in the united states district court for the …. defendant is a serial respa violator. ... on july...

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION ) Steven Bivens, on behalf of himself ) and all persons similarly situated, ) ) Plaintiff, ) ) CIVIL ACTION FILE v. ) ) NO. 1:17-cv-0760-WSD-WEJ Select Portfolio Servicing, ) Inc., ) ) Defendant. ) )

RESPONSE TO DEFENDANT’S MOTION TO DISMISS

COMES NOW, Plaintiff Steven Bivens, by and through his attorney of

record, and files this Response to Defendant Select Portfolio Servicing, Inc.’s

(“SPS”) Motion To Dismiss.

A. Defendant Is A Serial RESPA Violator.

As SPS correctly stated, Mr. Bivens had already filed two separate actions

against Select Portfolio Servicing, Inc. (“SPS”) because of its failure to provide

requested information as required under 12 U.S.C. 2605(e) (“RESPA”). See

Motion to Dismiss at p. 4. So, when Mr. Bivens sent his Qualified Written

Request (“QWR”) on June 30, 2016, it was both surprising and unsurprising that

Case 1:17-cv-00760-WSD-WEJ Document 9 Filed 04/17/17 of 18

2

SPS flatly refused to provide any of the information he had requested. It was

surprising because the idea behind RESPA’s private right of action is that a

violator of the law would mend its ways after being sued because it would be

cheaper to provide the requested information than to go to court again. But, SPS’s

refusal was also unsurprising because SPS had already shown in the other two

lawsuits that it preferred spending money on litigation to providing the requested

(and required) information.

B. DEFENDANT’S REFUSAL TO PROVIDE THE INFORMATION REQUESTED IS ENTIRELY UNJUSTIFIED UNDER RESPA

SPS, in its Motion on p. 4 tells this Court that it first refused to provide any

of the information Mr. Bivens asked for in his QWR:

In response, on July 29, 2016, SPS sent a letter to Plaintiff identifying itself as the servicer on the account and further stating, in relevant part:

The issues presented in your letter are part of an ongoing litigation. SPS is aware of the issues presented in your letter and would like to work with you to reach a resolution. Due to the current litigation, SPS believes that it would be more appropriate to refrain from providing a detailed response to you at this time. We encourage you to continue working with our legal counsel to determine the available resolution options.

Yet, in the next two sentences, SPS admits that when Mr. Bivens resent the same

QWR, it provided some of the information:

On August 3, 2016, Plaintiff sent another letter to SPS demanding the


3

same information again. (Doc. 1-3.) On October 6, 2016, counsel for SPS provided a three-page response, addressing each of the individual requests in the June 30 Letter. (Doc. 1-4.)

It could not be more clear that when SPS received the same QWR for the second

time, it realized its initial reason for refusing to provide the information was

wholly inadequate under RESPA.

Now, SPS tries to justify its initial, complete refusal to answer Mr. Bivens’

QWR by claiming:

SPS sufficiently responded as permitted under Reg X by notifying Plaintiff that his requests were duplicative of prior requests that are the subject of pending litigation.

See Motion at p. 9 (emphasis added). This argument fails on its face because the

federal regulations permit a servicer to refuse to provide information only when the

request is duplicative and the information has already been provided:

12 CFR 1024.36 - Requests for information. (f)Requirements not applicable -

(1)In general. A servicer is not required to comply with the requirements of paragraphs (c) and (d) of this section if the servicer reasonably determines that any of the following apply:

(i)Duplicative information. The information requested is substantially the same as information previously requested by the borrower for which the servicer has previously complied with its obligation to respond pursuant to paragraphs (c) and (d) of this section.

Nowhere does SPS show that it already provided the information. Therefore, the

exception does not apply.


4

SPS also repeats that it told Mr. Bivens in its response that: “the issues in

the June 2016 letter ‘are part of an ongoing litigation’ and ‘SPS is aware of the

issues presented in your letter.’” See Motion at p. 11 (citing its June 2nd response).

