Driggers v. Caliber Home Loans, Inc. et al

Filing 61

ORDER granting 31 Defendant Fay Servicing LLC's Motion to Partially Dismiss Plaintiff's Amended Complaint. Plaintiff's claims of negligence per se (Count IV) and wantonness (Count V) are dismissed with prejudice. Signed by District Judge Jeffrey U. Beaverstock on 10/14/20. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
JAMES R. DRIGGERS,
Plaintiff,
v.
CALIBER HOME LOANS, INC., et al
Defendants.

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) CIVIL ACTION NO. 1:19-00850-JB-B
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ORDER

This matter is before the Court on Defendant Fay Servicing, LLC’s (“Fay” or “Defendant”)
Motion to Partially Dismiss Plaintiff’s Amended Complaint (Doc. 31).1 The Motion has been fully
briefed and is ripe for review.
I.

BACKGROUND
This dispute arises from Fay’s and others’ servicing efforts on Plaintiff’s mortgage.

Plaintiff lives in Baldwin County, Alabama. (Doc. 20 at ¶4, PageID.100). On April 13, 2007,
Plaintiff entered into a real estate mortgage loan with Beneficial Alabama, Inc. (a non-party) for
$125,996.80. (Id. at ¶9, PageID.101). The loan was a purchase money mortgage. (Id. at ¶14,
PageID.102). Beneficial was the original servicer of Plaintiff’s loan. (Id. at ¶10, PageID.101).
Plaintiff’s loan initially required two-hundred and forty (240) payments of $1,097.42, at an
interest rate of 9.229 %. (Doc. 20 at ¶13, PageID.102).

1

Defendant Citibank N.A. as Trustee for CMLTI Asset Trust (“Citibank”) also joins in Fay’s Motion to Partially Dismiss
Plaintiff’s Complaint for the reasons outlined in Fay’s Motion. (Doc. 44, PageID.206).

1

Plaintiff defaulted on his mortgage in 2010. (Doc. 20 at ¶17, PageID.103). Following his
default, Beneficial foreclosed on Plaintiff’s home on April 9, 2010. (Id.). Plaintiff alleges he was
unaware of the foreclosure until an ejectment action was filed against him in the Baldwin County
Circuit Court.

(Id. at ¶18, PageID.103).

In response to the ejectment action, Plaintiff

counterclaimed against Beneficial, alleging the foreclosure was void due to insufficient notice.
(Id. at ¶19). Plaintiff filed for Chapter 13 Bankruptcy on August 19, 2010. (Id. at ¶20). Plaintiff
and Beneficial reached a settlement regarding his mortgage payments some time in August 2011,
and the Bankruptcy Court approved that agreement two (2) months later. (Id. at ¶¶20, 25,
PageID.103 – 104). The settlement provided the following: (1) Plaintiff’s interest rate was
adjusted to 5.25%; (2) Plaintiff’s loan term was extended to 360 months; (3) Plaintiff’s monthly
payment was reduced to $670.61; (4) the loan principal was determined to be $121,442.92; (5)
Plaintiff’s delinquent interest amount was determined to be $19,690.00; (6) Plaintiff’s remaining
fees and property taxes was determined to be $3,479.30; and (7) Plaintiff’s “Lender Placed
Insurance” amounted to $2,028.99. (Id.). Thereafter, Plaintiff had several other disagreements
with Beneficial regarding repayment of his loan as adjusted by the settlement agreement. (Id. at
29 – 31, PageID.104).
Plaintiff’s mortgage was sold to LSF9 Matter Participation Trust on May 1, 2015. (Doc. 20
at ¶34, PageID.104). After Plaintiff’s loan was sold, Defendant Caliber began servicing Plaintiff’s
mortgage. Caliber considered Plaintiff’s loan in default when it began its servicing efforts. (Id. at
¶¶35 – 36, PageID.104 – 105). After a dispute with Caliber over the amount owing on his loan,
Plaintiff and Caliber reached an agreement that Plaintiff had a remaining balance of $112,437.69.

