Wotanis v. PNC Bank, N.A., CIVIL ACTION NO. 3:19-CV-00588
| Decision Date | 28 August 2019 |
| Docket Number | CIVIL ACTION NO. 3:19-CV-00588 |
| Parties | CHARLES L. WOTANIS and, RENEE B. WOTANIS, Plaintiffs, v. PNC BANK, N.A., Defendant. |
| Court | U.S. District Court — Middle District of Pennsylvania |
(JUDGE CAPUTO)
Presently before me is a Motion to Dismiss (Doc. 12) filed by the Defendant PNC Bank, N.A. ("PNC"). PNC contends that the Plaintiffs Charles L. Wotanis and Renee B. Wotanis ("Mr. and Mrs. Wotanis" or "Wotanis's") have failed to state a claim upon which relief may be granted on two separate claims under the Real Estate Settlement Procedures Act ("RESPA"). Because the Wotanis's have adequately pled violations of RESPA in Count I of their complaint but have failed to adequately plead violations in Count II, PNC's Motion to Dismiss will be granted in part and denied in part. The Plaintiffs will be given leave to amend.
The facts from the Wotanis's Complaint (Doc. 1), taken as true and viewed in the light most favorable to Mr. and Mrs. Wotanis are as follows:
Charles L. and Renee B. Wotanis, husband and wife, are the owners of real property located at 950 Taylor Avenue, Scranton, Pennsylvania, Lackawanna County ("the Property"). (Doc. 1 at ¶ 7). In May 2006, Mr. and Mrs. Wotanis entered into a real-estate secured Direct Installment Loan with PNC for the Property in the amount of $153,694.00 at an interest rate of 7.9%, to be paid in monthly installments of $1,463.86. (Id. at ¶ 9).
On December 9, 2012, Plaintiffs received a document from PNC which purported to be a loan modification agreement, offering a reduced interest rate on the loan (4.19%) if Plaintiffs paid a one hundred dollar loan modification processing fee. (Id. at ¶ 10). In response, on January 18, 2013, Plaintiffs signed and submitted this loan modification offer at their local PNC branch and further authorized PNC to debit one hundred dollars from their PNC checking account to satisfy the modification processing fee. (Id. at ¶ 11).
In 2018, Mr. and Mrs. Wotanis noticed that they had nonetheless been paying the initial 7.9% interest rate. (Id. at ¶ 12). On May 16, 2018, they notified PNC of this "error" and requested more information about the servicing of their loan including what they referred to as the "servicing notes." (Id. at ¶ 12; Doc. 3 Ex. C). On June 22, 2018, PNC responded to this letter stating that the loan modification offer was never properly accepted due to either the bank never actually receiving the agreement, or, even if received, an omission of the account number on the modification processing fee agreement. (Id. at ¶13; Doc. 3, Ex. D.). In this same response, PNC provided Mr. and Mrs. Wotanis with various records of payment history, but did not attach any "servicing notes" instead stating that they were "outside the scope of what can be requested as, to the extent such information exists, it is confidential, irrelevant, or privileged, and the request was overly broad and unduly burdensome." (Id. at ¶15; Doc. 3, Ex. D).
Mr. and Mrs. Wotanis initiated this action on April 5, 2019, alleging two violations ofRESPA, 12 U.S.C. § 2601 et seq: failure to adequately respond to a Notice of Error on behalf of themselves (Count I); and failure to adequately respond to a Request for Information on behalf of a larger class of those similarly harmed (Count II). (See generally Doc.1). Mr. and Mrs. Wotanis named PNC as the lone Defendant. (Id. at ¶ 26). Plaintiffs seek various forms of actual and statutory damage awards for themselves and, as to Count II, for the class they purportedly represent plus costs. (Id. at ¶¶ 35-36, 44).
PNC filed its Motion to Dismiss on June 21, 2019, contending that the Wotanis's fail to state a claim upon which relief can be granted because their claims fall outside the scope of the RESPA statute as they do not involve loan servicing, and, in any event, PNC responded to the Wotanis's request for information adequately. (See Docs. 12, 13). PNC further contends that no claim has been stated because Mr. and Mrs. Wotanis failed to adequately plead actual and statutory damages under the applicable statute such that they are not entitled to relief. (See Doc. 12).
