Bulpitt, et al. v. Carrington Mortgage Services, LLC., et al.

2017 DNH 184

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Gary D. Bulpitt and Carolyn L. Bulpitt

v. Civil No. 16-cv-399-JD Opinion No. 2017 DNH 184 Carrington Mortgage Services, LLC and Deutsche Bank National Trust Company, as Trustee for the New Century Home Equity Trust 2005-3

O R D E R

Gary D. and Carolyn L. Bulpitt brought suit in state court

against Carrington Mortgage Services, LLC (“Carrington”) and

Deutsche Bank National Trust Company, as Trustee for the New

Century Home Equity Trust 2005-3 (“Deutsche Bank”) after the

foreclosure sale of their home in Atkinson, New Hampshire. The

defendants removed the case to this court and moved for summary

judgment. The court granted the motion for summary judgment in

favor of the defendants except for the plaintiffs’ claim under

Regulation X of the Real Estate Settlement Procedures Act

(“RESPA”) in Count III.

The plaintiffs filed a motion for reconsideration of that

part of the summary judgment order which held that they had not

alleged a claim under Regulation B of the Equal Credit

Opportunity Act (“ECOA”) and held that equitable relief is not available under RESPA. In the alternative, the plaintiffs

sought leave to amend the complaint. The plaintiffs then filed

a separate motion to amend their complaint and a second motion

for reconsideration that again asserts a claim under Regulation

B, challenges the court’s ruling on equitable relief, and argues

that they properly alleged a claim under the Fair Debt

Collection Practices Act (“FDCPA”).

The defendants object to the plaintiffs’ motions. The

defendants also filed a motion for reconsideration of that part

of the summary judgment order that did not dismiss the RESPA

Regulation X claim to the extent the claim was based on a loan

modification application made in 2013. The plaintiffs object to

the defendants’ motion.1

I. Motions for Reconsideration

Reconsideration of an order is “‘an extraordinary remedy

which should be used sparingly.’” Palmer v. Champion Mtg., 465

F.3d 24, 30 (1st Cir. 2006) (quoting 11 Charles Alan Wright et

al., 11 Federal Practice and Procedure § 2810.1 (2d ed. 1995)).

For that reason, reconsideration is “appropriate only in a

limited number of circumstances: if the moving party presents

newly discovered evidence, if there has been an intervening

To avoid unnecessary delay, the defendants’ motion to file a 1

reply to the plaintiffs’ objection is denied.

2 change in the law, or if the movant can demonstrate that the

original decision was based on a manifest error of law or was

clearly unjust.” United States v. Allen, 573 F.3d 42, 53 (1st

Cir. 2009; see also LR 7.2(d).

A motion for reconsideration cannot succeed when the moving

party is attempting “to undo its own procedural failures” or

“advanc[ing] arguments that could and should have been presented

earlier.” Allen, 573 F.3d at 53. A motion for reconsideration

also is not a means to reargue matters that were considered and

rejected in the previous order. Biltcliffe v. CitiMortgage,

Inc., 772 F.3d 925, 930 (1st Cir.2014) (internal quotation marks

omitted).

A. Plaintiffs’ Motions for Reconsideration

The plaintiffs’ motions are considered together to address

the issues the plaintiffs’ raise in both motions. Although the

plaintiffs asked for a hearing on the second motion, they did

not provide any reasons why a hearing would be of assistance to

the court. LR 7.1(d). As a result, no hearing was held.

1. Regulation B

The plaintiffs contend that the court erred in concluding

“that Reg B was not asserted in the Complaint.” That contention

misstates the court’s order. As the court noted in the summary

3 judgment order, the plaintiffs cited Regulation B in the

introduction section of their complaint but failed to allege any

facts to support a claim under Regulation B or to allege a claim

in any of the three counts in the complaint.2 The defendants

object to reconsideration, arguing that no claim under

Regulation B was pleaded.

Merely asserting a regulation in the introduction to the

complaint does not allege a cause of action. See Fed. R. Civ.

P. 8(a). Therefore, the plaintiffs provide no grounds to

support reconsideration of that part of the summary judgment

order.

