United States District Court, D. New Hampshire
McCafferty, United States District Judge
Wenzel and Eric Daneault brought suit in New Hampshire
Superior Court, Hillsborough County against defendants
Carrington Mortgage Services (“Carrington”) and
National Creditors Connection, Inc. (“National
Creditors”), alleging that Carrington's unlawful
conduct in mishandling their loan payments forced them into
default on their mortgage agreement.
also alleged that Carrington and National Creditors violated
federal and state law in their efforts to collect on
plaintiffs' debt. Defendants removed the case to this
court and move for summary judgment on all of plaintiffs'
claims. Plaintiffs object.
movant is entitled to summary judgment if it “shows
that there is no genuine dispute as to any material fact and
[that it] 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. 2013).
issues where the movant does not have the burden of proof at
trial, the movant can succeed on summary judgment by showing
‘that there is an absence of evidence to support the
nonmoving party's case.'” OneBeacon Am.
Ins. Co. v. Commercial Union Assur. Co. of Canada, 684
F.3d 237, 241 (1st Cir. 2012) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 325 (1986)). If the moving party
provides evidence to show that the nonmoving party cannot
prove a claim, the burden shifts to the nonmoving party to
show that there is at least a genuine dispute as to a factual
issue that precludes summary judgment. Woodward v. Emulex
Corp., 714 F.3d 632, 637 (1st Cir. 2013).
the Local Rules of this district, “[a] memorandum in
support of a summary judgment motion shall incorporate a
short and concise statement of material facts, supported by
appropriate record citations, as to which the moving party
contends there is no genuine issue to be tried.” LR
56.1(a). “A memorandum in opposition to a summary
judgment motion shall incorporate a short and concise
statement of material facts, supported by appropriate record
citations, as to which the adverse party contends a genuine
dispute exists so as to require a trial.” LR 56.1(b).
Importantly, “[a]ll properly supported material facts
set forth in the moving party's factual statement may be
deemed admitted unless properly opposed by the adverse
December 17, 2007, plaintiffs executed a promissory note in
favor of SurePoint Lending abn First Residential Mortgage
Network, Inc. (“SurePoint”) in exchange for a
loan in the amount of $235, 480. The note was secured by a
mortgage on plaintiffs' home in Manchester, New
timely submitted their first four monthly payments due under
the note. They failed to make their fifth monthly payment, or
any payment due under the note thereafter.
April 22, 2011, Mortgage Electronic Registration Systems,
Inc. (“MERS”), as SurePoint's nominee,
assigned the mortgage to BAC Home Loans Servicing, L.P.
(“BAC”). On February 2, 2012, MERS, as BAC's
nominee, assigned the mortgage to Bank of America, N.A.
(“Bank of America”). Bank of America was also the
servicer of the loan.
December 5, 2012, plaintiffs and Bank of America entered into
a loan modification agreement (the “first loan
modification agreement”). At that time, plaintiffs were
54 months in arrears on their loan. Plaintiffs made the first
14 payments required under the first loan modification
agreement, but, beginning with their payment due on February
1, 2014, they failed to make the next nine payments.
November 2014, plaintiffs and Bank of America executed a
second loan modification agreement. Plaintiffs submitted
their first payment under the second agreement on time, but
were late on their second payment and fell behind by two
months. Since that time, plaintiffs made 33 payments, all of
which have been a minimum of 60 days late.
Service Responsibilities Transferred to Carrington
10, 2016, Bank of America sent plaintiffs a notice that
servicing responsibilities of their mortgage loan would be
transferred to Carrington on July 1, 2016. See doc. no. 1-1
at 16-19. At some point in July, Carrington sent plaintiffs a
“Notice of Servicing Transfer.” The Notice of
Servicing Transfer is dated July 11, 2016, and Carrington
asserts that it mailed the notice on or around that date.
Wenzel states in an affidavit that she did not receive the
notice until July 26, 2016. See doc. no. 41-1 at ¶ 5.
26, 2016, Wenzel called Carrington, explained to a
representative that she had just received paperwork from
Carrington indicating that it was her new loan servicer on
that same date, and attempted to make a monthly payment over
the phone. Wenzel explained to the representative that she
had been two months behind in her mortgage payments
“forever” but that Bank of America always allowed
her to make a one-month payment over the phone. The
representative informed Wenzel that because her paperwork
showed her as being at least two months behind on her
payments (for May and June 2016), Carrington could not accept
one month's payment over the phone, and she would need to
mail the payment or submit it online. During the call, the
representative told Wenzel that she needed to update her
contact information, including her telephone number. Wenzel
provided her cell phone number, which she stated was her only
that same call, Wenzel told the Carrington representative
that the paperwork she had received listed her outstanding
balance as $244, 672.23, but that she believed this
information was incorrect. Wenzel stated that paperwork from
Bank of America showed that her outstanding balance was $243,
053.15. The representative confirmed that Wenzel's
outstanding balance was $243, 053.15.
