Bocci v. Nationstar Mortgage LLC

Background

Candace Bocci, acting without a lawyer, sued Nationstar Mortgage LLC, doing business as Mr. Cooper, and Deutsche Bank National Trust Company, as trustee for a specified mortgage trust. Bocci alleged that defendants mishandled her mortgage, failed to honor a temporary forbearance plan, improperly reported information about her, and pursued foreclosure. Her amended complaint asserted claims under the Real Estate Settlement Procedures Act (RESPA), the Truth in Lending Act, the Fair Credit Reporting Act, the Consumer Financial Protection Act, the Fair Debt Collection Practices Act, the Coronavirus Aid, Relief, and Economic Security Act, several New York statutes, and common-law theories including breach of contract, fraud, defamation, and negligence.

Nationstar and Deutsche Bank moved to dismiss the amended complaint for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Magistrate Judge Katharine H. Parker recommended granting the motion in part and denying it in part. Both sides objected. Judge Cronan reviewed the contested portions and adopted the Report and Recommendation in full.

Claims Dismissed

The court dismissed with prejudice Bocci’s claims under the CARES Act and the Consumer Financial Protection Act because those statutes did not provide a private right of action for the claims asserted. It also dismissed with prejudice the Fair Debt Collection Practices Act and malicious-prosecution claims, which Bocci had conceded failed as a matter of law.

The court dismissed with prejudice the RESPA claims based on the first five qualified written requests because they were time-barred. It dismissed without prejudice the RESPA claims based on the three most recent requests because Bocci did not plausibly connect defects in defendants’ responses to those requests with her claimed damages. The court dismissed without prejudice Bocci’s Fair Credit Reporting Act claim because the amended complaint did not allege that a credit-reporting agency notified Nationstar of her dispute. Her later objections could not amend the complaint.

The court dismissed without prejudice Bocci’s Truth in Lending Act claims because she did not identify the required disclosures that defendants allegedly failed to provide. It dismissed without prejudice the breach-of-contract theory based on an alleged promise to provide a standard loan modification, finding no sufficiently definite written offer and acceptance and concluding that oral statements could not modify the mortgage under New York’s statute of frauds. It also dismissed without prejudice claims under New York General Business Law Section 349, common-law fraud, and defamation.

The court dismissed with prejudice Bocci’s claim under New York Banking Law 12-D Section 419 because that provision had been repealed. The court also dismissed with prejudice her claim under New York Banking Law Section 9-x because that COVID-19-era provision did not apply to her circumstances. Although the Section 419 claim was dismissed with prejudice, the court permitted Bocci to amend if she wished to develop a claim under a different regulation, 3 N.Y.C.R.R. Part 419.

Claims Allowed to Continue

The court left standing Bocci’s RESPA claim under 12 U.S.C. § 2605(e)(3), concerning alleged reporting of overdue-payment information within 60 days after Nationstar received her June 28, 2021 qualified written request. Defendants’ statute-of-limitations argument did not require dismissal, and their additional arguments were raised too late in the objections.

The court also left standing Bocci’s claim under 12 C.F.R. § 1024.41 concerning Nationstar’s alleged failure to acknowledge a complete loan-modification application within the required time. It allowed to continue Bocci’s breach-of-contract claim alleging that Nationstar failed to honor the forbearance letter and her claim alleging that Deutsche Bank failed to verify certain information before starting the December 2018 foreclosure action. Defendants had not properly raised dismissal arguments concerning those claims at the earlier stage.

As to the forbearance-letter contract claim, the court held that Bocci plausibly alleged a binding agreement, a breach through the refusal to accept her reduced payments and the referral of her home for foreclosure, and damages including legal expenses, additional interest or fees, and harm to her credit score. The court noted that discovery might disprove those damages, but the allegations were sufficient at the motion-to-dismiss stage.

Leave to Amend and Disposition

The court granted Bocci leave to file a second amended complaint within 30 days. It warned that the new complaint would replace, rather than supplement, the existing amended complaint and should comply with the requirement that pleadings be short, simple, concise, and direct. If Bocci did not timely amend or obtain an extension, the court stated that it would dismiss with prejudice the claims identified as inadequately pleaded. The court overruled both parties’ objections, adopted the Report and Recommendation, and directed the Clerk to terminate the pending motion.