822 F.3d 1241 (11th Cir. 2016), 15-10582, Renfroe v. Nationstar Mortgage, LLC
| Citation | 822 F.3d 1241, 26 Fla.L.Weekly Fed. C 302 |
| Opinion Judge | MARTIN, Circuit Judge. |
| Party Name | MARGARET C. RENFROE, Plaintiff-Appellant, v. NATIONSTAR MORTGAGE, LLC, Defendant-Appellee |
| Judge Panel | Before WILSON and MARTIN, Circuit Judges, and RODGERS,[*] District Judge. |
| Case Date | May 12, 2016 |
| Court | United States Courts of Appeals, U.S. Court of Appeals — Eleventh Circuit |
Page 1241
Appeal from the United States District Court for the Southern District of Alabama. D.C. Docket No. 1:14-cv-00314-CG-M.
REVERSED AND REMANDED.
Before WILSON and MARTIN, Circuit Judges, and RODGERS,[*] District Judge.
OPINION
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MARTIN, Circuit Judge.
Margaret Renfroe is a retired bank manager who claims that her mortgage payment incorrectly increased after Nationstar Mortgage, LLC (" Nationstar" ) began servicing her loan. She wrote Nationstar to ask why her payment had gone up, but Nationstar gave no explanation. Instead, it said her account was correct and attached some loan documents. Mrs. Renfroe sued Nationstar under the Real Estate Settlement Procedures Act (" RESPA" ), 12 U.S.C. § 2601 et seq., a consumer-protection statute geared toward mortgagors. Nationstar succeeded in getting the suit dismissed, after which Mrs. Renfroe appealed to this Court. Because the District Court improperly elevated Nationstar's allegations over those of Mrs. Renfroe at the motion-to-dismiss stage, and because Mrs. Renfroe adequately pleaded damages, we REVERSE and REMAND for proceedings consistent with this opinion.
I. BACKGROUND
A. MORTGAGE SERVICING ERROR
In 2006, Mrs. Renfroe refinanced her mortgage with Wilmington Finance, Inc. at a fixed rate of 7.75 percent for a 30-year term, with monthly payments of $998.68. After several years, servicing of the loan was transferred to Nationstar. Mrs. Renfroe alleges that after this transfer, her monthly payments increased by about $100.
Mrs. Renfroe says she repeatedly called Nationstar seeking an explanation, but got none. She suspected that Nationstar was either mistakenly charging her for property taxes or had miscalculated her loan amortization schedule. In September 2013, Mrs. Renfroe refinanced her mortgage with Regions Bank, which ended Nationstar's servicing of the loan.
B. THE RESPA LETTERS
On June 17, 2014, Mrs. Renfroe sent Nationstar a letter pointing out the increase
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in payment, as well as her suspicions about its cause. She requested an investigation, a " detailed explanation," certain account information, and a refund if appropriate. She attached several loan documents in support of her letter. This " notice of error" letter triggered certain rights Mrs. Renfroe possesses under RESPA. See 12 U.S.C. § 2605(e).
On June 26, 2014, Nationstar responded to Mrs. Renfroe's letter. It denied any error, stating that the " loan and related documents were reviewed and found to comply with all state and federal guidelines that regulate them. As such, the above-mentioned loan account will continue to be serviced appropriate to its status." 1 Nationstar also represented that several loan documents were enclosed, but none of these enclosures are contained in the record. Mrs. Renfroe had not requested many of the documents that Nationstar listed, and some were even duplicates of the documents that she had sent to Nationstar. While Nationstar described the kind of information that generic documents of these types might contain, its letter said nothing about the substantive content of the documents and gave no explanation for Mrs. Renfroe's predicament.
C. PROCEDURAL HISTORY
A month later, Mrs. Renfroe filed this suit. For our purposes here, she claimed that Nationstar had violated RESPA by failing to reasonably investigate the error she pointed out in her account, by failing to adequately respond to her notice of error, and by failing to refund her overpayments. Nationstar moved to dismiss Mrs. Renfroe's amended complaint for failure to state a claim, arguing that it had satisfied its obligations under RESPA and that Mrs. Renfroe had not adequately pleaded damages. Mrs. Renfroe responded that Nationstar had not complied with RESPA, and this failure damaged her.
