Perun v. Carrington Mortgage Services, LLC

Background

Steve Perun fell behind on mortgage payments. Carrington Mortgage Services serviced the loan, and Wilmington Savings Fund Society owned it. After Perun submitted a loan-modification application and provided additional materials, the lenders treated the application as complete on February 12, 2021.

The lenders said they sent Perun a February 26 letter stating that he qualified only for a home-liquidation option. Perun said he never received that letter. The lenders produced the letter but not proof that it had been mailed. On May 20, 2021, they offered Perun a trial loan modification, which he acknowledged receiving. No foreclosure sale had occurred when the opinion was issued.

Perun asserted claims under federal mortgage-servicing regulations implementing the Real Estate Settlement Procedures Act, or RESPA, and under California’s Homeowner’s Bill of Rights. He also asserted negligence, negligent misrepresentation, breach of contract, unjust enrichment, and unfair-business-practices claims based on the alleged statutory violations.

Court’s analysis

The lenders moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. The court accepted the complaint’s factual allegations as true for purposes of the motion but concluded that several claims lacked sufficient factual or legal support.

The court granted the request to incorporate three exhibits into the complaint because Perun’s claims relied on those documents, including the February 26 letter. It denied as moot the request for judicial notice of the letters and granted judicial notice of the deed, assignment, and notice of sale because they were public records. The court stated that this did not affect the outcome.

For the RESPA claims, the parties agreed the lenders complied with the regulation requiring notice about whether the application was complete. The court found that Perun’s allegation that he did not receive the February 26 letter made it plausible only that he did not receive it—not that the lenders prepared it and then failed to send it. The court therefore dismissed the RESPA claims. It also noted that such claims require actual damages and found that Perun had not plausibly alleged sufficient actual damages.

The court dismissed the California Homeowner’s Bill of Rights claims for the same pleading reason. It also held that, even if the letter had not been sent, the later loan-modification offer triggered a statutory safe harbor protecting a servicer from liability for a violation corrected before a trustee’s deed is recorded. The court further concluded that any violation was not material because Perun later had an opportunity to obtain a loan modification.

The court dismissed the remaining claims as well. Claims that depended on an underlying statutory violation failed because the alleged statutory violations were not plausibly pleaded. The negligence claim failed because the lenders did not owe the alleged duty of care under the circumstances described. The negligent-misrepresentation claim lacked a plausible allegation that the lenders had no reasonable basis for the representation. The breach-of-contract claim failed because Perun was already in breach and the alleged conduct concerned actions after that breach rather than the original contract. The unjust-enrichment claim failed because the complaint did not allege economic injury caused by the lenders’ conduct.

Disposition

Judge Richard Seeborg granted the motion to dismiss and dismissed the complaint in its entirety, with leave to amend. The order allowed Perun 21 days from August 23, 2021, to file an amended complaint.