This statement has no legal relevance whatsoever. First, lawsuits do not operate as

a stay to RESPA, and while SPS implies that it does, SPS does not actually claim

otherwise. Second, as SPS is well aware, RESPA litigation does not provide a

cause of action for Mr. Bivens to sue for the information itself – he can only sue

for damages. Third, being “aware of the issues presented” is very different from

providing information about those issues. So, while SPS tries to imply that Mr.

Bivens can get the information through the previous cases that he has filed, SPS

does not actually say so because it is well aware that this is not true.

SPS’s implied exceptions are simply disingenuous. It is well aware that the

only way for Mr. Bivens to get the information he is requesting is to resend his

requests until the information is provided, and to sue SPS when it refuses to

comply with RESPA.

SPS tries to portray itself as a victim, but it never explains why it did not

simply provide the information requested – an action that would have cost SPS less

than it spent to have its attorneys read the Complaint. If this is how poorly SPS

responds to borrowers who have already sued, how much worse are its responses


5

to borrowers who have not sued?

C. THIS LAWSUIT HAS A SEPARATE CAUSE OF ACTION FROM ANY OTHER LAWSUIT MR. BIVENS HAS FILED AGAINST SPS.

SPS argues that this lawsuit should be dismissed because “all these matters

are based on the same facts and circumstances[.]” See Motion at p. 6 (emphasis

added). Yet it is obvious that they are not. The lawsuit that SPS calls “Bivens I” is

based on a December 17, 2012 QWR from Mr. Bivens and SPS’s responses to it.1

See id. at pp. 4,5. The lawsuit that SPS calls “Bivens II” is based on a March 25,

2015 QWR from Mr. Bivens and SPS’s responses to it. See id. And, this lawsuit

is based on a June 30, 2016 QWR from Mr. Bivens and SPS’s responses to it. See

id. Plainly, the facts are not the same.

Just as the first two lawsuits are separate cases based on separate causes of

action and different facts, so this case is separate from the prior two. In fact, the

QWR at issue here was not even mailed until after the Amended Complaint had

been submitted to the court in “Bivens II.” See Dkt. No. 19. Plaintiff has not

“split” his claims -- this is a different cause of action that simply did not exist at the

time “Bivens I” and “Bivens II” were filed.

1 The appeal in this case is scheduled for oral argument in May 17 (16-15119).


6

D. PLAINTIFF’S JUNE 30, 2016 LETTER WAS A QUALIFIED WRITTEN REQUEST.

As Defendant correctly acknowledges, a Qualified Written Request must be

for “information relating to the servicing of such loan” and servicing is “receiving

any scheduled periodic payments.” See 12 U.S.C. 2605(e)(1)(A) (emphasis added)

and (i)(3) and see Motion at pp. 7,8.

RESPA is a remedial statute and so is to be construed liberally. The

Eleventh Circuit has held:

[W]e have held that RESPA is a consumer protection statute. See Hardy v. Regions Mortg., Inc., 449 F.3d 1357, 1359 (11th Cir.2006). Consequently, RESPA is to be “construed liberally in order to best serve Congress' intent.” Ellis v. Gen. Motors Acceptance Corp., 160 F.3d 703, 707 (11th Cir.1998) (addressing the remedial nature of the Truth in Lending Act (“TILA”)).

McLean v. GMAC Mortgage Corp., 398 F. App'x 467, 471 (11th Cir. 2010)

(emphasis added). Because “relating to” is a broad term and because RESPA is to

be “construed liberally” the statute must be interpreted broadly in favor of the

borrower.

SPS cites no authority to show that any of Plaintiff’s requests for

information are not related to servicing. The cases it does cite as persuasive

authority are wrongly decided where they narrowly construe RESPA to limit

“related to servicing” in favor of the lenders – the opposite of what the Eleventh


7

Circuit requires.

