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

Filing 35

AMENDED ORDER re: 31 Order on 20 Motion to Dismiss. 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

AMENDED
 ORDER

Defendant
 Barclays
 Capital
 Real
 Estate,
 Inc.
 has
 filed
 a
 Motion
 to
 Dismiss
 the

First
 Amended
 Complaint
 for
 failure
 to
 state
 a
 claim
 upon
 which
 relief
 can
 be

granted,
 along
 with
 a
 supporting
 brief.

 (Docs.
 20
 &
 21.)

 Plaintiffs
 have
 filed
 a
 brief

in
 response
 wherein
 they
 agree
 that
 some
 of
 the
 claims
 asserted
 against
 this

Defendant
 are
 subject
 to
 dismissal
 but
 argue
 that
 the
 remaining
 claims
 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
 the
 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.’”

 (Am.
 Compl.
 ¶
 7,
 Doc
 17.)

 The

bankruptcy
 court
 ultimately
 confirmed
 the
 reorganization
 plan,
 which
 required
 the

2

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

Barclays
 has
 moved
 to
 dismiss
 all
 claims
 against
 it
 for
 failure
 to
 state
 a
 claim

pursuant
 to
 Rule
 12(b)(6)
 of
 the
 Federal
 Rules
 of
 Civil
 Procedure.

 Some
 of
 the

issues
 raised
 in
 Barclays’
 motion
 to
 dismiss
 have
 been
 resolved
 by
 Plaintiffs’

response.

 They
 agree
 that
 several
 of
 their
 claims
 against
 Barclays
 are
 barred
 by
 the

statute
 of
 limitations.

 Thus,
 Plaintiffs’
 claims
 against
 Barclays
 for
 breach
 of
 fiduciary

duty
 (Count
 Three),
 negligence
 (Count
 Four),
 fraud
 (Count
 Six),
 and
 promissory

fraud
 (Count
 Seven)
 are
 due
 to
 be
 dismissed
 on
 statute
 of
 limitations
 grounds.

 The

Court
 need
 not
 address
 the
 alternative
 grounds
 for
 dismissal
 asserted
 by
 Barclays

with
 respect
 to
 those
 counts.

 Below,
 the
 Court
 sets
 forth
 the
 applicable
 standard
 of

review
 before
 addressing
 each
 of
 the
 remaining
 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).

5

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

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
 plainitff’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
 Contract
 (Count
 One)

6

Barclays
 argues
 that
 this
 count
 is
 due
 to
 be
 dismissed
 for
 three
 reasons:

 (1)

the
 complaint
 fails
 to
 identify
 a
 contract
 between
 these
 parties
 and/or
 any
 specific

contractual
 provision
 that
 was
 breached;
 (2)
 Plaintiffs
 have
 failed
 to
 support
 a

breach
 of
 contract
 claim
 based
 on
 a
 third-­‐party
 beneficiary
 theory;
 and
 (3)
 at
 least
 a

portion
 of
 the
 breach
 of
 contract
 claim
 is
 barred
 by
 the
 Statute
 of
 Frauds.

 In

response
 to
 the
 first
 argument,
 Plaintiffs
 point
 to
 allegations
 in
 the
 Amended

Complaint
 that
 Barclays
 represented
 itself
 in
 bankruptcy
 court
 as
 a
 secured
 creditor

and
 reached
 an
 agreement
 with
 Plaintiffs,
 confirmed
 by
 the
 bankruptcy
 court,
 to

accept
 $306.62
 over
 60
 months
 in
 payment
 of
 Plaintiffs’
 arrearages.

 Then,

according
 to
 Plaintiffs,
 Barclays
 violated
 that
 agreement
 by,
 inter
 alia,
 failing
 to

properly
 allocate
 those
 payments.

 These
 allegations
 are
 sufficient
 to
 state
 a
 breach

of
 contract
 claim
 based
 on
 the
 Chapter
 11
 reorganization
 plan.

