Benjamin v. Rosenberg & Assocs.
| Decision Date | 26 August 2021 |
| Docket Number | Civil Action 19-3012 (RDM) |
| Court | U.S. District Court — District of Columbia |
| Parties | MELISSA AKAR BENJAMIN, Plaintiff, v. ROSENBERG & ASSOCIATES, LLC, Defendant. |
This case presents a fact pattern that has become a familiar one in federal courts: Plaintiff Melissa Akar Benjamin-a defendant in a foreclosure action-has sued the loan servicer financial services provider, and debt collection law firm that pursued the foreclosure action against her. She claims that these entities made repeated misrepresentations in an attempt to collect on her debt or obtain a foreclosure and in so doing, violated multiple federal and District of Columbia laws.
Benjamin initially alleged violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq.; the Real Estate Settlement Procedures Act (RESPA) 12 U.S.C. § 2601 et seq.; the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq.; the Truth in Lending Act, 15 U.S.C. § 1601 et seq.; the Mortgage Lender and Broker Act, D.C. Code § 26-1101 et seq.; and the District of Columbia Consumer Protection Procedures Act, D.C. Code § 28-3901 et seq. Dkt. 1 (Compl.); Dkt. 23 (Am. Compl.). As the litigation proceeded, however, she voluntarily dismissed her claims against the loan servicer and financial services provider, Dkt. 29; Dkt. 33, leaving only her FDCPA claims against the law firm, Rosenberg & Associates (“R&A”), to be resolved. Meanwhile, in the underlying foreclosure action, the parties have stipulated to a voluntary dismissal. Praecipe of Dismissal, Wilmington Sav. Fund Soc'y, FSB v. Benjamin, 2016 CA 008365 R(RP) (D.C. Super. Ct. Sept. 16, 2020).
This matter is before the Court on R&A's motion to dismiss for failure to state a claim, Dkt. 25, which Benjamin opposes, Dkt. 32. Although only one count of the complaint is directed at R&A, that count includes several distinct claims under the FDCPA. For the reasons explained below, the Court concludes that Benjamin lacks standing to pursue some of those claims, that others fail as a matter of law, but that two claims may proceed beyond the pleadings. The Court will, accordingly, GRANT in part and DENY in part R&A's motion to dismiss.
The following facts derive from Benjamin's complaint, documents incorporated into the complaint, and matters of which the Court may take judicial notice.[1] See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Trudeau v. FTC, 456 F.3d 178, 183 (D.C. Cir. 2006); EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997); Savignac v. Jones Day, 486 F.Supp.3d 14, 24 (D.D.C. 2020).
Benjamin owns a property in northeastern Washington, D.C., and has lived there for more than 30 years. Dkt. 23 at 2 . In September 2009, she refinanced her property and signed a promissory note (“note”) and deed of trust (“deed”) in exchange for a loan of $226, 597.00 from the lender Village Capital & Investment. Id.; Dkt. 32-4; Dkt. 32-5. Several different entities claimed an interest in the loan in the ensuing years and played a role in the foreclosure action that followed. In 2011, Wells Fargo, claiming to have acquired both servicing rights and ownership of the loan, declared the loan in default. Dkt. 23 at 2 . Three years later, in 2014, Selene Finance LP (“Selene”), a subsidiary of Selene Holdings LLC, acquired the right to service the loan. Id. (Am. Compl. ¶¶ 4, 8).
In November 2016, R&A filed a foreclosure action on behalf of Christiana Trust-a division of Wilmington Savings Fund Society, FSB (“WSFS”)-as trustee for Sunset Mortgage Loan Trust, Series 2014-2. Dkt. 32-1 (Compl. for Judicial Foreclosure); Dkt. 23 at 3 . The foreclosure complaint, which was verified by a corporate representative, represented that the named plaintiff was “the beneficiary of [the] Note secured by [Benjamin's] property.” Dkt. 32-1 at 2. Subsequently, R&A filed a motion to substitute, which affirmed that “[a]t the time the . . . [foreclosure action] was filed, Christiana Trust was the proper [p]laintiff” but that, “[through a series of assignments, Christiana Trust [had] transferred its rights and interest in the Note and Deed of Trust . . . to Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, as trustee for Normandy Loan Trust, Series 2017-2.” Dkt. 32-2 at 1. R&A, accordingly, asked to substitute Wilmington Savings Fund Society at the named plaintiff, “in lieu of Christiana Trust, ” id. at 2; see also Dkt. 23 at 4 , and the Superior Court granted that motion on May 25, 2018, Dkt. 26-1 at 4.