2. Equitable Relief

The plaintiffs argue that because they could have pursued

equitable remedies under their state law claims, which they

agreed could not avoid summary judgment, they are entitled to

equitable remedies under RESPA. They also assert that the

Declaratory Judgment Act and the court’s inherent authority

empower the court to impose equitable remedies under RESPA. The

plaintiffs are mistaken. As explained in the summary judgment

2 Because the plaintiffs are represented by counsel, they are not entitled to lenient consideration that might pertain to parties proceeding pro se.

4 order, no equitable relief is available under RESPA. Order,

doc. no. 22, at 10.

3. FDCPA

In the motion for summary judgment, Carrington asserted

that it was not a debt collector for purposes of FDCPA because a

foreclosure sale without attempting to collect a deficiency is

not debt collection activity. In their objection, the

plaintiffs argued only that Carrington collects debts on behalf

of Deutsche Bank and did not dispute that a mortgage foreclosure

sale is not debt collection within the meaning of the FDCPA.

Citing Harry v. Countrywide Home Loans Inc., 215 F. Supp. 3d

183, 187 (D. Mass. 2016), the court noted that generally

foreclosure is not debt collection activity and concluded that

the plaintiffs had not shown a triable issue as to whether

Carrington was a debt collector in his case.

The plaintiffs now seek reconsideration of that decision.

They assert a new theory, without citation to authority or

explanation, that “[b]y its very nature under [15 U.S.C. §

1692(f)(6)] foreclosure constitutes a prohibited debt collection

Act [sic].” Even if reconsideration were appropriate based on a

new theory that could and should have been raised in the

parties’ objection to summary judgment, the plaintiffs have not

shown that their new theory would succeed.

5 Section 1692(f)(6) applies to “debt collectors.” As

discussed in the prior order, Carrington demonstrated that it is

not a debt collector within the meaning of the FDCPA. In

addition, § 1692(f)(6) prohibits “nonjudicial action to effect

dispossession or disablement of property” in only three

circumstances. The plaintiffs have not addressed those

circumstances or shown that any occurred in this case. As such,

the plaintiffs have not shown that summary judgment on the FDCPA

claim against Carrington was based on a manifest error of law or

fact.

B. Defendants’ Motion for Reconsideration

The defendants move for reconsideration of the court’s

decision not to grant summary judgment on Count III. In the

complaint, the plaintiffs alleged that they “had submitted a

complete loss mitigation application to Deutsche Bank or its

servicer well before the first step in the foreclosure process

was commenced.” Complaint, doc. no. 1-1, ¶ 6. The plaintiffs

further alleged that the foreclosure was begun while they

thought their application was still under consideration and

“without first using ‘reasonable diligence to collect

information needed to complete the application’ (indeed without

any contact of Borrowers by Deutsche Bank throughout 2014).”

Id. (internal quotation is not attributed to a source in the

6 complaint). The plaintiffs contend that those actions were

taken in violation of RESPA Regulation X.

Despite the allegations pertaining to a failure to act

through 2014, the defendants assumed that the plaintiffs were

alleging that the defendants violated Regulation X by conducting

the foreclosure sale after the plaintiffs filed a request for

mortgage assistance in November of 2015. Based on that

assumption, the defendants moved for summary judgment, asserting

that they did not violate Regulation X based on the November of

2015 request for mortgage assistance. Although the plaintiffs’

objection to summary judgment focused primarily on matters that

were not material to the motion, Gary Bulpitt’s affidavit

submitted in support of the objection addressed their 2013

application for a loan modification.

The defendants fully demonstrated that the plaintiffs could

not prove a claim that the defendants violated Regulation X

based on the 2015 request for mortgage assistance. However,

they did not address the 2013 application for loan modification.

Because the plaintiffs’ claim in Count III was based on the 2013

application, the court denied the motion for summary judgment on

that claim.

The defendants move for reconsideration of that part of the

order. They contend that the plaintiffs only raised the 2013

7 application in response to the motion for summary judgment and

therefore did not plead that claim. They further contend that

“the Court made a clear error of law by failing to dismiss this

claim as the section of Regulation X at issue was not effective

at the time the 2013 Application was submitted and cannot be

applied retroactively.” In response, the plaintiffs argue that

it is unsettled whether Regulation X applies in this case.

Although the plaintiffs’ complaint is far from a model of

clarity, the Regulation X claim in Count III, as alleged in the

complaint, is based on the 2013 loan modification application.