Both Parties have fully submitted briefs in support of their positions and the Motion is ripe for review. (See Docs. 13, 17, 19).
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted. When considering a Rule 12(b)(6) motion, the Court's role is limited to determining if a plaintiff is entitled to offer evidence in support of her claims. See Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir. 2000). The Court does not consider whether a plaintiff will ultimately prevail. Id. A defendant bears the burden of establishing that a plaintiff's complaint fails tostate a claim. See Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir. 2000).
A pleading that states a claim for relief must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The statement required by Rule 8(a)(2) must "'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Detailed factual allegations are not required. Twombly, 550 U.S. at 555. However, mere conclusory statements will not do; "a complaint must do more than allege the plaintiff's entitlement to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). Instead, a complaint must "show" this entitlement by alleging sufficient facts. Id. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). As such, "[t]he touchstone of the pleading standard is plausibility." Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012).
The inquiry at the motion to dismiss stage is "normally broken into three parts: (1) identifying elements of the claim, (2) reviewing the complaint to strike conclusory allegations, and then (3) looking at the well-pleaded components of the complaint and evaluating whether all of the elements identified in part one of the inquiry are sufficiently alleged." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011).
Dismissal is appropriate only if, accepting as true all the facts alleged in the complaint, a plaintiff has not pleaded "enough facts to state a claim to relief that is plausible on its face," Twombly, 550 U.S. at 570, meaning enough factual allegations "'to raise a reasonable expectation that discovery will reveal evidence of'" each necessary element. Phillips v.County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556). "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678. "When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id.
In deciding a motion to dismiss, the Court should consider the allegations in the complaint, exhibits attached to the complaint, and matters of public record. Mayer v. Belichick, 650 F.3d 223, 230 (3d Cir. 2010) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)). The Court may also consider "undisputedly authentic" documents when the plaintiff's claims are based on the documents and the defendant has attached copies of the documents to the motion to dismiss. Pension Benefit Guar. Corp., 998 F.2d at 1196. The Court need not assume the plaintiff can prove facts that were not alleged in the complaint, see City of Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 263 & n.13 (3d Cir. 1998), or credit a complaint's "'bald assertions'" or "'legal conclusions.'" Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir. 1997)).
PNC moves to dismiss both of the claims raised by Mr. and Mrs. Wotanis under Federal Rule of Civil Procedure 12(b)(6) for failing to state plausible claims for relief under RESPA.
RESPA was enacted as a consumer protection statute and it was designed to give home-buyers access to more information about their home mortgages so that they mayprotect themselves from any fraudulent or deceptive practices by their mortgage loan servicers. See Stefanowicz v. Sun Trust Mortgage, 2017 WL 1103183, at *6-7 (M.D. Pa. 2017), report and recommendation adopted, 2017 WL 1079163 (M.D. Pa. 2017); Wilson v. Bank of America, 48 F.Supp.3d 787, 798-99 (E.D. Pa. 2014). While its primary purpose was to protect home buyers from "'material nondisclosures in settlement statements,'" RESPA, by its terms, applies to "'the 'servicing' of any 'federally related mortgage loan.'" Stefanowicz, 2017 WL 1103183, at *6 (quoting Cortez v. Keystone Bank, Inc., 2000 WL 536666, at *10 (E.D. Pa. May 2, 2000)).
The servicing of any mortgage loan includes any inquiries by the borrower into the application and management of payments towards principal and interest. Cortez, 2000 WL 536666, at *10. More specifically, the statute defines servicing as "receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan . . . and making payment of principal and interest . . . as may be required pursuant to the terms of the loan." 12 USC s 2605(i)(3). Importantly, while requests for loan modifications are not considered inquiries into the application of payments, and are therefore not servicing inquiries, Schepisi v. Santander, 2019 WL 699959, at *3 (D.N.J. 2019), requests into the application of payments for a believed modification can be considered servicing inquiries because they...
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