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)

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IN  THE  UNITED  STATES  DISTRICT  COURT  FOR  THE   SOUTHERN  DISTRICT  OF  ALABAMA   SOUTHERN  DIVISION     GEORGE  P.  SHEDD,  JR.,  et   al.,     Plaintiffs.     v.     WELLS  FARGO  HOME   MORTGAGE,  INC.,  et  al.,     Defendants.     )   )   )   )   )   )   )   )   )   )   )           CIVIL  ACTION  NO.   14-­‐00275-­‐CB-­‐M     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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