Miller v. Seterus, Inc.

Motion to Dismiss for Lack of Jurisdiction , Motion to Dismiss for Failure to State a Claim . Oral Argument requested.

D. Or.January 19, 2017

710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 DEFENDANT SETERUS, INC.’S MOTION TO DISMISS Pilar C. French, OSB No. 962880 frenchp@lanepowell.com Hans N. Huggler, OSB No. 144993 hugglerh@lanepowell.com LANE POWELL PC 601 SW Second Avenue, Suite 2100 Portland, Oregon 97204-3158 Telephone: 503.778.2170 Facsimile: 503.778.2200 Attorneys for Defendant Seterus, Inc. UNITED STATES DISTRICT COURT DISTRICT OF OREGON EUGENE DIVISION RITA MILLER, Plaintiff, v. SETERUS, INC., Defendant. Case No. 3:16-cv-02081-MO Defendant Seterus, Inc.’s MOTION TO DISMISS ORAL ARGUMENT REQUESTED Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 1 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE i - TABLE OF CONTENTS/TABLE OF AUTHORITIES TABLE OF CONTENTS Page I. LR 7-1 CERTIFICATE OF CONFERRAL ................................................................................ 1 II. MOTION .................................................................................................................................... 1 III. INTRODUCTION .................................................................................................................... 1 IV. STATEMENT OF FACTS ....................................................................................................... 2 V. ARGUMENT ............................................................................................................................. 5 A. Standard of Review. ................................................................................................ 5 A Rule 12(b)(6) motion seeks dismissal for failure to state a claim upon which relief can be granted ...................................................... 5 A Rule 12(b)(1) motion tests a federal court’s power to adjudicate a dispute ...................................................................................................... 5 B. TILA Does Not Provide a Cause of Action Against Seterus as a Servicer. ........... 6 C. Plaintiff Has Failed to State Claims Under RESPA (Counts Two and Three). ...... 7 Seterus’s response to plaintiff’s NOE complies with RESPA .................... 7 Plaintiff’s allegations show Seterus timely acknowledged receipt of plaintiff’s NOE............................................................................................ 7 Plaintiff cannot plead facts to establish actual damages or a pattern or practice. ....................................................................................................... 8 a. Plaintiff has not pleaded facts to establish that she suffered actual damages ................................................................................ 9 b. Plaintiff has not pleaded a “pattern or practice” of purported violations by Seterus, and even if she had, her statutory claim would be limited to a single statutory damages award of no more than $2,000. ...................................................................... 9 (1) Refusal to accept payments other than by check does not violate RESPA or establish a “pattern or practice.” ........... 9 (2) The failure to properly acknowledge and respond to a single Notice of Error does not constitute a “pattern or practice” to support statutory damages. ............................ 10 (3) Even if plaintiff could assert a pattern and practice, which she cannot, plaintiff’s statutory recovery cannot exceed $2,000................................................................................ 10 D. Plaintiff’s FDCPA Claim (Count Four) Fails to State a Claim. ........................... 11 Seterus is not a “debt collector.” ............................................................... 11 Plaintiff has failed to allege a violation of the FDCPA. ........................... 12 Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 2 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE ii - TABLE OF CONTENTS/TABLE OF AUTHORITIES a. Plaintiff has failed to allege a violation of § 1692d, because she has not alleged harassing, oppressive, or abusive conduct of the kind prohibited in that section. ........................................... 12 b. Plaintiff has failed to allege a violation of § 1692f, because she has not alleged collection by unfair or unconscionable means of the kind prohibited in that section. ................................ 14 Even if plaintiff has stated a claim under the FDCPA, her statutory damages cannot exceed $1,000 in this action. .......................................... 15 The statute of limitation bars recovery for any conduct occurring one year before October 28, 2016. ............................................................ 15 E. Plaintiff Has Failed to Allege a Breach of the Covenant of Good Faith and Fair Dealing (Count Five). ............................................................................. 16 F. The Economic Loss Rule Bars Plaintiff’s Claim for Tortious Breach of the Covenant of Good Faith and Fair Dealing (Count Six). ....................................... 17 G. Plaintiff Cannot State a UTPA Claim (Claims 7 and 8). ...................................... 17 The UTPA does not apply to plaintiff’s loan, which was consummated before the UTPA applied to extensions of credit. ..................................... 17 Plaintiff cannot establish an ascertainable loss. ........................................ 17 The UTPA’s statute of limitations limits plaintiff’s claims to conduct occurring only one year before filing. ....................................................... 18 H. The Court Lacks Subject Matter Jurisdiction Over Plaintiff’s TILA, RESPA, Breach of Contract, and UTPA Claims, Because Plaintiff Lacks Standing to Bring Those Claims (Counts One-Three and Five-Eight). ............................... 18 VI. CONCLUSION....................................................................................................................... 21 Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 3 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE iii - TABLE OF CONTENTS/TABLE OF AUTHORITIES TABLE OF AUTHORITIES Page(s) Cases Adams v. Law Offices of Stuckert & Yates, 926 F. Supp. 521 (E.D. Pa. 1996) ............................................................................................15 Allen v. LaSalle Bank, N.A., 629 F.3d 364 (3rd Cir. 2011) ...................................................................................................14 Ashcroft v. Iqbal, 556 U.S. 662 (2009) ...................................................................................................................5 Bret Binder v. Weststar Mortg., Inc., No. 14-7073, 2016 WL 3762710 (E.D. Pa. July 13, 2016) .....................................................11 Brown v. American Prop. Mgmt. Corp., 1 P.3d 1051 (Or. Ct. App. 2000) ..............................................................................................16 Che v. Aurora Loan Services, LLC, 847 F. Supp. 2d 1205 (C.D. Cal. 2012) .....................................................................................6 De Dios v. Int’l Realty & Investments, 641 F.3d 1071 (9th Cir. 2011) ...........................................................................................11, 12 Dolan v. Select Portfolio Servicing, AKT, 2016 WL 4099109 (E.D.N.Y. Aug 2, 2016) .................................................................20 Farris v. U. S. Fidelity & Guar. Co., 587 P.2d 1015 (Or. 1978) ........................................................................................................21 Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507 (9th Cir. 1994) ...................................................................................................13 Garcia v. Wachovia Mortg. Corp., 676 F. Supp. 2d 895 (C.D. Cal. 2009) .....................................................................................10 Griffin Indus., Inc. v. Irvin, 496 F.3d 1189 (11th Cir. 2007) .................................................................................................7 Harper v. Better Bus. Servs., Inc., 961 F.2d 1561 (11th Cir. 1992) ...............................................................................................15 Harvey v. Great Seneca Fin. Corp., 453 F.3d 324 (6th Cir. 2006) ...................................................................................................14 Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 4 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE iv - TABLE OF CONTENTS/TABLE OF AUTHORITIES Luciw v. Bank of America, N.A., No. 5:10-cv-02779-JF/HRL, 2010 WL 3958715 (N.D. Cal. Oct. 7, 2010) ...............................9 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) .................................................................................................................18 Marais v. Chase Home Finance LLC, 736 F.3d 711 (6th Cir. 2012) .....................................................................................................6 McLean v. GMAC Mortg. Co., 595 F. Supp. 2d 1360 (S.D. Fla. 2009) ....................................................................................10 McQuinn v. Bank of America, 656 F. App’x 848 (9th Cir. 2016) ............................................................................................20 Meeks v. Ocwen Loan Servicing, LLC, No. 16-cv-81003-BLOOM/Valle, 2016 WL 3999570 (S.D. Fla. July 26, 2016) ................8, 20 Mejia v. Ocwen Loan Servicing, LLC, NO. 16-CV-81269-BLOOM/Valle, 2016 WL 4587129 (Sept. 2, 2016) .................................20 Nguyen v. Madison Mgmt. Servs., LLC, 2016 WL 4708538 (D. Or. 2016) .................................................................................16, 17, 18 Onita Pac. Corp. v. Trustees of Bronson, 843 P.2d 890 (Or. 1992) ..........................................................................................................17 Paroline v. United States, 134 S. Ct. 1710 (2014) .............................................................................................................13 Payne v. Seterus, Inc., No. 16-0203, 2016 WL 4521659 (W.D. La. Aug. 26, 2016) .....................................................6 Pearson v. Philip Morris, Inc., 361 P.3d 3 (Or. 2015) ..............................................................................................................18 Ploog v. HomeSide Lending Inc., 209 F. Supp. 2d 863 (N.D. Ill. 2002) .................................................................................10, 11 Robins v. Spokeo, 742 F.3d 409 (9th Cir. 2014) ...................................................................................................19 Soriano v. Countrywide Home Loans, Inc., No. 09-CV-02415-LHK, 2011 WL 1362077 (N.D. Cal. April 11, 2011) .................................8 Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) .............................................................................................5, 19, 20, 21 Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 5 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE v - TABLE OF CONTENTS/TABLE OF AUTHORITIES Strubel v. Comenity Bank, 842 F.3d 181, 191-95 (2016) ...................................................................................................20 Sutton v. Ocwen Loan Servicing, LLC, No. 16-cv-81234-BLOOM/Valle, 2016 WL 4417688 (August 19, 2016) ..............................20 Uptown Heights Assocs. Ltd. P’ship v. Seafirst Corp., 891 P.2d 639 (Or. 1995) ..........................................................................................................16 Whittier v. Ocwen Loan Svcing, L.L.C., 594 F. App’x 833 (5th Cir. 2014) ........................................................................................9, 19 Statutes Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. .............................. passim Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601, et seq. ........................ passim Truth in Lending Act (TILA), 15 U.S.C. § 1601, et seq. ....................................................... passim Unlawful Trade Practices Act (UTPA), ORS 646.605, et seq. .............................................. passim Other Authorities “Regulation X”, 12 C.F.R. § 1024.30 et seq. .......................................................................3, 6, 7, 8 Fed. R. Civ. P. 12(b)(1)................................................................................................................1, 5 Fed. R. Civ. P. 12(b)(6)................................................................................................................1, 5 OAR 137-020-0805(5) ...................................................................................................................18 Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 6 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 1 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS I. LR 7-1 CERTIFICATE OF CONFERRAL Counsel for defendant Seterus, Inc. (“Seterus”) has conferred in good faith with counsel for plaintiff Rita Miller. The parties have been unable to resolve this dispute. II. MOTION Pursuant to Fed. R. Civ. P. 12(b)(1) and (6), defendant Seterus respectfully moves the Court to dismiss all of plaintiff’s claims with prejudice. III. INTRODUCTION This is not a wrongful foreclosure case, but it does involve a mortgage. Plaintiff’s eight claims stem from her efforts to (1) assume liability for her deceased husband’s mortgage and (2) modify the terms of that loan to bring it out of default. Working with Federal National Mortgage Association (“Fannie Mae”) and its servicer, Seterus, plaintiff accomplished both goals—as her complaint sets out, she assumed the loan by November 2015. Further, the loan was modified and has not been in default since December 2014. Despite these positive outcomes, plaintiff now sues Seterus, alleging conduct in violation of state and federal consumer protection laws, and seeking over $60,000 in statutory damages and a punitive damage award. Plaintiff’s claims center largely on communications exchanged between her and Seterus in August and September of 2016—almost a year after all parties agree her loan was modified and out of default. Each of these claims should be dismissed for the following reasons, as summarized below:1  Plaintiff’s Truth in Lending Act, 15 U.S.C. § 1601, et seq. (“TILA”) claim fails because TILA does not provide a cause of action against a loan servicer like Seterus under the facts alleged in Plaintiff’s Complaint.  Plaintiff has not pleaded claims for violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 (“RESPA”). Plaintiff’s allegations establish that 1 Plaintiff has structured her Complaint around “counts,” some of which contain more than one claim for relief under applicable law. Seterus has structured this motion to match plaintiff’s complaint, addressing each “count” and the claims included therein. Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 7 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 2 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS Seterus timely acknowledged receipt of and responded to plaintiff’s Notice of Error (“NOE”). Moreover, plaintiff cannot plead facts to establish actual damages, or a pattern and practice.  