Wirtz v. JPMorgan Chase Bank, N.A.

Background

This matter returned to the district court after an appeal. The district court had previously determined that Specialized Loan Servicing, LLC (SLS) violated the Real Estate Settlement Procedures Act (RESPA) by failing to adequately investigate and remedy an error in Steven L. Wirtz’s mortgage-loan payment history. It also determined that SLS violated Minnesota’s Mortgage Originator and Servicer Licensing Act (MOSLA) because of that RESPA violation. The district court had awarded Wirtz $80 in actual damages and $4,137.22 in statutory damages.

The Eighth Circuit agreed that SLS violated RESPA by failing to conduct a reasonable investigation and provide requested information about Wirtz’s loan history. But it held that Wirtz had not shown actual damages caused by those violations. The $80 Wirtz spent obtaining bank records from 2012 and 2013 did not result from SLS’s failure to investigate or provide information about payment history before 2011. Because RESPA required actual damages before additional statutory damages could be awarded, the Eighth Circuit reversed the damages award. It also rejected Wirtz’s argument that SLS engaged in a pattern or practice of noncompliance.

The Eighth Circuit remanded the MOSLA issue: whether MOSLA provides a cause of action when a loan servicer violates a federal mortgage law, such as RESPA, but the borrower cannot maintain a federal claim because he lacks actual damages. SLS and Wirtz each moved for summary judgment on that issue.

Legal standard

Summary judgment is appropriate when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. The court must view the evidence and reasonable inferences in favor of the party opposing the motion, but that party must identify specific evidence supporting a genuine issue for trial.

MOSLA analysis

MOSLA prohibits a mortgage servicer from violating federal law regulating residential mortgage loans. It also creates a private right of action for a borrower “injured by” a MOSLA violation. The statute permits recovery of actual, incidental, and consequential damages; statutory damages; punitive damages when appropriate; court costs; and reasonable attorney fees.

Wirtz argued that he could sue under MOSLA based on the established RESPA violation even without an injury. The court rejected that argument. It distinguished a borrower’s standing to bring a claim from the separate question of whether the borrower can prevail on the claim. The court concluded that MOSLA requires injury, not merely a statutory violation.

The court also rejected Wirtz’s argument that the $80 cost of obtaining bank records could qualify as actual damages under MOSLA. Because the MOSLA claim was based solely on the RESPA violation, and the Eighth Circuit had determined that Wirtz suffered no actual damages under RESPA, the court concluded that he had no actual damages under MOSLA either.

Disposition

The court granted SLS’s second motion for summary judgment, entered judgment in SLS’s favor on the RESPA and MOSLA claims, denied Wirtz’s second motion for summary judgment, and dismissed the action with prejudice.