Charny v. Pennymac Loan Services, LLC

- IN THE UNITED-STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

* ‘

MELISSA CHARNY ET AL.,

*

Plaintiffs, :

& .

v.

. * Civil No. 23-2955-BAH

PENNYMAC LOAN SERVICES, LLC,

*

Defendant.

* -

* * * * * * * * * * * * *

MEMORANDUM OPINION

Plaintiffs Melissa Charny (“Charny”) and Daniel Jean (“Jean”).sued Defendant PennyMac

Loan.Services, LLC, alleging federal and state claims relating to Defendant’s loan servicing to

Plaintiffs. ECF 1 (Notice of Removal). Pending before the Court is Defendant’s Partial Motion

for Summary Judgment (the “Motion”). ECF 22: Plaintiffs filed an opposition, ECF 26, and

Defendant filed a reply, ECF 27. All filings include memoranda of law and exhibits.’ The Court

has reviewed all relevant filings and finds that no hearing is necessary. See Loc. R. 105.6 (D. Md.

2023). Accordingly, for the reasons stated below, Defendant’s Motion is GRANTED. □

I. BACKGROUND

This case arises out of Plaintiffs’ allegations that Defendant failed to renew Plaintiffs’

homeowners’ insurance in violation of state and federal law.” See ECF 2, at 4-5 19-31. On

The Court references all filings by their respective ECF numbers and page numbers by the ECF-

generated page numbers at the top of the page.

2 The Court has detailed the nature of the factual allegations in an earlier opinion addressing

Defendant’s partial motion to dismiss and does net recount them verbatim here. See Charney v.

PennyMac Loan Servs., LLC, Civ. No. 23-2955-BAH, 2024 WL 2391140, at *1-2 (D. Md. May

23, 2024). The prior opinion misstated Plaintiff Charny’s surname as “Charney.” The. Court

.

May 23, 2024, this Court granted in part and denied in part Defendant’s motion to dismiss

Plaintiffs’ claim, dismissing their negligence claim (Count II of Plaintiffs’ amended complaint)

but allowing el claim under the Real Estate Settlement Procedures Act (“RESPA”) to proceed

(Count III). See narey, 2024 WL 2391140, at *9. Defendant now moves for summary judgment -

solely on olsinty RESPA claim. ECF 22, at 2 { 2. Count I of Plaintiffs’ amended complaint

alleging a seal of contract is not at issue in the instant motion.

To summa the arguments relevant to the pending motion for partial summary judgment,

Plaintiffs allege that Defendant violated RESPA when it failed to act to address Plaintiffs’ request

for information regarding whether Defendant had renewed Plaintiffs’ homeowners’ insurance

- policy. ECF 2, at 10 754. Plaintiffs argue that Defendant’s failure to meaningfully respond to

two communications a May 25, 2021 electronic message communication sent by Plaintiff Daniel

Jean and a follow-up electronic inquiry by Plaintiff Jean sent on June 4, 2021, see ECF 22-10, at

1-2, violated 12 use. § 2605(e), the provision of RESPA which governs a mortgage servicers?

responsibility to Vespond to inquiries from mortgagers. ECF 2, at 11 958. Defendant argues in

response that itis entitled to summary judgment on the RESPA claim because Plaintiffs failed to

direct their communication to the address designated for receiving such correspondence and

therefore Defendant’s obligations under RESPA were not triggered. ECF 22-1, at 9.

Il. LEGAL STANDARD □□

Federal ale of Civil Procedure 56(a) provides that summary judgment should be granted

the movant ows that there is no genuine dispute as to any material fact and the movant is

entitled to ea as a matter of law.” Fed. R. Civ. P. 56(a). The relevant inquiry is “whether

the evidence presents a sufficient disagreement to require submission to a [trier of fact] or whether

| { . .

apologizes for this error but for clarity will continue to reference that opinion by using the incorrect

caption. .

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it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 251-52 (1986).

“Once a motion for summary judgment is properly made and supported, the opposing party

has the burden of showing that a genuine factual dispute exists.” Progressive Am. Ins. Co. v. Jireh

House, Inc., 603 F. Supp. 3d 369, 373 (E.D. Va. 2022) (citing Matsushita Elee. Indus. Co. v. Zenith

Radio Corp., 475 U.S. 574, 385-86 (1986)). “A dispute is genuine if “a reasonable jury could

return a verdict for the nonmoving party.” Libertarian Party of Va. v. Judd, 718 F.3d-308, 313

(4th Cir. 2013) (quoting Dulaney v. Packaging Corp. of Am., 67 F.3d 323, 330 (4th Cir. 2012)).

“A fact is material if it ‘might affect the outcome of the suit under the governing law.’” Jd. (quoting

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Accordingly, “the mere existence of

some alleged factual dispute between the parties will not defeat an otherwise properly supported □

_ motion for summary judgment .. . .” Anderson, 477 U.S. at 247-48 (emphasis in original).

