Kievman v. Federal National Mortgage Ass'n
901 F. Supp. 2d 1348
S.D. Fla.2012Background
- Plaintiffs are borrowers under TILA with a mortgage loan owned by Fannie Mae and serviced by Seterus, which is not a party.
- Seterus received a July 7, 2011 information-request letter from Plaintiffs’ counsel and responded August 3, 2011.
- Count I alleges Fannie Mae is vicariously liable for Seterus’s alleged §1641(f)(2) violation by failing to provide owner’s address/phone number.
- Count II alleges Seterus failed to provide an itemized payoff within a reasonable time in response to the July 7, 2011 request, and asserts vicarious liability as to this as well.
- Plaintiffs bring the action in Florida state court originally; it was removed to this federal court and the defendant moved to dismiss under Rule 12(b)(6).
- The court grants the Motion to Dismiss, holding creditors/assignees are not liable for servicers’ §1641(f)(2) or Regulation Z violations and that there is no private right of action for the Regulation Z violation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability of creditor/assignee for servicer’s §1641(f)(2) violation | Kievman argues owner/assignee liable for servicer’s failure to disclose owner’s contact | Fannie Mae argues liability does not extend to owners/assignees for servicer’s §1641(f)(2) violation | No liability for creditor/assignee |
| Vicarious liability under §1641(a) for owner-servicer | Plaintiffs rely on private right of action implied by §1640(a) | Statute does not extend vicarious liability to owners/assignees | Not reached; court declines to extend liability |
| Private right of action for Regulation Z violation | Regulation Z violation by servicer actionable | There is no private right of action for this Regulation Z provision | No private right of action; dismissal of Count II |
Key Cases Cited
- Khan v. Bank of N.Y. Mellon, 849 F. Supp. 2d 1377 (S.D. Fla. 2012) (discusses liability under §1641(f)(2) and private action)
- Bragg v. Bill Heard Chevrolet, Inc., 374 F.3d 1060 (11th Cir. 2004) (liberal construction of TILA in consumer protection context)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard; not just legal conclusions)
- Bell Atl. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)