2

(Id. at ¶38).2 The agreement also deferred $30,488.26, in amounts owing other than the
principal. (Id. at ¶41).
Servicing authority was transferred to Fay on October 31, 2018, (Doc. 20 at ¶55,
PgeID.106), and ownership of Plaintiff’s loan was transferred to Citibank on September 9, 2019.
(Id. at ¶ 56). Fay and Citibank considered Plaintiff’s loan in default at the time each assumed
their respective servicing duties and ownership. (Id. at ¶57). Sometime after Fay began servicing
Plaintiff’s loan, a disagreement developed between them concerning the loan balance and the
status of his account. (Id. at ¶63). Plaintiff contends Fay sent him monthly statements requesting
he pay amounts not owing on his loan. (Id. at ¶64).
Plaintiff sent his first Notice of Error (“NOE”) to Fay on November 13, 2018, to an address
designated on Fay’s website for “Inquiries and Other Written Correspondence.” (Id. at ¶¶65 –
66, PageID.107 – 108). Fay did not respond. Plaintiff sent Fay a second NOE on January 26, 2019,
to an address designated on Fay’s website for “Notices of Error or Information Requests.” (Id. at
20 ¶68, PageID.108). Fay also failed to respond to this letter. (Id. at ¶69). Plaintiff sent a third
NOE to Fay on February 18, 2019, to every address visible on Fay’s website. (Id. at ¶70). In each
NOE, Plaintiff complained his payments were being inappropriately applied to his outstanding
balance. (Id. at ¶77). Fay acknowledged Plaintiff’s last NOE on February 27, 2019, and informed
him it intended to respond in thirty (30) days. (Id. at ¶69). Fay responded to Plaintiff on March
11, 2019, only addressing Plaintiff’s concern relating to deferred amounts owing on his loan. (Id.

2

Plaintiff originally named Caliber as a Defendant to this action. However, Plaintiff dismissed his claims against
Caliber with prejudice on April 15, 2020. (Doc. 50).

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at ¶73).

Plaintiff further contends the “transaction history” he received from Fay as a

consequence of this NOE was illegible. (Id. at ¶76).
Plaintiff commenced this action on October 21, 2019. (Doc. 1). Thereafter, Plaintiff filed
an Amended Complaint. (Doc. 20). Plaintiff’s Amended Complaint consists of five (5) claims. In
Count I, Plaintiff alleges Fay violated 12 U.S.C. §2605(e) (“RESPA”) by failing to conduct any
reasonable investigation of the errors described in Plaintiff’s letters and failing to correct his
account to reflect the terms of his prior agreement. Plaintiff also alleges, under this claim, Fay
failed to timely acknowledge and respond to Plaintiff’s NOE’s and failed to comply with the
requirements of 12 CFR §1024.35(d) (“Regulation X”) regarding its obligations to respond to
Plaintiff’s letters and failing to address Plaintiff’s account. (Doc. 20, PageID.111). In Count II,
Plaintiff alleges Fay violated 15 U.S.C. § 1692 (the “Fair Debt Collection Practices Act” or “FDCPA”)
by attempting to collect amounts that were not owing, and/or attempting to collect a debt by
use of false, deceptive, and/or misleading statements aimed at coercing Plaintiff to pay. (Id. at
PageID.113). Plaintiff’s final counts, Counts IV and V, are for negligence per se and wantonness.
In Count VI, Plaintiff alleges Fay breached duties of care imposed by RESPA and its
corresponding regulations by failing to review his file and accurately account for payments he
made. (Id. at PageID.116). Also under this claim, Plaintiff alleges Fay breached the statutory duty
of care imposed by the FDCPA for collecting amounts not owing and “[t]aking or threatening to
take any nonjudicial action to effect dispossession or disablement of property when there is no
present right to possession of [Plaintiff’s] property.” (Id.). In his wantonness claim (Count V)
Plaintiff alleges Fay failed to accurately account for Plaintiff’s payments, improperly applied

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Plaintiff’s payments to his loan balance, and imposed charges it knew or should have known were
incorrect. (Id. at PageID.117).3
II.