The Court must view the evidence in the light most favorable to the nonmoving party and

draw all reasonable inferences in that party’s favor, Tolan v. Cotton, 572 U.S. 650, 657 (2014) (per

curiam); ‘Scott v. Harris, 550 U.S. 372, 378 (2007), and the Court “may not make credibility

determinations or weigh the evidence,” Progressive Am. Ins. Co., 603 F. Supp. 3d at 373 (citing

Holland vy. Wash. Homes, Inc., 487 F.3d 208, 213 (4th Cir. 2007)). For this reason, summary

judgment ordinarily is inappropriate when there is conflicting evidence because it is the function

of the factfinder to resolve factual disputes, including matters of witness credibility. See. Black &

Decker Corp. v. United States, 436 F.3d 431, 442 (4th Cir, 2006); Dennis v. Columbia Colleton

Med. Cir., Inc., 290 F.3d 639, 644-45 (4th Cir. 2002).

At the same time, the Court must “prevent factually unsupported claims and defenses from

proceeding to trial.” Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 526 (4th Cir.

2003) (quoting Drewitt v. Pratt, 999 F.2d 774, 778-79 (4th Cir. 2003)). “The existence of a mere

scintilla of evidence in support of the nonmoving party as well as conclusory allegations or denials,

without more, aré insufficient to withstand a summary judgment motion.” Progressive Am. Ins.

Co., 603 F. Sup: 3d at 373 (citing Tom v. Hosp. Ventures LLC, 980 F.3d 1027, 1037 (4th Cir.

2020). | .

I. ANALYSIS

RESPA i a consumer-protection statute that imposes, among other provisions, short

timeframes for ve servicers to respond to inquiries from mortgagors. 12 U.S.C. §

2605(e)(1); see also Roth v. CitiMortgage Inc., 756 F.3d 178, 181 (2d Cir. 2014) (citing Freeman

v. Quicken Loans, Inc., 556 U.S. 624, 626 (2012)). Section 2605(e)(1)(A) provides that “[i]f any

servicer of a redally related mortgage loan receives a qualified written request from the borrower

(or an agent of the borrower) for information relating to the servicing of such a loan, the servicer

shall provide a alten response acknowledging receipt of the correspondence within 5 days[.]’ A

“qualified nites request,” frequently referenced in relevant caselaw as a “QWR,” is defined as:

[A] widen correspondence, other than notice on a payment coupon or other

payment faedium supplied by the servicer that—

(i) includes, or otherwise enables the servicer to identify, the name and account of

the borrower; and

(ii) include a statement of the reasons for the belief of the borrower, to the extent

applicable, that the account is in error or provides sufficient detail to the servicer

regarding other information sought by the borrower.

12 U.S.C. § 260/%ex1)). .

“RESPAts implementing regulations allow (but do not require) servicers to establish a

designated ss for QWRs.” Lupo v. JpMorgan Chase Bank, N.A., Civ. No. DKC 14-0475,

2016 WL 5459855. at *5 (D. Md. June 24, 2016) (quoting Roth, 756 F.3d at 181). “The final

rulemaking notice for the operative regulation, Regulation X, explained that if a servicer

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establishes a designated QWR address, then the borrower must deliver its request to that office in

order for the inquiry to be a[QWR].” Roth, 756 F.3d at 181 (internal citation and quotation marks

omitted). This Court previously concluded that “when a loan servicer elects to receive QWRs_

through a particular address and notifies its mortgagors of that address, communications received

outside of that address are not QWRs.” Charney, 2024 WL 2391140, at *6. Regulation X, now

found at 24 C.F.R. §§ 1024 et seq.,° provides that if a mortgage servicer designates one address

for “notices of error,” it “shall designate the same address for receiving information requests

pursuant to § 1024.36(b),” and vice versa. 12 C.F.R. §§ 1024.35(c); 1024.36(b).

Defendant argues that Plaintiffs’ inquiry regarding the status of their homeowners’

insurance does not qualify as a QWR because it was sent through an online messaging system, not

to the address designated for receipt of QWRs. ECF 22-1, at 9. To support this contention,

Defendant points to several instances where it put Plaintiffs on notice of its designated QWR

address. On January 11, 2021, for example, Defendant sent Plaintiffs a letter informing them of

the transfer of their mortgage with the proviso that “[n]otices of error or information requests must

be mailed” to a specific Post Office (“P.O.”) Box in Los Angeles, California, ECF 22-4, at3. A

subsequent mortgage statement, dated January 16, 2021, reiterated the same directive in a

3 “Under the Dodd-Frank Act, responsibility for the administration, enforcement, and

implementation of RESPA was transferred from the Department of Housing and Urban

Development (‘HUD’) to the [Consumer Financial Protection Bureau (“CFPB”)].” McCray v.

