UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Gary D. and Carolyn L. Bulpitt
v. Civil No. 16-cv-399-JD Opinion No. 2017 DNH 248 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 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 have
moved for summary judgment on the remaining claims in the case.
The plaintiffs object.
Standard of Review
In the order issued on September 6, 2017, the court granted
the defendants leave to file a dispositive motion, either a
motion to dismiss or a motion for summary judgment, on the
plaintiffs’ remaining claims.1 In response, the defendants filed
1 Different standards of review and response times apply to motions under Federal Rule of Civil Procedure (12)(b)(6) and a motion for summary judgment, document no. 41, pursuant to
Federal Rule of Civil Procedure 56. In the defendants’ attached
memorandum in support of the motion, however, they represent
that the motion was intended both to seek dismissal under Rule
12(b)(6) and summary judgment under Rule 56, without explaining
why they were proceeding under both rules.2 To avoid unnecessary
confusion, the court treats the motion as one seeking summary
judgment under Rule 56.
Summary judgment is appropriate when the moving party
“shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “A genuine dispute is one that a
reasonable fact-finder could resolve in favor of either party
and a material fact is one that could affect the outcome of the
case.” Flood v. Bank of Am. Corp., 780 F.3d 1, 7 (1st Cir.
2015). The facts and reasonable inferences are taken in the
light most favorable to the nonmoving party. McGunigle v. City
of Quincy, 835 F.3d 192, 202 (1st Cir. 2016).
Federal Rule of Civil Procedure 56, making it inappropriate to seek relief under both rules in a single motion. See LR 7.1(a)(1).
2 In addition, the defendants rely on the affidavit of Elizabeth A. Ostermann, along with ten documents submitted with the affidavit, to support their motion. They do not show that the affidavit or the appended documents could be considered for purposes of a motion to dismiss under Rule 12(b)(6).
2 The purpose of summary judgment is to determine whether a
trial is necessary. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249 (1986). “On issues where the movant does not have the
burden of proof at trial, the movant can succeed on summary
judgment by showing ‘that there is an absence of evidence to
support the nonmoving party’s case.’” OneBeacon Am. Ins. Co. v.
Commercial Union Assurance Co. of Canada, 684 F.3d 237, 241 (1st
Cir. 2012) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986)). If the moving party provides evidence to show that the
nonmoving party cannot prove a claim, the burden shifts to the
nonmoving party to show that there is at least a genuine and
material factual dispute that precludes summary judgment.
Woodward v. Emulex Corp., 714 F.3d 632, 637 (1st Cir. 2013).
In this district, “[a] memorandum in support of a summary
judgment motion shall incorporate a short and concise statement
of material facts, supported by appropriate record citations, as
to which the moving party contends there is no genuine issue to
be tried.” LR 56.1(a). “A memorandum in opposition to a
summary judgment motion shall incorporate a short and concise
statement of material facts, supported by appropriate record
citations, as to which the adverse party contends a genuine
dispute exists so as to require a trial.” LR 56.1(b).
Importantly, “[a]ll properly supported material facts set forth
3 in the moving party’s factual statement may be deemed admitted
unless properly opposed by the adverse party.” Id.
The Bulpitts, who are represented by counsel, failed to
provide record citations in their statement of facts.3 The
requirements of Rule 56.1 were explained in the court’s order
granting in part and denying in part the defendants’ previous
motion for summary judgment. See Doc. no. 22. Despite that
explanation, the Bulpitts’ counsel again failed to comply with
the rules.
Pursuant to Local Rule 56.1(b), the court is authorized to
deem the defendants’ properly supported facts to be admitted by
the Bulpitts, as occurred for purposes of the previous motion
for summary judgment. Because the Bulpitts submitted Gary
Bulpitt’s affidavit and several documents with their memorandum
in opposition to the motion, however, the court will consider
those exhibits in deciding the defendants’ motion for summary
judgment.
Background
In April of 2005, Gary Bulpitt obtained a loan from New
Century Mortgage Corporation to buy property in Atkinson, New
3 The Bulpitts’ counsel requested and was granted an extension of time to file the opposition to the motion for summary judgment. Nevertheless, the opposition was filed in the early morning of the day after the deadline and does not comply with the local rule.
