Tanasi v. CitiMortgage, Inc.
257 F. Supp. 3d 232
D. Conn.2017Background
- Richard and Athansula Tanasi defaulted on a 2007 mortgage; CitiMortgage serviced the loan and Hudson (now M & T) owned it. A Connecticut Superior Court entered judgment of strict foreclosure in March 2016; Tanasis appealed.
- The Tanasis allege a long-running pattern (2009–2016) of CitiMortgage soliciting loss‑mitigation applications, failing to properly acknowledge or process applications, sending duplicative document requests, and failing to answer Requests for Information (RFIs), Qualified Written Requests (QWRs), and Notices of Error (NOEs).
- Tanasis filed a federal First Amended Complaint asserting (1) RESPA and Regulation X violations, (2) negligence (including negligent infliction of emotional distress), and (3) CUTPA violations; they seek actual and statutory RESPA damages, emotional distress, and other economic losses.
- Defendants moved to dismiss for lack of jurisdiction under Rooker‑Feldman and on res judicata grounds and, alternatively, under Rule 12(b)(6) for failure to state claims.
- The court held Rooker‑Feldman did not bar the federal suit because the claims were largely “independent” of the foreclosure judgment, but applied Connecticut res judicata (transactional test) to bar many claims that were or could have been raised in the state foreclosure case.
- Surviving claims: certain Regulation X/RFI and NOE claims (post‑foreclosure and non‑loss‑mitigation RFIs), some RESPA pattern-or-practice allegations, negligence claims limited to solicitation and single‑point‑of‑contact failures, and CUTPA claims for ascertainable monetary loss; many loss‑mitigation and modification processing claims were dismissed as precluded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rooker‑Feldman bars the federal suit | Tanasis say claims (RESPA, CUTPA, negligence) seek damages for servicer misconduct, not review of the foreclosure judgment | CitiMortgage says federal court must not review/undo the state foreclosure judgment | Rooker‑Feldman inapplicable: claims are ‘‘independent’’ and do not invite reversal of the state judgment (court accepts plaintiff’s framing) |
| Whether res judicata bars claims arising from loss‑mitigation/modification processing | Tanasis contend many claims could not or were not required to be raised as counterclaims in state court | Defendants contend all claims arise from same transaction and were or could have been litigated in foreclosure | Court applies Connecticut transactional test: claims tied to making/validity/enforcement of note (improper processing of modification apps) barred; post‑filing RFIs/NOEs and non‑mortgage‑modification claims survive |
| Whether RESPA §2605(e) (QWR) was triggered by payoff/owner inquiries | Tanasis assert QWRs sought payoff and note‑holder info and thus triggered RESPA duties | CitiMortgage contends (1) requests did not concern "servicing" and (2) some letters were not received/are insufficient | Court: QWR duty under §2605(e) requires relation to "servicing"; payoff and owner‑identity requests do not concern "servicing" for §2605(e) purposes, so §2605(e) claims dismissed |
| Whether Regulation X §§1024.36 (RFIs) and 1024.35 (NOEs) were violated | Tanasis allege multiple RFIs/NOEs (post‑2014) went unacknowledged or were inadequately answered, including owner/assignee and other account info | CitiMortgage argues many requests sought irrelevant or privileged info (e.g., investor restrictions, loss‑mitigation program parameters) and properly invoked exceptions | Court: RFI duties under §1024.36 survive for requests about owner/assignee and account‑related info (no timely acknowledgments alleged); requests for loan‑modification program parameters and investor instructions are irrelevant under Regulation X and dismissed; NOE claims survive to the extent they assert failure to provide loss‑mitigation information (covered errors) |
| Damages, negligence, CUTPA, statute of limitations, and vicarious liability of M & T | Tanasis seek actual and statutory RESPA damages, emotional distress, postage/professional fees; negligence duty arises from RESPA/Regulation X/NMS; CUTPA damages include emotional distress and monetary losses; continuing course tolls statutes | Defendants argue plaintiffs lack causation for damages, emotional distress not recoverable under CUTPA, many claims time‑barred, and M & T cannot be vicariously liable for servicer acts | Court: Plaintiffs plausibly alleged actual RESPA damages (limited) and statutory pattern‑or‑practice claim; emotional‑distress damages under RESPA possible but limited and unavailable under CUTPA alone; ascertainable monetary CUTPA losses (postage, fees) are sufficient; continuing course doctrine defeats statute‑of‑limitations dismissal at this stage; M & T plausibly alleged vicarious liability given alleged agency/privity facts |
Key Cases Cited
- Rooker v. Fidelity Trust Co., 263 U.S. 413 (federal courts lack jurisdiction to review state court judgments)
- District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (federal courts cannot act as appellate tribunals over state court decisions)
- Hoblock v. Albany County Bd. of Elections, 422 F.3d 77 (2d Cir. 2005) (four‑part Rooker‑Feldman test and discussion of "injury caused by" state judgment)
- Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423 (2d Cir. 2014) (Rooker‑Feldman applied to claims effectively seeking to nullify a foreclosure judgment)
- Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (federal courts may hear independent claims even if they involve same subject matter as state litigation)
- Migra v. Warren City School Dist., 465 U.S. 75 (federal courts must give state‑court judgments the same preclusive effect they would receive in state court)
- Weiss v. Weiss, 297 Conn. 446 (Connecticut res judicata principles and permissive counterclaim treatment)
- CitiMortgage, Inc. v. Rey, 150 Conn. App. 595 (Conn. App. 2014) (transactional test in foreclosure context: counterclaims must sufficiently relate to making, validity, or enforcement of note/mortgage)