Plaintiff has not pleaded facts to establish a violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”). Seterus is not a debt collector. Plaintiff’s allegations do not establish a violation of the FDCPA. And, even if they did, parts of that claim are time-barred.  Plaintiff cannot plead a claim for breach of the duty of good faith and fair dealing because Seterus is merely a servicer for the loan, not a party to any contract.  Plaintiff cannot plead a claim for tortious breach of the duty of good faith and fair dealing because she and Seterus do not have a special relationship.  Plaintiff’s Unlawful Trade Practices Act (“UTPA”) claims must be dismissed, because plaintiff’s loan existed before the UTPA was amended to apply to extensions of credit. In addition, plaintiff has failed to plead facts establishing an ascertainable loss. Finally, the UTPA’s statute of limitations bars using conduct that occurred more than one year before this lawsuit was filed as a basis for any UTPA claim. ORS 646.638(6).  Plaintiff’s case should be dismissed for lack of subject matter jurisdiction. Even if she could plead facts to show violations of law, she cannot establish that she suffered a concrete injury. IV. STATEMENT OF FACTS2 In 2008, plaintiff and her husband, Robert Lawson, signed a trust deed securing a loan against residential property (“the Property”). (Compl. at ¶¶ 6-7.) Lawson signed a corresponding Note obliging him to repay the lender for the debt. (Compl. ¶ 6 & Ex. 1 at 3.) Included in the 2 Seterus accepts the facts in the light most favorable to plaintiff in accordance with the applicable standard of review, and solely for purposes of this motion to dismiss. Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 8 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 3 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS terms of the Note was the explicit covenant to make payments by cash, money order, or check at a mailing address designated by the lender. (Id.; Ex. 1 at 3.) At some point after plaintiff and Lawson purchased the property, Lawson passed away. (See id. ¶ 7.) In addition, prior to June 2013, Lawson or his estate defaulted on the loan. (See id. ¶ 10.) In June 2013, Seterus became the loan servicer on behalf of Fannie Mae. (Id.) With the loan in default and the deceased Lawson the sole obligor on the Note, Seterus and plaintiff entered into two separate agreements to move the loan to a performing status and secure it. First, in November 2014, Seterus, as servicer for Fannie Mae, offered plaintiff a loan modification to recapitalize the loan and take it out of default. (Id. ¶ 18 & Ex. 3 (the “Loan Modification Agreement”).) Plaintiff accepted the terms of that modification on December 2, 2014, and met her payment obligations under that agreement. (Id. at ¶ 19 & Ex. 3 at 8.) Second, Fannie Mae and plaintiff entered into an agreement by which plaintiff would succeed her husband as the obligor liable on the Note (“the Assumption Agreement”). (Id. at ¶ 17.) Plaintiff executed that agreement in January 2015, but did not return two copies to Seterus, as required for its implementation. (Id. ¶ 20; Ex. 2 at 2.) As a result, from December 2014 through October 2015, Seterus sent plaintiff account statements that continued to designate Lawson as the borrower and showed “unapplied payments.” (Id. ¶ 22.) In September 2016, almost a year after the last such statement was sent and a month before this suit was filed, plaintiff sent Seterus a Request for Information (“RFI”) to find out why the payments were not being applied and the statements continued to issue in Lawson’s name during that period. (Id. ¶¶ 22-23.) In addition to the RFI, on September 12, 2016, pursuant to 12 C.F.R. § 1024.35, a regulatory provision of RESPA, plaintiff sent Seterus a NOE. (Id. Ex. 2 at 1.) In the NOE, plaintiff accused Seterus of violating Section 1024.35(b)(1) by refusing “to accept a payment that conforms to the servicer’s written requirements for the borrower to follow in making payments.” (Id.; Ex. 2 at 2.) Plaintiff further asserted that “[e]ach month [she] has sent payment via certified mail,” and Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 9 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 4 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS that she “has attempted to make payment via the online web portal since mid-2015,” but that “the system did not recognize either the borrower’s account number or social security number.” (Id. Ex. 2 at 2.) Although plaintiff did not claim that Seterus had failed to accept the monthly payments, she contended that Seterus was required to accept electronic payments. (Id. at 2.) Plaintiff requested the following information in the NOE: Please provide a detailed explanation, including specific reference as to the Mortgage and/or Modification Agreement and/or Assumption Agreement, which prohibits the Borrower from making payments from the online web portal. Please also provide a detailed life of loan transaction history for all payments from December 1st, 2014 to the present. (Id. (emphasis added).) On September 23, 2016, Seterus issued a combined response to the RFI and NOE. (Id. ¶¶ 24, 28.) As to plaintiff’s inquiry regarding the continued issuance of statements in Lawson’s name, Seterus explained that it did not receive the required documentation from plaintiff until July 2015, which caused delay in effectuating the Assumption Agreement. (Id.; Ex. 1 at 2.) Seterus further explained that once plaintiff delivered the proper documentation, Seterus transferred the Note into plaintiff’s name, and applied all payments to the underlying loan, rendering it current. (Id. ¶ 24; Ex. 1 at 2.) Plaintiff acknowledges that this response resolved her concerns about unapplied payments and why the statements were not in her name. (Id. ¶ 25.) In response to plaintiff’s request for a life of loan transaction history, Seterus enclosed the transaction history it had received from the prior servicer, as well as a payment history of its servicing. (Id. at 2; Ex. 1 at 7-26.) Seterus also responded to plaintiff’s demand about not being able to make payments through the web portal: Our records indicate that there is an active username and password associated with the loan. The last time the account was accessed was on July 3, 2013. If your client is attempting to set up a new account, it will not allow another account to be created. If your client is unable to access the loan with the registered account Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 10 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 5 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS information, you will need to contact our customer service representatives at the number listed above to have the account reset. (Id. at 2 (emphasis added).) Finally, separate from the correspondence set forth above, on August 11, 2016, plaintiff sent Seterus a request for a payoff statement setting out plaintiff’s total outstanding balance, referencing federal regulations promulgated under TILA. (Compl. ¶¶ 32-34; Ex. 4.) Plaintiff alleges that Seterus violated TILA, because it did not respond to that request until September 26, 2016. (Compl. ¶ 37.) Plaintiff filed this suit on October 28, 2016. V. ARGUMENT A. Standard of Review. A Rule 12(b)(6) motion seeks dismissal for failure to state a claim upon which relief can be granted. To survive such a motion, a complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). While the court must give plaintiff the benefit of all factual allegations in the complaint and all reasonable inferences arising from those facts, the court must disregard all legal conclusions. A Rule 12(b)(1) motion tests a federal court’s power to adjudicate a dispute. Among other jurisdictional restraints, the doctrine of standing imposes limitations on the exercise of federal jurisdiction. