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Rentz v. J.P. Morgan Chase Bank N.A.

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

April 13, 2017

JAMES E. RENTZ, Plaintiff,
J.P. MORGAN CHASE BANK, N.A., Defendant.


         This case is before the court on defendant's motion to dismiss plaintiff's Second Amended Complaint.[1] Federal Rule of Civil Procedure 12(b) permits a party to move to dismiss a complaint for, among other reasons, “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). This rule must be read together with Rule 8(a), which requires that a pleading contain only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). While that pleading standard does not require “detailed factual allegations, ” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 550 (2007), it does demand “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted). As the Supreme Court stated in Iqbal:

A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” [Twombly, 550 U.S., at 555]. Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.” Id., at 557.
To survive a motion to dismiss founded upon Federal Rule of Civil Procedure 12(b)(6), [for failure to state a claim upon which relief can be granted], a complaint must contain sufficient factual matter, accepted as true, to “state a claim for relief that is plausible on its face.” Id., at 570. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id., at 556. The plausibility standard is not akin to a “probability requirement, ” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.'” Id., at 557 (brackets omitted).
Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id., at 555 (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we “are not bound to accept as true a legal conclusion couched as a factual allegation” (internal quotation marks omitted)). 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. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. 490 F.3d, at 157-158. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not “show[n]” - “that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2).
In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When 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.

Iqbal, 556 U.S. at 678-79 (emphasis supplied, second and fourth alterations in original, other alterations supplied).


         Plaintiff, James E. Rentz, is a retired veteran of the United States military.[2]Plaintiff and his then-wife, Elaine Josephine Rentz, entered into a Deed of Trust on real property they owned in Bell County, Texas (“the Bell County property”), in favor of McAfee Mortgage Corporation, on April 30, 2001.[3] Mr. and Mrs. Rentz satisfied their obligations under the Deed of Trust through July 6, 2005, when they divorced. The July 6, 2005 divorce decree provided that the Bell County property would be conveyed to Mrs. Rentz, subject to the outstanding obligation to McAfee Mortgage.[4]The divorce decree also required Mrs. Rentz “to liquidate any and all outstanding sums due under the Deed of Trust outstanding at the time of the entry of the Court's decree . . . .”[5] Even so, Mr. Rentz “was not relieved of any obligation of debt on the subject property.”[6] Pursuant to the divorce decree, Mr. Rentz executed a Special Warranty Deed on October 14, 2005, transferring all of his right, title, and interest in and to the Bell County property to Mrs. Rentz.[7]

         On some unspecified date after October 14, 2005, McAfee Mortgage Corporation assigned its interest in the Deed of Trust securing the Bell County property to Washington Mutual.[8] On June 4, 2008, agents of Washington Mutual procured a “false affidavit of Military Status representing that Rentz was not an active duty member of the United States military.”[9] In fact, plaintiff served as an active duty member of the United States military until May 31, 2010, when he retired.[10]

         On some unspecified date, Mrs. Rentz defaulted on the obligation secured by the Deed of Trust.[11] On another unspecified date, she entered into a loan modification agreement with defendant JP Morgan Chase Bank, NA (“Chase”).[12] Plaintiff did not receive notice of the loan modification agreement, or of any action for foreclosure under the Deed of Trust, and no court order was entered to allow a foreclosure to proceed against plaintiff.[13] Even so, plaintiff does not allege that any foreclosure actually occurred.

         Plaintiff alleges that he “has received false and incorrect Form 1099's issued by Chase, to he [sic] and his former wife, Josie, for [calendar] years 2012, 2013, 2014, 2015 and has every expectation of receiving a similar 1099 for 2016.”[14] Additionally, plaintiff states that:

22. On or about March 12, 2012, the United States of America, by and through the United States Justice Department and 50 American States, filed an action against several Defendants for misconduct in their origination and servicing of single-family residential mortgages [United States, et al. v. Bank of America Corp., et al., No. 12-CV-361 (D. D.C. March 12, 2012)]. Said claims were asserted against these companies, which included JP Morgan Chase and Company and JP Morgan Chase Bank N.A. This misconduct alleged violations of numerous Federal statutes including but not limited to wrongful conduct related to foreclosures as well as violations of the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. app. § 501-597(b), [15] which included Defendant's failing to determine consistently and accurately the military status of borrowers in foreclosure, which resulted in a pattern and practice of violating servicemembers['] rights under the SCRA, including but not limited to:
(a) foreclosure upon mortgage without required court orders on properties that were owned by servicemembers who, at the time, were on military service or otherwise protected by the SCRA.
(b) failing to file accurate affidavits stating that servicemembers who had not entered an appearance in a civil action involving a foreclosure, were at the time in military service or otherwise protected by SCRA, in violation of 50 U.S.C. app. § 521[16] as well as other claims of SCRA violations. Said assertions alleged that the Defendant institutions had made no waiver of rights under a separate agreement as provided for by SCRA 50 U.S.C. app. § 527, [17] and further that servicemembers affected by such wrongful conduct suffered damages and are aggrieved persons under SCRA 50 U.S.C. app. § 517.[18] Said conduct [was] in violation and disregard of the rights of the affected servicemembers.
23. Under SCRA § 519, [19] a servicemember may be represented by an attorney acting on his behalf for purposes of the act and said act provided numerous protections of service members.
24. On or about April 4, 2012, named Defendants, including JP Morgan Chase and Company and JP Morgan Chase Bank, N.A., collectively as Defendants, entered into a consent agreement with the United States of America and the various attorney generals of the United States of America, consenting to a disposition of the issues raised in the Complaint, without trial or adjudication of any issue of law or fact and waived any appeal to the consent judgment entered and submitted by the parties. Under the terms of said agreement, Defendants agreed to make financial payments to the Plaintiffs and direct payments on behalf of certain identified consumers from funds that were escrowed for the purpose of the settlement agreement, including the sum of 1 billion, one hundred twenty-one million, one hundred eight-eight thousand, six hundred and sixty-one dollars ($1, 121, 188, 661.00) as well as payments to foreclosed borrowers in the amount of one billion, four hundred eighty-nine million, eight hundred thirteen thousand, nine hundred and twenty-five dollars ($1, 489, 813, 925.00) to allow a named administrator to make cash payments to borrowers who[se] homes were sold or taken in foreclosure during the period of January 1, 2008 through December 31, 2011. Further requirements included the sum of three billion, six hundred seventy-five million, four hundred thousand dollars ($3, 675, 400, 000.00) in relief to consumers who met the eligibility criteria described under the terms and exhibits of the consent settlement and five hundred and thirty-seven million dollars ($537, 000, 000.00) in refinancing relief to consumers who met eligibility requirements in the forms and amounts described in Paragraph 9 of Exhibit D of the consent settlement.
25. The consent settlement agreement further provided that no cash payment or modification would be considered forgiveness of debt and therefore have no taxable effect upon the borrower.

Doc. no. 17 (Second Amended Complaint), at ¶¶ 22-25 (alterations supplied).

         Plaintiff alleges that he “had no knowledge of the conduct of the Defendant and his former spouse, did not consent to said conduct, and has been damaged as a result thereof.”[20] Additionally, plaintiff “has made numerous inquiries of the Defendant, in an effort to obtain information surrounding the issuance of the 1099s by the Defendant and the Defendant has consistently refused to respond or explain the action of the parties arising from the modification agreement executed on or about December 3, 2012.”[21] Finally, plaintiff alleges that he

has received no documentation, communication or further explanation of the conduct of the parties and has been shown each year through the filings of the Defendant, to be receiving substantial compensation, both in violation of the consent agreement entered into in the previously referenced cause of action as well as incorrectly reflecting benefit to the Plaintiff for which he has been annually charged a taxable liability for the undisclosed conduct of the Defendant.

Doc. no. 17 (Second Amended Complaint), at ¶ 29.

         Based upon the foregoing factual allegations, plaintiff

demands relief under the right of action granted to him under 50 U.S.C. app. § 501 for the failure of compliance from the Defendant, the refusal to disclose the action of the [D]efendant and the former spouse of the plaintiff and the damages inuring to the Defendant to the Plaintiff [sic] by virtue of the violations of the consent agreement between the Justice Department and the ...

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