The Medrano decision from the Ninth Circuit is a good example of an

incorrect decision that is cited by SPS in its Motion as the reason it did not have to

provide information in response to Mr. Bivens QWR No. 4, which asked for a copy

of the documents in the custodial file:

The statute thus distinguishes between letters that relate to borrowers' disputes regarding servicing, on the one hand, and those regarding the borrower's contractual relationship with the lender, on the other. That distinction makes sense because only servicers of loans are subject to § 2605(e)'s duty to respond—and they are unlikely to have information regarding those loans' originations. In summary, we hold that letters challenging only a loan's validity or its terms are not qualified written requests that give rise to a duty to respond under § 2605(e).5

Medrano v. Flagstar Bank, FSB, 704 F.3d 661, 667 (9th Cir. 2012) (emphasis

added) (cited on p. 13).

First, this case is inapposite – it held that a challenge to a “loan’s validity or

terms” was not a QWR. In the present case (QWR No. 4) Mr. Bivens’ QWR

instead simply asks for information; he asked for a copy of the documents in the

custodial file. Second, the decision is a narrow interpretation that both fails to

acknowledge and contradicts a court’s obligation to interpret remedial statutes

liberally. Finally, the court’s decision is incorrect because it improperly assumes

facts not in evidence: “and they are unlikely to have information regarding those

loans' originations,” and the court bases its decision on this assumption.


8

Importantly here, we know that SPS does have the documents Mr. Bivens

asked for in his QWR No. 4 – it had already obtained them from the custodial

bank, US Bank: “You have requested a copy of the documents in the custodial

file for this loan that SPS obtained from US Bank.” See Motion to Dismiss, Ex.

6, ¶ 5 (emphasis added). Why did SPS, a servicer, get those documents from US

Bank? The answer is very simple: they are “related to servicing.”

The bottom line is clear: all of the information that servicers have, or have

access to, is related to servicing. Servicers contract with lenders to collect

payments, and everything they do and all of the information they have is for the

sole purpose of collecting those payments.

E. DEFENDANT DID NOT SATISFY ITS OBLIGATION TO RESPOND.

SPS states falsely: “SPS adequately responded to the letter.” See Motion at

pp. 2 and 18. This is false because RESPA requires not just any “response,” but

the response must include the information requested by the borrower:

(C) 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 requested is unavailable or cannot be obtained by the servicer; and

12 U.S.C. §2605(e). Any “response” is not “adequate” unless it contains the

“information requested by the borrower.” Nowhere in its Motion does SPS


9

show that it actually provided the requested information in its “response” to

the June 30, 2016 letter, nor does it show that it had previously provided the

requested information. Its July 29th “response” was an absolute refusal to

provide the requested information, and it had no legal justification.

SPS tries to wiggle out of this by claiming it: “sufficiently responded

as permitted under Reg X by notifying Plaintiff that his requests were

duplicative of prior requests that are the subject of pending litigation.” See

Motion at p. 9. What SPS disingenuously omits from that statement is that

“duplicative” exception requires that the information have already been

provided:

12 CFR 1024.36 - Requests for information. (f)Requirements not applicable -

(1) In general. A servicer is not required to comply with the requirements of paragraphs (c) and (d) of this section if the servicer reasonably determines that any of the following apply:

(i)Duplicative information. The information requested is substantially the same as information previously requested by the borrower for which the servicer has previously complied with its obligation to respond pursuant to paragraphs (c) and (d) of this section. (emphasis added).

Nowhere does SPS provide any evidence that Mr. Bivens ever sent a

request for information a second time when SPS had provided that

information the first time. Again, it is clear that SPS’s obligation is not just

to “respond,” but to respond by providing the requested information, and it


10

is clear that SPS’s July 29th “response” did not provide the requested

information.

