Sun v. Mortg. Research Ctr.
| Decision Date | 27 September 2022 |
| Docket Number | Civil Action 1:21-cv-02108 |
| Parties | HUNG SUN, Plaintiff, v. MORTGAGE RESEARCH CENTER, LLC d/b/a Veterans United Home Loans and NATIONSTAR MORTGAGE, LLC d/b/a Mr. Cooper, Defendants. |
| Court | U.S. District Court — Middle District of Pennsylvania |
This federal civil action was commenced on December 16, 2021, when the plaintiff, Hung Sun, filed a fee-paid pro se complaint against his mortgage servicer, Mortgage Research Center, LLC d/b/a Veterans United Home Loans (“Veterans United”). (Doc. 1.) On December 28, 2021, Sun filed a number of documentary exhibits in support of his complaint. (Doc. 5.)
On January 7, 2021, Sun filed a pro se amended complaint as a matter of course, pursuant to Rule 15(a)(1) of the Federal Rules of Civil Procedure. (Doc. 6.) The amended complaint was identical to the original complaint, except that its caption now named Sun's mortgage lender Nationstar Mortgage, LLC d/b/a Mr. Cooper (“Cooper”) instead of his mortgage servicer Veterans United. (Id.) Both defendants, however, are named in the body of the otherwise identical original and amended complaints, and thus we have liberally construed the amended complaint as having named both Veterans United and Cooper as party-defendants. See generally Mala v. Crown Bay Marina, Inc., 704 F.3d 239, 244-46 (3d Cir. 2013) (discussing a court's obligation to liberally construe pro se pleadings and other submissions). We note that the defendants themselves have done so as well in their motion papers. (See Doc. 16 n.1.)
Appearing jointly through counsel, Veterans United and Cooper have moved to dismiss the amended complaint for failure to state a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Doc. 16.) The motion is fully briefed and ripe for decision. (Doc. 20; Doc. 23.)
In his pro se pleadings, the plaintiff has alleged that he applied for certification of a disabled veterans' real property tax exemption,[1] which was granted effective December 2, 2020.[2] He forwarded a copy of his certification letter to Veterans United, which responded with a written letter acknowledging its receipt of Sun's request to update his escrow analysis to reflect this tax exemption, and advising that the request had been forwarded to the mortgage servicer's tax department for further review. The plaintiff alleges that Veterans United did not, however, modify the escrow payments it collected.
Sun alleges that he then took matters into his own hands and began sending in partial payments-he timely remitted payment of the full amount due for principal and interest plus the portion of the escrow payment attributable to his yearly hazard insurance premium. He withheld payment of the portion of the escrow payment attributable to local real estate taxes and wrote “no real estate tax” on his checks.[3] The mortgage servicer accepted and deposited these checks but continued to demand payment of the full escrow amount, including real estate taxes
At some point, Veterans United mailed written “pre-foreclosure” notices to the plaintiff. Sun then checked his credit report at all three credit reporting agencies-Experian, TransUnion, and Equifax. He found that Veterans United had (allegedly inaccurately) reported his partial payments as deficiencies or late payments, which ruined his credit score. As a result, Sun was unable to secure consumer loans or new mortgage financing.
For relief, Sun seeks an award of “thousands of dollars” in compensatory damages for the funds collected from him to pay real estate taxes that he purportedly did not owe, plus $5 million in punitive damages.
Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a defendant to move to dismiss for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting all well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court finds the plaintiff's claims lack facial plausibility.” Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56 (2007)). In deciding the motion, the Court may consider the facts alleged on the face of the complaint, as well as “documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). Although the Court must accept the fact allegations in the complaint as true, it is not compelled to accept “unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegation.” Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (quoting Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007)). Nor is it required to credit factual allegations contradicted by indisputably authentic documents on which the complaint relies or matters of public record of which we may take judicial notice. In re Washington Mut. Inc., 741 Fed. App'x 88, 91 n.3 (3d Cir. 2018); Sourovelis v. City of Philadelphia, 246 F.Supp.3d 1058, 1075 (E.D. Pa. 2017); Banks v. Cty. of Allegheny, 568 F.Supp.2d 579, 588-89 (W.D. Pa. 2008).
