Filed: Aug. 17, 2016
Latest Update: Aug. 17, 2016
Summary: MEMORANDUM OPINION ROBERT D. MARIANI , District Judge . Presently before the Court are two Reports and Recommendations ("R&R") by Magistrate Judge Carlson. In the First R&R, (Doc. 46), Magistrate Judge Carlson recommends granting Defendant Christiana Trust's ("CT") Motion for Summary Judgment. In the Second R&R, (Doc. 47), Magistrate Judge Carlson recommends granting Defendant Carrington Mortgage Services, LLC's ("Carrington") Motion for Summary Judgment. The Plaintiffs, Douglas and Cathy
Summary: MEMORANDUM OPINION ROBERT D. MARIANI , District Judge . Presently before the Court are two Reports and Recommendations ("R&R") by Magistrate Judge Carlson. In the First R&R, (Doc. 46), Magistrate Judge Carlson recommends granting Defendant Christiana Trust's ("CT") Motion for Summary Judgment. In the Second R&R, (Doc. 47), Magistrate Judge Carlson recommends granting Defendant Carrington Mortgage Services, LLC's ("Carrington") Motion for Summary Judgment. The Plaintiffs, Douglas and Cathy H..
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MEMORANDUM OPINION
ROBERT D. MARIANI, District Judge.
Presently before the Court are two Reports and Recommendations ("R&R") by Magistrate Judge Carlson. In the First R&R, (Doc. 46), Magistrate Judge Carlson recommends granting Defendant Christiana Trust's ("CT") Motion for Summary Judgment. In the Second R&R, (Doc. 47), Magistrate Judge Carlson recommends granting Defendant Carrington Mortgage Services, LLC's ("Carrington") Motion for Summary Judgment. The Plaintiffs, Douglas and Cathy Hawk, have filed Objections to both R&Rs. (Docs. 48, 50). Defendant Carrington has filed a Limited Objection "to the extent that the Magistrate Judge suggests that Plaintiffs be allowed to amend their Complaint-or seek to amend their Complaint-at atime where pleadings are closed, discovery is complete, and summary judgment motions filed and decided." (Doc. 49, at 1). Upon de novo review of Magistrate Judge Carlson's R&Rs, the Court will overrule Plaintiffs' Objections and adopt the R&Rs for the reasons that follow. In addition, the Court will sustain Defendant Carrington's Limited Objection and Plaintiffs will not be permitted to amend their complaint.
I. CHRISTIANA TRUST'S MOTION FOR SUMMARY JUDGMENT
Plaintiffs object to the Magistrate Judge's First R&R, asserting that Defendant CT should be vicariously liable on its claim under the Real Estate Settlement Procedures Act ("RESPA"). (Doc. 48). Plaintiffs raise no objection, however, to the Magistrate Judge's recommendation that the Court grant CT's Motion For Summary Judgment with respect to their pendent state law claims. (Id.).
In concluding that CT, the holder of the Hawk's mortgage, is entitled to summary judgment, the Magistrate Judge found, after citing the relevant statutory provisions, that:
[A] RESPA claim does not lie against Christiana Trust on these facts, as alleged by the plaintiffs. RESPA is a federal consumer protection statute applicable to mortgage lending. In part, RESPA requires lenders to refrain from collecting unearned closing fees and kickbacks; compels lenders to disclose to borrowers the fact that servicing on their loans may be transferred; and requires loan servicers to respond in atimely fashion to `Qualified Written Requests' from borrowers seeking information regarding the status of home loans. 12 U.S.C. § 2607.
