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Sheely v. Bank of America, N.A.

United States District Court, N.D. Georgia, Atlanta Division

August 11, 2014

ANTHONY SHEELY, JR., et al., Plaintiffs,
BANK OF AMERICA, N.A., et al., Defendants

Page 1365

For Anthony Sheely, Jr., Felicia A. Boyd-Sheely, Plaintiffs: Peggy Lynnette Brown, LEAD ATTORNEY, Law Offices of Peggy L. Brown, Lawrenceville, GA.

For Bank of America, N.A., The Bank of New York Mellon, formerly known as The Bank of New York, as Trustee for the Certificateholders of CWALT, Inc., Alternative Loan Trust 2007-19 Mortgage Pass-Through Certificates, Series 2007-19, Defendants: Michael Towle Hosmer, LEAD ATTORNEY, McGuire Woods-NC, Charlotte, NC.

Page 1366


Timothy C. Batten, Sr., United States District Judge.

This case is before the Court on the motion to dismiss of Defendants Bank of America, N.A. and The Bank of New York Mellon [1] [5].

I. Background

Plaintiffs Anthony Sheely, Jr. and Felicia Boyd-Sheely's story is familiar. In May 2007, they took out a loan from Countrywide Home Loans, Inc. to refinance their home. This loan was evidenced by a $461,000 note that Anthony Sheely executed in favor of Countrywide. To secure payment of the note, the Sheelys (jointly) executed a security deed for their home in favor of Countrywide.

In the security deed, Mortgage Electronic Registration Systems, Inc. is listed as the nominee for Countrywide and its successors and assigns. MERS is also the grantee under the security deed. In February 2010, MERS assigned the Sheelys' security deed to BAC Home Loans Servicing, LP (formerly Countrywide Home Loans Servicing, LP). Then in June 2011, BAC assigned their security deed to Defendant Bank of New York Mellon.

For a while, the Sheelys paid their mortgage on time. But after they suffered a financial setback during the Great Recession, they began to worry about their ability to pay their mortgage. So in July 2012, they applied for a loan modification from Bank of America.

Page 1367

The Sheelys diligently pursued a modification. They often spoke with representatives at Bank of America and submitted (and frequently resubmitted) documents to the bank. At each turn, however, they were denied a modification.

At some point, the Sheelys stopped paying their mortgage, defaulting under the note. (It is unclear whether they entered default before or after they applied for a modification.)

In December 2012, six months after the Sheelys began the modification process, Bank of New York Mellon sent them a notice of acceleration and foreclosure sale. The notice stated that the sale would take place on February 5, 2013. It also notified them that Bank of America had the authority to negotiate, amend or modify the terms of the loan. For myriad reasons, including three bankruptcy petitions filed by the Sheelys, the foreclosure sale has yet to occur.

Eight days before the scheduled foreclosure sale, Anthony Sheely sent Bank of America a fifteen-page letter titled " Qualified Written Request." In this letter, Sheely demanded a wide range of information and documents, some of which were related to the servicing of his loan. Less than two weeks later, the bank sent two letters in response to Sheely's letter.

In January 2014, the Sheelys filed this action in the Superior Court of Fulton County. Defendants timely removed this action to this Court and now move to dismiss the Sheelys' complaint. Their motion will be granted.

II. Legal Standard

A claim will be dismissed under Federal Rule of Civil Procedure 12(b)(6) if the plaintiff does not plead " enough facts to state a claim to relief that is plausible on its face." Bell A. Corp. v. Twombly, 550 U.S. 544, 547, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Chandler v. Sec'y of Fla. Dep't of Transp., 695 F.3d 1194, 1199 (11th Cir. 2012). The Supreme Court has explained this standard as follows:

A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a " probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully.

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citation omitted); Resnick v. AvMed, Inc., 693 F.3d 1317, 1325 (11th Cir. 2012). Thus, a claim will survive a motion to dismiss only if the factual allegations in the complaint are " enough to raise a right to relief above the speculative level," and " a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. And while all well-pleaded facts must be accepted as true and construed in the light most favorable to the plaintiff, Powell v. Thomas, 643 F.3d 1300, 1302 (11th Cir. 2011), the court need not accept as true plaintiff's legal conclusions, including those couched as factual allegations, Iqbal, 556 U.S. at 678. Thus, evaluation of a motion to dismiss requires two steps: (1) eliminate any allegations in the complaint that are merely legal conclusions, and (2) where there are well-pleaded factual allegations, " assume their veracity and . . . determine whether they plausibly give rise to an entitlement to relief." Id. at 679.

III. Discussion

The Sheelys assert the following causes of action:

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(1) violations of the Real Estate Settlements and Procedures Act against Bank of America;
(2) fraud against both Bank of America and Bank of New York Mellon;
(3) wrongful foreclosure against both Bank of America and Bank of New York Mellon; and
(4) intentional infliction of emotional distress against Bank of America.

They seek injunctive relief; statutory, actual and punitive damages; and reasonable attorney's fees and costs.

A. Bank of America's Alleged RESPA Violations

On January 28, 2013, Anthony Sheely sent a letter to Bank of America " requesting a statement of his loan history [and] requesting verification of its proof of claim and various other information related to the servicing of the loan." The Sheelys contend that this letter constitutes a " qualified written request" under RESPA, 12 U.S.C. § 2605(e)(1)(B) (2006 & Supp. V 2012).

Ten days later (counting Saturday and Sunday), Bank of America sent Sheely two letters in response to his request. The Sheelys posit that these letters " were greatly unresponsive" to his request. They assert that the bank merely " acknowledged receipt of the QWR and stated that some requests [were] valid and some [were] not and that [it would] treat the loan as enforceable." Critically, in their view, the bank " refused to answer [Sheely's] questions related to the servicing of the loan."

The Sheelys contend that Bank of America's response (or lack thereof) constitutes a RESPA violation. As they correctly recognize, when Sheely sent his letter, RESPA required Bank of America to acknowledge receipt of a QWR within twenty days and to respond within sixty days.[2] § 2605(e)(1)(A) & (2). Bank of America allegedly violated this requirement because it did not " provide the information requested or an explanation of why the information requested [wa]s unavailable or unobtainable within sixty days."

To state a claim for a violation of § 2605(e), the Sheelys must allege facts that show (1) Bank of America was a loan servicer; (2) Bank of America was sent a valid QWR; (3) Bank of America failed to adequately respond within sixty days; and (4) actual damages or an entitlement to statutory damages. See id. ; Frazile v. EMC Mortg. Corp., 382 F.App'x 833, 836 (11th Cir. 2010).

Bank of America argues that the Sheelys have failed to state a claim under § 2605(e) for three reasons. First, Sheely's January 28 letter does not constitute a QWR. Second, the bank responded to the servicing-related requests in this letter within the statutory period. And third, the Sheelys have not alleged either actual damages or a pattern or practice of noncompliance

Page 1369

with § 2605(e). The Court agrees.

RESPA defines a QWR as

written correspondence . . . that--

(i) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and
(ii) includes 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. § 2605(e)(1)(B).

The borrower's request must be for " information related to the servicing of the loan." § 2605(e)(1)(A). Federal regulations confirm that a QWR must include " a statement of the reasons that the borrower believes the account is in error, if applicable, or that provides sufficient detail to the servicer regarding information related to the servicing of the loan sought by the borrower." 12 C.F.R. § 1024.21(e)(2) (2013).

And servicing is defined narrowly: " receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan . . . and making the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the ...

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