United States District Court, D. Colorado
Brooke Jackson United States District Judge.
matter is before the Court on defendant CitiMortgage,
Inc.'s motion to dismiss [ECF No. 5]. For the reasons
below, the Court GRANTS that motion.
case is but the latest chapter in an ongoing saga over the
mortgage encumbering plaintiffs Eugene and Sharon
Christenson's property in Grand Junction, Colorado.
See Christenson v. Citimortgage, Inc., No.
12-cv-02600-CMA-KLM, 2013 WL 5291947, at *2 (D. Colo. Sept.
18, 2013). The saga began when plaintiffs defaulted on the
mortgage on their property in May of 2010. ECF No. 5-3 at 2-3
(December 1, 2014 letter); Def.'s Mot. to Dismiss, ECF
No. 5, at 3 (representing that the date of plaintiffs'
default was in May of 2010). Several months later on October
8, 2010 defendant, which holds the promissory note and deed
of trust on plaintiffs' property and held them at the
time plaintiffs defaulted, subsequently commenced foreclosure
proceedings. ECF No. 5-8 (Notice of Election and Demand for
foreclosure fast approaching, plaintiffs tried four things to
try to prevent the loss of their home. First, they sent
defendant a letter dubbed a “formal written inquiry
under” the Real Estate Settlement Procedures Act or
“RESPA” (the “March 2011 letter”).
Christenson, 2013 WL 4291947, at *3; ECF No. 5-2
(March 31, 2011 letter). That letter requested information
from defendant about its “loss mitigation”
activities to date-in other words, information that might
enable plaintiffs to determine whether defendant had met its
legal obligations to work with plaintiffs to avoid the loss
of their home. See ECF No. 5-2 at 2. Defendant
allegedly failed to respond. Christenson, 2013 WL
4291947, at *3.
in June of 2011 plaintiffs filed for an admittedly
“unnecessary” Chapter 13 bankruptcy. See
id.; ECF No. 5-1 at 2 (October 30, 2014 letter); ECF No.
5-3 at 2 (December 1, 2014 letter). That pending bankruptcy
automatically stopped plaintiff's foreclosure proceedings
for the time being. See Christenson, 2013 WL
5291947, at *3; 11 U.S.C. § 362(a).
with their foreclosure on pause plaintiffs filed suit against
defendant before another division within this Court on
October 1, 2012. See Christenson, 2013 WL 5291947,
at *3. In that lawsuit, plaintiffs asserted, among other
things, that by failing to respond to their letter defendant
violated § 2605(e) of RESPA. See Id. However,
my colleague, Judge Christine Arguello, wasn't buying it.
Id.at **4-6. Dismissing plaintiffs' RESPA claim
on September 18, 2013, Judge Arguello held that defendant had
no legal obligation to respond to plaintiffs' letter
under 12 U.S.C. § 2605(e). Id. She explained
that that requirement only comes into play when a borrower
requests information related to the “servicing”
of a mortgage-i.e., the scheduled payments of the loan's
principal and interest or other pre-established payments-not
when a borrower requests information related to loss
mitigation activities. Id.
roughly one month after Judge Arguello denied plaintiffs'
motion to reconsider that holding, see Christenson v.
Citimortgage, Inc., No. 12-cv-02600-CMA-KLM, 2014 WL
4637119, at *3 (D. Colo. Sept. 16, 2014), and roughly one
month after plaintiffs' bankruptcy case was finally
dismissed, ECF No. 5-13, plaintiffs sent defendant a second
“RESPA” letter (“the October 2014
letter”), ECF No. 5-1. As both parties acknowledge,
this second letter was almost identical to plaintiffs'
first. See Compl., ECF No. 3, at ¶15 (admitting
that the October 2014 letter “was largely, but not
completely, the same as a letter Plaintiffs sent in
2011”); ECF No. 5 at 5. However, it differed in one
seemingly important respect. Unlike their March 2011 letter,
plaintiffs' October 2014 letter added a request that
defendant explain why it had not accepted payments plaintiffs
purportedly made while in bankruptcy on their loan and their
arrearage. ECF No. 5-1 at 4.