Further, whether there are or are not similar requests “that are the

subject of pending litigation” is legally meaningless. There is no “pending

litigation” exception, and SPS cites none. RESPA is not a statute that

provide a cause of action to get information from a servicer. Instead, it

allows a borrower to get damages from a servicer who does not provide

information. The purpose of RESPA is to provide incentives for servicers to

provide information to borrowers by making it expensive to fail to comply,

but borrowers still have to send QWRs to get information.

F. THE INDIVIDUAL QUALIFIED WRITTEN REQUESTS.

1. You still have not completely responded to the question below (especially you have not provided the documents asked for), so I am asking for the rest of the information again: Please tell me who are the different servicers, subservicers and master servicers, who currently are involved with this loan and provide documents showing their authority and responsibilities regarding this loan and when their involvement started. SPS’s previous response stated that it was the “servicer” for the first part of

the time it claims to have been servicing Mr. Bivens’ loan and that it now is the

“master servicer.” See Motion, Ex. 4. Given this strange admission, Mr. Bivens

primarily wants to know if, since SPS now claims to be the “master servicer,” there


11

is now a different “servicer.” SPS has never provided a complete answer to this

question. A question about who one’s servicer is deserves a complete answer

because it is “related to servicing.”

2. Please list all the charges that comprise the $9,999.99 charge in the account history, the date of the charge and explain the reason for each of the charges. Also please list all the charges that comprise the $863.07 charge in the account history, the date of the charge and explain the reason for each of the charges. It is true that Plaintiff had previously asked SPS, “What was the reason for

the $9,999.99 charge or credit in the account history … ?” See Motion, Ex. 5.

However, because that answer only stated generally, and unhelpfully: “Prior

Servicer-Pre-distributed Interest, Escrow, Payment,” all of which was dated

12/10/2012, Plaintiff rephrased the question to ask SPS to list the specific charges.

See Motion, Ex. 6 and see Complaint, Ex. A. SPS refused to do so in its July 29th

response, but did so in its October 6th response after Mr. Bivens resent the same

request. See Complaint, Exhibits B, C and D.

SPS’s contention that its previous response to a less specific request in an

earlier QWR (sent both on Feb. 4 and on April 20, 2016) was adequate is simply

absurd. See Motion at p. 11. Below is first a copy of the previous question

together with the previous response, and then a copy of the June 30th question (as

re-asked on August 3rd) together with the belated October 6th response – these


12

show that SPS had not previously provided the information Mr. Bivens was asking

for in his June 30th QWR:

See Motion, Ex. 6 (June 2, 2016 Response to April 20 QWR),


13


14

See Complaint, Ex. D (October 6, 2016 Response to August 3 QWR).

SPS’s initial refusal on July 29 to list the specific charges that comprised the

$9,999.99 figure in response to Mr. Bivens’ June 30 QWR is a violation of

RESPA. SPS’s belated October 6th response after that QWR was resent in August

clearly shows the information it could have and should have provided to the first

QWR.

3. Please describe all of the attempts you have made to obtain the account history for the time before January 16, 2007, and when you made each of those attempts. SPS has never provided Mr. Bivens’ account history from before January 16,

20017, but in its QWR response, dated June 2, 2016, it said it was “continuing to

investigate” Plaintiff’s request for this information. See Motion to Dismiss, Ex. 6,

at ¶ 4. The investigation is part of servicing and is required under 12 U.S.C.

§2605(e)(2)(C), so questions about it are “related to servicing.”

4. You refused to send me a copy of the documents in the custodial file, even though you, the servicer, took them from the custodial bank and have them in your possession. I am again requesting that information. As explained above (pp. 6,7), SPS has already obtained these documents

from the custodial bank, US Bank. SPS got them because this file and those

documents are “related to servicing.” Since SPS has the file, from whom else can

Mr. Bivens get a copy?


15

5. You have also refused to send me any documents showing when the current holder of the note became the current holder of the note. I am again requesting that information. Documents showing when the current holder of the note became the holder

is information that is “related to servicing” because they would show who had the

right to collect payments at the time SPS says it began servicing Mr. Bivens’ loan.