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). “The ‘irreducible constitutional minimum’ of standing consists of three elements. The plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id. (internal citation omitted). “To establish injury in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Id. at 1548 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 11 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 6 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS B. TILA Does Not Provide a Cause of Action Against Seterus as a Servicer. In plaintiff’s first claim for relief, denominated as “Count One,” she claims that Seterus is liable under TILA for failing to promptly respond to her request for a payoff quote on her loan. See 12 C.F.R. § 1026.36(c)(3). This claim on these allegations must be dismissed because servicers, like Seterus, are not liable pursuant to TILA. TILA provides a cause of action against “creditors” who violate TILA’s statutory and regulatory requirements. 15 U.S.C. § 1640(a). A “Creditor” is defined as: [A] person who both (1) regularly extends, whether in connection with loans, sales of property or services, or otherwise, consumer credit which is payable by agreement in more than four installments or for which the payment of a finance charge is or may be required, and (2) is the person to whom the debt arising from the consumer credit transaction is initially payable on the face of the evidence of indebtedness or, if there is no such evidence of indebtedness, by agreement. 15 U.S.C. § 1602(g). In certain circumstances, assignees of a creditor are also liable for TILA violations in mortgage transactions. 15 U.S.C. § 1641(e). However, § 1641(f) provides that “[a] servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as an assignee of such obligation for purposes of this section unless the servicer is or was the owner of the obligation.” In interpreting these provisions, courts have uniformly found that servicers are not liable under TILA. See Marais v. Chase Home Finance LLC, 736 F.3d 711, 718-19 (6th Cir. 2012) (holding that servicers are not liable under TILA); Payne v. Seterus, Inc., No. 16-0203, 2016 WL 4521659, at *7 (W.D. La. Aug. 26, 2016) (no servicer liability under 24 C.F.R. § 1026.36(c)(1) and TILA); Che v. Aurora Loan Services, LLC, 847 F. Supp. 2d 1205, 1208-09 (C.D. Cal. 2012) (granting summary judgment because servicer did not own plaintiff’s loan and therefore was not “creditor” under TILA). Plaintiff admits that Seterus is only the loan servicer, not the owner. (Compl. at ¶¶ 8, 11.) Accordingly, plaintiff cannot state a claim against Seterus pursuant to TILA. Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 12 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 7 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS C. Plaintiff Has Failed to State Claims Under RESPA (Counts Two and Three). Seterus’s response to plaintiff’s NOE complies with RESPA. Plaintiff’s “Count Two” alleges a violation of RESPA’s underlying regulation, 24 C.F.R. § 1024.35. Specifically, plaintiff asserts that Seterus failed to adequately respond to her NOE, which contended that Seterus had failed to accept 20 payments, and that it refused to accept payments by any means other than certified mail. (Compl. ¶¶ 45, 47.) Plaintiff’s claim is belied by the facts. The response enclosed documents supporting Seterus’s servicing of the loan. (Id.; Ex. 1.) It further confirmed that there was no error; Seterus reported that it accepted all payments and the loan was “current.” (Id.; Ex. 1 at 2.) In addition, Seterus advised plaintiff that she could make electronic payments if she wanted, and noted that there was already an existing online account. (Id.) Seterus further provided her with a contact number she could call to address any access problems to the web portal. (Id.) The allegations simply do not support plaintiff’s contention that Seterus was refusing to accept payments conforming to the servicer’s written requirements. 12 C.F.R. §1024.35(b)(1). Indeed, the Note provides that borrower is to make payments by mail. Plaintiff has not alleged any facts to establish that she was required to make payments electronically, but was prevented from doing so. (Compl. Ex. 1 at 3.) Moreover, her NOE does not claim that Seterus rejected payments by regular mail.3 Plaintiff’s allegations show Seterus timely acknowledged receipt of plaintiff’s NOE. 24 C.F.R. § 1024.35(c) requires a servicer to provide the borrower “a written response 3 Throughout the complaint, plaintiff alleges in conclusory fashion that she has been “required” to make payments by certified mail or that Seterus has “refused payment * * * via regular mail.” (Compl. at ¶¶ 27, 47.) But plaintiff’s NOE does not claim that Seterus refused to accept payments by “regular mail” and therefore Seterus was not put on notice of that alleged error. (Compare Compl. at ¶ 27 with Ex. 2 at 1-2.) When exhibits attached to a complaint contradict conclusory allegations in the pleadings, the exhibits govern. Griffin Indus., Inc. v. Irvin, 496 F.3d 1189, 1206 (11th Cir. 2007). Accordingly, allegations that Seterus required plaintiff to submit payments by certified mail or failed to accept payments by regular mail cannot serve as a basis for this RESPA claim, and should be disregarded. Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 13 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 8 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS acknowledge receipt of” a notice of error “within five days (excluding legal public holidays, Saturdays and Sundays)” of receipt. Plaintiff alleges that she sent her NOE on September 12, 2016, that Seterus signed a certified receipt confirming it received the NOE on September 15, 2016, and that it responded to the NOE on September 26, 2016. (Compl. ¶¶ 64-65, 49; Ex. 2.) Notwithstanding these allegations, plaintiff contends that Seterus violated RESPA because it was required to provide a written acknowledgement that Seterus had received her NOE by no later than September 27, 2016. (Compl. ¶¶ 71, 73.) These allegations fail for two reasons. First, plaintiff admits that Seterus acknowledged receiving the NOE by signing a certified return receipt. (Compl. ¶ 65; Ex. 5.) The act of providing the certified return receipt satisfies the obligation to provide a written acknowledgment. See Meeks v. Ocwen Loan Servicing, LLC, No. 16-cv-81003-BLOOM/Valle, 2016 WL 3999570, at *3-6 (S.D. Fla. July 26, 2016) (servicer’s execution of a certified return receipt constituted a written acknowledgment). In addition, plaintiff concedes that Seterus sent a substantive NOE response before the September 27 acknowledgment deadline. Seterus’s response in and of itself is an acknowledgment of receipt. Count 3 should be dismissed. Plaintiff cannot plead facts to establish actual damages or a pattern or practice. RESPA obligates a loan servicer to respond substantively to a NOE within certain time periods. See 12 U.S.C. § 2605(e); 12 C.F.R. 1024.35(e). If a servicer violates RESPA’s provisions, the affected borrower may recover actual damages that result from the violation. 12 U.S.C. § 2605(f)(1)(A). The borrower may also recover statutory damages totaling no more than $2,000 if the borrower proves a “pattern or practice” of RESPA violations. Id. at § 2605(f)(1)(B). Here, plaintiff has not pleaded facts sufficient to support an actual damages or statutory damages claim under RESPA, and Counts Two and Three should be dismissed in their entirety. Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 14 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 9 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS a. Plaintiff has not pleaded facts to establish that she suffered actual damages. Actual damages must be “causally related to the RESPA violation itself[.]” Soriano v. Countrywide Home Loans, Inc., No. 09-CV-02415-LHK, 2011 WL 1362077, at *7 (N.D. Cal. April 11, 2011). Plaintiff has not pleaded that she suffered actual damages resulting from Seterus’s purported failure to comply with RESPA. Instead, she seeks to recover attorney’s fees and mailing costs she incurred before Seterus allegedly inadequately responded to the NOE. (Compl. at ¶¶ 61, 75.) Those amounts are not “actual damages” within the meaning of RESPA. The mailing costs for the 20 payments were not caused by the allegedly inadequate September 26, 2016 response to the NOE. As for attorneys’ fees, they do not constitute actual damages. RESPA allows for recovery of attorneys’ fees only if the borrower’s RESPA claim is successful. See 12 U.S.C. § 2605(f)(3). See Luciw v. Bank of America, N.A., No. 5:10-cv-02779-JF/HRL, 2010 WL 3958715, at *5 (N.D. Cal. Oct. 7, 2010) (“attorneys’ fees typically are not considered “actual damages,” and other district courts have rejected similar arguments.”); Whittier v. Ocwen Loan Svcing, L.L.C., 594 F. App’x 833, 836-37 (5th Cir. 2014) (“The Whittiers further argue that the district court incorrectly relied on another district court’s opinion to support its holding that the attorney’s fees and expenses of litigation they incurred cannot, as a matter of law, satisfy the actual damages requirement of a RESPA claim. * * * We agree with the result, as RESPA allows for fees and expenses in addition to actual damages.”) (internal citations omitted). b. Plaintiff has not pleaded a “pattern or practice” of purported violations by Seterus, and even if she had, her statutory claim would be limited to a single statutory damages award of no more than $2,000. (1) Refusal to accept payments other than by check does not violate RESPA or establish a “pattern or practice.” To bolster her statutory damages claim, plaintiff alleges in Counts Two and Three, without citation to law, that “as a result of Seterus’s actions, Seterus is liable to the Plaintiff for actual damages, twenty (20) different statutory damages, costs Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 15 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 10 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS and attorneys’ fees.” (Compl. ¶ 62.) Plaintiff can only be referring to her implausible allegation that for twenty payments, Seterus required plaintiff to send it checks via certified mail. RESPA is a notice and disclosure statute. 12 U.S.C. § 2601. RESPA does not, in any way, regulate the method of payment that can be required by a lender. Plaintiff’s allegation that Seterus required payment by certified mail should be disregarded as implausible. (2) The failure to properly acknowledge and respond to a single Notice of Error does not constitute a “pattern or practice” to support statutory damages. RESPA and its implementing regulations do not define what constitutes a “pattern or practice.” But as one district court observed, the courts have interpreted the term “pattern or practice” in accordance with the usual meaning of the words and “‘[t]he term suggests a standard or routine way of operating.’” McLean v. GMAC Mortg. Co., 595 F. Supp. 2d 1360, 1365 (S.D. Fla. 2009) (quoting In re Maxwell, 281 B.R. 101, 123 (Bankr. D. Mass. 2002)). Courts applying RESPA have made clear that “almost as a matter of definition, a single failure to respond to a Qualified Written Request does not state a claim for a ‘pattern or practice’ of doing so.” Garcia v. Wachovia Mortg. Corp., 676 F. Supp. 2d 895, 909 (C.D. Cal. 2009). For example, the McLean court found that failure to respond correctly to two separate letters was insufficient, 595 F. Supp. 2d at 1365, while another court held that the failure to respond to five letters was sufficient to state a “pattern or practice” claim. See Ploog v. HomeSide Lending Inc., 209 F. Supp. 2d 863, 868 (N.D. Ill. 2002). With these authorities as a guidepost, plaintiff’s allegation that a single NOE was mishandled by Seterus cannot, as a matter of law, establish a pattern and practice of RESPA violations. (3) Even if plaintiff could assert a pattern and practice, which she cannot, plaintiff’s statutory recovery cannot exceed $2,000. RESPA allows a borrower that proves a “pattern or practice of noncompliance” with § 2605 to recover “additional damages, as the court may allow, * * * in an amount not to exceed $2,000.” Contrary to the pleadings, statutory damages are awarded for the overall pattern of violation, not on an instance-by-instance basis. Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 16 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 11 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS Ploog, 209 F. Supp. 2d at 869 (holding that damages for proving a pattern and practice are capped at $1,000 and that such damages are not available on a per instance basis); Bret Binder v. Weststar Mortg., Inc., No. 14-7073, 2016 WL 3762710, at *11-12 (E.D. Pa. July 13, 2016) (collecting cases holding the same). In the event that the Court does not dismiss plaintiff’s claim for statutory damages, the Court should limit recovery to a maximum statutory award of $2,000. D. Plaintiff’s FDCPA Claim (Count Four) Fails to State a Claim. The FDCPA is a consumer protection statute that provides a cause of action for violations of its provisions. 15 U.S.C. § 1692k. Here, plaintiff cites 15 U.S.C. §§ 1692d (harassment or abuse) and 1692f (unfair practices) as the statutory bases for her FDCPA claim. Plaintiff’s claim fails here because Seterus is not subject to the requirements of the FDCPA as to plaintiff, and plaintiff has not alleged conduct that violates the FDCPA. Seterus is not a “debt collector.” The FDCPA provides a remedy against “debt collectors.” That term broadly encompasses persons who engage in “any business the principal purpose of which is the collection of any debts, or who regularly collect[] or attempt to collect * * * debts owed [to another].” 15 U.S.C. § 1692a(6). However, excluded from that definition are persons “collecting or attempting to collect any debt owed * * * to the extent such activity * * * (iii) concerns a debt which was not in default at the time it was obtained by such person.” Id. at (6)(F). To determine whether a debt is in “default,” a court must “look to any underlying contracts and applicable law governing the debt at issue.” De Dios v. Int’l Realty & Investments, 641 F.3d 1071, 1074 (9th Cir. 2011). Taking plaintiff’s allegations as true, at the time Seterus began servicing her mortgage, the obligor on the Note was Robert Lawson and the Note was in default. (Compl. at ¶¶ 7, 10.) Thereafter, Lawson died and plaintiff and Fannie Mae, the obligee on the Note, negotiated a loan modification and the Assumption Agreement. (Compl. at ¶¶ 17-20.) Plaintiff entered into the loan modification agreement and began making payments in accordance with that agreement in December 2014. (Compl. at ¶¶ 18-19.) At that point, the Note was no longer in default because Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 17 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 12 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS the modification agreement explicitly set a revised loan amount of $177,176.11 “consisting of the unpaid amount(s) loaned to [plaintiff] by [Fannie Mae], plus any interest and other amounts capitalized. (Compl. Ex. 