Collins et al v. BSI Financial Services et al

Filing 35

MEMORANDUM OPINION AND ORDER: it is hereby ORDERED that the 19 Motion to Dismiss is GRANTED in part and DENIED in part, as follows: 1) The abandoned claims in Counts Eight and Fourteen are Dismissed with Prejudice; 2) Plfs' Negligence (Count O ne), Wantonness (Count Two), Unjust Enrichment (Count Three), Wrongful Foreclosure (Count Four), TILA (Count Ten), and RESPA (Count Eleven) claims are Dismissed with Prejudice; 3) Plfs' claims for Slander of Title (Count Five), Breach of Contrac t (Count Six), Fraudulent Misrepresentation (Count Seven), Defamation, Libel, Slander (Count Nine), FCRA (Count Twelve), and FDCPA (Count Thirteen) are Dismissed, with right to replead, as further set out in order; 4) Plfs are given until 11/30/2016 to file a Second Amended Complaint, to the extent they choose to do so, as further set out in order. Signed by Honorable Judge W. Harold Albritton, III on 11/15/2016. (Attachments: # 1 Civil Appeals Checklist) (wcl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
MARIANN COLLINS,
RICK COLLINS,
Plaintiff,
v.
BSI FINANCIAL SERVICES,
SERVIS ONE INC., MCM CAPITAL
PARTNERS LLC, VENTURES
TRUST 2013-I-H-R, and
CITIMORTGAGE, INC.,
Defendants.

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CASE NO. 2:16-CV-262-WHA
(WO)

MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
This matter comes before the court on a Motion to Dismiss Amended Complaint (Doc. #
19), filed by the Defendant, CitiMortgage, Inc. (“CitiMortgage”) and the Joinder in
CitiMortgage’s Motion to Dismiss (Doc. # 21), filed by the other Defendants.
On March 7, 2016, Plaintiffs, Mariann Collins and Rick Collins (collectively, the
“Plaintiffs”) filed a Complaint against the Defendants in state court (Doc. # 1-6). CitiMortgage
properly removed this action to federal court with joinder by the other Defendants, and,
subsequently, CitiMortgage filed a Motion to Dismiss (Doc. # 8), under Rule 12(b)(6) of the
Federal Rules of Civil Procedure (“FRCP”). In response, Plaintiffs sought leave to amend their
complaint under FRCP 15(a)(2), (Doc. # 11), which this court granted on May 23, 2016. (Doc. #
12). The Amended Complaint, (Doc. # 17), repled the same causes of action as the original
Complaint, including: (1) Negligence; (2) Wantonness; (3) Unjust Enrichment; (4) Wrongful

1

Foreclosure; (5) Slander of Title; (6) Breach of Contract; (7) Fraud; (8) False Light Invasion of
Privacy; (9) Defamation, Libel, Slander; (10) Violations of the Truth in Lending Act, 15 U.S.C. §§
1601–1667f (“TILA”); (11) Violations of the Real Estate Settlement Procedures Act, 12 U.S.C. §§
2601–2617 (“RESPA”); (12) Violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681–
1681y (“FCRA”); (13) Violations of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692–
1692p (“FDCPA”); and (14) Claim for Declaratory Relief. Id. Each claim is asserted against all
Defendants. CitiMortgage again moved to dismiss all of Plaintiffs’ claims (Doc. # 19), and the
other Defendants joined (Doc. # 21).1 For reasons to be discussed, the Motion to Dismiss is due to
be GRANTED in part and DENIED in part.
II. STANDARD FOR MOTION TO DISMISS
The court accepts the plaintiffs’ factual allegations as true, Hishon v. King & Spalding, 467
U.S. 69, 73 (1984), and construes the complaint in the plaintiffs’ favor, Duke v. Cleland, 5 F.3d
1399, 1402 (11th Cir. 1993). In analyzing the sufficiency of pleading, the court is guided by a
two-prong approach: one, the court is not bound to accept conclusory statements of the elements of
a cause of action and, two, where there are well-pleaded factual allegations, a court should assume
their veracity and then determine whether they plausibly give rise to entitlement to relief. See
Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). “[A] plaintiff's obligation to provide the ‘grounds’
of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation
of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007). To survive a motion to dismiss, a complaint need not contain “detailed factual allegations,”
but instead the complaint must contain “only enough facts to state a claim to relief that is plausible
1

The other Defendants have not filed separate briefs, but in their Joinder have adopted the briefs
of CitiMortgage (Doc. # 21).
2

on its face.” Id. at 570. The factual allegations “must be enough to raise a right to relief above the
speculative level.” Id. at 555.
III. FACTS
The allegations of the Plaintiffs’ complaint are as follows:
On June 19, 2000, Plaintiffs purchased a home in Montevallo, Alabama and entered into a
mortgage loan with Ronnie Miskelly, Jr. on the property. (Doc. # 17). Thereafter, the loan was
transferred; first, to Riverside Mortgage Company, Inc.; then, to “The Associates;” and, finally, to
CitiMortgage. Id. When CitiMortgage received the loan, Plaintiffs were allegedly behind on their
payments. Accordingly, the Plaintiffs agreed to pay an additional amount for twelve (12) months
to bring the account up to date. Id.
In July 2014, Plaintiffs allegedly fell behind on their payments, and CitiMortgage initiated
foreclosure proceedings on the Plaintiffs’ property. Id. Plaintiffs allege, however, that they were
not in default on their mortgage at the time and that the foreclosure proceedings were improper at
that time. Id. Plaintiffs sent a letter to CitiMortgage’s attorney including a qualified written request
(“QWR”), asking for an accounting of the loan. Id. However, CitiMortgage did not respond until
January 2015. At that point, the Plaintiffs again made arrangements to bring the account up to date.
Id.
However, in July 2015, CitiMortgage again commenced foreclosure proceedings. Id.
CitiMortgage attempted at least two other foreclosure proceedings in 2015, but each proceeding
was stalled or canceled due to improper publication notices in the Montgomery Independent
newspaper. CitiMortgage never foreclosed on the property. Id.
In November 2015, the loan was sold to Ventures Trust 2013-I-H-R and serviced by BSI
Financial Services, Servis One Inc., and MCM Capital Partners LLC (collectively, the “other
3

Defendants”).2 Id. On November 8, 2015, the other Defendants improperly and wrongfully began
foreclosure proceedings on the property. Id. Plaintiffs allege that the remaining Defendants
reported such foreclosure to the national credit bureaus, which negatively affected their credit and
reputation. Id.
Plaintiffs maintain, however, that at no point was the mortgage loan in default and that the
attempted foreclosure proceedings were wrongful. Id.
IV. DISCUSSION
A. Abandoned Claims (Count Eight & Fourteen)
Plaintiffs did not respond to CitiMortgage’s arguments to dismiss Plaintiffs’ false light
invasion of privacy claim (Count Eight), or its claim for Declaratory Relief (Count Fourteen).
Consequently, Plaintiffs have abandoned these claims and they are subject to dismissal. See Coal.
for the Abolition of Marijuana Prohibition v. City of Atlanta, 219 F.3d 1301, 1326 (11th Cir. 2000)
(“[F]ailure to brief and argue this issue during the proceedings before the district court is grounds
for finding that the issue has been abandoned.”); see also McMaster v. United States, 177 F.3d
936, 940–41 (11th Cir. 1999) (noting that a claim may be considered abandoned when the
allegation is included in the plaintiff’s complaint but he fails to present any argument concerning
the claim to the district court).
B. Federal Claims
Plaintiffs allege four (4) federal claims against CitiMortgage: (i) Violations of TILA, (ii)
Violations of RESPA, (iii) Violations of the FCRA, and (iv) Violations of the FDCPA. The court
will address these claims in succession.
1. Violations of TILA (Count Ten)
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Plaintiffs do not direct any allegations towards CitiMortgage after November 8, 2015. Id.
4