STANDARD OF REVIEW
Rule 12(b)(6) requires the Court to construe “the complaint in the light most favorable to

the plaintiff and accept[] all well-pled facts alleged . . . in the complaint as true.” Austin v. Auto
Owners Ins. Co., 2012 U.S. Dist. LEXIS 105862, *5 n. 2 (S.D. Ala. 2012); see also Boyd v. Medtronic,
PLC, 2018 U.S. Dist. LEXIS 69962, *7-8 (N.D. Ala. 2018) (“This Court . . . ‘assume[s] the[] veracity’
of the complaint's ‘well-pleaded factual allegations’ and ‘determine[s] whether they plausibly
give rise to an entitlement to relief.[”]) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)).
To withstand a motion to dismiss, a plaintiff must plead enough facts to state a claim to
relief that is plausible on its face, so as to nudge a claim across the line from conceivable to
plausible. See Iqbal, 556 U.S. at 678 – 680. A claim is facially plausibile when a plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged. Iqbal, 556 U.S. at 678; see also Austin, 2012 U.S. Dist. LEXIS 105862,
at *16 (“The complaint must ‘allow[] the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.’”) (quoting Speaker v. United States HHS CDC &
Prevention, 623 F.3d 1371, 1380 (11th Cir. 2010)).
Review of the complaint is a context-specific task that requires the Court to draw on its
judicial experience and common sense. Iqbal, 556 U.S. at 679. "Although notice pleading does

3

Fay concedes Plaintiff adequately pled his RESPA and FDCPA claims and does not seek dismissal of them at this
time. (Doc. 31, PageID.153 – 154). Fay, however, contends it is entitled to dismissal of Plaintiff’s Breach of Contract
claim. (Id. at PageID.154). Plaintiff concedes dismissal of his Breach of Contract claim as to Fay is appropriate. (Doc.
37, PageID.169). Accordingly, the Court dismisses Plaintiff’s Count III (Breach of Contract) as to Defendant Fay.

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not require a plaintiff to specifically plead every element of his cause of action, a complaint must
still contain enough information regarding the material elements of a cause of action to support
recovery under some 'viable legal theory.'" AFL-CIO v. City of Miami, 637 F.3d 1187, 1186 (11th
Cir. 2011) (quoting Roe v. Aware Woman Ctr. For Choice, Inc., 253 F.3d 678, 683 – 84 (11th Cir.
2001)).
Minimum pleading standards “require[] more than labels and conclusions.” Young v.
Midwest Recovery Sys., 2019 U.S. Dist. LEXIS 213587 *14 (S.D. Ala. 2019) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)). General accusations and “a formulaic recitation of the
elements of a cause of action will not do.” Id.
III.

DISCUSSION
Fay contends the Court should dismiss Plaintiff’s negligence per se and wantonness claims

regarding its loan servicing because Alabama law does not recognize such claims. (Doc. 31,
PageID.154). In response, Plaintiff contends the Court should deny Fay’s Motion because his
negligence per se and wantonness claims are based on the violations of a duties prescribed by
the FDCPA, RESPA, and Regulation X. (Doc. 37, PageID.172). In sum, Plaintiff argues as follows.
Alabama law recognizes per se tort liability premised on violations of statutory and regulatory
duties. (Id., PageID.173). The FDCPA, RESPA, and Regulation X prescribe duties to debt collectors
and loan servicers. (Id.). Because Plaintiff’s negligence per se and wantonness claims arise from
violations of federal duties, and because Plaintiff has suffered the injuries those authorities
contemplate, his claims should withstand Defendant’s Motion. (Id., PageID.173 – 176).4 In Reply,

4

Plaintiff does not specify which authority creates a duty for his wantonness claim. (See Doc. 20, PageID.117).
Plaintiff’s argument on his wantonness claim is as follows:

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Fay relies upon a line of precedent which, it contends, demonstrates Alabama law specifically
forbids the negligence per se and wantonness claims as presented in Plaintiff’s Opposition. (Doc.
38, PageID.178 – 181).5
Plaintiff presents several arguments in his Sur-Reply, which, he contends, require the
Court to deny Fay’s Motion.
Plaintiff first contends Fay’s argument that its duty to Plaintiff is contractual fails because
Plaintiff is not in contractual privity with Fay. (Doc. 51, PageID.223). Because the parties are not
in contractual privity, Plaintiff contends, Defendant’s Motion should be denied. Plaintiff also
contends the precedent Fay relies upon is inapplicable to the instant case for the same reason.
Further, Plaintiff contends, Alabama law has long recognized per se tort liability based upon
statutory and regulatory duties, but that other courts’ failures to properly address the present
issue has left the judicial system bereft of “an in depth explanation of any policy basis for

