Jackson et al v. Bank of America, N.A.

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

W.D.N.Y.December 6, 2016

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK BUFFALO DIVISION BOBBI JACKSON and MATTHEW JACKSON, Plaintiffs, v. BANK OF AMERICA, N.A., Defendant. Case No. 1:16-cv-00787 DEFENDANT BANK OF AMERICA, N.A.’S NOTICE OF MOTION TO DISMISS THE COMPLAINT Case 1:16-cv-00787-FPG Document 6 Filed 12/06/16 Page 1 of 3 -2- PLEASE TAKE NOTICE that for the reasons set forth in its accompanying Memorandum of Law in Support of its Motion to Dismiss the Complaint, Defendant Bank of America, N.A. respectfully moves this Court for an order pursuant to Federal Rule of Civil Procedure 12(b)(6) dismissing the Complaint in its entirety and granting such other and further relief as the Court deems just and proper. As grounds for its request, Bank of America states that Plaintiffs fail to state a claim upon which relief can be granted, as their Complaint pleads no violation of 12 C.F.R. § 1024.41 nor any misleading or deceptive acts directed at consumers in violation of Section 349 of the New York General Business Law. In addition to the concurrently filed Memorandum of Law, Bank of America also submits a Declaration of Lorena P. Diaz in support of its Motion. Bank of America anticipates it will file and serve a reply in support of its motion. Respectfully submitted, /s/ Keith Levenberg Keith Levenberg (admitted in W.D.N.Y.) Goodwin Procter LLP 901 New York Ave., N.W. Washington, D.C. 20001 Tel.: (202) 346-4248 klevenberg@goodwinlaw.com Counsel for Defendant Bank of America, N.A. James W. McGarry (full admission forthcoming) Courtney L. Hayden (full admission forthcoming) Goodwin Procter LLP 100 Northern Ave. Boston, Mass. 02210 Tel.: (617) 570-1000 jmcgarry@goodwinlaw.com chayden@goodwinlaw.com Date: December 6, 2016 Case 1:16-cv-00787-FPG Document 6 Filed 12/06/16 Page 2 of 3 -3- CERTIFICATE OF SERVICE I hereby certify that the foregoing filed through the CM/ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF), and that paper copies will be sent to those indicated as non-registered participants on December 6, 2016. /s/ Keith Levenberg Case 1:16-cv-00787-FPG Document 6 Filed 12/06/16 Page 3 of 3 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK BUFFALO DIVISION BOBBI JACKSON and MATTHEW JACKSON, Plaintiffs, v. BANK OF AMERICA, N.A., Defendant. Case No. 1:16-cv-00787 DEFENDANT BANK OF AMERICA, N.A.’S MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS THE COMPLAINT Keith Levenberg (admitted in W.D.N.Y.) GOODWIN PROCTER LLP 901 New York Ave., N.W. Washington, D.C. 20001 Tel.: (202) 346-4248 klevenberg@goodwinprocter.com Counsel for Defendant Bank of America, N.A. James W. McGarry (admission forthcoming) Courtney Hayden (admission forthcoming) GOODWIN PROCTER LLP 100 Northern Ave. Boston, Mass. 02210 Tel.: (617) 570-1000 jmcgarry@goodwinprocter.com chayden@goodwinprocter.com Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 1 of 32 -i- TABLE OF CONTENTS PRELIMINARY STATEMENT .................................................................................................... 1 BACKGROUND ............................................................................................................................ 2 A. The Incomplete January 2014 Application ......................................................................... 2 B. The Successful August 2014 Application and Permanent Loan Modification ................... 4 C. The October 2015 Application and Denial ......................................................................... 4 D. The February 2016 Application and the Forbearance Plan Plaintiffs Turned Down ......... 5 E. The Complaint and Plaintiffs’ Claims ................................................................................. 5 LEGAL STANDARD ..................................................................................................................... 6 ARGUMENT .................................................................................................................................. 6 I. Plaintiffs Fail to Plead Any Violations of Regulation X. ......................................................... 6 A. Plaintiffs Have No Claim Based on the January 2014 Application Because the Required Notices Were Timely, and the Allegedly Untimely Notices Were Not Required. .................... 7 1. Plaintiffs concede that Bank of America complied with Section 1024.41(b)’s five-day notice requirement. ......................................................................................... 7 2. Because Plaintiffs’ application was incomplete, they have no claim under provisions governing the time and content of responses to complete applications. ..... 9 B. Plaintiffs Have No Claim Based on Their August 2014 Application Because They Received the Assistance They Applied For. ............................................................................ 12 C. Plaintiffs Have No Claims Based on their 2015 or 2016 Applications Because the Regulation Only Applies to a Borrower’s First Application. ................................................. 16 D. Even if Plaintiffs Had Otherwise Stated a Valid Claim, They Plead No Cognizable Damages, Which Mandates Dismissal. ................................................................................... 18 II. Plaintiffs’ GBL Claim Also Fails. .......................................................................................... 21 A. Plaintiffs Fail to Plead Acts Directed to Consumers. .............................................................. 22 B. Plaintiffs Fail to Plead Any Misleading or Deceptive Acts. .................................................... 23 C. Plaintiffs Fail to Plead Injury. ................................................................................................. 25 Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 2 of 32 -ii- TABLE OF AUTHORITIES Page(s) Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...................................................................................................................6 Avila v. JPMorgan Chase Bank, N.A., 2015 WL 1648940 (S.D. Tex. Apr. 13, 2015) .........................................................................13 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .............................................................................................................6, 13 Durland v. Fieldstone Mortg. Co., 2011 WL 805924 (S.D. Cal. Mar. 1, 2011) .......................................................................19, 20 Garrow v. Wells Fargo Bank, N.A., 2016 WL 1637441 (W.D. Mich. Apr. 26, 2016) .......................................................................7 Green v. Wells Fargo Bank, N.A., 927 F. Supp. 2d 244 (D. Md. 2013), aff’d, 582 F. App’x 246 (4th Cir. 2014) ........................20 Hopson v. Chase Home Fin. LLC, 14 F. Supp. 3d 774, 788 (S.D. Miss. 2014), aff’d, 605 F. App’x 267 (5th Cir. 2015) ........................................................................................................................................20 Houle v. Green Tree Servicing, LLC, 2015 WL 1867526 (E.D. Mich. Apr. 23, 2015) .......................................................................17 Kaymark v. Bank of Am., N.A., 783 F.3d 168 (3d Cir. 2015).....................................................................................................19 Kilgore v. Ocwen Loan Servicing, LLC, 89 F. Supp. 3d 526, 539 (E.D.N.Y. 2015) ....................................................................... passim Kirkpatrick v. Wells Fargo Bank, N.A., 2016 U.S. Dist. LEXIS 110883 (C.D. Cal. June 28, 2016) .....................................................17 Lage v. Ocwen Loan Servicing LLC, 145 F. Supp. 3d 1172, 1187 (S.D. Fla. 2015) ............................................................................9 Laskowski v. Liberty Mut. Fire Ins. Co., 2011 WL 4965454 (N.D.N.Y. Oct. 19, 2011) .........................................................................22 Lee v. Mortg. Ctr., LLC, 2015 WL 12681314 (E.D. Mich. May 22, 2015) .....................................................................15 Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 3 of 32 -iii- Lettenmaier v. Fed. Home Loan Mortg. Corp., 2011 WL 3476648 (D. Or. Aug. 8, 2011) ................................................................................20 