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Wirtz v. Specialized Loan Servicing, LLC

United States Court of Appeals, Eighth Circuit

April 3, 2018

Steven L. Wirtz, Plaintiff- Appellee,
v.
Specialized Loan Servicing, LLC, Defendant-Appellant.

          Submitted: October 16, 2017

          Appeal from United States District Court for the District of Minnesota - Minneapolis

          Before SMITH, Chief Judge, MURPHY and COLLOTON, Circuit Judges.

          COLLOTON, Circuit Judge.

         Steven Wirtz sued Specialized Loan Servicing, LLC for violations of the Real Estate Settlement Procedures Act ("RESPA") and the Minnesota Mortgage Originator and Servicer Licensing Act. The district court granted summary judgment in favor of Wirtz, and awarded him a total of $50, 962.55 in actual damages, statutory damages, attorney's fees, and costs under the two statutes. Specialized appeals, and we reverse because Wirtz did not prove actual damages under RESPA and thus did not establish an essential element of his federal claim.

         I.

         RESPA imposes various duties on mortgage loan servicers. 12 U.S.C. § 2605. One duty is to respond to certain borrower inquires, called "qualified written requests, " in one of three ways. § 2605(e). First, the servicer may correct the borrower's account and notify the borrower of the correction. § 2605(e)(2)(A). Second, the servicer may, "after conducting an investigation, " provide the borrower with "a statement of the reasons for which the servicer believes the account of the borrower is correct as determined by the servicer." § 2605(e)(2)(B)(i). Or third, the servicer may, "after conducting an investigation, " provide the borrower with the "information requested by the borrower or an explanation of why the information requested is unavailable or cannot be obtained by the servicer." § 2605(e)(2)(C)(i).

         If a mortgage loan servicer fails to comply with its duties to respond appropriately to a qualified written request, the individual borrower is entitled to "any actual damages to the borrower as a result of the failure." § 2605(f)(1)(A). The borrower also may recover "any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $2, 000." § 2605(f)(1)(B). The Minnesota Act piggybacks on RESPA by forbidding a servicer to violate a "federal law regulating residential mortgage loans." Minn. Stat. § 58.13, subdiv. 1(a)(8).

         Wirtz ended up in a dispute with Specialized over the servicer's responses to Wirtz's qualified written requests. To understand the dispute, it is necessary to review the history of Wirtz's mortgage loan.

          In August 2001, Wirtz received a mortgage loan from ABN Amro Mortgage Group, Inc. JPMorgan Chase Bank, N.A. ("Chase") began to service the loan in 2002. Chase assigned servicing of the loan to Specialized in June 2013. As part of the transfer of service, Specialized received from Chase a portion of Wirtz's payment history, which included a record of payments beginning on June 11, 2011.

         This partial payment history showed that Wirtz was one-month delinquent on his loan as of the first entry for June 2011. The partial payment history also showed that Wirtz fell behind by another payment between June 2011 and June 2013. Based on this history received from Chase, Specialized sent Wirtz a notice that loan payments were past due.

         After Wirtz made several telephone calls to Specialized disputing that his account was overdue, Wirtz contacted the Minnesota Attorney General's office. The Attorney General's office sent a letter to Specialized on October 9, 2013, asking the servicer to review the matter promptly.

         Specialized responded on October 18, 2013, stating that its records showed that Wirtz's account was one month delinquent on June 11, 2011, that Wirtz had missed two payments to Chase in February 2012 and February 2013, and that Wirtz had made an extra payment in May 2012, resulting in an overall two-month delinquency. Specialized said that if Wirtz wanted to prove that his loan was not delinquent when Chase began servicing the loan, he needed to provide records from the loan servicer who preceded Chase. Similarly, if Wirtz wanted to contest the record that he missed payments in February 2012 and February 2013, then Specialized required Wirtz to provide the front and back of cancelled checks showing that Chase received those payments.

         On November 8, 12, and 25, 2013, Wirtz's counsel sent a series of three qualified written requests to Specialized asking for information, including "[t]he monthly principal and interest payment, and monthly escrow payment from origination to present." He also sought "[a] full explanation of why [Specialized] believes that Steven Wirtz's mortgage was past due on or before 6/17/2013 when [Specialized] was transferred the servicing rights for the above-referenced loan." Specialized responded to the three letters on December 9, 2013, and reiterated that Wirtz must provide the ...


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