2814 N. Halsted LLC et al v. Service One Inc. et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Magistrate Judge Maritza Dominguez Braswell
Civil Action No. 24–cv–00465–MDB
SAMI ALLAM,
Plaintiff,
v.
SERVICE ONE, INC. d/b/a BSI FINANCIAL SERVICES, and
MASON MCDUFFIE MORTGAGE CORP.,
Defendants.
ORDER
SUMMARY FOR PRO SE PLAINTIFF
The Court is denying your request for reconsideration, as well as your attempt to file a
second amended complaint. In its motion to dismiss Order, the Court allowed a limited
opportunity to amend if you could reasonably assert a claim under 12 U.S.C. § 2605(e)(3).
However, your proposed second amended complaint does not attempt to state a claim under §
2605(e)(3), and even if you did attempt to bring such a claim, the allegations do not support it.
Based on these orders, the Court is closing this case. This is only a summary of the Court’s
order, which is set out in full below.
ORDER
This matter is before the Court on Plaintiff’s Motion Respectfully Asking Judge
Dominguez Braswell To Reconsider Dismissal of Mason McDuffie Mortgage ([“Motion for
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Reconsideration”], Doc. No. 51) and Plaintiff’s filing at ECF 53 which the Court construes as a
motion to amend the Complaint ([“Motion to Amend”], Doc. No. 53) (collectively, the
“Motions”). Defendants have responded in opposition to both Motions (Doc. No. 55 (BSI’s
response to the Motion for Reconsideration); Doc. No. 56 (BSI’s response to the Motion to
Amend); Doc. No. 57 (Mason McDuffie’s response to both Motions)) to which Plaintiff has
replied in support of his Motions (Doc. No. 57 (reply to BSI); Doc. No. 59 (reply to Mason
McDuffie)). For the following reasons, Plaintiff’s Motions are DENIED, and this case is closed.
STATEMENT OF THE CASE
Plaintiff’s Amended Complaint asserted claims for (1) “Violation of U.S. Code 12 USC §
2605, Servicing of mortgage loans,” (specifically §§ 2605(c) and (d)); (2) “Negligence,
Negligence Per Se, and Gross Negligence On Behalf Of BSI,” and (3) “Libel/Slander.” (Doc.
No. 28.) Defendants moved to dismiss all claims against them. (Doc. Nos. 31; 32.) Both motions
were granted by the Court on December 5, 2024. (Doc. No. 48.) In its Order, the Court
concluded Plaintiff had failed to state viable claims under 12 U.S.C. § 2605, a statute under the
Real Estate Settlement and Procedures Act (“RESPA”) framework. (Id. at 8–15.) The Court
further concluded Plaintiff’s common law negligence and libel/slander claims were preempted
by the Fair Credit Reporting Act (“FCRA”) and thus not cognizable.1 (Id. at 15–16.) Plaintiff’s
claims were dismissed with prejudice. (Id. at 17.)
However, in its Order, the Court noted some of Plaintiff’s allegations tended to sound in
a claim against BSI under a different RESPA provision, 12 U.S.C. § 2605(e)(3). (Id. at n. 10.)
1 Moreover, to the extent Plaintiff had attempted to fashion his common law claims as claims
under the FCRA, the Court concluded such claim(s) “would likely fail as a matter of law.” (Doc.
No. 48 at n.12.)
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Because Plaintiff is pro se, the Court allowed Plaintiff a limited opportunity to amend. (Id. at
17.) Plaintiff was expressly warned “he should only submit a Second Amended Complaint if he
reasonably believes he can state a viable section 2605(e)(3) claim” and that “[t]he Court may
dismiss any frivolous attempt to state such a claim, without further notice.” (Id. at n. 13.)
Following the Court’s Order, Plaintiff filed his Motion for Reconsideration. (Doc. No.
51.) Plaintiff also filed a red-lined second amended complaint. (Doc. No. 49.) However, because
the purported second amended complaint did not attempt to assert a non-frivolous claim pursuant
to 12 U.S.C. 2605(e)(3), Plaintiff’s filing was rejected for failure to comply with the Court’s
Order. (Doc. No. 52.) Nevertheless, because the Court’s December 20, 2024, deadline to amend
had not yet run, Plaintiff was allowed to reattempt his amendment. Plaintiff filed the instant
Motion to Amend on December 11, 2024. (Doc. No. 53.)