Under the facts as alleged in the Amended Complain [,] Fay is also liable for
wantonness. “’Wantonness’ is statutorily defined as ‘Conduct which is carried
on with a reckless or conscious disregard of the rights or safety of others.’ Ala.
Code 1975, § 6-11-20(b)(3)”). Bozeman v. Cent. Bank of the S., 646 So. 2d 601,
603 (Ala. 1994). As with the negligence claim, the violation of a statutory duty
can form the basis of a wantonness claim. See, e.g., Autauga Cty. Emergency
Mgmt. Commc’n Dist. v. Bellsouth Telecommunications, LLC, 2016 WL 5848854,
at *8 (N.D. Ala. Oct. 6, 2016) (allegations of violation of state statute sufficiently
formed basis of wantonness claim under Alabama law).
Violation of a [f]ederal consumer protection statute amounts to wantonness.
See Rigby v. FIA Card Servs., N.S., 490 F. App’x 230, 237 (11th Cir. 2012)
(“[B]ecause Rigby adequately pleaded the FCBA claim, and that statutory claim
meets the requirements for supporting a negligence per se claim under Alabama
law . . . we also conclude that Rigby alleged sufficient facts relating to his claims
for negligence and wantonness”).
(Doc. 37, PageID.176).
5

After Defendant filed its Reply, Plaintiff filed a Motion to Strike, or, in the Alternative, to Disregard Portions Thereof.
(Doc. 43). After a telephonic hearing, the Court denied Plaintiff’s Motion and permitted Plaintiff to file a Sur-Reply.

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exempting [loan servicers] from general tort liability applicable to every other actor in society[.]”.
(Doc. 51, PageID.224). Plaintiff contends this purported policy inconsistency requires the Court
to re-examine the issue afresh and find in his favor.
Next, Plaintiff contends his contractual relationship with Beneficial (which was eventually
transferred to Citibank) does not prevent his claims of negligence per se and wantonness
regarding the servicing of his loan. (Doc. 51, PageID.225). Rather, Plaintiff contends, Alabama
law recognizes that, even in actions founded principally on a contractual relationship, tort liability
as to third parties can arise. (Doc. 51, PageID.227).
Third, Plaintiff argues his wantonness claim should survive Defendant’s Motion based on
this Court’s decision in Givens v. Saxon Mortg. Servs., Inc., 2014 WL 2452891 (S.D. Ala. June 2,
2014). Plaintiff contends that, like the plaintiff in Givens, he seeks recovery for emotional
distress, and these damages preclude dismissal.
Finally, Plaintiff reasserts his earlier Opposition argument, contending Fay violated its
statutory and regulatory duties. Plaintiff contends that because Fay violated these duties,
combined with the reasoning in Rawlings v. Dovenmuehle Mortg., Inc., 64 F. Supp. 2d 1156 (M.D.
Ala. 1999), the Court must deny Defendant’s Motion. (Id., PageID.227 – 229). Plaintiff also
requests that, alternative to denying Defendant’s Motion, the Court certify the question of
whether such causes of action exist to the Alabama Supreme Court. (Id., PageID.231 – 232).
A.
Plaintiff’s request for certification is due to be denied because the question is
not close, sufficient authority exists to guide the Court’s analysis, and principles of
comity and federalism will not be contravened by reaching a decision in this matter.
The Court first turns to Plaintiff’s request for certification to the Alabama Supreme Court.
Rule 18 of the Alabama Rules of Appellate Procedure provides federal courts may certify