Bank of Am., Corp., Civ. No. ELH-14-2446, 2017 WL 1315509, at *14 (D. Md. Apr. 10, 2017)

(citing 79 F.R. 34224-01 (June 16, 2014)). “The CFPB ‘substantially duplicate[d]’ HUD’s

regulations, reenacting them at 12 C.F.R part 1024.” /d. (citing 76 F.R. 78978-01 (Dec. 20, 2011)).

“The Mortgage Servicing Rules, otherwise known as Regulation X, were ‘repromulgated by the

CFPB in 2013 and became effective on January 10, 2014.’” Richards v. New Rez, LLC, Civ. No.

ELH-20-1282, 2022 WL 657568, at *13 (D. Md. Mar. 4, 2022) (quoting Sutton v. CitiMortgage,

Inc., 228 F. Supp. 3d 254, 261 (S.D.N.Y. 2017) and Mortgage Servicing Rules Under the Real

Estate Settlement Procedures Act), 78 Fed. Reg. 10696-899 (February 14, 2013), codified as 12

CER. 3§ 1024 et seq, (hereinafter, “Regulation X”)).

subsection entitled “How to Contact Us” by stating that “[n]otices of error or information requests

must be mailed é this [Los Angles P.O. Box] address.” ECF 22-5, at 3 (emphasis in original).

The same bolded requirement that notices of error or information requests must be sent to a specific

P.O. Box set in another mortgage statement dated February 10, 2021. ECF 22-6, at 3.

Subsequently, in a letter dated March 10, 2021, Defendant informed Plaintiffs that it was changing

its mailing sans “for Notice of Error and Information Requests,” effective April 1, 2021. ECF

22-7, at 1. rhielhotic reflected that “[t]o submit a Notice of Error or Information Request, [the

recipient] must the following address,” and reflected a new P.O. Box in Forth Worth, Texas.

Id. The new wares for the Texas P.O. Box appeared in further mortgage statements sent to

Plaintiffs in the Ling of 2021. See ECF 22-8, at 3; ECF 22-9, at 3. These letters also included

the admonition Ce “[nJotices of error or information requests must be mailed to this [Fort Worth □

P.O. Box] sis id. (emphasis in original).

Plaintiffs ‘do not dispute the authenticity of these communications but instead allege that

the format of be mortgage statement, specifically the “How to Contact Us” ‘subsection, is

“unclear.” ECF 26-2, at 6-7. They first argue that Defendant did not clearly indicate that “QWRs”

must be sent the designated P.O. Box address but instead stated only that “[n]otices of error or

information vets should be mailed there. ECF 26-2, at 6. In addition, Plaintiffs argue that

the positioning | the designated QWR P.O. Box address adjacent to contact information for both

Defendant’s sume service hotline and its online chat service, the service utilized by Plaintiffs

to communicate with. Defendant, alongside an encouragement to “Go Paperless today!,”

reasonably led vio “to believe that written communication sent to either [the physical mailing

or the online she address would be treated as a QWR.” Jd. at 7. In support of this second

argument, Plait point out that Defendant did, in fact, notice and respond to their

communication through the online. chat function. Jd. (“More importantly, it is undisputed that

PennyMac received the QWR from Plaintiffs and responded to Plaintiffs”). Finally, in their

response to the Motion, Plaintiffs argue that summary judgment is premature because depositions

have not yet taken place, and Plaintiffs anticipate that depositions of Defendant’s corporate

representatives may indicate that Plaintiff's communication was, in fact, forwarded to or received

at the designated address for QWRs. id. at 8.

A. ‘Defendant properly designated an address for the receipt of Plaintiffs’

QWR

Plaintiffs essentially argue that because the notice sent by Defendant did not specifically

use the term “QWR,” but instead referenced “notices of error” and “requests for information,”

Plaintiffs cannot be faulted for believing that the use of an internet chat function to raise their

concerns regarding their loan servicing “would be treated as QWR.” ECF 26-2, at 7. Viewing all

evidence in the light most favorable to the nonmoving party, the Court apres with Plaintiffs’

argument that “none of [Defendant’s] communications to Plaintiffs. specifically identified the

proper mailing address for 4 QWR under RESPA[.]” ECF 26-2, at 9. However, this position

ignores the plain fact that Plaintiffs’ communication was unquestionably a specific type of OWR

specifically described in RESPA’s implementing regulations. And Defendant was clear in its

correspondence as to the address where this type of OWR must be directed, Since there is □□□

debate that Plaintiffs failed to send their correspondence to that address, summary judgment must

be granted as to their RESPA claim. .

