Jackson v. Rushmore Loan Mgmt. Servs. (In re Jackson), Case No. 10-11716-MSH

• Court: United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts
• Writing for the Court: Melvin S. Hoffman, U.S. Bankruptcy Judge
• Citation: 622 B.R. 321
• Parties: IN RE: Kimmy R. JACKSON, Debtor Kimmy R. Jackson, Plaintiff v. Rushmore Loan Management Services, Defendant
• Docket Number: Adversary Proceeding No. 18-01162-MSH,Case No. 10-11716-MSH
• Decision Date: 02 November 2020

622 B.R. 321

IN RE: Kimmy R. JACKSON, Debtor

Kimmy R. Jackson, Plaintiff
v.
Rushmore Loan Management Services, Defendant

Case No. 10-11716-MSH
Adversary Proceeding No. 18-01162-MSH

United States Bankruptcy Court, D. Massachusetts, Eastern Division.

Signed November 2, 2020

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David G. Baker, Esq., Boston, MA, for the plaintiff Kimmy R. Jackson

Jennifer J. Normand, Esq., David M. Rosen, Esq., Rosen Legal, LLC, Waltham, MA, for the defendant Rushmore Loan Management Services, LLC

MEMORANDUM OF DECISION ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

Melvin S. Hoffman, U.S. Bankruptcy Judge

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The defendant in this adversary proceeding, Rushmore Loan Management Services, has moved for summary judgment on all three counts of the complaint filed by Kimmy R. Jackson, the debtor in the main case and the plaintiff here. After a hearing on the motion and consideration of the parties' oral and written submissions, I will, for the reasons explained below, grant the defendant's motion and enter judgment in favor of Rushmore on all counts of the complaint.

Facts

The following facts are taken from the undisputed allegations in the complaint and the statement of facts and affidavit in support of Rushmore's motion for summary judgment.¹ Ms. Jackson, who owns condominium unit 316 at 700 N. Wellman Avenue in North Chelmsford, Massachusetts, borrowed money and granted her lender a first mortgage on her unit sometime prior to 2018. Rushmore became the servicer of her mortgage loan around May 1, 2018. Prior to that time, Capital One had been Ms. Jackson's mortgage loan servicer. While Capital One was the loan servicer, Ms. Jackson submitted a loan modification application with respect to her loan. Capital One responded to the application by letter dated January 11, 2018, requesting more information. The letter stated: "Please send us the requested information by February 10, 2018, or your request for assistance will be closed for incompleteness." In her unverified complaint here, Ms. Jackson alleges that she submitted the requested information and never received further correspondence from Capital One. Capital One's records, apparently transferred to Rushmore when it became the new servicer, reflected that Jackson in fact did not provide all the requested documents, and on April 10, 2018, Capital One determined that due to her incomplete application, no loss mitigation option was available to Ms. Jackson.

After Rushmore became the servicer of Ms. Jackson's mortgage loan, it sent her three letters along with forms and applications advising Ms. Jackson of Rushmore's borrower assistance and loss mitigation options. The letters were sent on May 5, 9, and 15, 2018, respectively.

Ms. Jackson did not respond to any of Rushmore's letters offering assistance. Instead, on May 26, 2018, Ms. Jackson's attorney sent a letter to Rushmore asking the following questions:

1. Who was the prior servicer?

2. When was servicing transferred?

3. What is the current principal balance?

4. What is the amount of the current monthly payment, itemized into principal, interest and escrow (if applicable)?

5. Is this loan owned by any governmental agency such as HUD, FNMA or FHLMC?

6. What loan modification options does Ms. Jackson have?

Rushmore acknowledged receipt of the letter on June 7, 2018, and followed up by

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mailing Ms. Jackson on June 15, 2018, her "customer account activity statement" containing her loan payment history. On October 24, 2018, slightly more than five months after becoming her mortgage servicer, Rushmore notified Ms. Jackson that the servicing of her mortgage was being transferred to another servicer. The last day Rushmore serviced Ms. Jackson's loan was November 12, 2018.

Ms. Jackson, who filed a petition for relief under chapter 7 of the Bankruptcy Code in this Court in February 2010 and converted her case to one under chapter 13 in January 2013, initiated this adversary proceeding in October of 2018. In her complaint, she asserted claims against Rushmore for violations of the federal Real Estate Settlement Procedures Act (RESPA) (count I), violations of various federal regulations and state laws (count II), and breaches of contract (count III).

