UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

C. SUKARI HARDNETT, on behalf of herself and all others similarly situated, et al.,

Plaintiffs, Civil Action No. 24-01534 (AHA) v.

SELECT PORTFOLIO SERVICING, INC.,

Defendant.

Memorandum Opinion and Order

Two D.C. homeowners sue the company that services their mortgages, Select Portfolio

Servicing, Inc., on behalf of a putative class, alleging the company charges unlawful “pay-to-pay”

fees when borrowers make mortgage payments online or by phone. The homeowners assert claims

under the D.C. Consumer Protection Procedures Act (“CPPA”) and the D.C. Mortgage Lender and

Broker Act (“MLBA”). Select Portfolio answered the amended complaint and moves for judgment

on the pleadings, arguing that the homeowners’ claims are barred and fail on the merits. The Court

denies the motion.

I. Background

Select Portfolio is a residential mortgage servicer. ECF No. 16 ¶ 2. Lenders and note

holders pay Select Portfolio to act as their agent and exercise their rights and responsibilities. Id.

¶ 27. Loan servicers generally offer multiple ways to make mortgage payments by check and

automatic bank withdrawal; however, to reduce their costs and offer borrowers more flexibility,

they may also offer payment online or by phone. Id. ¶¶ 44–48. Select Portfolio provides borrowers

the option of paying online or by phone, but it attaches a fee of up to $15 for such payments, often called a “pay-to-pay” fee. Id. ¶ 49. According to the amended complaint, processing a phone or

online payment costs Select Portfolio less than fifty cents per transaction, and Select Portfolio

profits from the difference. Id. ¶¶ 50, 53.

C. Sukari Hardnett and Lisa Dennis own property in D.C. with a mortgage that is serviced

by Select Portfolio. Id. ¶¶ 7–8. They make their mortgage payments by phone or online, and Select

Portfolio has accordingly charged them a pay-to-pay fee to do so. Id. ¶¶ 65, 68. The homeowners

brought this putative class action alleging Select Portfolio’s practice of charging pay-to-pay fees

violates the CPPA and the MLBA. Id. ¶¶ 100–17. Select Portfolio filed a motion to transfer the

case to the Eastern District of New York, which the Court denied. ECF No. 17. Select Portfolio

then moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), and the

Court stayed discovery pending resolution of the motion. ECF No. 28. 1

II. Discussion

The federal rules allow a party to move for judgment on the pleadings “[a]fter the pleadings

are closed.” Fed. R. Civ. P. 12(c). The moving party “shoulders a heavy burden of justification”:

it must show “that no material fact is in dispute and that it is entitled to judgment as a matter of

law.” Dist. No. 1 v. Liberty Mar. Corp.,

(D.C. Cir. 2019) (citation omitted). The

court must “accept as true the allegations in the opponent’s pleadings” and give those pleadings

“all reasonable inferences.”

(citations omitted). Judgment on the pleadings is not

appropriate if “material questions of fact are presented by the pleadings.”

(citation omitted).

Here, Select Portfolio argues for judgment on the pleadings because threshold issues bar

the claims asserted and the claims fail on the merits, but the Court disagrees on both.

1 This case was initially assigned to the Honorable Randolph D. Moss and was reassigned to the Honorable Amir H. Ali on November 27, 2024.

2 A. Select Portfolio’s Timeliness And Notice Defenses Are Unpersuasive

Select Portfolio raises a threshold issue as to each named plaintiff: it asks the Court to

conclude that Hardnett’s claims are time-barred because she was not charged any pay-to-pay fees

during the applicable limitations period, and that Dennis’s claims are barred for failing to provide

adequate pre-suit notice. ECF No. 28-1 at 17–21. Neither argument is convincing.

First, the Court cannot conclude based on the pleadings that Hardnett’s claims are untimely.

The D.C. Circuit has made clear that “courts should hesitate to dismiss a complaint on statute of

limitations grounds based solely on the face of the complaint.” Firestone v. Firestone,

(D.C. Cir. 1996). Because “statute of limitations issues often depend on contested

questions of fact, dismissal is appropriate only if the complaint on its face is conclusively time-

barred.” Id.; see also, e.g., Vaughan v. Cap. City Protective Servs. II, No. 20-cv-2932,

, at *4 (D.D.C. Jan. 23, 2025) (explaining that in context of motion for judgment on the

pleadings, the defendant must show that “no reasonable person could disagree on the date on which

the cause of action accrued, and the complaint on its face is conclusively time-barred” (citation

omitted)).

