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Hoy v. Aurora Loan Services, LLC

United States District Court, S.D. Ohio, Western Division

June 5, 2017

MICHAEL HOY, Plaintiff,
v.
AURORA LOAN SERVICES, LLC, et at., Defendants.

         DECISION AND ENTRY SUSTAINING DEFENDANT CARRINGTON MORTGAGE SERVICES, LLC'S MOTION TO DISMISS (DOC. #7), DEFENDANT NATIONSTAR MORTGAGE LLC'S MOTION TO DISMISS (DOC. #14), MOTION OF DEFENDANT RUSHMORE LOAN MANAGEMENT SERVICES, LLC, TO DISMISS FOR FAILURE TO STATE A CLAIM (DOC. #16), AND DEFENDANT AURORA LOAN SERVICES, LLC'S MOTION TO DISMISS (DOC. #25); DISMISSING RESPA CLAIMS WITH PREJUDICE; DECLINING TO EXERCISE SUPPLEMENTAL JURISDICTION OVER BREACH OF CONTRACT CLAIMS, AND DISMISSING THEM WITHOUT PREJUDICE; JUDGMENT TO ENTER IN FAVOR OF DEFENDANTS AND AGAINST PLAINTIFF; TERMINATION ENTRY

          WALTER H. RICE UNITED STATES DISTRICT JUDGE.

         Following foreclosure proceedings and a Sheriff's sale of his home, Plaintiff, Michael Hoy, filed suit against four mortgage loan servicers alleging violations of the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2601 etseq., and its accompanying regulations, and asserting two breach of contract claims.

         This matter is currently before the Court on motions to dismiss filed by Defendants Carrington Mortgage Services, LLC (Doc. #7), Nationstar Mortgage LLC (Doc. #14), Rushmore Loan Management Services, LLC (Doc. #16), and Aurora Loan Services, LLC (Doc. #25).

         I. Background and Procedural History

         According to the Complaint, in October of 2006, Clinton Dalton purchased a house located on approximately 34.222 acres of land in Springfield, Ohio. The promissory note was secured by a mortgage on the property. In September of 2010, Dalton and Plaintiff, Michael Hoy, jointly assumed the loan.[1]

         In February of 2011, the loan servicer, Aurora Loan Services, LLC ("Aurora") began foreclosure proceedings on the property. A Foreclosure Decree was entered on January 11, 2012. Thereafter, numerous Sheriff's sales were scheduled, but Hoy filed five separate bankruptcy proceedings, which repeatedly disrupted the sale of the property.

         During this time, Hoy attempted to work with a string of mortgage loan servicers to modify the loan and keep the property. At some unspecified time, Aurora allegedly told Hoy that, if he successfully made all required payments under a temporary Loan Modification Offer, it would offer him a permanent loan modification. Hoy allegedly made all of the required payments, but did not receive the permanent loan modification documents. It was later discovered that Aurora had mailed them to the wrong address. Aurora later told Hoy that the permanent loan modification offer was no longer valid and that he would have to start the application process all over again.

         Unbeknownst to Hoy, Aurora then transferred the loan servicing to Nationstar Mortgage, LLC ("Nationstar"). Nationstar sent correspondence concerning the loan to the wrong address for several months before the error was discovered. Nationstar then allegedly approved Hoy for a loan modification. According to the Complaint, in order to accept this offer, Hoy was required, within a specified amount of time, to make a onetime payment of $3, 500.00, and then subsequent payments of $900.00 per month. Within the time allotted, Hoy allegedly called Nationstar to accept the offer and tender the $3, 500.00 payment. Nationstar informed him, however, that it could not accept the payment, because loan servicing had again been transferred, this time to Carrington Mortgage Services, LLC ("Carrington"). Nationstar told him to contact Carrington.

         Carrington refused to honor Nationstar's loan modification offer, and told Hoy that he must begin the process anew. Thereafter, in July of 2014, loan servicing was transferred to Rushmore Loan Management Services, LLC ("Rushmore"). Hoy made numerous unsuccessful attempts to contact Rushmore about modifying the loan. Ultimately, the property was sold to Aurora at a sheriff's sale on or around August 31, 2015.

         On March 8, 2016, Hoy filed suit against Aurora, Nationstar, Carrington and Rushmore, alleging violations of RESPA, and breach of contract. Hoy v. Aurora Loan Servs., LLC, Case No. 3:16-cv-77. On June 10, 2016, the parties stipulated to a dismissal of Hoy's claims without prejudice.

         Hoy re-filed the above-captioned suit on December 14, 2016. He again alleges that Aurora, Nationstar, Carrington and Rushmore violated RESPA, and that Aurora, Nationstar and Carrington are liable for breach of contract. Doc. #1. Each defendant has filed a motion to dismiss for failure to state a claim upon which relief may be granted. Docs. ##7, 14, 16, 25.

         II. Standard of Review

         Federal Rule of Civil Procedure 8(a) provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The complaint must provide the defendant with "fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 ...


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