The United States District Court for the Eastern District of New York dismissed an action against a loan servicer and denied plaintiff’s motion to amend to add FDCPA, RESPA, and TILA claims, holding that plaintiff’s initial allegations were mooted by defendant’s refund of the allegedly improper charges, and that plaintiff did not sufficiently set forth the elements of these other causes of action. See Izmirligil v. Select Portfolio Servicing, Inc., 2020 WL 1941192 (E.D.N.Y. Apr. 22, 2020). Plaintiff purchased a home in 2006, and defendant was the servicer on the mortgage beginning in 2013. Plaintiff allegedly defaulted in 2009, and defendant’s predecessor brought a state foreclosure action. In 2013, defendant notified plaintiff that plaintiff did not have the required insurance on the property and that it would force-place a policy. Plaintiff sent defendant proof that it had the required insurance, but defendant allowed the force-placed policy to continue for six months, billing plaintiff for the same. Defendant eventually stopped pursuing plaintiff for the premiums paid for the force-placed policy, albeit after plaintiff initiated this action. In this action, plaintiff alleged a number of state law claims, as well as federal claims under RICO, arising from the force-placed insurance. Defendant filed a motion to dismiss, arguing that plaintiff lacked standing and/or that the claims were moot because defendant was no longer seeking payment for those premiums. Plaintiff cross-moved to amend to add claims under the FDCPA, RESPA, and TILA.
The Court granted the motion to dismiss and denied the cross-motion to amend. The Court first found that plaintiff had standing because, at the time it filed this action, defendant was seeking those force-placed premiums as part of the state court foreclosure action. However, the Court also found that the claims were now moot because the defendant no longer sought those charges in the foreclosure action. The Court also denied the motion to amend. First, the Court found that there could not be an FDCPA claim because any deficient collection notices were sent to plaintiff’s attorneys, not to plaintiff, and that the notices sufficiently explained what plaintiff owed on the debt. Second, the Court found that plaintiff had not set forth a sufficient nexus between plaintiff’s alleged RESPA claim and his alleged damages, noting that plaintiff’s conclusory claims that he suffered “attorney’s fees, court fees, costs in having to respond to . . . reinstatement letters, pay-off letters, printing, copying, and postage fees, uncorrected late fees, unapplied or misapplied mortgage payments, business loss, loss of retirement funds, mental anguish, embarrassment, nausea, and emesis” was not linked to any RESPA violation. Third, the Court found that plaintiff’s TILA claim also was deficient. Among other issues, he sought actual damages without alleging that these damages were caused by “detrimental reliance” on defendant’s incorrect of incomplete disclosures, which is required under TILA. Nonetheless, the Court gave plaintiff the opportunity to replead these new allegations.