Shedd et al v. Barclays Capital Real Estate, Inc. et al

Filing 34

ORDER granting in part and denying in part 24 Renewed Motion to Dismiss by Wells Fargo Bank, N.A. and Monument Street Funding, II, LLC. The motion to dismiss is granted in part in part as follows: Counts Two, Three, Four, Thirteen and Eighteen are dismissed in their entirety; Count Five is dismissed only as to Monument; Count Ten is dismissed, in part; Counts Fourteen and Fifteen are dismissed, in part. As to all other issues raised, the motion to dismiss is denied. Signed by Senior Judge Charles R. Butler, Jr on 11/17/2014. copies to parties. (sdb)

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IN  THE  UNITED  STATES  DISTRICT  COURT  FOR  THE   SOUTHERN  DISTRICT  OF  ALABAMA   SOUTHERN  DIVISION     GEORGE  P.  SHEDD,  JR.,  et   al.,     Plaintiffs.     v.     WELLS  FARGO  HOME   MORTGAGE,  INC.,  et  al.,     Defendants.     )   )   )   )   )   )   )   )   )   )   )           CIVIL  ACTION  NO.   14-­‐00275-­‐CB-­‐M     ORDER       This  matter  is  before  the  Court  on  a  Renewed  Motion  to  Dismiss  filed  by   Defendants  Wells  Fargo  Home  Mortgage,  Inc.  and  Monument  Street  Funding,  II,  LLC   seeking  dismissal  of  various  counts  of  the  First  Amended  Complaint  (“the  Amended   Complaint”)  for  failure  to  state  a  claim  upon  which  relief  can  be  granted  and   supporting  brief.    (Docs.  24  &  25.)    Plaintiffs  have  filed  a  brief  in  response.    (Doc.  27.)     As  discussed  below,  the  Court  finds  that  some  counts  are  due  to  be  dismissed  and   others  are  not.   Procedural  Background     On  May  9,  2014,  Plaintiffs  George  P.  Shedd,  Jr.  and  Pamela  J.  Shedd  (“the   Shedds”)  filed  a  complaint  in  the  Circuit  Court  of  Mobile,  Alabama  against   defendants  Wells  Fargo  Home  Mortgage,  Inc.  (“Wells  Fargo”),  Monument  Street   Funding,  II,  LLC  (“Monument”),  and  Barclays  Capital  Real  Estate,  Inc.  (“Barclays”).     The  complaint  asserted  sought  various  state  law  causes  of  action  and  ought   damages  and  injunctive  relief  against  the  Defendants  in  connection  with  the  Shedds’   home  mortgage  on  property  located  in  Mobile,  Alabama.    The  Defendants  removed   the  action  to  this  Court  asserting  removal  jurisdiction  based  on  diversity  of   citizenship.  Shortly  after  removal  all  Defendants  filed  motions  to  dismiss  the   complaint.    Plaintiffs  responded  with  an  amended  complaint,  which  expanded  the   factual  allegations  and  added  several  causes  of  action.    Defendants’  renewed   motions  to  dismiss  followed.   The  Amended  Complaint     The  First  Amended  Complaint  (“the  Amended  Complaint”)  is  based  on  events   related  to  the  servicing  of  the  Shedds’  mortgage  by  the  Defendants.    In  2001,  the   Shedds  signed  a  promissory  note  and  executed  a  mortgage,  secured  by  their   residence  in  Mobile,  Alabama,  to  The  Mortgage  Outlet.    Barclays  serviced  the  loan   pursuant  to  a  contract  with  The  Mortgage  Company.    Barclays  continued  to  service   the  loan  after  the  loan  and  mortgage  were  assigned  to  Monument,  which  is  owned   by  Wells  Fargo,  in  2007.    In  2008,  the  Shedds  filed  a  Chapter  11  plan  of   reorganization  in  the  United  States  Bankruptcy  Court  for  the  Southern  District  of   Alabama.    Barclays,  the  loan  servicer,  represented  to  the  bankruptcy  court  that  it   was  the  creditor  and  sought  a  relief  from  the  automatic  stay.      In  an  order  dated   April  25,  2008,  the  bankruptcy  court  “noted  that  Barclays  and  Plaintiffs  had  entered   into  an  adequate  protection  agreement”  and  that  “Plaintiffs  would  pay  Barclays   their  regular  mortgage  payment  plus  an  additional  $306.62  monthly,  beginning  with   the  April  2008  payment,  and  ‘upon  confirmation  of  the  Plan  of  Reorganization,  the   terms  of  the  confirmed  plan  shall  control,’  including  ‘the  additional  payment  to  be   made  HomeEq  for  purposes  of  paying  out  the  pre-­‐petition  arrearage  and  charges.’”       2   (Am.  Compl.  ¶  7,  Doc  17.)    