The amended complaint does not conclusively show that Hardnett’s claims are time-barred.

The parties appear to agree the CPPA and the MLBA have three-year statutes of limitations. ECF

No. 28-1 at 17; ECF No. 29 at 33–35; see, e.g., Murray v. Wells Fargo Home Mortg.,

(D.C. 2008) (explaining that residual three-year statute of limitations applies where no

term is specified). Select Portfolio says it has not charged Hardnett any pay-to-pay fees since 2020,

and therefore any such fees are outside of that three-year window. ECF No. 28-1 at 17–18. As

Select Portfolio acknowledges, however, the amended complaint itself does not state when

Hardnett was charged the relevant fees. Id. at 17. To the contrary, the complaint’s language

indicates these charges have been ongoing. See ECF No. 16 ¶ 65 (alleging that Hardnett “makes

3 payments over the phone” and that “[e]ach time she does so, [Select Portfolio] charges her a Pay-

to-Pay Fee”). Hardnett “was not required to plead facts in anticipation of” Select Portfolio’s

affirmative statute of limitations defense. See Xilojitzep v. Nat’l R.R. Passenger Corp., No. 22-cv-

3788,

, at *2 (D.D.C. Mar. 21, 2024) (citation omitted).

Select Portfolio says a letter it sent in response to Hardnett’s pre-suit notice shows she has

not been charged any pay-to-pay fees since prior to March 2021. ECF No. 28-1 at 18; see ECF No.

28-5. According to Select Portfolio, the letter may be considered because Hardnett “references” it

in the amended complaint. ECF No. 28-1 at 4 n.6 (citing ECF No. 16 ¶¶ 77, 79). This argument is

dubious given that the cited paragraphs refer to the notice sent by Hardnett but never mention

Select Portfolio’s letter. ECF No. 16 ¶ 77 (alleging Hardnett “made a written pre-suit demand upon

[Select Portfolio]”); id. ¶ 79 (alleging Select Portfolio “was given a reasonable opportunity to cure

the breaches complained of herein, but has failed to do so”). Even if the letter were merely

referenced in the amended complaint, moreover, it would not necessarily be properly considered

at this stage. See, e.g., In re Domestic Airline Travel Antitrust Litig.,

(D.D.C.

2016) (finding that documents were not integral to plaintiffs’ claims where they were “merely cited

as the source of certain factual allegations within the Complaint”); see also Lindsey v. District of

Columbia,

, 76 n.4 (D.D.C. 2009) (declining to consider matters outside the

pleadings, which would necessitate conversion to a motion for summary judgment and “an

opportunity to seek discovery”). And in any event, the letter does not conclusively show Hardnett’s

claims are time-barred; it simply states that a fee was assessed to Hardnett’s account and “the

account is due for March 1, 2021.” ECF No. 28-5 at 4. Because the Court cannot discern that

4 Hardnett’s claims are time-barred on their face, Select Portfolio’s timeliness defense fails, at least

in this posture. 2

Nor can the Court grant judgment to Select Portfolio as to Dennis’s claims based on failure

to provide adequate pre-suit notice. Select Portfolio notes that in Dennis’s mortgage agreement,

which is attached to the amended complaint, she agreed to sue for any alleged breach only after

notifying Select Portfolio and affording it “a reasonable period after the giving of such notice to

take corrective action.” ECF No. 28-1 at 18 (quoting ECF No. 16-3 ¶ 20). According to Select

Portfolio, the pleadings show Dennis failed to comply with that requirement.

at 18–21.

As an initial matter, some courts have held that such notice provisions apply only to breach

of contract claims, and not to statutory claims like Dennis brings. See, e.g., DeSimone v. Select

Portfolio Servicing, Inc.,

, 150 (E.D.N.Y. 2024) (collecting cases and

observing that “numerous courts . . . have held that notice-and-cure provisions that are identical or

nearly-identical to the ones at issue here do not extend to claims that exist independent of a

contractual agreement between the parties, such as statutory claims” (internal quotation marks and

citation omitted)); Richards v. NewRez LLC, No. 20-cv-1282,

, at *21 (D. Md.