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“determinative” questions of law where “there are no clear controlling precedents in the
decisions of the Supreme Court of this State” to receive “instructions concerning such questions
or propositions of state law[.]” Ala. R. App. P. 18(a). Courts consider the following factors when
deciding whether to certify a question to the Alabama Supreme Court: (1) the closeness of the
question; (2) the existence of sufficient sources of state law; (3) the degree to which
considerations of comity are relevant in light of the particular issue and case to be decided; (4)
the likelihood of recurrence of a particular issue; and (5) the practical limitations of the
certification process. Arnold v. State Farm Fire and Casualty Company, 2017 WL 5451749, *4
(S.D. Ala. 2017) (citing Smigiel v. Aetna Casualty & Surety Co., 785 F.2d 922, 924 (11th Cir. 1986));
see also Heatherwood Holdings, LLC v. First Commer. Bank, 61 So.3d 1012, 1026 (Ala. 2010)
(declining to answer a certified question where Alabama law was sufficient to guide the court in
answering the certified question).
Plaintiff contends the Court must certify the following question: “[g]iven the rule,
articulated principally in Alabama [f]ederal district courts, that Alabama law does not recognize
the tort of negligent mortgage servicing, are mortgage servicers exempt from the recognized rule
that tort liability may be premised on the violation of a statute or regulation?” (Doc. 51,
PageID.231). The Court finds the answer to this question is not close, sufficient sources of state
law exist to guide the Court’s analysis, and principles of comity and federalism6 are not
contravened by reaching a decision in this case.

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Roe v. Mobile Cty. Appointment Bd., 676 So.2d 1206, 1218 (Ala. 1995) (“The procedure providing for certified
questions was adopted to further the return to federalism in this country.”).

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As has been noted in this Court, “there is a veritable avalanche” of authority recognizing
Alabama law does not recognize claims of negligent or wanton loan servicing. James v.
Nationstar Mortg., LLC, 92 F. Supp. 3d 1190, 1198 n. 8 (S.D. Ala. 2015) (collecting cases); see also
Blake v. Bank of Am., N.A., 845 F. Supp. 2d 1206, 1209 (M.D. Ala. 2012); U.S. Bank v. Shepherd,
202 So.3d 302, 314 – 315 (Ala. 2015) (finding no wanton loan servicing claim exists under
Alabama law); Bennett v. Nationstar Mortgage, LLC, 2015 WL 5294321, *5 (S.D. Ala. Sept. 8, 2015)
(quoting James, 2015 U.S Dist. LEXIS 28762, at *26 – 27)7; Gregory v. Select Portfolio Servicing,
2016 U.S. Dist. LEXIS 117596, *27 (N.D. Ala. Aug. 31, 2016); Diehl v. PayMap, Inc., 2018 U.S. Dist.
LEXIS 55760, *4 – 5 (S.D. Ala. Apr. 19, 2018).
Though Plaintiff distinguishes the authorities above because, inter alia, those claims,
generally, were not per se tort claims like his, this Court has addressed Alabama’s approach to
such claims. See James, 92. F. Supp. 3d at 1200 n. 9 (“[F]ederal courts in Alabama have given
short shrift to similar efforts invoking the doctrine of negligence per se to outflank the phalanx
of case authorities holding that Alabama law does not recognize a cause of action for negligent
or wanton loan servicing.”). Significantly, when the Alabama Supreme Court found no claim for
wanton loan servicing to exist under Alabama law in Shepherd, it endorsed this Court’s conclusion
on that issue. Shepherd, 202 So.3d at 314 – 315. There, relying on this Court’s analysis in James,
the Shepherd court found the trial court erred by entering judgment in the appellee’s favor on
their wantonness claim because

7

The parenthetical includes the original citation before James’ incorporation into Federal Reporter. That quotation
may be found at James, 92 F. Supp. 3d 1190, 1200 n.9 (S.D. Ala. 2015).

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the relationship between the Shepherd and the Trust is based upon
the mortgage and is therefore a contractual one; that is to say, “the
duties and breaches alleged by [the Shepherds] clearly would not
exist but for contractual relationship between the parties.” … This
Court has held that the proper avenue for seeking redress when
contractual duties are breached is a breach-of-contract claim, not
a wantonness claim. … Following this principle, federal courts
applying Alabama law have repeatedly rejected attempts to assert
wantonness claims based on a lender’s actions handling and
servicing a mortgage once the mortgage is executed. . . . The James
court has correctly stated Alabama law as it applies to claims
alleging that lenders have acted wantonly with regard to servicing
and handling mortgages.
Shepherd, 202 So.3d 302, 314 – 315 (emphasis in original, internal citations omitted). This Court
subsequently found Shepherd’s reliance on James controlling on negligence claims against loan
servicers. In McCleary v. DLJ Mortg. Capital, Inc., the court concluded:
"The James court has correctly stated Alabama law as it applies to
claims alleging that lenders have acted wantonly with regard to
servicing and handling mortgages." U.S. Bank National Association
v. Shepherd, 202 So. 3d 302, 315 (Ala. 2015) (emphasis added).
Because Shepherd did not involve a negligence claim, or any claim
against a servicer, the italicized words do not indicate
disagreement with this Court's application of the same rule to
negligence claims or to claims against servicers. Nor does the
plaintiff argue that the rule is or should be different when the claim
is brought against a servicer with which the plaintiff is not in a
contractual relationship. See generally Blake v. Bank of America,
N.A., 845 F. Supp. 2d 1206, 1210-11 (M.D. Ala. 2012) (explaining
the rule as applied to servicers).
2017 U.S. Dist. LEXIS 167908, *8 n.6 (S.D. Ala. Oct. 11, 2017)
Considering Shepherd’s endorsement of James, the Court finds certification unnecessary.
Specifically, the Court finds the significant amount of precedent available and the Alabama
Supreme Court’s endorsement of James clearly indicate the question is not close, sufficient
authority exists to answer the questions before the Court, and principles of comity and federalism