The  bankruptcy  court  ultimately  confirmed  the   reorganization  plan,  which  required  the  Shedds  to  pay  the  additional  $306.62  for  60   months  to  satisfy  the  pre-­‐petition  arrearage  of  $16,500  in  full.         The  Shedds  began  paying  the  $306.62  as  required,  and  continued  to  do  so,   but  Barclays  (and  Monument)  failed  to  apply  the  payments  to  the  pre-­‐petition   arrearage  as  agreed.    In  September  2008,  Barclays  notified  the  Shedds  the  loan  was   in  default,  accelerated  the  debt  and  scheduled  a  foreclosure.    “Throughout  2009  and   in  2010  .  .  .  Barclays  continued  to  .  .  .  wrongfully  initiat[e]  foreclosure  proceedings;   misallocate[e]  payments  [or  refuse]  payments  .  .  .  fail[  ]  to  properly  credit  mortgage   interest,    [incorrectly]  report[ed]  Plaintiffs  to  credit  reporting  agencies  as   delinquent.    (Id.  ¶  9(M).)    Also,  in  2009  and  in  2010,  “Barclays  .  .  .    wrongfully   disburs[ed]  $3,576.3  for  ‘hazard  insurance’  to  unknown  third  parties,  in  violation  of   [the  loan  agreement]  and  fail[ed]  to  notify  Plaintiffs”  that  it  had  done  so.    (Id.  ¶   9(N).)     In  September  2010,  Wells  Fargo  took  over  as  servicing  agent  for  Monument,   but  the  same  problems  continued.    The  loan  was  placed  in  foreclosure,  payments   were  misapplied,  the  Shedds  were  reported  delinquent  to  credit  reporting  agencies,   mortgage  interest  was  underreported  on  IRS  Form  1098  for  tax  years  2010-­‐13.    In   addition,  Wells  Fargo  “force-­‐placed  insurance  .  .  .  each  year”  even  though  the  Shedds   already  had  hazard  insurance  and  had  notified  Wells  Fargo  of  that  fact.  (¶  17(F).)           Based  on  these  facts,  the  Shedds  have  asserted  the  following  claims:   3   Count    One   Cause  of  Action   Breach  of  Contract   Two   Breach  Covenant  of  Good   Faith/Fair  Dealing   Three   Breach  of  Fiduciary  Duty   Four   Negligence   Five   Wantonness   Six   Fraud   Seven   Promissory  Fraud   Eight   Fraudulent   Suppression/Concealment   Unconscionability   All     Unjust  Enrichment   All     Conversion   All     Injunctive  Relief   All     Real  Estate  Settlement   Wells  Fargo  &  Monument   Procedures  Act,  12  U.S.C.  §     2601  (RESPA)  violation     (Escrow  Payments)       RESPA  violation  (Error   Wells  Fargo  &  Monument   Resolution/Info  Requests)     RESPA  violation  (Force-­‐ Wells  Fargo  &  Monument   Placed  Hazard  Insurance)     Truth  in  Lending  Act  ,  15   Wells  Fargo  &  Monument   U.S.C.  §  1601  (TILA)  &     Regulation  Z  violation   (Payment  Crediting)     TILA/Regulation  Z   Wells  Fargo  &  Monument   violation  (Periodic   Statements)   RESPA  Violation  (Loss   Wells  Fargo  &  Monument   Mitigation)   Nine   Ten   Eleven   Twelve   Thirteen   Fourteen   Fifteen   Sixteen   Seventeen   Eighteen           4   Defendants   All     All       All     All     Wells  Fargo  &  Monument     All     All     All   Issues  Raised     Wells  Fargo  and  Monument  (collectively,  “the  Defendants”),  seek  dismissal  of   Counts  Two  through  Ten,  Thirteen  and  Count  Eighteen  in  their  entirety  and  portions   of  Counts  Thirteen  through  Fifteen.    Below,  the  Court  sets  forth  the  applicable   standard  of  review  before  addressing  each  of  these  claims.   Standard  of  Review     A  complaint  must  “set  forth  a  short  and  plain  statement  of  the  claim  showing   that  the  pleader  is  entitled  to  relief.”    Fed.  R.  Civ.  P.  8(a)(2).    In  Bell  Atlantic  Corp.  v.   Twombly,  550  U.S.  544  (2007),  the  Supreme  Court  set  forth  the  parameters  of  a  well-­‐ pleaded  complaint.    A  claim  for  relief  “must  set  forth  enough  factual  matter  (taken  as   true)  to  suggest  [the  required  elements  of  a  cause  of  action].”      Id.  at  556;  see  also   Watts  v.  Florida  Int’l  University,  495  F.3d  1289,  1295  (11th  Cir.  2007)  (applying   Twombly).      Furthermore,  a  complaint  must  “provide  the  defendant  with  fair  notice   of  the  factual  grounds  on  which  the  complaint  rests.”    