Alverson et al v. PNC Bank, N.A.
Filing
13
ORDER granting 6 Motion to Dismiss. Signed by Senior Judge Charles R. Butler, Jr on 12/15/2014. copies to parties. (sdb)
IN
THE
UNITED
STATES
DISTRICT
COURT
FOR
THE
SOUTHERN
DISTRICT
OF
ALABAMA
SOUTHERN
DIVISION
ERNEST
MICHAEL
ALVERSON
and
SADIE
B.
ALVERSON
Plaintiffs,
v.
PNC
BANK,
a
National
Banking
Association,
Defendant,
)
)
)
)
)
)
)
)
)
)
)
)
CIVIL
ACTION
NO.
14-‐00387-‐CB-‐B
ORDER
This
matter
is
before
the
Court
on
Defendant’s
motion
to
dismiss
pursuant
to
Rule
12(b)(6)
of
the
Federal
Rules
of
Civil
Procedure.
(Doc.
5.)
The
motion
has
been
fully
briefed
by
the
parties.
(Docs.
6,
8
&
10.)
Upon
due
consideration
of
the
issues
raised
and
the
relevant
law,
the
Court
finds
that
the
motion
is
due
to
be
granted.
Factual
&
Procedural
Background
This
action
arises
from
attempts
by
the
Plaintiffs,
Ernest
Michael
Alverson
and
Sadie
B.
Alverson
(the
Alversons),
to
obtain
a
loan
modification
from
their
mortgagee,
Defendant
PNC
Bank.
On
March
12,
2007,
the
Alversons
“entered
into
a
mortgage
with
PNC
encumbering
property
[their
home]
owned
by
them
in
Baldwin
County,
Alabama.”
(Compl,
¶
2,
Doc.
1-‐1.)
The
Alversons
subsequently
“incurred
substantial
physical
and
economic
setbacks”
and,
beginning
in
November
2012,
“requested
individually
and
through
counsel
that
the
loan
be
modified
based
on
their
economic
and
physical
conditions.”
(Id.
¶
3.)
Between
November
2012
and
January
2014,
Plaintiffs
submitted
five
loan
modification
packages
to
PNC.
“As
to
the
majority
of
the
submissions.
.
.,
Plaintiffs
received
no
communication
back
whatsoever
from
PNC
although
on
occasion
Plaintiffs,
after
retaining
counsel
received
communications
from
PNC
that
their
loan
modification
package
needed
to
be
supplemented.”
(Id.
¶
4.)
Counsel,
after
correspondence
with
PNC,
would
supplement
the
packages
as
requested.
However,
“the
loan
modification
packages
submitted.
.
.
by
the
Plaintiffs
.
.
.
were
not
processed,”
and
no
reason
was
given
for
PNC’s
failure
to
do
so.
(Id.)
During
this
time,
PNC
communicated
with
the
Alversons
directly
“twenty
to
thirty”
times,
with
notifications
that
their
loan
was
in
default
and
threatening
foreclosure,
even
though
PNC
had
been
given
notice
that
the
Alversons
were
represented
by
counsel.
(Id.
¶
5.)
In
December
2013,
Plaintiffs
received
“notification
that
their
loan
could
not
be
modified
as
they
had
not
submitted
loan
modification
documentation
to
support
the
application.”
(Id.
¶
7.)
PNC
did
not
immediately
explain
how
the
loan
modification
request
was
deficient.
(Id.)
Plaintiffs
allege
that
they
“have
exhibited
to
PNC
through
Social
Security
disability
records,
income
records,
hardship
affidavits,
and
other
expenditures
and
debts,
that
they
would
be
able
to
service
the
mortgage
indebtedness
if
the
same
were
modified.”
(Id.
¶
8.)
In
mid-‐January
2014,
counsel
for
PNC
contacted
Plaintiffs’
counsel
“requesting
that
the
same
package
be
faxed
as
it
had
previously
been
emailed,
notwithstanding
the
fact
that
it
was
received
by
e-‐mail,
it
had
to
be
faxed,
[and].
.
.
it
was
faxed
on
or
about
January
20,
2014.”
(Id.)
After
the
Alversons
threatened
legal
action
in
late
January
2014,
PNC’s
counsel
requested
that
the
Alversons
“refrain
from
filing
suit
so
that
the
matter
could
be
resolved.”
(Id.
¶
10.)
