Cole v. Jpmorgan Chase Bank, N.A.

• Decision Date: 25 August 2016
• Docket Number: Case No. 2:15-cv-2634
• Parties: ANDREW COLE, Plaintiff, v. JPMORGAN CHASE BANK, N.A., Defendant.
• Court: U.S. District Court — Southern District of Ohio

ANDREW COLE, Plaintiff, v. JPMORGAN CHASE BANK, N.A., Defendant.

Case No. 2:15-cv-2634

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

August 25, 2016

Chief Judge Edmund A. Sargus, Jr.

Magistrate Judge Elizabeth Preston Deavers

OPINION AND ORDER

This matter is before the Court on Defendant's Motion to Dismiss Plaintiff's Second Amended Complaint (ECF No. 31), pursuant to Federal Rules of Civil Procedure 12(b)(6), with prejudice, Defendant's Motion to Transfer Venue (ECF No. 14), and Plaintiff's Motions for Leave to file a Surreply. (ECF No. 22, 36.) For the reasons that follow, Defendant's Motion to Dismiss and Motion to Transfer Venue are DENIED. Plaintiff's motions for leave to file a surreply are DENIED.

I. BACKGROUND

Plaintiff Andrew Cole ("Plaintiff") filed his Second Amended Complaint (ECF No. 30) ("Complaint") on February 8, 2016, against Defendant JPMorgan Chase, N.A. ("Defendant" or "Chase"). The Complaint asserts a violation of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2605, et seq. This Court dismissed Plaintiff's prior Complaint pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), finding that Plaintiff lacked standing to assert claims that he could or should have brought before or during his prior Chapter 13 bankruptcy case, which was dismissed on July 11, 2012. (ECF No. 29.) Plaintiff was permitted to amend his Complaint to address claims that accrued after the July 11, 2012 date.

In this Complaint, Plaintiff alleges that he is a resident of the State of Colorado, and that Defendant is a mortgage servicer as defined by 12 U.S.C. § 2605. (Compl., ECF No. 30, at p. 1, ¶1.) Plaintiff alleges that the Complaint arises under RESPA, 12 U.S.C. § 2605, and thus the Court has federal question jurisdiction. (Id.)

A. Facts

The well-pleaded allegations of the Complaint are taken as true for purposes of the pending Motion to Dismiss. Plaintiff asserts that he is the owner of a principal residence located in Grand Junction, Colorado, secured by a United States Department of Agriculture ("USDA") loan, and that Chase is and has been the servicer of Plaintiff's mortgage. (Id. at p. 2, ¶ ¶ 2, 4.) The current action stems from Plaintiff's efforts to obtain information "about failed loss mitigation efforts" and his hope that Chase would "acknowledge and/or correct the problems with his applications." (Compl., ECF No. 30, at p. 7, ¶ 13.)

Plaintiff asserts that Paragraph 16 of the deed of trust for his home states, in pertinent part:

"Governing Law; Severability; Rules of Construction. This security instrument shall be governed by federal law and the law of the jurisdiction in which the property is located. All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of applicable law. . . ."

"Applicable Law" means all controlling applicable federal, state and local statutes, regulations, ordinances, rules and orders (that have the effect of law) as well as all applicable final, non-appealable judicial opinions."

(Id. at pp. 2-3, ¶ 5.)

Plaintiff asserts that the applicable law includes the provisions of 42 U.S.C. § 472(h)(13) addressing loss mitigation for USDA loans:

"(13) Loss mitigation. Upon default or imminent default of any mortgage guaranteed under this subsection, mortgagees shall engage in loss mitigation actions for the purpose of providing an alternative to foreclosure (including actions such as special forbearance, loan modification, pre-foreclosure sale, deed in lieu of foreclosure, as required, support for borrower housing counseling,subordinate lien resolution, and borrower relocation), as provided for by the Secretary." (Emphasis added).

(Id. at p. 3, ¶ 6.) Plaintiff asserts that "the purpose of the USDA program was to 'assist eligible households in obtaining adequate but modest, decent, safe, and sanitary dwellings and related facilities for their own use in rural areas.'" (Id. at p. 4, ¶11.) In Paragraph 16 of the Complaint, Plaintiff further asserts that

While Chase had dismissed its foreclosure proceedings, Plaintiff was highly concerned about a new foreclosure, as Chase was not accepting payments. Plaintiff tried to generate straight answers that would make it obvious to Chase that a new foreclosure would be against USDA guidelines, and that could be used with USDA administratively and in any new foreclosure proceeding to prevent a foreclosure sale that was against these regulations.

(Id. at p. 9, ¶ 16.) Based on conduct in this case, plaintiff alleges that Defendant was "avoiding an evaluation of Plaintiff's loan since July 12, 2012 by repeatedly claiming that Plaintiff's loss mitigations were incomplete." (Id. at p. 3, ¶ 8.)