Jackson  v.  Bellsouth   Telecommc’ns,  Inc.,  372  F.3d  1250,  1271  (11th  Cir.  2004).           In  Ashcroft  v.  Iqbal,  556  U.S.  662,  129  S.Ct.  1937  (2009),  the  Supreme  Court   further  refined  the  threshold  requirements  for  a  claim  under  Rule  8(a)(2).         Two  working  principles  underlie  our  decision  in  Twombly.  First,  the   tenet  that  a  court  must  accept  as  true  all  of  the  allegations  contained   in  a  complaint  is  inapplicable  to  legal  conclusions.  Threadbare  recitals   of  the  elements  of  a  cause  of  action,  supported  by  mere  conclusory   statements,  do  not  suffice.    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.  Second,  only  a  complaint  that   states  a  plausible  claim  for  relief  survives  a  motion  to  dismiss.   Determining  whether  a  complaint  states  a  plausible  claim  for  relief   will  .  .  .  be  a  context-­‐specific  task  that  requires  the  reviewing  court  to   draw  on  its  judicial  experience  and  common  sense.  But  where  the     5   well-­‐pleaded  facts  do  not  permit  the  court  to  infer  more  than  the  mere   possibility  of  misconduct,  the  complaint  has  alleged-­‐but  it  has  not   “show[n]”-­‐“that  the  pleader  is  entitled  to  relief.”       Iqbal,  129  S.Ct.  at  1949-­‐50  (quoting  Fed.  R.  Civ.  P.  8(a)(2))  (other  citations  omitted).         “When  considering  a  motion  to  dismiss,  all  facts  set  forth  in  the  plaintiff’s   complaint  ‘are  to  be  accepted  as  true.”    Grossman  v.  Nationsbank,  N.A.,  225  F.3d   1228,  1232  (11th  Cir.  2000)(per  curiam).    Conclusory  allegations,  however,  are  not.     “A  district  court  considering  a  motion  to  dismiss  shall  begin  by  identifying   conclusory  allegations  that  are  not  entitled  to  an  assumption  of  truth—legal   conclusions  must  be  supported  by  factual  allegations.”    Randall,  610  F.  3d  at  709-­‐10.       Next,  the  court  “should  assume,  on  a  case-­‐by-­‐case  basis,  that  well  pleaded  factual   allegations  are  true  and  then  determine  whether  they  plausibly  give  rise  to  an   entitlement  to  relief.”    Id.  at  710.    Plausibility  means  something  more  than   allegations  that  are  “merely  consistent  with”  liability.    Iqbal,  129  S.Ct.  at  1949.    The   facts  alleged  must  “allow[  ]  the  court  to  draw  the  reasonable  inference  that  the   defendant  is  liable  for  the  misconduct  alleged.”    Id.       Legal  Analysis     Breach  of  the  Duty  of  Good  Faith  and  Fair  Dealing  (Count  Two)     Defendants  argue  that  this  claim  should  be  dismissed  because  no  duty  of   good  faith  and  fair  dealing  arose  from  the  mortgage  contract.    Plaintiffs  respond  that   Alabama  law  recognizes  cause  of  action  for  breach  of  the  duty  of  good  faith  and  fair   dealing  arising  from  contract  and  argue  that  the  Amended  Complaint  sufficiently   alleges  such  a  cause  of  action.  Plaintiffs  are  correct  that  the  cause  of  action  exists;   however,  their  factual  allegations  fall  short.     6     Alabama  recognizes  that  every  contract  carries  an  implied  obligation  of  good   faith  and  fair  dealing,  which  has  been  defined  as  “an  implied  covenant  that  neither   party  shall  do  anything  which  will  have  the  effect  of  destroying  or  injuring  the  rights   of  the  other  party  to  receive  the  fruits  of  the  contract.”    Lloyd  Noland  Found.,  Inc.  v.   City  of  Fairfield  Healthcare  Auth.,  837  So.  2d  253,  267  (Ala.  2002)  (quoting  Seller  v.   Head,  261  Ala.  212,  217,  73  So.2d  747,  751  (1954)).    The  parameters  of  this  claim   have  not  been  well  defined.1  However,  it  is  clear  that  the  obligation  is  not  actionable   unless  the  breach  of  that  duty  can  be  tied  to  the  performance  of  a  specific  term  of   the  contract.    Lake  Martin/Alabama  Power  Licensee  Assoc.  v.  Alabama  Power  Co.,  Inc.,   601  So.  2d  942,  945  (Ala.  1992).    More  specifically,  Alabama  courts  have  recognized   the  duty  of  good  faith  and  fair  dealing  when  “the  contract  fails  to  specify  all  the   duties  and  obligations  intended  to  be  assumed.”  