Davis v. The Money Source Inc.
| Decision Date | 30 August 2021 |
| Docket Number | 3:21-CV-00047 (AWT) |
| Court | U.S. District Court — District of Connecticut |
| Parties | PAULETTE DAVIS, Plaintiff, v. THE MONEY SOURCE INC. and SERVICELINK FIELD SERVICES, LLC and MMC CONTRACTING SERVICES INC. Defendants. |
RULING ON THE DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S AMENDED COMPLAINT AND/OR STAY THE ACTION
Plaintiff Paulette Davis (“Davis”) has filed a First Amended Complaint against defendants The Money Source Inc. (“TMS”), ServiceLink Field Services, LLC (“SLFS”), and MMC Contracting Services Inc. (“MMC”), bringing claims for violations of the Fair Housing Act (“FHA”), 42 U.S.C. §§ 3601 et seq., trespass, negligent supervision of employees, violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605(e) and 12 C.F.R. §§ 1024.35, and violations of the Connecticut Unfair Trade Practices Act (“CUTPA”) Conn. Gen. Stat. §§ 42-110a et seq. TMS and SLFS have filed motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) or, in the alternate, to stay the case pending resolution of a state court foreclosure action. For the reasons set forth below, their motions are being denied except with respect to the claim in Count I based on 42 U.S.C. §3604(c).
“The complaint, which [the court] must accept as true for purposes of testing its sufficiency, alleges the following circumstances.” Monsky v. Moraghan, 127 F.3d 243, 244 (2d Cir. 1997).
Davis is a Black resident of Waterbury, Connecticut. Prior to living in Waterbury, Davis was living in Bridgeport but wanted to move closer to her then-job in Washington Connecticut. On the day she was to close on her new home in Waterbury, Davis was laid off from her job. Davis decided to go through with the closing because she knew that she had a great track record of employment, and because she would lose her $5, 000 deposit if she did not close. “At all times relevant to [the] Complaint, TMS owned and serviced Ms. Davis's FHA-backed mortgage on her home, and SLFS and MMC performed property inspections on behalf of TMS, as TMS's agents, on Ms. Davis's home.” First Amended Complaint (ECF No. 25) (“FAC”) at ¶12.
Davis had trouble obtaining consistent income, was abandoned by her husband, and ultimately fell behind on her Federal Housing Administration-backed mortgage. Davis did what she could to improve her career and income opportunities, including attending nursing school, which she quit at the guidance of TMS. She worked as a housekeeper, took in an international student, and provided in-home care in her own home to an elderly individual in an effort to make money. Despite these efforts, Davis was behind on her mortgage and feared that she would be forced to leave her home. During this time, Davis stayed in contact with TMS in hopes of obtaining a loan workout.
Shortly after Davis fell behind on her mortgage, TMS directed SLFS to send strangers to enter and inspect the property on its behalf. TMS paid SLFS an agreed-upon amount for each task and subsequently charged Davis for the amounts that it paid to SLFS. In turn, SLFS contracted with MMC for an agreed-upon amount per task to actually conduct the inspections. TMS provided SLFS with a set of requirements and obligations under which it was to conduct its “field services” work, including strict deadlines, hiring requirements, communications with TMS and its customers, and access to TMS's customers' confidential information. FAC at ¶ 26. SLFS then hired MMC to perform the “field services” with the same requirements. Id. at ¶ 27. MMC hired the individuals who performed the inspections, subjecting them to the same requirements.
The Consumer Financial Protection Bureau (“CFPB”) issued a bulletin regarding mortgage servicers on October 31, 2016. That bulletin obligated TMS to supervise “service providers, ” like SLFS and MMC, and include in the contract with the service providers clear expectations about compliance, as well as enforceable consequences, internal controls and monitoring to ensure compliance. It also obligated TMS to take prompt action to address any problems identified through the monitoring process, including termination of the relationship where appropriate.
In early 2019, Davis was home alone when she saw a young man walking around outside her home. She rapped on the window and shouted to the man “you shouldn't be doing that, ” and the man scurried away. Id. at ¶ 31. A month or two later, Davis saw another man on her property, peering through her windows. Davis went outside to ask the man what he was doing. The man got annoyed and responded: Id. at ¶ 32. The man also pointed to the “No Trespassing” sign that was on the golf course just beyond Davis's property line and stated that the sign was there because the country club was concerned that she and her family would try to rob the golfers. Before the man left, he attempted to forcibly open Davis's garage door and, in the process, broke it. After this interaction, Davis called TMS to complain. TMS confirmed that it was sending inspectors to her property and stated that it had to do so because she was behind on her mortgage payments. TMS refused to do anything differently.
A few months later, a different inspector entered Davis's property and she confronted him. Davis asked if this individual intended to damage her property like the previous inspector. He responded that he did not blame the previous inspector because he may have thought that Davis was at the property stealing copper rather than living there, given the neighborhood and Davis's complexion.
The two previously mentioned inspectors, as well as others, continued to appear during the first part of each month for inspections. These people would often ignore Davis's presence, and one gave her the middle finger. Davis contacted TMS many times to complain about strangers, as she was worried about them looking into her windows and scaring her underage grandson. Davis offered to set up regular appointments for the inspections, but TMS refused to accept the offer. In or around February 2020, Davis told TMS that she would call the police on any future intruder, and TMS advised her that such a call would only lead to her being arrested.
On or about June 1, 2020, another stranger drove up to Davis's property and pointed something at her which she believed looked like a gun, but turned out to be a camera. Davis was terrified and no longer feels safe in her own home. She lives in constant fear of having to confront another stranger on her property and worries that the situation will escalate to something more serious than a broken garage door.
Under the CARES Act, Davis was eligible to receive a forbearance because she had a federally-backed loan. See Coronavirus, Aid, Relief, and Economic Security Act, Pub. L. No. 116-136 §4022(b)(1), 134 Stat. 281, 490 (2020). She repeatedly requested a forbearance from TMS over the phone and in writing, but her request was denied each time. Three TMS employees told Davis over the phone that, even if she received a forbearance, she would have to make up any missed payments by making a lump sum payment at the end of the forbearance period. This information was incorrect, and such a requirement is actually prohibited by the FHA.
Davis also sent TMS a qualified written request and notice of error under RESPA on September 4, 2020. In it, she specifically disputed the information that the TMS employees had given her regarding a lump sum payment, and she reiterated her request for a forbearance pursuant to the CARES Act. TMS ignored Davis's request for a forbearance, conducted no investigation, and did not provide any response regarding the erroneous information she had been given by TMS employees.
In the past three years, at least eleven borrowers have complained to the CFPB about poor servicing when they applied for a loan workout from TMS, five customers have complained since the implementation of the CARES Act about TMS's failure to fulfill its obligations, and at least two others have brought claims against TMS based on its failure to comply with its obligations under RESPA and Regulation X.
Davis now faces loss of the opportunity to keep her home, increased costs and fees, and potential foreclosure and eviction as a result of TMS's refusal to grant her a forbearance. TMS has initiated a state foreclosure action against Davis, which is currently pending.
When deciding a motion to dismiss under Rule 12(b)(6), the court must accept as true all factual allegations in the complaint and must draw inferences in a light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). Although a complaint “does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 550, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)) (on a motion to dismiss, courts “are not bound to accept as true a legal conclusion couched as a factual allegation”). “Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.” Ashcroft v Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555 (internal citations and quotations omitted). However, the plaintiff must...
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