Plaintiffs are correct that RESPA’s implementing regulation, Regulation X, requires that

mortgage servicers make their disclosures, including notices of designated addresses for receipt of

QWRs, in a “clear and conspicuous” manner. 12 C.FLR. § 1024.32(@)(1). The Court again notes

that it is undisputed that the mailings from Defendant that are at issue here never specifically used

the term QWR.| See ECFs-22-4 through 22-9, Defendant minimizes the significance of this

omission by assyming that there is no distinction between the terms used in the mailings and the

term QWR. See ECF 22-1, at 7 (noting that a “Welcome Letter” sent to Plaintiffs when their

mortgage loan was transferred to PennyMac, included “its designated Qualified Written Request

address” when the. actual letter actually used the terms “Notice of Error” and “Request for

Information”). Defendant’s grouping of the terms is understandable, for as Judge Grimm noted,

“there appears ed be some confusion among federal courts applying RESPA as to whether a NOEs

[‘Notice of wera and RFs [‘Requests for Information’] are subsets of QWRs, or whether they

are three site categories of communication, each requiring a different kind of response.”

Garey ¥. BWW, Grp., LLC, No. 8:19-CV-03112-PWG, 2021 WL 4521329, at *13 (D. Md. Oct.

4, 2021). But las Judge Grimm acknowledged, the Consumer Financial Protection Bureau

(“CFPB”), wich now administers regulations related to RESPA, promulgated an official

interpretation ofthe pertinent regulations that “supports the latter view and explains that there is

overlap beeen the three,” but noting that they are, in fact, different terms. Jd. Specifically, the

CFPB noted that'“[a] qualified written request is just one form that a written notice of error or

information as may take. Thus, the error resolution and information request requirements in

[12 CFR] $§ 1 024.35 and 1024.36 apply as set forth in those sections irrespective of whether the

servicer receives a qualified written request.” Jd. (citing 12 CFR. § 1024, Supp. I (official CFPB

interpretations) As such,“[w]hile there is significant overlap between QWRs and notices of

errors and request for information, the terms are not synonymous.” Messina v. Green Tree

Servicing, LLC, 210 F. Supp. 3d 992, 1007 (N.D. Ill. 2016).

Other colirts seem to agree that QWRs can take many forms but acknowledge that “NOEs

and RFIs are bot types of QWRs,” and thus “see no harm with referring to them all as QWRI]s.”

1 . .

:

Fowler v. Bank of Am., Corp., 747 ¥. App’x 666, 669 n.3 (10th Cir. 2018); see also Best v. Ocwen

Loan Servicing, LLC, No. 15-cv-13007, 2016 WL 125875, at *3 (E.D. Mich. Jan. 12, 2016), aff'd,

No. 16-1217, 2016 WL 10592245 (6th Cir. Nov. 29, 2016) (“The language of the [12 C.F.R. §§

1024.35(c) and 1024,36(b)] leaves no ambiguity. If a servicer establishes a QWR mailing address

and provides it to a borrower by written notice, ‘a borrower must use’ the designated address to

submit a QWR.”) (citing 12 C.F.R. § 1024.35(c)).

It is also undisputed that Defendant’s mailings only directed “[nJotices of error or

information requests” to go to a specific P.O. Box address. See ECF 26-2, at 6. Given that the

term QWR is not used in Defendant’s mailings, it is entirely reasonable for Plaintiffs to believe

that some forms of electronic communications might still be deemed a QWR, and unlock RESPA □□

liability, even if though such communications weren’t serit to the P.O. Box noted in Defendant’s

niailings, But to stop the inquiry there would overlook the substance of what Plaintiff submitted,

which was, in fact, allegations that either “assert[ed] an error” on the part of Defendant, see 12

C.F.R. § 1024.35 (a), of constituted a “request for information from a borrower,” see 12 C.F.R. §

1024.36 (a). Both messages sent over the online chat service asked for information from the loan

servicer about who bore responsibility for the payment of insurance premiums and inquired into

9°

“what went wrong?” * ECF 22-10, at 1.-For these types of QWRs,” the regulations clearly provide

that Defendant 7 and in this case did, “establish an address that a borrower must use” to register

either type of oye See 12 C.F.R: §§ 1024.35 (b) and 1024.35 (c) (emphasis added). There is

no dispute that ee failed‘to.send their inquiries to the specific P.O. Box address designated

by Plaintiff for QWRs of the kind Plaintiffs submitted. ‘

wan Defendant’s mailings are also consistent with the prevailing regulations

implementing RpsPA “RESPA’s implementing regulations construe the statute as authorizing

two types of QWRs: notices of errors under 12 C.F.R. § 1024.35 and requests for information

under 12 cra 1024.36.” Moral v..PHH Mortg. Corp., No. 6:21-CV-01070-HLT-TJJ, 2022

WL 4016583, *4 (D. Kan. Sept. 2, 2022) (citing Fowler, 747 F..App’x at 669). Defendant’s

plain requiremest that mortgagees must send “[nJotices of error or information requests” to a

particular “sy was therefore not overbroad but instead mindful of the exact Janguage used in

* The applicable regulations establish that a “notice of error” includes a claim that a servicer failed

“to apply an accepted payment to principal, interest, escrow, or other charges under the terms of

the mortgage loan and applicable law.” 12 C.F.R. § 1024.35(b)(2). It is undisputed that Plaintiffs’ .

electronic communications initially alleged that a past-due notice from their insurer “was supposed

to have been paid'from [Plaintiffs”] escrow,” ECF 22-10, at 2, and then added that Defendant must

inquire into “what went wrong,” thus alleging error on the part. of Defendant under that

. unambiguous regulation. At minimum, Plaintiffs’ electronic communication sought “information ~

relating to the servicing of the mortgage loan” and thus should be. treated as” a request for

information mr 12 C.F.R. § 1024.36(a), .

