Berneike v. CitiMortgage, Inc.
2013 U.S. App. LEXIS 3879
| 10th Cir. | 2013Background
- Berneike sued CitiMortgage in Utah federal court, asserting RESPA, UCSPA, and contract claims based on alleged overcharges and fees; she sent numerous QWRs by fax to Citi addresses not designated for QWRs; Citi designated a QWR address in a Welcome Letter and monthly statements; Citi responded to some inquiries but did not receive QWRs at the designated address; district court dismissed under Rule 12(b)(6); court later affirmed dismissal on appeal.
- Berneike filed state-law and federal claims, seeking damages including statutory RESPA penalties; Citi removed the case to federal court; the district court dismissed RESPA, UCSPA, and contract claims with prejudice.
- RESPA regulation allows servicers to designate a exclusive QWR address and requires receipt at that address to trigger duties; Berneike’s letters were not sent to the designated address.
- UCSPA claim deemed barred by Utah law under Carlie v. Morgan, as applicable to mortgage servicing conduct governed by more specific statutes.
- Court affirmed dismissal and denial of leave to amend, holding amendments would be futile for RESPA and UCSPA claims and that contract claim lacked factual support.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RESPA: Does designated QWR address control trigger of duties? | Berneike argues dismissal wrong because Citi waived right or receipt occurred. | Citi asserts receipt at designated address is required to trigger RESPA duties. | Designated-address receipt controls; RESPA duties not triggered here. |
| Document consideration in Rule 12(b)(6) review | Welcome Letter considered improperly; not attached to complaint. | Welcome Letter central to RESPA claim; authentic and incorporated by reference. | District court erred in considering the letter, but error harmless due to other evidence. |
| UCSPA applicability to mortgage servicing | UCSPA covers deceptive practices; should apply. | Carile/Utah law bar UCSPA where more specific statutes govern; applicable law controls. | UCSPA claim barred by Carlie doctrine; dismissed. |
| Leave to amend the contract claim | Amendment could cure pleading deficiencies. | Amendment futile; RESPA/UCSPA would still fail and contract facts inadequate. | District court did not abuse discretion; leave to amend denied. |
Key Cases Cited
- Khalik v. United Air Lines, 671 F.3d 1188 (10th Cir. 2012) (de novo review of Rule 12(b)(6); plausibility standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleading)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must cross the line from conceivable to plausible)
- Gee v. Pacheco, 627 F.3d 1178 (10th Cir. 2010) (exceptions to considering outside-pleadings on Rule 12(b)(6))
- GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381 (10th Cir. 1997) (documents central to claims may be considered on motion to dismiss)
- Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (U.S. 2007) (use of reasonable inference to determine plausibility)
- Regions Hosp. v. Shalala, 522 U.S. 448 (U.S. 1998) (agency readings may fill gaps if reasonable)
- Carlie v. Morgan, 922 P.2d 1 (Utah 1996) (specific statutes control over more general UCSPA)
- Wankier v. Crown Equip. Corp., 353 F.3d 862 (10th Cir. 2003) (Utah state-law considerations informing preemption and supplemental jurisdiction)