United States District Court, D. New Hampshire
Jason S. Dionne, et al.
Federal National Mortgage Association and JPMorgan Chase Bank, N.A. Opinion No. 2016 DNH 209
E. Buckley, Esq., Gary Goldberg, Esq., Andrea Bopp Stark,
Esq., Nathan Reed Fennessy, Esq.
McCafferty United States District Judge.
originally filed this mortgage foreclosure dispute in the New
Hampshire Superior Court, Hillsborough County, Southern
District, seeking to enjoin defendants Federal National
Mortgage Association (“Fannie Mae”) and JPMorgan
Chase Bank, N.A. (“Chase”) from recording a
foreclosure deed on their home. Defendants removed the
lawsuit to this court, and plaintiffs filed an amended
complaint, asserting eight claims against defendants, five of
which remain. The parties have filed cross-motions for
motions for summary judgment proceed under the same standard
applicable to all motions for summary judgment, but the
motions are addressed separately. Fadili v. Deutsche Bank
Nat'l Tr. Co., 772 F.3d 951, 953 (1st Cir. 2014). A
movant is entitled to summary judgment where he “shows
that there is no genuine dispute as to any material fact and
[that he] is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). In reviewing the record, the
court construes all facts and reasonable inferences in the
light most favorable to the nonmovant. Kelley v. Corr.
Med. Servs., Inc., 707 F.3d 108, 115 (1st Cir.
Dionne has lived at her home at 40 Tallant Road in Pelham,
New Hampshire (the “property”) since 1977. In
2005, Denise added her son, Jason Dionne, to the
property's deed. In 2006, Denise and Jason took out a
$300, 000 loan (the “Loan”) from Domestic Bank,
which was secured by a mortgage on the property. The mortgage
states that Mortgage Electronic Registration Systems, Inc.
(“MERS”) is the mortgagee as nominee for Domestic
Bank and its successors in interest. Jason's wife, Kathy
Dionne, did not sign the note, but signed the mortgage.
13, 2006, Domestic Bank assigned its interest in the Loan to
Fannie Mae. Fannie Mae has owned the Loan since that time.
as nominee for Fannie Mae, assigned the mortgage to
Washington Mutual Bank (“Mutual Bank”) in April
2008. In July 2008, Denise and Jason entered into a loan
modification agreement with Mutual Bank. Shortly thereafter,
in September 2008, Chase became the servicer of the Loan. The
Loan was in default at the time Chase acquired the servicing
rights. Chase has been the Loan servicer since
point after Chase acquired the Loan servicing rights, the
Dionnes fell behind on their payments under the modification
agreement. In March 2009, the Dionnes signed a
forbearance agreement, in which Mutual Bank agreed not to
proceed with foreclosure if the Dionnes complied with the
payment schedule outlined in the agreement. At some point in
2009, the Dionnes fell behind on their payments under the
2009 or early 2010, after falling behind on their payments
under the forbearance agreement, the Dionnes submitted
another loan modification application. On March 2, 2010,
Chase and the Dionnes entered into a second loan modification
after entering into the second loan modification agreement,
Denise lost her job. The Dionnes subsequently fell behind on
their payments under the second loan modification agreement.
fall of 2010, the Dionnes received a notice of an intent to
foreclose, and a foreclosure sale was scheduled for October
15, 2010. The foreclosure sale was eventually
postponed. Chase subsequently sent the Dionnes another notice
of intent to foreclose in May 2011, setting a foreclosure
date for June 10, 2011.
thereafter, the Dionnes submitted a third loan modification
application. Chase denied the application in September 2011.
The Dionnes then submitted a fourth loan modification
application in January 2012. Chase denied the application in
2, 2012, Fannie Mae, through its foreclosure counsel, Harmon
Law Office (“Harmon”), sent a notice of
foreclosure sale to the Dionnes via certified mail, setting a
foreclosure date of June 1, 2012. The notice informed the
Dionnes of their right to petition the superior court to
enjoin the foreclosure sale. On August 29, 2012, the Dionnes
filed a Chapter 13 bankruptcy petition. The bankruptcy
court dismissed the petition on February 24, 2014, when the
Dionnes fell behind on their plan payments to the bankruptcy
March 2014, Chase sent the Dionnes paperwork for a fifth loan
modification application. On August 12, 2014, the Dionnes
received a notice scheduling a foreclosure sale for October
Dionnes faxed Chase their loan modification application on
August 25, 2014 (the “August 2014 application”).
On the application, the Dionnes identified Denise's
current employers as Accountemps and Demoulas Supermarket
(“Demoulas”). Chase acknowledged receiving the
Dionnes' application in a letter dated August 27, 2014.
