United States District Court, S.D. Alabama, Southern Division
For Aaron Lee James, Sr., Willie Mae James, Plaintiffs: Kenneth J. Riemer, LEAD ATTORNEY, Mobile, AL.
For Nationstar Mortgage, LLC, Federal National Mortgage Association, Defendants: Gregory C. Cook, LEAD ATTORNEY, Balch & Bingham, Birmingham, AL; Griffin Lane Knight, LEAD ATTORNEY, Balch & Bingham, Montgomery, AL; John Wesley Naramore, Balch & Bingham LLP, Montgomery, AL.
WILLIAM H. STEELE, CHIEF
UNITED STATES DISTRICT JUDGE
This matter comes before the Court on defendants' Motion to Dismiss (doc. 8). The Motion has been briefed and is now ripe.
Plaintiffs, Aaron Lee James, Sr. and Willie Mae James (collectively, the " Jameses" ), brought this action against Nationstar Mortgage, LLC (" Nationstar" ) and Federal National Mortgage Association (" FNMA" ). Although the Complaint spans 17 pages, the gist of it is straightforward, to-wit: the Jameses contend that defendants failed to credit their mortgage payments properly, setting off a chain of events culminating in cascading violations of federal consumer protection statutes.
The Complaint's well-pleaded factual allegations (which are accepted as true on Rule 12(b)(6) review) reflect that the Jameses entered into a home mortgage loan (the " Loan" ) with nonparty Homecomings Financial Network Inc. in September 2004, with the Loan secured by the James' longstanding residence. (Doc. 1, ¶ 6.) Servicing rights on the Loan were transferred to Nationstar in January 2009, at which time the Loan was deemed to be in default. ( Id., ¶ 8.) When Mr. James filed a Chapter 13 bankruptcy petition in June 2011, Nationstar filed a proof of claim pursuant to which more than $20,000 of pre- and post-petition arrearage ( i.e., unpaid loan payments and fees) were placed in his bankruptcy plan and ultimately paid through the bankruptcy trustee. ( Id., ¶ ¶ 9-11.) The Complaint alleges that the arrearage has been paid in full, and that the Jameses simultaneously continued to make regular monthly payments on the Loan. ( Id., ¶ ¶ 11, 13.)
The problems giving rise to this lawsuit began on November 22, 2013, when Nationstar sent a letter to Mr. James stating incorrectly, " You have not made payments on your loan since 12/01/2012." (Doc. 1, ¶ 14.) The November 22 letter concluded with Nationstar threatening to initiate foreclosure proceedings unless the Jameses immediately paid a nearly $12,000 arrearage. ( Id.) The Complaint alleges that the letter's statements alleging nonpayment and arrearage " were false and Nationstar knew they were false" because its own records confirmed that the Jameses
had made 28 regular payments on the Loan since December 2012. ( Id., ¶ 15.) The Complaint also alleges that Nationstar sent the November 22 letter directly to Mr. James, despite knowledge that he was represented by counsel. ( Id., ¶ 16.) The letter caused the Jameses to undergo " extreme stress, worry and fear of losing their home." ( Id., ¶ 17.)
Follow-up communications by Mr. James proved ineffectual, as Nationstar persisted in its incorrect assertion that the Jameses had made no Loan payments in nearly a year. ( Id., ¶ ¶ 18, 26.) On January 16, 2014, Mr. James wrote to Nationstar disputing the company's representations in the November 22 letter and requesting specific information concerning his account and the servicing of the Loan. ( Id., ¶ 19.) Nationstar's reply was nonresponsive in multiple respects, contained formulaic and irrelevant objections, failed to provide requested information and documentation, and did not correct the servicing error that Mr. James had pointed out, even though Nationstar's own payment history information conclusively established the error of its November 22 letter. ( Id., ¶ ¶ 21-27.) Northstar compounded these defects by refusing to credit certain April 2014 payments to the Loan, and by reporting false and derogatory information about the Jameses to consumer reporting agencies. ( Id., ¶ ¶ 30-31.)
On the strength of these and other factual allegations, plaintiffs assert six causes of action in their Complaint, to-wit: (i) breach of mortgage and note against both defendants; (ii) multiple violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § § 2601 et seq. (" RESPA" ), against defendant Nationstar; (iii) multiple violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (" FDCPA" ), against defendant Nationstar; (iv) violation of the Truth in Lending Act, 15 U.S.C. § § 1601 et seq. (" TILA" ), against defendant FNMA; and (v) negligence and wantonness against both defendants. Defendants have moved pursuant to Rule 12(b)(6), Fed.R.Civ.P., for dismissal of one subpart of the FDCPA claim, the entire TILA claim, and the state-law negligence / wantonness claims, all for failure to state a claim upon which relief can be granted. Plaintiffs oppose the Rule 12(b)(6) Motion.
A. Legal Standard.
Defendants' Motion asserts that portions of the Complaint fail to state claims upon which relief can be granted, and therefore is properly analyzed under Rule 12(b)(6), Fed.R.Civ.P. To withstand Rule 12(b)(6) scrutiny and comply with the minimum pleading requirements of Rule 8(a), a plaintiff must plead " enough facts to state a claim to relief that is plausible on its face," so as to " nudge[ ][its] claims across the line from conceivable to plausible." Be ...