Communications
2
between
counsel
for
the
parties
continued
from
February
through
June
2014.
On
June
3,
2014,
Defendant’s
counsel
represented
to
Plaintiffs’
counsel
“that
there
was
currently
no
foreclosure
sale
pending
given
the
status
of
the
negotiations.”
(Id.
¶
11.)
However,
in
a
letter
dated
June
9,
2014,
PNC
notified
Plaintiffs’
counsel
“that
in
fact
the
foreclosure
was
scheduled
for
July
14,
2014.”
(Id.
¶
13.)
Further
communications
between
counsel
ensued.
The
July
foreclosure
sale
was
cancelled
but
was
reset
for
August
11,
2014.
Plaintiffs
filed
this
lawsuit
on
August
8,
2011.
Plaintiffs
filed
the
underlying
Complaint
in
the
Circuit
Court
of
Baldwin
County
on
August
8,
2014
asserting
claims
against
PNC
Bank
for
negligence,
wantonness,
and
violations
of
the
Fair
Debt
Collection
Practices
Act
(FDCPA),
15
U.S.C.
§§
1692a-‐1692p,
and
the
Fair
Credit
Reporting
Act
(FCRA),
15
U.S.C.
§§
1681a-‐
1681x..
The
Complaint
alleged
damages
in
the
amount
of
$1
million
and
also
requested
a
temporary
restraining
order
(TR0)
enjoining
the
scheduled
foreclosure
sale
of
their
property.
On
August
11,
2014,
the
date
of
the
scheduled
sale,
a
TRO
was
entered
by
Baldwin
County
Circuit
Judge
Lang
Floyd.
On
August
15,
2014,
PNC
filed
a
notice
of
removal
in
this
Court
based
on
both
diversity
and
federal
question
jurisdiction.
Shortly
after
removal,
PNC
filed
a
motion
to
dismiss
for
failure
to
state
a
claim
upon
which
relief
can
be
granted.
Issues
Raised
Defendant
contends
the
facts
alleged
in
the
Complaint
do
not
support
a
claim
for
relief
under
state
or
federal
law.
In
response,
Plaintiffs
argue
that
their
state
law
claims
for
negligence
and
wantonness
should
survive
the
motion
to
dismiss.
Plaintiffs,
however,
appear
to
have
abandoned
their
federal
law
claims.
They
do
not
3
address
these
claims
(both
contained
in
Count
III
of
the
Complaint)
at
all
in
their
response.
Moreover,
they
conclude
their
brief
by
“request[ing]
that
the
Motion
to
Dismiss
as
filed
by
Defendant,
PNC
Bank,
N.A.,
be
denied
as
to
Counts
I
and
II.”
Consequently,
the
Court
considers
the
motion
to
be
unopposed
as
to
Count
III
and
below
addresses
the
sufficiency
of
Plaintiffs’
negligence
and
wantonness
claims
under
Alabama
law.
Standard
of
Review
A
complaint
must
“set
forth
a
short
and
plain
statement
of
the
claim
showing
that
the
pleader
is
entitled
to
relief.”
Fed.
R.
Civ.
P.
8(a)(2).
In
Bell
Atlantic
Corp.
v.
Twombly,
550
U.S.
544
(2007),
the
Supreme
Court
set
forth
the
parameters
of
a
well-‐
pleaded
complaint.
A
claim
for
relief
“must
set
forth
enough
factual
matter
(taken
as
true)
to
suggest
[the
required
elements
of
a
cause
of
action].”
Id.
at
556;
see
also
Watts
v.
Florida
Int’l
University,
495
F.3d
1289,
1295
(11th
Cir.
2007)
(applying
Twombly).
Furthermore,
a
complaint
must
“provide
the
defendant
with
fair
notice
of
the
factual
grounds
on
which
the
complaint
rests.”
Jackson
v.
Bellsouth
Telecommc’ns,
Inc.,
372
F.3d
1250,
1271
(11th
Cir.
2004).
In
Ashcroft
v.
Iqbal,
556
U.S.
662,
129
S.Ct.
1937
(2009),
the
Supreme
Court
further
refined
the
threshold
requirements
for
a
claim
under
Rule
8(a)(2).
Two
working
principles
underlie
our
decision
in
Twombly.
First,
the
tenet
that
a
court
must
accept
as
true
all
of
the
allegations
contained
in
a
complaint
is
inapplicable
to
legal
conclusions.
