Roche v. Rushmore Loan Mgmt. Servs., LLC
| Decision Date | 25 March 2020 |
| Docket Number | Case No. 19-cv-24872-BLOOM/Louis |
| Parties | FRANCISCO ROCHE and SONNY C. ROCHE, Plaintiffs, v. RUSHMORE LOAN MANAGEMENT SERVICES, LLC and CARLSBAD FUNDING MORTGAGE TRUST, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
THIS CAUSE is before the Court upon Defendants Rushmore Loan Management Services, LLC ("Rushmore") and Carlsbad Funding Mortgage Trust's ("Carlsbad") (collectively, "Defendants") Motion to Dismiss, ECF No. [23] ("Motion"). Plaintiffs Francisco Roche and Sonny C. Roche (collectively, "Plaintiffs") filed a Response to the Motion, ECF No. [26] ("Response"), to which Defendants did not file a Reply. The Court has carefully reviewed the Motion, all opposing and supporting submissions, the record in this case, and the applicable law, and is otherwise fully advised. For the reasons discussed below, Defendants' Motion is denied.
Plaintiffs initiated this action on November 25, 2019, asserting claims against Rushmore for violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq. ("RESPA") and the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA"), and claims against both Defendants' for violations of the Florida Consumer Collection Practices Act, Fla. Stat. § 559.55, et seq. ("FCCPA") and the Truth in Lending Act, 15 U.S.C. § 1601, et seq. ("TILA"). See ECF No. [1] ("Complaint"). The Complaint alleges the following facts:
In May 1997, Plaintiffs purchased their home in Miami, Florida. Id. at 5, ¶ 20. In October 2007, Plaintiffs refinanced their home through a loan secured by a mortgage on the property. Id. at 5, ¶ 21; id. at 21-35 ("Mortgage Agreement"); id. at 36-38 ("Mortgage Note"). In 2009, while Mr. Roche was receiving social security disability payments after having been deemed permanently disabled, Mrs. Roche became critically ill, which resulted in Plaintiffs' income being significantly reduced. Id. at 5, ¶ 22. On or around March 1, 2010, Plaintiffs defaulted on their loan. Id. at 5, ¶ 23. On September 11, 2010, a foreclosure action was initiated against Plaintiffs in the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, id. at 5, ¶ 25, and Plaintiffs retained counsel to defend them in the foreclosure action, id. at 5, ¶ 26.
Effective May 1, 2016, the rights as the servicer of Plaintiffs' loan were assigned to Rushmore, id. at 6, ¶ 29; id. at 43-44 ("Rushmore Servicing Assignment"), and on around June 17, 2016, the Mortgage Agreement and the Mortgage Note were assigned to Wilmington Savings Fund Society ("Wilmington") as trustee for Carlsbad, id. at 6, ¶ 30; id. at 45-46 ("Carlsbad Mortgage Assignment"). Id. at 6, ¶ 31.
Around April 22, 2016, "Rushmore, on behalf of Carlsbad and Wilmington, sent a 'Notice of Assignment, Sale or Transfer of Servicing' letter to [Plaintiffs] despite their being represented by counsel," which identified the current creditor as Wilmington, as trustee for Carlsbad. Id. at 6, ¶ 32; id. at 47-49 ("Notice of Servicing Assignment"). Further, on or around May 24, 2016, "Rushmore, on behalf of Carlsbad and Wilmington, sent Plaintiffs a Summary of Total DebtComposition and provided an itemization of the total amount due and owing on the mortgage as $360,199.61," which included the current principal balance in the amount of $239,717.82, current unpaid accrued interest of $101,130.96, and "Other Charges" of $19,350.83. Id. at 6, ¶ 33; id. at 50 ("Summary of Total Debt Composition").
On December 20, 2016, Plaintiffs' previous counsel was replaced by Amador & Cuellar, PLLC ("Plaintiffs' Counsel"), and Plaintiffs' Counsel filed their notice of appearance on the same day. Id. at 6, ¶ 34. Despite being represented by counsel, however, Defendants continued calling and sending mortgage statements and correspondence to Plaintiffs in an attempt to collect on the mortgage. Id. at 6, ¶ 35. After applying numerous times for a modification, on June 5, 2018, Plaintiffs were granted a Trial Modification, which called for monthly payments in the amount of $2,875.00 for six months. Id. at 6-7, ¶ 36. "Plaintiffs repeatedly questioned the total amount outstanding, the principal balance, fees and the payment balance." Id. at 7, ¶ 37.