They allege that Deutsche Bank did not contact them during all

of 2014, which could only apply to the 2013 application and not

to the application submitted in November of 2015. They also

allege that the defendants violated Regulation X based on an

application submitted well before foreclosure began, which would

not be the November of 2015 request.

The defendants also argue that the court should have

dismissed sua sponte the Regulation X claim, based on the 2013

application, because the applicable parts of Regulation X were

not in effect until after the 2013 loan modification application

was denied. It is not the function of the court to raise

grounds to support a motion for summary judgment that are not

8 raised by the moving party, particularly when, as here, those

parties are represented by counsel.

Therefore, the defendants have not shown grounds to

reconsider the summary judgment order.

II. Motion to Amend

The plaintiffs move to amend to add a claim in Count III

under Regulation B. Although the proposed amended complaint

includes Count I and Count II, as pleaded in the original

complaint, those claims have been dismissed on summary judgment

and cannot be revived by amendment now. Similarly, to the

extent the plaintiffs are seeking equitable relief under RESPA

in Count III, that claim also has been dismissed.

In the proposed amended complaint, the plaintiffs have

added allegations to address a claim under Regulation B.3

Beginning at paragraph 22, there are new allegations as to

provisions of Regulation B regarding notification.

The defendants object to the motion to amend because the

plaintiffs failed to meet the requirements of Local Rule 15.1

and because the plaintiffs failed to move to amend the

scheduling order under Federal Rule of Civil Procedure 16(b)(4).

3 Local Rule 15.1(a)(ii) and (iii) require parties moving to amend to identify any new factual allegations and to explain why those were not included in the original filing. The plaintiffs have done neither here.

9 The defendants also argue that the motion to amend should be

denied because the claims are futile. The plaintiffs did not

respond to the defendants’ objection.

The defendants are correct that the plaintiffs did not meet

the requirements of Local Rule 15.1 or Rule 16(b)(4). Those

omissions could support denying the motion to amend, which would

leave the original complaint as the operative complaint with one

claim remaining in Count III. The defendants also assert,

however, that the claims are futile.

Rather than address the claims in the context of futility,

the better approach in this case is to address the claims in the

proposed amended complaint, which are the claims asserting

violations of Regulation B and Regulation X, on the merits

through a dispositive motion. For that reason, the plaintiffs

are granted leave to amend the complaint to add a claim under

Regulation B in Count III, and the defendants are granted leave

to file a dispositive motion to challenge the viability of the

Regulation B and Regulation X claims in Count III.

Conclusion

For the foregoing reasons, the plaintiffs’ motions for

reconsideration (documents nos. 23 and 26) are denied. The

defendants’ motion for reconsideration (document no. 24) is

10 denied. The defendants’ motion for leave to reply (document no.

35) is denied.

The plaintiffs’ motion to amend (document no. 25) is

granted as follows:

The plaintiffs are granted leave to amend their complaint

to add a claim in Count III that the defendants violated

Regulation B. The claims in Count III, for purposes of the

amended complaint, are that the defendants violated Regulation B

and Regulation X based on the plaintiffs’ 2013 loan modification

application and the foreclosure in 2015. The claims in Counts I

and II and the claim for equitable relief under RESPA in Count

III remain dismissed.

The plaintiffs shall file the amended complaint as a

separate document on or before September 8, 2017, and once filed

the amended complaint will become the operative complaint in the

case.

The defendants are granted leave to file a dispositive

motion, either a motion to dismiss or a motion for summary

judgment, on the remaining Regulation B and Regulation X claims

in Count III. The dispositive motion shall be filed within

fourteen days after the amended complaint is filed. The

plaintiffs shall respond to the motion as provided under the

11 local rules of this district and the Federal Rules of Civil

Procedure.

If the case is not resolved by dispositive motion, a date

will be set for the defendants to file an answer to the amended

complaint and a new discovery plan will be ordered. The trial,

which is scheduled for the period beginning on October 3, 2017,

is continued and will be rescheduled, if necessary, after the

defendants’ dispositive motion is resolved. The final pretrial

conference scheduled for September 21, 2017, is cancelled.

SO ORDERED.

__________________________ Joseph DiClerico, Jr. United States District Judge

September 6, 2017

cc: Steven J. Dutton, Esq. Henry Klementowicz, Esq. William C. Sheridan, Esq.