Maurizio v. Goldsmith, 230 F.3d 518 (2d Cir. 2000).....................................................................................................22 Mrla v. Fannie Mae, 2016 WL 3924112 (E.D. Mich. July 21, 2016) .......................................................................17 Olin Corp. v. E.I. Dupont de Nemours & Corp., 2006 WL 839415 (W.D.N.Y. Mar. 27, 2006)....................................................................11, 16 Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 647 N.E.2d 741 (N.Y. 1995) ....................................................................................................22 Roth v. Jennings, 489 F.3d 499 (2d Cir. 2007).....................................................................................................11 Sands v. Ticketmaster-N.Y., Inc., 616 N.Y.S.2d 362 (1st Dep’t 1994) .........................................................................................22 Silverman v. Household Fin. Realty Corp. of N.Y., 979 F. Supp. 2d 313 (E.D.N.Y. 2013) .....................................................................................22 Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) .............................................................................................................14 Terry v. Wells Fargo Bank, N.A., 2016 WL 3999314 (N.D. Cal. July 26, 2016) ........................................................................8, 9 Trionfo v. Bank of Am., N.A., 2015 WL 5165415 (D. Md. Sept. 2, 2015) (D. Md. Sept. 2, 2015) .............................17, 21, 24 U.S. v. Bank of Am. Corp., No. 12-3631, ECF No. 191, at 25-26 (D.D.C. Dec. 16, 2014) ................................................21 Wentzell v. JPMorgan Chase Bank, N.A., 627 F. App’x 314 (5th Cir. 2015) ............................................................................................17 Statutes and Regulations 12 U.S.C. § 2605 ................................................................................................................13, 19, 21 12 C.F.R. § 1024.41 ............................................................................................................... passim Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act, 78 Fed. Reg. 10695 (Feb. 14, 2013) ..........................................................................................7 Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 4 of 32 -iv- Other Authorities RESTATEMENT (SECOND) OF CONTRACTS § 24 (1981) ...................................................................24 U.S. Dep’t of Treasury, MAKING HOME AFFORDABLE® PROGRAM HANDBOOK FOR SERVICERS OF NON-GSE MORTGAGES v4.5 (2015) ...................................................................3 Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 5 of 32 -1- PRELIMINARY STATEMENT Delinquent on their mortgage loan for years and unable to pay the considerable arrearage necessary to bring the loan current, Plaintiffs sought assistance from Bank of America in the form of a loan modification. Compl. ¶¶ 78-82. Plaintiffs received a modification that allowed them to bring their loan current and put off paying the arrearage—but decided it wasn’t generous enough and almost immediately went back into default, wagering that they would qualify for a better one the next time around. Id. at ¶¶ 114-16. Unfortunately, they didn’t. Once again delinquent and accruing an arrearage, Plaintiffs rejected a repayment plan that would bring them current and eventually filed this lawsuit complaining that the help they were offered wasn’t good enough and came too late. Id. Plaintiffs attempt to tie these claims to purported violations of a regulation promulgated under the Real Estate Settlement Procedures Act (RESPA), 12 C.F.R. § 1024.41, and New York General Business Law Section 349. Plaintiffs have no claim under either law. The regulation is a procedural regulation that sets forth time frames for mailing various notices that are part of the modification application process. “Nothing in [the regulation] imposes a duty on a servicer to provide any borrower with any specific loss mitigation option,” or with any option at all. Id. § 1024.41(a). This disconnect between the protections offered by the statute and Plaintiffs’ underlying grievance (their failure to obtain a better plan than the one they got) is fatal to their claims. For one thing, the complaint labors hard to bury the fact that all but one of Bank of America’s notices were clearly and concededly timely (and the one exception, if untimely, was untimely by only a few days). But even if Plaintiffs had a valid claim that the notices were late or otherwise inadequate, they do not connect that claim to any cognizable injury, as they must to have a claim under the statute. The mere claim that an acknowledgment notice was late by a few days is not a claim that Plaintiffs Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 6 of 32 -2- would have been in any better position had they received it sooner—particularly where, as here, Plaintiffs in fact received the loan modification they were applying for, and there is no claim of any delay in connection with that. Actual injury proximately caused by a violation of Section 1024.41’s notice provisions is an essential element of Plaintiffs’ claim, and they plead none. Plaintiffs’ GBL claim fails for many of the same reasons, and for other reasons besides. Their theory that Bank of America made misleading statements by “offering” loan modifications “without intending to provide them” fails right out of the gate given the conceded fact that Bank of America did give Plaintiffs a loan modification (and several other workout options). But again, Plaintiffs make no effort to connect their underlying grievance to the conduct the statute actually proscribes—misleading statements directed to the public at large. Plaintiffs do not even identify any specific statements they allege to be misleading, but to the extent they gesture at them, each was made to them individually (not to the general public) and there is no articulation anywhere of where, or how, Plaintiffs were misled. Their complaint should be dismissed. BACKGROUND Plaintiffs defaulted on their loan in 2009 and began exploring loan-modification options in 2010 (Compl. ¶ 78-82), but they base this lawsuit on a series of four separate applications they allegedly made in the period from January 2014 to March 2016. A. The Incomplete January 2014 Application The first application at issue was allegedly submitted by Plaintiffs on January 28, 2014, or about two weeks after “new RESPA regulations became effective” which governed servicers’ handling of loan-modification applications. Id. at ¶¶ 84-85. Plaintiffs note that Bank of America acknowledged the receipt of the application within two days, and then, on February 1, 2014, “sent [Plaintiffs] another letter” notifying them that “some financial information it needed from Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 7 of 32 -3- [Plaintiffs] was either missing or incomplete.” Id. at ¶¶ 89-90. Plaintiffs conclusorily allege that the January 28 application was “complete” when they submitted it, but they admit that the package they submitted did not include some of the financial information listed in the February 1 letter, such as Plaintiffs’ tax returns. Id. at ¶¶ 85, 90. They claim that they responded to Bank of America’s February 1 letter by sending in the requested documents on February 4. Id. at ¶ 91. Bank of America acknowledged receipt of the materials Plaintiffs sent in letters dated February 20 and March 4, 2014, and sent more letters from March to May specifying the additional documents needed to evaluate Plaintiffs’ application. Id. at ¶¶ 92-98. Plaintiffs complain, however, that they had already provided the documentation those letters sought (such as tax returns and bank statements). Id. at ¶¶ 93, 95, 98. This is not unusual, because loan- modification program guidelines require that financial documentation be current, so borrowers are often asked to provide document types they had already provided because servicers need the “most recent” versions of those documents. E.g., U.S. Dep’t of Treasury, MAKING HOME AFFORDABLE® PROGRAM HANDBOOK FOR SERVICERS OF NON-GSE MORTGAGES v4.5 § 5.1.7 (2015) (income must be supported by “copies of the two most recent bank statements”). In any event, documents referenced in the complaint (and, in consequence, properly subject to consideration at the Rule 12(b)(6) posture) negate Plaintiffs’ claim that they had already provided all of the documents requested. For example, as set forth in further detail below, Plaintiffs allege they had provided a hardship affidavit with their original January application (Compl. ¶ 98), but the application itself shows that Plaintiffs left that section blank. Ex. 2.1 On June 28, 2014, Bank of America notified Plaintiffs that it had not received all the required documentation and “was no longer reviewing [Plaintiffs] application.” Id. at ¶ 100. 