Jaki Baez v. Specialized Loan Servicing, LLC , 709 F. App'x 979 ( 2017 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-17292
Non-Argument Calendar
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D.C. Docket No. 9:15-cv-81676-KAM
JAKI BAEZ,
individually,
Plaintiff-Appellant,
versus
SPECIALIZED LOAN SERVICING, LLC,
Foreign Limited Liability Company,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(September 22, 2017)
Before HULL, WILSON, and ROSENBAUM, Circuit Judges.
PER CURIAM:
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Plaintiff-appellant Jaki Baez claims that she suffered damages as a result of
Defendant-appellee Specialized Loan Servicing, LLC’s (“Specialized Loan”)
failure to adequately respond to her request for certain information relating to her
mortgage loan. Baez submitted her request pursuant to the provisions of
Regulation X, 12 C.F.R. part 1024, which implements the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. §§ 2601, et. seq. If a servicer fails to
comply with its obligations under RESPA or its regulations, plaintiffs can recover
“any actual damages to the borrower as a result of the failure.” 12 U.S.C.
§ 2605(f)(1)(A).
The district court granted Specialized Loan summary judgment because
Baez had not shown any “actual damages” caused by the alleged failure to comply
with RESPA. On appeal, Baez contends that she suffered damages in the form of
the following: (1) postage costs for sending the request for information;
(2) attorney’s fees flowing from a review of the deficient response; and (3) the
deprivation of information that she would have received had Specialized Loan
complied with its obligations. After careful review, we agree with the district court
that Baez has failed to produce sufficient evidence of actual damages caused by her
servicer’s failure to comply with RESPA. We therefore affirm.
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I. Regulation X
“RESPA is a consumer protection statute that imposes a duty on servicers of
mortgage loans to acknowledge and respond to inquiries from borrowers.” Bivens
v. Bank of Am., N.A., ___ F.3d ___, ___, 2017 WL 3529113, *2 (11th Cir. Aug. 17,
2017). RESPA requires servicers to comply with the obligations specified in 12
U.S.C. § 2605 as well as any regulations issued to carry out the statute’s purposes.
See 12 U.S.C. § 2605(k)(1). A servicer’s failure to comply with RESPA or its
implementing regulations gives rise to a private cause of action. See Id. § 2605(f).
This case concerns two provisions in Regulation X, which implements
RESPA. These provisions were promulgated by the Consumer Financial
Protection Bureau (“CFPB”) and went into effect on January 10, 2014. See
Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act, 78
Fed. Reg. 10696 (Feb. 14, 2013).
The central regulation at issue outlines a servicer’s duties in responding to a
borrower’s “written request for information,” or “RFI.” See 12 C.F.R.
§ 1024.36(a). When a borrower requests information “with respect to the
borrower’s mortgage loan account,” the servicer is required to take certain
responsive actions within certain times periods. See id. § 1024.36(a). The servicer
must provide written acknowledgement of the request within five days. Id.
§ 1024.36(c) Then, within 30 days, the servicer must either provide the
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information the borrower requested or, after a reasonable investigation, notify the
borrower in writing that it has determined that the information is not available and
explain the basis for its decision. Id. § 1024.36(d); see id. § 1024.36(d)(2)(i)(A)
(reducing the time limit to 10 days if the borrower requests the identity of the
secured creditor). The regulation also specifies, among other things, alternative
means of compliance, id. § 1024.36(e), as well as situations in which a servicer is
not required to provide the information requested, id. § 1024.36(f).
The second regulation at issue, 12 C.F.R. § 1024.41, “dictates how a
mortgage loan servicer must review a borrower’s loss mitigation application.”
Lage v. Ocwen Loan Servicing LLC, 839 F.3d 1003, 1006–07 (11th Cir. 2016)
(summarizing the requirements of this regulation). “A loss mitigation application
is simply a request by a borrower for any of a number of alternatives to
foreclosure, known as loss mitigation options, including, among others,
modification of the mortgage.” Id. at 1006.
II. Factual Background
Baez purchased her home in 2005 with a mortgage loan from First Franklin
Bank. At some point, Specialized Loan took over as her mortgage loan servicer.
Since that time, Baez claims, Specialized Loan has continued to raise her monthly
mortgage payments without providing adequate explanation.
