Roth v. CitiMortgage Inc.

13-3839-cv
Roth v. CitiMortgage Inc.
1
2 In the
3 United States Court of Appeals
4 For the Second Circuit
5 ________
6
7 AUGUST TERM, 2013
8
9 ARGUED: APRIL 1, 2014
10 DECIDED: JUNE 24, 2014
11
12 No. 13-3839-cv
13
14 PATRICIA ROTH, individually and on behalf of a class of borrowers
15 similarly situated, a/k/a Patricia McCarthy,
16 Plaintiff-Appellant,
17
18 v.
19
20 CITIMORTGAGE INC.,
21 Defendant-Appellee.
22 ________
23
24 Appeal from the United States District Court
25 for the Eastern District of New York.
26 No. 12-cv-2446 – Sandra J. Feuerstein, Judge.
27 ________
28
29 Before: WALKER, CHIN, and DRONEY, Circuit Judges.
30 ________
31
32 Defendant CitiMortgage Inc. services a second residential
33 mortgage for plaintiff Patricia Roth. Roth alleges that CitiMortgage’s
34 responses to requests for information about her mortgage violated
2 No. 13-3839-cv
1 the Real Estate Settlement Procedures Act (‚RESPA‛), 12 U.S.C.
2 §§ 2601-2617, the Fair Debt Collection Practices Act (‚FDCPA‛), 15
3 U.S.C. §§ 1692-1692p, and N.Y. General Business Law (‚GBL‛) § 349.
4 The district court (Feuerstein, J.) dismissed Roth’s complaint under
5 Fed. R. Civ. P. 12(b)(6) for failure to state a claim, and we AFFIRM.
6 ________
7
8 ROSARIO G. SICURANZA, Sicuranza Law Firm LLC,
9 Melville, NY, for Plaintiff-Appellant.
10 JAMES C. SCHROEDER, Mayer Brown LLP, Chicago
11 IL (Therese Craparo, Mayer Brown LLP, New
12 York, NY, on the brief), for Defendant-Appellee.
13 ________
14
15 PER CURIAM:
16 Defendant CitiMortgage Inc. services a second residential
17 mortgage for plaintiff Patricia Roth. Roth alleges that CitiMortgage’s
18 responses to requests for information about her mortgage violated
19 the Real Estate Settlement Procedures Act (‚RESPA‛), 12 U.S.C.
20 §§ 2601-2617, the Fair Debt Collection Practices Act (‚FDCPA‛), 15
21 U.S.C. §§ 1692-1692p, and N.Y. General Business Law (‚GBL‛) § 349.
22 The district court (Feuerstein, J.) dismissed Roth’s complaint under
23 Fed. R. Civ. P. 12(b)(6) for failure to state a claim, and we AFFIRM.
24 BACKGROUND
25 Because the district court dismissed Roth’s claims on the
26 pleadings, we must limit our consideration ‚to the factual
27 allegations in [the] amended complaint, which are accepted as true,
28 to documents attached to the complaint as an exhibit or
29 incorporated in it by reference, to matters of which judicial notice
30 may be taken, or to documents either in plaintiffs’ possession or of
31 which plaintiffs had knowledge and relied on in bringing suit.‛
32 Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150 (2d Cir. 1993).
