Hawthorne v. Rushmore Loan Mgmt. Servs.
| Decision Date | 30 August 2021 |
| Docket Number | Civil Action 20-393 (RDM) |
| Parties | ERICA N. HAWTHORNE, Plaintiff, v. RUSHMORE LOAN MANAGEMENT SERVICES, LLC, Defendant. |
| Court | U.S. District Court — District of Columbia |
Plaintiff Erica Hawthorne, the record owner and borrower for a property in the District of Columbia, brings claims for breach of contract, negligence, negligent misrepresentation intentional infliction of emotional distress, defamation, and violations of the D.C. Consumer Protection Procedures Act the Fair Credit Reports Act, and the Fair Debt Collection Practices Act against the entity that serviced her mortgage Defendant Rushmore Loan Management Services, LLC (“Rushmore”). Rushmore timely removed this action from D.C. Superior Court and has now moved to dismiss all of Plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. 7. For the reasons set forth below, the Court will GRANT in part and DENY in part Rushmore's motion.
For purposes of resolving Rushmore's motion to dismiss, the Court must consider the complaint as a whole, accepting the factual allegations therein as true, and may also consider materials attached to or incorporated by reference into the complaint. See Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007); Banneker Ventures, LLC v. Graham, 798 F.3d 1119, 1133 (D.C. Cir. 2015). The doctrines of incorporation by reference and attachment have their limits, however. For one, documents typically are incorporated into the pleadings only if they are “central to” the pleadings, Slovinec v. Georgetown Univ., 268 F.Supp.3d 55, 59 (D.D.C. 2017) (quoting Strumsky v. Washington Post Co., 842 F.Supp.2d 215, 217-18 (D.D.C. 2012)), or if they are “extensively referenced and relied upon” in the pleadings, 5A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1327 (4th ed. 2021). Moreover, if a party contests the authenticity of documents referenced in or attached to the complaint, see Slovinec, 268 F.Supp.3d at 59, consideration of these records may convert the motion to dismiss into a motion for summary judgment, see Fed. R. Civ. P. 12(d); cf. Banneker Ventures, LLC, 798 F.3d at 1133 (). Here, Plaintiff's complaint references and relies upon certain loan records, and neither party disputes the accuracy or authenticity of any of those records, or argues that consideration of those records requires conversion of the pending motion into a motion for summary judgment, see Fed. R. Civ. P. 12(d). The Court will, accordingly, rely on these unopposed materials for purposes of resolving the pending motion.
Plaintiff, who is now a New Jersey resident, “is the record owner and borrower” of a property located in the District of Columbia, for which she obtained a mortgage loan of $256, 267.00 on November 30, 2007, from Real Estate Mortgage Network, Inc. Dkt. 1-1 at 2-3 (Compl. ¶¶ 2-4); Dkt. 7-2 at 2-8 (Ex. A). Plaintiff fell behind on her mortgage in 2015 as a result of “out-of-pocket medical expenses and [her] student loan transitioning out of forbearance.” Dkt. 1-1 at 3 (Compl. ¶ 5). The next year, Rushmore, a limited liability company based in Delaware, assumed responsibility for servicing her mortgage loan. Id. (Compl. ¶¶ 3, 6).
“In or about October 2016, ” Plaintiff “began the loss mitigation application process” with Rushmore, for which she received an “assigned point of contact”-Shari Jabri-Gingras, an employee of Rushmore. Id. (Compl. ¶¶ 7-8). On December 1, 2016, Rushmore notified Plaintiff by email that she was approved for a loan modification, id. at 4 (Compl. ¶ 10), and on January 26, 2017, again by email, it informed her that the offer letter had been sent out, id. (Compl. ¶ 11). The offer stipulated a trial modification, allowing modified payments between March 2017 and August 2017. Id. Plaintiff accepted and returned the offer letter shortly after she received it. Id.; Dkt. 7-4 at 2-6 (Ex. C).
Despite her participation in the trial modification, Plaintiff began to receive notices of foreclosure. The first such notice that Rushmore's foreclosure counsel sent to Plaintiff was dated March 9, 2017. Dkt. 1-1 at 4 (Compl. ¶ 12). Plaintiff contacted “Rushmore to express her concern” and stated that “she felt like she was ‘going to have a heart attack'” because of the stress of possible foreclosure. Id. (Compl. ¶ 13). When Plaintiff contacted Rushmore's foreclosure counsel on March 23, 2017, “to notify them that she was on an active trial modification, ” counsel explained “that Rushmore was delayed in communicating that information to them and that [counsel] would ask the court to continue the [foreclosure] case[, ] since [Plaintiff] was in good standing with the modification.” Id. (Compl. ¶ 14). Rushmore's foreclosure counsel further confirmed that Rushmore “would not ask the court to foreclose and that once a permanent modification was received, the case would be dismissed.” Id. On July 17, 2017, Rushmore informed Plaintiff that her application for final modification had been submitted for review (a process that generally takes 3-4 weeks) and that “once [the documents] were returned, it would take” another four weeks“for the system changes” to take effect, after which Plaintiff could make payments online. Id. at 5 (Compl. ¶ 16).