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will not be contravened by proceeding.8

Further, as detailed infra, Plaintiff’s efforts to

circumvent Alabama’s general prohibition on claims of negligent and/or wanton loan servicing
by pursuing them on a statutory or regulatory basis does not preclude their dismissal. Rather,
Plaintiff’s attempts to “engraft a negligence cause of action onto a statute that already includes
its own set of remedies and means of obtaining them and a statute, in the absence of which, no
[] comparable common-law claim would exist" is futile in light of Shepherd and other decisions.
Gregory v. Select Portfolio Servicing, 2016 U.S. Dist. LEXIS 117596, *26 – 27 (N.D. Ala. Aug. 31,
2016) (quoting Guy v. Alabama Power Co., 2013 U.S. Dist. LEXIS 3929858, at *4 (M.D. Ala. July 29,
2013)).
B.

Plaintiff’s negligence per se and wantonness claims are due to be dismissed.
1.

Plaintiff’s argument on the lack of contractual privity between he and Fay
is unavailing.

Plaintiff’s argument regarding his lack of privity with Fay is straightforward. In sum,
Plaintiff contends because he and Fay are not in contractual privity, Alabama’s law which holds
that the only duties imposed upon loan servicers to borrowers arise from contract should not
apply to his claims. (Doc. 51, PageID.223 – 224). Moreover, Plaintiff contends, the cases which
address this issue fail to provide sufficient analysis on why such a rule exists. (Doc. 51,
PageID.224). Plaintiff’s argument here has been addressed in an earlier decision by this Court.

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The Court notes Plaintiff argues both the FDCPA and RESPA impose statutory duties upon Fay for servicing and
collecting amounts owing on Plaintiff’s loan. Though the bulk of case law discussed above relates specifically to
RESPA, the Court reaches the same conclusion as to Plaintiff’s negligence per se and wantonness claims premised
on a statutory duty imposed by the FDCPA. As other courts have acknowledged, FDCPA does not impose a duty
upon servicers. See Thompson v. Resurgent Capital Servs., L.P., 2015 U.S. Dist. LEXIS 41639, *77, 2015 WL 1486974
(N.D. Ala. March 31, 2015) (“But just as Defendants' putative violations of the FDCPA do not constitute negligence
under Alabama law, they also do not constitute wantonness.”).

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In Diehl v. PayMap, Inc., this Court found the plaintiff’s negligence claim based on facts
concerning loan servicing withstood the defendant’s motion to dismiss, but only because the
complaint alleged the defendant “had nothing to do with servicing Diehl’s mortgage, but merely
administered an add-on program” and “forward[ed] [funds received from Diehl’s bank account]
to LoanCare to be directed to the mortgage company.” 2018 U.S. Dist. LEXIS 65760, *8 (S.D. Ala.
Apr. 19, 2018). The Diehl court noted that “as contractual relationships become attenuated from
the mortgage and note, the James / Shepherd strand of decisions gives way to the QORE[, Inc.
Bradford Bldg. Co., 25 So.3d 1116 (Ala. 2009)] principle that a plaintiff who is a stranger to a
contract may have a claim in negligence under Alabama law against a defendant who breached
that contract.” Id.9
Plaintiff does not allege Fay’s relationship with the note and mortgage are so attenuated
as to match the facts in Diehl. Plaintiff cannot so allege because Fay, unlike the defendant in
Deihl, is a servicer whose duties exist solely by way of contract. Considering Fay owed no duty
beyond what is contained in Plaintiff’s contract, the Court finds Plaintiff’s argument unavailing
and shall not depart from the line of precedent on this matter as endorsed by the Alabama
Supreme Court.