 See
 Paul
 v.
 Monts,

906
 F.2d
 1468
 (10th
 Cir.
 1990)
 (per
 curiam)
 (recognizing
 state
 law
 cause
 of
 action

for
 breach
 of
 contract
 based
 on
 confirmed
 bankruptcy
 reorganization
 plan);
 see
 also

In
 re
 Arts
 Dairy,
 LLC,
 432
 B.R.
 712,
 716
 (Bankr.
 N.D.
 Ohio
 2010)(confirmed
 plan
 of

reorganization
 operates
 as
 a
 new
 and
 binding
 contract
 between
 debtor
 and

creditors);
 cf.
 In
 re
 Shenago
 Group,
 501
 F.3d
 338,
 344
 (3d
 Cir.
 2007)
 (“In
 construing

confirmed
 plan
 of
 reorganization,
 we
 apply
 contract
 principles.”).

The
 next
 issue
 raised
 by
 Barclays
 is
 Plaintiffs’
 claim
 that
 they
 “were
 a
 third

party
 intended
 beneficiary
 of
 Barclays’
 servicing
 contract
 with
 Monument.”

 (Am.

Compl.

 ¶
 23(A).)
 1

 Barclays
 argues
 that
 Plaintiffs
 have
 failed
 to
 allege
 facts
 to

support
 a
 breach
 of
 contract
 claim
 based
 on
 a
 third-­‐party
 beneficiary
 theory.

1
 The
 Amended
 Complaint
 does
 not
 state
 specifically
 how
 Barclays
 breached

its
 loan
 servicing
 contract
 with
 Monument.

7

Plaintiffs
 respond
 that
 “discovery
 will
 reveal
 both
 the
 arrangement
 between

Barclays
 and
 Monument
 and
 the
 surrounding
 circumstances
 related
 to
 it.”

 (Pls.’

Rsp.
 10,
 Doc.
 23.)

 As
 both
 parties
 recognize,
 under
 Alabama
 law
 it
 is
 well-­‐settled

that
 “[a]
 party
 claiming
 to
 be
 a
 third-­‐party
 beneficiary,
 must
 establish
 that
 the

contracting
 parties
 intended,
 upon
 execution
 of
 the
 contract,
 to
 bestow
 a
 direct,
 as

opposed
 to
 an
 incidental,
 benefit
 upon
 the
 third
 party.”

 Cincinnati
 Ins.
 Cos.
 v.
 Barber

Insulation,
 Inc.,
 946
 So.2d
 441,
 443
 (Ala.
 2006)
 (internal
 quotation
 marks
 omitted).

Plaintiffs’
 bare
 allegation
 that
 they
 are
 third-­‐party
 intended
 beneficiaries
 of
 the

Monument/Barclays
 servicing
 contract
 is
 precisely
 the
 type
 of
 factually

unsupported
 legal
 conclusion
 that
 Iqbal

 and
 Twombley
 prohibit.

Barclays’
 final
 argument,
 quite
 possibly,
 is
 a
 non-­‐issue.

 It
 relates
 to
 an

allegation
 in
 the
 Amended
 Complaint
 that
 “Barclays,
 through
 its
 counsel,
 also

promised
 that
 Plaintiffs
 would
 be
 deemed
 current
 on
 the
 loan.”

 (Am.
 Compl.
 ¶
 12.)

Barclays
 argues
 that
 this
 amounts
 to
 an
 oral
 agreement
 to
 forebear
 repayment
 of

the
 loan
 and,
 as
 such,
 is
 barred
 by
 the
 Statute
 of
 Frauds,
 Ala.
 Code
 §
 8-­‐9-­‐2(7)
 (1975),

which
 requires
 that
 every
 agreement
 to
 delay
 or
 forbear
 repayment
 of
 money
 must

be
 in
 writing.