1 Exhibit citations refer to the Exhibits to the Declaration of Lorena P. Diaz, filed concurrently. Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 8 of 32 -4- B. The Successful August 2014 Application and Permanent Loan Modification Plaintiffs claim they submitted “another loss mitigation application” on August 4, 2014. Id. at ¶ 105. Bank of America allegedly “acknowledg[ed] receipt of the application” on August 16 and sent another letter on August 21 seeking further documentation on Ms. Jackson’s claimed child-support income. Id. at ¶ 105, 108. Plaintiffs provided it, and on September 9, 2014, Bank of America offered Plaintiffs a trial loan modification under the Federal Housing Administration’s Home Affordable Modification Program. Id. at ¶¶ 109, 111. Plaintiffs successfully completed the trial plan and were offered a permanent loan modification in December of 2014. Id. at ¶ 114. Under the terms of the permanent loan modification, Plaintiffs’ loan would be brought current, but “their monthly principal and interest payment increased from $609.44 to $712.44.” Id. Plaintiffs call the increase “inexplicabl[e],” but they recognize that it was, in fact, for a very obvious reason: Plaintiffs had not made loan payments for about five years, and so they had a delinquent balance of $52,676.87 which the loan modification added to their unpaid principal balance, naturally entailing an increase to the monthly principal and interest payment (but not as large an increase as it could have been, because the modification kept the monthly payment down by adjusting the interest rate and extending the maturity date of the loan). Id. at ¶¶ 113-14. Plaintiffs accepted the offer but within months “became concerned” about their ability to keep making the payments. Id. at ¶ 116. They inquired about another loan modification but were told that they were not eligible for one because they were current on the loan. Id. Hoping to qualify for a better program (but lacking any basis for thinking they would), Plaintiffs decided to “stop[] making their monthly payments” and defaulted on their loan, again. Id. C. The October 2015 Application and Denial Plaintiffs submitted a third application on October 18, 2015. Id. at ¶ 119. As before, Bank Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 9 of 32 -5- of America acknowledged receipt of the application within two days and on October 22, sent Plaintiffs a letter specifying the additional documents it needed. Id. at ¶¶ 120, 122. Again, Plaintiffs complain they were asked for documents they had already provided, but “resubmitted” them anyway. Id. at ¶¶ 123, 125, 129. On November 24, Bank of America notified Plaintiffs that “they had been reviewed for all loss mitigation options and that they did not qualify for a loan modification under any program,” but could be offered a short sale. Id. at ¶ 132. Plaintiffs also had been notified on November 5 that if they did not bring their loan current, they were at risk of losing their property to foreclosure. Id. at ¶ 128. Even after having their application denied, however, Plaintiffs remained in default. Id. at ¶ 135. A formal foreclosure proceeding was initiated against Plaintiffs on January 29, 2016. Id. at ¶ 136. D. The February 2016 Application and the Forbearance Plan Plaintiffs Turned Down On February 8, 2016, Bank of America allegedly “solicited [Plaintiffs] to submit another loss mitigation application,” and they did. Id. at ¶ 137. This time, Bank of America did not ask Plaintiffs for any additional documents or information and, on March 5, 2016, sent them a letter offering them an opportunity to cure their default through “an FHA Formal Forbearance plan.” Id. at ¶ 140. (Plaintiffs do not describe the terms of the plan, but it basically permitted them to repay their arrearage in installments.) Plaintiffs complain that the plan was not “affordable,” and they remained in default. Id. at ¶ 142. E. The Complaint and Plaintiffs’ Claims Plaintiffs filed this lawsuit on September 30, 2016. The complaint asserts two claims for relief. First, Plaintiffs claim assorted violations of Regulation X, 12 C.F.R. § 1024.41, a regulation promulgated by the Consumer Financial Protection Bureau under authority of the Real Estate Settlement Procedures Act (RESPA). The regulation sets forth various procedures for the Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 10 of 32 -6- evaluation and review of certain applications for loss-mitigation programs, for example (as pertinent here) by setting forth timelines for various mandatory notices. Compl. ¶ 162. Then, in Count II, Plaintiffs claim a violation of New York’s General Business Law § 349, based on the theory that Bank of America was supposedly “deceptive” to Plaintiffs because it never “intend[ed] to provide them” the assistance it allegedly “offered.” Id. at ¶ 170. Plaintiffs attempt to support these claims not only by describing their own dealings with the bank, but by dredging up claims made in another, unrelated lawsuit and a few customer complaints posted on the Internet. Id. at ¶¶ 15, 72-76. The allegations based on the other case do not even have a superficial connection to this case, because they are from 2013 and earlier, well before the relevant time period here. Id. at ¶ 72. The allegations based on other customers’ complaints appear to be included here in an effort to plead the “pattern or practice” necessary to recover statutory damages under RESPA, 12 U.S.C. § 2605(f)(1)(B), but while the quoted complaints reflect six customers’ assorted dissatisfactions with Bank of America, none of them say enough to indicate one way or another whether those dissatisfactions arise from any violations of the regulation at issue here. LEGAL STANDARD A complaint must be dismissed if it fails to “contain sufficient factual matter . . . to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). To meet this standard, Plaintiffs must make “allegations plausibly suggesting (not merely consistent with)” a violation of the statutes at issue. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). ARGUMENT I. PLAINTIFFS FAIL TO PLEAD ANY VIOLATIONS OF REGULATION X. Plaintiffs’ primary claim is under 12 C.F.R. § 1024.41, a regulation concerned primarily with ensuring that borrowers receive proper notices at various stages of the modification Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 11 of 32 -7- application process and with ensuring timely decisions on completed applications (whether yea or nay). “Nothing in § 1024.41 imposes a duty on a servicer to provide any borrower with any specific loss mitigation option,” or with any loss mitigation option at all. Id. § 1024.41(a). The CFPB has made clear that the regulation is merely meant to give borrowers “certain protections regarding the process (but not the substance) of [servicers’] evaluations.” Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act (Regulation X), 78 Fed. Reg. 10695, 10818 (Feb. 14, 2013). Courts have held the same, finding, for example, that “there is no such thing as a ‘wrongful denial’ under RESPA, so long as the regulation’s procedures are followed.” Garrow v. Wells Fargo Bank, N.A., 2016 WL 1637441, at *2 (W.D. Mich. Apr. 26, 2016). Thus, Plaintiffs’ efforts to transmogrify their dissatisfaction with the programs they were offered into a claim for violation of the regulation’s notice provisions is doomed to failure. A. Plaintiffs Have No Claim Based on the January 2014 Application Because the Required Notices Were Timely, and the Allegedly Untimely Notices Were Not Required. The facts pleaded in Plaintiff’s own complaint negate their claim of purported Regulation X violations in connection with their first alleged application for assistance. Instead, the complaint engages in misdirection, trying to make it look like a violation occurred by citing irrelevant communications and claiming that they did not contain the required notices, while admitting that other communications did contain the required notices. 