Medina v. Parkside Lending LLC, 1:19-cv-00109

Background

Plaintiffs Amber Medina and Pamela and Jerome Schmidt were record owners and borrowers on a $215,650 mortgage secured by a deed of trust on 108 Plantain Drive, Hutto, Texas; Parkside was the servicer and Cenlar the sub‑servicer.
Plaintiffs entered a loan modification in July 2017, fell behind in March 2018, and thereafter experienced interrupted mail and online access; Medina was locked out of her online account May–Oct 2018.
Medina contacted Parkside in August–September 2018 and was told a loss mitigation packet would be mailed; Plaintiffs repeatedly requested the packet and provided alternative contact info; Parkside faxed a packet in mid‑September and Plaintiffs emailed a completed packet on September 27, 2018.
Plaintiffs received notice that the property was set for foreclosure sale shortly before October 2, 2018; the home sold at foreclosure auction on October 2, 2018; underwriting later marked the file “complete, pending review.”
Plaintiffs (pro se) sued alleging breach of contract, RESPA violations, DTPA violations, and a tort of "outrage," seeking substantial actual and exemplary damages; Parkside and Cenlar moved to dismiss under Rule 12(b)(6).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
DTPA: Is the loan/servicing a “good or service” such that Plaintiffs are consumers?	Plaintiffs contend DTPA applies (asked court to follow other jurisdictions).	Loan/servicing is not a good or service; borrowers not consumers under Texas law.	Dismissed with prejudice — mortgage servicing/loan not a DTPA consumer claim.
RESPA: Private right of action under 12 C.F.R. §§1024.35, .38, .39, .40?	Plaintiffs did not oppose this argument in response.	These regulatory provisions do not give a private cause of action / Plaintiffs forfeited response.	Dismissed with prejudice for abandonment.
RESPA QWR/notice provisions (12 C.F.R. §§1024.35, .36): Were Plaintiffs’ communications non‑qualifying because sent to wrong address?	Plaintiffs allege the servicers did not post the designated QWR address on their websites and could not find it; thus communications should be treated as qualifying.	Plaintiffs sent requests to the wrong address; servicer duty is triggered only if QWR sent to designated address.	Denied as to dismissal — complaint alleges designated address not posted, so factual dispute precludes dismissal.
RESPA dual tracking (12 C.F.R. §1024.41): Did servicer pursue foreclosure while considering a loss mitigation application (application complete >37 days before sale)?	Plaintiffs (in pro se response and complaint) say Defendants faxed a packet earlier and documents show consideration before sale, supporting dual‑tracking.	The completed application was submitted only 5 days before sale; thus §1024.41 does not apply.	Denied as to dismissal — court construed pro se filings liberally and found factual allegations sufficient to plead dual‑tracking plausibly.
Breach of contract: Can Plaintiffs recover despite admitting default?	Plaintiffs assert default was due to serious health issues and seek relief.	Plaintiffs admitted nonpayment; under Texas law a borrower in default cannot maintain breach claim.	Dismissed with prejudice — default bars breach claim.
Intentional infliction of emotional distress / "outrage": Did defendants act in an extreme and outrageous manner?	Plaintiffs allege misinformation, misdirection, wrong notices, foreclosure and denial of second modification caused severe distress.	Enforcement of contractual foreclosure rights, without more, is not extreme and outrageous.	Dismissed with prejudice — conduct not extreme/outrageous as a matter of law.

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading must contain factual matter making liability plausible)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (established plausibility standard for complaints)
In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007) (accept well‑pleaded facts as true on motion to dismiss)
Miller v. BAC Home Loans Servicing, L.P., 726 F.3d 717 (5th Cir. 2013) (mortgage loan/servicing not a "good or service" under DTPA)
Freeman v. Quicken Loans, Inc., 566 U.S. 624 (U.S. 2012) (RESPA is a consumer‑protection statute)
Berneike v. CitiMortgage, Inc., 708 F.3d 1141 (10th Cir. 2013) (if servicer designates a QWR address, borrower must send request there for it to qualify)
Roth v. CitiMortgage Inc., 756 F.3d 178 (2d Cir. 2014) (same principle regarding designated QWR address)
Geoffrion v. Nationstar Mortgage LLC, 182 F. Supp. 3d 648 (E.D. Tex. 2016) (servicer duty to respond triggered only if QWR delivered to servicer's designated address)