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Martins v. Wells Fargo Bank N.A.

United States District Court, D. Maryland

December 5, 2016

GWENDOLYN A. MARTINS
v.
WELLS FARGO BANK, N.A

          MEMORANDUM

          Catherine C. Blake United States District Judge

         Plaintiff Gwendolyn A. Martins (“Martins”) brings this lawsuit against defendant Wells Fargo Bank, N.A. (“Wells Fargo”) seeking statutory damages, attorney's fees, and litigation costs. Martins asserts a violation of the Real Estate Settlement Procedures Act (“RESPA”) relating to Wells Fargo's alleged failure to comply with RESPA's requirements for managing borrowers' requests for information regarding their mortgage loans. Now pending is Wells Fargo's motion to dismiss (ECF No. 14). The motion is fully briefed and no oral argument is necessary. See Local R. 105.6. For the reasons set forth below, the defendant's motion will be denied.

         BACKGROUND

         Martins, a resident of Baltimore, has a mortgage loan on her property serviced by Wells Fargo. (Compl. ¶ 4, ECF No. 1). In May of 2013, Wells Fargo allegedly sent a letter to Martins notifying her that her mortgage loan was delinquent due to her failure to pay her property taxes. (Id. ¶ 13). According to Martins, she never received the 2013 notification. (Id. ¶ 14). The letter informed Martins that Wells Fargo had paid the overdue property taxes on her behalf and set up an escrow account to recover the amount, which would be paid out of an increased mortgage payment. (Id. ¶ 13). Martins, having never received the letter, did not make the increased payments to her mortgage account. (See id. ¶ 14, Ex. D, p. 12-17).

         In mid-May of 2015, Martins realized there was an issue with her mortgage loan and reached out to a Wells Fargo loan representative. (Id. ¶ 15). Martins claimed she did not owe any overdue property taxes, and the Wells Fargo representative told her to submit financial records demonstrating she had been paying taxes on the property as required. (Id.). Martins submitted bank statements she claims demonstrate timely payment of her taxes to Wells Fargo on May 18, 2015. (Id. ¶ 16). Wells Fargo responded to Martins on June 4, 2015, and informed her that, after analyzing her bank statements and escrow account, it had determined she had been making only partial property tax payments. (Id. ¶ 17, Ex. A, p. 1). As a result, Wells Fargo concluded, there remained a shortage on her escrow account. (Id. ¶ 17). Wells Fargo also informed Martins that her account had been referred to foreclosure. (Id.). Martins subsequently retained an attorney to assist her in managing her mortgage loan issue with Wells Fargo. (Id. ¶ 18).

         On August 17, 2015, Martins and her attorney sent Wells Fargo a letter containing a number of requests for information regarding Martins' loan. (Id. ¶ 19, Ex. B, p. 1-2). The letter identified itself as a “Qualified Written Request, ” “Notice of Error, ” and “Request for Information.” (Id. at Ex. B, p. 1). The letter requested nine itemized pieces of information regarding Martins' loan including a certified true copy of the loan's promissory note, a ledger statement of the loan history covering the life of the loan, the name and telephone number of an individual who could provide Martins with assistance over the phone, an explanation of the alleged debt owed, and notes related to the application and processing of a loan modification. (Id. at Ex. B, p. 1-2). Wells Fargo acknowledged receipt of Martins' letter on August 21st, and it promised to provide Martins with a response by September 3rd. (Id. ¶ 20, Ex. C). According to Martins, neither she nor her lawyer received any documentation from Wells Fargo on or before September 3rd. (Id. ¶ 21). Martins' attorney contacted Wells Fargo regarding its lack of response on October 7th and was informed by a Wells Fargo representative that the bank had sent information to both the plaintiff and her attorney on September 3rd. (Id. ¶ 23-24). Plaintiff and her attorney eventually received a copy of the letter on October 10, 2015. (Id. ¶ 26, Ex. D). Wells Fargo's direct response dated September 3, 2015, contained only two brief paragraphs of information related to a “notification of payment increase” and “income utilized in the recent payment assistance review.” (Id. at Ex. D, p. 2). Additionally, Wells Fargo enclosed two letters it claims to have sent Martins on June 4, 2015, and June 29, 2015, which provide a brief explanation of the alleged account deficiency. (Id. at Ex. D, pp. 4-6). The enclosed letter dated June 29, 2015, also contains a copy of the original letter Wells Fargo claims to have sent Martins on March 6, 2013, notifying her of the tax delinquency and the opening of the escrow account. (Id. at Ex. D, pp. 7-8). The June 29th letter also appears to include a customer account activity statement for Martins mortgage loan covering basic payment history and application from January 2013 through June 2015. (Id. at Ex. D, pp. 12-17).