33 Since September 2008, Roth has been in default and has made
34 no payments on her second residential mortgage serviced by
3 No. 13-3839-cv
1 CitiMortgage. On April 8 and 9, 2011, Roth’s lawyer sent two nearly-
2 identical letters to CitiMortgage1 requesting many specific pieces of
3 information about her mortgage, each of which stated: ‚Please treat
4 this letter as a ‘qualified written request’ under the Real Estate
5 Settlement Procedures Act.‛ CitiMortgage responded to Roth’s
6 lawyer on April 18, acknowledging the ‚numerous questions about
7 the origination and/or servicing of *Roth’s+ mortgage loan,‛ but
8 noting that ‚it appears *Roth’s+ immediate concern is obtaining
9 financial assistance.‛ On June 11, 2011, Roth’s lawyer sent another
10 letter, which was identical to the two April letters except that it
11 asked to be treated ‚as a SECOND ‘qualified written request’‛ and it
12 stated that CitiMortgage’s April 18 letter had not complied with
13 RESPA. The three letters from Roth’s lawyer to CitiMortgage were
14 sent to two addresses: one in O’Fallon, Missouri,2 and another in Des
15 Moines, Iowa.
16 After Roth’s lawyer sent his letters, CitiMortgage sent at least
17 three letters directly to Roth. On July 11, 2011, CitiMortgage sent
18 Roth a packet with a financial information form to determine her
19 eligibility for loan modification programs. On March 14, 2012,
20 CitiMortgage wrote to Roth in response to a complaint she had filed
21 with the N.Y. Department of Financial Services, stating that her
22 allegations of improper servicing of her loan were ‚unsubstantiated‛
23 but that CitiMortgage would research and respond to any specific
24 servicing questions. And on April 10, 2012, CitiMortgage sent Roth a
25 notice that her loan was 1322 days in default and that CitiMortgage
1
The letters were actually addressed to an entity named CMI Workout
MS in O’Fallon, Missouri, but Roth’s complaint alleges that this entity
regularly corresponds with CitiMortgage on mortgage servicing issues,
and the letters were also copied to a CitiMortgage address in Des Moines,
Iowa. CitiMortgage’s response to Roth’s lawyer’s letters referenced the
CMI Workout MS address.
2 The address on the letters actually states ‚O’Fallon, MD,‛ but this
appears to be a typo, as the zip code corresponds to O’Fallon, Missouri,
and this Missouri address was contained in CitiMortgage’s April 18 letter.
4 No. 13-3839-cv
1 might commence legal action if the matter was not resolved within
2 ninety days.
3 On May 16, 2012, Roth commenced this action, alleging
4 violations under RESPA, FDCPA, and N.Y. GBL § 349. She filed an
5 amended complaint on August 8, 2012. On September 11, 2013, the
6 district court granted CitiMortgage’s motion to dismiss under Rule
7 12(b)(6). Roth v. CitiMortgage Inc., No. 12-CV-2446, 2013 WL 5205775
8 (E.D.N.Y. Sept. 11, 2013). Roth timely appealed.
9 DISCUSSION
10 We review the dismissal of a complaint under Fed. R. Civ. P.
11 12(b)(6) de novo, drawing all reasonable inferences in the plaintiff’s
12 favor and dismissing only if the complaint does not ‚contain
13 sufficient factual matter, accepted as true, to state a claim to relief
14 that is plausible on its face.‛ DiFolco v. MSNBC Cable L.L.C., 622 F.3d
15 104, 111 (2d Cir. 2010) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678
16 (2009)) (internal quotation marks omitted). As we explain below, the
17 district court did not err in dismissing Roth’s claims under RESPA,
18 FDCPA, or N.Y. GBL § 349, and Roth should not be granted leave to
19 amend her complaint.
20 I. Real Estate Settlement Procedures Act
21 CitiMortgage’s duties under RESPA are triggered if it receives
22 a qualified written request (‚QWR‛), defined as correspondence that
23 identifies a borrower’s account and ‚includes a statement of the
24 reasons for the belief of the borrower, to the extent applicable, that
25 the account is in error or provides sufficient detail to the servicer
26 regarding other information sought by the borrower.‛ 12 U.S.C.
27 § 2605(e)(1)(B)(ii). Roth alleges that the three letters sent by her
28 lawyer in April and June 2011 are QWRs, and that CitiMortgage is
29 liable for failing to provide the requested information (in violation of
30 § 2605(e)(2)) and for providing information about overdue payments
31 to credit agencies during the sixty-day period following receipt of
32 the letters (in violation of § 2605(e)(3)). We conclude that the district
33 court properly dismissed these claims on the basis that her lawyer’s
5 No. 13-3839-cv
1 letters were not sent to CitiMortgage’s designated QWR address,
2 and the requests are thus not QWRs under RESPA.
3 RESPA is a consumer-protection statute, see Freeman v. Quicken
4 Loans, Inc., 132 S. Ct. 2034, 2038 (2012), and it imposes short
5 timeframes for mortgage servicers to respond to potentially detailed
6 inquiries.3 To aid servicers with this task of providing consumers
7 with timely information, RESPA’s implementing regulations allow
8 (but do not require) servicers to establish a designated address for
9 QWRs. See 24 C.F.R. § 3500.21(e)(1) (‚By notice either included in the
10 Notice of Transfer or separately delivered by first-class mail, postage
11 prepaid, a servicer may establish a separate and exclusive office and
12 address for the receipt and handling of qualified written requests.‛).