1. Plaintiffs concede that Bank of America complied with Section 1024.41(b)’s five-day notice requirement. 12 C.F.R. § 1024.41(b) provides that a servicer that “receives a loss mitigation application 45 days or more before a foreclosure sale” must “[n]otify the borrower in writing within 5 [business] days after receiving the loss mitigation application that the servicer acknowledges receipt of the loss mitigation application and that the servicer has determined that Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 12 of 32 -8- the loss mitigation application is either complete or incomplete.” Plaintiffs conclusorily allege that Bank of America violated this provision in connection with their January 28, 2014 application because “[i]nstead” of sending the required notice, “BofA sent the Jacksons a letter dated January 30, 2014 acknowledging receipt of their loss mitigation application, but the letter did not state whether BofA had determined whether the application was complete or incomplete.” Compl. ¶ 89. But in the very next paragraph, Plaintiffs concede that Bank of America “sent the Jacksons another letter dated February 1, 2014”—easily within the 5-day period—notifying them that their application was incomplete and specifying the documents needed to complete the application, exactly as Section 1024.41(b) requires. Id. at ¶ 90. Nothing in the regulation requires only a single notice to a borrower or requires that the very first paper the borrower receives after an application be the Section 1024.41(b) notice. The regulation merely requires that the notice be sent within five business days—and Bank of America did that. Compl. ¶¶ 85, 90 (January 28 application; February 1 notice). While the text of the regulation is so clear on this point that one would scarcely expect the matter to have been litigated before, it turns out that at least one court has, in fact, considered and rejected the same theory forwarded by Plaintiffs. Terry v. Wells Fargo Bank, N.A., 2016 WL 3999314 (N.D. Cal. July 26, 2016), rejected a claim that a servicer violated Section 1024.41(b) where the plaintiffs applied for a modification on January 14, 2014, received letters “on January 14, 15, and 17, 2014, acknowledging receipt of the application,” and received another letter on January 20 notifying them the application was incomplete. Id. at *1, 3. The court held: [T]he letters sent on January 14, 15, and 17 were not “notices” within the meaning of 12 C.F.R. 1024.41(b)(i)(B). To hold otherwise would be to discourage servicers from acknowledging receipt of an application until all missing documentation has been identified. Borrowers benefit from prompt acknowledgment of an application, however, as time is precious when a foreclosure is on the horizon. As long as the bank “promptly” determines completeness, it need not do so “immediately.” Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 13 of 32 -9- To be sure, Wells Fargo had a duty to notify plaintiffs within five days (excluding weekends and holidays) as to whether their application was complete or incomplete. But here, the facts alleged suggest that Wells Fargo complied with that duty by sending a letter on January 20 that requested additional documentation. Id. at *3. The instant case is on all fours. 2. Because Plaintiffs’ application was incomplete, they have no claim under provisions governing the time and content of responses to complete applications. Plaintiffs next invoke Section 1024.41(c), which provides that once an application is “complete,” the servicer must evaluate it and notify the borrower of the result “within 30 days.” 12 C.F.R. § 1024.41(c)(1)(i)-(ii). Plaintiffs claim that Bank of America violated this provision when it sent them “a letter dated June 28, 2014 stating that it had not received the documentation requested in its May 20, 2014 letter” and “informed the Jacksons that BofA was no longer reviewing their application.” Compl. ¶¶ 100-101. But Bank of America’s statement that it “had not received the documentation requested” necessarily indicates it had determined that Plaintiffs’ application was incomplete, so Section 1024.41(c) is inapplicable. The obligation to evaluate the application within 30 days only applies to “complete” applications. 12 C.F.R. § 1024.41(c)(1); see, e.g., Lage v. Ocwen Loan Servicing LLC, 145 F. Supp. 3d 1172, 1187 (S.D. Fla. 2015) (“Once the application is complete or facially complete, then, and only then, is the servicer required to evaluate the application within the 30-day window”). Plaintiffs’ theory that Bank of America violated Section 1024.41(c) by failing to evaluate a complete application thus assumes what it sets out to prove—that Plaintiffs’ application was, in fact, complete. Plaintiffs’ allegation that Bank of America also violated Section 1024.41(d) fails for the same reason. Plaintiffs allege that Bank of America “did not comply with 12 C.F.R. 1024.41(d)” because “the notice sent under § 1024.41(c)” was defective. Compl. ¶ 102. That contention, of course, rests on the premise that the notice Plaintiffs received was a notice under Section Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 14 of 32 -10- 1024.41(c), since Section 1024.41(d) is merely a provision governing what “the notice sent to the borrower pursuant to paragraph (c)(1)(ii)” needs to contain. 12 C.F.R. § 1024.41(d). But the notice in question was not a notice sent “pursuant to paragraph (c),” it was the opposite. A paragraph (c) notice is a notice of decision on a “complete” application, and Bank of America’s notice was a notice that the application was being denied for incompleteness. Compl. ¶ 100. Because the notice was not made “pursuant to paragraph (c),” the notice did not have to contain any of the information mandated by paragraph (d). Of course, Plaintiffs claim that their application was complete and that they should have received a decision under Section 1024.41(c), but this does not change the analysis, for two reasons. First, as a matter of law, what matters under the regulation is Bank of America’s determination of completeness or incompleteness at the relevant time, not Plaintiffs’ own self- serving claim of completeness after filing suit. It is up to the servicer “to determine if the loss mitigation application is complete” and to notify the borrower what it “has determined.” 12 C.F.R. § 1024.41(b)(2)(i)(A)-(B) (emphasis added). The application is not considered facially complete for purposes of the regulation until and unless the “borrower submits all the missing documents and information as stated in the notice required pursuant to § 1024.41(b)(2)(i)(B), or no additional information is requested in such notice.” 12 C.F.R. § 1024.41(c)(2)(iv).2 An allegation that the servicer made an incorrect determination in sending out the Section 1024.41(b) notice is therefore immaterial. The regulation also gives the servicer the power to determine completeness by defining a “complete” application as “an application in connection 2 The regulation distinguishes between facially complete applications—established when the borrower provides all of the information requested by the servicer—and actually complete applications—determined when the servicer has all of the information it needs to evaluate the borrower. Facially complete applications trigger certain protections for the borrower, but the 30- day evaluation window for the application only begins from “the date the application was actually complete.” 12 C.F.R. § 1024.41(c)(2)(iv) (emphasis added). Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 15 of 32 -11- with which a servicer has received all the information that the servicer requires from a borrower in evaluating applications for the loss mitigation options available.” 