6. I am asking again for the rest of the trust agreement that you sent the front page from, especially the part that shows whether my loan is in that trust. SPS sent a copy of the first page of a trust agreement that it said was the

trust Mr. Bivens’ loan was in, but it did not send the part of the agreement that

shows which loans are in that trust. This is “related to servicing” because it will

show who has the right to collect payments. Further, SPS, a servicer, has this

document, so it must be “related to servicing.”

7. Please explain what “title cure costs” are and why they were charged to my account.

“Title cure costs” are listed as a charge on the “Financial Breakdown

Details” that SPS had previously provided to Mr. Bivens. See Motion, Ex. 6

(Charge dated 12/11/2012). There is no more basic request for information

“related to servicing” than questions about charges listed on an account history.

SPS’s statement in its Motion to Dismiss that: “Title cure costs” are

expenses the servicer incurred and did not pass along to Plaintiff,” shows both how


16

easy it would have been for SPS to have provided the requested information and

shows why Mr. Bivens was asking – the account history listed “title cure costs” as

an expense charged to him. See Motion at p. 16.

8. Finally, please send me copies of all of the property inspection reports.

Servicers, including SPS, get property inspection reports as part of servicing

accounts. Plainly, they believe property inspection reports are “related to

servicing.”

G. ACTUAL DAMAGES

Defendant does not even suggest that the costs of sending follow-up

Qualified Written Requests when the requested information was not provided are

not actual damages under RESPA. Here the facts and causation are simple – SPS

refused to send any of the information requested by Mr. Bivens in his June 30,

2016 QWR, so Mr. Bivens asked for that same information again in his August 3,

2016 QWR. The fact that SPS then provided at least some of the information

requested in its October 6, 2016 response to this second QWR shows that it even

achieved part of its purpose. See Complaint, Ex. D.

It is obvious that the only reason SPS supplied this additional information

was because of Mr. Bivens’ follow-up QWR, and SPS does not argue otherwise.

Therefore, Mr. Bivens’ expenses for faxing the second QWR are actual damages.


17

H. STATUTORY DAMAGES

SPS argues only that Mr. Bivens has not sufficiently pled a claim for

statutory damages because he has not sufficiently pled a claim for actual

damages. SPS, by failing to argue otherwise, concedes that Mr. Bivens has

adequately pled a claim for statutory damages if he has adequately pled a claim for

actual damages. Since, as shown above, Mr. Bivens has adequately pled a claim

for actual damages, SPS’s only argument fails.

I. CONCLUSION

Plaintiff has sufficiently pled a violation of RESPA and Defendant’s liability

for damages for himself and the defined class. Accordingly, Defendant’s Motion

to Dismiss should be denied.

Submitted this 17th day of April, 2017.

BY: Wayne Charles, P.C. s/Wayne Charles_______ Wayne Charles Georgia State Bar No. 515244 WAYNE CHARLES, PC 395 Highgrove Dr. Fayetteville, GA 30215 (770) 241-8936 (770) 460-0412 (fax) Attorney for named Plaintiff and the Class


18

CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 5.1

I hereby certify that I prepared the foregoing in Times New Roman, 14-point

font, as approved by Local Rule 5.1.

s/Wayne Charles s Wayne Charles

CERTIFICATE OF SERVICE

I hereby certify that on April 17, 2017, I presented the foregoing to the Clerk

of Court for filing and uploading to the CM/ECF system, which will send a notice

to the counsel of record listed below:

Elizabeth J. Campbell Alexandra M. Dishun Locke Lord LLP Terminus 200, Suite 1200 3333 Piedmont Rd. NE Atlanta, GA 30305 Counsel for Select Portfolio Servicing

DATED this 17th day of April, 2017. s/Wayne Charles s Wayne Charles