The Current Motions
In his Motion for Reconsideration, Plaintiff asks the Court to reconsider its Order
dismissing all claims in this action. (Doc. No. 51 at ¶ 7.) Plaintiff cites his lack of “prior
litigation experience” and inability to hire counsel. (Id.) He also says he is “currently engaged in
ongoing meetings with the Federal Pro Se clinic” in order to properly pursue his case. (Id. at ¶ 8.)
As to his claims, Plaintiff says he “only recently learned that an Agency relationship exists
between Mason McDuffie Mortgage and Servis One Inc.” (Id. at ¶ 9.) He further contends that
“that Patrick Brock[,] an employee of Mason McDuffie Mortgage Corporation[,] ... materially
participated in the negligence by providing Mr. Allam with the incorrect address to send the first
payment to.” (Id. at ¶ 10.)
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In response, Defendants argue the Motion for Reconsideration fails to demonstrate any
basis for reconsideration under Federal Rule of Civil Procedure 59(e). (Doc. No. 56 at 5–6; Doc.
No. 58 at 4–5.) Moreover, Defendants argue Plaintiff’s pro se status is irrelevant to whether or
not the Court should reconsider its Order. (Doc. No. 56 at 6; Doc. No. 58 at 4.)
In his replies, Plaintiff says he “recently obtained a Credit Union Letter verifying
discrepancies in the account balances, fees, and charges associated with his mortgage loan.”
(Doc. No. 59 at 1; Doc. No. 57 at 2.) Plaintiff refers to this letter as new evidence and says it
“supports [his] longstanding assertion that the amounts demanded and the disclosures provided
by Mason McDuffie were inaccurate, incomplete, or misleading.”2 (Doc. No. 59 at 1–2, 4.)
Plaintiff’s Motion to Amend is a red-lined copy of a proposed second amended complaint
(“proposed SAC”). (Doc. No. 53.) The proposed SAC adds factual allegations and legal
argument. (See id. at 1–6.) Further, it purports to bring claims for “[v]iolation of U.S. Code 12
USC § 2605(b) through (d), Servicing of mortgage loans, Reg X, 12 C.F.R, 1024.33 (a) (b) and
(c).” (Id. at 7–10.) In their responses, Defendants note the proposed SAC fails to comply with the
Court’s Order that Plaintiff could amend his Complaint only to assert a 12 U.S.C. § 2605(e)(3)
claim. (Doc. No. 56 at 5; Doc. No. 58 at 6.) Defendants also argue the proposed SAC does not
contain any allegations that could support a § 2605(e)(3) claim and that the claims Plaintiff does
attempt to assert are futile. (Doc. No. 56 at 5–6; Doc. No. 58 at 6–7.) Plaintiff’s replies do not
appear to address the Motion to Amend. (Doc. Nos. 57; 59.)
LEGAL STANDARD
2 The remainder of Plaintiff’s replies appear to be re-argument on the motions to dismiss or other
discussion of unclear relevance. (See Doc. No. 59 at 2–5; Doc. No. 57 at 3–6.)
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I. 	Motion for Reconsideration
The Court considers Plaintiff’s Motion for Reconsideration under Federal Rule of Civil
Procedure 59(e). See Servants of Paraclete v. Does, 204 F.3d 1005, 1012 (10th Cir. 2000) (“[A]
motion to reconsider filed within ten days after entry of judgment is considered a Fed.R.Civ.P.
59(e) motion.”). “Grounds warranting a motion to reconsider include (1) an intervening change
in the controlling law, (2) new evidence previously unavailable, and (3) the need to correct clear
error or prevent manifest injustice.” Servants of Paraclete, 204 F.3d at 1012. While “[a] Motion
for Reconsideration is appropriate where the court has misapprehended the facts, a party’s
position, or the controlling law,” Silva v. U.S. Bank, National Assoc., 2019 WL 8223556, at *1
(D. Colo. Feb. 20, 2019), it “should not revisit issues already addressed or advance arguments
that could have been raised in prior briefing.” Id.; see also Exxon Shipping Co. v. Baker, 554
U.S. 471, 485 n.5 (2008) (stating that a Rule 59(e) motion should not be used to relitigate or raise
arguments that could have been raised prior to entry of judgment). “Motions to amend judgments
under Rule 59(e) are disfavored and should be granted only in extraordinary circumstances.”
Rivera v. JPMorgan Chase Bank, N.A., 312 F.R.D. 216, 219 (D.D.C. 2015).
