United States District Court, N.D. Alabama, Southern Division
ANNIE P. PERRY, Plaintiff,
MATRIX FINANCIAL SERVICES CORP., et al., Defendants.
action, Plaintiff Annie P. Perry has alleged a variety of
federal and state law claims against Defendants Matrix
Financial Services Corporation (“Matrix”),
Nationstar Mortgage, LLC (“Nationstar”), and
Mortgage Electronic Registration System, Inc.
(“MERS”). (Doc. 24). The claims are based on
allegations that Defendants falsely reported that Perry was
in default on a mortgage loan and wrongfully initiated
foreclosure proceedings on her property, among other things.
(Id.). Defendants have moved to dismiss the amended
complaint in its entirety. (Doc. 26). For the reasons that
follow, the court concludes that the motion is due to be
granted in full with regard to Defendant MERS and granted in
part and denied in part with regard to the other two
filed this action in the Circuit Court of Jefferson County,
Alabama, asserting fourteen separate claims against
Defendants: negligence, wantonness, unjust enrichment,
wrongful foreclosure, slander of title, breach of contract,
fraud, false light, defamation/libel/slander, violation of
the Truth in Lending Act, violation of the Real Estate
Settlement Procedures Act, violation of the Fair Credit
Reporting Act, violation of the Fair Debt Collection
Practices Act, and a claim for declaratory relief. (Doc. 1-1
at 3-40). Defendants removed the action to this court and
then moved to dismiss all of the claims contained in the
complaint, or, to the extent any claims remained, moved for a
more definite statement of those claims. (Docs. 1, 8).
response to the motion to dismiss, Perry filed a motion for
leave to file an amended complaint, noting the different
pleading standards in federal and state court. (Doc. 15).
Despite Defendants argument that any amendment would most
likely be futile, (doc. 16), the court granted Perry's
motion to file an amended complaint. (Doc. 17). After two
extensions, (docs. 20 & 25), Perry filed her amended
complaint on January 14, 2019. (Doc. 24). The amended complaint
contains a more detailed set of factual allegations and
deleted two claims (wrongful foreclosure and slander of
title), but otherwise the differences between the two
complaints are minimal. As before, Defendants have moved to
dismiss all the claims in the amended complaint. (Doc. 26).
The motion has been fully briefed and is now ripe for
STANDARD OF REVIEW
have moved for dismissal pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure, which authorizes the
dismissal of all or some of the claims in a complaint if the
allegations fail to state a claim upon which relief can be
granted. Federal Rule of Civil Procedure 8(a)(2) requires
only “a short and plain statement of the claim showing
that the pleader is entitled to relief, ” in order to
“give the defendant fair notice of what the ... claim
is and the grounds upon which it rests.” Conley v.
Gibson, 355 U.S. 41, 47 (1957). The court assumes the
factual allegations in the complaint are true and gives the
plaintiff the benefit of all reasonable factual inferences.
Hazewood v. Foundation Financial Group, LLC, 551
F.3d 1223, 1224 (11th Cir. 2008). However, “courts
‘are not bound to accept as true a legal conclusion
couched as a factual allegation.'” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(quoting Papasan v. Allain, 478 U.S. 265, 286
(1986)); see also Ashcroft v. Iqbal, 556 U.S. 662,
678-79 (2009) (“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.”). Nor is it proper to assume that a
plaintiff can prove facts he has not alleged or that the
defendants have violated the law in ways that have not been
alleged. Twombly, 550 U.S. at 563 n.8 (citing
Associated Gen. Contractors of Cal., Inc. v.
Carpenters, 459 U.S. 519, 526 (1983)).
a complaint attacked by a Rule 12(b)(6) motion to dismiss
does not need detailed factual allegations, a plaintiff's
obligation to provide the grounds of his entitlement to
relief requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action
will not do.” Id., 550 U.S. at 555 (citations,
brackets, and internal quotation marks omitted).
“Factual allegations must be enough to raise a right to
relief above the speculative level. . . .” Id.
Thus, “a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief
that is plausible on its face, '” i.e., its
“factual content ... allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678
have also moved for a dismissal of Perry's fraud claim
pursuant to Rule 9(b). Rule 9(b) requires that “in all
averments of fraud or mistake, the circumstances constituting
fraud or mistake shall be stated with particularity.”