Mar. 18, 2021) (noting courts have held “claims that exist independent of a contractual agreement

between the parties, such as allegations of deceptive trade practices, are not subject to the notice

and cure provisions that might otherwise apply”). But even if Select Portfolio is correct that the

notice provision applies here, the amended complaint specifically alleges Dennis made a written

pre-suit demand on Select Portfolio informing it that the fees were unfair and requesting a refund.

ECF No. 16 ¶ 78; see McFadden v. Nationstar Mortg. LLC, No. 20-cv-166,

, at

2 The Court therefore need not reach Hardnett’s alternative argument that the statute of limitations was tolled due to the COVID-19 pandemic. ECF No. 29 at 34–35.

5 *14 (D.D.C. July 30, 2021) (“McFadden I”) (noting that “at this stage, the question is one of

pleading,” and that the plaintiffs sufficiently alleged they provided notice), report and

recommendation adopted,

(D.D.C. Apr. 4, 2022) (“McFadden II”).

Select Portfolio again relies on documents outside the amended complaint, citing a pre-suit

letter that Dennis sent. ECF No. 28-1 at 19; see ECF No. 28-7. For similar reasons as above, the

Court arguably could disregard the letter at this stage because it is “merely cited as the source of

certain factual allegations within the Complaint.” Domestic Airline Travel,

.

But even considering the letter, it indicates that Dennis wrote one month prior to suit, notified

Select Portfolio of “an additional service fee,” and asked the company to “look into this practice.”

ECF No. 28-7 at 2. Select Portfolio offers no authority that would allow the Court to conclude that

the time provided or the notice itself was unreasonable as a matter of law. See McFadden II,

, at *19 (rejecting argument that plaintiffs’ notice had to provide more “specific

information” and concluding that mortgage agreement did not require party “to give notice of a

specific legal claim prior to any judicial action”); McFadden I,

, at *14

(concluding that mortgage agreement required plaintiffs to give notice only of the alleged breach,

not “to give a recitation of each right [the defendant] allegedly violated”). The Court accordingly

cannot grant Select Portfolio judgment on the pleadings on that basis.

B. Select Portfolio Has Not Shown It Is Entitled To Judgment On The Homeowners’ CPPA Claims

Select Portfolio argues the homeowners’ CPPA claims fail because the company cannot be

sued under the statute and, even if it could be, the amended complaint does not allege the

company’s conduct violates the statute. The Court disagrees.

The CPPA protects consumers from merchants who “engage in an unfair or deceptive trade

practice, whether or not any consumer is in fact misled, deceived, or damaged thereby.” D.C. Code

6 § 28-3904. It defines “merchant” as a person “who in the ordinary course of business does or would

sell, lease (to), or transfer, either directly or indirectly, consumer goods or services, or a person

who in the ordinary course of business does or would supply the goods or services which are or

would be the subject matter of a trade practice.” Id. § 28-3901(a)(3). And it defines “goods and

services” to include “any and all parts of the economic output of society, at any stage or related or

necessary point in the economic process, and includes consumer credit, franchises, business

opportunities, real estate transactions, and consumer services of all types.” Id. § 28-3901(a)(7).

Despite Select Portfolio’s arguments to the contrary, it is a “merchant” under the CPPA.

The D.C. Court of Appeals has recognized the CPPA applies to real estate mortgage transactions

and mortgage refinancing, but it has not yet resolved whether the Act covers a mortgage loan

servicer. Logan v. LaSalle Bank Nat’l Ass’n,

(D.C. 2013). Other courts in this

District “have found that the [CPPA] applies to many aspects of the mortgage industry.”

McFadden I,

, at *11 & n.13 (collecting cases). Under the plain terms of the

CPPA, Select Portfolio acts as a merchant because it provides consumer services that are “part[]

of the economic output of society.” The homeowners allege that Select Portfolio performs services

in connection with the property they own, including customer service obligations and other

obligations assumed by the lenders. ECF No. 16 ¶¶ 28, 44. Similarly, in McFadden I, the complaint

adequately alleged a consumer-merchant relationship by identifying multiple examples of services

the defendant provided, including “paying taxes and insurance from escrow accounts, modifying

mortgages, and property preservation.”

, at *12. The complaint also alleged that

the defendant’s role as a mortgage servicer was “a stand-alone consumer service that [the

defendant] operated to generate substantial revenue,” which was “another marker that this was

7 indeed a consumer service that was ‘part[] of the economic output of society.’”

