Pollack v. Seterus Inc.

          ORDER DENYING MOTION TO DISMISS

          ROBERT N. SCOLA, JR. UNITED STATES DISTRICT JUDGE.

         Homeowners Randi and Alan Pollack complain that their home-loan servicer, Seterus, Inc., failed to properly respond to their request for information as required by the implementing regulations of the Real Estate Settlement Procedures Act. Seterus counters that the Pollacks’ complaint should be dismissed because their request for information did not meet certain statutory requirements and therefore no response was required. Seterus also argues the Pollacks have not adequately alleged they suffered any actual damages. Seterus has not persuaded the Court that the Pollacks have failed to properly allege a regulatory violation or resulting actual damages arising out of that violation. On the other hand, the Court also concludes that the Pollacks have conceded that neither their claim for statutory damages nor injunctive relief is viable. The Court therefore grants in part and denies in part Seterus’s motion (ECF No. 17).

         1. Legal Standard

         When considering a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court must accept all of the complaint’s allegations as true, construing them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir. 2008). A pleading need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “[T]he pleading standard Rule 8 announces does not require detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation omitted). A plaintiff must articulate “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

         “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. Thus, a pleading that offers mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action” will not survive dismissal. See Twombly, 550 U.S. at 555. “Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Iqbal, 556 U.S. at 679.

         Yet, where the allegations “possess enough heft” to suggest a plausible entitlement to relief, the case may proceed. See Twombly, 550 U.S. at 557. “[T]he standard ‘simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence’ of the required element.” Rivell v. Private Health Care Sys., Inc., 520 F.3d 1308, 1309 (11th Cir. 2008). “And, of course, a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and ‘that a recovery is very remote and unlikely.’” Twombly, 550 U.S. at 556.

         2. Facts as Alleged

         The Pollacks, on November 28, 2016, sent a letter to Seterus, asking for information related to their home loan: telephone call notes; text messages; call logs; a list of all outbound calls conducted and created since Seterus began servicing their loan; and copies of all documents Seterus ever sent to the Pollacks. When, after nearly three months had passed, the Pollacks had not received a timely acknowledgement or response to their request, they sent Seterus, on February 22, 2017, a notice of error. On March 2, 2017, Seterus finally sent an acknowledgment letter although that letter did not specify whether it was in response to the Pollack’s initial request for information related to their home loan or to their later-sent notice of error. Then, on April 13, 2017, Seterus sent a response to the Pollacks, explaining that it believed Seterus had no obligation to reply to their request under RESPA. Believing Seterus’s response to be mistaken, the Pollacks sent a second notice of error, on May 5, 2017.

         Because of Seterus’s improper response to their correspondence, the Pollacks claim they suffered damages in the form of:

(1) costs and legal fees incurred to prepare each subsequent request for information and subsequent notices of error; (2) costs incurred in connection with the photocopying and mailing of the requests for information and notices of error; (3) costs incurred in the form of time spent, transportation costs, and other expense incurred during the process of obtaining the Defendant’s compliance with Regulation X.

(Am. Compl. ¶ 26, ECF No. 13, 6.) The Pollacks also allege entitlement to statutory damages as well. (Id.)^[1]

         3. Discussion

         A. The Pollacks’ initial correspondence triggered Seterus’s response obligations.

         In its motion, Seterus focuses on the Pollacks’ failure to properly allege a RESPA statutory claim. In accordance with 12 U.S.C. § 2605(e)(1)(A), under RESPA, “a qualified written request from a borrower for information” about a home loan, triggering servicer-response obligations, must relate “to the servicing of such loan.” “Servicing,” in turn, is defined as “receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan . . . and making the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the loan.” 12 U.S.C. § 2605(i)(3). The Court agrees with ...