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