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McNees v. Ocwen Loan Servicing, LLC

United States District Court, D. Colorado

February 16, 2017

JOHN L. MCNEES, Plaintiff,
OCWEN LOAN SERVICING, LLC, a Delaware limited liability corporation, and DOES 1 through 100, inclusive, Defendants.


          KRISTEN L. MIX, United States Magistrate Judge

         This matter is before the Court on Defendant Ocwen Loan Servicing, LLC's Motion to Dismiss [#15][1] (the “Motion to Dismiss”), and on Plaintiff's Motion for Preliminary Injunction, for Expedited Consideration, or for a Temporary Restraining Order [#11] (the “Motion for Injunctive Relief”). Plaintiff, who proceeds as a pro se litigant, [2] filed a Response in opposition to the Motion to Dismiss [#19], and Defendants filed a Reply [#21]. Defendant filed a Response [#16] to the Motion for Injunctive Relief, to which Plaintiff did not reply.[3] Pursuant to 28 U.S.C. § 636(b) and D.C.COLO.LCivR 72.1(c), the Motions have been referred to the undersigned for a recommendation regarding disposition. See Order Referring Case [#14, #17]. The Court has reviewed the Motions, Responses, Reply, the entire docket, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Court respectfully RECOMMENDS that the Motion to Dismiss [#15] be GRANTED, and that the Motion for Injunctive Relief [#11] be DENIED.

         I. Background[4]

         Plaintiff initiated this action by the filing of the Complaint [#1][5] on May 9, 2016. His claims pertain to a foreclosure of the mortgage loan secured by Plaintiff's property at 12510 Newton Street, Broomfield, Colorado 80020. Compl. [#23] ¶ 3. Plaintiff's application for a mortgage loan was originally approved by Town and Country Credit Corporation. Id. ¶ 5. The servicing rights to the mortgage loan were transferred to a series of servicers until they were ultimately transferred on or around March 11, 2013, to Defendant. Id. ¶ 7. Non-party Deutsche Bank National Trust Company (“Deutsche Bank”) is the holder of the Note that evidences the loan. Statement by Attorney for Qualified Holder [#15-2].

         Plaintiff alleges that Defendant's agent, Stephanie Boles (“Boles”), “repeatedly assured Plaintiff that [Defendant] was ceasing any foreclosure activity in relation to the Subject Property while Plaintiff sought workout options.” Id. ¶ 9. However, on or around December 9, 2015, Plaintiff's property was foreclosed on.[6] Id.

         Plaintiff alleges that Defendant failed to comply with its statutory obligations to: (1) mail Plaintiff a notice with the phone number for the state foreclosure hotline and the loss mitigation department, (2) personally serve or post a deferment notice, (3) serve a “notice of sale” and “right to cure and redeem, ” (4) publish the notice of sale in the newspaper, (5) respond to Plaintiff's “qualified written response” (“QWR”) regarding the loan, and (6) provide documentation detailing the changes of ownership of the loan and demonstrating Defendant's ability to foreclose on the property. Id. ¶ 10-16. Plaintiff also alleges that Defendant's foreclosing agent, Barrett Frappier & Weisserman LLP (“BFW”) failed to provide copies of foreclosure documents pertaining to the sale of the property after Plaintiff made “numerous requests.” Id. ¶¶ 10-16.

         Plaintiff raises the following claims based on his allegations: (1) violation of the Real Estate Settlement Procedures Act (“RESPA”), (2) violation of the Federal Trade Commission (“FTC”) Act, (3) violation of Colorado's wrongful foreclosure laws, (4) quiet title, and (5) fraud.

         Plaintiff seeks the following relief: a halt of “any foreclosure and/or eviction activity”; that judgment enter in favor of Plaintiff; an award of the equivalent of attorney's fees and costs to Plaintiff; special damages to account for severe emotional distress; punitive damages for Defendant's “willful, malicious, and wanton behavior”; and any other relief “the Court deems just and proper.” Compl. [#23] at 10-11. Defendant seeks dismissal of all claims pursuant to Rule 12(b)(6). See generally Motion to Dismiss [#15].

