United States District Court, D. Minnesota
Jonathan L. R. Drewes, Drewes Law, PLLC, MN 55404, for
J. Sathre, Houser & Allison, APC, MN 55331, for
MEMORANDUM OPINION AND ORDER
RICHARD NELSON, UNITED STATES DISTRICT JUDGE.
case arises from a homeowner's action against a lender
alleging violations of the Fair Debt Collection Practices
Act, 15 U.S.C § 1692 et seq.
(“FDCPA”). As a result of certain of
Defendant's communications and conduct, Plaintiff Andrew
Heinz alleges he lost his home of nearly twenty years to
foreclosure and suffered emotional distress. Defendant
Carrington Mortgage Services, LLC (“Carrington”)
now moves for summary judgment. Mr. Heinz opposes the motion.
Court is sympathetic to Mr. Heinz's plight. However,
because there is no evidence that the challenged
communications and conduct relate to the “collection of
a debt”, the law forbids holding Carrington liable for
these statements and actions under the FDCPA. For the reasons
set forth below, Defendant's motion is granted and Mr.
Heinz's complaint is dismissed with prejudice.
History of the Loan, Note, and Mortgage
material facts surrounding the underlying loan, promissory
note, and mortgage are not in dispute. Mr. Heinz is the
former fee owner of property located in Dakota County,
Minnesota (the “Property”). (Compl. [Doc. No.
1-1] (“Compl.”) ¶¶ 1-3; Ostermann Aff.
[Doc. No. 22] (“Ostermann Aff.”) Ex. A.) While
residing at the Property for nearly twenty years with his
wife and daughter, Mr. Heinz also operated his home-based
business Heartland Business Services, Inc. from the Property.
(Heinz Aff. [Doc. No. 30] (“Heinz Aff.”)
¶¶ 1-2; Ostermann Aff. Ex. H at 48.)
March 25, 2008, Mr. Heinz borrowed $ 247, 344 dollars from
lender Countrywide Bank, FSB (the “Loan”).
(Ostermann Aff. Ex. A.) The Loan was evidenced by a
promissory note, secured by a mortgage (the
“Mortgage”). (Id.) The Mortgage,
executed by Mr. Heinz and his wife, Sranya Heinz, identifies
Countrywide Bank FSB as the lender, and Mortgage Electronic
Registration Systems, Inc. (“MERS”) as the
mortgagee, acting “solely as a nominee for [Countrywide
Bank FSB's] and [Countrywide Bank FSB's] successors
and assigns.” (Id., Ex. A.) The Mortgage
expressly authorizes MERS to “foreclose and sell the
Property.” (Id., Ex. A at 2.)
about June 9, 2016, the note and Mortgage were assigned from
MERS, as nominee, to Bank of America, N.A.
(“BANA”). (Sathre Aff. [Doc. No. 23]
(“Sathre Aff.”) Ex. A.) BANA serviced the Loan
until a service transfer to Carrington effective July 11,
2017. (Ostermann Aff. Ex. K.)
2010, Mr. Heinz allegedly fell behind on his mortgage
payments. (See id., Ex. B.) Although Carrington
alleges that Mr. Heinz could not make a single payment
between February 2010 and March 2011, resulting in a
delinquency of $22, 740.73 dollars (Def.'s Summ. J. Br.
[Doc. No. 26] (“Def.'s Summ. J. Br.”) at 3),
the record only suggests that a loan modification was granted
in March 2011 curing Mr. Heinz's unidentified amount of
default, and bringing him current on his payments. (Ostermann
Aff. ¶ 11; Ex. B.) By the time Carrington took over
servicing of Mr. Heinz's loan from BANA, however, it is
undisputed the Loan was “in default” again.
(Compl. ¶ 11; Heinz Aff. ¶ 8.)
two loan modifications were granted to Mr. Heinz in 2011 and
2014, as described below, BANA ultimately recorded a notice
of pendency and power of attorney to foreclose the Property.
(Sathre Aff. Ex. B.) On June 16, 2017, Mr. Heinz was
personally served with the Notice of Mortgage Foreclosure
Sale, Notice of Homestead Designation, Help for Homeowners in
Foreclosure Notice, Foreclosure: Advice Notice to Tenants
Notice, and Notice of Redemption Rights sale notice
(together, the “Sale Notice”). (Ostermann Aff.
Ex. O; Compl. ¶ 21.) The Sale Notice informed Mr. Heinz
that the foreclosure sale of the Property was initially
scheduled for August 1, 2017. (Id.)
Property was eventually sold on November 14, 2017,
approximately four months after Carrington took over
servicing the Loan. As detailed further below, this
foreclosure followed two loss mitigation applications Mr.
