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Williams v. Rushmore Loan Management Services, LLC

United States District Court, D. Connecticut

March 31, 2018



          Robert N. Chatigny United States District Judge.

         Plaintiff Matthew D. Williams brings this action under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., against defendant Rushmore Loan Management Services, LLC.[1]Pending are Williams's motion for reconsideration of a ruling denying a motion for partial summary judgment that was previously briefed and argued (ECF No. 144) and Rushmore's motion for summary judgment (ECF No. 129). For reasons that follow, Williams's motion for reconsideration is denied and Rushmore's motion for summary judgment is granted in part and denied in part.[2]

         I. Background

         The record shows the following. In 2008, Williams and his former spouse obtained a loan secured by a mortgage on their home in Madison, Connecticut.[3] By 2009, they were in default and facing foreclosure proceedings. In 2010, Williams obtained a bankruptcy discharge, freeing him from any personal liability on the loan. See In re Williams, 10-BR-31257 (Bankr. D. Conn., Aug. 3, 2010) (ECF No. 28). Though he did not resume making mortgage payments, the foreclosure action remained dormant. In May 2013, the action was dismissed for failure to prosecute. See BAC Home Loans v. Williams, NNH-CV-10-6006965-S (Sup. Ct. New Haven).

         In June 2013, Rushmore became the servicing agent for the mortgage and on June 28, 2013, it sent a letter to Williams. The letter provided a “Summary of Total Debt Composition, ” the “Current Monthly Payment Amount, ” and the “Payment Due Date.” The letter stated:

Please call Rushmore Loan Management Services LLC at 1-888-504-6700 for a current payoff at the time of any payment.
Pursuant to the Federal Fair Debt Collections Practices Act, if you do not notify us within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, we will assume the debt is valid. . . .
You should consider this letter as coming from a Debt Collector as we sometimes act as a Debt Collector and any information received will be used for that purpose. However, if you are in Bankruptcy or received a Bankruptcy Discharge of this debt, this letter is not an attempt to collect a debt and does not constitute a notice of personal liability with respect to that debt.

         On July 2, 2013, Williams discussed his options regarding the loan with Rushmore representative John Torres. He expressed an interest in obtaining a loan modification and resuming payments to keep his home. Torres subsequently sent him a loss mitigation assistance package. On July 22, 2013, he submitted documents to Rushmore to apply for loss mitigation assistance.

         Included among the documents was a Third Party Authorization Request Form, which authorized Rushmore to discuss Williams's mortgage loan and “negotiate terms of a workout agreement” with his attorney, Bradford Sullivan. Plaintiff's affidavit states that, “[b]ecause I was interested in making arrangements to keep my home, I did not, either orally or in writing, ask Rushmore to stop contacting me. I requested and expected that Rushmore would deal with me through my lawyer.” Throughout August and September 2013, Williams provided additional documents in support of his loss mitigation application, which Torres had requested by telephone.

         On October 17, 2013, Rushmore sent Williams a letter confirming that he was approved for a Short Term Forbearance Agreement (“the Agreement”). The letter described how and when he should make the initial payment. Like the letter quoted above, it also provided a debt collection notice (“Rushmore . . . is attempting to collect a debt.”) and bankruptcy disclaimer (“[I]f you . . . have been previously discharged from a bankruptcy, please be advised that this letter does not in any way mean that Rushmore . . . is attempting to hold you personally liable for the loan.”).

         Williams executed the Agreement on October 28, 2013. Under the terms of the Agreement, Rushmore agreed not to foreclose on the property so long as Williams made certain specified payments from October 2013 to February 2014. If Williams fully complied, Rushmore agreed to conduct another review of the loan for a “final Loss Mitigation alternative which may fully cure the loan default.” The Agreement also stated the following:

If Borrower(s) . . . received a discharge from the Bankruptcy Court of his/her/their personal liability under the Note, Lender agrees and Borrower(s) acknowledge as follows: (i) Lender will not pursue collection of any discharged obligation from Borrower(s) personally, (ii) this Agreement is not intended as a demand for payment, (iii) unless the Bankruptcy Court has ordered otherwise, Lender continues to retain whatever rights Lender holds in the Property, despite Borrower(s)' bankruptcy filing . . .

         Williams made the agreed-upon payments, and on March 24, 2014, Rushmore sent him a proposed final loan modification agreement. The cover letter included a debt collection notice and bankruptcy disclaimer. Between April and July 2014, Williams expressed dissatisfaction with the payment terms under the proposed agreement and asked that they be changed. Rushmore requested additional information verbally and by letter, and Williams sent Rushmore a second loss mitigation application. Each letter sent by Rushmore included a debt collection notice and bankruptcy disclaimer.[4] Around this time, Williams submitted additional Third Party Authorization Request Forms naming attorneys Brian E. Kaligan and Michael J. Sweeney.

