United States District Court, N.D. Alabama, Southern Division
E. Ott Chief United States Magistrate Judge.
action, Plaintiff Jan Goodreau has alleged a variety of
federal and state law claims against Defendants U.S. Bank
National Association (“US Bank”), as Trustee of
the Igloo Series II Trust, and BSI Financial Services
(“BSI”). (Doc. 23). The claims are based on
allegations that Defendants falsely reported that Goodreau
was in default on a mortgage loan and wrongfully initiated
foreclosure proceedings on her property, among other things.
(Id.). Defendants have moved to dismiss all claims
contained in the amended complaint except the alleged
violations of the Fair Credit Reporting Act and Fair Debt
Collection Practices Act. (Doc. 31 at 2). For the reasons
that follow, the court concludes that the motion is due to be
granted in part and denied in part.
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 3-22). Defendants removed the action to this court and
then moved to dismiss the claims contained in the complaint.
(Docs. 1, 6, 8).
response to the motion to dismiss, Goodreau filed a motion
for leave to file an amended complaint, noting the different
pleading standards in federal and state court. (Doc. 15, 16).
The court granted Goodreau's motion to file an amended
complaint, (doc. 17), and, after an extension, Goodreau filed
her amended complaint on March 31, 2019. (Doc. 23). The
amended complaint contains a more detailed set of factual
allegations, removed the fraud claim, and set out through the
individual counts which Defendant is being sued for each
specific claim, but otherwise the differences between the two
complaints are minimal. (Compare Docs. 1-1 at 3-22 with Doc.
23). U.S. Bank and BSI have moved to dismiss all the claims
in the amended complaint except the alleged violations of the
Fair Credit Reporting Act and Fair Debt Collection Practices
Act. (Doc. 31). The motion has been fully briefed and is now
ripe for decision.
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
STATEMENT OF FACTS
alleges that she bought property located at 4133 Alston Lane
in Birmingham, Alabama, financed the purchase with SouthTrust
Mortgage Corporation, and executed a mortgage with MERS,
“acting solely as nominee for SouthTrust Mortgage
Corporation, ” on December 1, 2004. (Doc. 23 ¶ 5).
The loan was later “sold and transferred” and/or
assigned to both U.S. Bank and BSI. (Id.
¶¶ 7, 10). Although the allegations of the amended
complaint are anything but clear, from what the court can
glean from the allegations, Goodreau seems to allege that
MERS sold and transferred and/or assigned the loan to
“the Trust maintained by U.S. Bank” and BSI
serviced the loan. (Id. ¶¶ 7, 9). Then, at
some other point in time, the loan was transferred to BSI and
BSI remained the servicer of the loan. (Id.).
Goodreau “disputes the validity” of the transfers
and/or assignments, (id. ¶¶ 7, 10, 15,
17), 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.
September 1, 2018, U.S. Bank and BSI initiated foreclosure
proceedings on Goodreau's property. (Id.
¶¶ 11, 13, 23, 24). The foreclosure sale was
reported to the national credit bureaus, which damaged
Goodreau's credit and reputation. (Id.
¶¶ 14, 20, 25). Additionally, the foreclosure sale
date was published in the Alabama Messenger in September,
October, November, December 2018 and January and February
2019, and included false information regarding her alleged
default. (Id. ¶ 25).
to Goodreau, she was not in default on her loan and
Defendants knew she was not in default at the time they began
foreclosure proceedings. (Id. ¶¶ 13, 16,
24). She alleges that she was not behind on her payments and
that the note was improperly accelerated. (Id.
¶¶ 16, 26). Despite this knowledge,
“Defendants set foreclosure sales for October 30, 2018,
January 8, 2019, and February 8, 2019, ” but they were
cancelled. (Id. ¶ 11).
alleges that prior to April 2018, 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. ¶¶ 21, 22). When she
sent her monthly payment to Defendants in October, November
and December 2018, Defendants refused the payment and
returned it to her without explanation. (Id. ¶
21). When Goodreau 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 Goodreau they would not
accept any further payments and her account was being turned
over for foreclosure. (Id.).
October 26, 2018 and December 13, 2018, Goodreau sent a
qualified written request (“QWR”) to both BSI and
the attorney for BSI. (Id. ¶ 99). The letter
included a statement for the reasons Goodreau believed there
was an error regarding her mortgage loan and included
sufficient details for BSI to respond. (Id.). BSI
never acknowledged receipt of either QWR and never responded
to them. (Id. ¶ 100).
this action was pending, the Defendants improperly and
illegally foreclosed on Goodreau's property on March 1,
2019.” (Id. ¶ 11). Goodreau, however,
alleges that she and her husband currently reside in the
property at issue. (Id. ¶ 6).
amended complaint, Goodreau states four federal violations,
eight state law violations, and a count for declaratory
judgment. (Doc. 23 at 8-33). The court begins with
the alleged federal violations and then moves to the state
The Federal Claims
amended complaint, Goodreau alleges that BSI violated four
federal statutes: the Truth in Lending Act
(“TILA”), 15 U.S.C. §§ 1601 et
seq. (Count Fourteen); the Real Estate Settlement
Procedures Act (“RESPA”), 12 U.S.C. §§
2601 et seq. (Count Fifteen); the Fair Credit
Reporting Act (“FCRA”), 15 U.S.C. §§
1681 et seq. (Count Sixteen); and the Fair Debt
Collection Practices Act (“FDCPA”), 15 U.S.C.
§§ 1692 et seq. (Count Seventeen). (Doc.
23 at 23-33). BSI has moved to dismiss Counts Fourteen and
Fifteen. (Doc. 31 at 2, 17-20).
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 because of the failure and,
with certain limitations, statutory damages. 15 U.S.C. §
Count Fourteen of the amended complaint, Goodreau alleges
that BSI violated both TILA and Regulation Z. (Doc. 23
¶¶ 90-97). Specifically, she alleges that BSI
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. ¶ 93). She also alleges BSI 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.
¶¶ 94, 96). Finally, she contends BSI failed to
send proper monthly statements. (Id. ¶ 96).
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 BSI is not, in fact, the
person to whom the debt arising from the loan transaction was
initially payable. According to her amended complaint,
Goodreau financed the purchase of the home with SouthTrust
Mortgage. (Doc. 23 ¶ 5). As such, BSI is not a
“creditor” within the meaning of TILA because it
is not the party to whom the loan was initially payable.
Goodreau's TILA claim against BSI is due to be dismissed.
even if the court is incorrect in its conclusion that BSI 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 December 1, 2004, more
than thirteen years before the complaint was filed, well