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In January 2015, Baez stopped paying her mortgage to see if she could
qualify for a loan modification agreement that worked for her. Around that time,
she retained the law firm of Korte & Wortman, P.S. (the “Korte firm”) to both help
with any ensuing foreclosure and to achieve a loan modification. She has paid the
Korte firm a flat fee of $400 per month since that time.
Baez testified that she tried to work with Specialized Loan to get
information about why her mortgage payments were rising and whether she could
obtain a loan modification so that she could save her home. But Specialized Loan,
according to Baez, was unresponsive or unhelpful. In her view, Specialized Loan
stonewalled her efforts to obtain a modification by saying that it had not received
necessary documents that Baez had sent. And even though she received
“confirmations” about submitting all necessary documents, Baez could not
understand why she was never approved.
On September 18, 2015, Baez, through her attorney, sent a request for
information to Specialized Loan. In the request, she asked for information about
her mortgage loan, including any loss-mitigation applications she had submitted, a
payoff quote, and any notifications of servicer transfer. Specialized Loan
acknowledged the request and later submitted a packet of information in response.
Baez claims that the packet was deficient because it contained no correspondence
file of what Specialized Loan had communicated to Baez. She specifically points
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to two letters Specialized Loan sent her, dated March 18, 2015, and May 5, 2015,
respectively, which were produced during discovery in this case but which were
not included in Specialized Loan’s response.
Soon after she received Specialized Loan’s purportedly deficient response to
her request for information, Baez filed suit in state court alleging a violation of
RESPA. Specialized Loan removed the matter to federal district court and then
moved to dismiss the complaint. The district court denied the motion, and the case
proceeded through discovery. Both parties moved for summary judgment at the
close of discovery. Ultimately, the district court granted summary judgment to
Specialized Loan on the ground that Baez had failed to show that she had been
injured by Specialized Loan’s response to her RFI.1 Baez now appeals.
III. Standard of Review
We review de novo the district court’s grant of summary judgment.
Liebman v. Metropolitan Life Ins. Co., 808 F.3d 1294, 1298 (11th Cir. 2015).
Summary judgment is appropriate where, viewing the evidence and drawing all
reasonable inferences in favor of the party opposing summary judgment, “there is
1
Specialized Loan maintains on appeal, as it argued before the district court, that its
obligation to respond is limited to requests for information relating to “servicing” of the loan, see
12 U.S.C. § 2605(i)(3) (defining the term “servicing”), which in its view does not include
requests like Baez’s related to loan modification. Baez responds that the version of Regulation X
promulgated by the CFPB expanded a servicer’s response obligations to include any request for
information “with respect to the borrower’s mortgage loan,” 12 C.F.R. § 1024.36(a), which in
Baez’s view includes requests related to loan modification. The district court did not reach this
issue, and we find it unnecessary to resolve. Even assuming that Baez has established a RESPA
violation, she has not established actual damages as a result of that violation.
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no genuine issue of material fact and the moving party is entitled to judgment as a
matter of law.” Id.; Fed. R. Civ. P. 56(a).
IV. Discussion
A servicer’s failure to comply with its RESPA obligations allows a borrower
to recover any “actual damages . . . as a result of the failure” and “any additional
damages,” not to exceed $2,000, if there is “a pattern or practice of
noncompliance” with RESPA. 12 U.S.C. § 2605(f)(1). “Damages are an essential
element of a RESPA claim.” Lage, 839 F.3d at 1011. Thus, to prevail on a
RESPA claim, a plaintiff must show (1) a failure to comply with a RESPA
obligation and (2) actual damages sustained as a result of the failure to comply.
Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1244 (11th Cir. 2016).
We have not defined “actual damages” under RESPA, and that term is not
defined in the statute itself. See 12 U.S.C. § 2605(f)(1)(A). Nor have we applied a
consistent definition of that term across statutes. Compare Fanin v. U.S. Dep’t of
Veterans Affairs, 572 F.3d 868, 872–73 (11th Cir. 2009) (holding that, under the
Privacy Act, 5 U.S.C. § 552a(g)(4), “actual damages” means “pecuniary losses”
only, and does not include recovery for “mental injuries, loss of reputation,
embarrassment or other non-quantifiable injuries”); with Banai v. Sec’y U.S. Dep’t
of Hous. & Urban Dev. ex rel. Times, 102 F.3d 1203, 1207 (11th Cir.1997) (stating
that the Fair Housing Act’s allowance for “actual damages,” 42 U.S.C.