With respect to Plaintiffs’ TILA claim, CitiMortgage argues that it fails because
CitiMortgage is not a creditor and because it is barred by the statute of limitations.3 Also, this
argument has been adopted by the remaining Defendants. TILA provides a private right of action
to consumers against any “creditor” who fails to comply with the requirements imposed under the
law. 15 U.S.C. § 1640(a). TILA defines the term “creditor” as follows:
The term “creditor” refers only to 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 of indebtedness or, if
there is no such evidence of indebtedness, by agreement.”
15 U.S.C. § 1602(g). To qualify as a creditor under TILA, the entity must meet both prongs. See
Parker v. Potter, 232 F.App’x 861, 864 (11th Cir. 2007).
Plaintiffs admit that CitiMortgage was not the initial creditor to whom the mortgage loan
was first made payable. Plaintiffs’ allege that they entered into the mortgage loan with Ronnie
Miskelly, Jr. (Doc. # 17, p. 2). Further, Plaintiffs do not allege that any Defendant was involved in
the mortgage loan at its inception, but rather only became involved after the loan was later
As an initial matter, Plaintiffs’ TILA claim fails because it “merely recite[s] an element of a
claim without providing the facts from which one could draw such a conclusion.” Franklin v.
Curry, 738 F.3d 1246, 1248 n.1 (11th Cir. 2013). Plaintiffs’ complaint alleges, “Defendants, are
covered by the Act as it regularly extended or offered to extend consumer credit for which a
finance charge is or may be imposed or which, by written agreement, is payable in more than four
installments, and is the person to whom the transaction which is the subject of this action is
initially payable, making defendant a creditor within the meaning of TILA, 15 U.S.C. § 1602(f)
and Regulation Z § 226.2(a)(17).” (Doc. # 17, p. 17). Plaintiffs cannot rely upon “naked assertions
devoid of further factual enhancement.” Iqbal, 556 U.S. at 678. Without such factual
enhancement, this court cannot “draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id. Accordingly, Plaintiffs’ complaint fails to state a claim upon which relief
may be granted. However, even if Plaintiffs’ allegations survived its pleading deficiencies under
Iqbal, Plaintiffs’ TILA claim still fails for the reasons stated herein.
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transferred to CitiMortgage and then to Ventures Trust. Therefore, by Plaintiffs’ own admission,
the Defendants cannot qualify as a creditor under the second prong of TILA’s definition of
creditor, because they were not the creditor to whom the debt was initially made payable. See Rice,
2014 WL 3889472, at *4.
Second, Plaintiffs’ TILA claim is time barred. TILA establishes a one year statute of
limitations from the date the transaction is consummated. See 15 U.S.C. § 1640(e);4 see also
Velardo, 298 F. App'x at 892. (“Nondisclosure is not a continuing violation for purposes of the
statute of limitations.”) Plaintiffs allege that the mortgage loan at issue in this case originated on
June 19, 2000. Thus, the statute of limitations ran on June 19, 2001. Because Plaintiffs did not
commence this action until March 7, 2016, Plaintiffs’ TILA claim is time-barred as to all
Defendants.
2. Violations of RESPA (Count Eleven)
In Count Eleven, Plaintiffs allege that Defendants violated RESPA “by failing to
acknowledge or respond to the Plaintiffs’ Qualified Written Request (QWR).” (Doc. # 17, pp. 18–
19). To state a claim under 12 U.S.C. § 2605(e), Plaintiffs must show: (1) that Defendants are
servicers; (2) that Defendants received a QWR from the borrower; (3) that the QWR related to the
servicing of the loan; (4) that Defendants failed to respond adequately; and (5) that Plaintiffs are
entitled to actual or statutory damages. 12 U.S.C. § 2605(e); Renfroe v. Nationstar Mortgage, LLC,
822 F.3d 1241, 1246 (11th Cir. 2016) (“We join our sister Circuits in recognizing that damages are
an essential element in pleading a RESPA claim.”)
Section 1640(e) states, “any action under this section may be brought in any United States
district court, or in any other court of competent jurisdiction, within one year from the date of the
occurrence of the violation . . . .” Moreover, “ [t]he violation ‘occurs’ when the transaction is
consummated.” Velardo v. Fremont Inv. & Loan, 298 F. App'x 890, 892 (11th Cir. 2008)
4

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Defendants move for dismissal of Plaintiffs’ RESPA claim, arguing, first, that Plaintiffs
never submitted a QWR. (Doc. # 19, pp. 35–36). For a request to “qualify”—as a QWR—it must
(1) be in writing, (2) include or allow the servicer to identify the name and account of the borrower,
and (3) include a statement of the reasons for the belief of the borrower, to the extent applicable,
that the account is in error or provides sufficient detail to the servicer regarding other information
sought by the borrower. 12 U.S.C. § 2605(e)(1)(B).
To establish these requirements were met, the best practice is for a
plaintiff to attach a copy of the QWR submitted along with their
complaint. Where plaintiffs fail to provide a copy of the QWR itself,
federal courts have routinely held that Plaintiffs must plead facts
showing that the written request provided the detail necessary to
qualify under the statute.
Tallent v. BAC Home Loans, No. 2:12-CV-3719-LSC, 2013 WL 2249107, at *4 (N.D. Ala. May
21, 2013).
In this case, Plaintiffs did not attach a copy of any QWR along with their complaint. In
addition, Plaintiffs’ Amended Complaint fails to allege that their requests met any of the
requirements of § 2605(e)(1)(B); much less all three. Defendants rightly point out that “Plaintiffs
have not alleged a single fact regarding the content of the alleged QWRs.” (Doc. # 19, p. 35).
Moreover, Plaintiffs do not rebut Defendants’ argument in their Response. (Doc. # 30, pp. 25–
26).5 Accordingly, Plaintiffs’ RESPA claim is due to be dismissed on this basis alone.
In addition, Plaintiffs’ RESPA claim fails allege actual damages. Two types of damages
are available under RESPA: (A) any actual damages to the borrower as a result of the failure to
respond to the QWR; and (B) any additional damages, as the court may allow, in the case of a

Plaintiffs’ Response merely claims that they have set forth sufficient factual allegations that
Defendants violated or are otherwise vicariously liable for violations of federal regulations 12
C.F.R. § 1024.41 and 12 C.F.R. 1024.35 of Regulation X promulgated under RESPA.
5