Lloyd  Noland  Found.,  837  So.2d  at   267.  In  those  instances,  “the  law  will  imply  an  agreement  to  do  those  things  that                                                                                                                   1  Alabama  cases  in  which  recovery  on  such  a  claim  has  been  upheld  are  few.     The  only  cases  this  Court  has  been  able  to  locate  involve  employment  contracts.    In   Eager  Beaver  Buick,  Inc  v.  Burt,  503  So.2d  819  (Ala.  1987),  overruled  on  other   grounds,    Elmore  Co.  Comm’n  v.  Ragena,  540  So.2d  720  (Ala.  1989),  the  employer  (an   automobile  dealer)  had  insisted  that  the  plaintiff  (its  sales  manager)  falsify   documents  so  that  the  dealership  could  avoid  sales  tax,  which  would  have  been  a   violation  of  the  law.    The  plaintiff  refused,  but  the  dealership’s  owners  harassed  him   and  made  his  job  so  difficult  that  he  could  not  perform  and  ultimately  resigned.    The   court  held  that  the  defendant  breached  its  duty  of  good  faith  and  fair  dealing  by   making  it  impossible  for  the  plaintiff  to  perform  his  duties  under  his  employment   contract.    In  Hoffman-­‐LaRoche,  Inc.  v.  Campbell,  512  So2d  725  (Ala.  1987),  the   Alabama  supreme  court  upheld  a  jury  verdict  in  favor  of  the  plaintiff  for  breach  of   the  duty  of  good  faith  and  fair  dealing.    The  plaintiff’s  employment  contract  provided   that  an  employee  could  be  discharged  for  failure  to  meet  job  requirements,  and   plaintiff  was  ostensibly  terminated  for  that  reason.  But  because  the  defendant,   knowing  plaintiff’s  physical  limitations,  gave  him  duties  that  were  impossible  to   perform,  the  court  found  the  duty  of  good  faith  included  an  implied  or  constructive   condition  precedent  [for  discharge]  unsatisfactory  performance,  i.e.  that  he  be   physically  able  to  satisfactorily  perform.”    Id.  at  738.           7   according  to  reason  and  justice  the  parties  should  do  in  order  to  carry  out  the   purpose  for  which  the  contract  was  made.”  Id.    Plaintiffs  argue  that  they  have  sufficiently  alleged  a  breach  of  this  duty  with   respect  to  the  following  specific  contractual  terms:     1. Defendants  as  the  secured  creditor  or  acting  on  its  behalf  under  the  mortgage   loan  were  subject  to  particular  terms  of  the  mortgage  loan,  which  included   proper  applications  of  Plaintiffs’  payments  under  Paragraph  3  of  the   mortgage  loan.  .  .  .   2. Wells  Fargo,  based  on  additional  promises  made  to  Plaintiffs  that  the  loan   would  be  deemed  current  after  showing  it  delinquent  and  initiating   foreclosure,  “induced  Plaintiffs  not  to  resort”  to  legal  action  on  every   occasion  “set  out  above  that  Defendants  promised  Plaintiffs  that  Defendants   would  no  longer  breach  the  above  contracts.   3. Plaintiffs  were  a  third  party  beneficiary  of  Wells  Fargo’s  Servicing  contract   with  Monument.       (Pls.’  Br.  11.)     The  two  latter  arguments  can  easily  be  dismissed  because  neither  point  to   any  contractual  provision  that  was  breached  by  Defendants’  alleged  bad  faith   actions.    The  first  argument  does  identify  a  specific  contractual  provision,  but  it  is   not  the  type  of  provision  to  which  the  duty  of  good  faith  and  fair  dealing  applies.       Although  Plaintiffs  above  refer  to  “proper  applications  of  the  mortgage  payments,”   the  contract  is  actually  very  specific  with  respect  to  the  allocation  of  mortgage   payments.2    Proper  application  is  not  left  to  the  discretion  of  the  Defendants;  instead   there  is  a  specific  order  “in  which  payments  on  the  loan  would  be  applied”  to   principle,  interest,  escrow,  late  fees,  etc.    (Am.  Compl.  ¶  6.)    