days later, on July 29, 2016, Carrington sent plaintiffs a
notice of intent to foreclose. The notice stated that
Carrington had not received the payment due on May 1, 2016,
and that the amount required to cure the delinquency was $5,
502.30. See doc. no. 1-1 at 21-23.
subsequently mailed in a monthly payment, and Carrington
accepted it on August 9, 2016, as plaintiffs' payment for
May. Shortly thereafter, Wenzel mailed in a second payment,
which Carrington accepted on August 31, 2016, as
plaintiffs' payment for June.
point, Wenzel sent in a third payment, which she asserts
Carrington “initially rejected, and held, before [it
was] eventually accepted and cashed.” Doc. no. 41-1 at
¶ 8. Carrington acknowledges that it accepted
Wenzel's July payment on September 30, 2016, and applied
it to plaintiffs' outstanding balance. Plaintiffs have
made no further loan payments since that time.
Debt Collection Efforts
July 28 through October 11, 2016, Carrington made seven calls
on different dates to Wenzel's cell phone. Carrington
left two short voicemails on Wenzel's phone, on August 18
August 5, 2016, Carrington provided plaintiffs' address,
but not Wenzel's phone number, to National Creditors.
That same day, National Creditors sent a Debt Validation
Notice to Wenzel at plaintiffs' address. The notice
advised that National Creditors was acting on behalf of
Carrington, and stated that Carrington's records showed
that Wenzel owed a debt to Bank of America of $7, 336.40 as
of August 5, 2016. The letter advised Wenzel that unless she
disputed the validity of the debt within 30 days of receipt
of the notice, National Creditors would assume the debt to be
valid. Wenzel did not contact National Creditors to dispute
August 8, 2016, National Creditors, on Carrington's
behalf, sent a field agent to plaintiffs' home. The field
agent rang the doorbell and knocked on the door, but no one
answered. The agent left a contact letter in a sealed
personal and confidential envelope. The letter, which had
Carrington's name and address in the header, stated that
plaintiffs owed $7, 336.40 as of August 5, 2016, and stated
that it “is imperative that you contact a
representative at the telephone number listed below
immediately upon receipt of this letter.” Doc. no. 35-2
at 2. The telephone number listed on the letter was
Carrington's contact information. After the August 8,
2016 visit to the home, National Creditors had no contact, by
phone or otherwise, with plaintiffs.
bring seven claims against Carrington only: Violation of the
Real Estate Settlement Procedures Act (“RESPA”),
12 U.S.C. § 2601 et seq. (Count I); Negligent
Misrepresentation (Count II); Breach of the Covenant of Good
Faith and Fair Dealing (Count III); Violation of the
Telephone Consumer Protection Act (“TCPA”), 47
U.S.C. § 227 (Count IV); Two Counts of Violation of the
Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692 et seq. (Counts V and VII); and
“Standing” (Count IX). They also allege two
counts against both Carrington and National Creditors:
Violation of the FDCPA (Count VI); and Negligent Infliction
of Emotional Distress (Count VIII). Defendants move for
summary judgment on all claims. Plaintiffs object.
support of their motion for summary judgment, defendants
submitted affidavits from Elizabeth Ostermann, a Vice
President for Carrington (doc. no. 34) and Mark Hunt, Custodian
of Records and Director of Compliance for National Creditors
(doc. no. 35). These affidavits provide support for the
statement of undisputed facts included with defendants'
motion for summary judgment.
assert that pursuant to Federal Rule of Civil Procedure
37(c)(1), the court should not consider these affidavits
because Ostermann and Hunt were not identified in
defendants' initial disclosures, and defendants only
disclosed their identities shortly before the close of
discovery. They argue that defendants acted in bad
faith and that the late disclosure was highly prejudicial to
plaintiffs because they had no opportunity to depose these
fail to provide any legitimate basis for their assertion that
defendants acted improperly or in bad faith or that
plaintiffs suffered any prejudice. Although defendants did
not identify Ostermann or Hunt in their initial disclosures,
they supplemented those disclosures on October 24,
2017. See doc. no. 48-1. Consistent with their
pattern during the course of this litigation, plaintiffs
could have, but did not, seek to depose either Ostermann or
Hunt prior to the close of discovery on November 17, 2017.
See doc. nos. 20 & 23 (detailing plaintiffs' failure
to seek discovery throughout the litigation).
case on which plaintiffs rely and attach to their objection,
Rigby v. Philip Morris USA Inc. et al., No. 16-16831
(11th Cir. Oct. 23, 2017), does not support their argument.
