LeDoux v . JP Morgan Chase N.A., et a l . CV-12-260-JL 11/20/12
UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE
Scott LeDoux
v. Civil N o . 12-cv-260-JL Opinion N o . 2012 DNH 194 JP Morgan Chase, N.A., Federal Home Loan Mortgage Corporation, and Haughey, Philpot & Laurent, P.A.
MEMORANDUM ORDER
Plaintiff Scott LeDoux, proceeding pro s e , has brought a
five-count1 complaint against JP Morgan Chase, N.A. (“Chase”),
the servicer of his mortgage loan; the Federal Home Loan Mortgage
Corporation (more commonly known as “Freddie Mac”), the putative
mortgagee; and Haughey, Philpot & Laurent, P.A., foreclosure
counsel for Chase and Freddie Mac. LeDoux alleges that these
three defendants have pursued foreclosure against him even though
Freddie Mac does not hold the promissory note for his loan. He
further alleges that all three defendants violated the New
Hampshire Consumer Protection Act (“CPA”), N.H. Rev. Stat. Ann. §
358-A, and the federal Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1601 et seq., and that Chase both violated
the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. §
2601 et seq., and committed fraud. Chase and Freddie Mac (herein
1 LeDoux’s second amended complaint contains two “Complaints” and three separately-numbered “Counts.” The court construes each of these as purporting to state a distinct cause of action. referred to collectively as “defendants,” a term that, for
present purposes, is not intended to encompass Haughey, Philpot &
Laurent) have moved to dismiss, arguing that LeDoux’s second
amended complaint fails to state a claim upon which relief can be
granted. See Fed. R. Civ. P. 12(b)(6).
This court has jurisdiction over this matter pursuant to 28
U.S.C. § 1331 (federal question), by virtue of LeDoux’s claims
under various federal statutes, and 12 U.S.C. § 1452(f), which
provides this court with jurisdiction over “all civil actions to
which [Freddie Mac] is a party.” After hearing oral argument,
the court grants the motion in part and denies it in part. As
explained in more detail below, LeDoux has stated plausible
claims for relief under the CPA, FDCPA, and RESPA. Defendants’
motion is therefore denied as to those claims.
LeDoux’s claim for injunctive relief against foreclosure
must, however, be dismissed. LeDoux’s challenge to defendants’
ability to foreclose relies primarily on an apparent error in an
indorsement of the promissory note, but LeDoux may not challenge
this error under New Hampshire law. Furthermore, because LeDoux
has not pled “specific facts that make it reasonable to believe”
that Chase “knew that [its allegedly fraudulent statement] was
materially false or misleading,” N . Am. Catholic Educ.
Programming Found., Inc. v . Cardinale, 567 F.3d 8 , 13 (1st Cir.
2009), his claim for fraud is dismissed.
2 I. Applicable legal standard
To survive a motion to dismiss under Rule 12(b)(6), the
plaintiff’s complaint must allege facts sufficient to “state a
claim to relief that is plausible on its face.” Ashcroft v .
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v .
Twombly, 550 U.S. 544, 570 (2007)). In ruling on such a motion,
the court must accept as true all well-pleaded facts set forth in
the complaint and must draw all reasonable inferences in the
plaintiff’s favor. See, e.g., Martino v . Forward Air, Inc., 609
F.3d 1 , 2 (1st Cir. 2010). The court “may consider not only the
complaint but also facts extractable from documentation annexed
to or incorporated by reference in the complaint and matters
susceptible to judicial notice.” Rederford v . U.S. Airways,
Inc., 589 F.3d 3 0 , 35 (1st Cir. 2009). With the facts so
construed, “questions of law [are] ripe for resolution at the
pleadings stage.” Simmons v . Galvin, 575 F.3d 2 4 , 30 (1st Cir.
2009). The following background summary adopts that approach.
II. Background
A. Origination and ownership of LeDoux’s loan
On September 2 , 2003, plaintiff Scott LeDoux executed a
promissory note in the amount of $275,500 in favor of Regency
Mortgage Corporation. The note was secured by a mortgage on
LeDoux’s property in New Ipswich, New Hampshire, also executed in
3 Regency’s favor. That same day, Regency assigned the mortgage to
Mortgage Electronic Registration Systems (“MERS”), “as nominee
for Crescent Mortgage Services, Inc.” The following day, the
assignment was recorded in the Hillsborough County Registry of
Deeds.2 MERS, in turn, assigned the mortgage to Freddie Mac on
July 3 0 , 2010; shortly thereafter, that assignment was recorded
in the Hillsborough County Registry of Deeds.3
On their face, both assignments purported to transfer
ownership of the note as well as the mortgage. A separate,
undated note allonge, however, indorses the note to the order of
Crescent Mortgage Services, Inc. (though it incorrectly
identifies the date of the note as September 2 , 2002, rather than
September 2 , 2003). On the face of the note itself, Crescent
Mortgage Services, Inc. has indorsed the note in blank. LeDoux
disputes that Freddie Mac currently holds the note, though he
offers no suggestion as to who the actual holder might b e .
2 The assignment was recorded at Book 7054, Page 1470. As the recorded assignment is a matter of public record, this court may take note of it without converting defendants’ Rule 12 motion into a Rule 56 motion for summary judgment. See Greene v . Rhode Island, 398 F.3d 4 5 , 48-49 (1st Cir. 2005). And, as just mentioned, this court may also consider “facts extractable from documentation annexed to or incorporated by reference in the complaint.” Rederford, 589 F.3d at 3 5 . The assignment (as well as the subsequent assignment mentioned in the text that follows) was attached to LeDoux’s original state-court complaint and is referenced in his current complaint, as are all other documents cited or quoted in this order. 3 At Book 8226, Page 0995.