> Defendant only, challenge how Plaintiffs submitted their correspondence and do not raise an

argument that the contents of the electronic communication otherwise failed to satisfy the

requirements fora QWR under the definition in 12 U.S.C. § 2605(e)(1)(B). See ECF 22-1, at 6 □

(arguing that “Plaintiffs” communication is not a qualified written request subject to protection

under RESPA because it was not sent to the proper designated address.”) Thus Defendant appears

to concede that the submissions at issue constitute “written correspondence, other than notice on a

payment coupon, or other payment medium supplied by the servicer that” included enough

information for Defendant “to identify, the name and account of the borrower” and included “a

statement of the reasons for the belief of the borrower, to the extent applicable, that the account is

in error or provides sufficient detail to the servicer regarding other information sought by the

borrower.” 12 UiS.C. § 2605(e)(1)¢B).

10

12 C.F.R. §§ 1024.35(c) and 1024.36(b). The Court cannot penalize Defendant for its virtually

verbatim use of the relevant regulatory language, which was updated in large part to “benefit

consumers” and to avoid confusion that reigned when such correspondence only used. the term

QWR. See Mortgage Servicing Rules Under the Real Estate Settlement Procedures Act

(Regulation X), 78 Fed. Reg. 10696-01, at 10744.

A similar determination was made by the district court for the District of New Hampshire _

when it was faced with a RESPA challenge to what appears to be the exact language Defendant’s

mailings used here. See Moody v. PennyMac Loan Servs., LLC,. No. 16-CV-00021-JL, 2019 WL

7596261 (D.N.H. Nov. 12, 2019). . As here, the Moody plaintiff failed to direct his QWR “to

PennyMac’s designated address, even though PennyMac’s monthly mortgage statements from

January 2014 forward stated that ‘[nJotices of error or information requests must be mailed to’

PennyMac’s Los Angeles, CA address.” /d. at *2 (citing the language in PennyMac’s mailing).

The. Moody plaintiff contended, as Plaintiffs do here, “that, despite these instructions, PennyMac

failed to designate an address for receiving QWRs and only described ‘where to send everyday

notices of error or requests for information,’ but not ‘specifically ... where to send QWRs.”” Id.

at *11 (citing pleadings). Finding this argument “unpersuasive,” the Afeody court observed “that

nothing in Regulation X requires lenders to specifically use the term QWR in lieu of more

accessible language.” Jd. As such, Moody held “that PennyMac’s instructions in its post-2013

monthly mortgage statements reasonably sufficed to designate an address for sending qualified

written requests.” Je.

In making this finding, the court in Moody cited extensively to the decision of the United

States Court of Appeals for the Eleventh Circuit in Bivens v. Bank of Am., N_A., 868 F.3d 915 a Ith

Cir. 2017). There, the plaintiff/appellant argued that a loan servicer failed to designate an address

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for receiving QWRs because correspondence from the servicer noted only that “[ajll written □□

requests must be sent to the address listed below for Disputes/Inquiries, as this is our exclusive

address for oroekesing these matters.” Bivens, 868 F. 3d at 920. The Eleventh Circuit rejected this

argument and ses that “[b]y directing borrowers to send ai! written requests to the specified

address, [the ot sien necessarily directed them to send ‘qualified’ written requests to that

address.” - Jd. (emphasis in‘original). The Bivens court remarked that the notice at issue

.

“used more accessible language than Regulation X required” and observed that “borrowers likely

would be more | ir with the lay terms ‘disputes,’ ‘inquiries,’ and ‘written requests’ than with

the statutory el of art, ‘qualified written request.’” Jd. (citing 24 C.F.R. § 3500.21(e)(1)). The

court was verve to find that a mortgage servicer could violate RESPA by using terms that tended

to “minimize slosumer contision” in directing consumers where to file QWRs and related

communication Id. In fact, the Eleventh Circuit went so far as to note thatthe servicer “subjected.

itself to the sdmlystativ burden of evaluating and prioritizing a larger quantity of mail to identify .

