The U.S. District Court for the Southern District of Florida granted defendant SunTrust Mortgage, Inc.’s motion to dismiss plaintiff Jennifer Sandoval’s RESPA claim, finding that Sandoval failed to comply with a contractual condition precedent.
The case is Sandoval v. Ronald R. Wolfe & Associates, P.L., SunTrust Mortgage, Inc., and Nationstar Mortgage, LLC, (Case No. 16-61856).
The facts
Sandoval defaulted on her loan in January 2013. After a foreclosure lawsuit was initiated by defendant Ronald R. Wolfe & Associates, Nationstar Mortgage reassigned the mortgage agreement and note back to SunTrust. As the servicer and owner of the mortgage agreement and note, SunTrust then substituted itself for Nationstar as the plaintiff in the foreclosure lawsuit against Sandoval.
Sandoval retained law firm Van Horn Law Group, P.A. to defend her in the foreclosure lawsuit. In July 2015, Sandoval’s counsel mailed SunTrust a request for information.
SunTrust responded Aug. 3, 2015, and sent, through Wolfe, a reinstatement letter in which SunTrust advised Sandoval that if she wanted to avoid foreclosure, she needed to comply with certain requirements for reinstatement of her loan. Wolfe, acting as a debt collector for SunTrust, charged Sandoval “estimated amounts” for third-party services to reinstate her mortgage and avoid foreclosure.
Sandoval alleged in an amended complaint filed Sept. 15, 2016, that SunTrust and Wolfe sought and collected unlawful estimated attorney’s fees ($250 for a motion to dismiss that had not yet been filed and that would have been necessary to dismiss the foreclosure suit) and service-of-process fees ($1,094 – allegedly $360 per person served) from Sandoval. She alleged violations of RESPA (12 U.S.C. § 2605(k)), the FDCPA and the Florida Consumer Collection Practices Act (FCCPA).
On Oct. 19, 2016, SunTrust filed its motion to dismiss, arguing that Sandoval failed to state a claim upon which relief may be granted.
The court’s decision
U.S. District Judge William P. Dimitrouleas stated that the court’s primary basis for dismissing the case was because Sandoval failed to allege or show that she complied with a contractual condition precedent.
Paragraph 20 of the mortgage agreement required Sandoval to give SunTrust notice and a reasonable period of time to take corrective action of any breach of any provision of the mortgage or of any duty owed by reason of the mortgage before commencing a judicial action.
Paragraph 20 states the following: “Neither borrower nor lender may commence, join or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party’s actions pursuant to this security instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this security instrument, until such borrower or lender has notified the other party … of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action.”
The court found that Sandoval did not allege or show that she gave SunTrust notice and a reasonable period of time to take corrective action as required by Paragraph 20.
“Plaintiff was required to give SunTrust the mandatory notice and opportunity to cure in accordance with Paragraph 20 of the underlying mortgage contract at issue prior to initiating this lawsuit, which she failed to do. Based on the foregoing, the court holds that all of plaintiff’s claims in this case are fundamentally deficient because plaintiff failed to comply with the necessary contractual condition precedent set forth in Paragraph 20,” Dimitrouleas wrote.
The court further found Wolfe’s reinstatement letter constituted a valid response under RESPA because it timely provided Sandoval, in writing and in a clear and conspicuous manner, with the requested information and contact information for further inquiry.
“The clear and conspicuous nature of the provided reinstatement information is particularly apt in this case given the context — that the affidavit and attached invoices reflecting all charges associated with service of process in the state court foreclosure action was filed in the state court docket in support of a summary judgment motion on April 8, 2015, approximately three months prior to plaintiff’s counsel’s request for reinstatement figures, and that the Wolfe letter indicated that any overpayments would be refunded,” the court states.