Echeverria v. BAC Home Loans Servicing, LP

Citations: 900 F. Supp. 2d 1299; 2012 U.S. Dist. LEXIS 151600; 2012 WL 5227015Docket: Case No. 6:10-cv-1933-Orl-28DAB

Court: District Court, M.D. Florida; October 22, 2012; Federal District Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Plaintiffs Abdiel Echeverría and Isabel Santamaría filed a pro se Third Amended Verified Complaint against Defendants BAC Home Loans Servicing, LP and Bank of America, N.A., involving claims related to BAC's servicing of their home loan. The Court is addressing Defendants' motions to dismiss and for summary judgment on all claims. It determined that Counts Three (RICO) and Four (Infliction of Emotional Distress) do not survive the motion to dismiss, while Counts One (RESPA) and Two (Fraudulent Misrepresentation) do not survive the motion for summary judgment.

The Plaintiffs purchased their home on February 29, 2008, with Federal Housing Administration assistance and executed a promissory note with Taylor, Bean Whitaker Mortgage Corporation. In September 2009, they learned their loan was sold to BAC. After a series of interactions regarding loan modification requests, which BAC ultimately denied in September 2010, the Plaintiffs raised four legal claims against the Defendants: violations of RESPA (Count One), Fraudulent Misrepresentation (Count Two), RICO violations (Count Three), and Infliction of Emotional Distress (Count Four).

For the RICO claim, the Court emphasized that recovery under 18 U.S.C. 1964(c) is limited to economic injuries to business or property, excluding personal injuries, which the Plaintiffs incorrectly assert can satisfy this requirement. The ruling underscores the necessity for a complaint to present enough factual matter to establish a plausible claim for relief to survive a motion to dismiss.

Plaintiffs claim Isabel Santamaría suffered injuries on her property due to threats received through mail and harassing phone calls, leading to emotional and physical symptoms. However, the court finds that personal injuries are excluded under Section 1964(c), rendering the RICO claim inadequate and dismissing it with prejudice. Regarding the infliction of emotional distress, the plaintiffs assert both intentional and negligent claims based on the defendants' conduct related to loan modification and servicing, including threats of foreclosure and mishandling of documentation. For intentional infliction, plaintiffs must demonstrate conduct that is extremely outrageous, which the court determines is not met by the presented facts. Concerning negligent infliction, Florida’s impact rule requires emotional distress to stem from physical injury caused by an impact, which plaintiffs did not establish, nor did they provide grounds for an exception to this rule. Consequently, both claims for emotional distress fail and Count Four is dismissed with prejudice.

Counts One (RESPA) and Two (Fraudulent Misrepresentation) in the Third Amended Complaint are deemed to have sufficient factual basis to present plausible claims for relief, as per the standards set by Iqbal and Twombly. However, these counts do not withstand the Defendants’ Motion for Summary Judgment. The court applies the summary judgment standard, allowing for judgment when no genuine dispute exists regarding material facts, favoring the nonmoving party in factual interpretations. The nonmoving party must provide specific factual evidence beyond mere allegations when faced with a properly supported motion. Summary judgment is appropriate if the nonmoving party fails to show an essential element of their case or provides evidence that is merely colorable. The court's role at this stage is to assess whether there is a genuine issue for trial or if the evidence overwhelmingly favors one party.

Count One pertains to the Real Estate Settlement Procedures Act (RESPA), which mandates certain disclosure requirements for servicers of federally related mortgage loans, including communication regarding loan transfers. Plaintiffs allege violations of 12 U.S.C. 2605(e) for inadequate responses to their qualified written requests (QWRs) and 2605(c) for failing to notify them of a loan transfer within the required timeframe. To succeed under 2605(e), Plaintiffs must demonstrate that Defendants are servicers, received a QWR related to loan servicing, failed to respond adequately, and that Plaintiffs are entitled to damages. A QWR is defined as written correspondence that identifies the borrower and includes reasons for believing the account is in error or requests information related to the account.

A Qualified Written Request (QWR) must either identify an error in the loan account or seek information related to loan servicing, which encompasses receiving payments and managing escrow accounts. Defendants argue for summary judgment, claiming compliance with the Real Estate Settlement Procedures Act (RESPA) in responding to QWRs, and that Plaintiffs lack evidence of damages, a requisite for claims under section 2605. Plaintiffs reference three letters sent to Bank of America (BAC). The first, dated March 24, 2010, is a QWR, with Plaintiffs’ attorney sending it on April 30, 2010, along with requests for information about mortgage payments. Defendants counter with a letter from BAC dated May 10, 2010, acknowledging the request, and a more detailed response sent on May 14, 2010. Plaintiffs' deposed statements reveal a lack of prior knowledge of these response letters. Plaintiffs do not contest that these letters represent adequate responses under RESPA. 