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pattern or practice of noncompliance with the requirements of this section.” 12 U.S.C. 2605(f)(1).
“This language suggests there must be a “causal link” between the alleged violation and the
damages.” Renfroe, 822 F.3d at 1246.
In this case, Plaintiffs allege that they were damaged because they were not informed of the
information regarding their loan . . . [and]were not able to stop the foreclosure of their home.”
(Doc. # 17, p. 19, ¶ 106). However, Plaintiffs further allege that no foreclosure sale ever occurred.
Accordingly, even if Defendants failed to respond to their QWRs, Plaintiffs suffered no damages
and Plaintiffs’ RESPA claim is due to be dismissed.
3. Violations of FCRA (Count Twelve)
Next, Defendants challenge Plaintiffs’ FCRA claim. The FCRA provides exclusive
remedies for claims by consumers against those who furnish information to credit reporting
agencies. See § 15 U.S.C. § 1681s-2; see also Green v. RBS Nat. Bank, 288 Fed. App’x. 641, 642
(11th Cir. 2008). Plaintiffs make clear in their brief that they bring this claim under § 1681s-2(b),
which provides a private cause of action (Doc. # 30, p. 27). However, a consumer may not bring a
claim against a furnisher of information unless he first has pointed out a mistake to the consumer
reporting agency, the consumer reporting agency has notified the furnisher of information of the
mistake, and the furnisher of information fails to investigate or correct the information. See
1681s-2(b); see also Green, 288 F. App’x at 642 (“The FCRA does provide a private right of
action for a violation of § 1681s-2(b), but only if the furnisher received notice of the consumer’s
dispute from a consumer reporting agency.”).
The Amended Complaint alleges that “the Collinses contacted the credit national bureaus
and informed them of the inaccurate information and disputed same” (Doc. 17, p. 19), that “[t]he
National Credit Bureaus notified the Defendants of the disputed credit reporting; however,
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Defendants failed and refused to act on that notice for the credit reporting agencies and failed and
refused to make any changes or corrections regarding its reporting of the loan status to the credit
bureaus” (Doc. # 17, p. 20) after they “failed to conduct a reasonable investigation with respect to
consumer credit data it reported about the Plaintiff.” Id. While the Plaintiffs have alleged the basic
elements required for this claim, the allegations are problematic because they are directed against
all Defendants, the period of their alleged contacts with the Defendants complaining of inaccurate
reporting ran from September 2012 until January 31, 2016 (Doc. # 17, p. 19), and the Amended
Complaint alleges that “[i]n November 2015, the loan was allegedly sold again to Ventures Trust
2013-I-H-R, BSI, Servis One, Inc., and MCM Capital Partners LLC became the servicers of the
mortgage loan . . . .” Because of that, the court will grant the Motions to Dismiss this claim, but
without prejudice to allow a time for amendment. Any amendment should, to the extent counsel
may do so without violating Fed. R. Civ. P. 11, include allegations as to which credit bureaus
notified which Defendants of the consumer dispute, when, and after which how the receiving
Defendant failed to comply with the FCRA.
4. Violations of FDCPA (Count Thirteen)
Defendants contend that they are not “debt collectors” subject to this Act.
To state a claim under the FDCPA, a plaintiff must establish, among other things, that the
Defendant is a “debt collector.” Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211,
1216 (11th Cir. 2012). The Amended Complaint alleges in paragraph 1 under “Parties” that “[t]he
Defendants . . . are ‘debt collectors’ as that term is defined by 15 U.S.C. § 1692A(6). (Doc. # 17,
p.1). That conclusory allegation, however, is not sufficient as to any Defendant.
The Amended Complaint alleges that the mortgage loan in question was sold, transferred
or assigned to CitiMortgage by a previous owner at some time, and that in November 2015 it was
9

sold again to the Defendant Ventures Trust 2013-I-H-R. It alleges that BSI, Servis One, Inc., and
MCM Capital Partners LLC then became the servicers of the mortgage loan.
The FDCPA defines a debt collector as any person who (1) uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of which is the collection of
any debts, or (2) who regularly collects or attempts to collect, directly or indirectly, debts owed or
due or asserted to be owed or due another. See 15 U.S.C. § 1692a(6). Even if a Defendant qualifies
under one of those definitions, however, its collection activity is excluded from the term “debt
collector” to the extent that it “concerns a debt which was not in default at the time it was obtained
by such person.” 15 U.S.C. § 1692a(6)(f)(iii).
In this case, the Plaintiffs contend that they were never in default. Also, although the
Amended Complaint directs this claim against all Defendants it does not allege what each did, and
when, in violation of the statute.
The court will dismiss this claim, but without prejudice to the Plaintiffs filing an amended
claim for violation of the FDCPA, if they can do so under the constraints of Fed. R. Civ. P. 11. Any
amended claim must allege facts as to each Defendant that qualify it as a “debt collector” under the
statutory definition, see 15 U.S.C. § 1692a(6), and keep it from coming within the exclusion, see
15 U.S.C. § 1692a(6)(f)(iii), and, if they can do that, further as to each Defendant, what it did and
when that violated the statute.
C. State Law Claims
Five (5) of Plaintiffs’ state law claims include state law theories relating to the furnishing
of inaccurate information to consumer reporting agencies. The Defendants argue that remedies for
this conduct are governed by the FCRA, and that any state law remedy for the same conduct is
preempted by the FCRA. Accordingly, the court will address the preemption argument first. Then,
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the court will address the Plaintiffs’ remaining claims, in turn.
i. FCRA Preemption (Counts One, Two, Seven, Eight, and Nine)
“The stated purpose of the FCRA is ‘to prevent consumers from being unjustly damaged
because of inaccurate or arbitrary information in a credit report.’” Equifax Inc. v. F. T. C., 678 F.2d
1047, 1048 (11th Cir. 1982) (citing S. Rep. No. 91-517, 91st Cong. 1st Sess. 1 (1969)). The FCRA
sets forth the duties for those who furnish information to consumer reporting agencies, see 15
U.S.C. § 1681s-26, and establishes a process by which consumers can dispute the accuracy of
information reported on their credit report, see U.S.C. §§ 1681n7; 1681o8. Importantly, though, the
FCRA contains two preemption provisions concerning the availability of state law remedies
against furnishers of information for the same conduct: 15 U.S.C. § 1681h(e) and 15 U.S.C. §
1681t(b)(1)(F).
Section 1681h(e) states:
Except as provided in sections 1681n and 1681o of this title, no
consumer may bring any action or proceeding in the nature of
defamation, invasion of privacy, or negligence with respect to the
reporting of information against any consumer reporting agency,
any user of information, or any person who furnishes information to
a consumer reporting agency, based on information disclosed
pursuant to section 1681g, 1681h, or 1681m of this title, or based on
information disclosed by a user of a consumer report to or for a
consumer against whom the user has taken adverse action, based in
whole or in part on the report except as to false information
furnished with malice or willful intent to injure such consumer.
Section 1681t(b)(1), on the other hand, provides:

15 U.S.C. § 1681s-2(a)(1)(A) states, “A person shall not furnish any information relating to a
consumer to any consumer reporting agency if the person knows or has reasonable cause to believe
that the information is inaccurate.”
7
15 U.S.C. § 1681n governs civil liability for willful noncompliance.
8
15 U.S.C. § 1681o governs civil liability for negligent noncompliance.
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No requirement or prohibition may be imposed under the laws of
any State—
(1) with respect to any subject matter regulated under—
...
(F) section 1681s–2 of this title, relating to the responsibilities of
persons who furnish information to consumer reporting agencies.
While some district courts have found these overlapping statutes problematic, see
Woltersdorf v. Pentagon Federal Credit Union, 320 F. Supp. 2d 1222, 1224 (N.D. Ala. 2004);
McCloud v. Homeside Lending, 309 F. Supp. 2d 1335 (N.D. Ala. 2004); Watkins v. Trans Union,
L.L.C., 118 F. Supp. 2d 1217 (N.D. Ala. 2000), this court has consistently distinguished the two.
See Knudson v. Wachovia Bank, 513 F. Supp. 2d 1255, 1259 (M.D. Ala. 2007) (Albritton, J.).9 To

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The court notes that the Eleventh Circuit has not directly addressed whether § 1681t(b)(1)(F) is in
conflict with § 1681h(e). See, e.g., Lofton-Taylor v. Verizon Wireless, 262 Fed.Appx. 999, 1002 (11th Cir.
2008) (noting that because 15 U.S.C. § 1681h(e) preempts state law defamation and invasion of privacy
claims, it “need not decide whether the preemption language in § 1681t(b)(1)(F) is broad enough to also
preclude [other state law claims]”). Over time, this apparent silence has resulted in considerable division
among Alabama district court judges over the proper scope of FCRA preemption. See Hamilton v. Midland
Funding, LLC, 2015 WL 5084234, at *6 (N.D. Ala. Aug. 27, 2015) (Kallon, J.); Taylor v. Midland
Funding, LLC, 2015 WL 4670314, at *9–12 (N.D. Ala. Aug. 6, 2015) (Cooglar, J.); Dial v. Midland
Funding, LLC, 2015 WL 751690, at *6 (N.D. Ala. Feb. 23, 2015) (Acker, Jr., J.).
Nevertheless, “there appears to be a growing consensus [within the Eleventh Circuit] that tort
claims based on a furnisher's alleged reporting of inaccurate credit information to credit agencies fall within
the scope of section 1681t(b)(1)(F), not section 1681h(e), and are preempted.” Bush v. J.P. Morgan Chase
Bank, N.A., No. 2:15-CV-00769-JEO, 2016 WL 324993, at *7 (N.D. Ala. Jan. 27, 2016); see Gregory v.
Select Portfolio Servicing, Inc., No. 2:15-CV-00781-JHE, 2016 WL 4540891, at *8 (N.D. Ala. Aug. 31,
2016) (England, J.); Taylor, 2015 WL 4670314, at *9–12 (N.D. Ala. Aug. 6, 2015) (Cooglar, J.); Granville
Alley v. Farmers Bank, Inc., No. 3:13-CV-146 CAR, 2014 WL 4287103, at *6 (M.D. Ga. Aug. 29, 2014)
(Royal, J.); Lett v. Midland Funding LLC, No. 2:13CV665-MHT, 2013 WL 6162674, at *1 (M.D. Ala.
Nov. 22, 2013) (Thompson, J.); Folkes v. Equifax Info. Servs. LLC, No. 1:12-CV-900-WKW, 2013 WL
1946219, at *3 (M.D. Ala. May 9, 2013) (Watkins, C.J.); Spencer v. Nat'l City Mortgage, 831 F. Supp. 2d
1353, 1363 (N.D. Ga. 2011) (Batten, J.); Schlueter v. BellSouth Telecommunications, 770 F. Supp. 2d 1204,
1209 (N.D. Ala. 2010). (Blackburn, J.).
Other circuits have adopted this approach as well. See, e.g., MacPherson v. JP Morgan Chase
Bank, N.A., 665 F.3d 45, 47–48 (2d Cir. 2011) (reasoning that “the operative language in § 1681h(e)
provides only that the provision does not preempt a certain narrow class of state law claims; it does not

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the extent § 1681t(b)(1)(F) overlaps with § 1681h(e), it is not redundant, because, as the Seventh
Circuit Court of Appeals noted in Pursell v. Bank of America, “Section 1681h(e) preempts some
state claims that could arise out of reports to credit agencies[, while] § 1681t(b)(1)(F) preempts
more of these claims.” 659 F.3d 622, 625 (7th Cir. 2011). Moreover, § 1681t(b)(1)(F) is not in
conflict with § 1681h(e), because § 1681t(b)(1)(F) is the exclusive remedy for tortious conduct
against those who furnish information to credit reporting agencies under § 1681s-2, see Knudson,
513 F. Supp. 2d at 1260, while § 1681h(e) regulates disclosures to consumers and provides a
remedy against users of said information. See Schlueter v. BellSouth Telecommunications, 770 F. Supp.
2d at 1209.

In Knudson, Plaintiff alleged that his creditworthiness had been compromised when
Defendant, Wachovia Bank, reported inaccurate information to consumer reporting agencies;
specifically, that Plaintiff’s closed car loan was delinquent and past due. Id. at 1256. Plaintiff sued
Wachovia under the FCRA and, in addition, asserted a variety of state law claims, including for
defamation, invasion of privacy, violation of a Consumer Protection Act, and negligence. Id. at
1257. Wachovia moved to dismiss Plaintiff’s state law claims on the basis of preemption. Id. This
court agreed, reasoning, Ҥ 1681t(b)(1)(F) provides that no requirement or prohibition may be
imposed under the laws of any State with respect to any subject matter regulated under section
1681s-2 . . . .” Id. Because “[t]he violations of state law concerned the same conduct regulated
under 1681s-2,” Plaintiff’s state law claims were preempted. Id.
Likewise, five (5) of Plaintiffs’ state law claims, or portions thereof, concern conduct
regulated under 1681s-2. Specifically, in Count One, Negligence, Plaintiffs allege, in part, that all
prevent the later-enacted § 1681t(b)(1)(F) from accomplishing a more broadly-sweeping preemption”);
Purcell v. Bank of America, 659 F.3d 622 (7th Cir. 2011) (same); Ross v. F.D.I.C., 625 F.3d 808, 814 (4th
Cir. 2010) (same).

