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Peters v. Bank of America, N.A.

United States District Court, E.D. Virginia, Richmond Division

January 21, 2015

BANK OF AMERICA, N.A., et al., Defendants.


JOHN A. GIBNEY, Jr., District Judge.

This matter comes before the Court on the plaintiff's motion for leave to file an amended complaint. (Dk. No. 21.) As part of his original nine-count complaint filed in March 2014 against five defendants, Peters brought one claim against Specialized Loan Servicing, LLC ("SLS"), under the Real Estate Settlement Procedures Act ("RESPA"). Peters now moves for leave to file an amended complaint that would remove from the action the four defendants who settled with the plaintiff and add three new class claims under the Fair Debt Collection Practices Act ("FDCPA") against SLS.

As a mortgage servicing company, SLS qualifies for an exemption from the FDCPA's definition of a debt collector, so the proposed FDCPA claims against SLS fail as a matter of law. Even if the new claims were not futile, the Court would deny leave to amend at this late stage in the litigation.

Accordingly, the Court DENIES the plaintiff's motion for leave to amend his complaint.


Anticipating financial difficulties, Peters applied to the Home Affordable Modification Program in 2012 regarding his mortgage with Bank of America ("BOA"). BoA told Peters that he did not qualify for a modification because he had made all his payments on time. BoA advised him to skip his next two monthly payments in order to qualify for the program. After Peters followed the bank's instruction and re-applied for a modification, BoA reported his loan as delinquent and began foreclosure proceedings. Peters attempted to make up the missed payments, but BoA rejected his efforts. That November, BoA transferred the servicing rights to Peters' mortgage to SLS. SLS reported his account as delinquent because of the payments that BoA had advised him to skip.

Peters submitted a qualified written request[2] under RESPA to SLS, disputing the payments that SLS considered delinquent, requesting the deletion of any late fees or other foreclosure costs, and asking that SLS provide certain loan history documents. Peters claims that SLS, in violation of 12 U.S.C. § 2605(e)(2), failed to (1) make appropriate corrections to his account and notify him in writing of the corrections; (2) investigate his account and provide him with written clarification as to why SLS believed the account information to be correct; and (3) investigate his account and either provide the requested information or offer an explanation as to why the requested information was unavailable.

In addition to this RESPA claim, Peters' proposed amended complaint refers to a letter SLS sent to him in February 2014, in which SLS asked that Peters provide confirmation of the name and contact information of his attorney within thirty days. Peters claims that this letter violated the FDCPA by communicating with him in connection with the collection of a debt when SLS knew that he was represented by counsel. 15 U.S.C. § 1692c(a). Peters claims that SLS's representation that it did not have his attorney's contact information constituted a false or deceptive means to collect a debt, in further violation of the FDCPA. 15 U.S.C. § 1692e(10). Although the letter included a disclosure that it was "AN ATTEMPT TO COLLECT A DEBT, " Peters claims that it failed to include a statement required by the FDCPA that the letter was sent by a debt collector. 15 U.S.C. § 1692e(11). Peters brings these newly alleged violations, appearing as Counts I-III in the proposed amended complaint, as class claims.

Peters filed his original complaint in March 2014. He moved for leave to amend his complaint on December 17, 2014, the night before a scheduled settlement conference before Magistrate Judge Novak. Discovery closes on January 26, 2015, motions for summary judgment must be filed by February 5, and trial is set for April 6.


After the initial window to amend as a matter of course has passed, a "party may amend its pleading only with the opposing party's written consent or the court's leave. The court should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). "If the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits." Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227 (1962). In deciding whether to grant leave to amend, courts should consider any apparent or declared "undue delay, bad faith or dilatory motive..., repeated failure to cure deficiencies..., undue prejudice to the opposing party..., futility of amendment, etc." Id. These factors "embody a principle which focuses on prejudice or futility or bad faith as the only legitimate concerns in denying leave to amend, since only these truly relate to protection of the judicial system or other litigants." Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir. 1980). Peters' motion fails under both the futility and undue prejudice factors enumerated in Foman and Davis.

A. Futility of Proposed Amendments

A motion to amend is futile if "the proposed amendments could not withstand a motion to dismiss." Perkins v. United States, 55 F.3d 910, 917 (4th Cir. 1995) (citing Glick v. Koenig, 766 F.2d 265, 268-69 (7th Cir. 1985)). "Thus, a district court is justified in denying an amendment if the proposed amendment could not withstand a motion to dismiss.... The liberal amendment rules under Rule 15(a) do not require the courts to indulge in futile gestures." Glick, 766 F.2d at 269 (citations omitted).

The proposed amendments will not withstand a motion to dismiss. Peters attempts to raise three new claims against SLS under the FDCPA, which applies to "debt collectors" as defined in 15 U.S.C. § 1692a(6). This section exempts certain persons from coverage as a "debt collector, " including, and relevant here, when such debt collection activity "is incidental to a bona fide fiduciary obligation or bona fide escrow arrangement." 15 U.S.C. § 1692a(6)(F)(i). Courts in the Fourth Circuit have consistently held that this exemption covers "mortgage servicing companies, " removing them from liability under the FDCPA. Scott v. Wells Fargo Home Mortg. Inc., 326 F.Supp.2d 709, 718 (E.D. Va. 2003) aff'd per curiam, 67 Fed.App'x 238 (4th Cir. 2003) ("Mlle law is well settled... that creditors, mortgagors, and mortgage servicing companies ...

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