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)
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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