Johnson v. Reverse Mortgage Funding LLC, 3:19-cv-00856

Plaintiff Tammy Johnson alleges her husband obtained a reverse mortgage in 2008 without her knowledge; after his death she applied for HUD-insured Mortgagee Optional Election (MOE) to avoid foreclosure.
Count Four alleged Nutter violated the Equal Credit Opportunity Act (ECOA) by failing to respond to her MOE application within 30 days.
Nutter removed to federal court and attached to its Answer a set of documents, including a March 23, 2018 request from plaintiff's counsel, a July 13, 2015 notice about MOE, and an April 2, 2018 letter to plaintiff's counsel denying MOE eligibility based on a asserted marriage date.
The April 2, 2018 letter was sent within 30 days of receipt of the application and stated Ms. Johnson was ineligible because, according to Nutter, the marriage occurred after the loan closing.
Plaintiff sought leave to amend to add emails from Nutter's former counsel indicating Nutter had postponed a foreclosure sale while evaluating the claim and asked the court to treat Nutter’s Rule 12(c) motion as one for summary judgment.
The court granted Nutter’s motion for judgment on the pleadings as to Count Four and denied plaintiff’s motion to amend or convert to summary judgment, finding Nutter’s April 2 letter satisfied ECOA’s notice requirement and that amendment would be futile.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Nutter violated ECOA §1691(d)(1) by failing to notify Ms. Johnson of action on her MOE application within 30 days	Johnson argued Nutter never approved, denied, or requested additional information and thus failed to provide the required notice	Nutter argued it sent a timely adverse-action/eligibility notice (April 2, 2018) within 30 days of the completed application	Court held Nutter complied with §1691(d)(1); judgment on the pleadings for Nutter as to Count Four
Whether plaintiff should be allowed to amend complaint or convert the motion to summary judgment based on extra-pleading emails	Johnson sought leave to amend to add emails showing Nutter continued evaluating and postponed sale, and requested conversion to summary judgment	Nutter contended the April 2 letter is part of the pleadings and forecloses the ECOA claim; extra-pleading materials are unnecessary and amendment would be futile	Court denied leave to amend and denied conversion; the emails would not cure the dispositive fact that timely notice was provided

Priority Auto Grp., Inc. v. Ford Motor Co., 757 F.3d 137 (4th Cir. 2014) (Rule 12(c) standard mirrors Rule 12(b)(6))
Edwards v. City of Goldsboro, 178 F.3d 231 (4th Cir. 1999) (pleadings-standards for judgment on the pleadings)
Mendenhall v. Hanesbrands, Inc., 856 F. Supp. 2d 717 (M.D.N.C. 2012) (documents attached to an answer may be considered on Rule 12(c) if central and authentic)
HCMF Corp. v. Allen, 238 F.3d 273 (4th Cir. 2001) (leave to amend granted freely absent prejudice, bad faith, or futility)
Perkins v. United States, 55 F.3d 910 (4th Cir. 1995) (amendment is futile if the proposed claim cannot withstand a motion to dismiss)
Wigod v. PNC Bank, N.A., 338 F. Supp. 3d 758 (N.D. Ill. 2018) (ECOA notice is not rendered inadequate simply because the creditor's stated reason is factually incorrect)
Treadway v. Gateway Chevrolet Oldsmobile, Inc., 362 F.3d 971 (7th Cir. 2004) (statement of reasons allows applicants to correct misinformation)