         Plaintiff filed a claim against Wells Fargo on April 11, 2016, for violations of RESPA, specifically 12 U.S.C. § 2605(e) and accompanying regulation 12 C.F.R. § 1024.36, alleging Wells Fargo failed to comply with RESPA's procedures and requirements for handling borrowers' information requests. (Id. ¶ 28-33). Martins seeks actual damages for Wells Fargo's alleged violations under 12 U.S.C. § 2605(f)(1), $2, 000.00 in additional statutory damages for Wells Fargo's alleged pattern of noncompliance under 12 U.S.C. § 2605(f)(1)(B), and costs and reasonable attorney's fees under 12 U.S.C. § 2605(f)(3). (Id. ¶ 42-44). Wells Fargo filed the now-pending motion to dismiss Martins' RESPA claim on May 20, 2016. (ECF No. 14).

         STANDARD

         Wells Fargo moves to dismiss Martins' claim under Federal Rule of Civil Procedure 12(b)(6). In reviewing a motion to dismiss under Rule 12(b)(6), the court “must accept as true all of the factual allegations contained in the complaint” and “draw all reasonable inferences in favor of the plaintiff.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011). The complaint must allege facts sufficient to “state a claim to relief that is plausible on its face, ” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), and allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 566 U.S. 662, 678 (2009). The court is not required to accept the legal conclusions derived from the facts, and “[a] complaint that provides no more than labels and conclusions or a formulaic recitation of the elements of a cause of action” is insufficient to meet the pleading standard. Twombly, 550 U.S. at 555. Generally, a motion to dismiss for failure to state a claim “does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999); see also Tobey v. James, 706 F.3d 379, 387 (4th Cir. 2013).

         ANALYSIS

         Wells Fargo's primary contention is that it was not required to comply with RESPA's inquiry processing and response regulations because the letter Martins sent Wells Fargo on August 17, 2015, does not meet the statutory definition of a “Qualified Written Request” (QWR). Wells Fargo first argues that the letter, viewed holistically, cannot qualify as a QWR because the overall purpose of the document is to dispute the validity of the debt and the letter does not contain sufficient detail regarding the reason Martins believes the debt balance was incorrect. Wells Fargo also asserts that none of the itemized information requests can, on an individual basis, render the correspondence a QWR. Specifically, Wells Fargo claims that some of the requests are irrelevant to the “servicing” of Martins' mortgage loan, are duplicative, or lack sufficient detail regarding Wells Fargo's alleged error. Plaintiff apparently concedes that a number of requests contained in the August 17th letter do not qualify as a QWR. Martins claims, however, that the requests in paragraphs 4, 5, 6 and 9 of the letter statutorily qualify the correspondence as a QWR. The court will not, therefore, address Wells Fargo's specific objections to paragraphs 1-3, 7, and 8, and instead will focus on the defendant's challenges to the document as a whole and its individual challenges to the requests in paragraphs 4, 5, 6, and 9. As explained below, because Martins' letter is not primarily aimed at disputing the validity of her mortgage loan, is sufficiently detailed and related to the servicing of her loan, and the requests are not clearly duplicative, the correspondence may qualify as a QWR. Furthermore, Wells Fargo's October 10th response did not meet the requirements under RESPA. Accordingly, Martins has pled facts sufficient at this stage to demonstrate that Wells Fargo violated RESPA, and the defendant's motion to dismiss will be denied.

         In order to state a claim under RESPA for failure to properly respond to a QWR, the plaintiff must demonstrate that the defendant was responsible for the servicing of the plaintiff's loan; the defendant received a valid QWR from the plaintiff that relates to the servicing of a mortgage loan; the defendant failed to respond adequately; and the plaintiff is entitled to actual or statutory damages. See Ayres v. Ocwen Loan Servicing, LLC, 129 F.Supp.3d 249, 264-66 (D. Md. 2015); see also Ward v. Sec. Atl. Mortg. Elec. Registration Sys., Inc., 858 F.Supp.2d 561, 574-75 (E.D. N.C. 2012). Plaintiff alleges in her complaint that Wells Fargo is the servicer of her mortgage loan, and Wells Fargo does not dispute that it qualifies as a loan servicer under the statute. (See Compl. ¶ 7, ECF No. 1). As will be discussed in detail below, Martins' August 17, 2015, letter to Wells Fargo arguably qualifies as a QWR and relates to the servicing of her mortgage loan. The response Wells Fargo provided to Martins on October 10, 2015, did not contain the information plaintiff requested, and Wells Fargo did not explain why the information was unavailable or why Wells Fargo was not obligated to provide it to her. (See id. at Ex. D). Wells Fargo's response was therefore inadequate under RESPA.[1] Lastly, plaintiff has pled facts sufficient to demonstrate she incurred actual damages and attorney's fees as a result of Wells Fargo's RESPA violation, and, having alleged a pattern of noncompliance, she may be entitled to additional statutory damages.

         I. Martins' August 17th correspondence may qualify as a QWR

         Because Martins' information request was at least in part related to the servicing of her mortgage loan, was sufficiently detailed, and was not clearly duplicative, her August 17th correspondence could qualify as a QWR. Section 2605(e) of the RESPA requires loan servicers to respond to certain requests for information from borrowers regarding their loan. See 12 U.S.C. § 2605(e) (2016). A servicer's duty to respond is triggered when a borrower submits a QWR for information, and the servicer must acknowledge receipt of a QWR within five business days. Id. at ...


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