Gibson v. Chase Home Finance, LLC et al
Filing
102
ORDER GRANTING IN PART 79 Motion to dismiss. Gibsons breach of contract and breach of the duty of good faith and fair dealing claims are DISMISSED WITHOUT PREJUDICE. By April 13, 2012, in a paper of eight or fewer pages Gibson shall SHOW C AUSE why the contract claims should not suffer dismissal with prejudice. Chase may respond by April 27, 2012. Gibsons unjust enrichment, conversion, and monetary FDUTPA claims are DISMISSED WITH PREJUDICE. The claim for a declaratory judgment and an injunction under FDUTPA proceeds. Gibson may submit a third (and final) amended complaint by April 20, 2012.. Signed by Judge Steven D. Merryday on 4/2/2012. (TKD)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
PAUL F. GIBSON,
Plaintiff,
v.
CASE NO.: 8:11-cv-1302-T-23TBM
CHASE HOME FINANCE, LLC, et al.,
Defendants.
/
ORDER
In his second amended complaint (Doc. 75), Paul F. Gibson, for both himself
and a putative class, sues Chase Home Finance and JPMorgan Chase Bank (this
order discusses the defendants together, as “Chase”) for breach of contract, for
breach of the duty of good faith and fair dealing, for unjust enrichment, for
conversion, and for violation of the Florida Deceptive and Unfair Trade Practices
Act. Chase moves (Doc. 79) to dismiss.
Gibson’s previous complaint (Doc. 34) alleges that Chase breached Gibson’s
condominium mortgage and violated an anti-tying law and other laws by repeatedly
placing on Gibson’s condominium unit a flood insurance policy greater than a
coverage requirement in the National Flood Insurance Act. The NFIA, however,
lacks a bar on excess flood insurance; as described by Gibson, the flood insurance
force-placed by Chase lacks the features of an unlawful tie; and the previous
complaint lacks cogency and fails to state a claim. (Doc. 71) Switching theories,
Gibson alleges in the second amended complaint that Chase breached Gibson’s
mortgage and violated several laws by receiving some of the money Gibson paid for
force-placed flood insurance. That is, Gibson accuses Chase of accepting kickbacks
from the company Chase hires to provide flood insurance.
Under Gibson’s mortgage, Chase may require Gibson to purchase flood
insurance for his condominium unit “in the amounts . . . and for the periods that
[Chase] requires.” (Doc. 71 at 3) If Gibson fails to purchase sufficient flood
insurance, Chase may obtain the flood insurance at Gibson’s expense. The mortgage
warns Gibson that “the cost of insurance coverage so obtained might significantly
exceed the cost of insurance that [Gibson] could have obtained.”
Like the previous complaint, the second amended complaint alleges that Chase
repeatedly charged Gibson’s escrow account for force-placed flood insurance on
Gibson’s condominium unit. Unlike the previous complaint, the second amended
complaint never states that Chase cancelled each charge. In the second amended
complaint, Chase unambiguously charges Gibson for flood insurance but Chase
never unambiguously removes each charge. Instead, Chase sends “form letters”
merely “stating” the “reversal” of a charge. The second amended complaint leaves
the impression that a charge against Gibson for force-placed flood insurance remains.
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A perfect awareness that Chase charged his escrow account notwithstanding,
Gibson never acknowledges whether Chase refunded each charge. Even without
consideration of the previous complaint, which enumerates the refunding of each
charge, Gibson’s self-servingly inconsistent and muddied explanation of the
insurance charges lacks coherence or plausibility. The notion that Chase never
refunded one of the charges for force-placed flood insurance is apparently a recent
construct. Gibson attached to the first complaint a letter from Chase, written after
each event described in the second amended complaint, that cancels force-placed
insurance. Gibson entered the letter into the record earlier; he cannot ignore the
letter now. See Warner Bros. Entm’t, Inc. v. X One X Prod., 644 F.3d 584, 592 n.3 (8th
Cir. 2011).
In any event, although the second amended complaint alleges an enjoinable
wrong sufficient to establish Gibson’s standing, the second amended complaint fails
to allege facts establishing that Gibson suffers damages. Gibson tacitly concedes this
failure. With his response to the motion to dismiss, Gibson submits an accountant’s
calculation of Gibson’s “economic loss,” in which calculation the accountant
identifies $76.27, a sum of interest that allegedly accrued on flood insurance
premiums paid by, but refunded to, Gibson. See Long v. Slaton, 508 F.3d 576, 578 n.3
(11th Cir. 2007). Tellingly, neither the accountant nor Gibson identifies a discrete
loss besides the $76.27 in interest mentioned for the first time in the accountant’s
affidavit.