II. 	Motion to Amend the Complaint
Rule 15(a) provides that leave to amend “shall be freely given when justice so
requires.” Fed. R. Civ. P. 15(a)(2). A general presumption exists in favor of allowing a party to
amend its pleadings, see Foman v. Davis, 371 U.S. 178, 182 (1962), and the non-moving party
bears the burden of showing that the proposed amendment is improper. Openwater Safety IV,
LLC v. Great Lakes Ins. SE, 435 F. Supp. 3d 1142, 1151 (D. Colo. 2020). However, the Court
may refuse leave to amend “upon a showing of undue delay, undue prejudice to the opposing
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party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously
allowed, or futility of amendment.” Maloney v. City of Pueblo, 323 F.R.D. 358, 360 (D. Colo.
2018) (quoting Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993). Whether to allow an
amendment is within the trial court’s discretion. Tesone v. Empire Mktg. Strategies, 942 F.3d
979, 990 (10th Cir. 2019).
III. 	Pro se Plaintiff
Plaintiff is proceeding pro se. The court, therefore, “review[s] his pleadings and other
papers liberally and hold[s] them to a less stringent standard than those drafted by attorneys.”
Trackwell v. United States, 472 F.3d 1242, 1243 (10th Cir. 2007) (citations omitted); see Haines
v. Kerner, 404 U.S. 519, 520–21 (1972) (holding the allegations of a pro se complaint “to less
stringent standards than formal pleadings drafted by lawyers”). However, the plaintiff’s pro se
status does not entitle him to an application of different rules. Montoya v. Chao, 296 F.3d 952,
957 (10th Cir. 2002).
ANALYSIS
I. 	Motion for Reconsideration
Plaintiff’s Motion for Reconsideration fails Rule 59(e)’s high standard. First, while the
Court understands that proceeding in federal court without counsel is challenging, a pro se party
is not entitled to the application of rules different from those that apply to a represented party.
See Culp v. Williams, 2011 WL 1597686, at n.1 (D. Colo. Apr. 27, 2011) (“The Court notes that
a plaintiff’s pro se status does not entitle him to application of different rules, despite the fact
that pro se parties should be afforded significant leniency in their filings.”). Thus, while the
Court is sympathetic to Plaintiff’s status as a pro se litigant—and indeed has allowed him
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numerous opportunities to put forward cognizable claims—Plaintiff’s reference to his pro se
status has little relevance to the Court’s analysis of his reconsideration request. Instead, the Court
is guided by the framework of Rule 59(e), which allows for reconsideration under three
circumstances: “(1) an intervening change in the controlling law, (2) new evidence previously
unavailable, and (3) the need to correct clear error or prevent manifest injustice.” Servants of
Paraclete, 204 F.3d at 1012.
Plaintiff’s Motion for Reconsideration sets forth only two possible bases for
reconsideration under Rule 59(e): that an alleged “[a]gency relationship exists between Mason
McDuffie Mortgage and Servis One Inc” and that he has identified a Mason McDuffie employee
who allegedly provided him with an incorrect address to send his first mortgage payment to.
(Doc. No. 51 at ¶¶ 9–10.) But neither assertion is sufficient to for reconsideration. First, the
Court is unaware, and Plaintiff does not explain, what impact any agency relationship between
Mason McDuffie Mortgage and BSI has on Plaintiff’s claims. Moreover, even assuming that the
agency relationship has some bearing on Plaintiff claims—which the Court finds doubtful—
Plaintiff does not explain why this information was previously unavailable to him such that it
supports reconsideration of the Court’s Order under Rule 59(e).
Second, to the extent Plaintiff attempts to save his negligence claim by identifying a
Mason McDuffie employee who allegedly provided an incorrect address to send his first
mortgage payment to, such an attempt is futile because Plaintiff’s common law “claims are
preempted by the FCRA, and are thus not cognizable.”3 (Doc. No. 48 (citing Glynn v. Hyundai
3 Plaintiff’s replies also puts forward a third basis for reconsideration in the form of an
apparently newly discovered “Credit Union Letter verifying discrepancies in the account
balances, fees, and charges associated with his mortgage loan.” (Doc. No. 59 at 1.) However,
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Motor Am., 2023 WL 11804221, at *3 (D. Colo. May 25, 2023) (saying the FCRA “precludes a
consumer from bringing state law negligence, defamation, and invasion of privacy claims, except
as to false information furnished with malice or willful intent to injure such consumer” (internal
quotation omitted).) Accordingly, the Motion for Reconsideration is denied.