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§ 3612(g)(3), includes compensation for “anger, embarrassment, and emotional
distress”). Because it is not necessary to the result, we construe “actual damages”
broadly and assume, but do not decide, that plaintiffs can recover both pecuniary
losses and non-pecuniary losses under RESPA. See Renfroe, LLC, 822 F.3d at
1244 (RESPA is a “remedial consumer-protection statute” that “should be
construed liberally in order to best serve Congress’s intent”).
For actual damages to be “a result of” a servicer’s noncompliance, the
“plaintiff must present evidence to establish a causal link between the [servicer’s]
noncompliance and [her] damages.” See Turner v. Beneficial Corp., 242 F.3d
1023, 1027–28 (11th Cir.2001) (en banc) (interpreting the Truth in Lending Act
(“TILA”), which similarly allows for recovery of “actual damage sustained . . . as a
result of the failure” to comply with the TILA, 15 U.S.C. § 1640(a)(1)).
Baez asserts that she was harmed by Specialized Loan’s response to her RFI,
which we assume arguendo failed to comply with Regulation X, in three ways.
First, she paid $4.70 in postage to send the request for information in the first
place. Second, she paid her attorneys to review Specialized Loan’s deficient
response. Finally, Baez claims that the deficient response deprived her and her
counsel “of the ability to determine whether there was another RESPA violation
under §1024.41(b)(2), which governs loss mitigation procedures.” The “lack of
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information that is due,” she says, “is the damages.” (Emphasis omitted). We
address each contention in turn.
First, the cost of sending an initial request for information is not a cost to the
borrower “as a result of the failure” to comply with a RESPA obligation. See 12
U.S.C. § 2605(f)(1)(A). At the time the request is sent, and the postage cost
incurred, no RESPA violation has occurred, nor will one necessarily occur. The
servicer may adequately respond to the request, or it may not, but the postage cost
to the borrower is the same in both instances. A cost that is incurred whether or
not the servicer complies with its obligations is not a cost that is caused by, or “a
result of,” the failure to comply. 2 See Turner, 242 F.3d at 1028.
2
This is not a situation in which a past error becomes “current,” as in Renfroe. In
Renfroe, we held that a plaintiff could establish actual damages where a servicer fails to respond
to a notice of error by fixing past errors and issuing refunds of erroneous charges. See 822 F.3d
at 1246. That is because a notice of error “makes past errors current by requiring servicers to fix
errors they find upon reasonable investigation, including by issuing refunds as necessary.” Id.
Thus, “[w]hen a plaintiff plausibly alleges that a servicer violated its statutory obligations and as
a result the plaintiff did not receive a refund of erroneous charges, she has been cognizably
harmed.” Id. at 1246–47. Here, in contrast, the servicer’s compliance or lack of compliance
with its RESPA obligations has no effect on the costs Baez incurred in sending the initial
request. For instance, a plaintiff is not entitled to a return of her postage costs if the servicer
adequately responds.
For similar reasons, we do not find persuasive Baez’s reliance on Sixth Circuit precedent,
which appears to allow recovery for the initial costs of preparing and sending a request for
information where the servicer gives a deficient response. See Marais v. Chase Home Finance
LLC, 736 F.3d 711, 721 (6th Cir. 2013) (“[T]he district court’s determination that costs Marais
incurred associated with preparing her [request] did not constitute actual damages did not take
into account Marais’s argument that those costs were for naught due to Chase’s deficient
response, i.e., her [request] expenses became actual damages when Chase ignored its statutory
duties to adequately respond.”) (citation omitted). As explained above, the cost of preparing and
sending the request, even if it is “for naught,” is not causally linked to the deficient response.