 Plaintiffs
 counter
 that
 the
 statement
 is
 not
 an
 agreement
 to
 forbear

repayment
 but
 a
 promise
 to
 show
 the
 loan
 as
 current,
 i.e.,
 not
 in
 default.

Furthermore,
 the
 Court
 does
 not
 read
 the
 Amended
 Complaint
 to
 assert
 a
 breach
 of

contract
 claim
 based
 on
 this
 statement.
 Even
 assuming
 that
 it
 does,
 the
 Court
 finds

8

that
 the
 statement
 is
 susceptible
 to
 multiple
 interpretations2
 and
 declines
 to
 apply

the
 Statute
 of
 Frauds
 at
 this
 stage.

In
 summary,
 the
 Amended
 Complaint
 sets
 forth
 a
 viable
 breach
 of
 contract

claim
 based
 on
 Barclays’
 alleged
 breach
 of
 the
 bankruptcy
 reorganization
 plan.

 It

does
 not
 state
 a
 viable
 breach
 of
 contract
 claim
 based
 on
 a
 third-­‐party
 beneficiary

theory.

 Finally,
 the
 Court
 rejects
 Barclays’
 argument
 for
 dismissal
 based
 on
 the

Statute
 of
 Frauds.

Breach
 of
 the
 Duty
 of
 Good
 Faith
 and
 Fair
 Dealing
 (Count
 Two)

Barclays
 interprets
 this
 claim
 to
 be
 a
 claim
 for
 the
 tort
 of
 bad
 faith
 and
 argues

that
 it
 is
 barred
 by
 the
 two-­‐year
 statute
 of
 limitations
 applicable
 to
 torts
 and

because
 Alabama
 has
 recognized
 the
 tort
 of
 bad
 faith
 only
 in
 relation
 to
 insurance

contracts.

 In
 response,
 Plaintiffs
 argue
 that
 their
 claim
 for
 breach
 of
 the
 duty
 of

good
 faith
 and
 fair
 dealing
 sounds
 in
 contract.

 The
 Alabama
 Supreme
 Court
 has

recognized
 a
 bad
 faith
 claim
 under
 contract
 law
 for
 violation
 of
 a
 contract’s
 express

or
 implied
 obligation
 of
 good
 faith.

 See
 Lake
 Martin/
 Alabama
 Power
 Licensee
 Assoc.,

Inc.
 v.
 Alabama
 Power
 Co.,
 Inc.,
 601
 So.
 2d
 942,
 944
 (Ala.
 1992).

 Therefore,
 Barclays’

asserted
 grounds
 for
 dismissal
 are
 inapplicable.3

Fraudulent
 Suppression/Concealment
 (Count
 Eight)

Barclays
 argues
 that
 Plaintiff’s
 fraudulent
 suppression
 claim
 fails
 because

“Plaintiffs
 have
 failed
 to
 allege
 that
 Barclays
 had
 a
 duty
 to
 disclose,
 and
 have
 failed

2
 In
 the
 context
 of
 these
 facts,
 a
 promise
 to
 deem
 the
 loan
 current
 could
 also

be
 a
 promise
 to
 correct
 the
 errors
 that
 placed
 the
 loan
 in
 default
 or,
 alternatively,
 as

an
 admission
 that
 the
 loan
 was
 erroneously
 placed
 in
 default.

3Because
 Barclays
 has
 misinterpreted
 the
 claim,
 it
 has
 not
 challenged
 the

sufficiency
 of
 Plaintiffs’
 contractual
 breach
 of
 the
 duty
 of
 good
 faith
 and
 fair
 dealing.

The
 Court
 will
 not
 address
 a
 potential
 basis
 for
 dismissal
 that
 has
 not
 been
 raised.

9

to
 present
 any
 proof
 or
 argument
 as
 to
 the
 source
 of
 Barclays’
 duty
 to
 disclose.”

(Barclays’
 Br.
 23,
 Doc.
 21.)

