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
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