Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Hamilton v. Federal Home Loan Mortgage Corporation

United States District Court, D. Maine

September 15, 2014

RICHARD E. HAMILTON, JR., et al., Plaintiffs,
v.
FEDERAL HOME LOAN MORTGAGE CORPORATION D/B/A FREDDIE MAC, et al., Defendants.

ORDER AFFIRMING IN PART AND REJECTING IN PART THE RECOMMENDED DECISION OF THE MAGISTRATE JUDGE

JOHN A. WOODCOCK, Jr., Chief District Judge.

Richard E. Hamilton, Jr. and Richard E. Hamilton, Sr. brought this seventeen-count civil case against numerous Defendants with connections to Richard Hamilton, Jr.'s now-defaulted home loan and the efforts of various creditors to foreclose his mortgage. Before the Court are motions to dismiss by Nationstar Mortgage, LLC (Nationstar); the Federal Home Loan Mortgage Corporation (Freddie Mac); Phillips, Olore, Dunlavey & York, P.A. (PODY), a law firm; and Attorney Brent A. York (Attorney York). The Magistrate Judge recommended dismissal of a number of the claims against these Defendants. With the exception of one issue not before the Magistrate Judge, the Court affirms the Magistrate Judge's recommendations.

I. LEGAL STANDARD

When evaluating a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, a court must determine "whether, construing the well-pleaded facts of the complaint in the light most favorable to the plaintiffs, the complaint states a claim for which relief can be granted." Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 7 (1st Cir. 2011). A court need not assume the truth of conclusory allegations, and the complaint must state at least a "plausible claim for relief." Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). However, "[n]on-conclusory factual allegations in the complaint must... be treated as true, even if seemingly incredible." Ocasio-Hernández, 640 F.3d at 12. A court may not "attempt to forecast a plaintiff's likelihood of success on the merits." Id. at 13. Furthermore, courts should be "solicitous of the obstacles that pro se litigants face, and... endeavor, within reasonable limits, to guard against the loss of pro se claims due to technical defects." Dutil v. Murphy, 550 F.3d 154, 158-59 (1st Cir. 2008). In deciding a Rule 12(b)(6) motion, a court may consider any documents attached to the complaint as well as any other documents "integral to or explicitly relied upon in the complaint, even though not attached to the complaint." Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008) (quoting Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir. 2000)).

II. FACTUAL BACKGROUND

A. Facts Alleged in the Complaint

1. The Parties

Richard E. Hamilton, Jr. (REH, Jr.) is a resident of Merritt Island, Florida and New Gloucester, Maine, Aff. of Paula Lee-Chambers Attach. 18 Compl. ¶ 1 (ECF No. 40) ( Compl. ); Richard E. Hamilton, Sr. (REH, Sr.) is a resident of Turner, Maine. Id. ¶ 2.

Freddie Mac is a private corporation that purchases and guarantees mortgages, with headquarters in McLean, Virginia. Id. ¶ 3. Nationstar is a mortgage servicing company with headquarters in Lewisville, Texas. Id. ¶ 7.

PODY is a law firm with headquarters in Presque Isle, Maine. Id. ¶ 8. Attorney York practices law in Presque Isle, Maine. Id. ¶ 9. Nationstar, PODY, and Attorney York provided services to Freddie Mac. Id. ¶ 11.

2. The Purchase and Sale

On May 19, 2000, REH, Jr., then 28 years old, signed a contract to purchase a mobile home and land in New Gloucester, Maine for $99, 000.00. Id. ¶¶ 12, 16. REH, Jr. financed the purchase through a loan from Bank of America (BOA). Id. ¶¶ 13-15. On July 21, 2000, as part of the transaction, REH, Jr. granted a mortgage on the property to BOA. Id. ¶ 15. The Plaintiffs allege that REH, Jr. received numerous unsigned documents related to the loan at the closing. Id. They also allege that he "[r]equested an owner's policy of title insurance which has not been received, " id. ¶ 15(B), though the unsigned Settlement Statement showed a fee paid for owner's coverage. Id. ¶ 15(I).

In July 2005, REH, Jr. moved to Florida. Id. ¶ 47(C). However, he "has maintained a residence in both Maine and Florida, " id. ¶ 47(D), and has not abandoned his property in Maine. Id. ¶ 47(E). On a routine basis, REH, Sr. would perform yard maintenance, repairs, snow removal, and security checks at the New Gloucester property. Id. ¶ 27. They have maintained the property in good order. Id. ¶ 47(F).

