Margaret C. Renfroe v. Nationstar Mortgage, LLC
2016 U.S. App. LEXIS 8707
| 11th Cir. | 2016Background
- Renfroe refinanced in 2006; loan later serviced by Nationstar, after which her monthly payment allegedly rose by about $100.
- Renfroe repeatedly sought explanation; in June 2014 she sent a RESPA "notice of error" asking Nationstar to investigate, explain the increase, provide documents, and refund any overpayments.
- Nationstar replied with a generic letter denying error, stating documents were reviewed (attachments not in record), and providing no substantive explanation for the payment increase.
- Renfroe sued under RESPA, alleging Nationstar failed to reasonably investigate, failed to give a proper written explanation, and failed to refund overpayments; she also alleged a pattern-or-practice of using boilerplate responses to notices of error.
- The magistrate and district courts granted Nationstar’s motion to dismiss for failure to state a claim and for insufficiently pleaded damages; Renfroe appealed.
- The Eleventh Circuit reversed and remanded, holding Renfroe plausibly alleged a RESPA violation and adequate actual and pattern-or-practice damages at the motion-to-dismiss stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Renfroe plausibly allege a RESPA violation for inadequate response to a notice of error? | Nationstar’s letter was boilerplate and omitted the required written explanation of reasons and access to relied-on documents; no reasonable investigation was conducted. | Nationstar argued its response satisfied RESPA because it investigated and concluded there was no error, pointing to its response letter and referenced documents. | Held: Renfroe plausibly alleged a RESPA violation; the court must accept plaintiff’s allegations and cannot credit Nationstar’s unexplained assertions or undisclosed attachments at 12(b)(6). |
| Whether attachments or a servicer’s contrary assertions in its response letter can defeat a complaint at the 12(b)(6) stage | Renfroe argued the letter’s generic statements and missing attachments cannot be used to contradict her allegations. | Nationstar asked the court to treat its letter and descriptions of documents as dispositive. | Held: Court rejected elevating defendant’s assertions; Griffin principle does not apply where cited documents aren’t in the record or only generically described. |
| Did Renfroe adequately plead "actual damages" under RESPA? | Alleged failure to refund prior overpayments caused cognizable actual damages causally linked to Nationstar’s failure to comply after the notice of error. | Nationstar argued alleged damages occurred before the notice and thus are not recoverable under RESPA. | Held: Actual damages sufficiently pleaded; RESPA duties triggered by notice can require correction/refund of past errors, so timing argument fails at dismissal stage. |
| Were pattern-or-practice (statutory) damages sufficiently pleaded? | Alleged that Nationstar used the same boilerplate, inadequate responses on at least five occasions and to borrowers in multiple locations, supporting a pattern or practice. | Nationstar contended plaintiff failed to plead specifics (identities, dates) and one additional letter can’t establish a pattern. | Held: Allegations of multiple similar responses were plausible and sufficient at pleading stage to support pattern-or-practice damages; specifics not required on a motion to dismiss. |
Key Cases Cited
- Timson v. Sampson, 518 F.3d 870 (11th Cir. 2008) (Rule 12(b)(6) review; accept plaintiff’s allegations and construe in plaintiff’s favor)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleadings)
- Griffin Indus., Inc. v. Irvin, 496 F.3d 1189 (11th Cir. 2007) (exhibits attached to the complaint can govern when they plainly contradict allegations)
- Toone v. Wells Fargo Bank, N.A., 716 F.3d 516 (10th Cir. 2013) (damages are an essential element of a RESPA claim)
- Int’l Bhd. of Teamsters v. United States, 431 U.S. 324 (U.S. 1977) (definition of "pattern or practice" as regular operating procedure)
- Turner v. Beneficial Corp., 242 F.3d 1023 (11th Cir. 2001) (interpreting causation language in consumer-protection damages provisions)
- Ellis v. Gen. Motors Acceptance Corp., 160 F.3d 703 (11th Cir. 1998) (remedial statutes construed liberally)