3 at 3.) Further, the parties acknowledged at that time that the Note was no longer in default, as they agreed in the loan modification to grant Fannie Mae certain authorities “[i]n the event of future default.” (Compl. Ex. 3 at 6.) In January 2015, plaintiff and Fannie Mae executed the Assumption Agreement and plaintiff became the obligor on the Note. (Compl. at ¶ 20.) Therefore, at the time that Seterus obtained the right to collect on the Note as to plaintiff, the Note was not in default. Because the Note was not in default at that time, the § 1692a(6)(F)(iii) exemption applies, and Seterus is not a “debt collector” in relation to plaintiff under the terms of the FDCPA. See 15 U.S.C. § 1692a(6)(F); De Dios, 641 F.3d at 1074-75 (forbearance agreement in place when party obtains right to collect debt renders debt not “in default” and therefore servicer not “debt collector” under FDCPA) (citing Bailey v. Security Nat. Servicing Corp., 154 F.3d 384, 386-89 (7th Cir. 1998)). Because Seterus is not a “debt collector” under the FDCPA, plaintiff’s FDCPA claim must be dismissed. Plaintiff has failed to allege a violation of the FDCPA. a. Plaintiff has failed to allege a violation of § 1692d, because she has not alleged harassing, oppressive, or abusive conduct of the kind prohibited in that section. 15 U.S.C. § 1692d prohibits “any conduct any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.” The statute then lists examples of conduct that are per se abusive, oppressive, or harassing: 1. The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person. 2. The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader. 3. [Subject to certain exceptions,] [t]he publication of a list of consumers who allegedly refuse to pay debts[.] Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 18 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 13 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS 4. The advertisement for sale of any debt to coerce payment of the debt. 5. Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number. 6. [Subject to certain exceptions,] the placement of telephone calls without meaningful disclosure of the caller’s identity. Id. By the terms of the statute, this list is “non-exhaustive,” and plaintiff need not (and does not) allege conduct that “fall[s] neatly within any of these specified examples” to state a § 1692d violation. Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507, 1516 (9th Cir. 1994). However, “[i]t is * * * a familiar canon of statutory construction that [catchall] clauses are to be read as bringing within a statute categories similar in type to those specifically enumerated.” Paroline v. United States, 134 S. Ct. 1710, 1721 (2014) (citation and quotation marks omitted); Fox, 15 F.3d at 1518 (“normal rules of statutory construction require that the harassment or abuse condemned be of the same nature as the examples the statute supplies.”). The conduct plaintiff alleges simply does not resemble the type of conduct prohibited by §1692d, and therefore she fails to state a claim under that section. Plaintiff alleges that Seterus violated § 1692d by “restricting, without explanation, the plaintiff’s ability to remit at least twenty (20) mortgage payments from December 1, 2014 to the present to Seterus [and] by inexplicably denying her the ability to use her online account.” Plaintiff’s allegation, therefore, is that because Seterus required her to make payments by a particular method and did not satisfactorily answer her inquiries regarding access to an online payment account, it has harassed, oppressed, or abused her. First, as addressed above, plaintiff’s implausible allegation that Seterus has required her to send it checks via certified mail should be disregarded by the Court and cannot serve as the basis for a FDCPA claim or any other claim. Second, plaintiff’s allegations regarding web payment lack merit. As an initial matter, plaintiff has no contractual right to make payments via Seterus’s web portal. Plaintiff’s Note Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 19 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 14 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS requires payments by “cash, check or money order” and by mail. (Compl. Ex. 1 at 3.) While Seterus may have offered a web payment option, doing so was at Seterus’s discretion and was not its contractual obligation. Finally, when plaintiff sent the NOE to Seterus inquiring about her access to its web portal, Seterus promptly explained the problem and provided a next step to resolving the issue (contacting customer service to reset the online account to allow for registration). (Compl. Ex. 1 at 2.) This conduct, in total, simply is not “harassment or abuse.” Plaintiff has failed to allege that Seterus has engaged in conduct prohibited by § 1692d. See Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 330 (6th Cir. 2006) (“Although nonexhaustive, the examples of oppressive conduct listed in 1692d concern tactics intended to embarrass, upset, or frighten a debtor. They are likely to cause the suffering and anguish which occur when a debt collector attempts to collect money which the debtor, through no fault of his own, does not have.”) (internal citations and quotation marks omitted). Because the conduct alleged is not prohibited by § 1692d, plaintiff has failed to state a claim under that section of the FDCPA. b. Plaintiff has failed to allege a violation of § 1692f, because she has not alleged collection by unfair or unconscionable means of the kind prohibited in that section. The analysis set out for § 1692d also applies to plaintiff’s § 1692f claim. Plaintiff does not allege conduct that fits within one of the enumerated § 1692f prohibitions, but she relies on the “catch- all” prohibition against “unfair or unconscionable means to collect or attempt to collect any debt.” Acts specifically prohibited by § 1692f include collecting fees without a legal basis, using post- dated checks to threaten or create criminal sanctions for a borrower, and threatening to take nonjudical action to dispossess a borrower of property without legal basis. In short, § 1692f bars threatening or coercive tactics that fall outside social norms of fair play. See Allen v. LaSalle Bank, N.A., 629 F.3d 364, 367 n.4 (3rd Cir. 2011) (§ 1692f “broadly prohibits improper means” of debt collection); Adams v. Law Offices of Stuckert & Yates, 926 F. Supp. 521, 528 (E.D. Pa. 1996) (no Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 20 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 15 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS violation of § 1692f where collection letter did not manifest “patent unfairness” or reflect an “abuse of [the collection agency’s] superior economic position and level of sophistication, the hallmark of unconscionability”). Plaintiff alleges that Seterus violated § 1692f only by “restricting, without explanation, the Plaintiff’s ability to remit at least twenty (20) mortgage payments from December 1, 2014 to the present to Seterus [and] by inexplicably denying her the ability to use her online account.” Such conduct is not basically unfair or unconscionable, and is therefore not banned by § 1692f. Because plaintiff has pleaded no conduct in violation of the FDCPA, her claim under that statute should be dismissed. Even if plaintiff has stated a claim under the FDCPA, her statutory damages cannot exceed $1,000 in this action. As under RESPA, the FDCPA permits the recovery of statutory damages independent from claims for actual damages if a borrower proves a violation of the statute. 