Lupo v. Jpmorgan Chase Bank, N.A.
| Decision Date | 28 September 2015 |
| Docket Number | Civil Action No. DKC 14-0475 |
| Parties | LOUIS M. LUPO v. JPMORGAN CHASE BANK, N.A., et al. |
| Court | U.S. District Court — District of Maryland |
Presently pending and ready for resolution are (1) a motion for summary judgment filed by Defendant JPMorgan Chase Bank, N.A. (ECF No. 24); (2) Plaintiff Louis M. Lupo's verified motion in response (ECF No. 29); and (3) a partial motion to dismiss filed by Defendant Specialized Loan Servicing, LLC (ECF No. 33). The material issues have been briefed and the court now rules, no hearing being deemed necessary. Local Rule 105.6. For the following reasons, Defendant Chase's motion for summary judgment will be granted. Plaintiff's verified motion in response will be denied. Defendant SLS's partial motion to dismiss will be granted in part and denied in part.
Plaintiff Louis M. Lupo ("Plaintiff" or "Mr. Lupo") has lived in Montgomery County, Maryland, since 2011. (ECF No. 18 ¶ 5). He is employed by a federal contractor that stations him at various federal agencies throughout the Washington D.C. metropolitan area. (Id. ¶¶ 2-3). Defendant JPMorgan Chase Bank, N.A. ("Chase") is a national banking association that does business in Maryland, with its principal place of business in Ohio. (ECF Nos. 1-1, at 2; 1-2, at 2). Defendant Specialized Loan Servicing, LLC ("SLS") is a mortgage servicing corporation with its principal place of business in Colorado. (ECF No. 18 ¶ 13).
Plaintiff's amended complaint alleges that, on December 20, 2007, he executed a 30-year fixed-rate promissory note (the "Note") for $173,850.00 at 6.0% annual interest rate payable to the lender, Chase, in monthly installments of $1,551.24. (Id. ¶ 31). On the same day, Plaintiff executed a deed of trust (the "DOT") to secure repayment of the Note with a lien against hisproperty located in North Richland Hills, Texas (the "Property"). (Id. ¶ 33). The DOT specifies that it is "governed by federal law and the law of the jurisdiction in which the Property is located." (Id. ¶ 13). Plaintiff alleges that he thereafter made timely payments in full. (Id. ¶ 37). He complains that, since the inception of his mortgage loan, Defendant Chase, as loan servicer, has "miscalculated and overcharged for escrow" on his account every year. (Id. ¶ 38). For the first four years, Plaintiff alleges, he was able to secure a correction by a telephone call and find mortgage payments lost by Chase through the routing numbers for the mortgage payments. (Id. ¶¶ 39-40). However, Plaintiff contends that Chase made an error in 2013 that he has since been unable to resolve.
Plaintiff's specific allegations include that, on February 9, 2013, Chase "erroneously reported to Equifax that [he] was 30 days late on his November 30, 2012 mortgage loan payment" and "that Plaintiff was $4,000 delinquent for the month of November 2012." (Id. ¶¶ 46-47). Previously, Plaintiff's credit history was perfect. (Id. ¶ 43). He also alleges that the monthly payment including escrow averaged approximately $1,502.00 and that he telephoned Chase no fewer than ten times after discovering its report to Equifax. (Id. ¶¶ 48-49). During these telephone calls, Plaintiff was routed to loss mitigationanalysts and spoke to different Chase representatives, but they were unable to respond to his requests to correct his credit report and recalculate the escrow. (Id. ¶¶ 50-54). As a result, he asked Chase to investigate and inform him of the procedure for managing his own escrow, i.e., paying his own taxes and insurance directly. (Id. ¶¶ 55-58). Eventually, he was told that the investor in the Note would not permit anyone other than Chase to manage his escrow account. (Id. ¶ 59). During these discussions, Plaintiff was offered refinancing or repackaging options, but he declined. (Id. ¶¶ 62-64). Plaintiff learned that the Note had been sold to Freddie Mac shortly after the 2007 closing, and that Freddie Mac does allow self-management for loans with more than 20% equity.2 (Id. ¶¶ 65-66).
On February 14, 2013, Chase sent Plaintiff a letter identifying itself as a debt collector and stating that his mortgage is past due by two months and may be referred to foreclosure. (Id. ¶ 67). On February 22, 2013, Chase mailed Plaintiff a statement specifying that his escrow payment due was$978.48, a substantial increase from previous forecasts.3 (Id. ¶ 69). Conversations with Chase representatives followed, without resolution. On March 21, 2013, Plaintiff disputed to Equifax, a credit reporting agency, the November 2012 delinquency as a Chase creditor mistake. (Id. ¶ 78). On the same day, he faxed a letter to Chase directly to the JPMorgan Chase CEO James Dimon's office setting forth the reasons that Plaintiff believed his account to be in error and requesting an investigation and correction of his escrow account. (Id. ¶ 79). The letter was copied to the Consumer Financial Protection Bureau ("CFPB"), which initiated an investigation. (Id. ¶ 80). Other discussions with Chase representatives occurred, but Defendant refused to correct Plaintiff's credit report, recalculate his escrow, or reconcile his mortgage loan account. (Id. ¶¶ 83-91). Plaintiff reports, however, that Chase "confirmed the errant credit report in amount and date per Equifax update April 5, 2013." (Id. ¶ 92). In a telephone conversation with David Grace of Chase Executive Services, Mr. Grace replied that he would not repair Plaintiff's credit report until he paid $2020.80 for his March 2013 mortgage payment, although Plaintiff contends that that amount was not due. (Id. ¶¶ 93-98).
