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Montgomery v. Wells Fargo Bank N.A.

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

November 6, 2017

LARRY MONTGOMERY, JR., et al., Plaintiffs,
WELLS FARGO BANK, N.A., Defendant.



         This case is before the court on Defendant Wells Fargo Bank, N.A.'s Motion to Dismiss. (Doc. # 20). The Motion to Dismiss has been fully briefed (Docs. # 21, 26, 28-29) and is under submission. After careful review, and for the reasons explained below, Defendant's Motion to Dismiss (Doc. # 20) is due to be granted.

         I. Factual and Procedural History

         In December 2007, Plaintiffs Larry Montgomery, Jr., and Shameka Montgomery borrowed $231, 880 from RMC Funding Corporation to purchase the property at 6370 Letson Farm Road, Bessemer, Alabama 35022 (hereinafter the “Property”). (Doc. # 18 at 5-11, 22). In a promissory note signed by Plaintiff Larry Montgomery, the borrowers waived their right to issue notices of dishonor to the note holder. (Id. at 7). The promissory note indicates that RMC Funding transferred the promissory note to Defendant. (See Id. at 8).

         To secure the note, Plaintiffs granted a mortgage on the Property to RMC Funding. (Id. at 9, 11). The mortgage stated that Mortgage Electronic Registration Systems, Inc. (“MERS”) was the mortgagee and that MERS held legal title to the security interest conveyed by the mortgage. (Id.). The mortgage granted MERS the right to “foreclose and sell the Property.” (Id. at 11).

         Plaintiffs allege that they sent Defendant a “Negotiable Debt Instrument” on October 16, 2015. (Id. at 2). Defendant responded to Plaintiffs' October 2015 correspondence on October 28, 2015. (Id. at 41). In its response, Defendant stated that it could not provide any information to Plaintiffs because their request for information was too broad. (Id.). In a November 12, 2015 “Notice of Fault in Dishonor, ” Plaintiffs averred that their October 16, 2015 instrument was a tender offer to which Defendant was required to respond under Uniform Commercial Code § 3-306(b). (Id. at 47). They concluded that Defendant had “dishonored” the October 2015 tender offer because it did not send an account statement to them. (Id.). Plaintiffs directed Defendant to send them an account statement and “an acknowledgment of acceptance or rejection of the tender offer presented . . . October 16, 2015” within ten days. (Id.). On November 20, 2015, Defendant responded that Plaintiffs' account was being reviewed and that it would respond by December 4, 2015. (Id. at 45).

         Plaintiffs allege that Defendant accepted the terms of the Negotiable Debt Instrument by not complying with the requests for information made in that instrument. (Id. at 2, 37) (stating that Defendant's “failure to sufficiently respond or timely honor the Presentment, by the terms of the Presentment, constitutes [Defendant's] acceptance and approval”). Plaintiffs stated in a February 2016 “Notice of Default in Dishonor Consent to Judgment” that the acceptance of their offer discharged all debts, obligations, duties, and liabilities related to the loan and constituted an agreement to convey title of the Property to Plaintiffs. (Id. at 37). In February 2016, Plaintiffs purported to revoke their signatures on the loan documents because they were misled and coerced into agreeing to the loan. (Id. at 32-33). In March 2016, Plaintiffs signed a “Rescission of Mortgage”, which averred that Defendant had agreed to rescind the mortgage “by tacit agreement due to fraud perpetrated upon [Plaintiffs].” (Id. at 31). Plaintiffs filed the “Rescission of Mortgage” with the Jefferson County Probate Court. (Id.).

         Defendant commenced foreclosure proceedings for the Property in December 2016. (Id. at 29). Plaintiffs allege that the foreclosure proceedings were fraudulent because Defendant “was not a party” to the mortgage. (Id. at 3). Plaintiffs also allege that Defendant lacks “standing” to foreclose the Property because a mortgage-backed security pool is the actual note holder for the Property. (Id.).

         In their Amended Complaint, Plaintiffs first claim that Defendant committed fraud by instituting foreclosure proceedings for the Property. (Id.). Second, Plaintiffs claim that Defendant breached a contract between the parties. (Id.).

         II. Standard of Review

         The Federal Rules of Civil Procedure require that a complaint provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, the complaint must include enough facts “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Pleadings that contain nothing more than “a formulaic recitation of the elements of a cause of action” do not meet Rule 8 standards, nor do pleadings suffice that are based merely upon “labels and conclusions” or “naked assertion[s]” without supporting factual allegations. Id. at 555, 557. In deciding a Rule 12(b)(6) motion to dismiss, courts view the allegations in the complaint in the light most favorable to the non-moving party. Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007). Moreover, the court must liberally construe Plaintiffs' Amended Complaint because they submitted the complaint pro se. Erickson v. Pardus, 551 U.S. 89, 94 (2007). Having said that, “[a] district court can generally consider exhibits attached to a complaint in ruling on a motion to dismiss, and if the allegations of the complaint about a particular exhibit conflict with the contents of the exhibit itself, the exhibit controls.” Hoefling v. City of Miami, 811 F.3d 1271, 1277 (11th Cir. 2016).

         To survive a motion to dismiss, a complaint must “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. 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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Although “[t]he plausibility standard is not akin to a ‘probability requirement, '” the complaint must demonstrate “more than a sheer possibility that a defendant has acted unlawfully.” Id. A plausible claim for relief requires “enough fact[s] to raise a reasonable expectation that discovery will reveal evidence” to support the claim. Twombly, 550 U.S. at 556.

         In considering a motion to dismiss, a court should “1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.'” Kivisto v. Miller, Canfield, Paddock & Stone, PLC, 413 F. App'x 136, 138 (11th Cir. 2011) (quoting Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)). That task is context specific and, to survive the motion, the allegations must permit the court based on its “judicial experience and common sense . . . to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. at 679. If the court determines that well-pleaded facts, accepted as true, do not state a claim that is plausible, the claims are due to be dismissed. Twombly, 550 U.S. at 570.

         III. ...

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