In the early stages of the foreclosure lawsuit, a foreclosure sale seemed likely. WSFS filed a verified complaint at the beginning of the foreclosure action, representing that it held the note to Benjamin's loan and, as beneficiary of the deed, had the right to foreclose. Dkt. 32-1 at 2; Dkt. 23 at 3 . After WSFS filed the foreclosure action, Benjamin sought to conduct a short sale on the property. Dkt. 23 at 3 . These attempts failed. Id. According to Benjamin, she “abided by all of Defendants' requirements and found several buyers who submitted contract[s], but Defendants caused the contracts . . . to fall through by, among other things, not acting on the contracts and not communicating with” Benjamin to explain why. Id. Benjamin also attempted to modify the terms of her mortgage payment plan by submitting a loss mitigation application to the loan servicer, Selene, on October 29, 2018. Id. at 5 . It is unclear when Selene received this application.
In July 2018, R&A filed a motion for summary judgment in the foreclosure action, and on October 31, 2019, the Superior Court granted summary judgment in favor of Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, as trustee for Normandy Mortgage Loan Trust, Series 2017-2, and entered a decree for the sale of the property. Dkt. 26-1 at 4-5; Dkt. 26-2 (). Progress toward the foreclosure sale slackened, however, when, less than a month later, Benjamin obtained counsel and moved to alter or amend the Superior Court's order for summary judgment. Dkt. 23 at 4 ; Dkt. 26-1 at 5. Benjamin argued that the order should be vacated because (a) R&A and WSFS “acted in bad faith with respect to . . . Benjamin's efforts to short-[sell] the property;” (b) R&A and WSFS “did not hold a face-to-face meeting prior to filing the foreclosure action;” and (c) R&A and WSFS “did not prove they were in possession of the [n]ote at the start of the foreclosure, or . . . at any point during the foreclosure.” Dkt. 23 at 4 .
In December 2018, while Benjamin's motion to amend was pending, Benjamin's counsel sent the loan servicer, Selene, a letter claiming “that there were errors on [Benjamin's] account and request[ing] information on the account.” Dkt. 23 at 4 . According to Benjamin, Selene did not respond adequately to this letter. “Selene did not conduct a reasonable investigation of [the] letter[, ] . . . failed to make required corrections[, ] and failed to provide all of the information that [Benjamin's counsel] requested.” Id. Benjamin contends that “Selene did not provide th[is] information because . . . the information . . . would establish that Selene had no right to collect the debt, Selene had no right to foreclose, and Selene had assessed amounts on the account that were illegitimate.” Id. at 4-5 . Benjamin avers that, as a result, she “was charged with interests, fees, costs[, ] and other charges that should not have been applied to the account.” Id. at 4 . In the same month, Benjamin's counsel also requested a copy of the note from Selene. Id. at 5 (Compl. ¶ 20). Selene provided the note, but it was endorsed to the United States Department of Housing and Urban Development (“HUD”), rather than any of the foreclosing entities. Id. Moreover, in January 2019, Selene allegedly advised Benjamin that Normandy Mortgage “had [held] no rights in [her] debt [since] July 2018.” Id. (Compl. ¶ 18).
On February 22, 2019-while Benjamin's motion to alter or amend the Superior Court's judgment and decree was still pending-“R&A, at the behest of Selene, ” sent notice of a scheduled foreclosure sale to Benjamin. Id. (Am. Compl. ¶ 19). Benjamin's attorney responded by warning Selene that the foreclosure sale was illegal because (1) Benjamin's loss mitigation application had not been processed, as required by RESPA; (2) the note that Selene had provided to Benjamin's counsel was endorsed to HUD, not any of the foreclosing entities; and (3) Selene had represented that the trust for which WSFS was acting as trustee, Normandy Mortgage, no longer had any interest in Benjamin's debt. Id. (Am. Compl. ¶ 20). When contacted by Benjamin's counsel, Selene confirmed that it had received the letter, as well as Benjamin's loss mitigation request in October 2018, despite not responding to the latter, but it “would not agree to cancel the foreclosure sale.” Id. (Am. Compl. ¶ 21).
After the parties finished briefing the motion to alter or amend the Superior Court granted Benjamin's motion on March 19, 2019, and vacated the foreclosure order to “allow[] the issues presented in [Benjamin's] [m]otion to be more thoroughly explored.” Dkt. 26-3 at 2; Dkt. 23 at 6 ; Dkt. 26-1 at 5.[2] Benjamin subsequently filed a motion to dismiss based on the same arguments she had raised with WSFS and Selene: “(a) Defendants were not in possession of the [n]ote at the commencement of the foreclosure action[;] (b) the copy of the [...
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