Thomas v. America's Servicing Company et al
MEMORANDUM OPINION re dfts' 4 MOTION to Dismiss. Signed by Judge Abdul K Kallon on 8/10/2015. (YMB)
2015 Aug-10 PM 01:05
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
AMERICA’S SERVICING CO.,|
Civil Action Number
Plaintiff Harry Thomas brings this case against Defendants Wells Fargo
Bank, Wells Fargo Bank National Association, and American Servicing Company
(collectively “the defendants”) for events arising out of the foreclosure of a
property formerly owned by Thomas’ brother. Thomas brings claims of breach of
contract (Count II), wrongful foreclosure (Count III), and promissory estoppel
(Count IV) against the defendants.1 The defendants move to dismiss the complaint,
doc. 4, and the motion is fully briefed, docs. 5, 8, 11, and ripe for review. For the
reasons stated below, the motion is due to be granted.
Thomas’ original complaint, which was filed before he retained legal counsel, also included a
claim of adverse possession (Count I). However, Thomas stipulated in his response brief, doc. 8
at 2, and the court agrees, that this claim is due to be dismissed.
I. STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain “a
short and plain statement of the claim showing that the pleader is entitled to relief.”
“[T]he pleading standard Rule 8 announces does not require ‘detailed factual
allegations,’ but it demands more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Mere “labels and conclusions”
or “a formulaic recitation of the elements of a cause of action” are insufficient.
Iqbal, 556 U.S. at 678 (internal citations and quotation marks omitted). “Nor does
a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
enhancement.’” Id. (citing Bell Atl. Corp., 550 U.S. at 557).
Federal Rule of Civil Procedure 12(b)(6) permits dismissal when a
complaint fails to state a claim upon which relief can be granted. On a motion to
dismiss under Rule 12(b)(6) the court accepts all factual allegations as true. See,
e.g., Grossman v. Nations Bank, N.A., F. 3d 1228, 1231 (11th Cir. 2000). However,
legal conclusions unsupported by factual allegations are not entitled to that
presumption of truth. Iqbal, 556 U.S. at 664. “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (internal citations and
quotation marks omitted). A complaint states a facially plausible claim for relief
“when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id.
(internal citations omitted). The complaint must establish “more than a sheer
possibility that a defendant has acted unlawfully.” Id.; see also Bell Atl. Corp., 550
U.S. at 555 (“Factual allegations must be enough to raise a right to relief above the
speculative level.”). Ultimately, this inquiry is a “context-specific task that requires
the reviewing court to draw on its judicial experience and common sense.” Iqbal,
556 U.S. at 679.
II. FACTUAL BACKGROUND & PROCEDURAL HISTORY
The following is an account of Thomas’ allegations, accepted as true, that
are pertinent to the resolution of the defendants’ motion. In January 2006, Thomas’
brother executed a mortgage on a property located at 6486 Cambridge Road,
Pinson, Alabama (“the property”), in favor of New Century Mortgage. Docs. 5-1 at
1-15, 8 at 2. Thomas’ brother conveyed a quitclaim deed to the property to Thomas
in February 2006, doc. 5-2, and Thomas subsequently began making the mortgage
payments for the property, doc. 5-1 at 1. Thomas’ brother died in May 2007, and
Thomas filed an heirship affidavit in October 2013, allegedly at New Century
Mortgage’s request. Doc. 5-1 at 1; doc. 5-3. New Century Mortgage assigned the
mortgage to U.S. Bank National Association as a trustee in December 2013. Doc.
5-6 at 1; doc. 8-4. In June 2013, Thomas became aware that New Century
Mortgage did not recognize his assumption of the mortgage. Doc. 5-1 at 1. Thomas
did not believe his payments had been credited, id., and the mortgage eventually
went into default, leading U.S. Bank to initiate foreclosure proceedings in May
2014. Doc. 5-6 at 2. The property was sold at an auction in June 2014 to U.S. Bank
for a bid of $182,750. Id. Thomas filed this suit in state court in June 2014. Doc. 11 at 1. The defendants removed to this court in January 2015. Doc. 1.