4 Hampshire. As security for the loan, both Gary and Carolyn
Bulpitt signed a mortgage on the property to New Century. The
Bulpitts did not make the mortgage payment that was due in July
of 2011 and did not make any payments after that time.
Deutsche Bank is the trustee for the New Century Home
Equity Trust 2005-3, which holds the Bulpitts’ mortgage, and
Carrington is the mortgage servicer. Carrington sent the
Bulpitts letters in 2013 that advised them of opportunities for
loan assistance. The letters included Request for Mortgage
Assistance (“RMA”) forms.
Carrington received a RMA form from Gary Bulpitt on
September 12, 2013, and sent him a letter acknowledging receipt
of the form. A second letter was sent the same day that
notified Gary Bulpitt that the RMA was incomplete and requested
additional documents and information to be sent by October 12,
2013.4 Carrington represents that it received no response within
that time from the Bulpitts.5
4 The documents and information required were current property tax bills for all property owned by the Bulpitts, mortgage billing statements for all properties not serviced by Carrington, active homeowners insurance policies for all properties, and current HOA billing statements.
5 Elizabeth A. Ostermann, an officer of Carrington and “attorney-in-fact for Deutsche Bank,” provided her affidavit and attached exhibits to show the history of interactions with the Bulpitts.
5 Gary Bulpitt states in his affidavit that he sent an email
to Carrington with three documents attached on October 10, 2013.
He did not provide a copy of the email or the documents he
believes he sent. He represents that the documents were the
first three documents listed in the prior notice and that the
fourth document, presumably the HOA billing statements, did not
apply.
On October 14, 2013, the defendants sent a second notice
that the RMA was incomplete, listing the same four categories of
documents as in the September 12 notice. In that notice, the
defendants set a deadline of October 29, 2013, to send the
listed documents. Gary Bulpitt states in his affidavit that he
sent an email to Carrington at 8:46 am on October 29 “with
[a]vailable requested information” and “repeated statement re
non-applicable status of other requested documents,” but he did
not provide a copy of that email. Carrington represents that it
did not receive a response from the Bulpitts before the
deadline.
On October 30, 2013, the defendants notified Gary Bulpitt
that his RMA had been denied because his request for
modification was incomplete. That letter explained that Bulpitt
could submit “an appeal for reconsideration by submitting
written evidence that the denial was in error to CMS
6 [Carrington] within 30 calendar days from the date of this
letter.”
In his affidavit, Gary Bulpitt represents that he sent an
email to Carrington on November 29, 2013, with attachments of
updated versions of the previously submitted documents in
response to the October 30 notice.6 The copy of the November 29
email provided with the objection states: “Hi Shirley, I
believe I have found my mistake. I have sent the
Complete!!Homeowners policy as requested. and an updated P&I
Gary.” There is no response in the record from Carrington.
The defendants began foreclosure proceedings in November of
2015. The Bulpitts received notice of the foreclosure sale to
be held on December 3, 2015, and filed a petition to enjoin the
sale. On November 24, 2015, Gary Bulpitt sent Deutsche Bank a
request for mortgage assistance, which was denied the next day.
The foreclosure auction was held on December 3, 2015, and the
property was sold to Deutsche Bank for $215,360.00.
The Bulpitts filed suit against Carrington and Deutsche
Bank in state court in July of 2016. In the complaint, the
6 In his objection, however, Bulpitt represents that he sent the email on November 28. Although not mentioned in his affidavit or in his objection, Bulpitt submitted two copies of a letter from him to Shirley Bates at Carrington dated November 28, 2013. The letter states that it is in response to the October 30 notice.
7 plaintiffs alleged claims for equitable relief from the
foreclosure sale, Count I; violation of the New Hampshire
Unfair, Deceptive, or Unreasonable Collection Practices Act
(“UDUCPA”) and the federal Fair Debt Collection Practices Act
(“FDCPA”), Count II; and violation of Regulation X of the Real
Estate Settlement Procedures Act (“RESPA”), Count III. Although
the Bulpitts mentioned the Equal Credit Opportunity Act (“ECOA”)
and Regulation B in the introduction to the complaint, they did
not allege a claim based on Regulation B. The defendants moved
for summary judgment.
