Maine Federal Court Rejects Emotional Distress Claims in Mortgage Foreclosure

On January 10, the U.S. District Court for the District of Maine held that a plaintiff could not state a cause of action for either negligent or intentional infliction of emotional distress against a servicer or trustee in a mortgage foreclosure action. James v. GMAC Mortg. LLC, No. 2.09-cv-84 (D. Me. Jan. 10, 2011). In James, the mortgage originator allegedly understated the amount that the borrower owed on his mortgage payments by $32 per month in the required federal disclosure forms. Over a year later, the loan servicer notified the borrower that his loan was in default. Although the borrower tendered a check to remedy the default, the check lacked any information to identify the borrower or the loan, and the servicer returned the check and foreclosed on the mortgage. The magistrate judge rejected the borrower’s argument that the relationship between a homeowner and a mortgagor or servicer is a "special relationship" that could form the basis of a negligent infliction of emotional distress claim. The court also held that a minor error in the required mortgage payments, failure to cash a check that lacked identifying information, actual foreclosure, and force placing insurance were not "so extreme and outrageous as to exceed all possible bounds of decency" and that these actions could not sustain a claim for intentional infliction of emotional distress.