4 B. Modification efforts and LeDoux’s bankruptcy filing
At some point, Chase began servicing LeDoux’s loan. On June
7 , 2009, Chase informed LeDoux that he was in default as a result
of his failure to make two consecutive monthly payments, and
invited him to contact it. 4 LeDoux did s o , and was told that if
he “let it go” another month, he could obtain a loan modification
through the federal government’s Home Affordable Modification
Program (“HAMP”). LeDoux, relying on this representation,
continued to refrain from making his loan payments, and Chase
provisionally accepted him into HAMP--contingent upon his making
timely trial period payments.
Beginning in December 2009, LeDoux made five timely trial
payments of $2,170 via Western Union. Nonetheless, the following
April, Chase informed LeDoux that it was unable to offer him a
modification under HAMP, ostensibly because his monthly housing
expenses did not meet program guidelines. In that same letter,
4 The second amended complaint alleges–-and the documents attached to LeDoux’s original complaint confirm--that Chase Home Finance, LLC, was responsible for this communication. The original complaint alleges that Chase Home Finance, LLC is the former name of JP Morgan Chase, N.A., but this allegation is not repeated in LeDoux’s present complaint and there is no other indication in any of the parties’ various filings as to what, if any, relationship exists between the two entities. Defendants’ motion to dismiss, however, appears to assume that Chase Home Finance’s actions may be attributed to JP Morgan Chase, and the court does so as well for purposes of this order.
5 Chase told LeDoux that he would “be hearing from us regarding the
other programs we have available for you very soon.”
Chase did in fact contact LeDoux via telephone, telling him
that he could apply for its “other programs” through its website.
LeDoux did s o , and a short while later, one Shannon Jones, a
Chase “relationship manager,” contacted LeDoux to guide him
through Chase’s “special in house process.” Not long thereafter,
however, Chase sent LeDoux a letter informing him that it
intended to commence foreclosure. In response, LeDoux contacted
Jones, who told him to ignore the letter and assured him that he
was still being considered for a modification or other program.
Notwithstanding this assurance, Chase, acting through
Haughey, Philpot & Laurent, scheduled a foreclosure sale of
LeDoux’s property for September 8 , 2010. As that date
approached, LeDoux spoke with Jones repeatedly; Jones repeatedly
told LeDoux that the foreclosure had been cancelled and that he
was still under consideration for a modification. Again, despite
Jones’s representations, the sale was not, in fact, cancelled.
LeDoux filed for Chapter 13 bankruptcy on September 7 , 2010,
in an effort to stave off the then-imminent foreclosure sale.
See In re LeDoux, N o . 10-13850-JMD (Bkrtcy. D.N.H. Sept. 7 ,
2010). Roughly two months later, Haughey, Philpot & Laurent,
acting on Chase’s behalf, filed a proof of claim in the
bankruptcy case, alleging that Chase held a secured claim for
6 $277,087.23. The proof of claim attached LeDoux’s mortgage, the
aforementioned assignments, and the indorsed note and allonge.
LeDoux objected to Chase’s claim, and subsequently converted his
bankruptcy to a Chapter 7 bankruptcy and was granted a discharge.
After his bankruptcy filing, but before the discharge,
LeDoux continued to work with Chase’s bankruptcy department in
the hope of obtaining some sort of relief. He again applied for
a modification through Chase’s website. After additional
exchanges, on February 9, 2011, Chase notified LeDoux that he was
ineligible for any Chase modification programs (including HAMP),
and informed him that he might be eligible for some other
foreclosure alternative, such as a short sale or deed-in-lieu of
foreclosure. In a subsequent letter on April 1 9 , 2011, Chase
informed LeDoux that “the investor of your loan (the Federal Home
Loan Mortgage Corporation, or Freddie Mac) does not participate
in any of Chase’s alternative modification programs,” and again
suggested that he pursue other foreclosure alternatives.
On May 4 , 2012, Chase contacted LeDoux to provide him
information regarding “homeownership counseling services.” The
letter also stated that “[w]hile the loan remains in default, a
field representative may visit the property to conduct an
inspection, and an inspection fee may be assessed to the loan, if
permitted by your loan documents or applicable law.” Several
weeks later, Haughey, Philpot & Laurent notified LeDoux that
7 Chase had retained it to commence foreclosure. The next month,
Chase again invited LeDoux to apply for a modification.
C. Ledoux’s “qualified written request”
On November 8 , 2010, roughly two months after filing for
bankruptcy, LeDoux sent Chase a letter that purported to be a
qualified written request under the Real Estate Settlement
Procedures Act. See 12 U.S.C. § 2605(e). The letter accused
Chase of “engag[ing] in unfair, deceptive and possibly fraudulent
practices which cannot be explained away as simple paperwork
issues, computerized record problems, or incompetence on the part
of low level employees . . . for the singular purpose of
acquiring MY HOME through foreclosure.” In substance, the letter
repeated many of the allegations related above, and also accused
Chase of misrepresenting the amount due on the loan; refusing to
accept LeDoux’s payments; and applying his trial period payments
to “one set of books” while “pil[ing] up charges, fees and
arrearages to use against ME on another set of books.” LeDoux
informed Chase that he was disputing the debt’s validity, and
requested “clear and readable copies of all pertinent information
regarding [the] loan,” as well as numerous documents related to
the loan (including a number of documents unrelated to the
servicing of the loan, such as “[a]ll electronic transfers,
assignments, sales of my note, mortgage, deed or other security
8 instrument”). It also demanded “a detailed answer” to over 100
questions spanning nine topical areas.