15 U.S.C. § 1692k(a)(2)(A) permits recovery “in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000.” That provision permits a maximum recovery of $1,000 per action, and not per alleged individual unlawful act, as plaintiff suggests by seeking twenty individual awards of $1,000. Harper v. Better Bus. Servs., Inc., 961 F.2d 1561, 1563 (11th Cir. 1992). As a result, in the event that the Court does not dismiss plaintiff’s FDCPA, the Court should limit plaintiff’s statutory damages claim to $1,000. The statute of limitation bars recovery for any conduct occurring one year before October 28, 2016. The FDCPA contains a one-year statute of limitations “from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). Accordingly, should the Court find that plaintiff has stated an FDCPA claim (which she has not), it should limit plaintiff’s recovery for alleged unlawful practices occurring only one year before the date on which this complaint was filed. Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 21 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 16 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS E. Plaintiff Has Failed to Allege a Breach of the Covenant of Good Faith and Fair Dealing (Count Five). Oregon law “imposes a duty of good faith and fair dealing with respect to all contracts to facilitate performance and enforcement of the contract where it is consistent with and in furtherance of the agreed-upon terms of the contract or where it effectuates the reasonable contractual expectations of the parties.” Brown v. American Prop. Mgmt. Corp., 1 P.3d 1051, 1057 (Or. Ct. App. 2000) (internal quotation marks omitted)). However, a party that merely invokes “its express, written contractual right does not, merely by so doing, violate its duty of good faith.” Uptown Heights Assocs. Ltd. P’ship v. Seafirst Corp., 891 P.2d 639, 643 (Or. 1995). Plaintiff alleges that “Seterus’s ongoing, willful, and intentional failure to provide the contractual language that requires the plaintiff to make payments under the Loan via certified mail or alternatively the on-going requirement to make the plaintiff make timely contractual loan payments via certified mail are a blatant violation of Seterus’s obligation of good faith and fair dealing.” (Compl. ¶ 90.) Plaintiff has not plausibly alleged that Seterus has ever imposed this requirement. As discussed previously, Seterus advised plaintiff she could make online payments if she wanted, and to call if she was having trouble accessing the online account. Plaintiff’s claim fails for a second reason. She fails to allege a contractual obligation with Seterus. Nguyen v. Madison Mgmt. Servs., LLC, 2016 WL 4708538, at *8 (D. Or. 2016). In Nguyen, the court dismissed plaintiff’s claim where she only alleged that the defendant was acting as a servicer for the owner of the loan, because the complaint failed to plead sufficient facts to establish the requisite contractual relationship with the defendant to state a claim for breach of implied covenant of good faith and fair dealing. Id. Here, plaintiff’s complaint is equally deficient. Plaintiff only alleges that Seterus is the servicer for the loan. (Compl. ¶ 8.) Accordingly, she has not pleaded sufficient facts to establish a contractual relationship with Seterus. Finally, to the extent that the Court considers plaintiff’s allegations about her access to Seterus’s web portal, plaintiff is contractually obliged to make payments by mail. (Compl. Ex. 1 at 3.) Plaintiff has no contractual right to access Seterus’s web portal, and therefore cannot have Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 22 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 17 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS had a “reasonable contractual expectation” that she could do so. As a result, Seterus cannot have violated the implied covenant of good faith and fair dealing in allegedly refusing to accept payments by web portal. F. The Economic Loss Rule Bars Plaintiff’s Claim for Tortious Breach of the Covenant of Good Faith and Fair Dealing (Count Six). Plaintiff brings a duplicate claim for breach of the covenant of good faith and fair dealing in tort. Plaintiff alleges that Seterus can be liable in tort because it “is subject to a standard of care independent to its [contractual obligations] * * * through its role as a servicer under the Note and Deed of Trust including compliance with statutory and regulatory provisions applicable to Seterus’s role as servicer.” (Compl. ¶ 95.) This does not reflect the state of Oregon law, and this claim should be dismissed because it is barred by Oregon’s economic loss rule. Under Oregon law, a claim in tort for the recovery of economic losses “must be predicated on some duty of the negligent actor to the injured party beyond the common law duty to exercise reasonable care.” Onita Pac. Corp. v. Trustees of Bronson, 843 P.2d 890, 896 (Or. 1992). This Court has already determined that a servicer-borrower relationship is not “special.” Nguyen, 2016 WL 4708535, at *8 (finding that a servicer’s obligation to comply with the UTPA and federal consumer protection statutes did not create a special relationship.). G. Plaintiff Cannot State a UTPA Claim (Claims 7 and 8). Plaintiff’s UTPA claims fail for numerous reasons. The UTPA does not apply to plaintiff’s loan, which was consummated before the UTPA applied to extensions of credit. Prior to a 2010 legislative amendment, the UTPA did not apply to extensions of credit. This Court has determined that the UTPA does not apply to loans that were consummated before the March 23, 2010 amendment. Nguyen, 2016 WL 4708535, at *9. This law was consummated in 2008. Accordingly, the UTPA does not apply. Plaintiff cannot establish an ascertainable loss. In Counts Seven and Eight, plaintiff alleges two UTPA violations (mirrored from her RESPA claims) that may also give rise Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 23 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 18 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS to liability under the UTPA. ORS 646.608; OAR 137-020-0805(5). However, as with the RESPA claims themselves, plaintiff has failed to allege an “ascertainable loss”—that is, actual damages— that are a prerequisite for stating a claim under the UTPA. ORS 646.638(1). An “’ascertainable loss” flows from “the unlawful trade practice. That is, the unlawful trade practice must have caused the ascertainable loss that the plaintiff suffered.” Pearson v. Philip Morris, Inc., 361 P.3d 3, 23 (Or. 2015). Plaintiff pleads her ascertainable loss as “additional attorneys’ fees and mailing costs for having to assert the Plaintiff’s rights in reply to Seterus’s failure.” (Compl. at ¶¶ 106, 110.) Those kinds of losses do not constitute ascertainable losses within the meaning of the UTPA. The UTPA’s statute of limitations limits plaintiff’s claims to conduct occurring only one year before filing. Should the Court decline to dismiss plaintiff’s UTPA claim, it should limit plaintiff’s recovery to conduct occurring within one year from the date of filing. ORS 646.638(6). H. The Court Lacks Subject Matter Jurisdiction Over Plaintiff’s TILA, RESPA, Breach of Contract, and UTPA Claims, Because Plaintiff Lacks Standing to Bring Those Claims (Counts One-Three and Five-Eight). To have standing to bring a claim, a plaintiff must allege an injury that is “concrete and particularized.