In response to the defendants’ motion for summary judgment,
the plaintiffs initially argued that New Hampshire law does not
provide a statute of limitations for federal claims, a matter
not raised by the defendants’ motion for summary judgment. In
their surreply, however, the Bulpitts acknowledged that they
could not prove their claims in Count I or their claims against
Deutsche Bank in Count II, leaving a claim under the FDCPA
against Carrington in Count II and claims against both
defendants in Count III.
The court granted summary judgment in favor of the
defendants on Counts I and II, and on Count III to the extent it
was based on the request for mortgage assistance in November of
2015. Because the defendants did not address Gary Bulpitt’s
8 request for mortgage assistance in 2013 as a trigger for
Regulation X protection under RESPA, that part of the claim in
Count III survived summary judgment.
The Bulpitts and the defendants moved for reconsideration,
and the Bulpitts moved for leave to amend the complaint to state
a claim under Regulation B of the ECOA, as part of Count III.
The court denied the motions for reconsideration. The
defendants objected to the motion for leave to amend because the
Bulpitts failed to address the requirements for amending the
scheduling order under Federal Rule of Civil Procedure 16(b)(4)
and for seeking leave to amend under Local Rule 15.1 and
asserted that the claims in the amended complaint were futile.
The court allowed the Bulpitts to file the amended complaint but
also granted the defendants leave to file a dispositive motion
to address the Count III claims in the amended complaint.
The Bulpitts filed an amended complaint. The defendants
move for summary judgment on the remaining claims in Count III.
Discussion
The defendants move for summary judgment on that part of
Count III that asserts a claim under Regulation X on the ground
that Regulation X was not in effect when Gary Bulpitt sought
loan assistance in the fall of 2013. They move for summary
judgment on the Regulation B claim on the ground that they fully
9 complied with the requirements of Regulation B. The Bulpitts
object, arguing that Regulation X applies to their request for
loan assistance and that the defendants did not comply with
Regulation B.
A. Regulation X
In the amended complaint, the Bulpitts allege that the
defendants violated RESPA by failing to comply with Regulation
X, 12 C.F.R. § 1024.41(f)(2) and § 1024.41(g), by conducting the
foreclosure sale of their property in 2015 while their RMA
submitted in September of 2013 was pending. The defendants
contend that the claim fails because Regulation X was not in
effect in 2013 when Gary Bulpitt requested mortgage assistance
and because the facts do not support the Bulpitts’ claim. The
Bulpitts argue that their Regulation X claim is viable.
1. Retroactivity
Regulation X was promulgated under RESPA pursuant to the
Dodd-Frank Wall Street Reform and Consumer Protection Act and
became effective on January 10, 2014. Clark v. HSBC Bank USA,
N.A., 664 F. App’x 810, 812 (11th Cir. 2016); Berneike v.
CitiMortgage, Inc., 708 F.3d 1141, 1145 n.3 (10th Cir. 2013);
Hermosillo v. Caliber Home Loans Inc., 2017 WL 2653039, at *8
(D. Ariz. June 20, 2017); Sutton v. CitiMortgage, Inc., 228 F.
Supp. 3d 254, 260-61 (S.D.N.Y. 2017). The First Circuit has not
10 addressed the issue of the retroactive application of Regulation
X. Courts that have considered the issue have concluded that
Regulation X applies only to conduct that occurred after its
effective date and cannot be applied retroactively. See
Campbell v. Nationstar Mortg., 611 F. App’x 288, 296-97 (6th
Cir. 2015); Parris v. Nationstar Mortg. LLC, 2017 WL 3951906, at
*3 (N.D. Tex. Aug. 18, 2017); Christenson v. CitiMortgage, Inc.,
255 F. Supp. 3d 1099, 1108 (D. Colo. June 1, 2017); Miller v.
Bank of N.Y. Mellon, 228 F. Supp. 3d 1287, 1291 (M.D. Fla.
2017).