QWRs, re as to minimize consumer confusion.” Jd. “To penalize it for doing so would

be perverse.” id Ultimately, the Bivens court found that “[a] servicer’s designation of an

exclusive adsl for QWRs must be clear to a reasonable borrower—to say otherwise would

frustrate respi consumer-protection purpose.” fd,

Bivens aay supports Defendant’s argument that the mailings at issue were adequate to

put Plaintiffs 4 notice that their QWRs alleging error or seeking information must be sent to a

P.O. Box in □□□ or Texas. Nevertheless, there exist some important distinctions between

the soesponde from Defendant at issue here and the letter received by the plaintiff in Bivens.®

6 Bivens dealt wiih a subsection of a previous version of Regulation X, 24 C.F.R. § 3500.21 (e)(1),

which laid out requirements solely and specifically with respect to QWRs, not the new language

employed in thejupdated regulations that speaks to “notice from the borrower that asserts an error,”

12

The letter in Bivens provided the plaintiff “with three separate addresses to use for correspondence

-— one for General Correspondence, one for Disputes/Inquiries, and one for Payment Remittance.”

Bivens, 868 F. 3d. at 917. Specifically, the letter noted that “[i]f you wish to send a written request

about your account or dispute any of the information on this statement, please do not include it

with your monthly payment.” Jd. The letter cautioned that “[a]ll written requests must be sent to

the address listed below for Disputes/Inquiries, as this is our exclusive address for processing these

- matters” and further warned that “[i]f you send your request or dispute to any other address, it may

not be processed in accordance with our Customer Service Timelines.” Jd.

Here, of course, the notice from the servicer was slightly different. First, it lays out multiple

ways to contact the servicer and apparently fails to warn the recipient of the potential consequences

of sending a QWR to an address other than the one identified for the sending of an NOE or RFI.

Second, it encourages the recipient to use alternative methods to contact the servicer, even going

so far as to (loudly) encourage the recipient to “Go Paperless Today!,” and directs the recipient to

a website with a communication function that Plaintiffs obligingly utilized. Regardless, for the

reasons noted in Moody and Bivens, the Court is persuaded that the challenged notice goes far

enough in warning those who receive it that “[n]otices of error or information requests-must be

mailed to [a Los Angles P.O, Box] address.”” ECF 22-5, at 3 (emphasis in original).

A determination that this provision was sufficiently clear is also consistent with Judge

Chuang’s thoughtful opinion in Nash v. PNC Bank, N_A., Civ. No. TDC-16-2910, 2017 WL

1424317 (D. Md. Apr. 20, 2017). In addressing a RESPA claim involving correspondence directed

. 12 CLF.R. § 1024.35(a) and “written request. for information,” 12 C.F.R. § 1024.36 (a). However,

“courts have analyzed the updated regulation, 12 C.F.R. § 1024, in the same manner as the previous

HUD version, 24 C.F.R. § 3500,” and, “[a]s such, recent decisions interpreting RESPA have

continued to rely upon caselaw interpreting the older HUD version of Regulation X.” Basora v.

JP Morgan Chase Bank, 202 F. Supp. 3d 1328, 1331 (S.D. Fla. 2016) (collecting cases).

13

PNC Bank, Judge Chuang highlighted that the “[t]he purported notice of a designated QWR

address sdemited by PNC is the statement in [a] Denial Letter: ‘To request information or notify

us of an error regarding your account, please send a written request/notice to: PNC Mortgage, P.O.

Box 8807, Dayton, OH 45401-8807.’” Nash, 2017 WL 1424317, at *7 (citing an exhibit to the.

complaint in thelase, Judge Chuang observed that “[t]his statement did not explicitly identify

this address as the designated address for borrowers to send QWRs within the meaning of RESPA”

- because “[ijt in no way provided notice that a QWR must be sent to this address in order to qualify

as a QWR.” /d.|. Though he dismissed the RESPA claim on other’ grounds, Judge Chuang noted □

that “[b]ecause PNC did not provide notice that all QWRs ‘must’ be sent to the designated address,

the failure to send the Appeal Letter to the Dayton, Ohio address does not disqualify itas a QWR.”

id. (citing 12 CFR. 1024.36(b)). Here, in contrast to the PNC mailing at issue in Nash,

Defendant’s plaisly stated that “[njotices of error or information requests must be mailed” to a

specific address. ECE ‘22-5, at 3 (emphasis in original).

The Court cannot conclude that the use of the terms “notices of error” and “information □

requests” instead: of “QWkRs” may never have a consequence. Indeed, even the cases cited by

Defendant represént situations where correspondence to a plaintiff explicitly directed that QWRs

—not NOEs or RFIs — must be sent to a specific address. See, ¢.g., Bird v. Bank of New York

Mellon Tr. Co., NA. Civ. No. GLR-19-464, 2019 WL 4750289, at *2 (D. Md. Sept. 30, 2019)

(“The SLS retin Letter stated that “qualified written requests” (“QWR”) needed to take a

particular form and be sent to an address in Littleton, Colorado.”); McClain v. Wells Fargo Bank,

N.A., Civ. No. 20:2035, 2021 WL 3852322, at *3 (D. Md. Aug. 27, 2021) (reflecting that Plaintiff

was informed in a welcome letter “that QWRs must be sent to P.O. Box 630147, Littleton, CO

801 63-0147”; Lipo, 2016 WL 3459855, at *6 (noting that mortgage servicer sent correspondence

. 14

to Plaintiff alerting him to his rights under RESPA when it explicitly stated “A [QWR] is a written

correspondence which includes you name and account number and your reasons for the request.