Chase acknowledged receipt of LeDoux’s letter ten days
later, and another two months after that it sent a response to
the letter to LeDoux’s bankruptcy attorney. Chase’s response
enclosed a detailed transaction history for the period from
January 2009 through January 2011; escrow account disclosure
statements; and copies of the mortgage, several other
origination-related documents, and the note (but not the allonge
that Chase had submitted to the bankruptcy court). “Any
information or document requested but not included with this
package,” the cover letter explained, “is unavailable or
considered proprietary, and will not be provided.”
Rather than providing “a detailed answer” to each of
LeDoux’s questions, Chase’s cover letter provided generalized
responses to each of the nine topical areas into which he had
divided those questions. In most cases, Chase’s generalized
responses simply referred LeDoux to the documents enclosed with
the letter. The responses also indicated, again, that some of
the information LeDoux had requested was “either proprietary or
unavailable,” but did not identify which particular information
was unavailable and which was proprietary, or why.
At its end, the letter invited LeDoux to contact Chase’s
Loss Mitigation Department to discuss his loan modification
9 concerns, and to contact Chase’s Customer Service Department if
he had further questions. A telephone number for each department
was provided. LeDoux alleges that these numbers directed him to
Chase’s “first-level customer service department,” which refused
to speak with him as a result of his bankruptcy filing.
D. Procedural history
On June 1 1 , 2012, LeDoux filed suit against Freddie Mac and
Chase in Hillsborough County Superior Court; after LeDoux had
amended his complaint once, Freddie Mac and Chase removed the
case to this court. After the case was removed here, LeDoux
moved to amend the complaint to add Haughey, Philpot & Laurent,
P.A. as a defendant. The court granted that motion, and LeDoux
filed a second amended complaint (hereinafter referred to simply
as the “complaint”). The motion to dismiss presently before the
court followed.
III. Analysis
A. Authority to foreclose (“Complaint 1”)
LeDoux’s “Complaint 1” requests an injunction that bars the
defendants from foreclosing. LeDoux asserts that Freddie Mac, in
whose name Chase and Haughey, Philpot & Laurent are seeking to
foreclose, cannot foreclose on his mortgage because it does not
hold the associated promissory note. Although Crescent Mortgage
Services has indorsed the note in blank, LeDoux argues, this
10 indorsement cannot transfer ownership of the note to the bearer–-
Freddie Mac--because Crescent itself never obtained possession of
the note. LeDoux premises this argument on the notion that the
allonge to the note, because it recites an incorrect note date,
is ineffective to indorse the note to Crescent. Because LeDoux
lacks standing to raise this challenge to the indorsement, this
claim is dismissed.5
The parties agree that the note is a negotiable instrument
subject to the provisions of Article 3 of the Uniform Commercial
Code (“UCC”), N.H. Rev. Stat. Ann. § 382-A:3-101 et seq. Under
the UCC, the holder of an instrument may enforce i t . Id. § 382-
A:3-301. A holder is “a person who is in possession of an
5 Defendants appear to accept LeDoux’s underlying proposition that possession of the note is a necessary prerequisite to foreclosure of the mortgage. The court is not so confident of the accuracy of this proposition. In a lengthy, well-reasoned opinion, Judge Delker of the New Hampshire Superior Court concluded earlier this year that a mortgagee had the authority to foreclose even though its ownership of the note was uncertain. Dow v . Bank of N.Y. Mellon Trust Co., N o . 218-2011-CV-1297, slip op. at 18 (N.H. Super. C t . Feb. 7 , 2012). Judge Delker acknowledged, however, that his conclusion was in tension with a pair of 19th-century opinions of the New Hampshire Supreme Court, see id. at 7-9 (citing Smith v . Moore, 11 N.H. 55 (1840); Southerin v . Mendum, 5 N.H. 420 (1831)), and those opinions–- despite their vintage--might require this court to reach a different conclusion. See Bartlett v . Mut. Pharm. Co . , Inc., 759 F. Supp. 2d 171, 193 (D.N.H. 2010) (“As a federal court exercising diversity jurisdiction over a state-law action, this court must apply the most recent statement of state law by the state’s highest court.”). Because defendants have not challenged LeDoux on this point, the court need not confront the thorny issues it presents, and assumes, arguendo, that Freddie Mac may not foreclose unless it holds the note.
11 instrument drawn, issued, or indorsed to him or to his order.”
Kenerson v . FDIC, 44 F.3d 1 9 , 24 (1st Cir. 1995) (citing N.H.
Rev. Stat. Ann. § 382-A:1-201). At the outset of the loan, then,
Regency Mortgage Corporation was the holder of the note.
On some unspecified date, Regency affixed the allonge to the
note. The allonge reads, in pertinent part:
ALLONGE TO THAT CERTAIN NOTE DATE: September 2 , 2002 IN THE AMOUNT OF $275,500.00 FROM: Scott E . Ledoux TO: Regency Mortgage Corporation
PAY TO THE ORDER OF Crescent Mortgage Services, Inc.
