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Bennett v. CIT Bank, N.A.

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

September 17, 2019

JEANETTE BENNETT, et al., Plaintiffs,
v.
CIT BANK, N.A., et al., Defendants.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE CHIEF UNITED STATES DISTRICT JUDGE.

         This dispute over an insurance proceeds check comes before the court on Defendants CIT Bank, N.A.'s and CIT Group, Inc.'s partial motion to dismiss. (Doc. 73). Defendants contend that Plaintiffs Jeannette Bennett and Maggie Bell have not alleged any facts against CIT Group or stated a plausible claim for conversion of the proceeds check. For the following reasons, the court disagrees that Plaintiffs have not stated any facts against CIT Group, but agrees that Plaintiffs have not stated a plausible claim for conversion. So the court will deny in part and grant in part the motion to dismiss.

         I. STANDARD OF REVIEW

         Defendants move to dismiss part of the amended complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Under Rule 12(b)(6), a defendant can move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” The complaint will survive the motion to dismiss if it alleges “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). For a complaint to be “plausible on its face, ” it must contain enough “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). And, on a motion to dismiss, the court accepts as true the factual allegations in the complaint. Id.

         II. BACKGROUND

         Plaintiffs inherited a house from their mother, Catherine Getaw, subject to a mortgage serviced by Defendant CIT. A homeowner's property insurance policy issued by Foremost Insurance Company covered the house. The insurance policy named Ms. Getaw as the insured and CIT as mortgagee.

         After Plaintiffs inherited the house, a fire damaged the house. Plaintiffs filed a claim for the fire damage under the Foremost insurance policy.

         Then, CIT foreclosed on the mortgage and sold the house at the foreclosure sale to Defendant Federal National Mortgage Association. Later, CIT, which was then operating as “Financial Freedom, a Division of One West Bank, ” and Fannie Mae both filed claims for the fire damage under the Foremost insurance policy.

         On February 22, 2016, Foremost issued a proceeds check for the fire damage claim in the amount of $62, 262.13. Foremost wrote the check payable to

Financial Freedom, a Division of Onew [sic] Estate of Catherine Getaw

(Doc. 63 at ¶ 90; Doc. 63-14).

         Plaintiffs allege that CIT endorsed and deposited the check into its account without Plaintiffs' signatures as personal representatives of their mother's estate and transferred some or all of those funds to Fannie Mae. (Doc. 63 at ¶¶ 103, 108). Plaintiffs demanded that CIT and Fannie Mae give the proceeds to Plaintiffs. CIT and Fannie Mae refused. This lawsuit followed. Plaintiffs also brought suit against Foremost, but the court dismissed all claims against the insurance company on September 13, 2019. (See Doc. 102).

         Plaintiffs bring two claims against CIT and Fannie Mae: (1) declaratory judgment that only Plaintiffs are entitled to the insurance proceeds; and (2) conversion of the proceeds check.

         Defendants move to dismiss CIT Group as a defendant in this case because, according to Defendants, the amended complaint does not allege any specific facts against CIT Group besides the fact that it is the parent company of CIT Bank. And Defendants move to dismiss the conversion claim because they contend that the UCC provides that either party ...


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