Moody v. PennyMac Loan Services, LLC

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Dana E. Moody
v. 	Case No. 16-cv-021-JL
PennyMac Loan Services, LLC
REPORT AND RECOMMENDATION
The pro se plaintiff, Dana Moody, brings this action
against PennyMac Loan Services, LLC (“PennyMac”), alleging
violations of the Real Estate Settlement Procedure Act
(“RESPA”), 12 U.S.C. § 2601, et seq. 	Before the court for
Report and Recommendation is Moody’s motion to amend his amended
consolidated complaint, doc. no. 49, to which PennyMac objects,
doc. no. 52. 	The court held a telephonic hearing on November 9,
2016. 	For the following reasons, the court recommends that the
district judge grant Moody’s motion.
Background1
Moody originally brought this matter as four separate
actions in state court. 	These actions were removed to federal
court and consolidated. 	On April 6, 2016, pursuant to court
order, Moody filed an amended consolidated complaint (“first
1 The court provides a brief procedural background for the
purposes of context. 	A more detailed background can be found in
the court’s June 6, 2016 Report and Recommendation. 	See doc.
no. 37.
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amended complaint”). 	Doc. no. 30. 	On April 22, 2016, PennyMac
moved to dismiss the first amended complaint for failure to
state a claim. 	Doc. no. 31. 	The district judge referred this
motion to the undersigned magistrate judge.
On June 6, 2016, this court issued a Report and
Recommendation recommending that the district judge dismiss
Moody’s first amended complaint. 	Doc. no. 37. 	The court
concluded that Moody had not alleged actual damages and could
accordingly only recover, in the form of statutory damages, if
he could establish “a pattern or practice” of noncompliance with
RESPA by PennyMac.2 	Id. at 16–17. 	In his first amended
complaint, Moody alleged that PennyMac violated RESPA by failing
to properly respond to twenty qualified written requests
(“QWRs”) that he had propounded on PennyMac over the course of
four letters. 	The court disagreed, concluding that the letters
themselves, and not the individual requests therein, constituted
potential QWRs under RESPA. 	Id. at 17. 	The court further
concluded that two of these letters — a September 2015 letter
and an April 2015 letter — were not valid QWRs, and that the two
remaining letters — dated August 2015 and October 2015,
respectively — were insufficient to establish a pattern or
2 Statutory damages are only available when a claimant can show
“a pattern or practice of noncompliance . . . .” 12 U.S.C. §
2605(f)(1)(B).
2
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practice of noncompliance by PennyMac. 	Id. 	Accordingly, the
court concluded that Moody had failed to state a viable claim
against PennyMac under RESPA.
On June 20, 2016, Moody filed a purported “Objection to
Magistrate’s Report and Recommendation.” 	Doc. no. 40. 	The
district judge construed this as a motion for reconsideration of
the June 6, 2016 Report and Recommendation and referred it to
the undersigned for review. 	On August 26, 2016, Moody filed the
instant motion to amend. 	Four days later, on August 30, 2016,
the court issued an order substantively addressing the arguments
raised by Moody in his June 20, 2016 filing, and denying his
request for reconsideration of the June 6, 2016 Report and
Recommendation. 	Doc. no. 51. 	Thereafter, the district judge
referred Moody’s motion to amend for review.
Standard of Review
“[L]eave to amend should be ‘freely given’ in circumstances
in which ‘justice so requires.’” 	Calderon-Serra v. Wilmington
Trust Co., 715 F.3d 14, 19 (1st Cir. 2013) (brackets omitted)
(quoting Fed. R. Civ. P. 15(a)(2)). 	This does not mean,
however, that “‘a trial court must mindlessly grant every
request for leave to amend.’” 	Id. (quoting Aponte–Torres v.
Univ. of P.R., 445 F.3d 50, 58 (1st Cir. 2006)). 	A court may
deny a motion to amend “when the request is characterized by
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‘undue delay, bad faith, futility, or the absence of due
diligence on the movant’s part.’” 	Id. (brackets and ellipsis
omitted) (quoting Palmer v. Champion Mortg., 465 F.3d 24, 30
(1st Cir. 2006)). 	A request can similarly be denied if the
proposed amendment “‘would serve no useful purpose.’” 	Id.
(quoting Aponte–Torres, 445 F.3d at 58).
Discussion
Moody seeks to amend his first amended complaint to include
two additional letters, dated February 24, 2015 (“February 2015
letter”) and March 23, 20163 (“March 2016 letter”), respectively.
Moody contends that these letters constitute additional QWRs and
asserts that, when considered in conjunction with the August
2015 and October 2015 letters, they establish a cognizable claim
that PennyMac engaged in a pattern or practice of noncompliance
with RESPA.
First, the February 2015 letter. 	PennyMac’s response to
this letter is dated March 30, 2015. 	Doc. no. 49-3. 	Moody does
not dispute that he timely received this response, and indeed
referenced the February 2015 letter in his first amended
complaint and his objection to PennyMac’s motion to dismiss.
3 This date is handwritten above a crossed-out, typed date of
November 23, 2015. 	At the hearing, Moody explained that the
typed date was a scrivener’s error, and that the handwritten
date is correct.
4
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See doc. no. 30, ¶ 25; doc. no. 33, ¶ 2. 	He asserts that
PennyMac did not properly respond to three of the requests in
this letter, but notes that he did not previously seek damages
with respect to this letter because PennyMac “either . . . did
provide [the documents] upon subsequent [request] . . . or
[Moody] subsequently determined that [he] no longer required the
documents [in question].” 	Doc. no. 49. 	During the telephonic
hearing, Moody emphasized his pro se status and stated that he
did not previously realize the importance of alleging a
violation of RESPA with respect to this letter. 	He accordingly
seeks to amend his complaint now to include this letter in order
to “provide such additional evidence to support the fact that
[PennyMac] did in fact engage in a pattern or practice of non-
compliance . . . .” Id.