Fed.R.Civ.P. 9(b). The “particularity”
requirement “serves an important purpose in fraud
actions by alerting defendants to the ‘precise
misconduct with which they are charged' and protecting
defendants ‘against spurious charges of immoral and
fraudulent behavior.'” Ziemba v. Cascade
Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001)
STATEMENT OF FACTS
alleges that she bought property located at 333 Normandy Lane
in Chelsea Alabama, financed the purchase with Movement
Mortgage, LLC, and executed a mortgage with MERS,
“acting solely as nominee for Movement Mortgage,
” on November 24, 2015. (Doc. 24 ¶ 5). The loan
was later “sold and transferred” and/or assigned
to both Nationstar and Matrix. (Id. ¶ 7).
Although the allegations of the amended complaint are
anything but clear as to the timing or order of the alleged
sales/transfers/assignments, from what the court can glean,
Perry seems to allege that MERS sold and transferred and/or
assigned the loan to Nationstar, and Nationstar also serviced
the loan. (Id.). Then, at some later point, the loan
was transferred to Matrix and Nationstar remained the
servicer of the loan. (Id.). Perry “disputes
the validity” of the transfers and/or assignments,
(id. ¶¶ 7, 13), but provides no factual
basis for this allegation and does not attach a copy of any
allegedly defective or invalid transfers, sales or
assignments to the amended complaint.
2017, Perry complained to Defendants that they were improperly
maintaining her escrow account by charging fees to the
account and by demanding payment to the account when no
payment was due. (Id. ¶ 22). Perry alleges
Defendants did nothing to address the situation.
(Id.). Additionally, she alleges Defendants
“continually during 2017 improperly held [her] payments
in a ‘suspense account'” and “charged
late fees and interest as if the payments had not been made
even though they had received the payments.”
December 5, 2017, Perry sent a qualified written request
(“QWR”) to both Nationstar and the attorney for
Nationstar. (Id. ¶ 88). The letter included a
statement for the reasons Perry believed there was an error
regarding her mortgage loan and included sufficient details
for Nationstar to respond. (Id.). Nationstar never
acknowledged receipt of the QWR and never responded to it.
(Id. ¶ 89).
6, 2018, Defendants initiated foreclosure proceedings on
Perry's property. (Id. ¶¶ 9, 23). The
foreclosure sale was reported to the national credit bureaus,
which damaged Perry's reputation and credit.
(Id. ¶¶ 12, 25). Additionally, the
foreclosure sale date was published in the Shelby County
Reporter in June, July, August and September 2018, and
included false information regarding her alleged default.
(Id. ¶ 25).
to Perry, she was not in default on her loan and Defendants
knew she was not in default at the time they began
foreclosure proceedings. (Id. ¶¶ 11, 14,
26). On September 6, 2018, Perry alleges she sent another
QWR, as well as a notice of error (“NOE”) to
Nationstar and its attorneys. (Id. ¶ 88).
Nationstar did not respond. (Id. ¶ 89).
alleges that prior to September 2017,
Defendants accepted and cashed her monthly payments,
but did not properly apply them to her account
“pursuant to paragraph 2 of the mortgage
contract.” (Id. ¶¶ 20, 21). When she
sent her monthly payment to Defendants in October, November
and December 2017 and January 2018, Defendants refused the
payment and returned it to her without explanation.
(Id. ¶ 20). When Perry called and asked about
the returned payments, Defendants told her she was in default
for failure to make payments without any further explanation.
(Id.). Defendants told Perry they would not accept
any further payments and her account was being turned over
for foreclosure. (Id.).
the time Perry filed her amended complaint, she continued to
reside in the property. (Id. ¶ 6). It is
unclear from the amended complaint whether a foreclosure sale
was ever scheduled.
amended complaint, Perry states twelve counts - four federal
violations, seven state law violations, and a count for
declaratory judgment. (Doc. 24 at 7-26). Under each count,
there is a parenthetical that states the name of a Defendant
or Defendants. (Id.). The court assumes that the
defendants named in those parentheticals are the defendants
against which she brings the specific claim. That being said,
the amended complaint does not allege a single count against
MERS. Additionally, the court cannot find any
allegation in the amended complaint accusing MERS of any
alleged wrongdoing. As such, the motion to dismiss as it
relates to MERS is due to be granted in full.