Failure  to  properly  apply                                                                                                                   2  According  to  the  Amended  Complaint,  the  mortgage  set  forth  the  specific   order  in  which  payments  on  the  loan  would  be  applied  to  principle,  interest,  escrow,   late  fees,  etc.    (Am.  Compl.  ¶  6.)     8   payments  would  be  a  violation  of  a  specific  contractual  term,  not  a  violation  of  the   duty  of  good  faith  and  fair  dealing.   In  sum,  the  Amended  Complaint  does  not  allege  facts  that  would  support  a   cause  of  action  for  breach  of  the  duty  of  good  faith  and  fair  dealing  under  Alabama   law.    Accordingly,  Plaintiffs’  claims  against  Well  Fargo  and  Monument  in  Count  Two   of  the  Amended  Complaint  are  due  to  be  dismissed.   Breach  of  Fiduciary  Duty  (Count  Three)   Defendants  point  out  that  Alabama  law  generally  does  not  recognize  a   fiduciary  relationship  between  a  lender  and  a  borrower  or  a  mortgagor  and  a   mortgagee.    See,  e.g.,  K  &  C  Dev.  Corp.  v.  AmSouth  Bank,  N.A.,  597  So.  2d  671  (Ala.   1992);    Nettles  v.  First  Nat.  Bank  of  Birmingham,  388  So.  2d  916  (Ala.  1980).    An   exception  may  arise,  however,  “when  the  customer  reposes  trust  in  a  bank  and   relies  on  the  bank  for  financial  advice,  or  in  other  special  circumstances.”    Baylor  v.   Jordan,  445  So.  2d  254,  256  (Ala.  1984).    In  response,  Plaintiffs  argue  that  the   Amended  Complaint  asserts  facts  giving  rise  to  a  “heightened,  special  relationship”   between  Plaintiffs  and  Defendants  resulting  in  a  fiduciary  duty  on  Defendants’  part.     However,  Plaintiffs  fail  to  point  out  what  those  facts  are.    Alternatively,  Plaintiffs   argue  that  a  motion  to  dismiss  is  premature  because  “[e]vidence  of  the  special   relationship  of  trust  will  be  heightened  beyond  the  current  factual  allegations  as   discovery  unfolds.”    (Pls.’  Br.  12,  Doc.  27.)       To  survive  a  motion  to  dismiss  “[f]actual  allegations  must  be  enough  to  raise   a  right  to  relief  above  the  speculative  level.”    Bell  Atlantic  Corp.  v.  Twombly,  550  U.S.   544,  555,  127  S.  Ct.  1955,  1965,  167  L.  Ed.  2d  929  (2007)  (citing  5  C.  Wright  &  A.     9   Miller,  Federal  Practice  and  Procedure  §  1216,  pp.  235–236  (3d  ed.2004)).     Unspecified  allegations  and  the  hope  that  evidence  may  be  uncovered  in  discovery   are  not  enough.    Plaintiffs’  breach  of  fiduciary  duty  claim  against  these  Defendants  is   due  to  be  dismissed.         Tort  Claims—Negligence,  Wantonness  &  Fraud  (Counts  Four  through   Eight)   Defendants  lump  together  Plaintiffs’  claims  for  negligence,  wantonness,   fraud,  promissory  fraud,  and  fraudulent  suppression/concealment  and  argue  that  all   are  due  to  be  dismissed  for  either  of  two  reason.    First,  they  point  out  that  “Alabama   law  does  not  recognize  a  tort-­‐like  cause  of  action  for  the  breach  of  a  duty  created  by   contract.”    (Defs.’  Br.  3.)    (2)  Alternatively,  even  if  this  principle  does  not  apply,3  they   argue  that  Plaintiffs  cannot  recover  for  tortious  conduct  in  the  absence  of  physical   injuries,  immediate  risk  of  physical  injury  or  property  damage.”  (Id.  5.)    The   persuasiveness  of  these  arguments  depends  upon  the  claim  or  claims  to  which  they   are  directed.         First,  the  arguments  do  not  apply  at  all  to  Plaintiffs’  fraud-­‐based  claims.     These  claims  are  based  alleged  misrepresentations  outside  the  contract,  not  on  any   contractual  duties  or  obligations.    Likewise,  Defendants’  absence-­‐of-­‐damages   argument  holds  no  sway  with  respect  to  fraud  claims  because  a  plaintiff  need  only   prove  nominal  damages  to  recover.    See,  e.g.,  Life  Ins.  Co.  of  Georgia  v.  Smith,  719  So.   2d  797  (Ala.  1998);  Wilson  v.  Draper,  406  So.  2d  429,  432-­‐33  (Ala.  Civ.  App.  1981).                                                                                                                   