WITHOUT RECOURSE
Document n o . 1-2 at 3 2 . Maureen Brissette, Vice President of
Regency, executed the allonge. This allonge, as a paper affixed
to the note bearing the signature of a Regency representative,
would–-if valid–-serve to indorse the note to Crescent, making it
the holder. See N.H. Rev. Stat. Ann. §§ 382-A:3-204(a), 382-A:3-
205(a); Kenerson, 44 F.3d at 2 4 . And, if Crescent became the
holder, then its indorsement of the note in blank was sufficient
to make any subsequent bearer of the note a holder. See N.H.
Rev. Stat. Ann. § 382-A:3-205(b) (“When indorsed in blank, an
instrument becomes payable to bearer and may be negotiated by
transfer of possession alone until specially indorsed.”).
12 But LeDoux says the allonge was not valid. His complaint
does not question the allonge’s authenticity.6 He claims instead
that because the identifying date given for the note on the
allonge–-September 2 , 2002–-is not the same date as his note–-
September 3 , 2003–-the allonge is not effective as an indorsement
of the note.
In other words, LeDoux argues that the technical defect in
Regency’s indorsement to Crescent means the allonge was void and
transfer of the note cannot have occurred. As an initial matter,
the court observes that the UCC does not require an indorsement
to describe the instrument being indorsed, see id. § 382-A:3-204,
so it is debatable whether an error in such a description would
have any legal effect whatsoever. Even assuming it does, though,
the indorsement of a negotiable instrument is a contract, see
6 In a footnote to his opposition memorandum, LeDoux suggests it is a “likely reality” that “the allonge was faked, forged or fabricated.” Memo. in Opp. (document n o . 17-1) at 4 n.1. This allegation appears nowhere in the complaint, however. Even if it did, moreover, a complaint must “state a claim to relief that is plausible on its face” to withstand a Rule 12(b)(6) motion. Iqbal, 556 U.S. at 678. LeDoux’s accusation of forgery is far from plausible (let alone “likely”). The sole fact LeDoux cites in support of this charge is that there was no allonge attached to the copy of the note Chase provided in its response to his November 8 , 2010 letter. But Chase is only the servicer of the loan, not the purported noteholder, so there is no apparent reason Chase would retain a copy of the original note, with allonge, to give to LeDoux after submitting it in his bankruptcy case. And if the allonge were indeed a forgery, it would scarcely make sense for Chase to present the allonge to the bankruptcy court under penalty of perjury, then not give it to LeDoux himself several months later, thus revealing its misdeed.
13 Caldwell v . Porter, 17 N.H. 27 (1845), and where a writing “fails
to express the intentions the parties had in making the
contract,” as is alleged here, that is usually only grounds for
reformation of the contract, Matter of Lemieux, 157 N.H. 370, 373
(2008). At most, that defect evinces a mutual mistake that would
only render the contract voidable, see Gray v . First NH Banks,
138 N.H. 279, 284 (1994), not void, as LeDoux contends.
This distinction is fatal to LeDoux’s claim. Where not
displaced by the UCC, general principles of contract law apply to
negotiable instruments. Mundaca Inv. Corp. v . Febba, 143 N.H.
499, 502 (1999) (citing N.H. Rev. Stat. Ann. § 382-A:1-103); see
also Record v . Rochester Trust Co., 89 N.H. 1 , 6 (1937)
(“[E]xcept as controlled by the specific provisions of the
negotiable instruments law, negotiable paper is to be construed
like other contracts.”). And, as this court recently had
occasion to note, “New Hampshire law recognizes the general rule
that a debtor cannot interpose defects or objections which merely
render [an] assignment voidable at the election of the assignor
or those standing in his shoes.” Drouin v . Am. Home Mortg.
Servicing, Inc., 2012 DNH 089, 7 (quoting Woodstock Soapstone,
Co., Inc. v . Carleton, 133 N.H. 809, 817 (1991)). That is
precisely what LeDoux seeks to do here in challenging the
indorsement–-an assignment of the note–-by pointing to a defect
that appears to be nothing more than a typographical error.
14 This is not simply a failure by LeDoux to state a claim
under New Hampshire law; it deprives the court of jurisdiction to
entertain his claim. As this court explained in Drouin, the type
of claim LeDoux makes here is in essence an attempt to raise the
rights of third parties. Id. at 6-7 & n.1. The doctrine of
standing–-but one facet of Article III’s “case or controversy”
requirement–-dictates that he is therefore not the “proper party
to invoke judicial resolution of the dispute and the exercise of
the court’s remedial powers.” Id. at 5-6 (quoting Warth v .
Seldin, 422 U.S. 490, 518 (1975)). To the extent LeDoux’s
request for injunctive relief is premised on the theory that the
indorsement from Regency to Crescent was ineffective, it must be
dismissed.
In a single paragraph of his complaint, LeDoux also suggests
he is entitled to relief because the incorrect note date on the
allonge shows that it “indorses some other note.” See Compl.