(alteration in

original) (quoting

(a)(7)). 3

This case is therefore distinct from Select Portfolio’s authorities concluding that conduct

did not fall within the CPPA’s ambit because the defendant did not provide services to consumers

directly. See, e.g., Baylor v. Mitchell Rubenstein & Assocs., P.C.,

(D.C. Cir.

2017) (finding that conduct did not fall under CPPA where the defendant was a debt collector

“attempting to recoup funds on behalf of a creditor who did not itself provide [the plaintiff] with

any credit”). The amended complaint plausibly alleges that Select Portfolio provides services to

borrowers and thus is a merchant within the meaning of the CPPA. That is especially true given

the “broad remedial purposes” of the Act, which “defines its terms comprehensively in keeping

with the purpose to ‘assure that a just mechanism exists to remedy all improper trade practices.’”

DeBerry v. First Gov’t Mortg. & Invs. Corp.,

(D.C. 1999) (quoting

(b)(1)).

Select Portfolio argues that this is inconsistent with another decision of this District, Busby

v. Capital One, N.A.,

(D.D.C. 2011), which concluded the plaintiff’s pleadings

had not alleged the defendant loan servicer was a merchant under the CPPA.

at 279–80. But

Busby undertook the same inquiry—there, the plaintiff had “identified no goods or services she

purchased or received from [the defendant].”

; see also

at 279–80 (“[T]he amended

3 Select Portfolio insists that the court reached this conclusion in McFadden because the defendant was both the mortgage lender and servicer, whereas here Select Portfolio is only the servicer. ECF No. 30 at 3. But the court made clear that “mortgage servicers are merchants.” McFadden I,

, at *11 (capitalization omitted). The court concluded the defendant was a merchant “as a lender and as a servicer” and, accordingly, found it necessary to reject the defendant’s argument “that a mortgage-loan servicer can never be a merchant.” Id. at *12; see also id. at *12 n.14 (discussing nonbinding authorities that “provide applicable support for treating mortgage-loan servicers as merchants”).

8 complaint contains no factual allegations whatsoever indicating the existence of a consumer-

merchant relationship between the plaintiff and either defendant.”). Select Portfolio is incorrect

insofar as it suggests that “poor pleading” in Busby resulted in “a categorical ruling that a

mortgage-loan servicer can never be a merchant.” McFadden I,

, at *12. And,

in contrast to Busby, here the homeowners have specifically alleged Select Portfolio provides

services to consumers to make it a merchant under the CPPA.

Select Portfolio’s second basis for judgment in its favor on the CPPA claims—that the

homeowners allege no conduct violating the CPPA—is also unpersuasive. The D.C. Court of

Appeals has explained a merchant’s conduct “is a violation of the CPPA if the merchant

‘misrepresented’ or ‘failed to state’ a material fact.” Frankeny v. Dist. Hosp. Partners, LP,

, 1005 (D.C. 2020). And a misrepresentation or omission is material “if a reasonable

person ‘would attach importance to its existence or nonexistence in determining his or her choice

of action in the transaction’ or ‘the maker of the representation knows or has reason to know’ that

the recipient likely ‘regard[s] the matter as important in determining his or her choice of action.’”

(alteration in original) (quoting Saucier v. Countrywide Home Loans,

(D.C.

2013)). 4

4 Select Portfolio suggests the heightened Rule 9(b) pleading standard for fraud claims applies here. ECF No. 28-1 at 7. Several courts in this District have held otherwise, and this Court agrees. See, e.g., McMullen v. Synchrony Bank,

(D.D.C. 2016) (explaining that “imposing the particularized pleading requirements of Rule 9(b) on [CPPA] claims would undermine the statute’s purpose”); Campbell v. Nat’l Union Fire Ins. Co. of Pittsburgh,

(D.D.C. 2015) (declining to hold plaintiff’s CPPA claim to pleading requirements for fraud); see also Fort Lincoln Civic Ass’n, Inc. v. Fort Lincoln New Town Corp.,

, 1073 n.20 (D.C. 2008) (observing that state consumer protection statutes were “intended to overcome the pleadings problem associated with common law fraud claims by eliminating the requirement of proving certain elements such as intent to deceive and scienter”).