 Plaintiffs
 acknowledge
 that
 the
 Count
 Eight
 does
 not

specifically
 allege
 that
 Barclays
 had
 a
 duty
 to
 disclose,
 thought
 they
 contend
 that

this
 is
 a
 typographical
 error
 and
 that
 “[t]he
 intent,
 as
 can
 be
 gleaned
 throughout
 this

count
 is
 to
 assert
 the
 obvious—that
 all
 Defendants
 owed
 a
 duty
 to
 Plaintiffs.”

 (Pls.’

Br.
 18-­‐19.)

 Even
 assuming,
 arguendo,
 that
 Plaintiffs
 have
 pled
 the
 legal
 element,
 i.e.,

that
 Barclays
 had
 a
 duty
 to
 disclose,
 they
 have
 failed
 to
 allege
 facts
 to
 support
 that

claim.

 Alabama
 law
 defines
 fraudulent
 suppression
 as
 “’[s]uppression
 of
 a
 material

fact
 which
 the
 party
 is
 under
 an
 obligation
 to
 communicate.
 The
 obligation
 to

communicate
 may
 arise
 from
 the
 confidential
 relations
 of
 the
 parties
 or
 from
 the

particular
 circumstances
 of
 the
 case.’”

 State
 Farm
 &
 Cas.
 Co.
 v.
 Owen,
 729
 So.2d
 834,

837
 (Ala.
 1998)
 (quoting
 Ala.
 Code
 §
 6-­‐5-­‐102
 (1975)).

 In
 this
 case,
 the
 “material

fact”
 allegedly
 suppressed
 by
 Barclays
 was
 its
 “wrongful
 sharing
 in
 a
 commission,

payment
 kickback,
 fee
 or
 financial
 benefit
 when
 it
 force-­‐placed
 insurance
 on

Plaintiffs’
 property.”

 (Pls.’
 Br.
 18.)

 Plaintiffs
 contend
 that
 “special
 circumstances”

include
 Barclays’
 involvement
 in
 the
 Chapter
 11
 plan
 and
 Barclays’
 failure
 to
 comply

with
 the
 Chapter
 11
 agreement
 by
 force-­‐placing
 hazard
 insurance.

 These
 alleged

“special
 circumstances”
 are
 not
 specifically
 asserted
 in
 Count
 Eight,
 but
 even
 if
 they

were
 they
 would
 not
 support
 a
 legal
 determination
 that
 Barclays
 had
 a
 duty
 to

disclose.

 Whether
 special
 circumstances
 exist
 that
 give
 rise
 to
 a
 duty
 to
 disclose

exists
 is
 a
 question
 of
 law.

 Owen,
 729
 So.2d
 at
 839.

 Plaintiffs
 allege
 nothing
 more

than
 the
 existence
 of
 a
 contract
 (the
 Chapter
 11
 plan)
 and
 Barclays
 alleged
 breach
 of

10

that
 contract
 (force-­‐placing
 hazard
 insurance).

 These
 are
 not
 “special

circumstances”
 that
 would
 impose
 on
 Barclays
 a
 duty
 to
 disclose.

 “When
 both

parties
 are
 intelligent
 and
 fully
 capable
 of
 taking
 care
 of
 themselves
 and
 dealing
 at

arm’s
 length,
 with
 no
 confidential
 relationship,
 no
 duty
 to
 disclose
 exists
 when

information
 is
 not
 requested,
 and
 mere
 silence
 is
 not
 a
 fraud.”

 Bank
 of
 Red
 Bay
 v.

King,
 482
 So.2d
 274,
 285-­‐86
 (Ala.
 1985);
 see
 also
 Surrett
 v.
 TIG
 Premier
 Ins.
 Co.,
 869

F.Supp.
 919,
 924-­‐25
 (M.D.
 Ala.
 1994)
 (superior
 knowledge
 does
 not
 amount
 to

special
 circumstances
 imposing
 a
 duty
 to
 disclose);
 Owens,
 729
 So.2d
 at
 843

(relationship
 between
 insurer
 and
 insured
 not
 “special
 circumstance”);
 Mason
 v.