(document n o . 14) ¶ 1 1 . Even if LeDoux has standing to pursue
this alternative theory, he does not press it in his opposition,
and it does not save his claim in any event. A plaintiff must
plead “factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged”; allegations creating “a sheer possibility
that a defendant has acted unlawfully” are insufficient. Iqbal,
556 U.S. at 678. One cannot reasonably infer, as LeDoux asks
15 this court to d o , that Regency (1) extended another loan in the
amount of $275,500 to someone with the exact same name as LeDoux
exactly one year to the day before granting him a loan in that
exact same amount, (2) attached the allonge to LeDoux’s note by
mistake, and then (3) forewent any attempt to collect on his loan
while Chase did so on Freddie Mac’s behalf. Because the well-
pleaded factual allegations of the complaint do not nudge
LeDoux’s theory “across the line from conceivable to plausible,”
Twombly, 550 U.S. at 570, LeDoux’s passing suggestion that the
allonge “indorses some other note” fails to state a claim upon
which relief can be granted. “Complaint 1” is dismissed.
B. New Hampshire Consumer Protection Act (“Complaint 2”)
In “Complaint 2,” LeDoux alleges that the defendants
committed unfair and deceptive practices in violation of the CPA,
N.H. Rev. Stat. Ann. § 358-A. Defendants scarcely address this
claim in their motion to dismiss, asserting in a footnote that
Chase is exempt from suit pursuant to N.H. Rev. Stat. Ann. § 358-
A:3, I , which exempts from the CPA “[t]rade or commerce that is
subject to the jurisdiction of . . . federal banking or
securities regulators who possess the authority to regulate
16 unfair or deceptive trade practices.”7 This argument is
insufficiently developed to warrant dismissal at this time.
As this court recently noted, to determine whether trade or
commerce is “subject to the jurisdiction of” a regulator, the
court “must examine the statutes that define the [regulator’s]
powers and authority.” Elmo v . Callahan, 2012 DNH 144, 24-25
(quoting Rainville v . Lakes Region Water Co., Inc., 163 N.H. 271,
275 (2012)). “If those statutes grant the [regulator] the
authority to supervise or regulate the trade or commerce in which
the defendants’ deceptive practice occurred, then that trade or
commerce is ‘subject to the jurisdiction of’ the [regulator], and
the CPA does not apply.” Id. at 2 5 . In their opening
memorandum, defendants do not even identify the specific
regulators they say have jurisdiction over the trade or commerce
at issue, let alone the statutory basis for their authority. In
their reply memorandum, defendants suggest that the Office of the
Comptroller of the Currency (“OCC”) is “responsible for” Chase–-
again failing, however, to identify any statutory basis for the
OCC’s authority, or even cite controlling case law for that
proposition. Defendants also fail to explain, moreover, how
7 In the same footnote, defendants argue that any references to the CPA “appear to be ‘leftover’ from a prior pleading” and arguing that this court should therefore “refrain from entertaining” the CPA claim. Memo. in Supp. (document n o . 16-1) at 5 n.3 (citing Ahmed v . Rosenblatt, 118 F.3d 886, 890 (1st Cir. 1997)). At oral argument, defendants withdrew this argument, so the court does not address it here.
17 being “responsible for” a defendant is equivalent to having “the
authority to supervise or regulate the trade or commerce in which
the defendants’ deceptive practice occurred.” See id.
“The burden of proving exemptions from the provisions of
[the CPA is] upon the person claiming the exemption.” N.H. Rev.
Stat. Ann. § 358-A:3, V. By sketching the outline of an argument
in a footnote and leaving it to the court to fill in key details,
defendants have not carried that burden. This is not to say, of
course, that defendants’ argument is meritless. If defendants
wish to renew their argument in more detail in a motion for
judgment on the pleadings or summary judgment, they are free to
do s o . Their motion to dismiss LeDoux’s CPA claim is denied.
C. Fair Debt Collection Practices Act (“Count I”)
In “Count I” of his complaint, LeDoux seeks recovery under
the FDCPA, 15 U.S.C. § 1692 et seq. He alleges that defendants
violated a number of FDCPA provisions in a number of ways,
allegations that appear to be premised in large part on the
dubious assertion that “there are no creditors for whom any debt
collection activities could be lawfully pursued.” Compl.
(document n o . 14) ¶ 5 4 . Defendants argue that LeDoux’s FDCPA
claim must be dismissed because, wholly apart from its suspect
basis, the alleged misconduct either fell outside the FDCPA’s
one-year limitations period or was not prohibited by the FDCPA in
the first place. The court agrees that the statute of
18 limitations prevents LeDoux from recovering for most of the
misconduct alleged in support of this claim. Because the
remaining misconduct arguably falls within the ambit of the
FDCPA, however, the claim cannot be dismissed.
The FDCPA “prohibit[s] a broad range of conduct by debt
collectors.” Moore v . Mortgage Elec. Registration Sys., Inc.,
848 F. Supp. 2d 107, 123 (D.N.H. 2012). Among other things, the
act forbids the use of “any false, deceptive, or misleading
representation or means in connection with the collection of any
debt,”8 15 U.S.C. § 1692e, as well as the use of “unfair or
unconscionable means to collect or attempt to collect any debt,”
id. § 1692f; these general prohibitions are supplemented by more
specific prohibitions. See generally id. §§ 1692b–1692j. To
recover under the FDCPA, LeDoux must show that: “(1) [he has]
been the object of collection activity arising from a consumer
debt; (2) the defendant attempting to collect the debt qualifies
as a ‘debt collector’ under the Act; and (3) the defendant has
engaged in a prohibited act or has failed to perform a
requirement imposed by the [Act].” Moore, 848 F. Supp. 2d at 124
(quoting Beadle v . Haughey, 2005 DNH 016, at 7 ) .