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Without a plausible assertion of damage (again, the complaint never mentions
lost interest), the breach of contract claim and breach of the duty of good faith and
fair dealing claim each fail. Marseilles Capital, LLC v. Gerova Fin. Group, Ltd., 784
F.Supp.2d 1349, 1351 (S.D. Fla. 2011) (Cohn, J.); Bookworld Trade, Inc. v. Daughters of
St. Paul, Inc., 532 F.Supp.2d 1350, 1359 (M.D. Fla. 2007) (Whittemore, J.); see also
Burger King Corp. v. Weaver, 169 F.3d 1310, 1315-17 (11th Cir. 1999).
Gibson’s contract claims fail also on another ground. The mortgage requires
Gibson to send Chase pre-suit notice, in writing, of an alleged breach of the mortgage
and to afford Chase “a reasonable period” after the notice “to take corrective
action.” In his response to Chase’s previous motion to dismiss, Gibson argues that
his sending proof of flood insurance coverage to Chase satisfies the written notice
requirement. (Doc. 48 at 5) By raising the proofs of flood insurance as a substitute
for proper written notice alleging a breach of the mortgage, Gibson in effect admits
that he never sent a proper written notice. Stating only that “all conditions precedent
. . . have been performed,” the second amended complaint never alleges facts
showing that Gibson wrote Chase to assert a breach of the mortgage.
Gibson argues that sending Chase notice of an alleged breach would achieve
nothing because Chase’s contract with the flood insurer requires Chase to accept
kickbacks and therefore prevents Chase from correcting the breach that Gibson
alleges. But Gibson’s first two complaints sue Chase almost exclusively for forceplacing flood insurance greater than the National Flood Insurance Act’s required
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minimum. Gibson appears confused about why he sues. Receiving no notice before
this suit, Chase lost an opportunity to dissolve Gibson’s confusion without the
expense of fighting in court. Gibson contractually agreed to provide Chase with
notice, and Gibson deprived Chase of notice. With the pressure and the acrimony of
litigation absent, notice could have facilitated explanation and resolution – if
presented a chance.
Gibson never questions the validity of the mortgage. Chase’s alleged wrong
arises from Chase’s alleged abuse of the contractual privilege to force-place
insurance. In consequence, this action permits no equitable claim for unjust
enrichment. See Rushing v. Wells Fargo Bank, N.A., 752 F.Supp.2d 1254, 1265 (M.D.
Fla. 2010) (Bucklew, J.). The claim for conversion (another attempt to circumvent
the parties’ contract) fails because Gibson identifies no specific, separate money that
Chase bears an obligation to pay. See Gasparini v. Pordomingo, 972 So.2d 1053,
1055-56 (Fla. 3d DCA 2008).
Gibson demands both money and equitable relief under the Florida Deceptive
and Unfair Trade Practices Act (FDUTPA), Sections 501.201-.213, Florida Statutes.
Because Gibson fails to allege damages, the claim for money fails. See City First
Mortg. Corp. v. Barton, 988 So.2d 82, 86 (Fla. 4th DCA 2008). (Because FDUTPA
limits a private individual to equitable relief and to “actual damages,” Gibson errs by
seeking a civil penalty under Sections 201.2075 and 201.2077. See Eclipse Med., Inc. v.
Am. Hydro-Surgical Instruments, Inc., 262 F.Supp.2d 1334, 1357 (S.D. Fla. 1999)
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(Ryskamp, J.); 10A FLA.JUR. 2D CONSUMER PROTECTION § 172 (2012).) On the
other hand, Gibson plausibly alleges that he suffers from Chase’s repeated attempts
to subject Gibson to an unfair and deceptive act, the force-placement of flood
insurance from which Chase enjoys a gratuitous and secret commission. Hence, the
claim for equitable relief under FDUTPA may proceed.
The motion (Doc. 79) to dismiss is GRANTED IN PART. Gibson’s breach of
contract and breach of the duty of good faith and fair dealing claims are
DISMISSED WITHOUT PREJUDICE. However, by April 13, 2012, in a paper of
eight or fewer pages Gibson shall SHOW CAUSE why the contract claims should
not suffer dismissal with prejudice because of Gibson’s failure to comply with the
pre-suit notice provision in the mortgage. Chase may respond in a paper of eight or
fewer pages by April 27, 2012. Gibson’s unjust enrichment, conversion, and
monetary FDUTPA claims are DISMISSED WITH PREJUDICE. The claim for a
declaratory judgment and an injunction under FDUTPA proceeds. Gibson may
submit a third (and final) amended complaint by April 20, 2012.
ORDERED in Tampa, Florida, on April 2, 2012.
Steven D. Merryday
STEVEN D. MERRYDAY
UNITED STATES DISTRICT JUDGE
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