The Magistrate Judge recommended granting Nationstar's motion to dismiss. The judge reasoned that Nationstar complied with RESPA because it " explain[ed] that 'related documents [to the loan] were reviewed.'" Although those documents were nowhere in the record, the Magistrate Judge concluded that " [s]uch an explanation satisfies RESPA." Alternatively, the judge stated that Mrs. Renfroe had not pleaded damages under RESPA. First, because the overpayments occurred before Mrs. Renfroe wrote to Nationstar, the judge found that any such damages " sound in breach of contract . . . and not in a RESPA violation." Second, the Magistrate Judge rejected the idea that Mrs. Renfroe could count the cost of sending her " notice of error" letter as damages. Finally, the judge stated that no statutory " pattern or practice" damages could accrue without actual damages.
The District Court overruled Mrs. Renfroe's objections to the Magistrate Judge's report, adopted it, and dismissed the complaint without prejudice. Mrs. Renfroe timely appealed to this Court.
II. STANDARD OF REVIEW
" We review de novo the district court's grant of a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), accepting the allegations in the complaint as true and construing them in the light most favorable to the plaintiff." Timson v. Sampson, 518 F.3d 870, 872 (11th Cir. 2008) (per curiam). To survive a motion to dismiss, a complaint need only present sufficient facts, accepted as true, to " state a claim to relief that is plausible on its face." Bell A. Corp. v. Twombly,
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550 U.S. 544, 556, 570, 127 S.Ct. 1955, 1965, 1974, 167 L.Ed.2d 929 (2007). The complaint must " raise a right to relief above the speculative level," but it need not contain " detailed factual allegations." Id. at 555, 127 S.Ct. at 1964-65.
III. DISCUSSION
We consider two aspects of Mrs. Renfroe's claim: (1) whether she stated a RESPA violation, and (2) whether she stated damages related to that violation. Guiding this analysis is the principle that RESPA, as a remedial consumer-protection statute, should be construed liberally in order to best serve Congress's intent. Cf. Ellis v. Gen. Motors Acceptance Corp., 160 F.3d 703, 707 (11th Cir. 1998).
A. RESPA VIOLATION
Nationstar argues that Mrs. Renfroe failed to allege a RESPA violation. RESPA requires mortgage servicers like Nationstar to reasonably respond to notices of error like the one Mrs. Renfroe sent. Basically, a servicer must respond by fixing the error, crediting the borrower's account, and notifying the borrower; or by concluding that there is no error based on an investigation and then explaining that conclusion in writing to the borrower. See 12 U.S.C. § 2605(e)(2); 12 C.F.R. § 1024.35(e)(1)(i). In 2013, the Consumer Financial Protection Bureau promulgated new regulations that clarified servicers' obligations after receiving a notice of error: [A] servicer must respond to a notice of error by either:
(A) Correcting the error or errors identified by the borrower and providing the borrower with a written notification of the correction, the effective date of the correction, and contact information, including a telephone number, for further assistance; or
(B) Conducting a reasonable investigation and providing the borrower with a written notification that includes a statement that the servicer has determined that no error occurred, a statement of the reason or reasons for this determination, a statement of the borrower's right to request documents relied upon by the servicer in reaching its determination, information regarding how the borrower can request such documents, and contact information, including a telephone number, for further assistance.
12 C.F.R. § 1024.35(e)(1)(i) (emphasis added). Nationstar says it chose and complied with the second option. Thus, Nationstar purports to have: (1) conducted a reasonable investigation; (2) concluded that there was no error based on that investigation; (3) given Mrs. Renfroe a written statement of " the reason or reasons for this determination" ; and (4) facilitated Mrs. Renfroe's access to further information.
In her amended complaint, Mrs. Renfroe alleged that Nationstar violated RESPA because it failed to provide " any explanation" for its conclusion; failed to provide " an explanation of whether it was charging . . . property taxes" ; failed to provide " an explanation of how payments were calculated and which amortization schedule was used" ; and failed to " conduct any reasonable investigation." Instead, Mrs. Renfroe asserts that Nationstar " provided boilerplate statements and objections which do not apply to Mrs. Renfroe's letter, provided information and documents not requested[,] and without explanation[] stated the general conclusion that it did nothing wrong in servicing the account." Her allegations are supported by Nationstar's response letter. In its letter, Nationstar simply concluded, " [T]he above-mentioned loan and related documents were reviewed and found to comply with all state and federal guidelines that regulate them. . . . [W]e did review the account, and all transactions
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appear to be correct from our records review." Nationstar acknowledged at oral argument that its letter did not explain to Mrs. Renfroe...
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Florida Real Property & Business Litigation Report, Volume 13, Issue 28
...§ 2605(f)(1). In construing RESPA, this Court held that “damages are an essential element” of a claim, Renfroe v. Nationstar Mortg., LLC, 822 F.3d 1241, 1245–46 (11th Cir. 2016), and further stated that “the use of ‘additional’ seems to indicate that a plaintiff cannot recover pattern-or-pr......