13 The final rulemaking notice for the operative regulation, Regulation
14 X, explained that if a servicer establishes a designated QWR address,
15 ‚then the borrower must deliver its request to that office in order for
16 the inquiry to be a ‘qualified written request.’‛ Real Estate
17 Settlement Procedures Act, Section 6, Transfer of Servicing of
18 Mortgage Loans (Regulation X), 59 Fed. Reg. 65,442, 65,446 (Dec. 19,
19 1994).
20 We agree with the Tenth Circuit that ‚Regulation X’s grant of
21 authority to servicers to designate an exclusive address is a
22 permissible construction of RESPA,‛ and thus ‚*f+ailure to send the
23 [request] to the designated address . . . does not trigger the servicer’s
24 duties under RESPA.‛ Berneike v. CitiMortgage, Inc., 708 F.3d 1141,
25 1148-49 (10th Cir. 2013). As long as a servicer complies with the
26 notice requirements of 24 C.F.R. § 3500.21 for designating a QWR
27 address, a letter sent to a different address is not a QWR, even if an
3
At the time of Roth’s lawyer’s letter, servicers had twenty days to
acknowledge receipt of a QWR and sixty days to respond. See 12 U.S.C.
§ 2605(e)(1)-(2) (2011). As of January 10, 2014, servicers have five days to
acknowledge receipt and thirty days to respond, subject to limited
extensions. See Dodd–Frank Wall Street Reform and Consumer Protection
Act, Pub. L. 111-203, § 1463(c), 124 Stat. 1376, 2184 (2010) (codified at 12
U.S.C. § 2605(e)(1)-(2), (4)).
6 No. 13-3839-cv
1 employee at that address (who may not have training in RESPA
2 compliance) in fact responds to that letter.
3 Roth does not dispute that each of her mortgage statements
4 from CitiMortgage designated a QWR address, or that her lawyer
5 failed to use these addresses. For example, the ‚Customer Service‛
6 section of Roth’s April and May 2011 statements states:
7 PURSUANT TO § 6 OF RESPA, A ‚QUALIFIED WRITTEN
8 REQUEST‛ REGARDING THE SERVICING OF YOUR LOAN
9 MUST BE SENT TO THIS ADDRESS: CITIMORTGAGE, INC.
10 ATTN: CUSTOMER RESEARCH TEAM, PO BOX 9442,
11 GAITHERSBURG, MD 20898–9442. A ‚qualified written
12 request‛ is written correspondence, other than notice on a
13 payment coupon or statement, which includes your name,
14 account number and the reason(s) for the request.
15 Her March 2012 mortgage statement contains an identical notice but
16 with a new P.O. Box in Hagerstown, Maryland.4 As described above,
17 Roth has alleged that her lawyer sent his requests only to addresses
18 in O’Fallon, Missouri, and Des Moines, Iowa.
19 Roth argues that CitiMortgage’s QWR address notice failed to
20 comply with the obligations of Regulation X in three ways, but none
21 of these arguments have merit. First, Roth argues that the change in
22 the QWR address on the back of her mortgage statements and the
23 fact that other departments apparently handled her lawyer’s letters
24 suggest that CitiMortgage may not have had just one ‚separate and
25 exclusive office and address for the receipt and handling‛ of QWRs
26 as required by 24 C.F.R. § 3500.21(e)(1). But no authority suggests
27 that a servicer cannot change its QWR address, and how Roth’s
28 letters were handled is of little moment if they are not QWRs.
29 Second, Roth argues that the notice on the back of her
30 mortgage statements is not ‚separately delivered.‛ But in specifying
4
Roth attached the March 2012 statement to her complaint and the
April and May 2011 statements to her opposition to CitiMortgage’s
motion to dismiss, so these are properly before the court. See Brass, 987
F.2d at 150.
7 No. 13-3839-cv
1 that notice may be ‚either included in the Notice of Transfer or
2 separately delivered,‛ 24 C.F.R. § 3500.21(e)(1) simply means that
3 notice of the QWR address may be delivered separately from the
4 Notice of Transfer—not that it cannot be delivered along with other
5 mortgage information.