II. 	Motion to Amend
In its dismissal Order, the Court noted that while Plaintiff’s claims were being dismissed,
the Court would allow Plaintiff to file an amended complaint if he was able to make a non-
frivolous claim under a different RESPA section, 12 U.S.C. § 2605(e)(3). (See Doc. No. 48 at n.
13 (saying “[t]he Court may dismiss any frivolous attempt to state such a claim, without further
notice.”).) However, Plaintiff’s proposed SAC does not comply with this directive. Plaintiff
attempts to re-assert the same RESPA claims already dismissed, and does not attempt to bring a
claim under section 2605(e)(3). (Compare Id. at 8–15 (dismissing Plaintiff’s claims brought
under 12 U.S.C. §§ 2605(b), (c), and (d)), with Doc. No. 53 (Plaintiff’s proposed SAC,
purporting to bring claims under “12 U.S.C. § 2605 (b) through (d)” and “12 C.F.R. 1024.33 ...
(b) and (c)”—the regulations which implement 12 U.S.C. § 2605(b) and (c)).) This alone is
sufficient to deny the Motion to Amend and close the case. See Stauch v. El Paso Cnty., 2024
though Plaintiff makes the conclusory statement that this letter “directly refutes Mason
McDuffie’s position that it ‘fully complied’ with all contractual and statutory duties,” Plaintiff
does not attempt to explain why the letter is relevant to the Court’s analysis on the motions to
dismiss. (See Doc. No. 59-1 (a letter from Blue Federal Credit Union which reads, “[o]n
06/21/2023 the check for $3648.31 that was written to Mason McDuffie would have needed to
be initiated 5-10 business days before being cashed”).) Indeed, contrary to what Plaintiff appears
to believe (see, e.g., Doc. No. 57 at 5), whether or not Plaintiff’s initial mortgage payment was
timely was irrelevant to the Court’s analysis as to whether Defendants committed a RESPA
violation giving rise to damages. (See Doc. No. 48 at 8–15.) Moreover, Plaintiff does not explain
why this information was previously unavailable to him.
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WL 3722959, at *2 (D. Colo. Aug. 8, 2024) (noting Federal Rule of Civil Procedure 41(b) “has
long been interpreted to permit courts to dismiss actions sua sponte for a plaintiff’s failure to ...
comply with ... court orders”).
But the Court goes a step further and notes three things. First, the proposed SAC
allegations—even when construed in the light most favorable to Plaintiff—do not make out a §
2605(e)(3) claim. Plaintiff does not allege he sent BSI a qualified written request or that BSI
reported an overdue payment to a credit reporting agency within 60 days after such a request was
sent. See 12 U.S.C. §§ 2605(e)(3) (“During the 60-day period beginning on the date of the
servicer’s receipt from any borrower of a qualified written request relating to a dispute regarding
the borrower’s payments, a servicer may not provide information regarding any overdue
payment, owed by such borrower and relating to such period or qualified written request, to any
consumer reporting agency.”). Second, even assuming the Court had allowed Plaintiff to re-
assert his 12 U.S.C. §§ 2605(b), (c), and (d)—which it did not—the Court notes the claims in
proposed SAC are futile for the same reasons the motions to dismiss were granted. See Fuentes
v. Chavez, 314 F. App’x 143, 145 (10th Cir. 2009) (“There is a limit to how many bites even a
pro se plaintiff can have at the apple.”). Finally, Plaintiff’s references to, and attempt to assert
new claims under, 12 C.F.R. 1024.33 (a)-(c) are futile. Sections (b) and (c) are the regulations
that implement 12 U.S.C. § 2605(b) and (c). And section (a) applies to “reverse mortgage
transaction(s),” which is entirely irrelevant to this action. See 12 C.F.R. § 1024.30
(“Section 1024.33(a) only applies to reverse mortgage transactions.”).
CONCLUSION
For the foregoing reasons, it is
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ORDERED that Plaintiff’s Motion for Reconsideration (Doc. No. 51) and Motion to
Amend (Doc. No. 53) are DENIED. It is further
ORDERED that the Clerk of Court is directed to close this case.
Dated this 24th day of January, 2025.
BY THE COURT:
___________________________
Maritza Dominguez Braswell
United States Magistrate Judge
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