12 C.F.R. § 1024(b)(1) (emphasis added). The claim that Bank of America should have required fewer submissions is therefore irrelevant—what matters is what Bank of America in fact required. See 12 C.F.R. § 1024.41(b)(1), supp. I, cmt. 1 (“a servicer has flexibility to establish its own application requirements and to decide the type and amount of information it will require from borrowers”). The other reason Plaintiffs’ claim of completeness fails is that it is negated by the very documents Plaintiffs reference in the complaint. Plaintiffs say they were incorrectly told in a May 20, 2014 letter that “the required hardship explanation was allegedly missing from their original application,” because they “did include a hardship explanation with their original [application].” Compl. ¶ 98. This misrepresents the referenced documents. The May 20, 2014 letter (which this Court may consider on a Rule 12(b)(6) motion as a document referenced in the complaint)3 said: “Please provide a new RMA which lists the hardship reasons. Be sure to select the appropriate hardship. Also, include the loan number at the top of the page.” See Ex. 1 at 1. The included “Request for Mortgage Assistance” (RMA) included a “hardship affidavit” section requiring Plaintiffs to attest to one of five possible reasons (or “Other”) why they are “having difficulty making [their] monthly payment.” Id. at 4. Plaintiffs left that section blank in their January application (see Ex. 2 at 1), and while Plaintiffs did include a two-sentence explanation on a separate paper, they did not claim any reason for “difficulty” making their payments (they said the opposite, that “our income has increased[,] making our payments affordable”), and did 3 “Documents that are attached to the complaint or incorporated in it by reference are deemed part of the pleading and may be considered” in deciding a motion to dismiss. Roth v. Jennings, 489 F.3d 499, 509 (2d Cir. 2007). “If the documents referenced in the complaint contradict the facts alleged by the plaintiff, the documents control and the court need not accept as true the plaintiff’s allegations.” Olin Corp. v. E.I. Dupont de Nemours & Corp., 2006 WL 839415, at *1 (W.D.N.Y. Mar. 27, 2006). Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 16 of 32 -12- not “include the loan number” as requested. See Ex. 3. Bank of America was thus within its rights to ask Plaintiffs to resubmit the RMA with a complete hardship affidavit. Plaintiffs also claim that Bank of America had no right to request documents as late as May 20 and should have made the request “within 5 days” of their application. Compl. ¶ 98. That is incorrect. The regulation does not give a servicer a mere 5 days to identify every document it may need (since the review of some documents may, in practice, give rise to the need for other documents). To the contrary, the regulation expressly permits a servicer to request additional documents “[i]f the servicer later discovers additional information or corrections to a previously submitted document are required to complete the application.” 12 C.F.R. § 1024.41(c)(2)(iv). In short, neither Section 1024.41(c) nor Section 1024.41(d) applies to notices that an application is no longer being reviewed due to its incompleteness. As the June 28, 2014 letter was exactly that, Plaintiffs have no claim for violation of these provisions. B. Plaintiffs Have No Claim Based on Their August 2014 Application Because They Received the Assistance They Applied For. Plaintiffs’ claims with respect to an application allegedly “submitted” on August 4, 2014 fail for even more fundamental reasons, since this time Plaintiffs received the loan modification they applied for—scarcely a month after the alleged application, no less. Compl. ¶¶ 111-112. Nevertheless, Plaintiffs attempt to plead various technical violations of the notice requirements. Plaintiffs claim, again, that Bank of America failed to send a timely Section 1024.41(b) notice because it did not acknowledge the application until August 16 or identify missing documents until August 21. Compl. ¶¶ 105-108. As an initial matter, this is not enough to plead a plausible violation because the five-day deadline is based on when the application is “receiv[ed]” by the servicer—about which Plaintiffs plead nothing—not when it is “submitted” by the borrower. 12 C.F.R. § 1024.41(b)(2)(i)(B). The complaint therefore does not contain “allegations Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 17 of 32 -13- plausibly suggesting (not merely consistent with)” a violation. Twombly, 550 U.S. at 557. But there is no need for the Court to concern itself with a difference of a few days given the larger picture in which Plaintiffs were offered a modification by September 9, barely a month after their August 4 submission. A claim for violation of Section 1024.41 requires actual damages, and Plaintiffs have no conceivable claim of injury under these circumstances. See, e.g., Kilgore v. Ocwen Loan Servicing, LLC, 89 F. Supp. 3d 526, 539 (E.D.N.Y. 2015) (“[T]o survive a motion to dismiss, the complaint must contain factual allegations suggesting that any damages plaintiff suffered were proximately caused by defendant’s violations of § 2605. . . . The courts have consistently dismissed complaints under RESPA if they do not allege actual damages or state merely that in a conclusory fashion the defendant caused damages to the plaintiff.”) (internal citations, quotation marks, and brackets omitted).4 There is no situation conceivable here in which Plaintiffs could have been damaged by the alleged failure to acknowledge their application before August 16 or to identify the missing documents before August 21. Compl. ¶¶ 106, 108. Assuming arguendo that Plaintiffs’ application was received the very same day they claim they submitted it (Monday, August 4, 2014), Bank of America would had until the next Monday, August 11 (five business days) to send the Section 1024.41(b) completeness/incompleteness notice, and another thirty days to perform the evaluation required by Section 1024.41(c). Plaintiffs complain that Bank of America did not send them the incompleteness notice until August 21, but they did not end up in any 4 Actual damages are an essential element of the claim because the regulation provides that “[a] borrower may enforce the provisions of this section pursuant to section 6(f) of RESPA.” 12 C.F.R. § 1024.41(a). Thus, the regulation is only “enforceable, if at all, under 12 U.S.C. § 2605.” Avila v. JPMorgan Chase Bank, N.A., 2015 WL 1648940, at *3 n.19 (S.D. Tex. Apr. 13, 2015). And section 6(f) of RESPA, 12 U.S.C. § 2605(f), only permits a private right of action to plaintiffs who have suffered “actual damages.” 12 U.S.C. § 2605(f)(1)(A), (f)(2)(A). Thus, “actual damages” must be pleaded with plausibility to survive a motion to dismiss. Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 18 of 32 -14- different place than they would have been if the notice had been sent on August 11. The notice identified documents missing from the application (and this time Plaintiffs admit the documents were missing and that they “sent additional information” to Bank of America on August 28). Compl. ¶ 109. Thus, if Plaintiffs had received that notice on August 11 instead of August 21, even if Plaintiffs had responded with the missing documents that same day, Bank of America would have had until September 10, 2014 (30 days from Plaintiffs’ completion of the application) to evaluate the application and send out the Section 1024.41(c) notice—which Bank of America in fact sent one day earlier than that, on September 9. An earlier receipt of the Section 1024.41(b) notice thus would not have put Plaintiffs in any better position than they were in—under either circumstance, they were not owed a decision any sooner than they got one. This forecloses as a matter of law any claim of actual damages—or, for that matter, Article III injury- in-fact. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (no injury in fact, and thus no standing to sue, from “a bare procedural violation, divorced from any concrete harm”). Nor do Plaintiffs have any claim of harm based on their contention that they were “disheartened” that the modification offered to them wasn’t generous enough. Compl. ¶ 113. The regulation is explicit: “Nothing in section 1024.41 imposes a duty on a servicer to provide any borrower with any specific loss mitigation option.” 