background

         Plaintiff commenced this action in the Circuit Court for Montgomery County on December 9, 2015. Defendant removed the case to this court on January 19, 2016. (ECF No. 1). Plaintiff advances four counts against Defendant for: violation of 12 C.F.R. § 1024.41, a regulation under RESPA concerning loss mitigation procedures, because Defendant allegedly did not properly consider her HAMP loan modification application (Count I); violation of the FDCPA because Defendant purportedly failed to validate her debt and misidentified the owner or investor of the Loan (Count II); violation of the Consumer Financial Protection Act of 2010 ("CFPA"), 12 U.S.C. §§ 5481, 5564 (Count III);[5] and deceptive trade practices in violation of the Maryland Consumer Protection Act ("MCPA"), Md. Code Ann., Com. Law § 13-301 et seq. (Count IV). (ECF No. 2 ¶¶ 79-111).[6] Plaintiff's complaint seeks injunctive relief, monetary damages, and attorneys' fees and costs.

         Defendant moved to dismiss the complaint on February 16, 2016. (ECF No. 12). Plaintiff responded in opposition (ECF No. 18), and Defendant replied (ECF No. 19).[7]

         II. Standards of Review

         Defendant challenges Plaintiff's standing to enforce HAMP guidelines. Because standing is an element of subject matter jurisdiction, Defendant's motion to dismiss for lack of standing should be treated under Fed.R.Civ.P. 12(b)(1). See White Tail Park, Inc. v. Stroube, 413 F.3d 451, 459 (4th Cir. 2005); Axel Johnson, Inc. v. Carroll Carolina Oil Co., Inc., 145 F.3d 660, 661-62 (4th Cir. 1998) (affirming the district court's dismissal of the complaint for lack of standing pursuant to Rule 12(b)(1)). The existence of subject matter jurisdiction is a threshold issue the court must address before considering the merits of the case. Jones v. Am. Postal Workers Union, 192 F.3d 417, 422 (4th Cir. 1999).

         Defendant also moves to dismiss under Fed.R.Civ.P. 12(b)(6), arguing that Plaintiff's complaint fails to state a claim. The purpose of a motion to dismiss under Rule 12(b)(6) is to test the sufficiency of the complaint. Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006). A complaint need only satisfy the standard of Fed.R.Civ.P. 8(a)(2), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief." "Rule 8(a)(2) still requires a showing, ' rather than a blanket assertion, of entitlement to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 n.3 (2007). That showing must consist of more than "a formulaic recitation of the elements of a cause of action" or "naked assertion[s] devoid of further factual enhancement." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).

         At this stage, all well-pleaded allegations in a complaint must be considered as true, Albright v. Oliver, 510 U.S. 266, 268 (1994), and all factual allegations must be construed in the light most favorable to the plaintiff. See Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999) (citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)). In evaluating the complaint, unsupported legal allegations need not be accepted. Revene v. Charles Cnty. Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989). Legal conclusions couched as factual allegations are insufficient, Iqbal, 556 U.S. at 678, as are conclusory factual allegations devoid of any reference to actual events. United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979); see also Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009).

         Allegations of fraud, which Plaintiff asserts in Count IV of the complaint, are subject to the heightened pleading standard of Fed.R.Civ.P. 9(b). Harrison, 176 F.3d at 783. Rule 9(b) states that, "in alleging a fraud or mistake, a party must state with particularity the circumstances constituting the fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Such circumstances typically "include the time, place, and contents of the false representation, as well as the identity of the person making the misrepresentation and what [was] obtained thereby.'" Id. at 784 (quoting 5 Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. § 1297 (2d ed. 1990)). Rule 9(b) provides the defendant with sufficient notice of the basis for the plaintiff's claim, protects the defendant against frivolous suits, eliminates fraud actions where all of the facts are learned only after discovery, and safeguards the defendant's reputation. Id. at 784 (citation omitted). Fraud allegations that fail to comply with Rule 9(b) warrant dismissal under Rule 12(b)(6). See Harrison, 176 F.3d at 783 n.5.

         III. Analysis

         A. RESPA Regulation (Count I)

         Defendant's initial argument is that Plaintiff lacks standing to pursue her claims because she does not have a legal right to enforce HAMP and its guidelines. (ECF No. 12-1, at 19-22). In Count I, Plaintiff asserts that Defendant violated 12 C.F.R. § 1024.41 in connection with her purported loss mitigation application.[8] As best the court can discern, Plaintiff does not seek to enforce HAMP guidelines; rather, Plaintiff grounds Count 1 in the RESPA regulations. As § 1024.41 itself makes clear, "[a] borrower may enforce the provisions of this section pursuant to section 6(f) of RESPA (12 U.S.C. 2605(f))."[9] ...

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