Heinz submitted to Carrington.
Mr. Heinz's Loan Modification Applications with Prior
Mr. Heinz's first default in 2010, it is undisputed that
he applied for loss mitigation assistance with BANA to avoid
foreclosure. (Ostermann Aff. Ex. B.) Mr. Heinz was granted a
loan modification in 2011 which erased the default, brought
Mr. Heinz current on his payments, and allowed him to remain
on the Property. (Id.)
2013, Mr. Heinz again defaulted and applied for loss
mitigation assistance. (See Osterman Aff. Exs. C-D.)
On September 19, 2013, BANA wrote a letter to Mr. Heinz
notifying him that his request was denied for his failure to
provide the required documents to complete the loan
assistance application. (Ostermann Aff. Ex. D at 30-31.) Mr.
Heinz was ultimately able to obtain a second loan
modification that cured his default, and brought him current
on his loan payments. (Ostermann Aff. Ex. C.)
2016, Carrington alleges, without citing to the record, that
Mr. Heinz again defaulted and applied for loss mitigation
assistance. (Def.'s Summ. J. Br. at 4.) The record shows,
however, that in September 2016, BANA initiated a foreclosure
process against Mr. Heinz. (Sathre Aff. Ex. B.) On September
13, 2016, BANA recorded a notice of pendency and power of
attorney to foreclose the Property. (Sathre Aff. Ex. B.)
Pursuant to the Sale Notice, Mr. Heinz was informed that the
foreclosure sale of the Property was initially scheduled for
August 1, 2017.
March 4, 2017, BANA wrote a letter to Mr. Heinz notifying him
that his application was no longer being reviewed for his
failure to provide the required documents to complete the
loan assistance application. (Ostermann Aff. Ex. D at 29.)
Two months later, on May 18, 2017, BANA sent another letter
to Mr. Heinz notifying him that his application was still
incomplete and no longer under review for his failure to
submit the requested documents in support of his application.
(Id. at 28.)
Mr. Heinz's Loss Mitigation Applications with
July 11, 2017, Carrington began servicing Mr. Heinz's
loan. (Ostermann Aff. Ex. K.) Shortly after receiving notice
of this transfer, Mr. Heinz spoke to Carrington by telephone.
(Heinz Aff. ¶ 9.) During the call, Mr. Heinz alleges
that Carrington demanded that Mr. Heinz “produce to
them a loss mitigation package by midnight that same evening
in order to prevent a foreclosure sale of [Mr. Heinz's]
property.” (Heinz Aff. ¶ 10.) In response, Mr.
Heinz alleges that he immediately sought assistance from the
Minnesota Attorney General's Office “with the loss
mitigation submissions and his dealings with
Carrington.” (See Heinz Aff. ¶¶
12-21.) When Mr. Heinz made any submissions to Carrington, he
alleges that he “commonly sent copies of the
submissions to the Minnesota Attorney General's
Office.” (See Heinz Aff. ¶ 18.) It is
undisputed that the Minnesota Attorney General's Office
represented Mr. Heinz, and Mr. Heinz alleges that he relied
on the Office, including William Gosiger from the Consumer
Division of the Minnesota Attorney General's Office, to
“relay. . . any communications and information they
received from Carrington regarding [his] account.”
(See Heinz Aff. ¶ 21; Def's Summ. J. Br. at
avoid foreclosure, it is undisputed that Mr. Heinz submitted
his first loss mitigation application to Carrington on August
3, 2017. (Ostermann Aff. Ex. F; Compl. ¶ 21.) Five days
later, on August 8, 2017, Carrington submitted a letter to
Mr. Heinz acknowledging receipt of the application and
requesting the following documentation by August 23, 2017 to
remain eligible for loss mitigation assistance:
(1) Mr. Heinz's tax returns;
(2) IRS 4506-T Form fully executed by Mr. Heinz;
(3) a request for mortgage assistance (“RMA”)
completed and executed by Mr. Heinz;
(4) proof of all household income;
(5) monthly living expense worksheet; and (6) a detailed
(Ostermann Aff. Ex. F.)
phone calls between Carrington and Mr. Heinz about the
missing documents above, Carrington received additional
documents from Mr. Heinz to review, two days before its
August 23 deadline. Carrington, however, determined that the
application was incomplete because it was missing
“() complete income tax returns,  a complete RMA,
 proof of all household income, and  a monthly living
expense worksheet.” (Ostermann Aff. Ex. L at 77.)
acknowledges receiving additional documents on August 29 and
September 1, 2017 from Mr. Heinz, including, among other
things, a “profit and loss statement for July 2017
through August 2017” and an application of automatic
extension to file income tax returns for the years 2014 and
2016. (Id.) But, Carrington determined the