In this case, Gary Bulpitt submitted an application in
September of 2013 and was notified that the application was not
complete in September and October of 2013, all of which occurred
before the effective date of Regulation X. The foreclosure,
however, occurred in December of 2015, after the effective date.
Most courts have concluded that Regulation X applies only when a
complete application was submitted after its effective date,
January 10, 2014.7 See Costa v. Deutsche Bank Nat’l Tr. Co., 247
In White v. Wells Fargo Bank, N.A., 2015 WL 1842811, at *3 7
(E.D. Mich. Apr. 22, 2015), the court concluded that Regulation X applied to all events because foreclosure had not occurred before the effective date, even though the application was submitted before that date. The court relied on Lage v. Ocwen Loan Servicing LLC, 2015 WL 631014 (S.D. Fla. Feb. 12, 2015), in which the court expressed doubt in the context of a motion to dismiss about the defendant’s theory that Regulation X would not apply because the application was submitted before the effective
11 F. Supp. 3d 329, 348 (S.D.N.Y. Mar. 30, 2017); Reed v. Bank of
Am. Home Loans, 2016 WL 3218720, at *10-*12 (D. Md. June 10,
2016); Lage v. Ocwen Loan Servicing LLC, 145 F. Supp. 3d 1172,
1184-89 (S.D. Fla. 2015); Kiplinger v. Selene Fin., LP, 2015 WL
9255564, at *6-*7 (W.D. Mich. Dec. 18, 2015). That result is
necessary to avoid imposing new duties and liabilities under
Regulation X based on actions and circumstances that occurred
before its effective date. See Lage, 145 F. Supp. 3d at 1182-
87; accord Kiplinger, 2015 WL 9255564, at *7
Because the Bulpitts submitted their application in
September of 2013, before the effective date of Regulation X,
they cannot bring a RESPA claim for violation of Regulation X.
The Bulpitts argue, nevertheless, that the defendants are
equitably estopped from asserting that their application was not
filed after the effective date because: “There must be a remedy
when there is a wrong.”
There is no claim in this case for equitable estoppel.
Further, the Bulpitts’ theory of equitable estoppel lacks merit.
They argue that the defendants are estopped “from asserting that
date. That court subsequently reversed course, however, and granted summary judgment in favor of the defendant because the application was received before the effective date although the foreclosure had not yet been held. Lage v. Ocwen Loan Servicing LLC, 145 F. Supp. 3d 1172, 1185 (S.D. Fla. 2015). As a result, the reasoning in White lacks persuasive value.
12 the application was not filed after the effective date of Reg X,
because had it not been for their wrongdoing, Plaintiffs would
have filed again.”8 The Bulpitts have not shown that the
defendants engaged in any wrongdoing or that the doctrine of
equitable estoppel would apply in this case even if it had been
properly raised.
To the extent the Bulpitts argue that the forbearance
agreement, which expired on November 1, 2012, obligated the
defendants to provide the same protections that apply under
Regulation X, that theory cannot succeed. The Bulpitts did not
bring a claim for breach of the forbearance agreement, despite
two opportunities to amend the complaint. They cannot raise
that claim now.
2. No Violation
Even if Regulation X applied, the defendants contend that
the Bulpitts cannot show that a violation occurred. The
Bulpitts did not attempt to prove the claim on the merits. As
such, it appears that the Bulpitts concede that they cannot
prove a violation of Regulation X.
Regulation X, as raised in the Bulpitts’ claims, prohibits
foreclosure proceedings in two situations: (1) if the borrower
8 In fact, the Bulpitts did file another application for loan modification in November of 2015. Therefore, they were not precluded from doing so.
13 submits a complete application for loss mitigation before the
first foreclosure notice, § 1024.41(f)(2), and, (2) subject to
three exceptions, prohibits a foreclosure sale if the borrower
submits a complete application after the first foreclosure
notice but more than thirty-seven days before the scheduled
sale, § 1024,41(g).
The Bulpitts alleged that they submitted a complete
application in September of 2013. Carrington, however, notified
them that the application was not complete. Gary Bulpitt
acknowledged in his email dated November 29 that he had not
complied with the documentation requirements with respect to the
insurance policy. Therefore, they did not submit a complete
application within the time allowed.