During this same period, Plaintiff learned that Rushmore was reporting on her loan to credit agencies in a way that negatively affected her credit score. Plaintiff contacted Rushmore on May 16, 2017, “to inquire about” this “negative credit reporting, ” but it is unclear if she received any response. Id. (Compl. ¶ 15). Then, on September 17, 2017, Plaintiff informed Rushmore “that she [had] received an email from TransUnion indicating that the tradeline”-that is, the record of activity for a credit account-“for her loan was reported as having been foreclosed and that her payment due for September 2017 was $20, 000.00.” Id. (Compl. ¶ 17). Two days later, Plaintiff contacted Rushmore in response to correspondence she had received from the company “stating that [she] was in default and should pursue a modification.” Id. (Compl. ¶ 18). Plaintiff told Rushmore that she “was confused and caught off guard” by this notice. Id. Around the same time, Plaintiff received a mailing indicating that she qualified for a loan modification. Id. (Compl. ¶ 19). Shortly thereafter, on October 2, 2017, Jabri-Gingras notified Plaintiff that her new point of contact with Rushmore would be Fred Taggert, who would contact her. Id. (Compl. ¶¶ 19-20).
Taggert did not contact Plaintiff in the next few days, so on October 5, 2017, Plaintiff asked Jabri-Gingras for Taggert's direct number or to provide Taggert with Plaintiff's contact information. Id. at 6 (Compl. ¶ 22). Plaintiff explained to Jabri-Gingras that she had questions about documents related to her final modification, which she had to return to Rushmore by October 18, 2017. Id. Between October 11, 2017 and October 23, 2017, Plaintiff attempted to contact Taggert repeatedly “by phone and email to no avail.” Id. (Compl. ¶ 23). She informed
Rushmore “that she was incredibly frustrated” about this lack of contact and about Rushmore's failure to deliver paperwork that she was supposed to have received two weeks earlier. Id. “Specifically, [Plaintiff] informed . . . Rushmore that no one seemed to know what her modified monthly payment would be and that she wanted to get a specific number so that the modification could be finalized.” Id. (Compl. ¶ 24). She also noted that Rushmore had demanded different payment amounts “in different pieces of correspondence, ” had reported her credit line as “foreclosed, ” and had told her to “ignore the foreclosure reporting and court notices.” Id. (Compl. ¶¶ 25-26).
Taggert eventually contacted Plaintiff on October 23, 2017, to inform her that Rushmore was redrafting her final modification document “but that the processors could not give him a time table for completion.” Id. at 6-7 (Compl. ¶ 27). In the meantime, he told Plaintiff “that she could continue to make the trial payment of $2, 290.00 until” the final modification was completed. Id. at 7 (Compl. ¶ 27).
Plaintiff eventually received the final modification agreement on October 31, 2017. Id. (Compl. ¶ 28). That document set forth an agreement between Plaintiff, as the “Borrower, ” and the “Owner, by and through Rushmore . . . as current servicer and agent (‘Lender').” Dkt. 7-5 at 5 (Ex. D).[1] Among other things, the final modification agreement provided that Plaintiff's new principal balance was $299, 060.28; that $9, 260.28 of this amount would be “deferred;” and that her “[m]onthly payments of principal and interest” would be $1, 421.48. Id. at 5-6 (Ex. D). In addition, a letter from Rushmore that accompanied the modification agreement specified “that there [was] a shortage of funds in [Plaintiff's] escrow account in the amount of $1, 891.70, ” which was amortized over a five year period and included in Plaintiff's “estimated escrow” payment of $977.36 per month, leading to a total, estimated monthly payment amount of $2, 398.84.” Dkt. 7-5 at 2-3 (Ex. D).[2] Rushmore further explained in the accompanying letter that, if Plaintiff's “taxes, insurance premiums[, ] and/or assessment amounts change[d], ” her monthly escrow payment would also change. Id. at 2 (Ex. D). Finally, the modification agreement specified that “[a]ll covenants, agreements,...
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