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Bakko v. Quicken Loans, Inc.

United States District Court, D. Minnesota

December 11, 2018

Mary Bakko and Dawn White, Plaintiffs,
v.
Quicken Loans, Inc., Defendant.

          Andrew C. Walker and Paul H. Weig, Walker & Walker Law Offices, PLLC, Counsel for Plaintiffs.

          Lousene Hoppe, Fredrikson & Byron, P.A. and Thomas N. Abbott, Perkins Coie LLP, Counsel for Defendant.

          MEMORANDUM OPINION AND ORDER

          Michael J. Davis United States District Judge

         This matter is before the Court on Defendant's motion to dismiss the Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6).

         I. Amended Complaint

         Plaintiffs Bakko and White each filed for Chapter 7 bankruptcy - Bakko in September 2017 and White in April 2018. (Am. Comp. ¶¶ 9, 10.) At the time of Bakko's bankruptcy filing, both plaintiffs owed a mortgage loan secured by their homestead in Ramsey County, and serviced by Defendant Quicken Loans, Inc. (“Quicken”). (Id. ¶ 11.)

         Plaintiff Bakko signed a reaffirmation agreement for the mortgage loan in bankruptcy. (Id. ¶ 12.) Following the filing of this agreement, Quicken charged $125 in attorney's fees to Plaintiffs' loan for what it described as “Bankruptcy - Reaffirmation Agreement.” (Id. ¶ 13.)

         Plaintiffs claim that a reaffirmation agreement is a simple document that is routinely filed in bankruptcy cases, and that such form is available online from the United States Bankruptcy Court website. (Id. ¶¶ 14, 15.) There is no filing fee for such document. (Id. ¶ 16.) Plaintiffs further claim that the reaffirmation form filed in this case could not reasonably have taken an attorney between 15 minutes and half an hour to complete - which would represent $125 in attorney's fees - therefore the fee charged to Plaintiffs was unreasonable. (Id. ¶¶ 18-20.)

         Prior to filing suit, counsel for the parties exchanged correspondence as to whether Quicken could charge attorney's fees for the preparation of the reaffirmation agreement. (Id. ¶¶ 23, 24.) Because the parties were not able to reach an agreement on this issue, Plaintiffs filed the instant action.

         In Count I, Plaintiffs claim that Quicken violated the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605, by not removing and refunding the $125 attorney's fee charge for the completion of the reaffirmation agreement. (Id. ¶ 32.)

         In Count II, Plaintiffs claim that Quicken has engaged in a pattern or practice of charging unauthorized unreasonable fees by charging other consumers attorney's fees for the preparation of a reaffirmation agreement that was not negotiated or included changes to any information which would ordinarily be provided by a loan servicer. (Id. ¶ 38.) RESPA provides for additional damages in the case of a pattern or practice of noncompliance with the requirements of § 2605. (Id. ¶ 43.)

         In Count III, Plaintiffs claim that Quicken breached the terms of the mortgage and note by charging Plaintiffs unreasonable fees in a legal proceeding that might significantly affect Quicken's interest in the property and/or rights under the contract. (Id. ¶¶ 46-48.) Not only was the attorney's fee unreasonable, Bakko's chapter 7 bankruptcy proceeding did not modify the secured status of the mortgage and was therefore not a circumstance that might significantly affect Quicken's interest or rights under the contract. (Id. ¶¶ 48, 49.)

         In Count IV, Plaintiffs claim that Quicken violated Minn. Stat. § 58.13 by: failing to perform in accordance with the terms of the mortgage; charging an unauthorized and unreasonable attorney's fee; violating RESPA; and making false or misleading representations when servicing the loan.

         II. Standard ...


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