The defendants are entitled to summary judgment on the
Bulpitts’ claim in Count III that the defendants violated RESPA
by not complying with the requirements of Regulation X.
B. Regulation B
defendants violated the ECOA by failing to satisfy the
requirements for actions taken on loss mitigation applications
under Regulation B, 12 C.F.R. § 1002.9(a) and (c). The
defendants move for summary judgment on the claim, asserting
14 that they complied with all of the requirements of Regulation B.
The Bulpitts object.
The Bulpitts provide only conclusory allegations in the
amended complaint to support their Regulation B claim.9 The ECOA
requires a creditor to notify an applicant for credit of the
action it has taken on the application. 15 U.S.C. § 1692(d)(1).
Regulation B, promulgated to implement the ECOA, provides
specific requirements for notification to an applicant for
credit. 12 C.F.R. § 1002.9. Section 1002.9(c) pertains to
notice in response to incomplete applications. In their
objection to summary judgment, however, the Bulpitts assert that
they intended to bring a claim under only § 1002.9(c),
pertaining to notice of an incomplete application.
1. Notice to Applicant – Section 1002.9(a)10
Under § 1002.9(a), a creditor is required to provide
notice within a specified number of days of adverse action on a
9 “[T]he servicer commenced and the [sic] conducted when, due to borrower’s pending application for loss mitigation, servicer was expressly barred from doing so under . . . Reg B, 12 CFR Section 1002.9.” Am. Compl. ¶ 3. “[U]nder Reg B the bank must ‘evaluate or ‘take action’ on Plaintiffs’ application for loss mitigation within thirty (30) days of the bank’s receipt of a complete application.” Am. Compl. ¶ 22. The Bulpitts’s only other pertinent allegation simply quoted § 1002.9(a) and (c).
10 Although the Bulpitts now disavow any claim under § 1002.9(a), it is arguably alleged in the complaint and is addressed here to avoid any confusion about the viability of such a claim.
15 completed application, an incomplete application, and an
existing account. An “adverse action” within the meaning of §
1002.9(a) is defined by § 1002.2(c) and does not include “[a]ny
action or forbearance relating to an account taken in connection
with inactivity, default, or delinquency as to that account.”
§ 1002.2(c)(2)(ii). See also § 1691(d)(6) (“‘[A]dverse action’
. . . does not include a refusal to extend additional credit
under an existing credit arrangement where the applicant is
delinquent or otherwise in default, or where such additional
credit would exceed a previously established credit limit.”).
Denial of an application for a loan modification, when the
applicant is delinquent on payments for the existing loan, is
not an adverse action within the meaning of the ECOA and
Regulation B. See, e.g., Stripland v. Wells Fargo Bank, N.A.,
2016 WL 7007557, at *5 (N.D. Ga. Nov. 3, 2016); U.S. Bank Nat’l
Ass’n v. Tait, 2016 WL 5141990, at *5 (W.D. Wash. Sept. 21,
2016); Perryman v. JPMorgan Chase Bank, N.A., 2016 WL 4441210,
at *8 (E.D. Cal. Aug. 23, 2016); Dionne v. Fed. Nat’l Mortg.
Ass’n, 2016 WL 3264344, at *6 (D.N.H. June 14, 2016); Offiah v.
Bank of Am., N.A., 2014 WL 4295020, at *9 (D. Md. Aug. 29, 2014)
(citing cases).
There is no dispute that the Bulpitts did not make payments
on the loan after July 1, 2011. As a result, they were in
16 default on the mortgage when they applied for a loan modifica-
tion in September of 2013. They were still in default on the
mortgage when the defendants foreclosed in December of 2015.
Therefore, the requirements of § 1002.9(a) do not apply to the
defendants’ response to the Bulpitts’ application for a loan
modification.
2. Incomplete Applications – Section 1002.9(c)11
Under § 1002.9(c), a creditor is required to notify an
applicant who submits an incomplete application by using either
the § 1002.9(a) procedures or by complying with § 1002.9(c)(2).