Chrysler
 Corp.,
 653
 So.2d
 951,
 954-­‐55
 (Ala.
 1995)
 (dealership’s
 knowledge
 of

recurring
 defect
 automobile
 model
 purchased
 by
 customer
 did
 not
 give
 rise
 to
 duty

to
 disclose).

Unconscionability
 (Count
 Nine)

Barclays
 argues
 that
 no
 such
 cause
 of
 action
 exists,
 and
 Plaintiffs
 agree
 “that

the
 affirmative
 cause
 of
 action
 for
 unconscionability
 does
 not
 allow
 for
 money

damages.”

 (Pls.’
 Br.
 20.)

 They
 argue,
 however,
 that
 the
 Court
 may
 prevent
 an

unconscionable
 result.

 Plaintiffs’
 argument
 is
 unavailing.

 A
 more
 accurate

statement
 of
 the
 law
 is
 that

 “a
 court
 may
 rescind
 a
 contract,
 or
 a
 portion
 of
 a

contract,
 for
 unconscionability.”

 Layne
 v.
 Garner,
 612
 So.
 2d
 404,
 408
 (Ala.
 1992).

However,
 Plaintiffs
 do
 not
 seek
 rescission
 of
 the
 contract
 or
 a
 portion
 thereof.

 Other

than
 damages,
 the
 only
 relief
 they
 seek
 is
 “cancellation
 of
 any
 remaining
 debt”
 (i.e.,

to
 be
 relieved
 of
 their
 duty
 to
 perform).

 Moreover,
 they
 do
 not
 claim
 that
 the

contract
 was
 unconscionable.

 Instead,
 they
 allege
 that
 the
 Barclays
 (and
 the
 other

11

Defendants)
 behaved
 unconscionably
 by
 failing
 to
 comply
 with
 post-­‐contractual

promises
 and
 by
 failing
 to
 perform
 obligations
 under
 the
 contract.

 (Am.
 Compl.
 ¶

49.)

 In
 sum,
 Count
 Nine
 fails
 to
 state
 a
 claim
 for
 relief
 of
 any
 kind.

Unjust
 Enrichment
 (Count
 Ten)

Barclays
 asserts
 two
 grounds
 for
 dismissal
 of
 Plaintiffs’
 unjust
 enrichment

claim.

 First,
 Defendant
 contends
 that
 the
 claim
 is
 preempted
 by
 the
 existence
 of
 an

express
 contract.
 “[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).

 Nevertheless,
 alternative
 theories
 of

recovery
 may
 be
 presented
 to,
 and
 decided
 by,
 the
 trier
 of
 fact.

 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).

Dismissal
 is
 not
 appropriate
 merely
 because
 Plaintiffs
 have
 also
 asserted
 a
 breach
 of

contract
 claim.

Barclays
 also
 argues
 that
 this
 claim
 arose
 out
 of
 a
 tort-­‐like
 injury
 and
 is,

therefore,
 time-­‐barred
 under
 Alabama’s
 catch-­‐all
 two-­‐year
 statute
 of
 limitations,

12

Ala.
 Code
 §
 6-­‐2-­‐38(l)
 (1975).

 Both
 Barclays
 and
 Plaintiffs
 agree
 that
 the
 statute
 of

limitations
 for
 an
 unjust
 enrichment
 claim
 is
 determined
 by
 the
 nature
 of
 the
 injury

from
 which
 it
 arises.

 See
 Auburn
 Univ.
 v.
 Int’l
 Bus.
 Mach.
 Corp.,
 716
 F.Supp.2d
 1114,

1117-­‐1119
 (M.D.
 Ala.
 2010).4

 Barclays
 cites
 Auburn
 University
 but
 fails
 to
 apply
 the

analysis;
 instead,
 it
 asserts
 that
 “[t]he
 court
 in
 [that
 case]
 found
 that
 the
 claim
 arose

out
 of
 a
 tort
 injury.
 .
 .
 and
 that
 [t]he
 some
 conclusion
 would
 be
 reached
 in
 this
 case
 if

there
 were
 no
 express
 contract.”