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). Plaintiff lacks standing to bring her TILA, RESPA, breach of contract, and UTPA claims, because she has not alleged a “concrete” injury to herself that resulted from Seterus’s alleged failures to timely provide a payoff quote, acknowledge receipt of plaintiff’s NOE, or adequately respond to her NOE. As already discussed, plaintiff suffered no actual damages as a result of Seterus’s alleged violations of RESPA and, accordingly, has failed to state claims for relief under RESPA and the UTPA.4 But more fundamentally, plaintiff has not sufficiently alleged any injury, tangible or 4 Although not discussed above because actual damages are not a requirement to recover under TILA, plaintiff has failed to allege actual damages stemming from Seterus’s alleged TILA violation as well. Like with RESPA, attorney fees and costs are separately recoverable under TILA. See 15 U.S.C. § 1640(a)(1), (3). Accordingly, plaintiff has not pleaded actual damages cognizable under TILA. See Whittier v. Ocwen Loan Servicing, L.L.C., 594 Fed. App. 833, 836- Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 24 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 19 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS intangible, as a result of Seterus’s alleged regulatory violations. As a result, plaintiff lacks constitutional standing to bring these claims, and the Court must dismiss these claims for lack of subject matter jurisdiction. The Supreme Court recently clarified the standard for determining whether the violation of a statutory or regulatory right is a sufficiently concrete injury to provide standing to sue. In Spokeo, Inc. v. Robins, Robins sued a search engine specializing in locating contact information for individuals. Robins alleged that Spokeo violated the Fair Credit Reporting Act by failing to assure the accuracy of information it provided to a third party about Robins and failing to make certain statutory notices to users and data providers. 136 S. Ct. 1540, 1544-46 (2016). The district court dismissed for lack of standing, but the Ninth Circuit reversed, holding that “Spokeo violated [Robins’s] statutory rights” and that Robins had a “personal interest[] in the handling of his credit information.” Robins v. Spokeo, 742 F.3d 409, 413 (9th Cir. 2014). The Supreme Court reversed, holding that the circuit court had focused only on the “individualized” element of standing and failing to recognize that Robins had not suffered a “concrete” injury. Spokeo, 136 S. Ct. at 1548. The Court then discussed when a statutory or regulatory violation creates a “concrete” injury, even though the alleged harm is intangible. The Court noted that “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. Article III standing requires a concrete injury even in the context of a statutory violation.” Id. at 1549. The Court suggested that a “risk of real harm” may be sufficiently concrete, but that a “bare procedural violation” might “result in no harm” and therefore be insufficient. Id. at 1549-50. The Court remanded to the Ninth Circuit for further analysis of the facts presented by Robins and expressed no position on the prior finding that Robins had standing to sue. 37 (5th Cir. 2014) (separate provision for recovery of attorney fees and costs precludes considering such fees and costs “actual damages” for purposes of RESPA claim). Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 25 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 20 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS In the wake of Spokeo, federal courts have applied the Spokeo framework to TILA and RESPA claims. See McQuinn v. Bank of America, 656 F. App’x 848, 849 (9th Cir. 2016) (“We recognize that the Supreme Court’s recent decision in Spokeo * * * calls into question whether a violation of the Truth in Lending Act’s notice requirement * * * without more, creates an injury that is sufficiently concrete to confer standing.”). For example, in Dolan v. Select Portfolio Servicing, a federal court held that a RESPA claim alleging a servicer failed to provide notice of a change in servicers did not establish standing where the borrower conceded a lack of actual damages. No. 03-CV-3285 PKC AKT, 2016 WL 4099109, at *6 (E.D.N.Y. Aug 2, 2016). In a series of decisions, the United States District Court for the District of Florida dismissed RESPA claims for statutory damages where plaintiffs merely alleged “pattern or practice” violations without alleging injury of risk or future harm. See Meek v. Ocwen Loan Servicing, LLC, No. 16- cv-81003-BLOOM/Valle, 2016 WL 3999570 (July 26, 2016); Sutton v. Ocwen Loan Servicing, LLC, No. 16-cv-81234-BLOOM/Valle, 2016 WL 4417688 (August 19, 2016); Mejia v. Ocwen Loan Servicing, LLC, No. 16-CV-81269-BLOOM/Valle, 2016 WL 4587129 (Sept. 2, 2016). And in Strubel v. Comenity Bank, the Second Circuit held a plaintiff lacked standing as to two alleged TILA disclosure violations because the missed disclosures were not applicable to products the plaintiff was actually using. 842 F.3d 181, 191-95 (2016) Here, plaintiff lacks a concrete injury that supports her TILA, RESPA, breach of contract, and UTPA claims. Plaintiff’s TILA claim hinges on a payoff quote request that Seterus allegedly responded to in an untimely manner. But plaintiff does not allege that she obtained the payoff quote for a particular purpose (for example, satisfying her mortgage obligation) or that the lateness of the payoff quote affected in any way her decisions regarding her loan. Plaintiff’s TILA claim is exactly the type of “bare procedural violation” Spokeo holds insufficient to establish standing. Similarly, plaintiff lacks standing to bring her RESPA and UTPA claims based on the alleged failure to acknowledge plaintiff’s NOE (Counts Two and Seven), because she fails to allege any intangible impact of failing to receive her acknowledgment. Again, plaintiff does not Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 26 of 27 710929.0012/6855941.1 LANE POWELL PC 601 SW SECOND AVENUE, SUITE 2100 PORTLAND, OREGON 97204-3158 503.778.2100 FAX: 503.778.2200 PAGE 21 - DEFENDANT SETERUS, INC.’S MOTION TO DISMISS assert that Seterus’s alleged failure caused or prevented her from taking some action or exposed her to any risk whatsoever. And regarding her RESPA and UTPA claims asserting an insufficient substantive response to her NOE (Counts Three and Eight), plaintiff cannot allege intangible injury, because the substance of Seterus’s response in fact provided her with the information needed to address her servicing concerns. Plaintiff’s allegation that Seterus violated the technical requirements of RESPA without alleging why those requirements had any significance to her is another allegation of a “bare procedural violation” that cannot establish standing to sue after Spokeo. Finally, plaintiff’s breach of the covenant of good faith and fair dealing claims assert two specific injuries—the costs of sending payments by certified mail and “continued and exacerbated emotional distress.” As already discussed, the Court should disregard plaintiff’s allegation that Seterus required her to submit payments by certified mail as unsupported by specific factual allegations, and therefore implausible. And because emotional distress damages are not cognizable in breach of contract claims, plaintiff’s emotional distress cannot serve as the basis for standing. See Farris v. U. S. Fidelity & Guar. Co., 587 P.2d 1015, 1017 (Or. 1978). Accordingly, the Court should dismiss plaintiff’s TILA, RESPA, breach of contract, and UTPA claims for lack of subject matter jurisdiction. VI. CONCLUSION For the foregoing reasons, the Court should dismiss all of plaintiff’s claims with prejudice and without costs or fees. DATED: January 19, 2017 LANE POWELL PC By s/ Hans N. Huggler Pilar C. French, OSB No. 962880 Hans N. Huggler, OSB No. 144993 Telephone: 503.778.2100 Attorneys for Defendant Seterus, Inc. Case 3:16-cv-02081-MO Document 15 Filed 01/19/17 Page 27 of 27