The March 2016 letter was sent after this action commenced.
PennyMac’s response, which was prepared by counsel, is dated May
3, 2016. 	Doc. no. 52-2. 	During the telephonic hearing, Moody
stated that he received this response on May 23, 2016, an
assertion that PennyMac did not dispute. 	This date falls after
the date Moody filed his objection to PennyMac’s motion to
dismiss, but prior to his purported motion to reconsider to the
June 6, 2016 Report and Recommendation. 	In his motion to amend,
Moody characterizes the March 2016 letter as a “new letter also
containing multiple QWRs . . . .” 	Doc. no. 49.
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PennyMac opposes allowing Moody to amend his complaint to
include either letter. 	First, PennyMac contends that Moody’s
basis for seeking an amendment — in PennyMac’s view, to evade
the conclusions in the June 6, 2016 Report and Recommendation —
is improper. 	In a similar vein, PennyMac contends that Moody’s
request to amend is untimely, as it substantively seeks
reconsideration of the June 6, 2016 Report and Recommendation.
PennyMac further contends that the proposed amendment would be
futile because PennyMac properly responded to all requests in
both letters. 	Finally, PennyMac contends that even if these
letters did constitute RESPA violations, Moody still cannot
establish a pattern or practice of noncompliance on the part of
PennyMac.
When considering this case in its totality, see Quaker
State Oil Ref. Corp. v. Garrity Oil Co., 884 F.2d 1510, 1517
(1st Cir. 1989), the court concludes that Moody should be
allowed to amend his first amended complaint to include the
February 2015 and March 2016 letters. 	The court is not
convinced that the presently sought amendments are the result of
undue delay, bad faith, or the absence of due diligence on
Moody’s part. 	During the telephonic conference, Moody indicated
that he did not appreciate the importance of these letters until
he reviewed the June 6, 2016 Report and Recommendation. 	Given
Moody’s pro se status and the procedural background of this
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case, the court finds this contention to be reasonable.
This is especially true in light of the court’s
determinations in the June 6, 2016 Report and Recommendation
with respect to damages. 	As noted, RESPA allows the recovery of
both actual and statutory damages. 	12 U.S.C. § 2605(f)(1). 	In
the June 6, 2016 Report and Recommendation, the court concluded
that Moody had not pleaded actual damages, thus limiting Moody’s
potential recovery solely to statutory damages. 	Doc. no. 37, at
16. 	To recover statutory damages, a claimant must establish “a
pattern or practice of noncompliance with the requirements [of
RESPA]” on the part of the defendant. 	12 U.S.C. §
2605(f)(1)(B). 	Thus, it is conceivable that Moody did not
realize that he could only recover on a “pattern or practice”
theory until after he reviewed the Report and Recommendation.
Though Moody did not reference either letter in his
purported “Objection to Magistrate’s Report and Recommendation,”
this is not fatal to his present motion. 	It is unclear whether
Moody ever intended this filing to be a formal motion for
reconsideration of the June 6, 2016 Report and Recommendation,
and the district judge only construed it as such “in an
abundance of caution due to the plaintiff’s pro se
status . . . .” 	See July 2, 2016 Endorsed Order. 	The court
therefore cannot meaningfully determine whether Moody neglected
to mention these letters in a formal request for
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reconsideration, or merely objected to the conclusions in the
June 6, 2016 Report and Recommendation on certain discrete bases
to which he did not believe these additional letters were
relevant. 	In light of this confusion, the court cannot conclude
that Moody waived the ability to raise these letters now.
Finally, the court concludes that it is premature to
determine whether Moody’s proposed amendments are futile.
Though not unpersuaded by PennyMac’s arguments in this respect,
given that Moody seeks to rely on these letters to support a
“pattern or practice” claim, the court concludes that it would
be more appropriate to consider the viability of this theory
pursuant to a global dispositive motion rather than the
piecemeal manner the instant motion presents. 	In the event
PennyMac files a subsequent dispositive motion, then it may rely
upon any relevant argument previously raised in relation to its
motion to dismiss or the present motion to amend, along with any
other arguments it deems appropriate, at that time.
In reaching the above conclusions, the court is cognizant
that if the district judge approves this Report and
Recommendation, PennyMac’s motion to dismiss will be denied
without prejudice. 	See LR 15.1(c). 	The court acknowledges that
this poses an inconvenience to PennyMac. 	Still, in the event
PennyMac files a subsequent dispositive motion, many of the
arguments therein will likely already have been developed in the
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previous motion to dismiss and/or opposition to the instant
motion. 	Thus, the court does not believe that PennyMac will be
severely prejudiced by allowing Moody to amend his cause of
action.
Conclusion
Based on the foregoing, the court recommends that the
district court grant Moody’s motion to amend. 	Doc. no. 49. 	Any
objections to this Report and Recommendation must be filed
within fourteen days of receipt of this notice. 	See Fed. R.
Civ. P. 72(b)(2). 	Failure to file objections within the
specified time waives the right to appeal the district court’s
order. 	See United States v. De Jesús-Viera, 655 F.3d 52, 57
(1st Cir. 2011); Sch. Union No. 37 v. United Nat’l Ins. Co., 617
F.3d 554, 564 (1st Cir. 2010).
SO ORDERED.
__________________________
Andrea K. Johnstone
United States Magistrate Judge
November 28, 2016
cc: 	Dana E. Moody, pro se
Kevin P. Polansky, Esq.
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