The defendants' primary argument for dismissal is that the pro se plaintiff's pleadings fail to satisfy the most basic pleading requirements of the federal rules, set forth in Rule 8(a) of the Federal Rules of Civil Procedure. In the alternative, the defendants argue that the plaintiff's pro se pleadings fail to allege sufficient facts to state a claim either under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., or under state negligence law.
We first consider the defendants' proposition that the pleadings are so unintelligible as to require dismissal under Rule 8(a). Under the federal rules, a complaint must contain:
Fed. R. Civ. P. 8(a). Moreover, “Each allegation must be simple, concise, and direct.” Fed.R.Civ.P. 8(d). It is also helpful for a plaintiff to number each sentence of the complaint, with each sentence stating a fact that supports the plaintiff's claim for relief. See Fed.R.Civ.P. 10(b). Ultimately, a plaintiff must plead facts sufficient to show that his claim has substantive plausibility. See generally Johnson v. City of Shelby, 135 S.Ct. 346, 347 (2014) (per curiam); Ashcroft v. Iqbal, 556 U.S. 662 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). A district court may dismiss a complaint that does not comply with Rule 8 if the “complaint is so confused, ambiguous, vague, or otherwise unintelligible that its true substance, if any, is well disguised.” Ruther v. State Ky. Officers, 556 Fed. App'x 91, 92 (3d Cir. 2014) (per curiam) (quoting Simmons v. Abuzzo, 49 F.3d 83, 86 (2d Cir. 1995)).
The defendants contend that this is such a case, but we disagree.
As a pro se litigant, this court is obliged to liberally construe the plaintiff's pleadings and consider whether they have articulated a colorable claim arising under federal law. See Arbaugh v. Y&H Corp., 546 U.S. 500, 513 (2006).[4] “A party does not need to plead specific legal theories in the complaint, as long as the opposing party receives notice as to what is at issue in the lawsuit.” Elec. Constr. & Maint. Co. v. Maeda Pac. Corp., 764 F.2d 619, 622 (9th Cir. 1985); accord Small v. Chao, 398 F.3d 894, 898 (7th Cir. 2005); King Drug Co. of Florence, Inc. v. Cephalon, Inc., Civil Action No. 2:06-cv-1797, 2014 WL 982848, at *7 n.11 (E.D. Pa. Mar. 13, 2014) ). Further, the review of a pro se complaint focuses on whether the facts alleged state a claim under any legal theory, not just those explicitly named in the complaint. Small, 398 F.3d at 898; Ohuche v. Merck & Co., 903 F.Supp.2d 143, 150 (S.D.N.Y. 2012); Thiel v. Nelson, 422 F.Supp.2d 1024, 1028 (W.D. Wis. 2006).
Here, the gist of the complaint is that the defendants have failed to properly process the plaintiff's request that they correct the escrow amount being collected in connection with his mortgage payments to accurately reflect his exemption from real estate property taxes, and they have erroneously reported his account to the credit reporting agencies as delinquent, ruining his credit rating and preventing him from obtaining other lines of consumer credit.[5] Based on this, the defendants have themselves inferred FCRA and state-law negligence claims. We further construe the plaintiff's pro se pleadings to assert a violation of the servicer's obligations under the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., and its implementing regulation, Regulation X, 12 C.F.R. part 1024, and state-law breach of contract claims.
Under RESPA, a mortgage servicer is required to reasonably respond to “qualified written requests.” 12 U.S.C. § 2605(e).[6] A “qualified written request” is written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that . . . includes a statement of the reasons for the belief of the borrower . . . that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.
Id. § 2605(e)(1)(B). The statute provides that the servicer must provide a written response acknowledging receipt of the correspondence within...
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