Section 1002.9(c)(2) requires the creditor to “send a written
notice to the applicant specifying the information needed,
designating a reasonable period of time for the applicant to
provide the information, and informing the applicant that
failure to provide the information requested will result in no
further consideration being given to the application.” In
addition, “[t]he creditor shall have no further obligation under
this section if the applicant fails to respond within the
designated time period.” § 1002.9(c)(2).
11 The Bulpitts raise 15 U.S.C. § 1691(d)(1) in support of their claim under Regulation B. The court understands their argument to be an explanation of the difference between § 1002.9(b) and § 1002.9(c) and not an attempt to raise a new claim, which would not be allowed.
17 The defendants provide evidence that Carrington responded
to the Bulpitts’ application as is required under § 1002.9(c).
Carrington sent an “Initial Package Acknowledgement” to Gary
Bulpitt on September 12, 2013, stating that it had received the
request for mortgage assistance that day, that the request would
be reviewed, and that Carrington would notify him if the
documentation was not complete and describe what was required
with a timeline. On the same day, Carrington sent an
“Incomplete Information Notice – First Notice” to Gary Bulpitt
that listed the information that was required and provided a
deadline of October 12, 2013. Bulpitt contends that he sent an
email to Carrington on October 10 with documents.
On October 14, 2013, Carrington sent Bulpitt an “Incomplete
Information Notice – Second Notice” that listed the same
required information and set a new deadline of October 29, 2013.
Gary Bulpitt contends that he sent an email with documents on
October 29, which Carrington represents they did not receive.
When Bulpitt did not respond, Carrington sent him a “Non-
Approval Notice” on October 30, 2013, informing Bulpitt that
Carrington could not consider his request for assistance because
the request was incomplete. The Notice provided links to
contact other sources for assistance and addresses for
submitting an appeal.
18 The defendants contend that because Gary Bulpitt did not
respond to the notices within the time allowed, they had no
obligation to consider his request for modification. They
further contend that Regulation B does not provide for any
appeal process. As a result, they assert, the Bulpitts’ claim
fails to the extent it is based on their allegations that the
defendants did not respond to their appeal.
The Bulpitts argue that the default bar applicable under
§ 1002.9(a) does not apply to their claim under § 1002(9)(c).
The defendants, however, did not argue that default barred the
Bulpitts’ claim under § 1002.9(c). Therefore that theory is
inapposite to the motion for summary judgment.
The Bulpitts do not address the defendants’ argument that
they complied with the requirements of § 1002.9(c). It is
undisputed that their application continued to be incomplete,
which Gary Bulpitt acknowledged in his email to Carrington dated
November 29, 2013. As a result, the Bulpitts have not shown any
factual dispute that would prevent entry of summary judgment on
the claim of violation of Regulation B.
C. Statute of Limitations
The Bulpitts argue, as they did in their objection to the
defendant’s first motion for summary judgment, that “RSA 479:25
is preempted by the statute of limitations provided by Dodd
19 F[rank] and ECOA.” There has never been an issue in this case
about the statute of limitations provided in RSA 479:25. The
Bulpitts also make statements about the purpose of Regulation X
and Regulation B and damages available under RESPA and ECOA.
These arguments are inapposite to the claims under
Regulation X and Regulation B in this case, which have been
discussed and resolved on summary judgment. To the extent the
Bulpitts are attempting to revisit issues that were resolved in
the order granting, in part, the defendants’ previous motion for
summary judgment, they are too late.
D. Equitable Powers
The Bulpitts also argue that this court has jurisdiction to
exercise its equitable powers under Regulation X and Regulation
B. The issue of equitable relief was addressed in the court’s
prior orders and will not be addressed again here. Further,
because the Bulpitts do not have any claims remaining in this
case, there is no need to consider the relief that might be
granted on pending and meritorious claims.
Conclusion
For the foregoing reasons, the defendants’ motion for
summary judgment (document no. 41) is granted.
All of the plaintiffs’ claims are dismissed.
20 The clerk of court shall enter judgment accordingly and
close the case.
SO ORDERED.
__________________________ Joseph DiClerico, Jr. United States District Judge
December 7, 2017
cc: Steven J. Dutton, Esq. Henry Klementowicz, Esq. William C. Sheridan, Esq.