Thomas brings claims of breach of contract, wrongful foreclosure, and
promissory estoppel against the defendants. The court will address each claim in
A. Thomas Does Not Have Standing for his Breach of Contract Claim
Thomas contends that the defendants breached the mortgage contract
between his late brother and New Century Mortgage by improperly assigning the
mortgage. However, “[i]t is well-settled law that one not a party to, or in privity
with a contract, cannot sue for its breach.” Bernals, Inc. v. Kessler-Greystone,
LLC, 70 So. 3d 315, 319 (Ala. 2011) (internal citations and quotation marks
“To recover as a third-party beneficiary . . . the claimant must show (1) that
the contracting parties intended, at the time the contract was created, to
bestow a direct benefit on a third party; (2) that the claimant was the
intended beneficiary of the contract; and (3) that the contract was breached.”
Id. (emphasis in original). “The intention of the contracting parties, as disclosed by
the writing, if any, and the surrounding circumstances known to the parties,
determines the rights of the alleged third-party beneficiary.” Swann v. Hunter, 630
So. 2d 374, 376 (Ala. 1993). While Thomas has made the conclusory allegation
that he is in privity to the contract, there are no facts in the complaint suggesting
that either party to the mortgage intended it to directly benefit him at the time they
executed the mortgage. Likewise, there is no language in the contract suggesting
any such intent. Doc. 5-1.2 Accordingly, Thomas’ breach of contract claim is due
to be dismissed.
B. Thomas Has Failed to Plead a Claim of Wrongful Foreclosure
Thomas has alleged numerous procedural defects in the foreclosure of the
property. However, his wrongful foreclosure claim fails because he does not allege
any facts supporting this cause of action.
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.
However, it has defined such a claim as one where “a mortgagee uses the
power of sale given under a mortgage for a purpose other than to secure the
debt owed by the mortgagor.”
The mortgage was not made an exhibit to Thomas’ complaint, but is referred to in the pleading
and is central to it. “[T]he court may consider a document attached to a motion to dismiss
without converting the motion into one for summary judgment if the attached document is (1)
central to the plaintiff’s claim and (2) undisputed.” Day v. Taylor, 400 F.3d 1272, 1276 (11th
Cir. 2005), citing Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002). Thus, the court may
consider the mortgage without converting this motion to dismiss to one for summary judgment.
Jackson v. Wells Fargo Bank, N.A., 90 So. 3d 168, 171 (Ala. 2012) (emphasis
added) (quoting Reeves Cedarhurst Dev. Corp. v. First Am. Fed. Sav. & Loan
Ass’n, 607 So. 2d 180, 182 (Ala. 1992)). Thomas’ complaint contains no facts
suggesting that U.S. Bank foreclosed the property for any reason other than to
collect on the defaulted mortgage, contending instead that New Century Mortgage
improperly assigned the mortgage to U.S. Bank. This is beyond the scope of relief
the court can provide for a claim of wrongful foreclosure. See Jackson, 90 So. 3d
at 172 (defendant’s failure to provide notice of mortgage acceleration supported a
breach of contract claim, but not wrongful foreclosure claim). Accordingly,
Thomas’ wrongful foreclosure claim is due to be dismissed.
C. Thomas’ Promissory Estoppel Claim is Barred by the Statute of Frauds
Thomas argues that, by accepting the payments he made on the mortgage
and allegedly entering into negotiations with him to resolve the mortgage’s
arrearage, the defendants were estopped from foreclosing on the property.
However, Thomas has not demonstrated, or even alleged, the existence of a writing
required to create a valid “agreement or commitment to lend money, delay or
forebear repayment thereof, or . . . modify the provision of such an agreement or
commitment . . .” as specifically required under Alabama’s Statute of Frauds. Ala.
Code 1975 § 8-9-2; see Ott v. Quicken Loans, Inc., No. 2:13-CV-441-WHA, 2015
WL 248938 at *3 (M.D. Ala. 2015). The Supreme Court of Alabama has stated
that “[a]lthough allowing a plaintiff’s reliance on nonfraudulent representations to
abrogate the Statute of Frauds is a widespread phenomenon . . . Alabama has
rejected this approach to date . . . .” Regions Equip. Fin. Corp. v. M/V ACCU I,
Official No. 53396, No. CV-10-258-KD-M, 2010 WL 5376306 at *9 (S.D. Ala.
2010) (quoting Durham v. Harbin, 530 So. 2d 208, 213 (Ala. 1988)). As Thomas
cannot satisfy the Statute of Frauds, even if he were to meet all the elements of
promissory estoppel, his claim would still fail. Accordingly, it is due to be
For the reasons explained above, the defendant’s motion to dismiss is due to
be granted. The court will enter a separate order consistent with this opinion.
DONE the 10th day of August, 2015.
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE
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