 (Barclays’
 Br.
 27.)

 As
 Plaintiffs
 point
 out,
 the

unjust
 enrichment
 claim
 in
 Auburn
 University
 arose
 from
 an
 alleged
 patent

conversion,
 a
 tort-­‐based
 injury.

 In
 this
 case,
 the
 unjust
 enrichment
 theory
 is
 quasi-­‐
contractual
 based
 on
 Plaintiffs’
 assertion
 that
 Barclays
 took
 Plaintiffs’
 payments
 and

misapplied
 them,
 essentially
 using
 the
 funds
 to
 Barclays’
 benefit.

 See
 White,
 454

F.Supp.2d
 at
 1133
 n.
 24
 (unjust
 enrichment
 is
 a
 legal
 fiction
 used
 to
 create
 an

implied
 contract).

 Therefore,
 Alabama’s
 six-­‐year
 statute
 of
 limitations
 applicable
 to

breach
 of
 contract
 actions
 is
 applicable.

 See
 Ala.
 Code
 §
 6-­‐22-­‐34(4)
 (actions
 founded

on
 contract
 must
 be
 commenced
 within
 six
 years).

Conversion
 (Count
 Eleven)

4The
 statue
 of
 limitations
 applicable
 to
 unjust
 enrichment
 claims
 has
 not

been
 definitively
 resolved.

 In
 Snider
 v.
 Morgan,
 113
 So.3d
 643,
 655
 (Ala.
 2012),
 the

the
 Alabama
 Supreme
 Court
 stated:

The
 court
 in
 Auburn
 University
 observed
 that
 “Alabama
 state
 courts

have
 not
 decided
 whether
 unjust-­‐enrichment
 claims
 are
 tort
 claims
 or

implied-­‐contract
 claims,
 much
 less
 which
 statute
 of
 limitations
 applies

to
 such
 claims.”
 Our
 research
 similarly
 confirms
 that
 there
 is
 a
 distinct

absence
 of
 authority
 definitively
 stating
 the
 statute
 of
 limitations

applicable
 to
 an
 unjust-­‐enrichment
 claim.
 We
 need
 not,
 however,

decide
 that
 issue
 here.

Id.
 (quoting
 Auburn
 Univ.,
 716
 F.Supp.2d
 at
 1117).

13

Barclays
 contends
 that
 the
 conversion
 count
 is
 due
 to
 be
 dismissed
 because
 it

fails
 to
 state
 a
 claim
 for
 the
 conversion
 of
 money.

 In
 Hensley
 v.
 Poole,
 910
 So.2d
 96

(Ala.
 2005),
 the
 Alabama
 Supreme
 Court
 explained
 the
 limitations
 of
 a
 conversion

action
 when
 the
 conversion
 involves
 money:

This
 Court
 has
 held
 repeatedly
 that
 “
 ‘[g]enerally,
 an
 action
 will
 not
 lie

for
 the
 conversion
 of
 money’
 ”
 unless
 “
 ‘the
 money
 at
 issue
 is
 capable

of
 identification.’
 ”
 Only
 when
 money
 is
 “earmarked”
 or
 otherwise

identifiable,
 such
 as
 enclosed
 in
 a
 container
 like
 a
 bag
 or
 chest,
 does

an
 action
 lie
 for
 conversion
 of
 money.
 In
 Lewis
 v.
 Fowler,
 479
 So.2d

725,
 726
 (Ala.1985),
 this
 Court
 recognized,
 by
 reference
 to
 Limbaugh

v.
 Merrill
 Lynch,
 Pierce,
 Fenner
 &
 Smith,
 Inc.,
 732
 F.2d
 859
 (11th

Cir.1984),
 that
 “money
 directly
 traceable
 to
 a
 special
 account”—in
 the

Limbaugh
 case
 a
 “Ready
 Assets
 Trust
 Account”—is
 sufficiently

identifiable
 to
 support
 an
 action
 for
 conversion.
 So
 long
 as
 accounts
 at

financial
 institutions
 are
 “sufficiently
 segregated
 and
 identifiable,”
 this

Court
 will
 generally
 allow
 a
 conversion
 claim
 to
 proceed.