time defendant responded. See ECF No. 5-3 (December
1, 2014 letter). It advised plaintiffs that, prior to
commencing foreclosure proceedings years ago defendant had
reviewed plaintiffs' account history and offered them
numerous loss mitigation options. Id. at 2. It
reminded plaintiff that it had sent them letters in 2009 and
2010 apprising them of such options and attached those
letters again for plaintiffs' reference. Id. at
17-33 (letters). Furthermore, defendant informed plaintiffs
that it had operated pursuant to the bankruptcy court's
reorganization plan during plaintiffs' bankruptcy, and
that it had subsequently withdrawn foreclosure. Id.
at 2. Finally, among other things, defendant explained that
plaintiffs could still apply for loss mitigation
consideration by filling out and returning a workout package
application that defendant enclosed with its letter.
Id. at 2, 34-37. It is unclear whether plaintiffs
took defendant up on that offer.
14, 2016, roughly one month after Judge Arguello entered
final judgment in defendant's favor on plaintiffs'
other claims in the parties' first lawsuit, see
Christenson v. Citimortgage, Inc.,
12-CV-2600-CMA-KLM, 2016 WL 7868812, at *10 (D. Colo. June 7,
2016), plaintiffs filed a second suit against defendant, see
ECF No. 1. This time, instead of initiating their lawsuit in
the District of Colorado, plaintiffs brought suit against
defendant for RESPA violations in the Eastern District of
Missouri-i.e., the apparent location from which
defendant's response to plaintiffs' October 2014
letter originated. See id.
plaintiffs alleged that although defendant had responded to
their October 2014 letter that defendant had nevertheless
committed violations of § 2605(e) and § 2605(k) of
RESPA by either failing to respond in good faith or by
providing false answers to plaintiffs' inquiries.
Id. at ¶¶1, 20-22. In addition, plaintiffs
sought a declaratory judgment that any claim defendant may
have against them for breach of their mortgage and
acceleration of the debt was a compulsory counterclaim that
defendant waived by failing to assert it in the parties'
earlier lawsuit. Id. at ¶¶23-29.
August 4, 2016 defendant filed a motion to dismiss
plaintiff's complaint. ECF No. 5. Choosing not to decide
that motion, Judge Carole E. Jackson (no relation) of the
Eastern District of Missouri instead transferred the
parties' case to this Court on December 14, 2016.
See ECF No. 1. Three weeks later plaintiffs filed a
motion to amend the second claim within their complaint. ECF
No. 21. I granted that motion on February 20, 2017. ECF No.
30. I nevertheless informed the parties that I still
considered defendant's motion to be fully briefed and
that, after plaintiffs amended that claim, both parties could
file short supplements to their briefings before I decided
defendant's motion. Id.; see also
Pls.' First Am. Compl., ECF No. 21-1. Both parties
subsequently did exactly that. ECF Nos. 34-35.
STANDARD OF REVIEW
survive a 12(b)(6) motion to dismiss, the complaint must
contain “enough facts to state a claim to relief that
is plausible on its face.” Ridge at Red Hawk,
L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.
2007) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A plausible claim is a claim 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). While
the Court must accept the well-pleaded allegations of the
complaint as true and construe them in the light most
favorable to the plaintiff, Robbins v. Wilkie, 300
F.3d 1208, 1210 (10th Cir. 2002), conclusory allegations are
not entitled to be presumed true, Iqbal, 556 U.S. at
681. However, so long as the plaintiff offers sufficient
factual allegations such that the right to relief is raised
above the speculative level, he has met the threshold
pleading standard. See, e.g., Twombly, 550
U.S. at 556; Bryson v. Gonzales, 534 F.3d 1282, 1286
(10th Cir. 2008).
mentioned above, plaintiffs assert two claims in this action:
(1) a claim for violations of RESPA; and (2) a declaratory
judgment on defendant's inability to enforce
plaintiffs' default on their mortgage. See ECF
No. 3 at ¶¶15-29. For the reasons below, I agree
with defendant that both claims must be dismissed.
Accordingly, the Court GRANTS defendant's motion to
dismiss [ECF No. 5]. I discuss both claims in turn.
Claim One: ...