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Christenson v. Citimortgage, Inc.

United States District Court, D. Colorado

September 16, 2014

EUGENE CHRISTENSON, and SHARON CHRISTENSON, Plaintiffs,
v.
CITIMORTGAGE, INC., Defendant.

ORDER DENYING MOTION FOR RECONSIDERATION, AND DENYING IN PART AND GRANTING IN PART MOTION TO DISMISS

CHRISTINE M. ARGUELLO, District Judge.

This case revolves around a letter Plaintiffs Eugene and Sharon Christenson sent to Defendant Citimortgage on March 31, 2011. Defendant is a mortgage servicer that also holds the note securing the mortgage on Plaintiffs' home. In the letter, Plaintiffs, who had fallen behind on their mortgage payments, asked Defendant whether it had considered certain loss mitigation measures to avoid a foreclosure. Defendant never responded to the letter, which Plaintiffs allege violated a number state and federal laws. In a prior order, this Court determined that Plaintiffs had provided insufficient support to substantiate any legal claim. Plaintiffs have tried again in a second amended complaint. This time, the Court concludes at least one state-law claim is sufficiently pled to survive Defendant's second motion to dismiss. At the same time, the other two claims still fail, for largely the same reasons stated in this Court's original order.[1]

I. STANDARD OF REVIEW

Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." "The pleading standard Rule 8 announces does not require detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (quoting and citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks and citations omitted; alterations incorporated)).

Further, "only a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged- but it has not shown-that the pleader is entitled to relief." Id. at 679 (internal citations and quotation marks omitted; alterations incorporated). Thus, the burden is on the Plaintiffs to "nudge [their] claims across the line from conceivable to plausible." Twombly, 550 U.S. at 570.

The purpose of this pleading requirement is two-fold: "to ensure that a defendant is placed on notice of his or her alleged misconduct sufficient to prepare an appropriate defense, and to avoid ginning up the costly machinery associated with our civil discovery regime on the basis of a largely groundless claim." Kansas Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (internal quotation marks and citations omitted).

The Court applies this standard to the three claims on which the parties seek this Court's further review.

II. ANALYSIS

A. MOTION FOR RECONSIDERATION OF RESPA CLAIM

First, Plaintiffs allege that when Defendant failed to respond to the March 2011 letter, it violated 12 U.S.C. § 2605(e)(1)(A) of the Real Estate Settlement Procedures Act (RESPA). This statute requires Defendant to provide a written response to "a qualified written request [QWR[2] from [a] borrower... for information relating to the servicing of [a] loan." In the prior order, this Court determined that a letter inquiring about efforts at loss mitigation does not qualify as a QWR for purposes of this portion of RESPA.

Plaintiffs ask this Court to reconsider this decision based on their discovery of a new authority: a regulation issued by the Consumer Financial Protection Bureau (CFPB), concerning "error resolution procedures" related to loan servicers. 12 C.F.R. § 1024.35. In pertinent part, this regulation requires a "servicer" to respond to a QWR identifying certain "errors, " including the "[f]ailure to provide accurate information to a borrower regarding loss mitigation options and foreclosure, as required by [12 C.F.R.] § 1024.39." 12 C.F.R. § 1024.35(b)(7).

Plaintiffs argue that because the regulation requiring responses to QWRs related to alleged errors encompasses those related to the failure to provide information regarding loss mitigation, it must follow that this Court should interpret the separate statute mandating responses to QWRs related to loan servicing to include queries about loss mitigation.

Plaintiffs' argument fails because it conflates one statutory mandate for QWRs related to loan servicing ("loan-servicing QWRs") with a separate regulatory mandate based on a later-enacted statute that governs QWRs related to the above-mentioned list of errors ("error-resolution QWRs"). Cf. Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 666 & n.4 (9th Cir. 2012) (noting how many courts conflate QWRs related to loan servicing with other forms of QWRs), cert. denied, 133 S.Ct. 2800 (2013).

In short, all QWRs are not the same and this is a case about only loan-servicing QWRs. As noted above, to trigger the loan-servicing QWR mandate, a borrower must file a QWR that seeks "information relating to the servicing of a loan." 12 U.S.C. § 2605(e)(1)(A) (emphasis added). In the prior order, this Court interpreted the term "servicing" as used in this section not to include inquiries about loss mitigation. See Christenson, 2013 WL 5291947, at *4-5. The Court will not reiterate its reasoning for adopting such an interpretation of "servicing" but the analysis from that order clearly shows that what ...


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