9 The homeowners have sufficiently alleged that Select Portfolio’s practice of charging pay-

to-pay fees is unfair and deceptive. This includes allegations that, at most, the mortgages authorize

Select Portfolio to pass along actual costs incurred to borrowers. ECF No. 16 ¶¶ 42–43. Instead,

Select Portfolio misleads borrowers by charging a “fee” of up to $15 for the purpose of processing

a payment when the cost of processing is, in fact, little to nothing—and there is no benefit to

consumers in return, since Select Portfolio, like other loan servicers, could offer the option to pay

by phone or online for convenience, free of charge.

¶¶ 47–52. And the amended complaint

alleges that charging borrowers—who have no choice as to their loan servicer—in this way allows

Select Portfolio to unfairly collect fees that “can add up to hundreds of dollars over the life of a

single loan.” Id. ¶¶ 50, 53–54. The homeowners have thus alleged that Select Portfolio’s practices

are unfair and deceptive in violation of the CPPA. See Frankeny, 225 A.3d at 1005; McFadden I,

, at *12–13 (concluding that complaint plausibly alleged pay-to-pay fees were

misleading where defendant represented to borrowers it had the right to collect such fees, even

though it did not, and defendant never disclosed to borrowers that it had created an unfair profit

center for itself); McFadden II,

, at *17 (affirming that conclusion); see also,

e.g., DeSimone, 748 F. Supp. 3d at 168 (concluding under New York law that plaintiff sufficiently

alleged deceptive statement based on Select Portfolio’s representation that it was permitted to

impose pay-to-pay fees).

Select Portfolio argues that the homeowners have not identified any misrepresentation or

omission that is material because they have not shown they would have done anything differently

absent the misrepresentation or omission. ECF No. 28-1 at 23. But as discussed above, the D.C.

Court of Appeals’ controlling interpretation of the statute requires only that “a reasonable person

would attach importance to [the misrepresentation or omission’s] existence or nonexistence in

10 determining his or her choice of action” or that Select Portfolio knew or should have known that

someone paying the fee would likely “regard[] the matter as important in determining his or her

choice of action.” Frankeny, 225 A.3d at 1005 (internal quotation marks and citation omitted).

That court has rejected prior attempts to require more burdensome showings under the text of the

CPPA. See, e.g., id. at 1004 (explaining that “in light of the plain language and the legislative

intent of the CPPA, a consumer need not allege intentional misrepresentation of a material fact or

an intentional failure to disclose a material fact under

(e) and (f)”). Here, the

homeowners have alleged that failure to disclose that the unlawful fee provides hundreds of dollars

in profits over the course of a loan, rather than covering processing, was misleading, and the Court

finds no basis to go further and require the homeowners to include a specific allegation of “how

they would have acted differently.” McFadden II,

, at *17 (citation omitted).

The question whether Select Portfolio’s representations to borrowers “were actually material and

tended to mislead” is for a jury. McFadden I,

, at *12 (quoting Fort Lincoln

Civic Ass’n, Inc. v. Fort Lincoln New Town Corp.,

(D.C. 2008)). 5

Select Portfolio also argues that the pay-to-pay fees cannot be unfair or deceptive as a

matter of law because they are authorized by the terms of the homeowners’ mortgage agreements

5 Select Portfolio maintains that the homeowners’ CPPA claims improperly allege “unfairness” without specifying a particular provision of

. ECF No. 28-1 at 32. But the CPPA’s purpose is to “assure that a just mechanism exists to remedy all improper trade practices.”

(b)(1); see also Atwater v. D.C. Dep’t of Consumer & Regul. Affs.,

(D.C. 1989) (“Although § 28-3904 makes a host of consumer trade practices unlawful, its list of such practices was not designed to be exclusive. The remainder of the statute obviously contemplates that procedures and sanctions provided by the Act will be used to enforce trade practices made unlawful by other statutes.”). And some courts have declined to dismiss standalone CPPA claims. See Hettinger v. Bozzuto Mgmt. Co., No. 23-cv-3687,

, at *8 (D.D.C. Apr. 26, 2024) (allowing CPPA catch-all claim to proceed, though noting that defendant “does not separately address this unfairness challenge”). The Court thus is not convinced at this stage that Select Portfolio is entitled to judgment on the pleadings for the CPPA claim alleging unfairness.