Even if he has shown all these things, though, LeDoux may
only recover if he brought suit “within one year from the date on
8 “Debts,” for purposes of the FDCPA, include both alleged consumer obligations. 15 U.S.C. § 1692a(5).
19 which the violation occur[red].” 15 U.S.C. § 1692k(d); see
Poulin v . The Thomas Agency, 760 F. Supp. 2d 151, 157-58 (D. M e .
2011). Nearly all the alleged conduct that forms the basis for
LeDoux’s FDCPA claim occurred more than one year before LeDoux
filed this suit on June 1 1 , 2012. See Compl. (document n o . 14)
¶¶ 55-59; 62-63. LeDoux concedes this, but argues that “just
because the allegations may be time-barred by the FDCPA does not
mean that they didn’t happen” and suggests that he may use
evidence of time-barred FDCPA violations “to show background, to
establish a foundation for other evidence, [or] to show [his]
vulnerable state of mind and establish the extent of general
damages.” Memo. in Opp. (document n o . 17-1) at 11-12 (quoting
Joseph v . JJ Mac Intyre Cos., LLC, 281 F. Supp. 2d 1156, 1162
(N.D. Cal. 2003)). Whether or not the alleged pre-June 1 1 , 2011
violations have any evidentiary value–-and this court takes no
position on that issue at present–-they plainly fall outside the
limitations period, as LeDoux acknowledges. To the extent “Count
I” is premised on those violations, it fails to state a claim
upon which relief can be granted. The court does not agree,
however, that the FDCPA claim is subject to dismissal in its
entirety (at least not for the reasons defendants have advanced).
Two of the alleged FDCPA violations did occur within the
limitations period. First, on May 4 , 2012, Chase sent LeDoux a
letter regarding his debt, which mentioned the possibility that
20 inspection fees could be assessed on his loan (but only “if
permitted by [LeDoux’s] loan documents or applicable law”).
Second, on May 3 0 , 2012, Haughey, Philpot & Laurent sent LeDoux a
letter informing him that Chase had retained it to foreclose on
his mortgage. That letter also provided contact information for
Chase in the event LeDoux wished to attempt a workout.
LeDoux claims that both letters violated 15 U.S.C. §§
1692e(2)(A) & ( 1 0 ) , and that the second letter also violated 15
U.S.C. § 1692f(6)(A). Defendants argue, though, that these
letters cannot support LeDoux’s FDCPA claim because the May 4
letter “on its face did not attempt to even collect the debt,”
and the May 30 letter is not subject to the FDCPA because it was
merely an attempt to “enforc[e a ] security interest.” Defts.’
Surreply (document n o . 21) at 3 . This is not persuasive.
Defendants’ argument proceeds from the assumption that to
fall within the scope of the FDCPA, a communication must be an
explicit collection attempt. But defendants fail to cite any
authority for this proposition, and the FDCPA itself implies
otherwise, prohibiting certain practices “in connection with the
collection of any debt,” 15 U.S.C. § 1692e (emphasis added),
language that implies a broad application not strictly limited to
demands for payment. Case law, too, supports the conclusion that
the FDCPA’s reach is not nearly so narrow. See Grden v . Leikin
Ingber & Winters P C , 643 F.3d 169, 173 (6th Cir. 2011) (“The text
21 of § 1692e makes clear that, to be actionable, a communication
need not itself be a collection attempt; it need only be
‘connect[ed]’ with one.”); Gburek v . Litton Loan Servicing L P ,
614 F.3d 380, 385 (7th Cir. 2010) (“[A] communication need not
make an explicit demand for payment in order to fall within the
FDCPA’s scope; rather . . . a communication made specifically to
induce the debtor to settle her debt will be sufficient to
trigger the protections of the FDCPA.”).
The relevant inquiry is not whether the May 4 and May 30
letters attempted to collect the debt or to enforce a security
interest–-as defendants frame the issue–-but whether they were
made “in connection with” the collection of a debt, 15 U.S.C. §
1692e, i.e., in an effort “to induce payment by the debtor.”
Grden, 643 F.3d at 173. Viewing the letters in the context
alleged in the complaint, and drawing all reasonable inferences
in LeDoux’s favor, both letters can be viewed as attempts to
persuade LeDoux to pay his debt by threatening, respectively, to
charge fees to LeDoux as long as he remained in default and to
foreclose.9 While, as already alluded t o , the court harbors
9 The court’s conclusion should not in any way be taken as an indication that any communication relating to a foreclosure potentially falls within the scope of the FDCPA. The specific language of the May 30 letter--particularly its invitation to LeDoux to contact Chase regarding the repayment of his debt--as well as the context in which that letter arose bear heavily on the decision here. The court remains agnostic as to whether a foreclosure itself constitutes debt collection activity for
22 serious doubts about the eventual success of LeDoux’s FDCPA
claim, that claim may proceed–-for now.
D. Real Estate Settlement Procedures Act (“Count II”)
“Count II” of LeDoux’s complaint also invokes a federal
statute–-RESPA, 12 U.S.C. § 2601 et seq. LeDoux alleges that his
November 8 , 2010 letter to Chase constituted a qualified written
request (“QWR”) under 12 U.S.C. § 2605(e)(1)(B), and that, by
failing to provide all the information he requested and contact
information for an individual or department who could provide him
with further assistance, Chase violated RESPA and is liable to
him for actual and statutory damages. Defendants argue that the
complaint does not allege facts comprising a RESPA violation.10
They are wrong.
