DeSimone v. Select Portfolio Servicing, Inc

District Court, E.D. New York·Decided May 30, 2025·No. 1:20-cv-03837·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK -------------------------------------------------------x LISA DeSIMONE, et al.

Plaintiffs, MEMORANDUM & ORDER - against - 20-CV-3837 (PKC) (TAM)

SELECT PORTFOLIO SERVICING, INC.,

Defendant. -------------------------------------------------------x PAMELA K. CHEN, United States District Judge: In this putative consolidated class action, Plaintiffs Lisa DeSimone (“DeSimone”), Deborah Snowden (“Snowden”), and Inez Clara Washington (“Washington”) (collectively, “Plaintiffs”) allege that Defendant Select Portfolio Servicing, Inc. (“SPS” or “Defendant”), the mortgage loan servicing company that serviced Plaintiffs’ mortgage loans on behalf of non-party lenders, engaged in deceptive practices by charging “EZ Pay” fees or “pay-to-pay fees” (hereinafter “pay-to-pay fees”) of up to $15 each time Plaintiffs sought to make mortgage payments online or by phone, in violation of the Fair Debt Collection Practices Act (“FDCPA”) and various state statutory and common laws. Presently before the Court is Defendant’s motion to certify this Court’s September 13, 2024 Memorandum & Order (the “Order”) for immediate appeal pursuant to 28 U.S.C. § 1292(b). (See generally Mem. & Order MTD, Dkt. 101.) For the reasons stated below, Defendant’s motion is denied.1

1 Having reviewed the submissions from the parties, the Court finds oral argument unnecessary and accordingly denies SPS’s request for oral argument. (Dkt. 118.) BACKGROUND I. Relevant Factual Background The Court assumes the parties’ familiarity with the facts in this case and therefore recites only those facts relevant to this decision.2 SPS is a national loan servicing company that services residential loans. (First Amended Consolidated Class Action Compl. (“FACC”), Dkt. 87, ¶¶ 14, 23.) SPS “enters into service agreements with lenders, primary servicers, note holders, and trustees

pursuant to which SPS provides servicing, subservicing[,] and agency activities for loan portfolios.” (Id. ¶ 24.) According to those agreements, SPS “act[s] as [the lenders’, note holders’, and trustees’] agent and . . . exercise[s] their rights and responsibilities pursuant to their approval.” (Id.) II. Procedural History In their FACC, Plaintiffs alleged eight causes of action against SPS: (1) violation of the FDCPA, 15 U.S.C. §§ 1692e(2)(A) and 1692f; (2) violation of the New York General Business Law Section 349, N.Y. Gen. Bus. Law § 349; (3) violation of the Maryland Consumer Debt Collection Act, Md. Com. Law. Code Ann. § 14-201, et seq.; (4) violation of the Maryland Consumer Protection Act, Md. Com. Law. Code Ann. § 13-101, et seq.; (5) violation of the

Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code §§ 1788.13(e), 1788.14, 1788.17; (6) violation of the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200; (7) breach of contract; and (8) breach of the covenant of good faith and fair dealing. (See id. ¶¶ 182–291.)

2 A detailed description of the factual and procedural history of this case can be found in the Court’s Memorandum & Order granting in part and denying in part SPS’s motion to dismiss Plaintiffs’ First Amended Consolidated Class Action Complaint (“FACC”). (See Mem. & Order MTD, Dkt. 101, at 2–6.) In its Order granting in part and denying in part SPS’s motion to dismiss, the Court first analyzed Defendant’s arguments regarding Plaintiffs’ compliance with the notice-and-cure provisions of their mortgage agreements. Specifically, the Court found “that (1) Washington had satisfied the pre-suit notice-and-cure provision with respect to her breach of contract claim;

(2) DeSimone and Snowden were excused from complying with the notice-and-cure provision because compliance would be futile; and (3) the notice-and-cure provisions were inapplicable to Plaintiffs’ federal and state statutory claims.” (Mem. & Order MTD, Dkt. 101, at 11.) With respect to the merits of the Plaintiffs’ claims, the Court dismissed “(1) Snowden’s standalone claim under Section 13-301 of the [Maryland Consumer Protection Act]; (2) Washington’s claims under Section 1788.13(e) of the Rosenthal Act as well as under the “unfair” prong of the California Unfair Competition Law; and (3) Plaintiffs’ claims for breach of good faith and fair dealing.” (Id. at 60.) The Court denied SPS’s motion to dismiss on all other claims. (Id.) Following the Court’s Order granting in part and denying in part SPS’s motion to dismiss, SPS served a motion to certify the Order for interlocutory appeal on October 22, 2024. (Dkt. 108.)

Plaintiffs served their response on Defendant on November 21, 2024. (Dkt. 112.) The motion was fully briefed on December 19, 2024. (Dkts. 116–120.) LEGAL STANDARDS Under 28 U.S.C. § 1292(b) (“Section 1292(b)”), a district court may certify an interlocutory appeal where it involves: (1) “a controlling question of law,” (2) as to which there is “substantial ground for difference of opinion,” and (3) “an immediate appeal from the order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). All three prongs of Section 1292(b) must be met for leave to be granted. In re Poseidon Pool & Spa Recreational, Inc., 443 B.R. 271, 275 (E.D.N.Y. 2010). As a general matter, interlocutory appeals are presumptively disfavored as the “rare exception” to the “basic tenet of federal law to delay appellate review until a final judgment has been entered.” Koehler v. Bank of Bermuda Ltd., 101 F.3d 863, 865 (2d Cir. 1996) (citing Coopers & Lybrand v. Livesay, 437 U.S. 463, 475 (1978)); see also 28 U.S.C. § 1291. Only one question of law must satisfy the requirements of Section 1292(b) for a district

court to certify the entire order for appeal. City of New York v. Beretta U.S.A. Corp., 524 F.3d 384, 391–92 (2d Cir. 2008). A controlling question of law exists where a reviewing court could decide an issue “quickly and cleanly without having to study the record,” and where reversal would terminate the action, or at least “materially affect the litigation’s outcome.” Capitol Recs., LLC v. Vimeo, LLC, 972 F. Supp. 2d 537, 551 (S.D.N.Y. 2013) (first quoting Consub Delaware LLC v. Schahin Engenharia Limitada, 476 F. Supp. 2d 305, 309 (S.D.N.Y. 2007); and then quoting In re Enron Corp., No. 06-CV-7828 (SAS), 2007 WL 2780394, at *1 (S.D.N.Y. Sept. 24, 2007)). “A substantial ground for a difference of opinion may exist when (1) there is conflicting authority on the issue, or (2) the issue is particularly difficult and of first impression for the Second Circuit.” United States ex rel. Quartararo v. Cath. Health Sys. of Long Island Inc., 521 F. Supp. 3d 265,

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