         II. Legal Standard

         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test “the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994); Fed.R.Civ.P. 12(b)(6) (stating that a complaint may be dismissed for “failure to state a claim upon which relief can be granted”). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999) (citation omitted). To withstand a motion to dismiss pursuant to Rule 12(b)(6), “a complaint must contain enough allegations of fact ‘to state a claim to relief that is plausible on its face.'” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Bell Atlantic Co. v. Twombly, 550 U.S. 544, 570 (2007)); see also Shero v. City of Grove, Okla., 510 F.3d 1196, 1200 (10th Cir. 2007) (“The complaint must plead sufficient facts, taken as true, to provide ‘plausible grounds' that discovery will reveal evidence to support the plaintiff's allegations.” (quoting Twombly, 550 U.S. at 570)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “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 assertion[s] devoid of further factual enhancement.” Id. (brackets in original; internal quotation marks omitted).

         To survive a motion to dismiss pursuant to Rule 12(b)(6), the factual allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Christy Sports, LLC v. Deer Valley Resort Co., 555 F.3d 1188, 1191 (10th Cir. 2009). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ” a factual allegation has been stated, “but it has not show[n][ ]that the pleader is entitled to relief, ” as required by Fed.R.Civ.P. 8(a). Iqbal, 552 U.S. at 679 (second brackets added; citation and internal quotation marks omitted).

         III. Analysis

         A. RESPA Claim

         RESPA provides that a borrower or his agent may submit a QWR to his loan servicer to request information relating to the servicing of the loan. 12 U.S.C. § 2605(e)(1). In turn, “the servicer shall provide a written response acknowledging receipt of the correspondence within 5 days” and then make the requested corrections, or conduct an investigation and provide an explanation, within 30 days after receipt of the QWR. §§ 2605(e)(1)(A), (e)(2). If the servicer fails to comply with its statutory obligations, the borrower can be entitled to actual damages caused by the failure, as well as additional damages if there is a “pattern or practice of noncompliance with the requirements” of RESPA. § 2605(f)(1). Loan servicers have designated addresses “for receipt and handling of QWRs.” Berneike v. CitiMortgage, Inc., 708 F.3d 1141, 1149 (10th Cir. 2013). Written correspondence does not constitute a QWR unless sent to the correct address. Id. (“Failure to send the QWR to the designated address ‘for receipt and handling of [QWRs]' does not trigger the servicer's duties under RESPA.”).

         Plaintiff alleges that he “sent a written correspondence to [Defendant's] agent, BFW, constituting a ‘qualified written response' requesting pertinent documents pertaining to the Loan, ” and that “BFW[ ] has not responded to Plaintiff's[ ] qualified written request.” Compl. [#23] ¶¶ 14-15. Defendant argues that because Plaintiff did not send the letter to Defendant, but rather to Defendant's agent, the letter cannot be a QWR and his RESPA claim therefore fails. In Plaintiff's Response to the Motion to Dismiss, he states the following:

In essence, [Defendant] attempts to argue that it did not receive Plaintiff's qualified written request because the communication was sent to its attorney. The Court should see the absurdity in this argument since a communication to one's attorney is essentially a communication to the intended party.

Response [#19] at 4. Plaintiff's argument lacks merit. Plaintiff does not allege that he sent the letter to Defendant's designated QWR address, and does not even allege that he sent the letter to Defendant. See Berneike, 708 F.3d at 1149 (concluding that plaintiff's correspondence did not trigger the QWR duty to respond, where plaintiff mailed the letter to the defendant, but admitted she did not mail her address to the designated QWR address). Even taking Plaintiff's allegations as true, he has not sufficiently stated a RESPA claim.

         Therefore, the Court respectfully recommends that Plaintiff's RESPA claim be dismissed with prejudice. See Brereton v. Bountiful City Corp., 434 F.3d 1213, 1219 (10th Cir. 2006) (“A dismissal with prejudice is appropriate where a complaint fails to state a claim under Rule 12(b)(6) and granting leave to amend would be futile.”).

         B. FTC Act Claim

         Defendant argues that Plaintiff does not have standing to bring his FTC claim because there is no private right of action under the FTC Act. Motion to Dismiss [#15] at 7. Section 5 of the FTC Act prohibits “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce.” 15 U.S.C. § 45(a). The FTC Act empowers the Federal Trade Commission alone to enforce the prohibition. 15 U.S.C. § 45(b). “[P]rivate litigants cannot invoke the jurisdiction of the district courts by alleging violations of business practices proscribed by 15 U.S.C.A. § 45(a)(1).” Baum v. Great Western Cities, Inc., of New Mexico, 703 F.2d 1197, 1209 (10th Cir. 1983). Accordingly, there is no private right of action under the FTC Act and ...

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