A QWR is written correspondence from a borrower to the
servicer of a “federally related mortgage loan” that either seeks
information regarding the servicing of the loan or requests a
correction to the account and provides reasons for the borrower’s
belief that the account is in error. Id. § 2605(e)(1)(B). The
servicer must acknowledge receipt of the QWR within 20 business
purposes of the FDCPA. See Moore, 848 F. Supp. 2d at 124-25 & n.11. 10 In their opening memorandum, defendants also argue that LeDoux lacks standing to pursue his RESPA claim because that claim is the property of his bankruptcy estate. In their reply memorandum, defendants have withdrawn that argument, so the court does not address it here.
23 days, id. § 2605(e)(1)(A), and provide a more complete response
to the borrower within 60 business days, id. § 2605(e)(2).11
Failure to fulfill these obligations subjects the servicer to
liability for “any actual damages to the borrower as a result of
the failure,” o r , “in the case of a pattern or practice of
noncompliance,” statutory damages. Id. § 2605(f)(1).
Defendants do not argue that LeDoux’s letter was not a QWR
as defined by the statute, or that his loan is not a “federally
related mortgage loan.” They argue instead that Chase’s response
to the letter complied with all pertinent provisions of RESPA.
The response, they say, gave LeDoux the information he requested,
and where it did not provide that information, it gave him “an
explanation of unavailability.” They further note that Chase’s
response provided LeDoux with department contacts.
It is true that Chase provided LeDoux with a great deal of
the information he requested, and defendants’ motion may have
some merit insofar as LeDoux characterizes parts of Chase’s
response as RESPA violations when they do not appear to b e . But,
11 In July of 2010, Congress amended RESPA to shorten the time period under § 2605(e)(1)(A) from 20 days to five days, and to shorten the time period under § 2605(e)(2) from 60 days to 30 days. See Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. N o . 111–203, § 1463(c) (2010). Those amendments were not yet effective during the time period relevant to this action, however, and will not become effective until “18 months after the designated transfer date” of July 2 1 , 2011. See id. § 1400(c); Designated Transfer Date, 75 Fed. Reg. 57,252 (Sept. 2 0 , 2010).
24 accepting LeDoux’s allegations as true, the court cannot say that
Chase gave LeDoux everything that RESPA requires. Where, as was
the case here, a borrower makes a specific inquiry requesting
information about his or her loan, the servicer must:
after conducting an investigation, provide the borrower with a written explanation or clarification that includes–- (i) information requested by the borrower or an explanation of why the information is unavailable or cannot be obtained by the servicer; and
(ii) the name and telephone number of an individual employed by, or the office or department o f , the servicer who can provide assistance to the borrower.
12 U.S.C. § 2605(e)(2)(C). The allegations of LeDoux’s complaint
and supporting documents state a plausible claim that Chase did
not comply with either directive.
As discussed in Part II.C supra, Chase’s response indicated,
in multiple places, that certain information was “unavailable or
considered proprietary, and will not be provided.” It did not
identify which specific information was unavailable and which was
proprietary. If Chase considered certain information to be
“unavailable” because it was “proprietary,” its response did not
say s o . Nor, for that matter, did it give any other explanation
as to why the information requested was unavailable. RESPA
requires more than just a blanket assertion that the information
requested by a borrower is unavailable; it requires an
“explanation of why the information is unavailable.” Id.
25 § 2605(e)(2)(C)(i) (emphasis added); cf. McDonald v . OneWest
Bank, FSB, N o . C10-1942RSL, 2012 WL 555147, *2 (W.D. Wash. Feb.
2 1 , 2012) (rejecting “the proposition that any response, no
matter how cursory and uninformative, shields a loan servicer
from RESPA liability”). Chase did not give LeDoux such an
explanation.
Chase also failed to give LeDoux “the name and telephone
number of an individual employed by, or the office or department
o f , the servicer who can provide assistance to the borrower.”
Id. § 2605(e)(2)(C)(ii). Chase’s response did give LeDoux “the
name and telephone number of” an “office or department”–-in fact,
it gave LeDoux this information for two departments, Chase’s Loss
Mitigation and Customer Service Departments. LeDoux alleges,
however, that when he called those departments, they refused to
speak with him as a result of his bankruptcy filing. In other
words, neither department was willing or able to “provide
assistance to the borrower,” making the numbers to those
departments useless to LeDoux.12 This, too, makes out a
12 LeDoux alleges that shortly after his bankruptcy filing (and before he sent his November 8 letter), someone in Chase’s “Help for Homeowners” department told him that because of his bankruptcy filing, no one in that department could speak to him. Compl. (document n o . 14) ¶ 4 0 . That person then referred him to Chase’s bankruptcy department. Id. Defendants’ memoranda suggest that this referral somehow ameliorated Chase’s failure to provide the contact information required by RESPA. Based upon the information before the court, however, there is no reason to believe that the bankruptcy department would have been able to assist LeDoux in answering the questions posed in his QWR. Even
26 plausible claim for relief under RESPA. See, e.g., Crispin v .
BAC Home Loans Servicing, L P , N o . 11-cv-375, 2011 WL 6294319, *5
(E.D.N.C. Dec. 1 5 , 2011) (denying motion to dismiss RESPA claim
where the plaintiff alleged that “the individual whose name he
was given as someone who could help him told Plaintiff she cannot
provide such assistance”). Defendants’ motion to dismiss
LeDoux’s RESPA claim is denied.
