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Getaw v. Cit Bank, N.A.

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

May 30, 2018

CIT BANK, N.A., et al., Defendants.



         This case is before the court on Defendants' motions to dismiss the amended complaint. (Docs. 5, 8). Plaintiffs are (1) Jeanette Bennett and Maggie Bell, who allege that they are “the sole heirs” to Catherine Getaw's estate; and (2) Ms. Bennett and Ms. Bell as the Personal Representatives of Ms. Getaw's estate. (Doc. 1-2 at 36, 38). Defendants can be divided into two groups. The first group is comprised of three related entities: CIT Bank, N.A.; OneWest Bank, FSB b/d/a Financial Freedom; and OneWest Bank, N.A. OneWest Bank, N.A., was a predecessor to CIT Bank, and Financial Freedom is a division of CIT Bank. The court will refer to those three defendants as the “CIT Bank Defendants.” The second group is the Federal National Mortgage Association (“Fannie Mae”).

         Plaintiffs allege that Ms. Getaw executed a reverse mortgage on her home with the CIT Bank Defendants, and after she died, the CIT Bank Defendants foreclosed on the home. Shortly before the foreclosure sale, the home burned down. After the CIT Bank Defendants sold the property to Fannie Mae at the foreclosure sale, they collected the homeowners' insurance payout from the fire. Eventually, “Defendants” sold the property to an unnamed person or entity. “Defendants” paid Plaintiffs a portion of the insurance proceeds, but Plaintiffs allege that they were entitled to the entire payout, plus the proceeds from the second sale. Based on those allegations, Plaintiffs raise various state law causes of action against all of the defendants. Defendants move to dismiss the complaint. (Docs. 5, 8).

         The court notes that the amended complaint is a classic shotgun pleading in two ways. First, it contains “multiple counts where each count adopts the allegations of all preceding counts, causing each successive count to carry all that came before and the last count to be a combination of the entire complaint.” Weiland v. Palm Beach Cty. Sheriff's Office, 792 F.3d 1313, 1321 (11th Cir. 2015). Second, it is “replete with conclusory, vague, and immaterial facts not obviously connected to any particular cause of action.” Id. at 1322. Nevertheless, Defendants did not move for a more definite statement, and the court has done its best to parse the relevant facts for purposes of this motion to dismiss.

         Defendants move to dismiss the complaint on various grounds, but this court will address only one of those grounds. (See Docs. 5-1, 9). The court concludes that Plaintiffs lack standing to bring this lawsuit, and WILL DISMISS the amended complaint WITHOUT PREJUDICE for lack of jurisdiction.

         I. BACKGROUND

         Plaintiffs filed the initial complaint in the Circuit Court of Jefferson County on November 1, 2016. (Doc. 1-1 at 3). They filed an amended complaint on October 2, 2017, (doc. 1-2 at 36), and Defendants removed the case on October 30, 2017. (Doc. 1).

         According to the amended complaint, before her death, Catherine Getaw executed a reverse mortgage on real property that she owned in Birmingham, Alabama. The servicer of the reverse mortgage was one of the CIT Bank Defendants. The amended complaint identifies Pacific Reverse Mortgage, Inc., as the lender, but it does not name that entity as a defendant.

         Plaintiffs do not attach a copy of the reverse mortgage to their amended complaint, but they do refer vaguely to some of its terms. They allege that the reverse mortgage provided that a foreclosure would extinguish any deficiency under the mortgage. They also refer to a “one-year redemption period, ” although they do not explain what that means, what is required to redeem, or when the redemption period starts. (Doc. 1-2 at 36-37, 40).

         In April 2015, Ms. Getaw died, “leaving Jeanette Bennett and Maggie Bell as the sole heirs” to the property. After she died, “the Lender and/or [one of the CIT Bank Defendants]” began the foreclosure process.[1] But on October 31, 2015, a few days before the scheduled foreclosure sale, the house burned down. (Doc. 1-2 at 38).

         Plaintiffs immediately filed a claim on the homeowners' policy, and within a few days, the insurance company approved the claim for payment. After the insurance company approved the claim, on November 2, 2015, the CIT Bank Defendants sold the property at the foreclosure sale to Fannie Mae for $25, 000. Plaintiffs allege that “[p]ractically, though not in name, [the CIT Bank Defendants] and [Fannie Mae] acted as one and the same entity throughout the foreclosure process.” And they assert that, after the foreclosure sale, “Defendants became trustee(s) for the benefit of Plaintiffs during the one-year redemption period.” (Doc. 1-2 at 39- 40).

         Eight days after the foreclosure sale, on November 10, 2015, the insurance company issued a $62, 262.13 payment to the CIT Bank Defendants. In June 2016, during the one-year redemption period, “Defendants, or one of them, ” sold the property for $8, 000 to an unnamed person or entity. And in October 2016, one of the CIT Bank Defendants sent Plaintiffs a check for an undisclosed amount, telling Plaintiffs that it was an “insurance refund” for the amount Plaintiffs were entitled to receive. Plaintiffs allege that the insurance refund “was incorrect and intended to deceive Plaintiffs into accepting less than they were entitled to receive.” (Doc. 1-2 at 39-40).

         Plaintiffs raise claims for unjust enrichment, conversion, fraud and breach of quasi-fiduciary duty, wantonness, and “Unfair Trade Practices.” They seek the entirety of the insurance proceeds, the proceeds from the $8, 000 post-foreclosure sale, punitive damages, and attorneys' fees. (Doc. 1-2 at 41-44).

         The court has diversity jurisdiction. See 28 U.S.C. § 1332. The parties are completely diverse because the CIT Bank Defendants are citizens of California, Fannie Mae is a citizen of the District of Columbia, the Personal Representatives of Ms. Getaw's Estate are citizens of Alabama, and Plaintiffs in their individual capacities are citizens of Indiana. (Doc. 1 at 8-9; Doc. 32). Although Plaintiffs seek only $70, 262.13 in compensatory damages, they also seek punitive damages, so “the amount in controversy more likely than not exceeds the [$75, 000] jurisdictional requirement.” Roe v. Michelin North Am., Inc., 613 F.3d 1058, 1061 (11th Cir. 2010) (quotation marks omitted); id. at 1064 (stating that the court can “rely[ ] on its judicial experience and common sense” to determine whether a claim satisfies the amount in ...

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