3. Mr. Hamilton, Jr.'s Private Mortgage Insurance

The mortgage contract-REH, Jr.'s copy of which was unsigned-called for a monthly payment of $61.13 for private mortgage insurance (PMI) premiums. Id. ¶ 32(A). At the closing, no one told REH, Jr. that his PMI could be terminated. Id. ¶ 32(B). Between 2000 and 2010, REH, Jr. never received a notice from BOA that his PMI could be terminated and cancelled, nor any telephone number that he could call to inquire about this topic; however, he did receive such notices and telephone number(s) in 2011 and 2012. Id. ¶ 32(C), (D), (G). Between January 2004 and September 2013, the PMI premium changed from $61.13 to $15.68. See id. ¶ 32(I)-(K).

4. Toxic Waste and Mr. Hamilton, Jr.'s Default

An automobile junkyard abuts REH, Jr.'s property in New Gloucester. Id. ¶ 18. A portion of this junkyard encroached onto REH, Jr.'s property by approximately twenty-five feet. Id. ¶ 19(F). The Plaintiffs allege that BOA, the surveyor, and the appraiser hired by BOA knew of this encroachment before the closing but concealed this fact from REH, Jr. Id. ¶¶ 23-24. Toxic waste from the automobile junkyard has leaked onto REH, Jr.'s property, causing damage to the land. Id. ¶ 20. REH, Jr. cannot rent out his property because of the hazardous waste problem. Id. ¶ 47(H). In addition, the presence of toxic waste scuttled a sale of the land that would have closed on October 1, 2007. Id. ¶¶ 20-22, 25-26. Thereafter, REH, Jr. ceased making any payments on the mortgage. Id. ¶ 17.[1]

5. Foreclosure Proceedings Commence in 2008

Beginning on March 12, 2008, and continuing through May 28, 2013, REH, Sr. learned that a company called Safeguard Properties had changed the locks on the New Gloucester mobile home. Id. ¶ 27. He also found a variety of notices posted on the property indicating that foreclosure proceedings were in progress and that unauthorized persons were prohibited from entering the premises. Id.

REH, Jr. received numerous letters during this period threatening foreclosure. Id. ¶ 36. These included letters from PODY and Attorney York on March 4, 2010 and August 22, 2011. Id. ¶ 36(B), (C). Nationstar also sent a letter threatening foreclosure on July 26, 2013. Id. ¶ 36(F).

On March 11, 2010, REH, Jr. received a "Notice Of Default" from Attorney York, dated March 4, 2010. Id. ¶ 37. On March 16, 2010, REH, Jr. replied by letter to Attorney York with a proposed settlement offer. Id. ¶ 37(B). Attorney York did not respond to this letter. Id. REH, Jr. sent another letter to Attorney York on May 28, 2010, indicating that there were errors in the notice of default and requesting "the status of foreclosure regarding me and my property." Id. ¶ 37(C). Attorney York did not reply to this letter either. Id.

Over a year later, on September 8, 2011, REH, Jr. received a letter from Attorney York. Id. ¶ 37(D). The Complaint alleges that this letter recited an incorrect amount of debt, but the letter did state that if REH, Jr. wrote back indicating the debt was disputed, Attorney York would provide him with verification of the debt. Id. On October 3, 2011, REH, Jr. wrote back to Attorney York disputing the debt, but Attorney York did not respond. Id. ¶ 37(E).

6. Mr. Hamilton, Jr.'s Mortgage Changes Hands in 2009 and 2013

On November 2, 2009, REH, Jr. received a letter dated October 21, 2008 from BOA, stating that Bank of America Corporation d/b/a BAC Home Loans Servicing, LP would be the new servicer for his mortgage. Id. ¶¶ 5, 34.

On March 7, 2013, REH, Jr. received a letter dated March 1, 2013 from Nationstar, stating that as of February 16, 2013, Nationstar would be servicing the mortgage. Id. ¶ 35. Nationstar is now listed as "Lienholder #1" on REH, Jr.'s homeowner's insurance policy. Id. ¶ 35(A).

7. Bank of America's 2011 Foreclosure Proceeding

BOA, through PODY and Attorney York, filed a complaint for foreclosure in the Maine District Court on September 6, 2011. Id. ¶ 38; see also id. ¶¶ 11, 38(E)-(G).[2] REH, Sr., who was apparently a party in interest to the foreclosure, was served with the foreclosure complaint on March 21, 2012. Id. ¶ 38(A). REH, Jr. was served with the complaint on July 16, 2012. Id. ¶ 38(C). The Maine Superior Court, to which the case was removed, dismissed the complaint without prejudice on July 25, 2012. Id. ¶ 38(D).

