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Vilkofsky v. Specialized Loan Servicing, LLC

United States District Court, W.D. Pennsylvania

June 14, 2017

FRANCIS VILKOFSKY, JR., Plaintiff,
v.
SPECIALIZED LOAN SERVICING, LLC, U.S. BANK, N.A., and RUSHMORE LOAN MANAGEMENT SERVICES, LLC, Defendants.

          MEMORANDUM OPINION

          Nora Barry Fischer United States District Judge

         I. Introduction

         Presently before the Court is the Motion to Dismiss (Docket No. 59) filed by Rushmore Loan Management Services, LLC (“Rushmore”), and the Motion to Dismiss (Docket No. 61) filed by Specialized Loan Servicing, LLC (“SLS”) and U.S. Bank, N.A. (“USB”) (collectively, “Defendants”), pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendants seek dismissal of all causes of action by Francis Vilkofsky, Jr. (“Plaintiff”), in his Second Amended Complaint (Docket No. 58). Plaintiff has therein asserted claims pursuant to the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601, et seq. (“RESPA”) and the Fair Debt Collection Practices Act, 15 U.S.C.A. §§ 1692, et seq. (“FDCPA”). This Court exercises subject-matter jurisdiction over Plaintiff's claims pursuant to 28 U.S.C. § 1331 (federal question). For the following reasons, Defendants' Motions shall be GRANTED, in part, and DENIED, in part.

         II. Standard of Review

         Federal Rule of Civil Procedure 8(a)(2) requires that a complaint contain a short and plain statement of a claim, and show that the pleader is entitled to relief. Dismissal of a complaint or portion of a complaint is warranted under Federal Rule of Civil Procedure 12(b)(6) when a claimant fails to sufficiently state a claim upon which relief can be granted. Avoiding dismissal under Rule 12(b)(6) requires a pleading party's complaint to provide “enough factual matter” to allow the case to move beyond the pleading stage of litigation; the pleader must “‘nudge his or her claims across the line from conceivable to plausible.'” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 - 35 (3d Cir. 2008) (quoting Bell Atlantic Co. v. Twombly, 550 U.S. 544, 556, 570 (2007)).

         In assessing the merits of a claim subject to a motion to dismiss, a court must engage in a two-part analysis. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 - 11 (3d Cir. 2009). First, factual and legal elements of a claim must be distinguished. Id. Second, it must be determined whether the facts as alleged support a “plausible claim for relief.” Id. In making the latter determination, the court must be mindful that the matter pleaded need not include “detailed factual allegations, ” Phillips, 515 F.3d at 231 (quoting Twombly, 550 U.S. at 555), and the court must construe all alleged facts, and draw all inferences gleaned therefrom, in the light most favorable to the non-moving party. Id. at 228 (citing Worldcom, Inc. v. Graphnet, Inc., 343 F.3d 651, 653 (3d Cir. 2003)).

         Moreover, a pleading party need only “put forth allegations that ‘raise a reasonable expectation that discovery will reveal evidence of the necessary element[s].'” Fowler, 578 F.3d at 213 (quoting Graff v. Subbiah Cardiology Assoc., Ltd., 2008 WL 2312671 (W.D. Pa. June 4, 2008)). A well-pleaded complaint, even when “it strikes a savvy judge that actual proof of…facts is improbable, ” will not be dismissed as long as the pleader demonstrates that his or her claim is plausible. Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 555 - 56). To this end, the Court may consider the “pleadings, public record, orders, exhibits attached to the complaint, and documents incorporated into the complaint by reference, ” when reviewing the sufficiency of a complaint upon a motion pursuant to Rule 12(b)(6). Brodzki v. Fox Broadcasting Co., 868 F.Supp.2d 386, 388 (D. Del. 2012) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)).

         Nevertheless, the facts provided do need to raise the expectation of relief above a purely speculative level, and must include more than “labels and conclusions, and a formulaic recitation of the elements of a cause of action.” Phillips, 515 F.3d at 231 - 32 (quoting Twombly, 550 U.S. at 554 - 56). Rule 8(a)(2) “requires a ‘showing' rather than a blanket assertion of an entitlement to relief.” Id. at 232. “[T]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Fowler, 578 F.3d at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         III. DISCUSSION[1]

         A. RESPA

         As explained in the Court's prior Memorandum Opinion of March 3, 2017, disposing of Defendants' original Motions to Dismiss, the Court's inquiry as to Plaintiff's RESPA claims is solely whether or not Plaintiff pled sufficient factual matter to sustain causes of action for the improper handling of error notices, and related damages. (Docket No. 53 at 7).

         1. Response to Notice of Error

          Regarding notices of error, RESPA provides the following:

(e) Response to notice of error.
(1) Investigation and response requirements.
(i) In general. Except as provided in paragraphs (f) and (g) of this section, a servicer must respond to a notice of error by either:
(A) Correcting the error or errors identified by the borrower and providing the borrower with a written notification of the correction, the effective date of the correction, and contact information, including a telephone number, for further assistance; or
(B) Conducting a reasonable investigation and providing the borrower with a written notification that includes a statement that the servicer has determined that no error occurred, a statement of the reason or reasons for this determination, a statement of the borrower's right to request documents relied upon by the servicer in reaching its determination, information regarding how the borrower can request such documents, and contact information, including a telephone number, for further assistance.