Threadbare
recitals
of
the
elements
of
a
cause
of
action,
supported
by
mere
conclusory
statements,
do
not
suffice.
Rule
8
marks
a
notable
and
generous
departure
from
the
hyper-‐technical,
code-‐pleading
regime
of
a
prior
era,
but
it
does
not
unlock
the
doors
of
discovery
for
a
plaintiff
armed
with
nothing
more
than
conclusions.
Second,
only
a
complaint
that
states
a
plausible
claim
for
relief
survives
a
motion
to
dismiss.
Determining
whether
a
complaint
states
a
plausible
claim
for
relief
4
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
plaintiff’s
complaint
‘are
to
be
accepted
as
true.”
Grossman
v.
Nationsbank,
N.A.,
225
F.3d
1228,
1232
(11th
Cir.
2000)(per
curiam).
Conclusory
allegations,
however,
are
not.
“A
district
court
considering
a
motion
to
dismiss
shall
begin
by
identifying
conclusory
allegations
that
are
not
entitled
to
an
assumption
of
truth—legal
conclusions
must
be
supported
by
factual
allegations.”
Randall,
610
F.
3d
at
709-‐10.
Next,
the
court
“should
assume,
on
a
case-‐by-‐case
basis,
that
well
pleaded
factual
allegations
are
true
and
then
determine
whether
they
plausibly
give
rise
to
an
entitlement
to
relief.”
Id.
at
710.
Plausibility
means
something
more
than
allegations
that
are
“merely
consistent
with”
liability.
Iqbal,
129
S.Ct.
at
1949.
The
facts
alleged
must
“allow[
]
the
court
to
draw
the
reasonable
inference
that
the
defendant
is
liable
for
the
misconduct
alleged.”
Id.
Legal
Analysis
The
broad
issue
presented
is
whether
the
facts
asserted
in
the
Complaint
state
a
claim
for
negligence
or
wantonness.
Unfortunately,
the
parties’
briefs
are
not
particularly
helpful
in
addressing
that
question
because
they
misidentify
the
factual
basis
of
the
claims.
The
Complaint
alleges
negligence
and
wantonness
based
on
“the
conduct
of
PNC
in
failing
and
refusing
to
process
the
Plaintiffs’
loan
modification
packages.”
(Compl.
¶¶
17
&
20,
emphasis
added.)
However,
the
issue
the
Defendant
5
and
Plaintiffs
argue
is
whether
Alabama
recognizes
a
cause
of
action
for
negligent
or
wanton
servicing
of
a
mortgage
account.1
As
Defendant
correctly
points
out,
Alabama
law
does
not
recognize
a
tort-‐like
cause
of
action
for
breach
of
a
duty
created
by
contract,
at
least
not
between
the
parties
to
a
contract;
therefore,
a
mortgagor
cannot
maintain
a
cause
of
action
against
the
a
mortgagee
for
negligent
or
wanton
servicing
of
a
mortgage
contract.
See
Blake
v.
Bank
of
North
America,
845
F.Supp.
2d
1206,
1210
(M.D.
Ala.
2012).
While
servicing
a
mortgage
account
involves
duties
created
by
contract,
the
same
cannot
be
said
for
processing
a
request
for
a
loan
modification.
2
Therefore,
the
Court
must
look
more
closely
at
Plaintiffs’
negligence
and
wantonness
claims.
To
recover
under
a
negligence
theory,
Plaintiffs
must
allege
and
prove
Defendant
had
a
duty
to
process
their
request
for
a
loan
modification.
See
AALAR,
Ltd.
v.
Francis,
716
So.
2d
1141,
1144
(Ala.
1998)
(elements
of
negligence
claim
are
duty,
breach
of
that
duty,
causation
and
damages).
To
recover
under
a
wantonness
theory,
Plaintiffs
must
allege
and
prove
they
had
a
right
to
have
a
loan
modification
request
processed.
See
Ala.
Code
§
6-‐11-‐20(b)(3)
(defining
1
In
the
cases
cited
by
the
Defendant,
the
negligence
and
wantonness
claims
involved
the
defendant’s
servicing
of
the
existing
loan,
not
the
handling
of
a
modification
request.
Wallace
v.
SunTrust
Mortgage,
Inc.,
974
F.
Supp.
2d
1358,
1369
(S.D.
Ala.
