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Williams v. Select Portfolio Servicing Inc.

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

July 9, 2019

VALERIE WILLIAMS, Plaintiff,
v.
SELECT PORTFOLIO SERVICING, INC., and ROBERT DAWSON, Defendants.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.

         This matter comes before the court on “Defendant Select Portfolio Servicing, Inc.'s Motion for Judgment on the Pleadings and Incorporated Memorandum of Law.” (Doc. 10). Plaintiff Valerie Williams sued Defendant SPS, the company that services her mortgage, [1] and Defendant Robert Dawson, a contractor, following a fire that destroyed much of her house. (Doc. 1-1). Ms. Williams asserts four claims: (1) breach of contract against SPS for withholding her insurance funds to rebuild her house; (2) conversion of the insurance funds against SPS; (3) conversion of the insurance funds against Mr. Dawson; and (4) breach of duty by various unknown defendants.

         In this motion, SPS raises two grounds for judgment on the pleadings: (1) Ms. Williams does not plausibly state a claim for breach of contract, and (2) Ms. Williams's conversion claim fails as a matter of law. (Doc. 10). On March 7, 2019, Ms. Williams filed her response in opposition to the motion for judgment on the pleadings. (Doc. 13). On March 14, 2019, SPS filed its reply brief. (Doc. 14). The motion is now ripe for review.

         For the reasons stated below, the court will GRANT SPS's motion for judgment on the pleadings against Ms. Williams in its entirety.

         I. Background

         Ms. Williams owned a house on Westchester Avenue in Bessemer, Alabama. Ms. Williams had home insurance and a mortgage. At some point more than a year ago, the house was heavily damaged by fire.

         Following the fire, Ms. Williams called her home insurance provider to file a claim. The insurer determined that the cost to be paid was $154, 000.00. The insurer paid that amount to SPS, which was the company servicing Ms. Williams's mortgage. According to the complaint, SPS retained these funds, but agreed to release funds to Ms. Williams to pay for the necessary repairs to her house.

         Ms. Williams hired Mr. Dawson to complete the repairs on her home. Mr. Dawson made certain draws against the funds, totaling a payment of $64, 000.00. Ms. Williams alleges that Mr. Dawson “failed or refused to do the work in a good and workmanlike manner and according to the instructions and desires of the Plaintiff to rebuild a home similar and of [the] same quality [as] the one that was damaged by the fire.” (Doc. 1-1 at 8). After six months of work, Mr. Dawson allegedly had completed only 10% of the work. Ms. Williams confronted Mr. Dawson about his lack of performance and quality, at which point he announced he was leaving.

         Subsequently, Ms. Williams has attempted to hire additional contractors to complete the work, and after obtaining additional contractors, has requested that SPS release her funds. But, “for more than five straight months, [SPS] has failed or refused to release the funds for reasons that are now unknown and unexplained.” (Doc. 1-1 at 9). SPS asserts that Ms. Williams sought to receive the full balance of the insurance funds, instead of as progress payments as the work is completed. SPS contends that it has not released the funds to Ms. Williams because (1) she failed to provide a contract cancellation notice signed by Mr. Dawson, and (2) Mr. Dawson informed SPS that he was owed additional payment for the work he performed. (Doc. 10 at 3).

         As a result of her inability to restore her house, Ms. Williams has been without her home for a year, and her insurance will not continue to cover her temporary room and board expenses.

         Ms. Williams filed this suit on July 31, 2018 in the Circuit Court of Jefferson County, Alabama. She alleges four counts against Defendants. Count One alleges breach of contract against SPS for “holding funds wrongfully and contrary to their obligation under the contractual language between the parties and under their contractual obligation to exercise the contract and interpret the same in good faith.” (Doc. 1-1 at 9). Count Two alleges conversion by SPS of the funds allegedly owed to Ms. Williams from the insurance company. Count Three alleges conversion against Mr. Dawson regarding the $64, 000 he collected from SPS. Count Four alleges that “certain unknown Defendants” have “participated in the above breaches of duty to the Plaintiff and/or have conspired with one or more of the Defendants to cause the harm occasioned thereby.” (Id.).

         Defendants removed this action to federal court on September 18, 2018. (Doc. 1). SPS filed this motion for judgment on the pleadings as to the two counts asserted against it on February 21, 2019. (Doc. 10). Ms. Williams has not yet successfully served process on Mr. Dawson.

         II. Standard of Review

         Rule 12(c) of the Federal Rules of Civil Procedure allows a party to move for judgment on the pleadings after the pleadings are closed, but early enough to not delay trial. See Fed. R. Civ. P. 12(c). A judgment on the pleadings is appropriate “when there are no material facts in dispute, and judgment may be rendered by considering the substance of the pleadings and any judicially noticed facts.” Horsley v. Rivera, 292 F.3d 695, 700 (11th Cir. 2002). To determine whether the movant is entitled to a judgment on the pleadings, the court should “accept as true all material facts alleged in the non-moving ...


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