See doc. no. 21-3. The letter requested additional
documents and stated that Chase would make a determination of
eligibility within 30 days of receiving the additional
point after the Dionnes submitted the August 2014
application, but no later than the first week of September,
Denise lost her job with Demoulas. Denise remained unemployed
until mid-November. Defendants assert that Kathy subsequently
misrepresented to Chase during a phone call on September 19,
2014 that Denise was “fully employed by
Demoulas.” Doc. no. 41-23 at 2. The Dionnes
deny that Kathy made that representation.
October 3, 2014, Chase sent the Dionnes a second letter
acknowledging receipt of the August 2014 application. See
doc. no. 21-5. Like the August 27 letter, the
October 3 letter stated that the application was incomplete.
October 7, 2014, the Dionnes received two letters from Chase.
The first, like the October 3 letter, stated that the
Dionnes' loan modification application was incomplete.
See doc. no. 21-6. The letter stated that Chase
needed to receive a completed application by November 6,
2014, and that it would contact the Dionnes within 30 days of
receiving the missing documents.
second October 7, 2014 letter, Chase again stated that the
loan modification application was incomplete. See doc. no.
21-7. The “document status” section of
the second letter stated that pay stubs and a benefits
statement or letter were received, but that both were
incomplete or not legible. Id. at 5. The letter
requested another copy of those documents. The letter also
listed the November 6, 2014 deadline, and stated that Chase
would contact the Dionnes within 30 days of receiving the
Dionnes assert that Kathy called Chase after receiving the
October 7 letters and that a Chase representative told Kathy
to resubmit certain documents. The Dionnes state that Kathy
faxed those documents on October 17, 2014, and that the
August 2014 application was complete on that date.
however, sent the Dionnes two additional letters on October
18 and 21, 2014, stating that their loan modification
application was incomplete. See doc. nos. 21-9 and
21-10. Both letters stated that pay stubs and a
benefits statement or letter were received, but that both
were incomplete or not legible. Both letters listed the
November 6, 2014 deadline, and stated that Chase would
contact the Dionnes within 30 days of receiving the missing
Dionnes assert that on November 5, 2014, they sent Chase
paper copies via overnight mail of the August/September pay
stubs Chase had requested. In a letter dated November 8,
2014, Chase again notified the Dionnes that their application
was not complete. See doc. no. 21-12. The letter
stated that Chase had not received a completed application by
the November 6, 2014 deadline, but that it may still be able
to review the Dionnes' request for assistance if they
were to send Chase the missing information
“immediately.” Despite stating that the request
was incomplete, the “document status” section of
the letter listed several required documents, and stated for
each that “[t]here is nothing needed from you at this
time for this document.” Doc. no. 21-12 at
4-5. The letter listed several documents that had been
received but were pending review. See id.
November 18, 2014, Harmon sent a letter to Denise and Jason
on behalf of Chase and Fannie Mae. Harmon notified the
Dionnes that their loan had been referred to Harmon for
foreclosure. Doc. no. 43-20. The letter further
stated that “this office is attempting to collect a
debt and that any information obtained will be used for that
purpose.” Id. at 2.
November 19, 2014, Chase sent the Dionnes another letter
stating that their loan modification application was
incomplete. See doc. no. 21-15. As with the November
8 letter, the November 19 letter stated that Chase had not
received a complete application by the November 6, 2014
deadline, but that it may still be able to review the
Dionnes' request for assistance if they were to send
Chase the missing information “immediately.”
Unlike the November 8 letter, however, the “document
status” section of the November 19 letter listed the
pay stubs as incomplete or not legible, and requested that
the Dionnes send Chase another copy. See Id. at 8.
December 11, 2014, Harmon delivered a foreclosure notice to
the Dionnes on behalf of Chase and Fannie Mae. See doc. no.
21-18. The notice informed the Dionnes that a
foreclosure sale was scheduled for January 12, 2015, at 1:00
p.m., and that they had the right to petition the superior
court to enjoin the foreclosure sale.
January 12, an auctioneer appeared at the property to conduct
the foreclosure sale. Kathy called Chase, Fannie Mae, and
Harmon, but each told Kathy that it could not stop the
foreclosure sale. The foreclosure sale took place as
scheduled, and Fannie Mae purchased the property at the sale.
parties separately move for summary judgment on all five
counts in the amended complaint. The court addresses each
count separately below.
Count I: Real Estate Settlement Procedures Act
Count I of their amended complaint, the Dionnes allege that
Chase violated five separate provisions of Regulation X of
RESPA, 12 CFR § 1024.41. The five violations fall into
two categories of conduct: (1) failing to properly review the
Dionnes' loss mitigation application, see 12 CFR
§§ 1024.41(b)(1) & (b)(2), and (2) conducting a
foreclosure sale prior to acting on their complete loss
mitigation application, see 12 CFR §§ 1024.41(c),
f(2), & (g).