Plaintiff asserts that "[o]n July 12, 2012, Defendant was already on robust notice by way of a lawsuit filed in the United States District Court for the District of Columbia, in Case No. 1:12-cv-00361-RMC" (hereinafter "National Mortgage Settlement") by the United States and forty-nine state attorneys general, including the Attorney General of Ohio and the Attorney General of Colorado, of "problems with avoiding loss mitigation."¹ Specifically, Plaintiff asserts that Chase was on "the most robust notice of the problems with its system by the time 12 U.S.C. § 2605k became effective in January of 2014." (Id. at p. 7, ¶11.)

On March 5, 2014, Plaintiff sent to Chase at "an address maintained after the regulations to 12 USC 2605k became effective, a letter asking about failed loss mitigation efforts." (Id. at p. 7, ¶ 13.) Pertinent parts of the letter include the following:

I am writing to dispute your servicing of my mortgage. Please consider this letter a 'qualified written request' under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2605(e). Also please consider this a request under 12 U.S.C. § 2605(k) including all of the duties of the CFPB incorporated by 12 U.S.C. § 2605(k)(1)(E) including but not limited to 12 C.F.R. § 1024.35.²

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3. I am re-applying [for a loan modification] now; how will Chase consider the fact that I was not properly considered before and Chase has refused my payments for a long time. How will Chase handle the arrearage since I was not allowed to make payments for so long. All I seem to get is more requests and lost documents; for years. It seems as if Chase claims lost documents until the arrearage gets big due to interest and fees then is setting me up to claim I do not qualify under standards that fail to consider servicer fault. How does Chase plan to account for this?

(ECF No. 30-1, pp. 1, 4, Exh. A.) Plaintiff asserts that "Chase failed to send any meaningful or plausibly compliant response, only directing Plaintiffs [sic] to its counsel in Denver." (Compl., ECF No. 30, at p. 8, ¶ 14.)³ Plaintiff asserts that he ' 'again searched the internet for a Chase QWR address, and found a specific QWR address on another website maintained by Chase (but not found on the initial site)." (Id.) Plaintiff asserts that

"[a]s such, Defendant violated and [sic] 12 CFR 2605k by maintaining a website in violation of 12 CFR 1024.35c, which states, inter alia, as follows: 'A servicer that designates an address for receipt of notices of error must post the designated address on any Web site maintained by the servicer if the Web site lists any contact address for the servicer.' Defendant violated [sic] by maintaining at the time of Plaintiff's letter to that address, and by continuing to maintain to this day,a website at https://www.chasexom/mortgage/eontact-chase-mortgage containing a contact address without the designated QWR address.

(Id.) Upon finding the specific QWR address on this other website, Plaintiff sent "basically the same letter as the March 5, 2014 letter but marked "REPEAT REQUEST", a copy of which is attached as (Exhibit B)." (Id. at pp. 8-9.) Plaintiff asserts that "Chase failed to respond in any meaningful manner and lied in its response." (Id. at p. 9.) However, Plaintiff did receive a response to his June 26, 2014 letter by Chase's counsel, dated September 5, 2014. (ECF No. 30-3, Exh. C).

In the letter, Chase's counsel confirmed that Chase denied at least six of Plaintiff's loan modification applications in a three year period, and that at least two of denials occurred since July 12, 2012. (ECF No. 30-3, Ehx. C.) According to the September 5, 2014 letter from Chase's counsel, the two denials in April and August, 2013, respectively, were based on a lack of certain documents, or the fact that some of the documents in the pending application "had become outdated":

In or around April 2013, Mr. Cole's Loan modification application was denied because Chase had not received from him all of the documents Chase requested to complete his application and the documents Chase did receive had become outdated. Accordingly, Mr. Cole's Loan modification was denied because it was incomplete.

In or around August 2013, Mr. Cole's Loan modification application was denied because the application was not complete. For example, Chase did not receive from Mr. Cole the required monthly living expenses spreadsheet.

As a result of the foregoing, Chase has determined that no error occurred with respect to its review and denial of Mr. Cole's prior Loan modification applications.

(Id., at p. 2.) This September 5, 2014 letter from Counsel additionally states that "Mr. Cole has a Loan modification application under review. Chase will contact him after it receives all of the documentation and information relating to his pending modification application and after Chaseis able to make a determination of his eligibility for a modification." (Id.)⁴ Plaintiff asserts that "[u]nsurprisingly, Chase continued to invent claims that his packets were incomplete for reasons, some of which were entirely absurd, such as an 'illegible' paycheck stub that can be read on any smartphone." (Id. at p. 10, ¶17c.)

Plaintiff asserts that he suffered damages. As a result of "Defendant's evasive response...