12 C.F.R. § 1024.41(a); see also CFPB, 2013 Real Estate Settlement Procedures Act (Regulation X) and Truth in Lending Act (Regulation Z) Mortgage Servicing Final Rules: Small Entity Compliance Guide 110 (Nov. 3, 2014) (“The rule does not entitle a consumer to receive an evaluation for (or an offer of) any particular loss mitigation option. Under this particular rule, you are not liable to a consumer for a claim that your agreement with an owner of a mortgage loan requires you to evaluate a consumer for, or to offer a consumer, any particular loss mitigation option.”). Plaintiffs therefore cannot assert a Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 19 of 32 -15- claim under the regulation based on the fact that the loan modification they were offered was not as favorable as they would have liked. That is not a legally cognizable harm. Plaintiffs also attempt to plead technical violations in the letter they received offering them a modification. They claim that “[t]he September 9, 2014 letter did not comply with RESPA” because it “did not identify the specific reasons for BofA’s determination,” “explain the reasons why the Jacksons qualified for the FHA-HAMP program,” or explain “how BofA determined that their monthly payment was $946.15.” Compl. ¶ 112. This claim fails for the same reasons as above—since there is no alleged (or conceivable) harm from failing to include this information in an offer letter—and for other reasons besides. The plain language of Section 1024.41(d) does not require any statement of reasons for why a modification was offered or how the payment was calculated. See 12 C.F.R. § 1024.41(d). Rather, “[i]f a borrower’s complete loss mitigation application is denied,” Section 1024.41(d) requires notice to be sent “stat[ing] the specific reason or reasons for” the denial. 12 C.F.R. § 1024.41(d) (emphasis added). Plaintiffs’ related claim that the offer should have “explain[ed] the specific reasons why the Jacksons were denied other loan modification options” such as “an FHA Formal Forbearance” (Compl. ¶ 112) also fails. “The regulation is clear and requires a servicer to provide a borrower with specific reasons why the borrower was denied a trial or permanent loan modification option, not all loss mitigation options.” Lee v. Mortg. Ctr., LLC, 2015 WL 12681314, at *3 (E.D. Mich. May 22, 2015). In any event, the September 9, 2014 offer letter itself—referenced in the complaint but conveniently not exhibited with it—negates Plaintiff’s allegations and in fact lists highly specific reasons why Bank of America made its determinations with respect to the “[p]rograms [Plaintiffs] did not qualify for.” Ex. 4 at 6. For example, with respect to the “FHA Formal Forbearance” option referenced in the complaint, the letter stated: Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 20 of 32 -16- Id. at 6. This Court “need not accept as true” allegations contradicted by the very documents referenced in the complaint. Olin, 2006 WL 839415, at *1. C. Plaintiffs Have No Claims Based on their 2015 or 2016 Applications Because the Regulation Only Applies to a Borrower’s First Application. Plaintiffs’ claims based on their third and fourth applications fail for the most fundamental reason of all: the RESPA regulation does not even apply to them. The plain language of the regulation could not be clearer: “A servicer is only required to comply with the requirements of this section for a single complete loss mitigation application for a borrower’s mortgage loan account.” 12 C.F.R. § 1024.41(i). The CFPB interprets this provision to mean that servicers are not “required to comply with the requirements of . . . § 1024.41 if a borrower had previously been evaluated for loss mitigation options for the borrower’s mortgage loan account by that servicer.” 78 Fed. Reg. at 10836. Since Plaintiff’s August 2014 application was their “single complete” application (which was not only “evaluated” previously to the 2015 and 2016 applications, but actually resulted in a modification), Bank of America had no legal obligation to follow Section 1024.41’s requirements on any subsequent applications. The reason for Section 1024.41(i)’s exclusion of “duplicative requests” is that the CFPB “believe[d] that a limitation on the loss mitigation procedures to a single complete loss mitigation application provides appropriate incentives for borrowers to submit all appropriate information in the application and allows servicers to dedicate resources to reviewing applications most capable of succeeding on loss mitigation options.” Id. In other words, attempting to assist borrowers seeking relief for the first time was a higher priority for the CFPB than giving borrowers like Plaintiffs, who already got a modification but wanted a better one, a Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 21 of 32 -17- second bite of the apple. Furthermore, the CFPB recognized that if the rules applied to every application a borrower makes, it would incentivize borrowers to submit frivolous applications to “obstruct a servicer’s ability to proceed with an inevitable foreclosure sale.” Id. This limitation has been repeatedly enforced in the case law. See, e.g., Wentzell v. JPMorgan Chase Bank, N.A., 627 F. App’x 314, 319 (5th Cir. 2015) (“The federal restrictions, however, apply only to a borrower’s first loss mitigation application. Since the Wentzells’ claims relate to later alleged loan modifications, they have not stated a claim even under the federal regulation.”) (citation omitted); Mrla v. Fannie Mae, 2016 WL 3924112, at *5 n.2 (E.D. Mich. July 21, 2016) (defendants “relieve[d] of the strictures of Regulation X” because they previously “sent plaintiff a loan modification offer”); Houle v. Green Tree Servicing, LLC, 2015 WL 1867526, at *3 (E.D. Mich. Apr. 23, 2015) (“a borrower may not bring an action for violation of the loss mitigation rule if the borrower has previously availed himself of the loss mitigation process”); Kirkpatrick v. Wells Fargo Bank, N.A., 2016 U.S. Dist. LEXIS 110883, at *6 (C.D. Cal. June 28, 2016) (plaintiffs “failed to state a claim” because “they allege that they had already ‘submitted a complete loan modification’” application); Trionfo v. Bank of Am., N.A., 2015 WL 5165415, at *4 (D. Md. Sept. 2, 2015) (D. Md. Sept. 2, 2015) (dismissing claim where application at issue “was not the first time the plaintiffs submitted a loan modification application. . . . [T]he statute clearly only applies to those submitting applications for the first time.”). Given this express limitation, the merits of Plaintiffs’ accusations with respect to the third and fourth applications don’t even matter, but it is worth noting that Plaintiffs would have no valid claim even if Section 1024.41 applied. Plaintiffs’ claim of an untimely acknowledgment notice is invalid for the same reason it was for the first application: the notice was timely. See Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 22 of 32 -18- Compl. ¶¶ 119, 122 (October 18 application, October 22 notice). Plaintiffs’ claim that Bank of America violated the regulation by “proceeding with a foreclosure sale while [Plaintiffs’] loss mitigation application [was] under review” is invalid because no application was “under review” at the time of the January 29, 2016 foreclosure action. Id. at ¶ 136. Plaintiffs concede that they received a decision on their third application on November 24, 2015, and no other application was submitted until February 2016. Id. at ¶¶ 132, 137. That application resulted in Bank of America offering Plaintiffs an FHA Formal Forbearance plan. Id. at ¶ 140. Again, Plaintiffs complain that the letter contained insufficient “explanation[s]” for offering this option and not another one. Id. And again, that allegation is negated by the letter itself, which clearly explained the reason why the Formal Forbearance plan was the only one Plaintiffs could be approved for: Ex. 5 at 3. The letter proceeded to identify each such program. See id. Plaintiffs’ claims with respect to their third and fourth applications thus fail for threshold reasons and on the merits. D. Even if Plaintiffs Had Otherwise Stated a Valid Claim, They Plead No Cognizable Damages, Which Mandates Dismissal. We have already seen that Plaintiffs fail to identify any harm from allegedly receiving an acknowledgment notice on their second application a few days too late, given that the application resulted in a loan modification offered within the required timeframe anyway. See supra Part I.B. In fact, none of the damages theories pled in the complaint are cognizable as such under RESPA. Plaintiffs claim they were injured because they “were not offered an affordable repayment plan that would allow them to repay the arrearages on their loan.” Compl. ¶ 142. Of course, Plaintiffs were given a modification that brought their loan current and which they paid on for months before choosing to default in hopes of getting a better one. Id. at ¶ 116. As noted, Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 23 of 32 -19- Plaintiffs’ desire for a more generous modification and their claim of being “disheartened” by the one they were given is irrelevant (id. at ¶ 113), because “[n]othing in § 1024.41 imposes a duty on a servicer to provide any borrower with any specific loss mitigation option,” and Plaintiffs plead no facts suggesting they were eligible for one, anyway. 