E. Fraud (“Count III”)
“Count III” of LeDoux’s complaint purports to state a claim
against Chase for common-law fraud. “[T]he whole basis of the
fraud,” LeDoux explains in his opposition memorandum, is that
Chase repeatedly told him that he might be eligible for a non-
HAMP modification, even though such a modification was ultimately
not available to him because Freddie Mac did not participate in
any of Chase’s non-HAMP modification programs. Defendants,
invoking Rule 9(b) of the Federal Rules of Civil Procedure, argue
that LeDoux has not pleaded fraud with the requisite
particularity. The court agrees.
Rule 9(b) provides that, “[i]n alleging fraud or mistake, a
party must state with particularity the circumstances committing
if the bankruptcy department could have done s o , moreover, the pre-QWR referral to that department at most reduces the damages LeDoux suffered from Chase’s failure to include appropriate contact information in its response. It does not mean that LeDoux cannot recover at all for that violation of RESPA.
27 fraud or mistake.” This heightened standard, which “applies to
state law fraud claims asserted in federal court,” N . Am.
Catholic Educ. Programming Found., Inc. v . Cardinale, 567 F.3d 8 ,
13 (1st Cir. 2009), “means that a complaint rooted in fraud must
specify the who, what, where, and when of the allegedly false or
fraudulent representations.” Moore, 848 F. Supp. 2d at 130. Per
the Court of Appeals, it also means that “a complaint’s general
averment of the defendant’s ‘knowledge’ of material falsity” is
inadequate “unless the complaint also sets forth specific facts
that make it reasonable to believe that [the] defendant knew that
a statement was materially false or misleading.” Cardinale, 567
F.3d at 13 (quoting Greenstone v . Cambex Corp., 975 F.2d 2 2 , 25
(1st Cir. 1992)) (emphasis in original). It is this latter
aspect of the rule on which defendants seize. They argue that
LeDoux’s allegations contain only a “general averment” of Chase’s
knowledge, and fail to plead any “specific facts that make it
reasonable to believe” that Chase knew that Freddie Mac did not
participate in any of its non-HAMP modification programs at the
time it told him he would be considered for those programs.
After painstaking review of the complaint, the court, like
defendants, has been unable to find any facts alleged from which
one can reasonably infer that Chase knew its statements were
false or misleading. The only allegation of Chase’s knowledge
i s , as defendants argue, simply a generalized averment that Chase
28 “knew that Freddie Mac doesn’t accept any mortgage modifications
from Chase except HAMP modifications.” Compl. (document n o . 14)
¶ 7 9 . That assertion, however, “is not itself supported with
particulars that suggest scienter,” as required by Rule 9 ( b ) .
Cardinale, 567 F.3d at 1 3 . The bare fact that Chase serviced
LeDoux’s loan on behalf of Freddie Mac i s , standing alone, not
enough to suggest that Chase knew Freddie Mac would not accept
non-HAMP modifications at any point before Chase led LeDoux to
believe otherwise.13
13 In his opposition memorandum, LeDoux contends that Chase must have known, based upon “Freddie Mac Bulletin Number 2009-6,” a memorandum Freddie Mac sent to its servicers on March 1 1 , 2009, at that Freddie Mac would not accept non-HAMP modifications from Chase. That document is neither referenced in the complaint nor attached to i t , and therefore not properly before this court. See Watterson v . Page, 987 F.2d 1 , 3 (1st Cir. 1993) (with narrow exceptions not applicable here, “any consideration of documents not attached to the complaint, or not expressly incorporated therein, is forbidden” when ruling on a motion to dismiss). Moreover, taking that document, which is available online at http://www.freddiemac.com/sell/guide/bulletins/pdf/bll096.pdf (last visited November 1 5 , 2012), into account would not change the outcome. The document merely introduces the HAMP program for Freddie Mac servicers and retires the “Streamlined Modification Program.” Nowhere does it state, or even imply, that Freddie Mac will not consider borrowers for other types of modifications; to the contrary, the document expressly invites servicers to consider HAMP-ineligible borrowers for other alternatives to foreclosure. See id. at 4 . To the extent that LeDoux seeks leave to amend his complaint to include allegations regarding this document, that request is therefore denied. I f , in the future, LeDoux discovers any facts that make it reasonable to believe that Chase knew that Freddie Mac would not accept non- HAMP modifications at the time of its allegedly misleading communications, he may seek leave to amend his complaint to add those facts to the complaint and renew his fraud claim.
29 To establish fraud under New Hampshire law, a plaintiff must
show “that the representation was made with knowledge of its
falsity or with conscious indifference to its truth.” Tessier v .
Rockefeller, 162 N.H. 324, 332 (2011). Because LeDoux’s
complaint fails to allege this element of his fraud claim in
accord with Rule 9 ( b ) , “Count III” is dismissed.
IV. Conclusion
For the reasons set forth above, the motion to dismiss of
defendants JP Morgan Chase, N.A. and Federal Home Loan Mortgage
Corporation14 is GRANTED in part and DENIED in part. LeDoux’s
claims for injunctive relief (“Complaint 1") and fraud (“Count
III”) are dismissed. The motion is denied as to the remaining
claims.
SO ORDERED.
j/eph N . Laplante U Jo ited States District J
Dated: November 2 0 , 2012
cc: Scott LeDoux (pro se) Peter G. Callaghan, Esq. William Philpot, Jr., Esq.
14 Document n o . 1 6 .