3  Defendants  acknowledge  that  Wells  Fargo  was  not  a  party  to  the  contract   from  which  the  duties  arose.     10     With  regard  to  the  negligence  claim,  the  principle  upon  which  Defendants   rely  is  that  “negligent  failure  to  perform  a  contract  .  .  .  is  but  a  breach  of  the   contract.”    Vines  v.  Crescent  Transit  Co.,  264  Ala.  114,  119,  85  So.2d  436,  440  (1956).   Thus,  it  is  true  that  Monument  cannot  be  held  liable  for  negligent  breach  of  its   contract  with  Plaintiffs,  but  Wells  Fargo  was  not  a  party  to  that  contract.    Alabama   courts  have  held  that  “’[e]ven  when  a  third  party  is  not  in  privity  with  the  parties  to   a  contract  and  is  not  a  third-­‐party  beneficiary  to  the  contract,  the  third  party  may   recover  in  negligence  for  breach  of  a  duty  imposed  by  that  contract  if  the  breaching   party  negligently  performs  the  contract  with  knowledge  that  others  are  relying  on   proper  performance  and  the  resulting  harm  is  reasonably  foreseeable.’”  Temploy,   Inc.  v.  Nat'l  Council  on  Comp.  Ins.,  650  F.  Supp.  2d  1145,  1153  (S.D.  Ala.  2009)   (quoting  QORE,  Inc.  v.  Bradford  Bldg.  Co.,  Inc.,  25  So.  3d  1116,  1124  (Ala.  2009)).           Nevertheless,  Plaintiffs  have  failed  to  state  a  negligence  claim  against  either   Defendant  because  there  can  be  no  recovery  for  negligence  under  Alabama  law   absent  physical  injury,  an  immediate  risk  of  physical  injury,  or  property  damage.     See  Wallace  v.  SunTrust  Mortg.,  Inc.,  974  F.Supp.  2d  1358,  1369-­‐70  (S.D.  Ala.  2013)   (and  cases  cited  therein).  Physical  injury,  as  defined  by  Black’s  Law  Dictionary  is   “physical  damage  to  a  person’s  body.”    Black’s  Law  Dictionary  p.  906  (10th  ed.   2009).    Plaintiffs’  allegations  of    “physical  distress”  and  “physical  discomfort”  are   insufficient.       Wantonness  is  a  separate  and  distinct  creature  from  negligence.    See  Ex  Parte   Capstone  Bldg  Corp.,  96  So.  3d  77,  85  (Ala.  2012)  (“’[w]antonness  is  not  merely  a   higher  degree  of  culpability  than  negligence’”).      Physical  injury  is  not  a  prerequisite     11   for  recovery.    Brown  v.  First  Fed.  Bank,  95  So.3d  803,  818  (Ala.  2012).      However,   wantonness  (like  negligence)  is  not  an  alternative  theory  of  recovery  for  breach  of   contract  between  two  contracting  parties.    See,  e.g.,  Blake  v  Bank  of  North  America,   845  F.Supp.  2d  1206,  1210  (M.D.  Ala.  2012)  (dismissing  negligence  and  wantonness   claims  because  “Alabama  does  not  recognize  a  tort-­‐like  cause  of  action  for  breach  of   a  duty  created  by  contract”).    Consequently,  Plaintiffs’  wantonness  claim  against   Wells  Fargo  survives,  but  their  wantonness  claim  against  Monument  does  not.     Unconscionability  (Count  Nine)       Although  Defendants’  motion  to  dismiss  includes  Count  Nine  as  one  of  the   counts  due  to  be  dismissed,  neither  the  motion  to  dismiss  nor  the  supporting  brief   asserts  any  grounds  for  dismissal.    For  that  reason,  the  motion  is  denied.     Unjust  Enrichment  (Count  Ten)     Defendants  seek  dismissal  of  Plaintiffs’  unjust  enrichment  claim  “due  to  the   existence  of  a  valid  contract.”    (Defs.’  Br.  9,  Doc.  25.)  “[U]njust  enrichment  is  an   equitable  remedy  only  to  be  invoked  when  there  is  no  available  remedy  at  law.”     Northern  Assur.  Co.  of  Am.  v.  Bayside  Marine  Constr.,  Inc.,  2009  WL  151023  (S.D.  Ala.   Jan.  21,  2009);  see  also  American  Family  Care,  Inc.  v.  Irwin,  571  So.2d  1053,  1061   (Ala.  1990)  (“Equity  is  a  system  of  remedies  that  evolved  to  redress  wrongs  that   were  not  recognized  by  or  adequately  righted  by  the  common  law.”)    Thus,  it  is  true   that  breach  of  contract  and  unjust  enrichment  are  mutually  exclusive  when  both   claims  are  based  on  the  same  set  of  facts.    See  White  v.  Microsoft  Corp,  454  F.Supp.2d   1118,  1133-­‐34  (S.D.  Ala.  2006)  (granting  summary  judgment  on  unjust  enrichment   claim  where  plaintiff  also  sought  recovery  on  express  warranty).    