"After receiving the approval for the trial modification, Plaintiffs again requested a payoff amount and a breakdown of the total amounts due," because they were confused by the $37,000.00 discrepancy between the total plan arrears set forth on the trial modification agreement in the amount of $208,097.14, and the total outstanding amount due on their mortgage statement of $171,090.53. Id. at 7, ¶ 38; id. at 51-54 ("June 11, 2018, Statement"). Plaintffs were advised that the breakdown and the total amount due on the loan were unavailable at that time. Id. at 7, ¶ 39. "Plaintiffs repeatedly disputed the amounts in writing of the principal balance and the arrears." Id. at 7, ¶ 40. Id. at 7, ¶ 41.
On or around December 10, 2018, Plaintiffs received notice of the Final Modification, which "stated a new principal balance of $407,409.14, consisting of the unpaid principal balance of the original obligation, plus accrued but unpaid interest." Id. at 7, ¶ 43; id. at 55-63 ("Final Modification"). "The Final Modification also referred to the balance as of the date of refinancing, 'the unpaid principal balance of the original obligation, plus accrued but unpaid interest, secured by the existing mortgage is [$355,947.19].'" Id. at 7-8, ¶ 43; id. at 60. The original principal balance was $239,000.00. Id. at 8, ¶ 44. Id. Plaintiffs were also being billed for items they believed were erroneous. Id. Thus, Plaintiffs made an additional request for an explanation of the amounts due and a full payment history. Id.
On December 10, 2018, "Plaintiffs requested a payoff and payment history directly from Rushmore and through Defendants' counsel." Id. at 8, ¶ 45. Plaintiffs were advised that the information would be provided within fourteen days and that, in the meantime, they should continue making the modified payments. Id. at 8, ¶ 46. Moreover, Plaintiffs were Id. at 8, ¶ 47. While awaiting a response, Plaintiffs continued to honor the agreement and make payments to Defendants, including the payment for January 2019, despite their concerns about the amounts provided. Id. at 8, ¶¶ 48-49.
On or around January 10, 2019, Plaintiffs reached out to Defendants' counsel again for the payoff and payment history. Id. at 8, ¶ 50. On approximately January 14, 2019, "Rushmore sentPlaintiffs an incomplete payment history," that "only went as far back as May 6, 2016," despite Plaintiffs' request for "the full payment history from the origination of the loan in October of 2007 to the present." Id. at 8-9, ¶ 51; id. at 64-85 (the "Incomplete Payment History"). Plaintiffscontinued to request a full payment history and the payoff letter. Id. at 9, ¶ 52.
On or about January 22, 2019, Plaintiffs again contacted Rushmore regarding the payoff letter and the full payment history and were told that the permanent final modification was denied for failure to sign and return to them. Rushmore stated that Plaintiffs "would never again be considered for a modification." Plaintiffs protested that this was the first time they were told that they had a certain date to sign or forfeit the modification, that they were pending the payoff letter and payment history, and that they had repeatedly requested this information either through Defendants' counsel or Defendant. They had requested these items because they had legitimate concerns about the total amount they were being asked to pay and simply wanted a payoff letter and or payment history to verify the amounts they were signing off on.
Plaintiffs were advised for the first time on January 22, 2019, "that the Final Modification was in jeopardy due to their request for a complete payment history and a breakdown of the Principal Balance. Further, on January 31, 2019, Plaintiffs were informed that their Final Modification had been denied due to the failure to submit the signed modification. Id. at 9, ¶ 55. Plaintiffs continued to request a full payment history and payoff letter, and they continued to make their mortgage payments, including the February 2019 payment. Id. at 9,e compl ¶¶ 55-56. In March 2019, the February 2019 payment was returned and Plaintiffs Id. at 9-10, ¶ 57.
Defendants [misled] Plaintiffs to their detriment. Plaintiffs never received a response to their request for a full payment history, the Final Modification was revoked and Plaintiffs were was told they could never re-apply for a modification. Defendants failed to comply with payoff request deadlines and failed to provide Plaintiffs with a complete payment history and then denied the [Plaintiffs'] modification based on [Plaintiffs'] reliance on [Defendants'] promises that the deadline would be extended pending the...
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