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Defendants were negligent by:
failing to make sure that information disseminated to others
(including the national credit bureaus and those credit grantors
likely to use the information provided by those bureaus) was not
false, neither libelous nor slanderous, and rose to the level of
maximum accuracy;
(Doc. # 17, p. 8–9). In Count Two (Wantonness), Plaintiffs allege, in part, that Defendants
failed to make sure that information disseminated to others
(including the national credit bureaus and those credit grantors
likely to use the information provided by those bureaus) was not
false, neither libelous nor slanderous, and rose to the level of
maximum accuracy.
(Doc. # 17, p. 9). In Count Seven, Fraud, Plaintiffs allege that all Defendants committed fraud
because they:
misrepresented that the loan was in default. Further, the Defendant
make false and misleading representations, to wit: dissemination of
inaccurate information regarding the loan account as being in
default and dissemination of inaccurate information regarding the
credit history of the Plaintiff that was known to be false.
(Doc. # 17, p. 12–13). Count Eight, Placed in a False Light, Plaintiffs claim, in part, that the
Defendants held them up in a false light by making “undesirable and negative and credit reputation
remarks on or about the Collinses in the national credit reporting media.” (Doc. # 17, p. 13–14).
Finally, in Count Nine, Defamation, Libel, Slander, Plaintiffs allege that all Defendants
committed Defamation, Libel, Slander, in part, because they:
willfully, wantonly, recklessly and/or maliciously published and
communicated false and defamatory statements regarding the
Plaintiff and said statements have subjected the Plaintiff to the
denial of credit by third parties, resulted in homeowner’s insurance
cancellation and harmed the Plaintiffs’ credit reputation . . . . The
Defendant communicated to credit reporting agencies and/or other
third parties, false information that the Collinses defaulted on the
loan and was in foreclosure, disseminated and imputed false and
misleading credit history and worthiness information concerning
14

the Collinses . . . . Defendants knew this information was inaccurate
at the time it published this notice in the local paper, and the
published false information harmed the Collinses’ reputation and
character. As a result, the Collinses’ suffered damages of their
reputation which negatively affected their credit and their business
causing monetary losses.
(Doc. # 17, p. 14–16). All of these claims are based, in part, on the allegation that the Defendants
furnished inaccurate information to consumer reporting agencies. To that extent, those claims are
preempted under § 1681t(b)(1)(F). See also Gregory v. Select Portfolio Servicing, Inc., slip copy,
No.: 2:15-cv-00781-JHE, 2016 WL 4540891, at *8 (N.D. Ala. Aug. 31, 2016) (dismissing
Plaintiff’s “state-law claims to the extent they address the subject matter regulated under §
1681s-2” because they were preempted by the FCRA). Plaintiffs’ remedy for this conduct is
governed wholly by the FCRA, previously discussed. Accordingly, Counts One, Two, Seven,
Eight, and Nine, are due to be dismissed to the extent they allege bases for the claims that are
preempted by the FCRA.
2. Negligence (Count One), Wantonness (Count Two)
Defendants challenge the remainder of Plaintiffs’ negligence and wantonness claims for
failure to state claims. Plaintiffs allege that Defendants were negligent and wanton because: (i)
they breached duties imposed under the mortgage contract; (ii) they breached a duty to service the
mortgage contract; (iii) they breached a duty to train and supervise their employees; and (iv), for
the first time in their Response to Defendants’ Motions to Dismiss (Doc. # 30), they breached
statutory duties imposed under the federal RESPA statute. Defendants argue that they were not
negligent or wanton and that these claims are due to be dismissed because they did not owe any
duty to Plaintiffs. The court agrees.
“To establish negligence [under Alabama law], the plaintiff must prove: (1) a duty to a

15

foreseeable plaintiff; (2) a breach of that duty; (3) proximate causation; and (4) damage or injury.”
Lemley v. Wilson, 178 So. 3d 834, 841 (Ala. 2015). Failure to establish any one of these elements
renders a plaintiff’s claim for negligence insufficient. See Calvert Fire Ins. Co. v. Green, 180 So.
2d 269, 273 (Ala. 1965). Whether a duty exists is a question of law for the court. See Garner v.
Covington County, 624 So. 2d 1346, 1350 (Ala. 1993).
In this case, Defendants did not owe a general duty of care to the Plaintiffs as borrowers.
“Courts have traditionally viewed the relationship between a bank and its customer as a
creditor-debtor relationship that does not impose a fiduciary duty on the bank.” K & C Dev. Corp.
v. AmSouth Bank, 597 So. 2d 671, 675 (Ala. 1992); see also Wilkerson v. Gozdan, No.
2:14-CV-693-WKW, 2014 WL 4093279, at *4 n.8 (M.D. Ala. Aug. 19, 2014) (noting “absent
special circumstances, Alabama law recognizes no fiduciary duty on the part of a loan servicer
toward a borrower”); Shewmake v. Anderson, 2012 WL 5378942, at *5 (N.D.Ala. Oct. 30, 2012)
(“Under Alabama law, the relationship of a lender to a borrower generally does not impose a
fiduciary duty on the lender. This general rule also applies to the relationship between a mortgagee
and mortgagor.”)
In addition, the mortgage contract did not establish any extra-contractual, tort-like duties
on Defendants. In fact, “Alabama law does not recognize a tort-like cause of action for the breach
of a duty created by a contract.” Blake v. Bank of America, N.A., 845 F. Supp. 2d 1206, 1210 (M.D.
Ala. 2002). Instead, “a negligent failure to perform a contract . . . is but a breach of the contract.”
Vines v. Crescent Transit Co., 85 So. 2d 436, 440 (1956); see also Barber v. Business Prods. Ctr.,
677 So. 2d 223, 228 (Ala. 1996) (stating “a mere failure to perform a contractual obligation is not
a tort”). Plaintiffs’ Amended Complaint alleges that Defendants negligently (Count One) and
wantonly (Count Two) “serviced the loan made the basis of this suit” in various ways. (Doc. # 17,
16

pp. 8–9). All of these claims arise out of obligations under the mortgage contract. Accordingly, any
claim for a breach of those duties must sound in contract, not tort.
The Supreme Court of Alabama has held there is no tort cause of action for wanton
servicing of a mortgage account because the duties and breaches would not exist but for the
contractual relationship. U.S. Bank Nat. Ass’n v. Shepherd, __ So. 3d __, No. 1140376, 2015 WL
7356384, at *12 (Ala. Nov. 20, 2015). In so holding, the Court stated that “a veritable avalanche of
recent (and apparently unanimous) federal precedent has found that no cause of action for
negligent or wanton servicing of a mortgage account exists under Alabama law.” The Court cited
this court’s decision in Ott v. Quicken Loans, Inc., No. 2:13-cv-441-WHA, 2015 WL 248938
(M.D. Ala. Jan. 20, 2015), among others. See also Shedd v. Wells Fargo Bank, N.A.., No.
14-0275-WS-M, 2016 WL 3264127, at *4 (S.D. Ala. June 13, 2016) Therefore, Plaintiffs’ claims
based on negligent and wanton servicing of the account are due to be dismissed.
The Plaintiffs’ claims of negligently and wantonly training and supervising their
employees also fail. “To establish a claim of negligent supervision, the plaintiff must demonstrate
that (1) the employee committed a tort recognized under Alabama law, (2) the employer had actual
notice of this conduct or would have gained such notice if it exercised due and proper diligence,
and (3) the employer failed to respond to this notice adequately.” Edwards v. Hyundai Motor Mfg.
Alabama, LLC, 603 F. Supp. 2d 1336, 1357 (M.D. Ala. 2009) (citing Stevenson v. Precision
Standard, Inc., 762 So. 2d 820, 824 (Ala. 1999); Armstrong Bus. Servs. v. AmSouth Bank, 817 So.
2d 665, 682 (Ala. 2001).
Here, Plaintiffs allege that Defendants were negligent and wanton by failing to properly
train their employees on the thorough investigation of disputed accounts ;failed to properly train
and/or supervise their employees and agents with regard to the handling of Plaintiffs’ loan account
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and failing to remove the adverse reporting from Plaintiffs’ credit once they disputed the same.
The investigation by employees would be governed by the FCRA, Section 1681s-2, which, as
previously noted, preempts a state law claim. The other allegations amount to claims of negligent
and wanton servicing of the mortgage account, which are not torts recognized under Alabama law.
See Shepherd, 2015 WL 7356384, at *12. Therefore, these counts fail to allege claims for
negligent and wanton failure to train and supervise for which relief may be granted. Gregory v.
Select Portfolio Servicing, Inc., 2016 WL 4540891, at *11 (N.D. Ala. Aug. 31, 2016). Accordingly,