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For similar reasons, we agree with the district court that Baez’s evidence
fails to show a causal connection between her attorney’s review time and
Specialized Loan’s deficient response. Leaving aside the question of whether
attorney’s fees are damages recoverable under § 2605(f), the undisputed evidence
reflects that Baez had hired the Korte firm for a flat monthly fee to help with any
ensuing foreclosure and to achieve a loan modification. There is no evidence that
Baez incurred any additional representation costs as a result of the deficient
response. For instance, Baez has not shown that the deficient response caused her
to retain the Korte firm for longer than she otherwise would have. And the Korte
firm would have reviewed the response whether or not it complied with Regulation
X. Accordingly, the portion of her monthly fee Baez attributes to her attorney’s
review of the deficient response does not qualify as “actual damages . . . as a result
of” Specialized Loan’s failure to comply with RESPA.
Finally, Baez argues that Specialized Loan’s deficient response—
specifically its failure to produce the March 2015 and May 2015 letters to Baez,
among others—caused her “to forego immediately bringing a § 1024.41 claim”
alongside the claim for failure to adequately respond to her RFI. Baez casts
§ 1024.34 as an investigative tool for borrowers to discover other RESPA
violations. If a servicer frustrates that investigation by failing to respond or by
providing a deficient response, Baez reasons, it also frustrates a borrower’s ability
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to enforce its other rights under RESPA. As a result, according to Baez, a servicer
should be held liable in circumstances where, as here, its response was deficient.
Otherwise, she reasons, servicers can frustrate a borrower’s ability to enforce its
RESPA rights with relative impunity.
We have recognized that a plaintiff could potentially prove actual damages
for purposes of RESPA by showing that the servicer’s deficient response
“prevented her from taking some important action.” Bates v. JPMorgan Chase
Bank, NA, 768 F.3d 1126, 1135 (11th Cir. 2014) (“[Bates] has not explained why
her lack of knowing why she received the check in March somehow caused her
additional damages or prevented her from taking some important action.”). But
there is still a need for causation, which Baez does not dispute. And the plaintiff,
in order to have standing to bring such a claim, must establish “a concrete injury
even in the context of a statutory violation.” Spokeo, Inc. v. Robins, 136 S. Ct.
1540, 1549 (2016).
We need not resolve this issue here, however, because, in any case, she has
not properly preserved it for appeal. Throughout the proceedings before the
district court, Baez never claimed, as she does on appeal, that the lack of
information itself was the damages. In her motion for summary judgment, her
response in opposition to Specialized Loan’s motion for summary judgment, and
her reply to the Specialized Loan’s response to her motion for summary judgment,
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the only “actual damages” Baez requested were the cost of postage ($4.70) and her
attorney’s review time ($75.00). Her reply makes this explicit: she requested “a
judgment in the amount of $79.70, plus attorney’s fee and costs.” To be sure, in
her filings below, she addressed the interplay between § 1024.34 and § 1024.41
and the importance of receiving complete loss-mitigation information from the
servicer in response to an RFI, but she never put forth the specific argument that
she advances on appeal—that the failure to produce information due in response to
an RFI is itself “actual damages.”
It is well settled that we will generally not consider on appeal an issue or
argument not fairly presented to the district court. Resolution Trust Corp. v.
Dunmar Corp., 43 F.3d 587, 598–99 (11th Cir. 1995). While we have the
discretion to consider arguments raised for the first time on appeal, we will do so
only in “special circumstances.” Access Now, Inc. v. Sw. Airlines Co., 385 F.3d
1324, 1331 (11th Cir. 2004) (outlining these circumstances). We find no special
circumstances in this case that warrant our reaching an issue that was not fairly
presented to the district court.
V. Conclusion
For these reasons, we agree with the district court that Baez failed to
establish sufficient competent evidence of “actual damages . . . as a result of”
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Specialized Loan’s failure to comply with RESPA or Regulation X. 3 Accordingly,
we AFFIRM the district court’s grant of summary judgment against Baez.
3
To the extent Baez claims to have suffered damages in the form of mental anguish, she
raised that issue for the first time in her reply brief, so it is not properly before us. See Sapuppo
v. Allstate Floridian Ins. Co., 739 F.3d 678, 683 (11th Cir. 2014) (new arguments raised in a
reply brief “come too late”). In any case, Baez’s claim of mental anguish is based on the entire
course of her interactions with Specialized Loan. It has no clear causal connection to Specialized
Loan’s deficient response.
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