(Doc. 46, at 7-8). The Magistrate Judge further found, in relevant part, that:
[Sly its terms Section 2605 only imposes a duty upon loan servicers to respond to qualified written requests. 12 U.S.C. § 2605. Likewise the regulations enacted pursuant to RESPA speak solely in terms of loan servicers. . . . Given this plain statutory text, it has been held that mortgage holders, who are not serviCing loans, are not liable under RESPA for the alleged conduct of loan servicers. See, e.g., Green v. Cent. Mortg. Co., No. 3:14 CV 04281 LS, 2015 WL 7734213, at *15 (N.D. Cal. Dec. 1, 2015); Bennett v. Nationstar Mortg., LLC, No. CV 15-00165-KD-C, 2015 WL 5294321, at *10 (S.D. Ala. Sept. 8, 2015); McAndrew v. Deutsche Bank Nat'l Trust Co., 977 F.Supp.2d 440, 445 (M.D. Pa. 2013), But see Rouleau v. US Bank, NA, No. 14-CV-568 JL, 2015 WL 1757104, at *7 (D.N.H. Apr. 17, 2015). With one exception, Rouleau v. US Bank, NA, supra, these courts have rejected efforts to expand RESPA liability under § 2605 beyond the limits expressly set by statute, which only governs loan servicers, and impose vicarious liability upon loan holders as well. . . . We believe that this emerging majority position reflects the better view on this question regarding the scope and reach of RESPA. This position pays fidelity to the language used by Congress, languqge which spoke specifically and repeatedly about obligations owed by loan servicers when responding to consumers' quali'fled written requests. Congress presumably meant what it said in enacting RESPA, and to write an entirely new class of defendants into this statute would be an unwarranted intrusion into legislative prerogatives. In fact, when Congress chose in RESPA to extend liability beyond loan servicers to others, it did so clearly and explicitly. For example, RESPA's anti-kickback provision is cast broadly and plainly states that "no person" shall engage in this forbidden conduct. See 12 U.S.C. § 2607. Thus, it is unmistakably clear that when Congress wished to craft prohibitions of general application in RESPA it did so in clear and precise terms. Congress' ability and willingness in RESPA to draft some provisions of the law globally buttresses the growing legal consensus that the legislature's restrictions of § 2605 to loan servicers was an intentional, considered act which should not be lightly cast aside by the Courts. Given this evident expression of legislative intent, until Congress elects to extend civil RESPA culpability under § 2605 to loan holders who play no role in loan servicing we should decline to extend this liability to a class of defendants who are not mentioned in this provision of the statute.
(Doc. 46, at 9-11).
In its Objection, Plaintiffs request that the Court adopt the rationale of the New Hampshire District Court in Rouleau and hold Defendant CT, the mortgage holder who plays no role in loan servicing, liable under RESPA. Upon review of the applicable statute and case law, the Court agrees with the Magistrate Judge's thoughtful and well-reasoned recommendation and rejects the Plaintiffs argument.1 This argument, based as it is on general principles of agency, cannot overcome Congress's expressed legislative intent to impose aduty on "any servicer of afederally funded mortgage loan" to respond to a "qualified written request from the borrower," 12 U.S.C. § 2605(e), and to create acause of action in § 2605(e) as to "whoever fails to comply with any provision of this section. . . ." There is nothing in the language of RESPA that may be read to extend statutory liability to the passive mortgage holder, however salutary such a provision might be had it been included in the Act. Furthermore, even if the Court were to assume that Defendant CT could be vicariously liable on an agency theory of liability, the Court's review of the record reveals that Plaintiffs offer nothing but conjecture and conclusory statements in support of its agency theory of liability.2 Moreover, notwithstanding our conclusion that RESPA limits liability to loan servicers and does not extend to mortgage holders, we find that even if we, were to accept Plaintiffs' argument that vicarious liability is permissible or available under § 2605(e) so as to allow the cause of action against the mortgage holder, in this case, for the reasons set forth infra Part II, we have determined that summary judgment should properly be entered in favor of Defendant Carrington with the result that no vicarious liability claim can be made against CT in any event. Accordingly, Plaintiffs' Objections to the First R&R will be overruled, and summary judgment will be entered in favor of Defendant Christiana Trust. Aseparate order follows.
