Riggs-Degraftenreed v. Wells Fargo Home Mortgage Inc et al

Filing 41

ORDER denying as moot 36 Motion to Amend. 17 and 21 Motions to Dismiss are granted in part and denied in part. What remains is Riggs-Degraftenreed's breach-of-contract claim against the Wells Fargo Defendants; all other claims are dismissed. Wilson & Associates is out of the case. Scheduling Orders, with an expedited timetable, will issue. Signed by Judge D. P. Marshall Jr. on 6/27/2014. (jak)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
KATINA RIGGS-DEGRAFTENREED

v.

PLAINTIFF

No. 4:13-cv-669-DPM

WELLS FARGO HOME MORTGAGE INC.;
WELLS FARGO BANK NA; and WILSON
& ASSOCIATES PLLC

DEFENDANTS

ORDER
1. This removed case is stuck in maneuvering about the forum. The

Court denied Riggs-Degraftenreed's motion to remand. NQ 35. Wells Fargo
and Wilson & Associates have moved to dismiss the fourth amended
complaint.

Riggs-Degraftenreed has responded with a proposed fifth

amended complaint, which deletes the class allegations that triggered this
Court's subject matter jurisdiction under CAFA, but is unresponsive to the
alleged defects in her claims. Her motion to amend contains an embedded
request for remand on the heels of the amendment, if it's allowed.

2. Amendment? There's no need for another one. The proposed
amended complaint is the functional equivalent of non-suiting the class
allegations. That step makes good sense because of the recently certified
nationwide class in another court. Huyer v. W ells Fargo & Co., 295 F.R.D. 332,

2013 WL 5754885 (S.D. Iowa 23 Oct. 2013). All class-related allegations and
claims are dismissed without prejudice. Motion to amend, NQ 36, denied as
moot.

3. Jurisdiction? The Court had jurisdiction at removal. NQ 35. It still
has jurisdiction, notwithstanding dismissal of the CAFA-qualifying claims.
Brown v. Mortgage Electronic Registration Systems, Inc., 738 F.3d 926, 933 (8th

Cir. 2013). Section 1447(c)'s command does not apply. Compare Wallace v.
Conagra Foods, Inc., 747 F.3d 1025, 1033 (8th Cir. 2014). Instead, the question

is whether the Court should exercise its discretion under the supplementaljurisdiction statute to keep the case here.
The general rule, of course, is to remand or dismiss without prejudice.
Barstad v. Murray County, 420 F.3d 880, 888 (8th Cir 2005). Post-removal

amendments that take state-law issues to state courts should generally be
encouraged. But in this case, all the material circumstances favor going
forward. First, though the litigation has been pending for nearly two years,
little or nothing has been decided on the merits. The prompt administration
of justice is suffering. Second, the Court has dug into the motions to dismiss
because they've been pending for several months. This effort would be lost
if the Court remanded. Third, no novel state law issues seem present. Comity
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will thus not be damaged by adjudicating the case here. Overall, it strikes the
Court as the fairer and more efficient outcome to retain the case. Brown, 738
F.3d at 933-34. This dispute needs rulings on the merits, not another forum
bounce. The Court will address Riggs-Degraftenreed' s pending claims in
turn.
4. Breach of contract. The complaint doesn't allege, as it must, that any

contract existed between Wilson & Associates and Riggs-Degraftenreed. Key
v. Coryell, 86 Ark. App. 334, 342, 185 S.W.3d 98, 104 (2004); Ark. Model Jury

Instructions, Civil§ 2401 (2014). As to the Wells Fargo defendants, the claim
is thinly pleaded and scattered about the docket. The note and deed of trust,
for example, are attached to the original complaint, NQ 2 at 34-45, but not the
amended ones.

These problems are partly the result of an attempt to

incorporate prior complaints in this removed case by reference- a practice
permitted in state court, but not here. Compare ARK. R. CIV. P. 10(c) with
LOCAL RULE 5.5(e).
Still, the terms of the contract are set out sufficiently to make out the
claim against Wells Fargo. Perry v. Baptist Health, 358 Ark. 238, 244, 189
S.W.3d 54, 58 (2004).