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The court in Prickett v. BAC Home Loans & Bank of Am., N.A., 946 F. Supp. 2d 1236 (N.D. Ala. 2013) faced an
argument similar to the one presented here. Though that court found the plaintiff failed to allege a statute or
regulation supplied the duty the defendant allegedly breached, the court reasoned the plaintiff’s negligence claim
arising from contractual obligations could not proceed, stating: “[A] borrower still cannot allege a tort claim for a
mortgage servicer's negligent conduct because an agent to an agreement can "only incur tort liability . . . by causing
personal injury or property damages." Prickett, 946 F. Supp. 2d at 1245 (N.D. Ala. 2013) citing Blake v. Bank of Am.
N.A., 845 F. Supp. 2d 1206, 1210 (emphasis in original). Thus, the Prickett decision is consistent with others in
emphasizing that the only duty a mortgage servicer has to a borrower arises in contract, thereby precluding any
common law negligence claims. See Prickett, 946 F. Supp. 2d at 1247 (citing Lilya v. Greater Gulf State Fair, Inc., 855
So.2d 1049, 1056 (Ala. 2003)) (“Furthermore, even if the Court takes Plaintiffs to be alleging simple common law
negligence, the Complaint still fails to state a claim for which relief can be granted because . . . the only duty Plaintiffs
allege was breached was created by contract.”) (parenthetical omitted).

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2.

Plaintiff’s appeal to third-party liability is unavailing.

Plaintiff next argues his negligence per se and wantonness claims are not foreclosed
merely because his relationship to Fay is contractual in nature. (Doc. 51, PageID.225 – 226).
Rather, Plaintiff contends, Blake and the line of decisions following it, fail to “explain [] other than
to cite to the existence of a contract, why borrowers should be carved out of [the] wellestablished rule” that tort liability extends to those who, while performing contractual duties,
harm a third party. (Id.). In support of this argument, Plaintiff relies upon QORE, Inc., 25 So.3d
at 1124. This precise argument was discussed in Diehl. As noted supra, this Court found that
plaintiff’s negligence claim withstood the defendant’s motion to dismiss because of the
defendant’s attenuated relationship to the underlying note and mortgage and because the
defendant failed to respond to the plaintiff’s articulation of Alabama law. Diehl, 2018 U.S. Dist.
LEXIS 65760, at *7 n.4. The facts in Diehl, however, are not present here. In fact, Fay’s
responsibilities as Plaintiff’s servicer are tied directly to those documents. In light of Fay’s direct
relationship with Plaintiff’s note and mortgage, the Court is not persuaded to rule in
contravention to Blake and its progeny.
C.

The Court shall not take up Plaintiff’s request to revisit Blake.

Finally, Plaintiff contends Defendant’s Motion must be denied because his claims arise
from statutory and regulatory duties aimed at protecting a class to which Plaintiff belongs. (Doc
51, PageID.227). Here, Plaintiff contends Alabama law recognizes that duties can arise from
statutes and regulations. Further, he contends, several decisions, particularly Rawlings, provide
the necessary predicate to impose a duty upon loan servicers. Plaintiff argues that because
Alabama recognizes negligence per se and wantonness claims premised on statutory and