Positions of the Parties

Ms. Jackson argues that Rushmore had a duty to respond to each of the questions in her May 26th letter and failed to do so. Furthermore, she claims that Capital One never completed the disposition of her loan modification application and that Rushmore, as its successor servicer, had a duty to do so and failed to carry out that duty. This conduct, Ms. Jackson asserts, gives rise to the violations and breaches alleged in the three counts of her complaint.

Rushmore responds that Capital One closed Ms. Jackson's loan modification application due to her failure to submit all the documents requested by Capital One and thus there was no active loan modification process in existence at the time Rushmore became Ms. Jackson's loan servicer. While Rushmore concedes that it did owe duties to Ms. Jackson under federal and state law, it insists that it complied with all its duties. What's more, Rushmore maintains that even if it had failed to comply, Ms. Jackson suffered no damage as a result and, therefore, cannot prevail on her claims in any event. Finally, Rushmore asserts there were no contracts under which Ms. Jackson would have a right to bring a claim against it for a breach.

Summary Judgment Standard

Summary judgment must be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see also Fed. R. Bankr. P. 7056 (applying Rule 56 to adversary proceedings). A dispute is "genuine" when "supported by such evidence that ‘a reasonable jury, drawing favorable inferences,’ could resolve it in favor of the nonmoving party." Triangle Trading Co. v. Robroy Indus., Inc. , 200 F.3d 1, 2 (1st Cir. 1999) (quoting Smith v. F.W. Morse & Co. , 76 F.3d 413, 428 (1st Cir. 1996) ). A disputed fact is "material" if its resolution in the nonmovant's favor could affect the suit's outcome upon applying applicable law. McCarthy v. Nw. Airlines, Inc. , 56 F.3d 313, 315 (1st Cir. 1995). The moving party "bears the initial responsibility of informing the [trial] court of the basis for its motion and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmovant to " ‘present definite, competent evidence to rebut the motion.’ " Pagano v. Frank , 983 F.2d 343, 347 (1st Cir. 1993) (quoting Mesnick v. Gen. Elec. Co. , 950 F.2d 816, 822 (1st Cir. 1991) ).

Discussion

At the hearing on Rushmore's motion for summary judgment, Ms. Jackson's attorney

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incorrectly argued that Rushmore bore the burden of proof in the summary judgment process.² It is a settled rule, however, that "[o]n issues where the nonmovant bears the ultimate burden of proof at trial, he may not defeat a motion for summary judgment by relying upon evidence that is ‘merely colorable’ or ‘not significantly probative.’ " Pagano , 983 F.2d at 347 (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249-50, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). "As to issues on which the nonmovant has the burden of proof, the movant need do no more than aver ‘an absence of evidence to support the nonmoving party's case.’ " Mottolo v. Fireman's Fund Ins. Co. , 43 F.3d 723, 725 (1st Cir. 1995) (quoting Celotex , 477 U.S. at 325, 106 S.Ct. 2548 ); see also Fed. R. Civ. P. 56(c)(1)(B) (permitting moving party to show that fact cannot be genuinely disputed by "showing ... that an adverse party cannot produce admissible evidence to support the fact").

Count I

Count I of the complaint alleges that Rushmore violated RESPA by failing to adequately respond to Ms. Jackson's May 26, 2018 letter. RESPA is a consumer protection statute that, among other things, requires the servicer of a federally related mortgage loan to respond to certain borrower requests for information relating to the servicing of such a loan if the request is a "qualified written request" (QWR), as defined in the statute, 12 U.S.C. § 2605(e)(1).³ See also O'Connor v. Nantucket Bank , 992 F. Supp. 2d 24, 34 (D. Mass. 2014) (discussing RESPA requirements). A QWR is a written correspondence that "enables the servicer to identify[ ] the name and account of the borrower" and presents the reasons for the borrower's belief "that the account is in error" or otherwise requests information and "provides sufficient detail to the servicer regarding [the] information sought." 12 U.S.C. § 2605(e)(1)(B). RESPA defines a "servicer" as "the person responsible for servicing of a loan (including the person who makes or holds a loan if...