II. CARRINGTON MORTGAGE SERVICES' MOTION FOR SUMMARY JUDGMENT
The Court next addresses Plaintiffs' Objections to the Second R&R, where the Magistrate Judge concluded that the Court should grant Defendant Carrington's Motion For Summary Judgment. The Hawks "object to Section Bof the Honorable Judge Carlson's discussion where he found that Carrington Mortgage Service was entitled to Summary Judgment on the Plaintiffs' RESPA claim for lack of alleged damages."3 (Doc. 50, at 1); (Doc. 50-1, at 2-3). In support of its argument, the Plaintiffs direct the Court to the allegations of the complaint. (Doc. 50, at 1-2). But it is well-settled that on amotion for summary judgment the Plaintiffs cannot simply rely on the allegations in the complaint. See Jackson v. Taylor, 467 F. App'x 98,99-100 (3d Cir. 2012) (noting that the Plaintiff "did not go beyond the pleadings and point to evidence supporting his argument, as he was required to do to survive asummary-judgment motion") (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).4
In addition, in support of their argument that they incurred actual damages caused by the RESPA violation, the Hawks assert (without any citations to the record) that:
At all times relevant the Hawks had the funds available to bring their mortgage current. However, they were never able to obtain the documents needed from Carrington. The Hawks alleged in the complaint that they were trying to avoid foreclosure on their home, that they were disputing portions of the forced placed flood insurance on the property, and that they were questioning numerous other charges billed to their account. On January 30, 2014, they sent a RESAP [sic] letter to Carrington. They never received a response. They initiated their suit on May 30, 2014, in part to avoid foreclosure on their home. By September 19, 2014, Christiana began state court foreclosure proceedings against them seeking payment of the full amount of the disputed funds. While the Hawks have not paid the invoices, they have been litigating this separate suit and the unexplained fees and `corporate advances' that Christiana is seeking in the foreclosure action has increased phenomenally. All this flows from Carrington failing to provide the Hawks with astatutorily required response.
(Doc. 50, at 2-3).
A review of the record leads the Court to conclude that the Hawks failed to adequately allege RESPA damages, let alone present sufficient evidence of damages to survive a motion for summary judgment. See Jobe v. Bank of Am., N.A., Civil Action No. 3:10·1710, 2013 WL 1402970, at *7 (M.D. Pa. Apr. 5, 2013) (concluding that Plaintiffs "broad allegations of damages . . . are not adequate to establish the type of specific actual damages" required under RESPA). The Court agrees with the Magistrate Judge, who correctly rejected the Hawks' arguments and found that Carrington's Motion For Summary Judgment should be granted because the Hawks "have failed to show a direct causal connection between any alleged failure to respond to this written request and financial injuries suffered by the plaintiffs."5 (Doc. 47, at 8). Accordingly, the Court will overrule Plaintiffs' Objections to the Second R&R.
Turning to Defendant Carrington's Limited Objection to the Magistrate Judge's sua sponte suggestion that the Court may wish to grant the Hawks an opportunity to amend their complaint, (Doc. 49), the Court agrees with the Defendant. At this stage of the litigation, where discovery has been closed and motions for summary judgment filed, Plaintiffs should not be permitted an opportunity to amend their complaint. See Cureton v. Nat'l Collegiate Athletic Ass'n, 252 F.3d 267, 273 (3d Cir. 2001) ("When a party delays in making a motion to amend until after summary judgment has been granted to the adverse party . . . the interests in judicial economy and finality of litigation may become particularly compelling."); see also Bonilla v. City of York, Pennsylvania, No. 1:14-CV-2238, 2016 WL 3165619, at *6 (M.D. Pa. June 7, 2016) ("When a plaintiff `files a motion to amend after the filing of defendant's motion for summary judgment, the timing raises an inference that the plaintiff is attempting to bolster his legal position — and thereafter avoid summary judgment — by amending the complaint. This is an unacceptable reason to amend.") (internal citation and quotation marks omitted). And, notably, Plaintiffs have not moved for leave to amend their complaint. Accordingly, the Court will sustain Defendant Carrington's Limited Objection and Plaintiffs will not be permitted to amend their complaint. A separate order follows.