6 Third, Roth argues that notice of CitiMortgage’s QWR address
7 was insufficient because it was ‚buried in fine print.‛ However,
8 CitiMortgage’s notice clearly specifies in capital letters, and in the
9 same font size as the rest of the information on her mortgage
10 statement, that ‚A ‘QUALIFIED WRITTEN REQUEST’
11 REGARDING THE SERVICING OF YOUR LOAN MUST BE SENT
12 TO THIS ADDRESS.‛ Roth relies on Catalan v. RBC Mortgage Co.,
13 No. 05 C 6920, 2008 WL 2741159, at *7 (N.D. Ill. July 8, 2008), in
14 which the district court found notice insufficient when it stated that
15 ‚*c+ommunication regarding this notice should be sent to‛ a
16 specified person without providing her address or mentioning
17 RESPA. But as the district court here concluded, ‚the notice
18 provided by [CitiMortgage] contains none of the ambiguities that
19 concerned the court in Catalan.‛ Roth, 2013 WL 5205775, at *6.
20 In sum, we conclude that Roth has failed to allege that
21 CitiMortgage did not properly designate a QWR address or that any
22 of her lawyer’s letters were sent to the designated address. Because
23 Roth’s lawyer’s letters are not QWRs, CitiMortgage’s RESPA duties
24 were not triggered, and therefore the district court properly
25 dismissed Roth’s RESPA claims.
26 II. Fair Debt Collection Practices Act
27 Roth also alleges that CitiMortgage violated FDCPA
28 provisions that prohibit a ‚debt collector‛ from ‚communicat*ing+
29 with a consumer in connection with the collection of any debt . . . if
30 the debt collector knows the consumer is represented by an
31 attorney‛ and from taking actions to ‚harass, oppress, or abuse any
32 person in connection with the collection of a debt.‛ 15 U.S.C.
33 §§ 1692c(a)(2), 1692d. Roth argues that CitiMortgage violated these
34 provisions by directly sending her its financial assistance packet on
35 July 11, 2011; its response to her N.Y. Department of Financial
8 No. 13-3839-cv
1 Services complaint on March 14, 2012; and its letter of April 10, 2012,
2 stating that her loan was 1322 days in default.
3 However, the amended complaint does not allege that
4 CitiMortgage acquired Roth’s debt after it was in default and so fails
5 to plausibly allege that CitiMortgage qualifies as a debt collector
6 under FDCPA. See 15 U.S.C. § 1692a(6)(F)(iii) (‚The term ‘debt
7 collector’ . . . does not include . . . any person collecting or
8 attempting to collect any debt owed . . . to the extent such activity . . .
9 concerns a debt which was not in default at the time it was obtained
10 by such person.‛); see also Alibrandi v. Fin. Outsourcing Servs., Inc.,
11 333 F.3d 82, 85-86 (2d Cir. 2003) (per curiam). The district court
12 therefore did not err in dismissing Roth’s FDCPA claims.
13 III. New York General Business Law § 349
14 The final count of Roth’s complaint alleges violations of N.Y.
15 GBL § 349, which prohibits ‚*d+eceptive acts or practices in the
16 conduct of any business.‛ Roth argues that CitiMortgage violated
17 § 349 by providing inadequate notice of its QWR address, but as
18 discussed above, CitiMortgage’s QWR address notice was not
19 inadequate. The district court thus did not err in dismissing Roth’s
20 § 349 claim.
21 IV. Request for Leave to Amend
22 Finally, Roth argues for the first time on appeal that if we
23 conclude that her claims were properly dismissed, we should grant
24 her leave to amend her complaint. ‚The court should freely give
25 leave *to amend+ when justice so requires.‛ Fed. R. Civ. P. 15(a)(2).
26 However, ‚*w+hen a plaintiff has not moved for leave to amend in
27 the district court, we are ordinarily disinclined to exercise our
28 discretion to grant his belated request on appeal.‛ Kirsch v. Fleet St.,
29 Ltd., 148 F.3d 149, 171 (2d Cir. 1998). Furthermore, leave to amend
30 need not be granted where the proposed amendment would be
31 futile. Williams v. Citigroup Inc., 659 F.3d 208, 214 (2d Cir. 2011) (per
32 curiam). Roth does not propose any specific changes to the
33 complaint beyond adding the exhibits that were included with the
34 original complaint but mistakenly omitted from the amended
9 No. 13-3839-cv
1 complaint. However, those exhibits were considered by both the
2 district court and this court, and they are insufficient to save Roth’s
3 claims. Roth’s request for leave to amend is denied.
4 CONCLUSION
5 For the reasons stated above, we AFFIRM the judgment of the
6 district court.