Plaintiffs’ claims for negligent and wanton supervision fail to state a claim upon which relief may
be granted.
Finally, the federal RESPA statute does not impose any extra-contractual duties on the
Defendants. In a similar case, Judge Steele soundly rejected the argument that federal statutes,
such as RESPA, impose extra-contractual duties on defendants, stating:
Plaintiffs attempt to circumvent these principles by asserting that
statutes, rather than contracts, form the basis for the duties that
plaintiffs claim were breached. This argument is unpersuasive for a
host of reasons. First, plaintiffs' Complaint neither provides an
inkling that [its claims] are proceeding under a negligence per se
theory nor recites any statutes as being the source of the duties that
they claim were breached; therefore, it does not comport with
Twombly/Iqbal pleading requirements. Even plaintiffs' brief does
not fill in these gaps by articulating which statute(s) they contend
provide the legal underpinnings for their negligence and wantonness
claims herein. (Had the brief included that information, plaintiffs
still would not prevail, as a party cannot amend its pleading via brief
in response to a dispositive motion.) Second, federal courts in
Alabama have given short shrift to similar efforts invoking the
doctrine of negligence per se to outflank the phalanx of case
authorities holding that Alabama law does not recognize a cause of
action for negligent or wanton mortgage servicing. See Costine, 946
F.Supp.2d at 1233–34; Prickett, 946 F.Supp.2d at 1247. . . . Fourth,
the [Plaintiffs’] appeal to negligence per se cannot help them
because the legal duties underlying their claims against [the
Defendants] arise in contract. The statutes in play in this case
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regulate the contractual relationship between the [Plaintiffs] and
[the Defendants], but do not eliminate or supplant that contractual
relationship; therefore, the reasoning of the line of authorities
beginning with Blake (i.e., that the obligations in question are rooted
in contract rather than tort) remains fully intact, even in the face of a
negligence per se claim (had plaintiffs properly presented one in
their pleading, which they did not).
James, 92 F. Supp. 3d at 1200, n.9; see also Bush v. J.P. Morgan Chase Bank, N.A., No.
2:15-CV-00769-JEO, 2016 WL 324993, at *9 (N.D. Ala. Jan. 27, 2016). Accordingly, Plaintiffs’

argument that the “servicer violated the duty owed to them as imposed by RESPA when it fails
[sic] to respond to a request for loss mitigation, failed to process their application for loss
mitigation, and failed to postpone proceeding with a foreclose [sic] until a decision is made with
regard to loss mitigation” fails as a matter of law.
For all of the foregoing reasons, Defendants’ Motion to Dismiss Plaintiffs’ negligence and
wantonness claims are due to be GRANTED.
3. Unjust Enrichment (Count Three)
Next, Defendants dispute Plaintiffs’ unjust enrichment claim because, they argue, implied
contract remedies are unavailable when an express contract governs the agreement between the
parties. “The doctrine of unjust enrichment is an old equitable remedy permitting the court in
equity and good conscience to disallow one to be unjustly enriched at the expense of another.”
Scrushy v. Tucker, 955 So. 2d 988, 1011 (Ala. 2006) (internal citations and quotations omitted).
However, “under Alabama law, claims of both an express and an implied contract on the same
subject matter are generally incompatible.” Kennedy v. Polar-BEK & Baker Wildwood
Partnership, 682 So.2d 443, 447 (Ala. 1996). In fact, the Alabama Supreme Court has recognized
that “where an express contract exists between two parties, the law generally will not recognize an
implied contract regarding the same subject matter.” Id.
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Plaintiffs contend that the Defendants were unjustly enriched “by the payment of fees,
insurance proceeds and equity in the home” when they “[attempted] foreclosure on the home of the
Plaintiff in violation of law.” (Doc. # 17, p. 10). However, this conduct concerns the same subject
matter as the underlying mortgage contract at issue in this case. Therefore, Plaintiffs’ unjust
enrichment claim is due to be dismissed. See also Rice v. JP Morgan Chase Bank NA, No.
7:14-cv-00318-LSC, 2014 WL 3889472, at *11 (N.D. Ala. Aug. 5, 2014) (dismissing a claim for
unjust enrichment because a mortgage contract governed the issues in dispute).
4. Wrongful Foreclosure (Count Four)
Defendants next challenges Plaintiffs’ claim for wrongful foreclosure. The Supreme Court
of Alabama has explained that “Alabama has long recognized a cause of action for ‘wrongful
foreclosure’ arising out of the exercise of a power-of-sale provision in a mortgage.” Jackson v.
Wells Fargo Bank, N.A., No. 1100594, 2012 WL 517482 (Feb. 17, 2012). “A mortgagor has a
wrongful foreclosure action whenever a mortgagee uses the power of sale given under a mortgage
for a purpose other than to secure the debt owed by the mortgagor.” Reeves Cedarhurst Dev. Corp.
v. First Am. Fed. Sav. & Loan Assoc., 607 So.2d 180, 182 (Ala.1992).
However, the hallmark of a wrongful foreclosure claim is that a foreclosure sale actually
has occurred. See Rice, 2014 WL 3889472, at *8 (“To state a wrongful foreclosure claim, the
plaintiff must plead facts suggesting there [was] an actual foreclosure.”); ECP Fin. II LLC v. Ivey,
No. 6:13-cv-00920-LSC, 2013 WL 6330936, at *3 (N.D. Ala. Dec. 5, 2013) (“The plain reading of
the terms ‘uses the power of sale’ in the wrongful foreclosure claim establishes that there must be
an actual foreclosure sale.”); Vance v. Ocwen Loan Servicing, LLC, No. 2:12-CV-00588-RDP,
2012 WL 2036412, at *3 (N.D. Ala. Nov. 26, 2012) (“[I]n order to state a claim for wrongful
foreclosure, a foreclosure sale must have taken place.”)
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In this case, Plaintiffs allege that Defendants “wrongfully initiated and attempted to
conduct a foreclosure proceeding against the Plaintiff.” (Doc. # 17, p. 11). However, the Plaintiffs
fail to allege that a foreclosure sale ever took place. Accordingly, Plaintiffs’ claim for wrongful
foreclosure is insufficient on its face and cannot survive a 12(b)(6) motion for failure to state a
claim. See also Bush, 2016 WL 324993, at *11 (dismissing an identical wrongful foreclosure claim
because it was based on an allegation of attempted foreclosure).
5. Slander of Title (Count Five)
Additionally, Defendants contend that Plaintiffs’ slander of title claim is insufficient and
due to be dismissed. Under Alabama law, to establish a claim for slander of title, the plaintiff must
show:
(1) Ownership of the property by plaintiff; (2) falsity of the words
published; (3) malice of defendant in publishing the false
statements; (4) publication to some person other than the owner; (5)
the publication must be in disparagement of plaintiff’s property or
the title thereof; and (6) that special damages were the proximate
result of such publication (setting them out in detail).
Folmar v. Empire Fire & Marine Ins. Co., 856 So. 2d 807, 809 (Ala. 2003).
Defendants argue that Plaintiffs’ slander of title claim is deficient because Plaintiffs have
not alleged malice or special damages. “To satisfy the special damages pleading requirement, a
plaintiff must allege that the defendant’s false publication ‘interrupted, or injuriously affected,
some dealing of the plaintiff with his property’ or caused the plaintiff to incur expenses ‘to relieve
his right to the property from the damnifying effect of such false and malicious slander.’ ” Prickett
v. BAC Home Loans, 946 F. Supp. 2d 1236, 1244 (N.D. Ala. 2013) (quoting Ebersole v. Fields, 62
So. 73, 75 (Ala. 1913). Moreover, “[s]pecial damages must be ‘distinctly and particularly set out’
in the complaint, and ‘[a]n allegation of loss in general terms is not sufficient.’ ” Id.