On September 22, 2011, a foreclosure document was filed in the Cumberland County Registry of Deeds in the names of REH, Jr. and REH, Sr. Id. ¶ 38(H). However, following the dismissal of the foreclosure action, the foreclosure document remains in effect and no release has been filed. Id. ¶ 38(I).

The Complaint further alleges that "PODY and [Attorney York] caused REH, Jr. and REH, Sr. a lot of grief, lost time, expenses, and money, to defend this vexatious foreclosure action." Id. ¶ 38(G).

8. Mr. Hamilton, Jr.'s Communications with the Defendants

a. Regarding Account Balances, Mortgage Ownership, and Hazardous Waste

Between March 7, 2013 and August 29, 2013, REH, Jr. received ten letters or mortgage statements showing incorrect amounts of principal, interest, escrow, late charges, and lender expenses. Id. ¶ 40.

On March 25, 2013, REH, Jr. sent Nationstar a written request for "escrow, past due payment amount, legal fees, property inspections, maintenance expenses, and history report" for the period between September 1, 2000 to March 25, 2013. Id. ¶ 29(A). Nationstar did not provide this information. Id. He followed up with another letter on May 27, 2013, but once again, Nationstar provided no response. Id. ¶ 29(B).

On June 24, 2013, REH, Jr. sent a complaint letter to BOA, Nationstar, and others, complaining about the hazardous waste issue. Id. ¶ 30(F). No recipient of the letter has responded. Id. However, on August 30, 2013, REH, Jr. received a letter from BOA indicating that it had released his mortgage to a new mortgage servicer, and all future correspondence should be directed to the new servicer. Id. ¶ 30(G).

On July 5, 2013, REH, Jr. sent a complaint letter to Freddie Mac and complained about the ownership of his loan and the hazardous waste problem. Id. ¶ 30(H). Freddie Mac did not respond. Id.

b. Regarding Legal Fees

On June 18, 2013, in response to a request from REH, Jr., Nationstar provided a mortgage loan statement that showed the lender paid PODY and Attorney York legal expenses in the amount of $3, 695.00. Id. ¶¶ 41, 41(A). Two weeks later, Nationstar provided REH, Jr. with two legal invoices for work related to the foreclosure that totaled $3, 470.00. Id. ¶ 41(B). However, the Complaint alleges that of these services, portions totaling $2, 190.00 "did not happen." Id. ¶ 41(C). It also alleges that the legal fees paid to PODY and Attorney York were wrongful because they "botched the case." Id. ¶ 41(D).

c. Regarding Private Mortgage Insurance

At some time before June 28, 2013, REH, Jr. requested documents from BOA related to his PMI policy. Id. ¶ 42(A). On June 28, 2013, REH, Jr. received a letter from BOA indicating that the Bank could not locate the PMI documents that REH, Jr. requested, and suggested that he contact his new loan servicer. Id. ¶ 42(B). After several rounds of correspondence with Nationstar and state agencies, id. ¶ 42(D), (E), Nationstar ultimately wrote to REH, Jr. and informed him it was "unable to locate the information [he] requested." Id. ¶ 42((F). However, by letter dated July 31, 2013, Nationstar gave the PMI underwriter permission to provide the PMI information and documents to REH, Jr. Id. ¶ 42(J), (K).

9. Nationstar's Effort to Foreclose in 2013

Shapiro & Morley, LLC is a law firm representing Nationstar regarding REH, Jr.'s mortgage loan. Id. ¶ 43. On March 25, 2013, REH, Jr. received a letter from Shapiro & Morley, LLC. Id. ¶ 43(A). This letter indicated that Nationstar had referred REH, Jr.'s loan to the law firm for foreclosure, and stated that the amount of debt owed at that time was $78, 952.15. Id. REH, Jr. wrote two letters to Shapiro & Morley, LLC-one on April 21, 2013 and one on May 27, 2013-disputing the amount of the debt and asking for "all documents that show that the debt is owed to Nationstar." Id. ¶ 43(B), (C).

On June 3, 2013, REH, Jr. received a letter from Attorney William B. Jordan at Shapiro & Morley, LLC. Id. ¶ 43(D). The letter stated:

In response to your recent letter we believe to be qualified written request under RESPA, please be advised that we are not an agent of Nationstar Mortgage, LLC within the meaning of RESPA. We therefore do not believe that your letter constitutes a valid qualified written request.

Id.

