Rhonda J. Clark v. HSBC Bank USA, National Association
664 F. App'x 810
| 11th Cir. | 2016Background
- Rhonda Clark (pro se) sued HSBC Bank USA, N.A. and Nationstar Mortgage, LLC alleging wrongful foreclosure and violations of RESPA Regulation X related to a loan modification application.
- Clark submitted loan modification paperwork to Nationstar on March 25, 2015; foreclosure sale was scheduled April 7, 2015 (13 days later).
- Clark asserted she had earlier been under consideration for modification with Bank of America and contended HSBC (the note owner) knew or should have known about that status.
- District court dismissed Clark’s Regulation X claim and denied leave to amend; Clark appealed the dismissal and denial of leave to amend.
- The Eleventh Circuit reviewed de novo the dismissal and futility of amendment and treated pro se pleadings liberally but noted abandonment of issues not argued on appeal.
- Court concluded Nationstar was the servicer; Clark’s March 25, 2015 submission was outside Regulation X timing rules, and HSBC, as owner, was not a servicer subject to Regulation X.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Regulation X prevents foreclosure when servicer has not communicated decision on a modification request before sale | Clark: servicer had not communicated status; foreclosure should be barred because she was under consideration | Defendants: Regulation X protections apply only if application timing/completeness triggers duties; Clark’s application was untimely | Held: Clark’s March 25, 2015 application was too late (13 days before sale); Regulation X duties not triggered |
| Whether HSBC is a "servicer" subject to Regulation X | Clark: HSBC knew or should have known about prior modification efforts and thus is subject | HSBC: HSBC merely owned the loan/security deed; Nationstar served as mortgage servicer performing servicing functions | Held: HSBC is not a servicer under Regulation X; Nationstar was the servicer, so HSBC not liable under Regulation X |
| Whether amendment to add prior 2011 Bank of America application would cure defects | Clark: amendment would show prior mitigation efforts and servicer notice issues | Defendants: prior 2011 application predated Regulation X and Nationstar was servicer only after Reg X effective; amendment would be futile | Held: Amendment would be futile because the 2011 submission predated Regulation X and Clark never alleged a timely application to Nationstar |
| Whether district court erred in denying leave to amend | Clark: district court abused discretion by denying leave to amend | Defendants: denial proper because proposed amendment would be futile as a matter of law | Held: Denial affirmed as amendment would be futile |
Key Cases Cited
- Hunnings v. Texaco, 29 F.3d 1480 (11th Cir. 1994) (standard of review for dismissals under Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard for plausibility and rejection of conclusory allegations)
- Fla. Evergreen Foliage v. E.I. DuPont De Nemours & Co., 470 F.3d 1036 (11th Cir. 2006) (denial of leave to amend reviewed for futility de novo)
- Bingham v. Thomas, 654 F.3d 1171 (11th Cir. 2011) (pro se pleadings construed liberally)
- Irwin v. Hawk, 40 F.3d 347 (11th Cir. 1994) (issues not raised on appeal are abandoned)