         On August 1, 2014, Rushmore sent Williams a letter denying his request for a loan modification under the terms he requested. Again, the letter included a debt collection notice and bankruptcy disclaimer. Between August and September 2014, Williams disputed the accuracy of an appraisal used by Rushmore to calculate his proposed payments under the loan modification plan and submitted additional income documentation. Williams appealed Rushmore's decision denying his request. On October 1, 2014, Rushmore sent Williams a letter denying his appeal. This letter also included a debt collection notice and bankruptcy disclaimer.

         According to Williams, he spoke to Torres on October 1, 2014, and “specifically told . . . Torres[] that [his] attorney would get back to him.” Instead of waiting for Williams's attorney to respond, Torres called Williams on October 8, 2014, and engaged him in a lengthy conversation. After that phone call, Williams responded to all of Rushmore's calls by stating, “speak to my attorney.” Nonetheless, Torres called him directly on October 16, 2014, and twice on February 20, 2015. Another Rushmore representative called him directly on October 24, 2014.

         According to Williams, during the October 8 phone call, Torres told him that Rushmore's attorneys, Hunt Leibert Jacobson, P.C. (“Hunt”), [5] would enter a “foreclosure judgment” on November 6, 2014. However, foreclosure proceedings did not commence until June 2016. A judgment of strict foreclosure entered on September 11, 2017. See GMAT Legal Title Trust 2013-1 v. Williams, NNH-CV16-6063079-S (Sup. Ct. New Haven).[6]

         On December 29, 2014, Hunt sent Williams a letter stating that it had been retained to represent GMAT in connection with the mortgage loan. The letter stated that Hunt was aware Williams had received a discharge in bankruptcy and, consequently, Hunt was not attempting to collect the balance of the loan. Instead, the letter was meant to provide “notification of rights you have under federal law.” The letter referred to the signing attorney as a “Debt Collector” and included a debt collection notice and bankruptcy disclaimer similar to Rushmore's letters described above. The letter did not mention Rushmore.

         On February 20, 2015, Rushmore sent Williams a letter stating: “It is . . . our understanding that you have a strong desire to settle this debt with Rushmore, however the real property that secures your loan, may not sell for an adequate amount to pay off your loan in full. For this reason, you have asked if we would consider accepting an amount less than the total debt due through the sale of the property.” The letter asked Williams to provide information related to the request. The letter did not include a debt collection notice or bankruptcy disclaimer. The record does not show whether Williams responded to the letter. Williams filed this suit on May 6, 2015.

         Throughout the time Rushmore serviced Williams's mortgage loan, it sent him monthly mortgage statements. The statements included the “Amount Due, ” due dates, and instructions for making payment. Each statement included a debt collection notice and bankruptcy disclaimer. In addition, each month from December 2013 to December 2014, Rushmore reported to Experian, a national credit bureau, that Williams was in default and the property was in foreclosure. The reports to Experian did not indicate that the debt was disputed.

         II. Legal Standard

         Summary judgment may be granted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). To avoid summary judgment, the non-moving party must point to evidence that would permit a jury to return a verdict in his or her favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). In determining whether this standard is met, the evidence must be viewed in the light most favorable to the non-moving party. Id. at 255.

         III. Discussion

         Williams asserts four claims under the FDCPA. He claims that Rushmore: (1) communicated with him without his consent after Rushmore knew he had retained a lawyer, in violation of § 1692c(a)(2); (2) communicated false information to a credit bureau, in violation of § 1692e(8); (3) attempted to collect charges that were not due, in violation of § 1692f(1); and (4) falsely stated that foreclosure was imminent on a date certain, in violation of § 1692e(2)(A). Rushmore moves for summary judgment on all four claims. Before addressing Rushmore's motion, I address Williams's motion for reconsideration.

         A. Plaintiff's Motion for Reconsideration

         The motion for reconsideration concerns Williams's claim that Rushmore violated 15 U.S.C. § 1692c(a)(2) by communicating directly with Williams without his consent after it knew he had a lawyer. In previously moving for partial summary judgment as to Rushmore's liability on this claim, Williams asked the Court to find that the record established a violation of the statute as a matter of law. See Pl.'s Motion (ECF No. 56). The Court denied the motion stating, “genuine issues of material fact are presented with regard to whether the plaintiff consented to have the defendant communicate directly with him.” Order of May 30, 2017 (ECF No. 140).

         The standard for granting a motion for reconsideration is “strict.” Shrader v. CSX Transportation, Inc., 70 F.3d 255, 257 (2d Cir. 1995). “[R]econsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked - matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.” Id. A motion for reconsideration “cannot be employed as a vehicle for asserting new arguments or for introducing new evidence that could have been adduced during the pendency of the underlying motion.” Palmer v. Sena, 474 F.Supp.2d 353, ...

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