11 and a consent decree in another federal case. ECF No. 28-1 at 24–29. As to the mortgage

agreements, Select Portfolio relies on two provisions. First, it points to language addressing “Loan

Charges,” which states that the lender may charge fees related to a default, including attorney fees

and property inspection and valuation fees, and that “[i]n regard to any other fees, the absence of

express authority in this Security Instrument to charge a specific fee to Borrower shall not be

construed as a prohibition on the charging of such fee.” ECF No. 16-3 ¶ 14; see ECF No. 28-1 at

24–26. Second, Select Portfolio relies on language addressing “Governing Law,” which states that

“Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be

silent, but such silence shall not be construed as a prohibition against agreement by contract.” ECF

No. 16-3 ¶ 16; see ECF No. 28-1 at 26–28. According to Select Portfolio, these provisions both

authorize the charging of pay-to-pay fees. ECF No. 28-1 at 28.

But the quoted language does not do that. The agreements’ language expressly authorizes

certain fees, but not pay-to-pay fees. The statement that fees not mentioned may nonetheless be

permitted merely begs the question whether those fees are lawful. Indeed, the very next sentence

states that the lender “may not charge fees that are expressly prohibited by . . . Applicable Law.”

ECF No. 16-3 ¶ 14; see also McFadden I,

, at *4 (noting, in concluding that

pay-to-pay fees were not permitted by another statute, that certain fees are specifically authorized

and that the defendant “should have added convenience fees to this list of expressly permitted fees

if it wanted to charge them”). Similarly, the provision addressing governing law says nothing to

indicate pay-to-pay fees are authorized. And to the extent Select Portfolio suggests the fees are a

permissible separate agreement, courts have “reject[ed] arguments that Pay-to-Pay fees constitute

a separate agreement between the lender and borrower and are independent of the underlying

debt.” Langston v. Gateway Mortg. Grp., LLC, No. 20-cv-01902,

, at *2 (C.D.

12 Cal. Jan. 15, 2021); see also McFadden I,

, at *10 n.10 (“Permitting an entity

to claim the existence of a separate contract any time it charged a new, related fee would effectively

gut the fee protections provided by the mortgage agreement and consumer protection laws . . . .”).

The homeowners’ claims are premised on illegality of the pay-to-pay fees, and Select Portfolio

does not identify anything in the agreements that addresses their legality. 6

Nor does the federal consent decree that Select Portfolio identifies authorize the pay-to-

pay fees. ECF No. 28-1 at 28–29. More than two decades ago, the government brought claims

against Select Portfolio’s predecessor regarding certain servicing practices. ECF No. 28-9; see

ECF No. 28-1 at 29 n.19. Relevant here, the court’s consent order in that case provides that Select

Portfolio is

permanently restrained and enjoined, in connection with the servicing of any loan, from assessing and/or collecting any fee unless it is for services actually rendered and is . . . a reasonable fee for a specific service requested by a consumer that is assessed and/or collected only after clear and conspicuous disclosure of the fee is provided to the consumer and explicit consent is obtained from the consumer to pay the fee in exchange for the service, and such fee is not otherwise prohibited by law or the loan instruments.

ECF No. 28-9 at 10. According to Select Portfolio, this language authorizes the pay-to-pay fees.

ECF No. 28-1 at 29. But nothing in this language—that Select Portfolio is restrained and enjoined

from collecting fees for services not actually rendered, required to provide clear and conspicuous

disclosure and obtain consent, and cannot charge fees prohibited by law—purports to authorize

Select Portfolio to charge allegedly unlawful and misleading pay-to-pay fees. Indeed, that would

6 Select Portfolio relies on cases interpreting similar provisions and concluding that charging pay-to-pay fees is insufficient to show breach of contract. ECF No. 28-1 at 25–26. This case involves claims of unfair and deceptive practices in violation of the CPPA, not breach of contract claims. Moreover, for the reasons stated, the Court does not find that the provisions here provide any basis to conclude that pay-to-pay fees are authorized if they are otherwise unlawful.

13 turn the purpose of the consent order, which enjoined Select Portfolio from collecting certain fees

and failing to disclose information, on its head.

Select Portfolio has accordingly failed to show it is entitled to judgment on the

homeowners’ CPPA claims.

C. Select Portfolio Has Not Shown It Is Entitled To Judgment On The Homeowners’ MLBA Claims

Select Portfolio argues that the homeowners’ MLBA claims fail because the statute does

not provide a private cause of action and, even if it did, the homeowners do not allege Select

Portfolio engaged in conduct that violates the MLBA. The Court, again, disagrees.

The MLBA makes it illegal for a mortgage lender, including anyone who services

mortgage loans, to “[e]ngage in any unfair or deceptive practice toward any person.”