Writing a note on your payment coupon or envelope is not considered a [QWR]. . . .[QWRs] must

be sent to: Attn: Customer Care Support[,] P.O. Box 636005[,] Littleton, CO 801 63-6005”). Thus,

in the rare circumstance where a recipient of a loan servicer’s notice attempts sends QWR that is

not an RFI or NOE, the failure to include specific directions explaining where to send “Qualified

Written Requests” may yield a different result.

In denying the Defendant’s motion to dismiss in the present case, the Court noted that “[a]s

a matter of law, I agree with Defendant, the jurists in this District that have addressed the issue,

and the Second and Tenth Circuit opinions that when a loan servicer elects to receive QWRs

through a particular address and notifies its mortgagors of that address, communications received

outside of that address are not QWRs.” Charney, 2024 WL 2391140, at *6. Having the benefit

of full briefing and a fulsome record on summary judgment, the Court finds no dispute of fact that

Defendant did provide a specific address for the precise type of QWR at issue in this case and

Plaintiffs, even if for a good reason, failed to send their QWR to that address. As such, summary

Judgment is in order as to the RESPA claim.

The Court is not persuaded that the inclusion of the P.O. Box address next to an

encouragement to borrowers to “Go Paperless today!” and a description of other contact methods,

including a pathway leading to the electronic communication service used by Plaintiffs, could

reasonably lead Plaintiffs to believe that 2 QWR asking a question or asserting an error could be

sent to an electronic service or to the P.O. Box and still give rise to RESPA liability. While the

“How to Contact Us” section on the monthly mortgage statements did provide the contact

information for the online chat service in close proximity to the directive explaining where “notices

‘ 15

-of error or information requests must be mailed,” the two sections were distinctly separated. See,

e.g., ECF 22-5, at 3. Moreover, it bears repeating that the instruction explicitly stated that “notices

of error or information requests must be mailed” to the designated. address, and the word “must”

appeared in bold font. id. Defendant additionally notified Plaintiffs on two separate occasions

that it had ssiglate a specific address for receipt of error notices and information requests, first

in its January 1 2021 “welcome letter,” see ECF 22-4, at 3, and again in its notice of a change to

_ the designated | sarss see ECF 22-7, at 1. These designations were therefore “clear and

conspicuous” win the meaning of 12 C.F.R. 1024.32(a)(1).

The Court recognizes that it is often the case that even the most “conspicuous” of notices

may still be buried among pages of fine print in an impersonal form letter sent by metered mail

that itself may be hidden under stacks of holiday cards, catalogs, and other mailings. Moreover,

there is no dispune here that Plaintiffs made efforts to alert Defendant to an apparent failure to pay

for Plaintiffs’ neoner insurance, efforts that were unsuccessful. The failure to pay the

insurance turned! out to be of great significance after Plaintiffs suffered a tragic fire and

experienced the loss of property, not to mention the emotional trauma endured both as a result of

that loss and upon the understandably alarming discovery that there was a lapse in their insurance.

Unfortunely for the viability of their RESPA claim, however, Plaintiffs directed their

apparently well-rounded complaints to the wrong recipient. As harsh as it may scem in this

particular case, be caselaw is clear that “[t]he requirements for servicers to respond to QWRs or

notices of error bow from receipt of the correspondence by the servicer at the proper designated

address.” neta v. Fay Servicing, LLC, No. 3:22-CV-01911-HZ, 2023 WL 6122685, at *6 (D.

Or. Sept. 15, 2023); see also Maley v. Specialized Loan Servicing LLC, Civ. No. 18-13245, 2021

WL 1812698, at*3 (E.D. Mich. May 6, 2021) (“Tt ts well established that, when a loan servicer

provides an address at which the servicer receives QWRs, debtors must. submit their requests to

that address in order to trigger RESPA response obligations.”). The form and recipient of the

communication matters for RESPA. liability, even when, as here, a representative of Defendant

received the communication despite it being sent to the wrong address. See Cheetham v.

Specialized Loan Servicing LLC, No. 2:20-CV-762-ICC-DWC, 2021 WL 5205453, at *4 (W.D.

Wash. July 19, 2021) (Accordingly, Defendant is correct that Plaintiffs’ email correspondence

cannot form the basis of a RESPA violation”).