The second letter cited by Plaintiffs, dated July 10, 2010, requests a copy of the Promissory Note and does not qualify as a QWR since it does not pertain to loan servicing. A third letter, labeled as a "Demand Letter" from August 16, 2010, lists alleged account errors and demands financial compensation but is ambiguous regarding its status as a QWR. Defendants assert it does not meet QWR criteria, and even if it were treated as such, Plaintiffs only claim Defendants refused to meet the demands, not that they failed to respond per RESPA. Evidence indicates that Defendants responded to this Demand Letter on October 29, 2010, which Plaintiffs do not dispute in their response.

Even if the August 16, 2010 letter qualifies as a qualified written request (QWR) under the Real Estate Settlement Procedures Act (RESPA), there is no genuine dispute regarding whether Defendants complied with RESPA in their response. Plaintiffs have not provided evidence of actual damages resulting from any alleged RESPA violations nor demonstrated entitlement to statutory damages. Under RESPA, plaintiffs may seek actual damages for noncompliance, and statutory damages of up to $1,000 for a pattern of violations (12 U.S.C. 2605(f)(1)). Plaintiffs claim damages were caused by Defendant BAC’s noncompliance and assert a pattern of violations, yet Defendants argue that Plaintiffs only claim statutory damages without evidence to support this claim. Plaintiffs acknowledged that they seek only statutory damages. Allegations of proximate causation do not constitute evidence of actual damages. Furthermore, there is no genuine dispute regarding a pattern or practice of violations, as a single violation does not establish such a pattern (Davis v. Greenpoint Mortg. Funding, Inc., 2011). Thus, Plaintiffs' claim under 12 U.S.C. 2605(e) fails as a matter of law.

Regarding 12 U.S.C. 2605(c), which mandates that borrowers be notified of loan transfers within 15 days, Plaintiffs allege improper notification of their loan's transfer to BAC from the original lender, TBW. Although BAC submitted a transfer notice dated August 23, 2009, Plaintiffs dispute its timely delivery. However, the absence of proof of actual injury or a pattern of violations makes this dispute moot. A single violation does not demonstrate a pattern (Davis, 2011), leading to the conclusion that Plaintiffs' 12 U.S.C. 2605(c) claim also fails.

Lastly, for fraudulent misrepresentation claims in Florida, four elements must be established: (1) a false statement about a material fact; (2) knowledge of its falsity by the representor; (3) intent to induce reliance; and (4) resulting injury from reliance on the statement (Johnson v. Davis, 1985).

Plaintiffs allege that BAC made false statements regarding their loan modification application, claiming they would qualify for a modification upon default and had been approved for one after defaulting. However, they have not provided evidence of injury resulting from reliance on these misrepresentations. Although they claim to have incurred various damages, including financial and emotional distress, the only specific actions mentioned are continuing mortgage payments and home improvements based on the alleged misrepresentations. Notably, they have not claimed to have lost their home or demonstrated that their expenditures constituted actual injury. As a result, their claims of fraudulent misrepresentation fail legally.

The court orders the following: Defendants’ Motion to Dismiss is partially granted, dismissing the RICO and emotional distress claims with prejudice, while allowing the RESPA and fraudulent misrepresentation claims to proceed. The Motion for Summary Judgment is granted regarding the RESPA and fraudulent misrepresentation claims and denied as moot concerning the dismissed claims. The court directs the Clerk to enter judgment stating that Plaintiffs recover nothing from Defendants. Plaintiffs' assertion that the summary judgment motion was premature is rejected, as they failed to identify any necessary discovery. The court previously noted that RICO claims cannot be based on personal injuries and that Plaintiffs did not present sufficient evidence to establish a genuine dispute regarding injury to their business or property.

Plaintiffs' claims for intentional and negligent infliction of emotional distress would not withstand summary judgment, as they failed to present evidence demonstrating a genuine dispute regarding the Defendants' conduct exceeding acceptable norms or any resulting impact on the Plaintiffs. Although the Plaintiffs are representing themselves, they previously employed legal counsel in dealings with the Defendants. In their Third Amended Complaint, they categorized certain letters as 'qualified written requests' but referred to another as merely a 'Demand Letter.' A declaration by Paul W. Ettori, supporting Defendants' motion, included an August 23, 2009 letter from Bank of America Home Loans to the Plaintiffs. Additionally, the Plaintiffs sought to use a psychologist's report to demonstrate mental suffering caused by the Defendants’ actions, but this evidence was excluded due to noncompliance with Federal Rule of Civil Procedure 26(a). Even if admitted, the Plaintiffs did not clarify how their alleged injuries stemmed from reliance on any misrepresentations, and such injuries may not be actionable under misrepresentation claims. The Plaintiffs’ response to the Defendants' motion lacked supporting affidavits, and even if their claims were proven, they would not constitute a valid injury. The Court noted that the Plaintiffs continue to use the address of the contested property as their mailing address in case filings.