10. Mr. Hamilton, Jr.'s Credit Reports

The Complaint alleges that between 2004 and August 2013, Nationstar "electronically reported false, inaccurate, and misleading[] information on REH, Jr. to Experian, Equifax, and Transunion credit reporting agencies." Id. ¶ 33. Specifically, it claims that for each month between January 2004 and August 2013, "the monthly amount of the mortgage loan payment, the amount of the escrow payment, and the interest paid or charged on the mortgage loan[] were overstated." Id. ¶ 33(B). According to the Complaint, Nationstar failed to inform the three credit reporting agencies that he had reported complaints and disputes. Id. ¶ 33(C).

11. Ownership of Mr. Hamilton, Jr.'s Loan

At various times, a number of parties have made representations to REH, Jr. regarding who owns the loan that is presently in default. Id. ¶ 46. Between July 16, 2012 and December 17, 2012, both Attorney York and BOA represented that BOA owned the loan. Id. ¶ 46(A), (B). The Cumberland County Registry of Deeds indicates that BOA transferred the loan to Nationstar on March 22, 2013. Id. ¶ 46(D). Consistent with this transfer, on March 25, 2013, Shapiro & Morley, LLC represented to REH, Jr. that Nationstar owned the loan. Id. ¶ 46(C).

On June 28, 2013, BOA represented to REH, Jr. that Freddie Mac owned the loan. Id. ¶ 46(E). Nationstar corroborated this account on July 1, 2013. Id. ¶ 46(F). On July 5, 2013, REH, Jr. wrote to Freddie Mac and asked whether and on what date Freddie Mac acquired ownership of his loan, and requested documents pertaining to the ownership. Id. ¶ 46(G). Freddie Mac did not respond, id. ¶ 46(H), but it did "access[] REH, Jr.'s credit report from Experian... [and] Equifax." Id. ¶ 46(I), (J).

12. Mr. Hamilton, Jr.'s Emotional Distress

The Complaint alleges:

The combining impact and the magnitude of the problems with REH, Jr.'s property has created a very tense and dire situation for REH, Jr.
...
REH, Jr. suffered and continues to suffer from mental anguish, distress, anxiety, pain, indignation, despair, severe headaches, severe tension, severe trauma, and is unable to eat, sleep, and cope with daily life.

Id. ¶ 47(I), (L).

B. Procedural Posture

The Plaintiffs originally filed their Complaint in Cumberland County Superior Court on September 20, 2013. Compl. Nationstar removed the case to this Court on November 8, 2013, Notice of Removal (ECF No. 1), and, after a motion to remand, the Court eventually agreed to retain it.[3] Nationstar filed a motion to dismiss on November 25, 2013, Nationstar Mortg., LLC's Mot. to Dismiss Pls.' Compl. (ECF No. 10) ( Nationstar's Mot. to Dismiss ), with a separately attached memorandum of law. Id. Attach. 1 Mem. of Law in Support of Def. Nationstar Mortg., LLC's Mot. to Dismiss Pls.' Compl. (ECF No. 10). PODY and Attorney York also moved to dismiss on December 16, 2013. Mot. to Dismiss Pls.' Compl. by Defs. Phillips, Olore, Dunlavey & York, P.A. and Brent A. York (ECF No. 15). Freddie Mac filed its own motion to dismiss on March 3, 2014, Fed. Home Loan Mortg. Corp.'s Mot. to Dismiss Pls.' Compl. (ECF No. 65), with a separately attached memorandum of law. Id. Attach. 1 Mem. of Law in Support of Def., Fed. Home Loan Mortg. Corp.'s Mot. to Dismiss Pls.' Compl. (ECF No. 65) ( Mem. of Law in Support of Freddie Mac's Mot. to Dismiss Pls.' Compl. ).

After full briefing, the Magistrate Judge issued his Recommended Decision on the motions to dismiss on May 8, 2014. Recommended Decision on Mots. to Dismiss (ECF No. 84) ( Rec. Dec. ). Nationstar and Freddie Mac jointly filed an objection to the Recommended Decision on May 22, 2014, Defs.' Nationstar Mortg., LLC and Fed. Home Loan Mortg. Corp.'s Objection to the Magistrate's Recommended Decision on Mots. to Dismiss (ECF No. 88) ( Defs.' Objection ), and the Plaintiffs filed an objection the next day. Pls.' Objections to Magistrate Judge's Recommended Decision on Mots. to Dismiss (ECF No. 89) ( Pls.' Objection ). PODY and Attorney York responded to the Plaintiffs' objection on May 27, 2014. Resp. to Pls.' Objections to Magistrate Judge's Recommended Decision on Mots. to Dismiss Pls.' Compl. by Defs. Phillips, Olore, Dunlavey & York, P.A. and Brent A. York (ECF No. 90) ( Defs.' Reply ). On June 3, 2014, REH, Jr. responded to the objection by Nationstar and Freddie Mac. Pl.'s Objection to Defs.' Nationstar Mortg., LLC and Fed. Home Loan Mortg. Corp.'s Objection to the Magistrate's Recommended Decision on Mot. to Dismiss (ECF No. 93) ( Pl.'s Reply ).