And  if  the     12   existence  of  the  contract  is  undisputed,  then  there  is  no  reason  for  the  unjust   enrichment  claim  to  proceed.    Id.    However,  if  the  existence  of  an  express  contract  is   disputed,  then  the  two  claims  may  coexist  as  alternative  theories  of  recovery.    See   Kennedy  v.  Polar-­‐BEK  Baker  Wildwood  P’ship,  682  So.2d  443  (Ala.  1996)  (trial  court   properly  submitted  alternative  theories  of  breach  of  contract  and  implied  contract   to  jury).       The  Amended  Complaint  refers  to  “contracts”  that  were  “accepted  by  one  or   more  Defendants,”  but  there  is  no  undisputed  express  contract  involving  either  of   these  Defendants  other  than  the  mortgage  loan  agreement.    And,  as  far  as  the  Court   can  determine,  only  Monument  is  alleged  to  be  a  party  to  that  contract.    Therefore,   to  the  extent  the  unjust  enrichment  claim  and  the  breach  the  mortgage  loan   agreement  claims  overlap,  the  unjust  enrichment  claim  against  Monument  is  due  to   be  dismissed.    In  all  other  respects,  Defendants’  motion  to  dismiss  the  unjust   enrichment  claim  is  denied.     RESPA  Claims  (Counts  Thirteen  through  Fifteen  &  Eighteen)     The  First  Amended  Complaint  asserts  several  claims  under  the  Real  Estate   Settlement  Procedures  Act    (RESPA),  12  U.S.C.  §  2601  et  seq.,  as  amended  by  Pub.L.   11-­‐203,  125  Stat.  1376  (the  Dodd-­‐Frank  Wall  Street  Reform  and  Consumer  Act  or   “Dodd-­‐Frank”).    Defendants  raise  two  arguments,  the  first  of  which  is  not  disputed.     Defendants  point  out  that  claims  arising  more  than  three  years  prior  to  the  filing  of   this  action  are  time-­‐barred  under  RESPA’s  three-­‐year  statute  of  limitations,  12  U.S.C.   §  2614.    Plaintiffs  agree  that  they  cannot  recover  for  acts  that  occurred  prior  to  July   3,  2011.     13     Defendants’  second  argument  relates  only  to  Counts  Thirteen  and  Eighteen.     Both  of  those  counts,  Defendants  contend,  are  based  on  non-­‐retroactive   amendments  to  RESPA-­‐-­‐§  2605(k)  and  (l)-­‐-­‐that  were  not  in  effect  at  the  time  of  the   events  on  which  the  claims  are  based.    Before  reaching  that  issue,  the  Court  must   address  an  additional  hurdle,  to-­‐wit,  Count  Thirteen  specifically  alleges  a  violation   of  §  2605(g),  which  was  in  effect  during  the  relevant  time  period.    Nevertheless,   Defendants  argue,  and  the  Court  agrees,  that  the  claim  is  not  what  it  purports  to  be.     The  caption  to  Count  Thirteen  describes  it  as  “RESPA—Failure  to  Make  Timely   Payments  from  Escrow”  which  would  be  a  violation  of  §  2605(g),  if  facts  were   alleged  to  support  that  claim.4    However,  the  gravamen  Plaintiffs’  claim  in  Count   Thirteen  is  that  “Wells  Fargo  purchased  force-­‐placed  hazard  insurance”  even  though   “Plaintiffs  provided  proof  .  .  of  such  hazard  insurance”  during  the  relevant  time   periods.    (Am.  Compl.  ¶  65.)    This  claim  is  governed  by  §  2605(k)  and  (l),  Plaintiffs’   labels  notwithstanding.      Subsection  (k)(1)  prohibits  a  loan  service  provider  from,   among  other  things,  obtaining  force-­‐placed  hazard  insurance  “unless  there  is  a   reasonable  basis  to  believe  that  the  borrower  has  [failed  to  do  so].”    12  U.S.C.  §   2605(k)(1)(A).    Subsection  (l)  defines  the  requirements  that  must  be  met  before  a   loan  service  provider  can  have  a  “reasonable  basis”  for  that  belief.    Thus,  Count   Thirteen  asserts  a  claim  under  §  2605(k)  and  (l)  and  does  not  assert  a  claim  under  §   2605(k).    