The Federal Claims
amended complaint, Perry alleges that Nationstar violated
four federal statutes: the Truth in Lending Act
(“TILA”), 15 U.S.C. §§ 1601 et
seq. (Count Eight); the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. §§
2601 et seq. (Count Nine); the Fair Credit Reporting
Act (“FCRA”), 15 U.S.C. §§ 1681 et
seq. (Count Ten); and the Fair Debt Collection Practices
Act (“FDCPA”), 15 U.S.C. §§ 1692 et
seq. (Count Eleven). (Doc. 24 at 20-26). She also
alleges that Matrix violated the FCRA. (Id. at
23-25). Nationstar and Matrix have moved to dismiss all
federal claims alleged in the amended complaint.
a remedial consumer protection statute designed to
“assure a meaningful disclosure of credit terms so that
the consumer will be able to compare more readily the various
credit terms available to him and avoid the uninformed use of
credit, and to protect the consumer against inaccurate and
unfair credit billing and credit card practices.” 15
U.S.C. § 1601(a); see Beach v. Ocwen Fed. Bank,
523 U.S. 410, 412 (1998). TILA requires creditors to provide
consumers with “clear and accurate disclosures of terms
dealing with things like finance charges, annual percentage
rates of interest, and the borrower's rights.”
Id. at 412. TILA provides a private right of action
against “any creditor” who violates the
requirements of the statute's credit transactions section
and allows for actual damages as a result of the failure and,
with certain limitations, statutory damages. 15 U.S.C. §
Count Eight of the amended complaint, Perry alleges that
Nationstar violated both TILA and Regulation Z. (Doc. 24
¶¶ 77-86). Specifically, she alleges that
Nationstar failed to provide required disclosures
“prior to consummation” of her loan transaction,
failed to make required disclosures “clearly and
conspicuously in writing, ” and failed to
“include in the finance charge certain charges imposed
. . . [and] payable by plaintiff incident to the extension of
credit . . ., thus improperly disclosing the finance
charge.” (Id. ¶ 81). She also alleges
Nationstar made unauthorized charges in the form of attorney
fees and other fees not authorized by the mortgage contract,
as well as “improperly amortizing the loan.”
(Id. ¶¶ 83, 85).
stated above, by its plain language, TILA's private right
of action applies only to actions against
“creditors.” 15 U.S.C. § 1604(a). A
“creditor” is defined as:
a person who both (1) regularly extends, whether in
connection with loans, sales of property or services, or
otherwise, consumer credit which is payable by agreement in
more than four installments or for which the payment of a
finance charge is or may be required, and (2) is the person
to whom the debt arising from the consumer credit transaction
is initially payable on the face of the evidence. . . .
15 U.S.C. § 1602(g). The civil liability provision of
TILA does not apply generally to every person the statute
regulates, but only to originating creditors. Gregory v.
Select Portfolio Servicing, Inc., 2016 WL 4540891, at
*14 (N.D. Ala. Aug. 31, 2016).
factual allegations demonstrate that Nationstar is not, in
fact, the person to whom the debt arising from the loan
transaction was initially payable. According to her amended
complaint, Perry financed the purchase of the home with
Movement Mortgage, LLC. (Doc. 24 ¶ 5). As such,
Nationstar is not a “creditor” within the meaning
of TILA because it is not the party to whom the loan was
initially payable. Perry's TILA claim against Nationstar
is due to be dismissed.
even if the court is incorrect in its conclusion that
Nationstar is a “creditor” within the meaning of
TILA, the claim is time-barred. TILA provides for a one year
statute of limitations that begins to run from the date that
the borrower entered into the loan transaction. 15 U.S.C.
§ 1640(e); In re Smith, 737 F.2d 1549, 1552 (11th Cir.
1984). The loan here was signed on November 24, 2015, almost
three years before the complaint was filed, well outside the
limitations period. Perry's TILA claim against Nationstar
is due to be dismissed for this separate, additional reason.
Count Nine, Perry alleges that Nationstar violated RESPA by
“failing to acknowledge or properly respond to [her]
Qualified Written Request (QWR).” (Doc. 24 ¶ 87).
RESPA establishes the procedures a loan servicer must follow,
and certain actions it must take, upon receiving a QWR from a
borrower. 12 U.S.C. § 2605(e). Section 2605(e) of the
RESPA requires a loan servicer to send a written
acknowledgement of the borrower's QWR within five days
and a written response to the QWR within thirty days. 12
U.S.C. § 2605 (e)(1)(A), (e)(2). Failure to adequately
respond to a QWR results in liability “to the borrower
for each such failure in . . . an amount equal to the sum of
any actual damages to the borrower as a result of the
failure. . . .” 12 U.S.C. § 2605(f)(1)(A). To
succeed on a claim under § 2605(e), Plaintiff
“must show: (1) that Defendant is a servicer; (2) that
Defendant received a QWR from the borrower; (3) ...