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regulatory duties, the Court should disregard Blake and the line of cases following it and deny
Defendant’s Motion.
First, to the extent Plaintiff relies upon Ranger v. Wells Fargo Bank N.A., 757 F. App’x 896
(11th Cir. 2018), the Court notes that case applied Florida law, not Alabama law. See Ranger, 757
F. App’x at 904. Though Plaintiff argues the Court should adopt the Ranger court’s approach
because Florida, like Alabama, recognizes per se tort liability based on violations of statutory
duties, this does not address the Alabama Supreme Court’s holding in Shepherd. As to Alabama
law, Plaintiff’s reliance on Rawlings is also unavailing. The Rawlings court found RESPA imposed
a statutory duty upon loan servicers by operation of that statute. Rawlings, 64 F. Supp. at 1167.
However, as noted in James, the Rawlings court simply concluded a duty existed without
providing further analysis on the matter. Specifically, the James court noted:
[n]ot surprisingly, Rawlings in no way considers (much less rebuts)
the reasoning underlying such authorities, so it cannot support the
proposition that these numerous recent federal cases have all
interpreted and applied Alabama law incorrectly. Fourth, the
Jameses’ appeal to negligence per se cannot help them because the
legal duties underlying their claims against FNMA and Nationstar
arise in contract. The statutes in play in this case regulate the
contractual relationship between the Jameses and FNMA /
Nationstar, but do not eliminate or supplant that contractual
relationship; therefore, the reasoning of the line of authorities
beginning with Blake (i.e., that the obligations in question are
rooted in contract rather than tort) remains fully intact . . .
James, 92 F. Supp. at 1200 n. 9. Considering the Alabama Supreme Court’s endorsement of
James, the Court is not persuaded to abandon that line of precedent here.10

10

To the extent Plaintiff relies on Costine and Prickett to argue courts have failed to address per se tort liability in
substance, the Court notes both cases specifically stated the only duty a loan servicer is subjected to is one created
by contract. See Costine v. BAC Home Loans, 946 F.Supp. 2d 1224, 1234 (N.D. Ala. 2013); Prickett v. BAC Home Loans
& Bank of Am., N.A., 946 F. Supp. 2d 1236, 1247 (N.D. Ala. 2013) (citing Lilya v. Greater Gulf State Fair, Inc., 855 So.2d

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D.

The damages Plaintiff seeks in his wantonness claim do not prevent its dismissal.

Plaintiff contends the types of damages he seeks preclude dismissal of his wantonness
claim. Specifically, Plaintiff argues the Givens decision, which acknowledges emotional distress
damages as a possible remedy to wantonness, requires the Court to deny Fay’s Motion as to his
wantonness claim. In Givens, this Court acknowledged, as Plaintiff states, emotional distress
damages were viable in a wantonness claim. Givens, 2014 WL 2452891, at *15. However,
Plaintiff’s framing of this issue puts the cart before the horse. Before discussing damages, the
Court must address the question of whether a duty existed in the first place. Plaintiff premises a
duty on the federal statutes and regulation noted above. However, no such duty is prescribed
there and there is no general duty regarding loan servicing. See Gregory v. Select Portfolio
Servicing, 2016 U.S. Dist. LEXIS 117596, at *26 – 27 (N.D. Ala. Aug. 31, 2016); Thompson v.
Resurgent Capital Servs., L.P., 2015 U.S. Dist. LEXIS 41639, 77 (N.D. Ala. March 31, 2015) (first
citing Prickett, 946 F. Supp. 2d at 1244; then citing Rawlings, 64 F. Supp. 2d 1156 at 1168);
Prickett, 946 F. Supp. 2d at 1244, 1247; (first quoting Shepherd, 202 So.3d at 315; then citing Lilya
v. Greater Gulf State Fair, Inc., 855 So.2d 1049, 1056 (Ala. 2003)); Diehl, 2018 U.S. Dist. LEXIS
65760, at *4 – 5 (quoting Shepherd, 202 So.3d at 314). Because there is no general duty regarding
loan servicing, and Alabama does not recognize wantonness claims brought pursuant to a per se
theory of liability under Plaintiff’s cited authority, Plaintiff’s claim fails as a matter of law.

1049, 1056 (Ala. 2003)) (“[E]ven if the Court takes Plaintiffs to be alleging simple common law negligence, the
Complaint still fails to state a claim for which relief can be granted because . . . the only duty Plaintiffs allege was
breached was created by contract.”).

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CONCLUSION
Defendant Fay Servicing, LLC’s Motion to Partially Dismiss Plaintiff’s Amended Complaint
(Doc. 31) is granted. Plaintiff’s claims of negligence per se (Count IV) and wantonness (Count V)
are dismissed with prejudice.
DONE and ORDERED this 14th day of October, 2020
/s/ JEFFREY U. BEAVERSTOCK
UNITED STATES DISTRICT JUDGE

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