12 C.F.R. § 1024.41(a). Plaintiffs also claim damages in the form of “time and effort pursuing the loss mitigation process” and “administrative costs such as postage, travel expenses, photocopying, scanning, and facsimile expenses.” Compl. ¶¶ 143-45 But that “time and effort” paid off, first in the September 2014 modification offer and then in the March 2016 forbearance offer. Id. at ¶¶ 112, 140. The only sense in which Plaintiffs could have been damaged by exerting this “time and effort” is if they would have had some legal right to a more generous option but for the various technical and procedural violations they claim. See, e.g., Kilgore, 89 F. Supp. 3d at 539 (damages must be “proximately caused by defendant’s violations of § 2605”). Plaintiffs plead nothing to indicate as a matter of fact that they could ever have received a more beneficial modification, and they certainly had no right to one as a matter of law. See 12 C.F.R. § 1024.41(a). Finally, Plaintiffs claim that they were “wrongfully assessed thousands of dollars in fees” and “had their credit ruined.” Compl. ¶ 146. Both allegations are easily dispensed with. There is no allegation that Plaintiffs actually paid even a penny of these fees, only that fees have been “assessed” against their account. Id. Thus, they cannot qualify as damages. See, e.g., Kaymark v. Bank of Am., N.A., 783 F.3d 168, 181 (3d Cir. 2015) (“Because [plaintiff] has not adequately pled ascertainable loss from the fees he did not pay and currently disputes, his claim fails.”). Further, Plaintiffs do not articulate how any of the fees were “wrongful,” because they weren’t— they are not alleged even in the most conclusory terms to be the result of the alleged RESPA violations, as opposed to Plaintiffs’ own (multiple) defaults on their loan. See, e.g., Durland v. Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 24 of 32 -20- Fieldstone Mortg. Co., 2011 WL 805924, at *3 (S.D. Cal. Mar. 1, 2011) (“Plaintiff has failed to state a claim for actual damages under RESPA” because plaintiff did not “explain how Litton’s failure to respond caused him to incur ‘fees and charges . . . on the loan’”). Plaintiffs’ claim of “credit” damage fails for the same reason, as it results from their own delinquencies, not from any actual or conceivable defects in Bank of America’s RESPA notices. See Green v. Wells Fargo Bank, N.A., 927 F. Supp. 2d 244, 256 (D. Md. 2013), aff’d, 582 F. App’x 246 (4th Cir. 2014) (“lowered credit scores” were not caused by alleged misrepresentations regarding loan modification application, but “resulted from the fact that [p]laintiffs were not making the required payments under their existing mortgage”) (internal quotation marks omitted); Durland, 2011 WL 805924, at *3 (“Plaintiff does not allege any causal link between the reduction in his credit rating and [the alleged RESPA violation]. Nor does Plaintiff allege why the reduction caused him to suffer damages.”); Hopson v. Chase Home Fin. LLC, 14 F. Supp. 3d 774, 788 (S.D. Miss. 2014), aff’d, 605 F. App’x 267 (5th Cir. 2015) (allegation of “harm to . . . credit scores” and other damages insufficient because “there is nothing in the complaint to link any of these alleged damages to Chase’s alleged violation of RESPA”). Indeed, the allegation is insufficient to qualify as actual damages even if a causal link were present, because “[a] negative credit rating is not a loss at all, unless that rating causes damage to the plaintiff as evidenced by, for example, failing to qualify for a home mortgage.” Durland, 2011 WL 805924, at *3. Here, Plaintiffs do not allege anything about how their allegedly “ruined” credit score affected them. Plaintiffs’ plea for statutory damages does not save their claim absent a well-pleaded claim of actual damages. Statutory damages are only recoverable in “addition” to actual damages, not as a substitute for them. See Lettenmaier v. Fed. Home Loan Mortg. Corp., 2011 Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 25 of 32 -21- WL 3476648, at *12 (D. Or. Aug. 8, 2011); 12 U.S.C. § 2605(f)(1)(B). Statutory damages also require well-pleaded allegations of a “pattern or practice of noncompliance,” which Plaintiffs fail to make. Their attempts to do so are either conclusory boilerplate (Compl. ¶¶ 66-68) or completely misplaced: statements made on or before June 2013 are obviously incapable of saying anything about Bank of America’s compliance practices with respect to a regulation that did not become effective until 2014. Id. at ¶ 72; see also Trionfo, 2015 WL 5165415, at *6 n.6 (refusing to consider the same statements “because by the plaintiffs’ own admission the declarations were made prior to the allegedly deceitful conduct in this case and in an entirely unrelated litigation”). The customer complaints Plaintiffs plucked from the CFPB’s web site at least appear to fall in the right time period, but they are just vague complaints that the modification process took too long. Compl. ¶ 15. None contain enough information even to guess whether the grievances implicate the notice provisions of Regulation X. The sole claim grounded in any specifics turns out to have those specifics misrepresented: Plaintiffs claim that a “report issued by former North Carolina Banking Commissioner Joseph Smith, who is responsible for overseeing whether BofA is complying with the terms of the National Mortgage Settlement, found that BofA was not notifying borrowers within 5 days after receiving a loss mitigation application that it had received the application.” Id. at ¶ 65. The report actually says the opposite, that the alleged failure was “an unusual one-time event . . . that affected the mailing of the 5-Day Letters for only a limited period of time”—the polar opposite of a “pattern or practice” of noncompliance. U.S. v. Bank of Am. Corp., No. 12-3631, ECF No. 191, at 25-26 (D.D.C. Dec. 16, 2014). Plaintiffs’ failure to plead any entitlement to actual or statutory damages is sufficient ground in itself for dismissing their complaint. II. PLAINTIFFS’ GBL CLAIM ALSO FAILS. To state a claim under Section 349 of the New York GBL, Plaintiffs must plausibly Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 26 of 32 -22- allege that: “(1) the defendant’s deceptive acts were directed at consumers, (2) the acts are misleading in a material way, and (3) the plaintiff has been injured as a result.” Maurizio v. Goldsmith, 230 F.3d 518, 521 (2d Cir. 2000). Unlike the RESPA regulation, the GBL does not give Plaintiffs the ability to sue simply on account of procedural issues with the timeliness of the bank’s communications or the handling of their applications more generally. Rather, Section 349 is limited to prohibiting “deceptive acts and practices”—without a misleading act, there is no violation. Sands v. Ticketmaster-N.Y., Inc., 616 N.Y.S.2d 362, 363 (1st Dep’t 1994) (holding that challenged fees did not violate GBL § 349 because the fees were disclosed to the plaintiff). Some of Plaintiffs’ attempts to plead the elements of the GBL claim are conclusory boilerplate, such as their allegation that “BofA’s unlawful acts and practices described herein were directed at consumers and were materially deceptive and misleading.” Compl. ¶ 173. Such “factually-devoid conclusory statements . . . fail[] to state a plausible § 349 claim,” and can be disregarded. Laskowski v. Liberty Mut. Fire Ins. Co., 2011 WL 4965454, at *3 (N.D.N.Y. Oct. 19, 2011). Plaintiffs’ attempts to plead the elements more specifically also fail. A. Plaintiffs Fail to Plead Acts Directed to Consumers. The “directed at consumers” element means that a claim must describe “acts or practices [that] have a broader impact on consumers at large,” not just the plaintiffs. Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, N.A., 647 N.E.2d 741, 744 (N.Y. 1995). But Plaintiffs do not base their claims on any statements made to the public at large—their claims are based on statements made specifically to them. E.g., Compl. ¶ 82 (“BofA represented to the Jacksons. . . .”), ¶ 89 (“BofA sent the Jacksons a letter. . . .”). Such allegations are incapable of satisfying the “directed at consumers” element of a GBL claim. See Silverman v. Household Fin. Realty Corp. of N.Y., 979 F. Supp. 2d 313, 318 (E.D.N.Y. 2013) (whether advice given during loan application process was misleading is “specific to Plaintiffs, and do[es] not universally Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 27 of 32 -23- apply to other mortgages or impact the public at large.”). The Eastern District’s dismissal of the GBL claim in Kilgore is instructive here. The plaintiff in Kilgore “argue[d] that defendant’s conduct caused harm to the public interest because he alleged in the amended complaint that Ocwen’s ‘fraudulent’ modification program purported to offer the ‘possibility’ of a modification to plaintiff and other homeowners.” 89 F. Supp. 3d at 536. Plaintiffs here similarly describe being told “that loss mitigation options were available to them” (Compl. ¶ 82) though they say nothing about such a “possibility” being presented to any “other homeowners.” Kilgore, supra. The Eastern District held: Plaintiff’s pleading, however, lacks specificity both about (a) what representations made by defendant were misleading, and (b) how those alleged misrepresentations were made to the public at large. Even with respect to the misrepresentations made to plaintiff personally, he merely alleges he was “encouraged by defendant’s marketing to seek mortgage assistance.” The amended complaint is bereft of any detail about what the marketing materials were, what they said, how they were distributed, and so forth. Simply speculating that misrepresentations were broadcast to all of Ocwen’s homeowners is insufficient to support a plausible Section 349 claim. Kilgore, 89 F. Supp. 3d at 536. Here, Plaintiffs offer even less than the level of speculation that fell short in Kilgore, as they describe statements made only to them. Compl. ¶¶ 82, 89, 90, 92- 100, 106, 108, 110-111, 114, 117, 120, 124, 127-29, 131-35, 137-141. B. Plaintiffs Fail to Plead Any Misleading or Deceptive Acts. Plaintiffs’ claim that Bank of America “offers loss mitigation options to consumers without intending to provide them as offered” (Compl. ¶ 170-71) is groundless, since Bank of America concededly did provide multiple loss mitigation options to Plaintiffs, and nowhere do Plaintiffs claim that what they received differed in any way from the terms offered. Id. at ¶ 111. Insofar as this claim is grounded not in the specific loss mitigation programs actually offered to Plaintiffs but in the initial solicitation inviting them to apply for a program, the claim is even more groundless. The allegation that “BofA represented to the Jacksons that loss mitigation Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 28 of 32 -24- options were available to them” (id. at ¶ 82) is manifestly not a misrepresentation at all, since at least three such options were available and actually offered to them. See id. at ¶ 111 (FHA- HAMP loan modification), ¶ 132 (short sale), ¶ 140 (FHA Formal Forbearance plan). Moreover, an invitation to borrowers to apply for a loan modification is not an “offer” of a modification or a commitment that any borrower will actually qualify for one. An “offer” is a “manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.” RESTATEMENT (SECOND) OF CONTRACTS § 24 (1981). A general solicitation inviting borrowers to apply for loss- mitigation options does not qualify. The claim that a “modification program purported to offer the ‘possibility’ of a modification to plaintiff” was not an actionable misstatement in Kilgore, 89 F. Supp. 3d at 536, and Plaintiffs’ similar claims that Bank of America “encourag[ed] them to apply for mortgage assistance” are not actionable here, either. Compl. ¶ 82. The district court in Trionfo, rejecting a similarly theorized claim brought by the same lawyers representing Plaintiffs here under Maryland’s analogue to Section 349, offered an additional rationale for rejecting such claims. There, as here, Plaintiffs accused Bank of America of “offering loss mitigation options to consumers without intending to provide them as offered.” Trionfo, 2015 WL 5165415, at *6; Compl. ¶ 170 (same). The court ruled: I reject plaintiffs’ claims . . . for a simple reason: in the context of mortgage loan modifications, the application of this section makes no sense. As Bank of America points out, a loan modification is purely an accommodation on the part of the lender, who offers to lower a borrower’s debt obligations in exchange for nothing. Accordingly, a loan modification is not available to all mortgage-holders—only those applicants who satisfactorily demonstrate their eligibility. Even taking as true plaintiffs’ allegation that Bank of America stated that it offered loan modification programs, the fact that plaintiffs were not able to receive one is not a violation. It simply means that their application was denied. 2015 WL 5165415, at *6 (internal citation and quotation marks omitted). For similar reasons, Plaintiffs’ claim that Bank of America “refuses to process Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 29 of 32 -25- consumers’ loss mitigation applications in a manner that will ensure fair review” fails to plead the deception required for a GBL claim. Compl. ¶ 170. Plaintiffs’ inability to receive a modification they deemed good enough for them does not mean they failed to receive a “fair review.” It simply means they did not qualify for anything better. In any event, Plaintiffs do not identify any misleading statements about the nature of the review they would receive from which Bank of America deviated in practice. Plaintiffs also do not link their claim of being “improperly assess[ed] various fees” to any misleading or deceptive statement. Compl. ¶ 172. Nothing in Section 349 obligates defendants to adhere to (unspecified) standards of “fair review” or governs the assessment of late fees on a mortgage in the absence of misleading statements directed to consumers. As no such statements are pleaded here, the second element of the claim is lacking. C. Plaintiffs Fail to Plead Injury. Plaintiffs end their GBL count with a conclusory allegation that “BofA’s deceptive acts and practices caused injury to the Jacksons.” Compl. ¶ 174. “This allegation,” ruled Kilgore in response to a virtually identical claim of injury, “is plainly deficient. Alleging causation, and how the alleged acts have caused the alleged injury, is essential. . . . Here, the Court is unable to discern from the face of the complaint what injury is alleged, let alone how any alleged misrepresentations about the possibility of mortgage modifications caused said injury.” 89 F. Supp. 3d at 537. And the injury theories that proved deficient with respect to Plaintiffs’ RESPA claim are just as deficient in the context of the GBL, if not more so, because none of them are connected to any particular misstatement. Plaintiffs’ desire to put their financial difficulties behind them does not translate into a legal guarantee of any particular loan-modification option or other loss-mitigation program, and Plaintiffs certainly point to no actual statements misleading them into thinking there was any such guarantee. The complaint should be dismissed in full. Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 30 of 32 -26- /s/ Keith Levenberg Keith Levenberg (admitted in W.D.N.Y.) Goodwin Procter LLP 901 New York Ave., N.W. Washington, D.C. 20001 Tel.: (202) 346-4248 klevenberg@goodwinprocter.com Counsel for Defendant Bank of America, N.A. James W. McGarry (admission forthcoming) Courtney Hayden (admission forthcoming) Goodwin Procter LLP 100 Northern Ave. Boston, Mass. 02210 Tel.: (617) 570-1000 jmcgarry@goodwinprocter.com chayden@goodwinprocter.com Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 31 of 32 -27- CERTIFICATE OF SERVICE I hereby certify that the foregoing filed through the CM/ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF), and that paper copies will be sent to those indicated as non-registered participants on December 6, 2016. /s/ Keith Levenberg Case 1:16-cv-00787-FPG Document 6-1 Filed 12/06/16 Page 32 of 32