32 F. Supp. 3d 869
W.D. Mich.2014Background
- Plaintiff purchased a home in 2002 and financed it by mortgage; CitiMortgage, Inc. (CMI) later became the loan servicer by assignment.
- From late 2008 through 2011 plaintiff alleges servicing irregularities: CMI told him he could skip a December payment, he received statements reflecting double/incorrect charges, late fees were assessed, and CMI/Trott & Trott (servicer’s counsel) sent foreclosure/reinstatement notices.
- On October 8, 2010 plaintiff mailed a written inquiry (the "Letter") to Trott & Trott seeking clarification of the servicing irregularities; CMI later acknowledged the inquiry but responded that fees were valid and provided contact information that proved nonfunctional.
- Plaintiff filed suit alleging violations of RESPA § 2605(e) (failure to respond to a Qualified Written Request), civil RICO conspiracy, common‑law fraud, and seeking a declaratory judgment about 24 C.F.R. § 3500.21.
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6); the court considered exhibits attached to the complaint (including CMI account statements stating a separate QWR address) and treated certain plaintiff allegations as contradicted by those exhibits.
- Court dismissed all counts with prejudice: Letter was not a RESPA QWR because CMI had a designated separate address for QWRs; plaintiff waived opposition and failed to plead RICO and fraud with the required particularity; declaratory judgment claim failed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff's October 8, 2010 letter was a RESPA "Qualified Written Request" (QWR) that triggered servicer duties | Letter was a written inquiry seeking clarification of account errors and thus was a QWR | CMI had established a separate and exclusive address for QWRs on account statements; letter sent to Trott & Trott was general correspondence and not a QWR | Held: not a QWR; CMI’s designated address controlled and plaintiff’s letter to Trott & Trott did not trigger RESPA duties |
| Whether 24 C.F.R. § 3500.21 requires borrowers to send QWRs to the servicer’s designated address | Plaintiff sought declaratory judgment that the regulation does not impose such a requirement | Defendants contended the regulation permits and, where designated, requires sending QWRs to the servicer’s specified address | Held: the regulation requires sending QWRs to the designated address to trigger servicer duties under RESPA |
| Sufficiency of RICO claim (pattern, enterprise, predicate acts, particularity) | Alleged a civil RICO conspiracy based on defendants’ servicing and communications | Defendants argued plaintiff pled only conclusions, failed to allege an association‑in‑fact enterprise, pattern of racketeering, or predicate acts with Rule 9(b) particularity | Held: RICO claim dismissed for failure to plead required elements and for lack of opposition to dismissal arguments |
| Sufficiency of common‑law fraud claim (Rule 9(b) specificity and defendant identification) | Pleading re‑alleged prior paragraphs and claimed damages from defendants’ fraud | Defendants argued fraud allegations are conclusory, lack particularized facts, and fail to apportion acts to specific defendants | Held: fraud claim dismissed for failure to satisfy Rule 9(b) and for waiver of opposition |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (twombly pleading plausibility standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (Iqbal standards for plausibility and rejecting conclusory allegations)
- Regions Hosp. v. Shalala, 522 U.S. 448 (deference to reasonable agency regulation interpretations)
- Berneike v. CitiMortgage, Inc., 708 F.3d 1141 (10th Cir.) (holding QWR must be sent to designated address when servicer has one)
- Koubriti v. Convertino, 593 F.3d 459 (6th Cir.) (documents attached to pleadings may be considered on motion to dismiss)