In Rigby, the Eleventh Circuit held that the district court
did not abuse its discretion in excluding affidavits offered
by plaintiff in his objection to defendants' motion for
summary judgment. The Eleventh Circuit noted that plaintiff
supplemented his disclosures and identified his witnesses
“only after the discovery period had ended and
defendants had filed their motion for summary
judgment.” Doc. no. 41-2 at 4 (emphasis added).
in contrast, defendants disclosed Ostermann's and
Hunt's names and the topics about which they have
knowledge in a timely fashion. Plaintiffs had the opportunity
to depose these witnesses, but, consistent with their
behavior throughout this litigation, made no effort to do so.
Plaintiffs' argument that the court should exclude the
affidavits under Federal Rule of Civil Procedure 37 is
RESPA (Count I)
their complaint, plaintiffs allege that Carrington violated
RESPA, and specifically 12 U.S.C. § 2605, in the
following ways: 1) Carrington did not send plaintiffs a
timely notice of transfer of servicing of the loan; 2)
Carrington added late fees during the 60-day “grace
period” after the transfer date; and 3) Carrington
continued to add late fees despite receiving payments before
their due date, and returned plaintiffs' monthly mortgage
payments. See doc. no. 1-1 at ¶¶ 30-35. Defendants
argue that they are entitled to summary judgment because the
evidence in the record shows that Carrington did not take any
of the actions plaintiffs allege in support of their RESPA
claim and that, regardless, there is no evidence that
plaintiffs suffered any damages from Carrington's alleged
RESPA violations. See Bulmer v. MidFirst Bank, FSA,
59 F.Supp.3d 271, 279 (D. Mass. 2014) (“To succeed on a
compensatory claim, a plaintiff must demonstrate both a
violation of the statute and actual damages caused by the
RESPA violation.”). The court addresses each of
plaintiffs' allegations below.
Notice of Servicing Transfer
first allege that Carrington failed to provide timely notice
of the transfer of servicing responsibilities of their loan.
Under RESPA, “[e]ach transferee servicer to whom the
servicing of any federally related mortgage loan is assigned,
sold, or transferred shall notify the borrower of any such
assignment, sale, or transfer.” 12 U.S.C. §
2605(c)(1). The “notice required under paragraph (1)
shall be made to the borrower not more than 15 days after the
effective date of transfer of the servicing of the mortgage
loan (with respect to which such notice is made).”
Id. at § 2605(c)(2)(A).
argue that the undisputed evidence in the record shows that
Carrington sent plaintiffs the required notice of transfer
within 15 days of July 1, 2016, the effective date of the
transfer. But defendants themselves appear confused as to the
date Carrington sent the notice.
notice of transfer is dated July 11, 2016. See doc. no. 34-5
at 2-3. Defendants assert in their memorandum in support of
their summary judgment motion that Carrington sent the notice
on that same date, relying on Ostermann's affidavit. See
doc. no. 33 at 10. The statement in the affidavit upon which
defendants rely, however, merely refers to the date of the
letter itself, and does not provide the date that Carrington
sent the notice. See doc. no. 34 at ¶ 14. Later in their
memorandum, defendants state that Carrington mailed the
notice of transfer “on or about July 18, 2016”-a
date outside of the 15-day deadline. See doc. no. 33 at 14
(“Indeed, indisputable evidence shows that on or about
July 18, 2016, [Carrington] sent Plaintiffs notice to the
Subject Property address that the Subject Loan's
servicing had been transferred from [Bank of America] to
[Carrington].”). Then, in their reply brief, defendants
represent that “the Subject Loan's servicing notes
unequivocally establish Carrington sent the servicing
transfer notice on July 16, 2016, which is fifteen days (15)
after the July 1, 2016 effective day of
transfer.” Doc. no. 48 at 5.
defendants had settled on a single date that Carrington sent
the notice, plaintiffs provide evidence that Carrington
failed to comply with the 15-day deadline. On July 26, 2016,
Wenzel called Carrington and stated that she received on that
date a package from Carrington, which included the notice of
transfer. In her affidavit, Wenzel states that she received
the notice on July 26, 2016.
basis of this conflicting record, a genuine issue of material
fact exists as to whether Carrington complied with its
obligations under § 2605(c).
Fees Within 60 Days of Service Transfer
next allege that Carrington “failed to treat the
Plaintiffs' payments as required by 12 U.S.C. 2605(d)
during the 60 day period beginning at the effective date of
the transfer.” Doc. no. 1-1 at ¶ 32. Because of
the confusion that can result when a new loan servicer takes
over, RESPA protects debtors who make timely payments to the
predecessor servicing company for a period of 60 days after
the transfer. Plaintiffs' allegation appears to be that
Carrington improperly added late fees and/or other fees
during that 60-day grace period.
During the 60-day period beginning on the effective date of
transfer of the servicing of any federally related mortgage
loan, a late fee may not be imposed on the borrower with
respect to any payment on such loan and no such payment may
be treated as late for any other purposes, if the payment is
received by the transferor servicer (rather than the