C. The Causes of Action

The Complaint contains seventeen counts; the counts vary as to who is the plaintiff(s) and who is the defendant(s). See Compl. at 31-65. Eliminating the uninvolved defendants, the Court summarizes the status of each count in the Complaint as is relevant to the motions to dismiss by Nationstar, Freddie Mac, PODY, and Attorney York:

1) Count One: Breach of Contract - REH, Jr. v. Nationstar and Freddie Mac;
2) Count Two: Negligence - REH, Jr. v. Nationstar and Freddie Mac;
3) Count Three: Negligent Misrepresentation - REH, Jr. v. Nationstar and Freddie Mac;
4) Count Four: Intentional Misrepresentation - REH, Jr. v. Nationstar and Freddie Mac;
5) Count Five: Fraud - REH, Jr. v. Nationstar and Freddie Mac;
6) Count Six: Unfair Trade Practices Act - REH, Jr. v. Nationstar, Freddie Mac, PODY, and Attorney York; and REH, Sr. v. PODY and Attorney York;
7) Count Seven: Intentional Infliction of Emotional Distress - REH, Jr. v. Nationstar and Freddie Mac;
8) Count Eight: Negligent Infliction of Emotional Distress - REH, Jr. v. Nationstar and Freddie Mac;
9) Count Nine: Fair Debt Collection Practices Act - REH, Jr. v. Nationstar and Freddie Mac;
10) Count Ten: Truth in Lending Act - REH, Jr. v. Freddie Mac;
11) Count Eleven: Fair Credit Billing Act - REH, Jr. v. Nationstar;
12) Count Twelve: Fair Credit Reporting Act - REH, Jr. v. Nationstar and Freddie Mac;
13) Count Thirteen: RESPA - REH, Jr. v. Nationstar and Freddie Mac;
14) Count Fourteen: Defamation - REH, Jr. v. Nationstar, Freddie Mac, PODY, and Attorney York; and REH, Sr. v. PODY and Attorney York;
15) Count Fifteen: False Light - REH, Jr. v. Nationstar, Freddie Mac, PODY, and Attorney York; and REH, Sr. v. PODY and Attorney York;
16) Count Sixteen: Abuse of Process - REH, Jr. and REH, Sr. v. PODY and Attorney York; and
17) Count Seventeen: Fraud - REH, Jr. v. Nationstar, Freddie Mac, PODY and Attorney York.

Id.

D. The Recommended Decision

The recommendations of the Magistrate Judge as to each count and each party are:

1) Count One: Breach of Contract - REH, Jr.:
a) Nationstar - no dismissal;
b) Freddie Mac - no dismissal;
2) Count Two: Negligence - REH, Jr.:
a) Nationstar - dismissed;
b) Freddie Mac - dismissed;
3) Count Three: Negligent Misrepresentation - REH, Jr.:
a) Nationstar - no dismissal;
b) Freddie Mac - no dismissal;
4) Count Four: Intentional Misrepresentation - REH, Jr.:
a) Nationstar - no dismissal;
b) Freddie Mac - no dismissal;
5) Count Five: Fraud - REH, Jr.:
a) Nationstar - no dismissal;
b) Freddie Mac - no dismissal;
6) Count Six: Unfair Trade Practices Act - REH, Sr. and REH, Jr.:
a) Nationstar - no dismissal;
b) Freddie Mac - no dismissal;
c) PODY - dismissed as to both REH, Sr. and REH, Jr.;
d) Attorney York - dismissed as to both REH, Sr. and REH, Jr.;
7) Count Seven: Intentional Infliction of Emotional Distress - REH, Jr.:
a) Nationstar - no dismissal;
b) Freddie Mac - no dismissal;
8) Count Eight: Negligent Infliction of Emotional Distress - REH, Jr.:
a) Nationstar - dismissed;
b) Freddie Mac - dismissed;
9) Count Nine: Fair Debt Collection Practices ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.