(d)(2); see

§ 26-1101(8), (11). Although the D.C. Court of Appeals has yet to resolve

the issue, this Court agrees with a recent D.C. Superior Court decision concluding that the MLBA

allows a private cause of action. See Order, Swann v. Caliber Home Loans, Inc., No. 2022-CA-

4127-B, at 7–8 (D.C. Super. Ct. June 16, 2025); see also Rivera v. JPMorgan Chase Bank, N.A.,

No. 23-cv-00225,

, at *6 n.3 (D.D.C. Sept. 26, 2023) (noting that “[n]either any

District of Columbia court nor any federal court appears to have considered whether the MLBA

permits a private cause of action” (alteration in original) (quoting Mushala v. U.S. Bank, Nat’l

Ass’n, No. 18-cv-1680,

, at *9 n.10 (D.D.C. Mar. 29, 2019))). 7

Under District law, courts consider three factors to determine whether a statute creates a

private right of action: (1) whether the plaintiff is “one of the class for whose especial benefit the

7 The homeowners suggest the D.C. Court of Appeals has resolved the issue already because it has allowed MLBA claims to proceed. ECF No. 29 at 21; see Logan,

(finding that certain allegations made out an MLBA claim and remanding to trial court). But the Logan court did not discuss the question whether the MLBA provides a private right of action.

14 statute was enacted”; (2) whether there is “any indication of legislative intent, explicit or implicit,

either to create such a remedy or to deny one”; and (3) whether it is “consistent with the underlying

purposes of the legislative scheme to imply such a remedy for the plaintiff.” Gebretsadike v.

District of Columbia, No. 22-cv-1951,

, at *11 (D.D.C. Mar. 30, 2023) (quoting

In re D.G.,

, 166 (D.C. 1990)). “The ultimate issue is whether the legislature intended

to create a particular cause of action, because unless such [legislative] intent can be inferred from

the language of the statute, the statutory structure, or some other source, the essential predicate for

implication of a private remedy simply does not exist.” Coates v. Elzie,

(D.C.

2001) (alteration in original) (internal quotation marks and citation omitted).

Here, all three factors are satisfied. First, the homeowners are within the class for whose

benefit the MLBA was enacted. The homeowners are borrowers of mortgage loans. The MLBA

aims to protect borrowers by prohibiting mortgage lenders and servicers from defrauding or

misleading borrowers and engaging in deceptive practices. See, e.g.,

(d)(1)

(making it unlawful for a servicer to “[d]irectly or indirectly employ any scheme, device, or artifice

to defraud or mislead borrowers”).

Second, the statute indicates a legislative intent to provide a cause of action. Section 26-

1118(e) of the MLBA provides: “Nothing in this chapter shall be construed to preclude any

individual or entity who suffers loss as a result of any violation of this chapter from maintaining

an action to recover damages or restitution and, as provided by statute, attorney’s fees.”

(e). The statute thus contemplates that individuals who are harmed by violations of the

statute may “maintain[] an action.” Select Portfolio insists this language merely preserves the right

to bring claims under other statutes, not under the MLBA itself. ECF No. 28-1 at 9–10. But the

15 provision in question does not mention other statutes—it mentions individuals who suffer losses

based on violations of “this chapter.”

Select Portfolio’s reliance on Williams v. Equity Holding Corp.,

(E.D.

Va. 2007), is misplaced for similar reasons. ECF No. 28-1 at 10. There, the court analyzed

Virginia’s version of the MLBA, which provided: “Nothing in this article shall be construed to

preclude any individual or entity who suffers loss as a result of a violation of Articles 3 (§ 6.1-

330.53 et seq.) through 12 (§ 6.1-330.80 et seq.) of Chapter 7.3 of this title from maintaining an

action to recover damages or restitution and, as provided by statute, attorney’s fees.” Williams,

498 F. Supp. 2d at 846–47 (citation omitted). The court held the provision did not create a private

cause of action; instead, the provision made clear the statute did not preclude any individual who

suffered loss based on violations of the other statutes from suing. Id. at 847. But in the D.C. MLBA,

as noted above, there are no other statutes enumerated in the relevant provision, which mentions

only “this chapter.” 8

Third, an implied cause of action is consistent with the purposes of the statutory scheme.