21

A failure to plead special damages is fatal to Plaintiffs’ slander of title claim. See Dent v.
Balch, 104 So. 651, 652 (1925) (“In actions for slander of title, special damage of a pecuniary
nature is the gist of the action, and such damage must be directly and particularly set out in the
complaint; an allegation of loss in general terms not being sufficient.”); Stewart v. Williams,
2110725, 2013 WL 1165383 (Ala. Civ. App. Mar. 22, 2013) (noting that special damages is an
“essential element of the cause of action for slander of title”) (citing W. Prosser, The Law of Torts
§ 128, at 920 (4th ed. 1971)). In other words, special damages must be “distinctly and particularly
set out” in the complaint, and “[a]n allegation of loss in general terms is not sufficient.” Ebersole,
62 So. at 75.
Here, Plaintiffs allege that Defendants’ slandering of Plaintiffs’ title caused the Plaintiffs to
“suffer injuries and damages.” (Doc. 17, p. 11). However, this allegation does not meet the
particularity requirement for pleading special damages. See Prickett, 946 F. Supp. 2d at 1244. In
Prickett, Judge Cooglar dismissed a similar slander of title claim where the Plaintiffs merely
alleged “[Defendant’s] conduct ‘was the proximate cause of injuries and damages.’” Id. The court
reasoned, “This allegation does not describe with particularity the damages that resulted from the
[Defendant’s] actions, and is therefore insufficient to state a claim for slander of title under
Alabama law.” Likewise, a conclusory allegation that Defendants’ conduct caused the Plaintiff to
“suffer injuries and damages,” does not meet the particularity requirement for pleading special
damages.
Because a failure to plead malice and special damages is dispositive of a slander of title
claim, Plaintiffs’ slander of title claim is due to be dismissed, but the court will allow the Plaintiffs
to replead.
6. Breach of Contract (Count Six)
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Defendants next contend that Count Six of Plaintiffs’ Amended Complaint is due to be
dismissed. (Doc. # 19, p. 23). “The elements of a breach of contract claim under Alabama law are
(1) a valid contract binding the parties; (2) the plaintiff’s performance under the contract; (3) the
defendant’s nonperformance; and (4) resulting damages.” Reynolds Metals Co. v. Hill, 825 So. 2d
100, 105 (Ala. 2002). The linchpin of a breach of contracts claim is the existence of a valid and
enforceable contract. See Webb v. Ocwen Loan Servicing, LLC, No. 1:11-cv-732, 2012 WL
5906729, at *8 (S.D. Ala. Nov. 26, 2012). Defendants argue that they were not parties to the
original mortgage loan underlying this dispute, and that Plaintiffs expressly deny any transfer ever
took place between the original contracting parties and Defendants.
Plaintiffs’ Amended Complaint alleges that, although the Plaintiffs “signed a promissory
note with Ronnie Miskelly, Jr.,” the original contracting party, “[t]he mortgage loan was . . . later
transferred and sold to CitiMortgage,” (Doc. # 17, p. 2), and “the loan was allegedly sold again to
Ventures Trust 2013-T-H-R. BSI, Servis One, Inc., and MCM Capital Partners, LLC became
servicers of the mortgage loan (Doc. # 17, p. 5). The complaint goes on to state that Defendants
“breached the terms and conditions of said mortgage contract . . . failed to apply payments properly
. . . and failed to send proper notices” in breach of the mortgage contract. (Doc. # 17, p. 12). These
allegations, however, are problematic in that they refer to all Defendants without alleging which
Defendant did what, and when, that would constitute a breach of the mortgage contract.
Because the allegations of this count are unclear and confusing, the court will grant the
motion to dismiss this claim, but will allow Plaintiffs to amend to include allegations as to which
Defendant they claim breached the mortgage contract, when, and how. See, e.g., Bennett v.
Nationstar Mortg., LLC, No. 1:15-cv-165, 2015 WL 5294321, at *1, *14–15 (S.D. Ala. Sept. 8,
2015).
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7. Fraudulent Misrepresentation (Count Seven)
Next, the court turns to the Plaintiffs’ fraudulent misrepresentation claim. Defendants
move the court to dismiss the Plaintiffs’ fraudulent misrepresentation claim because it is not pled
with the requisite particularity and the Plaintiffs have failed to adequately allege detrimental
reliance. This court agrees as to both.
Defendants first argue that Plaintiffs’ fraudulent misrepresentation claim is not pled with
the requisite particularity. Rule 9(b) of the Federal Rules of Civil Procedure requires that “[i]n all
averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with
particularity.” Fed.R.Civ.P. 9(b). The Eleventh Circuit has clarified that Rule 9(b)’s particularity
requirement “may be satisfied if the complaint sets forth: (1) precisely what statements were made
in what documents or oral representations or what omissions were made, and (2) the time and
place of each such statement and the person responsible for making (or, in the case of omissions,
not making) same, and (3) the content of such statements and the manner in which they misled the
plaintiff, and (4) what the defendants obtained as a consequence of the fraud.” Brooks v. Blue
Cross & Blue Shield of Florida, Inc., 116 F.3d 1364, 1370–71 (11th Cir. 1997) (internal citations
and quotations omitted).
The court finds that the Plaintiffs failed to plead fraudulent misrepresentation with the
requisite particularity. While Plaintiffs allege that “Defendant misrepresented that the loan was in
default,” (Doc. 17, p. 12), it is entirely unclear whether Plaintiffs are referring to CitiMortgage or
another Defendant. Moreover, the Plaintiffs fail to allege what statements or representations were
made. The Plaintiff states that the “Defendant made false and misleading representations, to wit:
dissemination of inaccurate information regarding the loan account as being in default and
dissemination of inaccurate information regarding the credit history and credit of the Plaintiff that
24