In sum, as review of the mortgage statements and other communications sent from

Defendant to Plaintiffs indicates that neither the terminology nor the placement of Defendant’s

"notice of a designated address were unclear or inconspicuous,-the Court finds that Defendant

properly established a designated address for receipt of QWKRs, more specifically the precise type

of QWRs at issue in this case. Plaintiffs do not contest that they sent their correspondence to an

address other than the one Defendant designated for the receipt of this type of QWR. Defendant

is therefore entitled to summary judgment on Plaintiffs’ RESPA claim as a matter oflaw. □ -

B. A ruling on the motion for partial summary judgment is not premature □

Plaintiffs allege that scheduled depositions of Defendant’s corporate representatives may

reveal whether their online communication “was received by the same department that manages,

receives, and/or processes QWRs at the physical address” and therefore summary judgment at this

stage “is not warranted.” ECF 26-2; at 8-9. The Court disagrees. As a threshold matter, this

representation was made in July of 2024. See ECF 26-2, at 8 (noting on July 31, 2024 that the

depositions at issue “were scheduled”). A subsequent status report submitted jointly by the parties

noted that the depositions ultimately did, in fact, occur. See ECF 28, at 1 (stating that “the

depositions of PennyMac’s Corporate Representative and Plaintiffs have occurred”). No request

17

| .

to supplement the briefing related to the pending motion for partial summary judgment was filed

by either party the depositions occurred. ‘Thus, the Court concludes that even if summary

judgment was premature at the time the motion was filed, ample time has passed after the motion’s

filing to seek leave to supplement the briefing, discovery has now closed, and a ruling on the

motion is not ornate □

Repu if a servicer has complied with the requirements for designating an address for

receipt of QWRs, “a letter sent to a different address is not a QWR, even if an employee at that

address (who may not have training in RESPA compliance) in fact responds to that letter.” Lupo,

2016 WL 3459855, at *5 (quoting Roth, 756 F.3d at 181). Other federal courts have concluded

that even wherd a mortgage servicer received actual notice of a QWR, which appears to be the

case here, it is jnot obligated to respond to QWRs sent to an address other than the designated

QWR sees ‘Best, 2016 WL 10592245, at *2 (citing Berneike v. CitiMortgage, Inc., 708 F.3d

1141, 1149 (10th Cir. 2013) and Roth, 756 F.3d at 181-82). As Plaintiffs do not dispute that they

did, in fact, tive their QWRs to an address other than the one designated by Defendant,

subsequent discovery addressing whether Defendant received. actual notice does not alter the

selevant RESPAA inquiy As such, a decision on the motion for partial summary judgment is not

premature.

IV. .CONCLUSION

For the | repping reasons, Defendant’s motion for partial summary judgment as to Count

Ill of lant ‘complaint ‘is GRANTED. Plaintiffs’ breach of contract claim based in state law

remains. However, the Court intends to retain jurisdiction over the breach of contract claim. As

the Fourth Cire has explained, district courts “enjoy wide latitude in determining whether or not

to retain jurisdiction over state claims when all ‘federal claims have been extinguished.”

Shanaghan v. bana 58 F.3d 106, 110 (4th Cir. 1995); see also Carlsbad Tech., Inc. v. HIF Bio,

18

Ine., 556 U.S. 635, 639 (2009) (“A district court’s decision whether to exercise [supplemental]

jurisdiction after dismissing every claim over which it had original jurisdiction is purely

discretionary”). In deciding whether and when to retain jurisdiction over state claims, district

courts may consider factors such as “convenience and fairness to the parties, the existence of any

underlying issues of federal policy, comity, and considerations of judicial economy.” Shanaghan,

58 F.3d at 110.

After considering the Shanaghan factors, the Court will retain jurisdiction over Plaintiffs’

breach of contract claim on the grounds of judicial economy as well as convenience and fairness

to the parties. This case has been pending before the Court since October 2023 — nearly a year and

a half — and the parties have already engaged in discovery. Moreover, the parties have been

engaged in settlement proceedings since October of 2024, see ECF 34, and are scheduled to again

mediate this case, this time before a United States Magistrate Judge, in just a few days, see ECF

31. At this stage in the case, the Court is familiar with both the factual background and procedural

posture of the action and sees no reason to disrupt the course of the litigation when it is well-

positioned to continue presiding over it.’

A separate implementing Order will issue.

Dated: January 8, 2025 {sf

Brendan A. Hurson ,

United States District Judge

The Court is, however, mindful of the fact that Plaintiffs initially filed this matter in state court

and thus did not choose this forum for litigation of their claims. See Hall v. Greystar Mgmi. Servs.,

L.P., 179 F. Supp. 3d 534, 537 (D. Md. 2016) (including as a factor in the decision to retain

jurisdiction over state law claims the fact that the “case did not come before it on removal

jurisdiction: on the contrary, it was Plaintiff who elected to file her Complaint in federal court”).

As such, in the hopefully unlikely event that the mediation scheduled for January 15, 2025 is

unsuccessful, the Court will consider a motion to remand if it is filed promptly.

19.