992 F. Supp. 2d 24
D. Mass.2014Background
- In 2007 the O’Connors obtained a mortgage from Nantucket Bank (a division of Sovereign Bank). After default, the bank conducted a nonjudicial foreclosure sale on April 9, 2012.
- On April 13, 2012 Attorney Hayes (for Sovereign) sent a notice to vacate stating the O’Connors would be liable for use-and-occupancy at $200/day beginning May 1, 2012; the notice included an FDCPA “Notice of Important Rights.”
- Prior to the foreclosure, the O’Connors’ counsel (Ranney) sent a lengthy October 7, 2011 letter identified as a RESPA Qualified Written Request (QWR) seeking ~30 documents and ~140 specific questions about loan servicing; the bank acknowledged and responded on December 27, 2011 with documents including the note, loan history, modification, and appraisal.
- Sovereign (through Hayes) filed a summary-process eviction action seeking $9,600 in use-and-occupancy; at trial the Nantucket District Court ruled for the O’Connors on possession because Sovereign failed to introduce foreclosure-prerequisite documents.
- Plaintiffs sued in Massachusetts Superior Court asserting FDCPA, Mass. G.L. c.93 §49 (state debt-collection statute), Mass. G.L. c.93A, and RESPA claims; the case was removed to federal court and defendants moved to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the April 13 notice to vacate stating future use-and-occupancy liability violates the FDCPA | April/Hayes’ demand for $200/day was a debt-collection communication intended to coerce vacancy and thus falls under FDCPA | The April 13 letter only demanded anticipated/future payments (not an existing debt) and so is not a "debt" under FDCPA | Court: April 13 letter not covered by FDCPA (no existing obligation when letter sent); FDCPA claim for that letter dismissed as to Hayes and Hayes & Hayes; Sovereign dismissed entirely on Count One |
| Whether the post-foreclosure eviction action (summons/complaint) stating use-and-occupancy amounts states an FDCPA claim | The eviction filing misstated amounts and was used to intimidate and collect a consumer debt, so it is actionable under FDCPA | Sovereign argues it sought possession and was not a debt collector; Hayes argues litigation activity is protected or not within FDCPA scope | Court: Hayes and Hayes & Hayes are debt collectors (their letter self-identified as such) and filing the eviction seeking money tied to the property can constitute collection activity; FDCPA claim survived against Hayes/Hayes & Hayes for the eviction filing; sovereign dismissed |
| Whether the October 7, 2011 letter qualified as a RESPA QWR and whether the bank’s December 27 response complied | O’Connors say the letter was a QWR and the bank’s response was inadequate because it failed to answer ~140 questions and did not include an explanatory key to the loan history | Bank argues the request was overly broad/burdensome and some requests were unrelated to servicing; alternatively, the bank says its timely acknowledgement and December 27 substantive response satisfied RESPA | Court: Even assuming parts of the letter were servicer-related, the bank timely acknowledged and provided the loan history, note, modification and contact info and offered to respond to narrowed requests; RESPA claim dismissed with prejudice |
| Whether plaintiffs state Chapter 93A claims against bank and counsel (including demand-letter requirement and trade-or-commerce element) | Plaintiffs assert defendants engaged in unfair/deceptive debt-collection practices triggering c.93A liability | Defendants emphasize procedural requirements (30-day demand) and that attorneys are not acting in trade or commerce when litigating for a client | Court: Claim against bank dismissed for failure to allege a pre-suit 30-day demand to the bank; claims against Hayes/Hayes & Hayes dismissed because plaintiffs failed to plead that counsel acted in trade or commerce vis-à-vis plaintiffs |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (court may disregard legal conclusions and requires factual plausibility for complaints)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
- Heintz v. Jenkins, 514 U.S. 291 (FDCPA can apply to attorneys' litigating activities)
- Anuda v. Sears, Roebuck & Co., 310 F.3d 13 (FDCPA requires an existing or alleged obligation to pay money)
- Medrano v. Flagstar Bank, FSB, 704 F.3d 661 (QWR scope interpreted broadly but limited to servicing-related inquiries)