was known to be false.” However, without more, such a broad and generalized statement does not
meet the particularity requirement under Rule 9(b). See Gregory, 2016 WL 4540891, at *13
(dismissing the exact same allegation as “insufficient to allege fraud under Rule 9(b)”). Plaintiffs
fail to state when, where, to whom, by whom, or in what manner these alleged representations
were made. Rule 9(b) is designed to “[alert] defendants to the precise misconduct with which they
are charged and [protect] defendants against spurious charges of immoral and fraudulent
behavior.” Brooks, 116 F.3d at 1370–71. Plaintiffs’ vague allegations do none of these.
Furthermore, “[t]o establish a prima facie case of fraudulent misrepresentation, a plaintiff
must show: (1) that the representation was false, (2) that it concerned a material fact, (3) that the
plaintiff relied on the false representation, and (4) that actual injury resulted from that reliance.”
Cook’s Pest Control, Inc. v. Rebar, 28 So. 3d 716, 725 (Ala. 2009). While Plaintiffs allege several
misrepresentations, albeit inadequately, the only action they allege they took in reliance on them
was that “as a result of said reliance [they] proceeded with the execution of the loan.” (Doc. # 17,
p. 13). Plaintiffs, however, executed the mortgage loan with Ronnie Miskelly, Jr., not a Defendant.
Therefore, Plaintiffs could not possibly have relied on any representations by any of the
Defendants when they executed the loan, since the Defendants had no involvement in the
origination of the loan.
Accordingly, Plaintiffs’ fraudulent misrepresentation claim is due to be dismissed because
it fails to meet the procedural hurdles of Rule 9(b) and the substantive hurdles of detrimental
reliance to survive a Rule 12(b)(6) motion to dismiss for failure to state a claim. The Plaintiffs will
be allowed to replead.
8. Defamation, Libel, Slander (Count Nine)
Defendants next contend that Plaintiffs’ Defamation, Libel, Slander claim should be
25

dismissed. Under Alabama law, defamation consists of “libel, which involves the use of print
media to publish a defamatory comment; and slander, which involves the oral expression of a
defamatory comment.” Corp. Am. Car Wash Sys. v. City of Birmingham, No. 2:14-CV-781-RDP,
2016 WL 837718, at *7 (N.D. Ala. Mar. 4, 2016) (quoting Blevins v. W.F. Barnes Corp., 768 So.
2d 386, 390 (Ala. Civ. App. 1999)). As a procedural matter, in the absence of language imputing a
person with the commission of a crime—that is, in the absence of slander per se—both libel and
slander require Plaintiffs to plead special damages in accordance with Rule 9(g) of the Federal
Rules of Civil Procedure. See Ceravolo v. Brown, 364 So. 2d 1155, 1157 (Ala. 1978); see also Fed.
R. Civ. P. 9(g) (“If an item of special damage is claimed, it must be specifically stated.”)
“Evidence of special damages is evidence that the untrue statements resulted in a material loss
capable of being measured in money.” Cottrell v. Nat'l Collegiate Athletic Ass'n, 975 So. 2d 306,
331, n.10 (Ala. 2007).
In this case, Defendants argue that Plaintiffs failed to allege that any statements made by
them resulted in a material loss to Plaintiffs. However, Plaintiffs’ complaint does allege that “said
statements have subjected the Plaintiff [sic] to the denial of credit by third parties, resulted in
homeowner’s insurance cancellation and harmed the Plaintiff’s credit reputation,” and “the
Plaintiffs have suffered a loss of income due to their damaged reputations.” These statements, if
true, would evidence a material loss capable of being measured in money.
A problem with this count, however, as with other counts, is that the Plaintiffs claim
against all Defendants but do not specify what each Defendant did. Basically, the libel or slander
alleged is claiming that the Plaintiffs were in default on their mortgage when, in fact, they were
not. They allege in Count Nine of the Amended Complaint that the libel was committed when
“Defendants published in the local newspaper in Chilton County, Alabama, the false information
26

of the default on the loan in the foreclosure sale notice,” (Doc. # 17, p. 15), while in the Statement
of Facts, they also refer to a publication in the Montgomery Independent at a different time. (Doc.
# 17, p. 5). Neither states which Defendant is referred to.
Also, Count Nine alleges that the Defendants communicated false information to credit
reporting agencies, which the court has previously stated is a claim preempted by the FCRA,
“and/or other third parties,” without identifying which Defendant and whom the third parties were.
(Doc. # 17, p. 15).
Therefore, the court will grant the motion to dismiss Count Nine, but will allow the
Plaintiffs to file an amended claim distinguishing among Defendants and specifying what special
damages were caused by which Defendant, by what act or acts, and when.
D. Leave to Amend
At the conclusion of each of its responses to Defendants’ arguments to dismiss Plaintiffs’
claims, Plaintiffs request leave of the court to amend their (amended) complaint to correct any
deficiencies should the court find any. Defendants argue in response that these claims should be
dismissed with prejudice. The court will allow leave to amend to the extent the Plaintiffs can
re-plead consistent with this Order.
V. CONCLUSION
For the reasons stated herein, it is hereby ORDERED that the Motion to Dismiss (Doc. #
19) is GRANTED in part and DENIED in part, as follows.
1. The abandoned claims in Counts Eight and Fourteen are Dismissed with Prejudice.
2. Plaintiffs’ Negligence (Count One), Wantonness (Count Two), Unjust Enrichment (Count
Three), Wrongful Foreclosure (Count Four), TILA (Count Ten), and RESPA (Count
Eleven) claims are Dismissed with Prejudice.
27

3. Plaintiffs’ claims for Slander of Title (Count Five), Breach of Contract (Count Six),
Fraudulent Misrepresentation (Count Seven), Defamation, Libel, Slander (Count Nine),
FCRA (Count Twelve), and FDCPA (Count Thirteen) are Dismissed, with right to replead.
Plaintiffs are allowed to replead any of these claims if they can do so consistent with the
deficiencies set out in this Order and within the provisions of Rule 11. Plaintiffs are
reminded that Rule 11(b)(3), Fed. R. Civ. P., provides that the party signing a pleading
“certifies that to the best of the person’s knowledge, information, and belief, formed after
an inquiry reasonable under the circumstances . . . the factual contentions have evidentiary
support.”
4. Plaintiffs are given until November 30, 2016 to file a Second Amended Complaint, to the
extent they choose to do so. It must conform to the requirements of Local Rule 15.1 and be
complete unto itself. It may not include any claim which has been dismissed with prejudice
under this Order and may not state any new claims.

Done this 15th day of November, 2016.

/s/ W. Harold Albritton
W. HAROLD ALBRITTON
SENIOR UNITED STATES DISTRICT JUDGE

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