Id.
 at
 101
 (some
 internal
 citations
 omitted).

 Plaintiffs
 argue
 that
 the
 allegations
 of

the
 Amended
 Complaint
 are
 sufficient
 because
 they
 allege
 that
 “payments
 were

directly
 traceable
 to
 a
 particular
 account”
 and
 involve
 “specific
 money
 paid
 by

Plaintiffs.
 .
 .
 on
 particular
 dates
 [which
 are
 set
 out
 in
 the
 Amended
 Complaint].”

(Pls.’
 Br.
 24.)

 The
 phrase
 “directly
 traceable
 to
 a
 particular
 account”
 is
 a
 legal

conclusion.

 Moreover,
 the
 ability
 to
 trace
 specific
 payments
 says
 nothing
 about
 how

those
 payments
 are
 held.

 Because
 the
 Amended
 Complaint
 does
 not
 identify
 a

“segregated
 and
 identifiable
 account”
 such
 as
 an
 escrow
 or
 trust
 account,
 it
 does
 not

support
 a
 claim
 for
 conversion.

Request
 for
 Injunctive
 Relief
 (Count
 Twelve)

In
 Count
 Twelve,
 Plaintiffs
 have
 asserted
 their
 request
 for
 injunctive
 relief,

including
 “[a]
 immediate
 order”
 requiring
 Defendants
 to
 provide
 a
 full
 accounting
 of

Plaintiffs’
 mortgage
 payments
 and
 to
 provide
 (no
 later
 than
 July
 15,
 2014)
 revised

14

1098
 tax
 forms
 to
 properly
 credit
 Plaintiffs
 with
 mortgage
 interest.

 (Am.
 Compl,

Count
 XII
 ¶
 1.)

 In
 addition,
 Plaintiffs
 seek
 “a
 temporary
 restraining
 order,
 to
 be

followed
 by
 a
 preliminary,
 and
 then
 a
 permanent
 injunction,
 enjoining
 Defendants

from”
 making
 reports
 to
 credit
 agencies,
 providing
 1098
 former
 making
 any

representation
 about
 Plaintiffs’
 mortgage
 loan
 account
 without
 prior
 approval
 of
 the

Court.

 (Id.
 ¶
 4.)

 In
 their
 briefs,
 neither
 Barclays
 nor
 Plaintiffs
 make
 any
 distinction

among
 the
 types
 of
 injunctive
 relief
 sought—temporary
 restraining
 order
 (TRO),

preliminary
 injunction
 or
 permanent
 injunction—though
 their
 arguments
 appear
 to

address
 a
 motion
 for
 preliminary
 injunction.5

The
 requirements
 for
 obtaining
 a
 preliminary
 injunction
 are
 well
 settled:

A
 district
 court
 may
 grant
 injunctive
 relief
 only
 if
 the
 moving
 party

shows
 that:
 (1)
 it
 has
 a
 substantial
 likelihood
 of
 success
 on
 the
 merits;

(2)
 irreparable
 injury
 will
 be
 suffered
 unless
 the
 injunction
 issues;
 (3)

the
 threatened
 injury
 to
 the
 movant
 outweighs
 whatever
 damage
 the

proposed
 injunction
 may
 cause
 the
 opposing
 party;
 and
 (4)
 if
 issued,

the
 injunction
 would
 not
 be
 adverse
 to
 the
 public
 interest.
 In
 this

Circuit,
 “[a]
 preliminary
 injunction
 is
 an
 extraordinary
 and
 drastic

remedy
 not
 to
 be
 granted
 unless
 the
 movant
 clearly
 established
 the

‘burden
 of
 persuasion’
 ”
 as
 to
 each
 of
 the
 four
 prerequisites.