Count  Eighteen  does  not  invoke  a  specific  subsection  of  §  2605,  but                                                                                                                   4  That  subsection  provides:  “If  the  terms  of  any  federally  related  mortgage   loan  require  the  borrower  to  make  payments  to  the  servicer  of  the  loan  for  deposit   into  an  escrow  account  for  the  purpose  of  assuring  payment  of  taxes,  insurance   premiums,  and  other  charges  with  respect  to  the  property,  the  servicer  shall  make   payments  from  the  escrow  account  for  such  taxes,  insurance  premiums,  and  other   charges  in  a  timely  manner  as  such  payments  become  due.”  12  U.S.C.  §  2605(g).     14   Plaintiffs  do  not  contest  Defendants’  characterization  of  Count  Eighteen  as  a  claim   under  §  2605(k)(1)(E)  of  RESPA.5     Because  Counts  Thirteen  and  Eighteen  allege  violations  of  subsections  (k)   and/or  (l)  of  section  2605,  the  Court  must  decide  whether  the  events  described  took   place  after  those  subsections  became  effective.    Subsections  k,  l,  and  m  §  2605  were   added  as  part  of  the  “Mortgage  Reform  and  Anti-­‐Predatory  Lending  Act,”  (Title  XIV   of  Dodd-­‐Frank)  and  became  effective  January  10,  2014.  Berneike  v.  CitiMortgage,   Inc.,  708  F.3d  1141,  1146  (10th  Cir.  2013).  6    The  acts  giving  rise  to  the  claims  in   Counts  Thirteen  and  Eighteen  took  place  prior  to  that  date.     In  summary,  Counts  Thirteen  and  Eighteen  are  due  to  be  dismissed  in  their   entirety.    Furthermore,  events  alleged  in  Counts  Fourteen  and  Fifteen  that  occurred                                                                                                                   5  That  subsection  makes  it  unlawful  for  a  loan  service  provider  to  “fail  to   comply  with  any  other  obligation  found  by  the  Bureau  of  Consumer  Financial   Protection,  by  regulation,  to  be  appropriate  to  carry  out  the  consumer  protection   purposes  of  this  chapter.    12  U.S.C.  §  2605(k)(1)(E).    Count  Eighteen  asserts  that  the   Defendants  violated  Regulation  X  implemented  by  the  Consumer  Finance  Protection   Board  under  the  authority  delegated  by  RESPA.   6  Finding  the  effective  date  of  these  particular  amendments  is  not  an  easy   feat  and  requires  careful  sifting  through  the  applicable  legislation  and  regulations.     First,  the  Mortgage  Reform  and  Predatory  Lending  Act,  has  its  own  effective  date   found  in  Section  1400  of  Dodd-­‐Frank  (unhelpfully  entitled  “Short  Title  Designations   as  Enumerated  Consumer  Law”).    But  one  date  does  not  apply  to  all.    Instead,   Section  1400(c)  states  “’a  section,  or  provision  thereof,  of  this  title  shall  take  effect   on  the  date  on  which  the  final  regulations  implementing  such  section,  or  provision,   take  effect”  or,  if  no  regulations  have  been  issued,  “on  the  date  that  is  18  months   after  the  designated  transfer  date.”  Pub.L.  111–203  §§  1400(c),  1463,  124  Stat.   1376,  2183–84.    The  “transfer  date”  is  July  21,  2011.    Berneike  708  F.3d  1146  n.  3.   The  effective  date  would  be  January  21,  2013,  unless  a  final  regulation  was  issued   before  the  date.    In  this  case,  it  was.    On  January  17,  2013,  the  Consumer  Finance   Protection  Bureau  issued  a  final  rule  implementing  the  Dodd–Frank  amendments  to   RESPA  and  amending  Regulation  X,  with  an  effective  date  of  January  10,  2014.    See   78  Fed.  Register  10696-­‐01  Part  I  (E).     15   prior  to  July  3,  2011  are  barred  by  the  statute  of  limitations  and  are  due  to  be   dismissed.   Conclusion     For  the  reasons  set  forth  above,  the  motion  to  dismiss  is  granted  in  part  in   part  as  follows:      Counts  Two,  Three,  Four,  Thirteen  and  Eighteen  are  dismissed  in  their   entirety;   Count  Five  is  dismissed  only  as  to  Monument;   Count  Ten  is  dismissed,  in  part;   Counts  Fourteen  and  Fifteen  are  dismissed,  in  part.           As  to  all  other  issues  raised,  the  motion  to  dismiss  is  denied.       DONE  and  ORDERED  this  the  17th  day  of  November,  2014.                                   s/Charles  R.  Butler,  Jr.       Senior  United  States  District  Judge   16  

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