The note and deed dictated how much Riggs-

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Degraftemeed would have to pay the bank and how those payments would
be allocated, NQ 2 at 39 at ,-r 3; allegedly, Wells Fargo overcharged and misallocated; the alleged improper allocation led to extra and inflated fees.
Whether the intervening bankruptcy proceedings altered the terms of any
agreement, as Defendants suggest, can be ventilated during discovery. The
complaint, though, says enough to move the contract claim along as to the
Wells Fargo defendants; the claim is dismissed as to Wilson & Associates.
5. Unjust enrichment. Riggs-Degraftenreed' s note and deed outlined
how her mortgage payments were divided among principal, interest, and fees.
NQ 16 at ,-r 7. The note also covered "costs and expenses including reasonable

and customary attorneys' fees" associated with collecting on a default, limited
only by the relevant HUD regulations. NQ 2 at 35 at ,-r 6(C). The pending
issues, then, are ones of contract performance and interpretation. Did Wells
Fargo adhere to the payment-allocation agreement, and were the fees
reasonable? No one disputes the contract's validity. And because the note
and deed, along with federal law, govern the dispute and provide remedies
for any foreseeable losses resulting from any breach, there's no hole left for

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equity to fill. Deutsche Bank National Trust Co. v. Austin, 2011 Ark. App. 531,
at *8, 385 S.W.3d 381, 387. The unjust enrichment claim is dismissed.
6. Fraud. There aren't any allegations of fraud by the Wilson firm.

Ng 16 at ,-r,-r 35-42. Fraudulent concealment is a limitations defense, not a
claim. Barre v. Hoffman, 2009 Ark. 373, at *5, 326 S.W.3d 415, 418. The
remaining allegations about Wells Fargo's conduct are just too vague to
satisfy Rule 9. Riggs-Degraftenreed says, without detail, that Wells Fargo
made some false representations that she relied upon. Too many questions
remain. What, exactly, was the lie? Who said or wrote it? When and where?

Freitas v. Wells Fargo Home Mortgage, Inc., 703 F.3d 436,439-440 (8th Cir. 2013).
These basics are necessary so Wells Fargo can effectively prepare its case and
mount its defense. Drobnak v. Andersen Corp., 561 F.3d 778, 783 (8th Cir. 2009).
Riggs-Degraftenreed' s claim fails without them, and is dismissed.
7. Conversion. Arkansas law precludes Riggs-Degraftenreed- the

note's maker- from bringing an action for the note's conversion. ARK. CODE
ANN. 4-3-420(a); see also ARK. CODE ANN. 4-3-105(c)(maker is an issuer). In
any event, the note can't support a conversion claim because it has no value.
Everyone agrees that Riggs-Degraftenreed paid off her house and

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extinguished the note. NQ 16 at ,-r 12; NQ 18 at 10. After it was paid off, she
was entitled to the cancelled note or some other proof that it had been paid.
ARK. CODE ANN.§ 4-3-501(b)(2). She's received some other proof. NQ 2 at 66.
The Court doesn't understand, then, how Riggs-Degraftenreed was hurt by
not having possession of the cancelled note after it was paid off.

The

conversion claim is dismissed.
8. Accounting. To get this equitable relief, Riggs-Degraftenreed must

show that either Wells Fargo or Wilson & Associates was her fiduciary. Bostic

v. Goodnight, 443 F.3d 1044, 1048 (8th Cir. 2006). Neither was.

Riggs-

Degraftenreed was a bank customer, and the bank was her lender. She
doesn't allege otherwise. Arkansas law is clear that this type of lenderborrower relationship isn't the sort of confidential relationship for which an
accounting may be appropriate. Mans v. Peoples Bank of Imboden, 340 Ark. 518,
525-526, 10 S.W.3d 885, 889 (2000). And Wilson & Associates were not RiggsDegraftenreed' s lawyers.

* * *
Class allegations and claims dismissed. Motion to amend, NQ 36, denied
as moot. Motions to dismiss, NQ 17 & 21, granted in part and denied in part
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as explained. What remains is Riggs-Degraftenreed' s breach-of-contractclaim
against the Wells Fargo defendants; all other claims are dismissed. Wilson &
Associates is out of the case. Scheduling Orders, with an expedited timetable,
will issue.
So Ordered.

D.P. Marshall Jr.
United States District Judge

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