Siegel
 v.
 LePore,
 234
 F.3d
 1163,
 1176
 (11th
 Cir.
 2000)
 (en
 banc)
 (internal
 citations

omitted).

“A
 showing
 of
 irreparable
 injury
 is
 ‘the
 sine
 qua
 non
 of
 injunctive
 relief,’”
 and

its
 absence
 “make[s]
 preliminary
 injunctive
 relief
 improper.”

 Id.

 Plaintiffs
 argue

that
 they
 will
 be
 irreparably
 harmed
 because
 they
 “may
 not
 be
 able
 to
 resolve
 their

poor
 credit
 rating”
 resulting
 from
 Barclays
 actions
 giving
 rise
 to
 their
 claims.

 (Pls.’

Br.
 27.)

 But
 the
 threat
 of
 injury
 must
 be
 “real
 and
 immediate”
 rather
 than
 “merely

5
 Plaintiffs
 filed
 the
 Amended
 Complaint
 on
 July
 3,
 2014
 but
 did
 not
 pursue

their
 request
 for
 a
 TRO.

15

conjectural
 or
 hypothetical.”

 Church
 v.
 City
 of
 Huntsville,
 30
 F.3d
 1332,
 1337
 (11th

Cir.
 1994).

 The
 possibility
 that
 Plaintiffs
 may
 not
 be
 able
 to
 resolve
 their
 poor
 credit

rating
 is
 conjecture.

 The
 injury
 to
 Plaintiffs’
 credit
 rating
 has
 already
 been
 inflicted,

and
 there
 is
 no
 reason
 to
 believe
 that
 an
 immediate
 injunction
 would
 be
 more
 likely

to
 “resolve
 their
 poor
 credit
 rating”
 than
 one
 entered
 after
 a
 trial
 on
 the
 merits.

 In

sum,
 Plaintiffs
 are
 not
 entitled
 to
 preliminary
 injunctive
 relief.

Conclusion

Defendant
 Barclays
 motion
 to
 dismiss
 is
 due
 to
 be
 and
 hereby
 is
 GRANTED,

in
 part,
 as
 to
 Plaintiffs’
 Breach
 of
 Contract
 based
 on
 third-­‐party
 beneficiary
 theory

(Count
 One),
 Breach
 of
 Fiduciary
 Duty
 (Count
 Three),
 Negligence
 (Count
 Four),

Fraud
 (Count
 Six),
 Promissory
 Fraud
 (Count
 Seven),
 Fraudulent

Suppression/Concealment
 (Count
 Eight),
 Unconscionability
 (Count
 Nine),
 and

Conversion
 (Count
 Eleven).

 The
 motion
 is
 DENIED,
 as
 to
 Plaintiffs’
 claim
 for
 Unjust

Enrichment
 (Count
 Ten)
 and
 DENIED,
 in
 part,
 as
 to
 Plaintiffs’
 claims
 for
 Breach
 of

Contract
 claim
 based
 on
 violation
 of
 the
 bankruptcy
 plan
 of
 reorganization
 (Count

One)
 and
 Breach
 of
 the
 Duty
 of
 Good
 Faith
 and
 Fair
 Dealing
 (Count
 Two).

 Plaintiffs’

request
 for
 preliminary
 injunctive
 relief
 is
 DENIED,
 and
 their
 request
 for
 a

temporary
 restraining
 order
 is
 MOOT.

DONE
 and
 ORDERED
 this
 the
 17th

 day
 of
 November,
 2014,
 nunc
 pro
 tunc
 the

15th
 day
 of
 October,
 2014.

s/Charles
 R.
 Butler,
 Jr.

Senior
 United
 States
 District
 Judge

16