Dionnes and defendants separately move for summary judgment
on the RESPA claim in its entirety. Although the parties
address the individual RESPA violations specifically,
defendants also raise certain threshold issues with regard to
the claim, which they assert are dispositive of the RESPA
claim in its entirety. Therefore, the court addresses the
threshold issues first before turning to the parties'
arguments as to the individual RESPA violations.
argue that they are entitled to summary judgment on the
Dionnes' RESPA claim in its entirety because the Dionnes
submitted several other loss mitigation applications prior to
the August 2014 application. Defendants contend that these
prior loss mitigation applications eliminate RESPA protection
for the August 2014 application. Defendants also argue that
the Dionnes have not suffered any damages from the alleged
RESPA violations and that, regardless, defendants are
entitled to summary judgment as to Kathy Dionne's RESPA
claim because she did not sign the note.
Prior Loss Mitigation Applications
RESPA, “[a] servicer is only required to comply with
the requirements of [the statute] for a single complete loss
mitigation application for a borrower's mortgage loan
account.” 12 CFR § 1024.41(i). Defendants argue
that because Chase considered several loss mitigation
applications that the Dionnes submitted prior to 2014, and
even agreed to a loan modification in 2010, Chase did not
need to comply with RESPA when considering the August 2014
application. The Dionnes argue that Chase had to comply with
the requirements of RESPA at least once after January 10,
2014, the date § 1024.41 became effective, regardless of
whether the Dionnes had submitted other loss mitigation
applications prior to that date.
courts have consistently held that a loan servicer must
comply with the requirements of § 1024.41 at least once
after the January 10, 2014 effective date of the regulation,
regardless of whether the servicer evaluated a borrower's
prior loss mitigation application prior to that date. See,
e.g., Garmou v. Kondaur Capital Corp., No. 15-12161,
2016 WL 3549356, at *3 (E.D. Mich. June 30, 2016);
Bennett v. Bank of Am. N.A., 126 F.Supp.3d 871, 884
(E.D. Ky. 2015). Here, Chase reviewed the Dionnes' other
applications prior to January 10, 2014. Therefore,
consideration of those loan modification applications does
not relieve Chase of its obligations to comply with RESPA for
the August 2014 application.
Chase has not shown that it satisfied § 1024.41(i), and
defendants are not entitled to summary judgment on the
Dionnes' RESPA claim on that basis.
argue that summary judgment is appropriate on the
Dionnes' RESPA claim in its entirety because the Dionnes
have failed to establish that the alleged RESPA violations
caused them actual damages, including emotional distress
damages. The Dionnes argue that there is sufficient evidence
in the record of actual damages to support the claim.
RESPA, the borrower may recover (1) any actual damages
suffered as a result of the loan servicer's failure to
comply with RESPA and (2) any additional damages, as the
court may allow, in the case of a pattern or practice of
noncompliance, in an amount not to exceed $2, 000. See 12
U.S.C. § 2605(f)(1). To recover such damages, though, a
plaintiff “must present specific evidence to establish
a causal link between the financing institution's
violation and their injuries.” Moore v. Mortg.
Elec. Registration Sys., Inc., No. 10-cv-241-JL, 2013 WL
1773647, at *3 (D.N.H. Apr. 25, 2013) (internal quotation
marks and citation omitted). Actual damages under RESPA
include damages for emotional distress, provided that the
plaintiff establishes a causal relationship between that
distress and the alleged RESPA violation. Moore v. Mortg.
Elec. Registration Sys., Inc., 848 F.Supp.2d 107, 123
record evidence includes testimony from both Jason and Denise
that Chase's conduct during the loss mitigation
application process caused anxiety and distress. The Dionnes
also point to out-of-pocket expenses allegedly incurred as a
result of Chase's RESPA violations, such as the cost of
mailings. Viewed favorably to the Dionnes, the record
contains sufficient evidence to create a jury question as to
whether Chase's alleged violations of RESPA caused the
Dionnes to suffer actual damages.
Kathy Dionne's Standing
argue that one of the plaintiffs, Kathy Dionne, lacks
standing to recover damages for Chase's alleged RESPA
violations. Defendants assert that because Kathy did not sign
the promissory note, she is not a “borrower”
protected by RESPA.
provides that whoever fails to comply with its provisions
“shall be liable to the borrower” for damages.
§ 2605(f). Under RESPA, the term “borrower”
means a borrower on the loan, not merely a borrower named in
the mortgage. See Sharp v. Deutsche Bank Nat'l Trust
Co., No. 14-cv-369-LM, 2015 WL 4771291, at *5-6 (D.N.H.
Aug. 11, 2015) (collecting cases). Therefore, a plaintiff
named as a borrower in the mortgage but who did not sign the
note lacks standing to pursue a RESPA violation. Id.
record is clear that although Kathy signed the mortgage, she
did not sign the promissory note as a borrower. Thus, Kathy
is not a borrower on the loan and lacks standing to assert a
claim under RESPA.
defendants are entitled to summary judgment to the extent
Count I is based on Kathy Dionne's claims against Chase.
The Dionnes cannot recover damages suffered ...