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Boedicker v. Rushmore Loan Management Services, LLC

United States District Court, D. Kansas

April 20, 2017

DOUGLAS AND SERENITY BOEDICKER, Plaintiffs,
v.
RUSHMORE LOAN MANAGEMENT SERVICES, LLC, Defendant.

          MEMORANDUM AND ORDER

          J. THOMAS MARTEN, JUDGE

         Plaintiffs claim that their mortgage loan servicer, Rushmore Loan Management Services, LLC (“Rushmore”), violated the Fair Debt Collection Practices Act (FDCPA), the Real Estate Settlement Procedures Act (RESPA), and the Truth in Lending Act (TILA) with respect to plaintiffs' loan, and also committed acts constituting fraudulent misrepresentation and breach of contract. The matter is now before the court on Rushmore's motion to dismiss the complaint.

         I. Summary of the Complaint.

         The following allegations are taken from plaintiffs' complaint (Dkt. 1). Plaintiffs were behind on their home mortgage loan and contacted Rushmore for help in getting the loan current. On January 11, 2016, Rushmore sent plaintiffs a Reinstatement Payment Plan to bring their loan current and avoid foreclosure. The Plan stated in part that “the amount required to reinstate your loan in full as of 7392.91 [sic] is $6686.55.” Id., ¶17. Plaintiffs were confused by the Plan and spoke to a Rushmore representative, but the amount they were told was in arrears was not consistent with the statements that Rushmore sent. Serenity Boedicker obtained her credit report from Equifax on February 2, 2016. In it, Rushmore reported that $8, 449 was past due on the account as of January 7, 2016. Plaintiffs continued to try to clarify the information from Rushmore about the amount of the debt but “could never get a consistent answer.”

         Prior to September 1, 2016, plaintiffs sent an application for loss mitigation (“LM #1”) to Rushmore in which they listed their monthly gross income as $6, 766.00. Plaintiffs received correspondence from Rushmore indicating that LM #1 was denied a review under the Home Affordable Modification Program (HAMP) because their debt-to-income ratio was outside of the acceptable (25-42%) range. Rushmore stated in the letter that plaintiffs' gross monthly income was $8, 378.50, although plaintiffs' application indicated it was $6, 766.00.

         On September 6, 2016, plaintiffs received a letter from Rushmore offering a “Trial Modification Agreement.” This letter stated that the amount in arrears through September 30, 2016, was $14, 450.09. It offered a repayment proposal calling for an initial payment of $2, 950.00, payments of $1, 160.00 in the months of October-December 2016, and monthly payments thereafter of $1, 160.00 until confirmation of a permanent modification. The proposal was silent as to the terms of a permanent modification. Plaintiffs had 14 days from the date of the letter to accept.

         Plaintiffs contacted counsel, who sent a Notice of Error/Request for Information (“NOE #1”) to Rushmore requesting an explanation why the loan was ineligible for HAMP. Counsel requested the “waterfall analysis” used in the determination. Rushmore never provided plaintiffs with the requested waterfall analysis.

         Plaintiffs' counsel sent a second Notice of Error/Request for Information dated September 14, 2016, requesting information about whether the trial loan modification agreement was a forbearance agreement or a modification agreement. Rushmore allegedly never acknowledged whether it was a forbearance agreement or a loan modification, and plaintiffs did not tender payment to Rushmore “because they did not have sufficient information to make an informed decision to determine if the trial loan modification was in their best interest.” Dkt. 1, ¶40.

         On October 1, 2016, plaintiffs received a letter from Rushmore indicating that their trial loan modification was denied due to a failure to return documents in a timely manner.

         On November 3, 2016, plaintiffs received an acknowledgement of receipt from Rushmore of the two Notice of Error letters sent by plaintiffs, but Rushmore did not address the requested waterfall analysis or whether the trial modification was in fact a loan modification or a forbearance agreement.

         On November 4, 2016, plaintiffs received a Notice of Acceleration of their mortgage from a law firm representing Rushmore.

         Plaintiffs' complaint contains eight counts. The first three counts allege violations of Regulation X of RESPA (12 CFR Part 1024). Counts four and five allege, respectively, fraudulent misrepresentation and breach of contract. The last three counts allege violations of the FDCPA. Rushmore moves to dismiss all of the counts for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6).

         II. Standards Governing Motion to Dismiss - Rule 12(b)(6).

         Rule 12(b)(6) allows dismissal of a complaint where the facts alleged fail to state a claim to relief “that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting 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.” Id. at 678. Complaints containing no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action” may not survive a motion to dismiss. Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008). All well-pleaded factual allegations in the complaint are accepted as true and viewed in the light most favorable to the plaintiff for purposes of determining whether the complaint states a plausible ...


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