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Sudduth v. CitiMortgage, Inc.

United States District Court, D. Colorado

January 28, 2015

DAVID SUDDUTH, APARTMENTS RESURFACING, L.L.C., and DAYLAN HUNT, Plaintiffs,
v.
CITIMORTGAGE, INC., SERVIS ONE, INC., d/b/a BSI FINANCIAL SERVICES INC., and MRH SUB 1 L.L.C., Defendants

For David Sudduth, Apartments Resurfacing, L.L.C., Daylan Hunt, Individual and Tenant, Plaintiffs: Timothy A. Bullock, LEAD ATTORNEY, Bullock Law L.L.C., Castle Rock, CO.

For Servis One Inc., doing business as BSI Financial Services Inc., MRH SUB 1 L.L.C., Defendants: Deanne Renee Stodden, LEAD ATTORNEY, Rogers & Stodden, LLC, Denver, CO; Jennifer C. Rogers, Rogers & Stodden, LLC, Denver, CO.

Page 1194

ORDER

RAYMOND P. MOORE, United States District Judge.

This matter is before the Court on (1) Plaintiffs' motion to dismiss certain of its claims (ECF No. 28); (2) Defendants MRH Sub 1 LLC (" MRH Sub" ) and Servis One, Inc.'s (" Servis One" ) motion to dismiss Plaintiffs' First Amended Complaint (ECF No. 16); and (3) and Defendant CitiMortgage, Inc.'s (" CMI" ) motion to dismiss Plaintiffs' First Amended Complaint (ECF No. 24.)

For the reasons stated below, the Court: (1) GRANTS Plaintiffs' motion to dismiss certain of its claims; (2) GRANTS Defendants MRH Sub and Servis One's motion

Page 1195

to dismiss; and (3) DENIES as MOOT Defendant CMI's motion to dismiss.

I. BACKGROUND

A. Factual Background

Plaintiffs' First Amended Complaint (ECF No. 8) pleads eight claims for relief, some particular to an individual Defendant, related to Defendants' servicing some of the Plaintiffs' single-family mortgage. The following " facts" are taken from Plaintiffs' First Amended Complaint.

Plaintiff David Sudduth is the signatory of a deed of trust and a note securing a property (" Property" ) mortgage. (ECF No. 8 ¶ 4.) The Property is located 15055 York Street, Brighton, Colorado 80632. (ECF No. 8 ¶ 3.) By quitclaim deed from Sudduth, Plaintiff Apartments Resurfacing LLC (" ARA" ) became the subsequent owner of the Property. (ECF No. 8 ¶ 5.) Plaintiff Daylan Hunt is a tenant occupying the Property. (ECF No. 8 ¶ 6.)

Defendant CMI was the note holder and " servicer" of the Property through January 14, 2014. (ECF No. 8 ¶ 9.) Defendant Servis One was the servicer of the Property mortgage from January 14, 2014 through February 26, 2014. (ECF No. 8 ¶ 11.) Defendant MRH Sub purchased the property at a public foreclosure auction on or about February 26, 2014. (ECF No. 8 ¶ 13.)

Plaintiffs engaged CMI to modify their mortgage as applicants in the Home Affordable Modification Program (" HAMP" ). (ECF No. 8 ¶ 26.) CMI " turned down" Plaintiffs' initial HAMP application. (ECF No. 8 ¶ 27.) Plaintiffs wrote to CMI in which they requested an " escalation and appeal; review of the 'waterfall analysis; ' and review of the Net Present Value (" NPV" ) analysis." (ECF No. 8 ¶ 28.) CMI never provided a copy of the waterfall or NPV analysis. (ECF No. 8 ¶ 30.) During the " HAMP appeal," CMI transferred " servicing" the Property Mortgage to Servis One on or about January 21, 2014. (ECF No. 8 ¶ 31.) Servis One informed Plaintiffs that they would need to initiate a new HAMP application. (ECF No. 8 ¶ 32.) Servis One sent Plaintiffs a new HAMP solicitation and application dated February 21, 2014. (ECF No. 8 ¶ 33.) On or about February 26, 2014, Servis One and/or CMI foreclosed the Property and sold it to MRH Sub via a public auction. (ECF No. 8 ¶ 34.) CMI failed to respond to Plaintiffs' " multiple written enquires [sic]" related to the mortgage loan on the Property. (ECF No. 8 ¶ 36.)

B. Procedural Background

Plaintiffs allege that particular Defendants' conduct violated the: (1) Real Estate Settlement Procedures Act (" RESPA" ), 12 U.S.C. § § 2601-2617, (2) Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692, (3) Protecting Tenants at Foreclosure Act of 2009 (" PTAFA" ), 12 U.S.C. § 5220 et seq.[1], and (4) National Housing Act (" NHA" ), 12 U.S.C. § § 1707-1715. (ECF No. 8 ¶ ¶ 38-63.) Plaintiffs further allege that particular Defendants' conduct violated certain federal regulations (ECF No. 8 ¶ ¶ 64-73) and caused them emotional distress (ECF No. 8 ¶ ¶ 74-79).

Plaintiffs allege that the Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 (" Section 1331" ) because " this action arises under the laws of the United States." (ECF No. 8 ¶ 15.)

Page 1196

On May 13, 2014, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendants MRH Sub and Servis One moved to dismiss the claims against them in Plaintiffs' First Amended Complaint for failure to state a claim. (ECF No. 16.) On May 30, 2014, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, Defendant CMI moved to dismiss the claims against it in Plaintiffs' First Amended Complaint for failure to state a claim. (ECF No. 24.) No Defendant has answered Plaintiffs' First Amended Complaint or filed a motion for summary judgment. ( See generally Dkt.)

On June 12, 2014, Plaintiffs moved to dismiss certain of its claims against Defendants. (ECF No. 28.) Specifically, Plaintiffs moved to dismiss the following claims:

(1) Claim One: RESPA, 12 U.S.C. § 2605 et seq. against Defendant Servis One;

(2) Claim Four: NHA, 12 U.S.C. § 1715u against Defendants CMI and Servis One;

(3) Claim Six: Housing and Urban Development Regulation, 24 C.F.R. § 203.600 against Defendants CMI and Servis One; and

(4) Claim Seven: Regulation relating to Housing and Urban ...


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