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Miller v. Bank of New York Mellon

United States District Court, M.D. Florida, Fort Myers Division

January 10, 2017




         This matter comes before the Court on defendant's Motion to Dismiss Plaintiffs' First Amended Complaint (Doc. #14) filed on October 25, 2016. Plaintiffs Victor L. Miller and Vilma M. Miller filed a response in opposition (Doc. #22) on November 30, 2016. For the reasons set forth below, the motion is granted with leave to amend.


         On August 11, 2016, plaintiffs, proceeding pro se, filed an Amended Complaint (Doc. #5) against the Bank of New York Mellon (BONY) alleging violations of the Dodd Frank Act and the Real Estate Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. § 2601 et seq., and its implementing regulation, Regulation X.[1] (Doc. #5.) Plaintiffs allege that BONY failed to offer them loss mitigation options prior to commencing foreclosure on their home as required by Regulation X at 12 C.F.R. § 1024.41.

         According to the Amended Complaint, in June 2008 plaintiffs obtained a mortgage and signed a promissory note from BONY to purchase a home in Lehigh Acres, Florida. (Id. at 2.) Plaintiffs state that they had difficulties paying their mortgage in 2010 and foreclosure proceedings were instituted, which were voluntarily dismissed on December 29, 2010.[2] (Id.; Doc. #14.) Plaintiffs seek $2, 000, 000 in damages for the loss of their home and compensation for their pain and suffering. (Doc. #5 at 3.)

         Defendant moves to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), claiming various basis for dismissal. Because the loss mitigation provisions that plaintiffs rely on became effective after the underlying foreclosure proceedings were concluded, the Court will first examine whether 12 C.F.R. § 1024.41 should apply retroactively to this case.


         Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This obligation “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). To survive dismissal, the factual allegations must be “plausible” and “must be enough to raise a right to relief above the speculative level.” Id. at 555, 127 S.Ct. 1955. See also Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir. 2010). This requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).

         In deciding a Rule 12(b)(6) motion to dismiss, the Court must accept all factual allegations in a complaint as true and take them in the light most favorable to plaintiff, Erickson v. Pardus, 551 U.S. 89 (2007), but “[l]egal conclusions without adequate factual support are entitled to no assumption of truth”, Mamani v. Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011) (citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “Factual allegations that are merely consistent with a defendant's liability fall short of being facially plausible.” Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012) (internal quotation marks and citations omitted). Thus, the Court engages in a two-step approach: “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679.

         A pleading drafted by a party proceeding pro se, like the Amended Complaint at issue here, is held to a less stringent standard than one drafted by an attorney, and the Court will construe the allegations contained therein liberally. Jones v. Fla. Parole Comm'n, 787 F.3d 1105, 1107 (11th Cir. 2015). Nevertheless, “a pro se pleading must suggest (even if inartfully) that there is at least some factual support for a claim; it is not enough just to invoke a legal theory devoid of any factual basis.” Id. In other words, pro se status will not salvage a complaint devoid of facts supporting the plaintiffs' claims.


         Enacted as a consumer protection statute, “RESPA prescribes certain actions to be followed by entities or persons responsible for servicing federally related mortgage loans, including responding to borrower inquires.” McLean v. GMAC Mortg. Corp., 398 F. App'x 467, 471 (11th Cir. 2010) (per curiam) (citing 12 U.S.C. § 2605). The Dodd Frank Act granted rule-making authority under RESPA to the Consumer Financial Protection Bureau (the “CFPB”). See 12 U.S.C. § 2617(a). One such implementing regulation, Regulation X, in relevant part places various obligations on mortgage servicers when a borrower submits a loss mitigation application. Regulation X prohibits, among other things, a loan servicer from foreclosing on a property in certain circumstances if the borrower has submitted a completed loan modification, or loss mitigation, application. See generally 12 C.F.R. § 1024.41.[3]

         On January 17, 2013, the CFPB issued the final rule to amend Regulation X, effective as of January 10, 2014 (the “Effective Date”). See Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X), 78 Fed. Reg. 10696-01, 10696 (Feb. 14, 2013) (codified at 12 C.F.R. pt. 1024). The regulation did not expressly direct retroactive application, but generally “[r]etroactivity is not favored in the law . . . [and] congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result.” Landgraf v. USI Film Prods., 511 U.S. 244, 265 (1994).

         The Supreme Court has adopted a two-part test for determining whether a statute or regulation should retroactively apply to ...

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