2013)
(complaint
alleged
defendant
negligently
and
wantonly
“handled,
serviced
and
processed
payment,
fees
and
all
aspects
of
[her]
Mortgage
loan”)
Quinn
v.
Deustche
Bank
Nat’l
Trust
Co.,
2014
WL
977632
(S.D.
Ala.
Mar.
12,
2014)
(“crux
of
[plaintiff’s]
negligence
and
wantonness
claims
is.
.
.
that
defendants
should
have
accepted,
applied
and
credited
his
mortgage
payments
in
a
timely
and
accurate
manner,
and
that
their
alleged
failure
to
do
so
breached
a
duty
of
care
owed
to
him
and
caused
him
to
incur
damages”).
2
At
the
very
least,
there
are
no
facts
alleged
from
which
the
Court
could
infer
that
the
duty
to
process
the
loan
modification
arose
from
the
parties’
contract.
6
wantonness
as
“conduct
which
is
carried
on
with
a
reckless
or
conscious
disregard
of
the
rights
or
safety
of
others”).
As
far
as
this
Court
has
been
able
to
determine,
Alabama
courts
have
not
specifically
addressed
claims
of
negligent
or
wanton
failure
to
process
a
loan
modification
request.
The
Alabama
supreme
court
has,
however,
addressed
a
similar
type
of
claim.
In
Armstrong
Bus.
Serv.,
Inc.
v.
AmSouth
Bank,
817
So.
2d
665
(Ala.
2001),
the
plaintiff,
ABS,
argued
that
AmSouth
owed
a
duty
“to
properly
process
ABS’s
loan
request.”
Id.
at
680.
The
duty,
according
to
ABS,
arose
from
AmSouth’s
internal
loan
application
policies.
The
court
rejected
this
argument,
holding
that
the
policies
were
created
for
the
bank’s
own
benefit
and
did
not
create
a
common-‐law
duty
or
right.
Id.
at
681.
On
the
other
hand,
Alabama
has
recognized
a
duty
of
care
in
the
loan
processing
context
under
the
“doctrine
that
one
who
volunteers
to
act,
though
under
no
duty
to
do
so,
is
thereafter
charged
with
the
duty
of
acting
with
due
care.”
Southland
Bank
v.
A&A
Drywall
Supply
Co.,
Inc.
21
So.
3d
1196,
1219
(Ala.
2008).
But
those
cases
involved
special
circumstances
outside
the
typical
borrower/lender
relationship.
In
Southland
Bank,
the
bank
assisted
the
plaintiff
in
completing
and
submitting
a
loan
application
to
the
Small
Business
Administration,
and
the
court
held
that
the
bank
“arguably
undertook
a
duty
to
process
the
SBA
application;
this
was
done,
and
done
correctly.”
Id.
In
Williamson
v.
Realty
Champion,
551
So.
2d
1000
(Ala.
1989),
the
court
reversed
summary
judgment
in
favor
of
the
defendants
on
a
negligence
claim
holding
that
a
duty
of
care
arose
when
the
mortgage
company
undertook
to
help
the
plaintiffs
procure
an
F.H.A.
loan.
Id.
at
1003.
7
The
instant
case
is
more
like
Armstrong
and
is
distinguishable
from
the
“undertaken
duty”
cases.
In
both
the
latter
cases,
the
defendant
voluntarily
acted
on
behalf
of
(or
at
least
assisted)
the
plaintiff
in
submitting
a
loan
application
to
a
third
party.
Here
there
is
no
third-‐party
lender
involved
and
no
allegation
that
Defendant
volunteered
to
act
on
Plaintiffs’
behalf
or
to
assist
Plaintiffs.
Quite
the
opposite.
Plaintiffs
allege
they
submitted
multiple
requests
for
a
loan
modification
to
the
Defendant,
their
lender,
who
did
not
act
at
all,
much
less
undertake
to
act
on
Plaintiffs’
behalf.
The
facts
in
the
Complaint
describe
inept
handling
of
Plaintiffs’
loan
modification
request,
but
they
do
not
support
a
claim
for
negligence
or
wantonness
under
Alabama
law.
Conclusion
For
the
foregoing
reasons,
the
motion
to
dismiss
is
GRANTED.
Judgment
will
be
entered
by
separate
order
dismissing
Plaintiff’s
claims
without
prejudice.
DONE
and
ORDERED
this
the
15th
day
of
December,
2014.
s/Charles
R.
Butler,
Jr.
Senior
United
States
District
Judge
8
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