Plaintiff contends that Chase's refusal to correct his credit report or conduct an escrow analysis and recalculation is memorialized in an April 15, 2013 letter faxed by Plaintiff to Chase. (Id. ¶¶ 99-100). Plaintiff alleges that, attached to his requests for Chase to investigate and recalculate, he provided supporting documentation to show that his loan payments were current and not in arrears. (Id. ¶¶ 79, 100). On April 17, 2013, Chase purported to respond, but continued to overcharge Plaintiff's escrow, refused to recalculate Plaintiff's escrow, and explained that it had reversed funds originally applied to interest and principal payment and instead applied these funds to the claimed escrow shortage. (Id. ¶¶ 101-04).
Chase, from February 2013 until May 2013 and through its representatives and correspondence with Plaintiff, informed Plaintiff that his loan payments were overdue, that Chase was a debt collector, and that it was attempting to collect a debt. (Id. ¶¶ 67, 90, 96, 101, 105, 114, 117). Chase refused to repair Plaintiff's credit report until he made various payments, all of which Plaintiff alleges were not owed to Chase. (Id. ¶¶ 91, 97-99). On May 4, 2013, Chase sent Plaintiff another letter stating that the loan was in default by two months. (Id. ¶¶ 114-16). On May 7, another letter demanded sums that Plaintiff alleges were not due. (Id. ¶¶ 117-19). On May 31, Chase maileda "Notice of Assignment, Sale, or Transfer of Servicing Rights" to Plaintiff, informing him that Chase could no longer accept payments on his mortgage loan and that the loan had been transferred and assigned to SLS with an effective date of June 17, 2013. (Id. ¶ 121).
On June 20, 2013, SLS mailed to Plaintiff a similar notice stating that all payments due after June 17, 2013 should be sent to SLS and demanding payment. (Id. ¶¶ 129-30). Plaintiff contends that the payment instructions provided by SLS were illegible. (Id. ¶¶ 131, 134). On or about June 24, Plaintiff contacted SLS by telephone to make an electronic payment. The SLS representative informed Plaintiff that his loan was in default and it would not accept his automated clearing house ("ACH") payment. (Id. ¶¶ 135-36). Plaintiff explained to SLS that his mortgage loan account was current and sought an investigation. When he called thereafter, he was told that the investigation was ongoing. (Id. ¶¶ 137-40). On July 1, Plaintiff called again and learned that he could not make an ACH payment for the month because his account was in default. (Id. ¶ 141). He was told that, if he provided proof of prior payment, SLS would then accept his ACH payment. Plaintiff faxed documentation to SLS on July 1, including proof of payment for the previous 20 months and requests that SLS investigate his loan history, recalculate his escrow payments, reconcile hisaccount, and correct his credit report. (Id. ¶¶ 142-43). On July 11, SLS sent Plaintiff a "Notice of Default and Notice of Intent to Accelerate," stating that he was in default as he had failed to make loan payments since April 2013. (Id. ¶¶ 144-46). SLS again sent Plaintiff a letter on August 14 informing him, inter alia, that he must make a payment on his loan by August 28, 2013 in order to halt the foreclosure process. (Id. ¶¶ 153-57). On August 21, Plaintiff sent a letter to both Chase and SLS protesting SLS's refusal to accept his July and August payments and again requesting an investigation, escrow recalculation, and credit report correction. This correspondence included supporting documentation and proof of payment. (Id. ¶ 147). In a letter dated September 6, 2013, SLS stated that Plaintiff's July 1 fax was not a "qualified written request" under the Real Estate Settlement Procedures Act, that Plaintiff was in default based on Chase's escrow analysis, and that SLS could not correct Plaintiff's credit report. (Id. ¶ 148).
Plaintiff's employment requires that he hold certain security clearances, which call for the holder to maintain financial integrity. (Id. ¶¶ 41-42). During his dispute with Chase and SLS, Plaintiff was being vetted for an employment position that required additional security clearances. (Id. ¶ 44). He alleges that, on December 26, 2013, as a result ofDefendants' erroneous credit reporting, he "was placed on 'Delayed for Entry to Duty' status with his new client employer" and denied a...
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