As noted above, the purpose of the MLBA is to protect mortgage borrowers from unfair and

deceptive practices. A private right of action furthers that purpose by allowing borrowers to

enforce the protections afforded to them by the statute. Select Portfolio maintains that the

legislature did not intend to create a private right of action for damages because the MLBA

provides for administrative enforcement mechanisms and penalties, such as suspension of licenses.

ECF No. 28-1 at 11–13. To be sure, the MLBA provides that certain D.C. officials may suspend

8 Select Portfolio also argues implying a cause of action would render the phrase “as provided by statute” superfluous because section 26-1118(e) itself does not provide for attorney fees. ECF No. 28-1 at 10. But other provisions of the MLBA, such as section 26-1113(b)(3), do provide for attorney fees. So the language simply means what it says: plaintiffs can recover attorney fees where permitted by statute.

16 or revoke licenses for violations of the statute, may issue orders against any licensee, and may seek

to enforce those orders in court. See

(a)–(c). But in addition to those

mechanisms of enforcement, the statute also makes clear that individuals who suffer losses from

violations may “maintain[] an action to recover damages or restitution and, as provided by statute,

attorney’s fees.”

§ 26-1118(e). The statute thus permits private enforcement and is not limited

to administrative remedies.

Select Portfolio also notes that the MLBA creates an express private right of action in

another section. ECF No. 28-1 at 13–14; see

(b)(3) (“A borrower aggrieved

by any violation of this section shall be entitled to bring a civil suit for damages, including

reasonable attorney’s fees, against the lender.”). Select Portfolio relies on Bynum v. Equitable

Mortgage Group, No. 99-cv-2266,

(D.D.C. Apr. 7, 2005), to argue that the

inclusion of a cause of action in that section means the legislature did not intend to create a cause

of action in section 26-1118(e). ECF No. 28-1 at 13–14. But the Bynum court simply held that the

express mention of a remedy against lenders meant the plaintiff could not bring an action against

a broker.

, at *17. The court did not hold that section 26-1118(e) does not create

a cause of action; in fact, it stated that section 26-1118(e) “provides individuals are not precluded

from bringing actions to recover for violations.”

The Court accordingly concludes the

homeowners have a cause of action under the MLBA.

Turning to the merits, the homeowners have sufficiently asserted violations of the MLBA.

The homeowners allege Select Portfolio misled borrowers by charging fees that were not

authorized by the mortgage agreements. ECF No. 16 ¶ 105. The homeowners also assert Select

Portfolio engaged in a deceptive practice by failing to disclose that its costs to process payments

are well below the amount of fees it charges. Id. ¶ 106. The homeowners have sufficiently alleged

17 Select Portfolio’s practices are misleading and unfair or deceptive under the MLBA for the same

reasons discussed above with respect to the CPPA. See McFadden I,

, at *10

(holding that allegations regarding repeated assessment of improper fees and failure to disclose

costs to process third-party transactions made out an MLBA claim); McFadden II,

, at *15 (same). 9

The homeowners also allege Select Portfolio’s fees are not “reasonable” under the MLBA.

ECF No. 16 ¶ 107. An MLBA regulation authorizes fees “that are reasonable and for services

actually performed by the licensee or a third party providing services on behalf of the licensee.”

D.C. Mun. Regs. tit. 26-C, § 1118.2. The homeowners allege Select Portfolio violated this

regulation by charging unreasonable fees that do not correlate with an actual service rendered by

Select Portfolio. ECF No. 16 ¶ 107. Select Portfolio insists that this allegation is insufficient and

that the fees are charged in exchange for Select Portfolio’s agreement to accept payments by phone

or online. ECF No. 28-1 at 29–32. But the homeowners have alleged that the fees are unreasonable

because they dramatically exceed the cost to Select Portfolio to accept payments by phone or

online, and that the fees are thus “for” Select Portfolio’s profit margins rather than for any services

rendered. ECF No. 16 ¶¶ 50, 53, 107. So the Court cannot conclude that this claim fails on the

pleadings as a matter of law.

9 Select Portfolio’s arguments that the fees are authorized by the mortgage agreements and the consent order fail with respect to the MLBA claims for the same reasons already explained.

18 III. Conclusion

For these reasons, Select Portfolio’s motion for judgment on the pleadings, ECF No. 28, is

denied. The parties are directed to meet, confer, and file a joint status report by September 24,

2025, proposing a schedule for next steps in this matter.

AMIR H. ALI United States District Judge

Date: September 10, 2025

19