12 C.F.R. § 1024.35. RESPA also provides that a mortgage servicer “may, by written notice provided to a borrower, establish an address that a borrower must use” when submitting such a notice. 12 C.F.R. § 1024.35(c). However, the servicer must respond “not later than 30 days (excluding legal public holidays, Saturdays, and Sundays) after” receipt, 12 C.F.R. § 1024.35(e)(3)(i)(C), unless an “asserted error is substantially the same as an error previously asserted by the borrower for which the servicer has previously complied with its obligation to respond.” 12 C.F.R. § 1024.35(g)(1)(i). In the latter circumstance, the servicer need only inform the borrower that it will not reply to the duplicative notice within five days of making such a determination. 12 C.F.R. § 1024.35(g)(2).

         In its prior Motion to Dismiss (Docket No. 15), and as previously noted by this Court (Docket No. 53 at 8), Rushmore made “no argument regarding its treatment of Plaintiff's notices of error.” Presently, Rushmore contends that Plaintiff's RESPA claim against it must be dismissed because Plaintiff did not send any error notices to the appropriate address designated pursuant to 12 C.F.R. § 1024.35(c).[2] (Docket No. 59 at 7 - 9). Whatever merits this argument may have, Rushmore may not assert it at this juncture. The Third Circuit Court of Appeals has held that the Federal Rules of Civil Procedure impose certain restrictions on the filing of successive motions to dismiss; namely, that a party that makes a motion under Rule 12 cannot make a subsequent motion under Rule 12 raising a defense or objection that could previously have been asserted. Leyse v. Bank of America Nat'l Ass'n, 804 F.3d 316, 320 (3d Cir. 2015) (citing Fed.R.Civ.P. 12(g)(2)). See also Oliver v. Roquet, -- F.3d --, 2017 WL 2260961, at *4 n. 3 (3d Cir. 2017) (A party, “with limited exceptions, ‘must not make another such motion raising a defense or objection that was available to the party but omitted from its earlier motion.'”); Dicio v. Wells Fargo Bank, N.A., 2015 WL 8276585, at *17 (W.D. Pa. Nov. 4, 2015) report and recommendation adopted, 2015 WL 8207486 (W.D. Pa. Dec. 7, 2015) (Fischer, J.) (In case in which a motion to dismiss was denied following the filing of an amended complaint, a subsequent motion to dismiss could not raise defenses not raised - although available - in the first motion.). As noted in Plaintiff's Response, “Plaintiff's Second Amended Complaint incorporates in its entirety and verbatim the same RESPA allegations made against Rushmore that were in the Amended Complaint.” (Docket No. 64 at 2). Rushmore has failed to provide any intervening justification for its failure to raise this argument in an identical prior pleading. Accordingly, the Court will not now consider it. Having raised no other objection to Plaintiff's RESPA claim, Rushmore's Motion to Dismiss will be denied as to Count I.

         SLS also argues that its duties under RESPA were not triggered due to Plaintiff's failure to send notices of error to the address designated pursuant to 12 C.F.R. § 1024.35(c). (Docket No. 62 at 8 - 12). In response to the same argument in its prior Motion to Dismiss (Docket No. 26), this Court stated that Plaintiff “failed to affirmatively plead that he used the correct post office box number and that said number was designated by SLS as the appropriate means of delivering an error notice.” (Docket No. 53 at 15). However, the Court did note that the fact that the address used by Plaintiff[3] was so similar to that designated by SLS[4] lent credence to Plaintiff's argument that he used an acceptable address. (Id. at n. 4).

         The Second Amended Complaint now states that Plaintiff sent his error notice to SLS at P.O. Box 636005 which, while not the P.O. Box claimed by SLS in the Motion to Dismiss to be designated for receipt of same, was nonetheless previously provided to Plaintiff by SLS for sending error notices. (Docket No. 58 ¶¶ 42 - 46). Plaintiff also argues that SLS's response to his error notice - without any mention of the need to use another address - is further evidence that he utilized the correct address. (Id. ¶ 47 - 48). The Court agrees. A pleading party need only “put forth allegations that ‘raise a reasonable expectation that discovery will reveal evidence of the necessary element[s].'” Fowler, 578 F.3d at 213 (citation omitted). For purposes of surviving a motion under Rule 12(b)(6), Plaintiff has pled a sufficient factual basis as to this issue so that it may proceed through discovery.

         2. Damages

         Yet, SLS still asserts that a RESPA claim cannot be maintained because Plaintiff has pled no actual damages beyond generalized claims of harm to his emotional health. (Docket No. 62 at 12 - 15). As this Court noted in its prior Opinion, a “plaintiff claiming a RESPA violation must allege not only a breach of a duty required to be performed under RESPA, but must also show that the breach caused him to suffer damages.” Wilson v. Bank of America, N.A., 48 F.Supp.3d 787, 799 (E.D. Pa. 2014). In order to advance a claim under RESPA, a plaintiff must “sufficiently allege one of two types of damages: (1) actual damages[5] to the borrower as a result of the failure to comply with § 2605; or (2) statutory damages[6] in the case of a pattern or practice of noncompliance with the requirements of § 2605.” Giordano v. MGC Mortgage, Inc., 160 F.Supp.3d 778, 781 (D.N.J. 2016) (citations omitted). “[W]hen basing a claim on actual damages, ‘the borrower has the responsibility to present specific evidence to establish a causal link between the financing institution's violation and their injuries.'” Id. (quoting Straker v. Deutsche Bank Nat'l Trust, 2012 WL 7829989 *11 (M.D. Pa Apr. 26, 2012)).

         Plaintiff believes that his revised allegations of emotional distress-related damages are sufficient to survive dismissal. He relies primarily upon the following comments made in a May 9, 2016, error notice to SLS:

SLS has not cashed 5 monthly payments.
SLS is charging me $29.14 as a late fee for each check not cashed for a total of $524.52. I am also being charged interest on unpaid interest that would have been paid ...

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