United States District Court, W.D. Kentucky, Louisville Division
MEMORANDUM OPINION AND ORDER
J. Hale, Judge.
action arises from events following Plaintiff Evelyn
Miller's default on her home-mortgage loan. Miller sued
the original servicer of the loan, Defendant SunTrust
Mortgage, alleging violations of federal and state law
related to SunTrust's initiation of foreclosure
proceedings. (Docket No. 1) Miller also sued Defendant
Caliber Home Loans, the current servicer of the loan,
alleging that Caliber failed to evaluate potential
alternatives to foreclosure. (Id.) Caliber has moved
to dismiss Count X of Miller's complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). (D.N. 10) SunTrust
seeks dismissal of all claims against it. (D.N. 11) For the
reasons set forth below, the Court will grant both motions.
2008, Miller obtained a home-mortgage loan from SunTrust to
purchase a home in Louisville, Kentucky. (D.N. 1, PageID # 3)
In 2013, Miller fell behind on her monthly payments to
SunTrust and defaulted on the loan. (Id.) She
applied for and received public assistance in the form of an
Unemployment Bridge Loan, which made payments to SunTrust
from January to September 2014. (Id.; see
also D.N. 16, PageID # 218)
sequence of events that followed is central to Miller's
claims against SunTrust. In September 2014, Miller applied to
SunTrust for loss mitigation, a foreclosure alternative
commonly offered by loan servicers. (D.N. 1, PageID # 3)
Miller heard nothing from SunTrust until November 3, 2014,
when she received a letter informing her that she was in
default and that SunTrust was accelerating her debt.
(Id.) On November 7, 2014, SunTrust initiated
foreclosure proceedings against Miller in Jefferson County,
Kentucky Circuit Court. SunTrust Mortg., Inc. v. Evelyn
Miller, et al., Case No. 14-CI-402183. (Id.)
Finally, on November 14, 2014, SunTrust provided Miller
notice that her loss-mitigation application had been denied.
reapplied for loss mitigation with SunTrust in December 2014;
SunTrust denied the application shortly thereafter.
(Id., PageID # 4) She appealed the decision, but
SunTrust denied the appeal on March 27, 2015. (Id.)
Miller applied again in April 2015. (Id.) SunTrust
denied that application in July 2015. (Id.) After
retaining counsel, Miller reapplied in September 2015.
(Id.) SunTrust denied this final application in
January 2016. (Id., PageID # 5)
mid-December 2015, Caliber became the new servicer of
Miller's loan. (See D.N. 11-1, PageID # 189)
Once Miller learned that the loan had been transferred to
Caliber, Miller initiated loss-mitigation efforts with
Caliber, but Miller and Caliber were unable to agree on
terms. (D.N. 1, PageID # 6-9)
January 20, 2016, the Jefferson County Circuit Court
dismissed SunTrust's foreclosure action without prejudice
for failure to prosecute. (Id., PageID # 5) Miller
filed a motion to vacate the dismissal in order to bring
counterclaims against SunTrust, but the court denied the
motion. (D.N. 16, PageID # 220) The pleadings indicate that
no further foreclosure proceedings have been initiated
against Miller. (D.N. 16, PageID # 221)
next brought this action against SunTrust and Caliber,
alleging violations of federal and state law. Miller asserts
six claims against SunTrust: (i) violation of the regulations
pertaining to the Real Estate Settlement Procedures Act
(RESPA), (ii) negligence, (iii) gross negligence, (iv) breach
of contract, (v) wrongful foreclosure, and (vi) wrongful use
of judicial process. (D.N. 1, PageID # 9-11) Additionally,
Miller claims that Caliber violated RESPA and the Fair Debt
Collection Practices Act (FDCPA) and breached the terms of
the loan and mortgage by violating the duty of good faith and
fair dealing. (Id., PageID # 11-14) SunTrust has
moved to dismiss all claims against it. (D.N. 11) Caliber
seeks dismissal of the breach-of-contract claim only. (D.N.
order to avoid dismissal for failure to state a claim,
“a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is
plausible on its face “when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. If “the well-pleaded facts
do not permit the court to infer more than the mere
possibility of misconduct, ” the plaintiff has not
shown that she is entitled to relief. Id. at 679.
The complaint need not contain “detailed factual
allegations, ” but it must provide “more than an
accusation.” Id. (citing Twombly, 550
U.S. at 555). For purposes of a motion to dismiss, “a
district court must (1) view the complaint in the light most
favorable to the plaintiff and (2) take all well-pleaded
factual allegations as true.” Tackett v. M & G
Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009)
(citing Gunasekera v. Irwin, 551 F.3d 461, 466 (6th
Cir. 2009)). Finally, on a motion to dismiss, any attachments
to the pleadings are treated as part of the pleadings.
Regulation X Claim
Count I of her complaint, Miller alleges that SunTrust
violated 12 C.F.R. § 1024.41 (“Regulation X”
of RESPA). (D.N. 1, PageID # 9) Regulation X is a Consumer
Financial Protection Bureau regulation promulgated pursuant
to section 1022(b) of the Dodd-Frank Act, 12 U.S.C. §
5512(b), and RESPA, 12 U.S.C. § 2601 et seq.
The regulation prohibits a loan servicer from foreclosing on
a property if the borrower has submitted a complete
loss-mitigation application. 12 C.F.R. § 1024.41(g).
Specifically, Regulation X provides:
If a borrower submits a complete loss mitigation application
. . . before a servicer has [initiated foreclosure
proceedings], a servicer shall not [foreclose] unless: (i)
The servicer has sent the borrower a notice . . . that the
borrower is not eligible for any loss mitigation option and
the appeal process . . . is not applicable, the borrower has
not requested an appeal within the applicable time period for
requesting an appeal, or the borrower's appeal has been
denied . . . .
regulation further states that “[a] borrower may
enforce the provisions of this section pursuant to section
6(f) of RESPA (12 ...