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Beale v. Ocwen Loan Servicing, LLC

United States District Court, N.D. Alabama, Western Division

June 17, 2015

ELBERT L. BEALE, et al., Plaintiffs;
v.
OCWEN LOAN SERVICING, LLC, Defendant.

MEMORANDUM OF OPINION AND ORDER

L. SCOTT COOGLER, District Judge.

Before the Court is Defendant Ocwen Loan Servicing, LLC's ("Ocwen") motion to dismiss. (Doc. 4.) The motion has been fully briefed and is ripe for review. As further discussed below, the motion to dismiss is due to be granted in part and denied in part.

I. Facts[1]

Plaintiffs Elbert and Patricia Beale ("the Beales") executed a mortgage on their home, which Ocwen then began servicing on or around June of 2013. The Beale's were current on their loan when Ocwen began servicing it. However, after they began servicing the loan, Ocwen failed to properly and timely credit payments to the Beales' account, miscalculated the amounts due on the account, and incorrectly told the Beale's that they were behind on their payments.

On December 5, 2013, the Beales sent a payment by check to Ocwen but Ocwen informed the Beales that the payment had not been received. An Ocwen representative told them to cancel the check and pay over the phone instead, or the payment would be considered late and the Beales would be charged an appropriate fee. The Beales allowed Ocwen to debit their checking account directly and then canceled the check. Regardless, Ocwen later charged a check cancellation fee, despite telling the Beales that cancelling the check payment would avoid such a fee.

On November 14, 2014, the Beales sent Ocwen a "Qualified Written Request" under 12 U.S.C. ยง 2605(e) of the Real Estate Settlement Procedures Act ("RESPA"), asking Ocwen to correct "certain errors." (Doc. 1-1 at 10.) Ocwen responded to the request on January 5, 2015, but did not make any corrections to the Beales' account. In addition, Ocwen continued to represent to the Beales that they were behind on their payments, sent multiple notices of default to the Beales, threatened to foreclose on their home, and improperly charged the Beales various fees and penalties.

II. Standard of Review

Rule 8(a) of the Federal Rules of Civil Procedure requires a pleading to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). "Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678-679 (2009). Instead, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face." Id. at 678 (internal quotations omitted). This is a notable departure from the "no set of facts" standard; the Supreme Court has stated that standard is "best forgotten as an incomplete, negative gloss on an accepted pleading standard: once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Bell Atl. Corp v. Twombly, 550 U.S. 544, 563 (2007).

Iqbal establishes a two-step process for evaluating a complaint. First, the Court must "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 679. A complaint is not sufficient "if it tenders naked assertion[s]' devoid of further factual enhancement.'" Id. at 678 (quoting Twombly, 550 U.S. at 555 (2007)). Second, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. Factual allegations in a complaint need not be detailed, but they "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).[2]

III. Analysis

The Beale's complaint consists of seven counts. Count I alleges a breach of contract against Ocwen. Count II alleges a RESPA violation by Ocwen. Count III alleges negligence by Ocwen in the handling of the Beales' loan, while Count IV alleges wantonness. Count V alleges negligent and/or wanton hiring, training, supervision, and/or instruction by Ocwen. Count VI alleges fraudulent misrepresentation, while Count VII alleges defamation. Ocwen has moved to dismiss all of these counts. Each will be addressed in turn.

A. Count I - Breach of Contract

The elements of a breach of contract claim under Alabama law are "(1) a valid contract binding the parties; (2) the plaintiffs' performance under the contract; (3) the defendant's nonperformance; and (4) resulting damages." Reynolds Metals Co. v. Hill, 825 So.2d 100, 105 (Ala. 2002).

Count I of the Beales' complaint simply states that "a contract existed between the Beales and the Defendants, " Ocwen breached the contract, and that the Beales were damaged as a result of the breach. The complaint fails to provide any facts detailing what contract existed between the Beales and the Defendants, and in what way Ocwen did not perform ...


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