Machado et al v. Bank of America, N.A.
Filing
37
ORDER: Defendant Bank of America's Motion to Dismiss Plaintiffs' Amended Complaint (Doc. # 33 ) is granted in part and denied in part. Bank of America is directed to file an answer to the surviving claim within 14 days. Signed by Judge Virginia M. Hernandez Covington on 5/15/2018. (AHG)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
LIUBERT MACHADO and ILEANA
ACOSTA,
Plaintiffs,
v.
Case No. 8:17-cv-2531-T-33AAS
BANK OF AMERICA, N.A.,
Defendant.
_____________________________/
ORDER
This matter comes before the Court upon consideration of
Defendant Bank of America, N.A.’s Motion to Dismiss Plaintiffs’
Amended Complaint (Doc. # 33), filed on March 28, 2018. Plaintiffs
Liubert
Machado
and
Ileana
Acosta
filed
their
response
in
opposition on April 12, 2018. (Doc. # 34). The Amended Complaint,
(Doc. # 26), represents Plaintiffs’ fourth attempt at pleading in
this
case.
For
the
reasons
below,
the
Court
grants
Bank
of
America’s Motion to Dismiss in part and denies in part. Finding
that leave to amend at this juncture would be futile, Plaintiffs
may not file a second amended complaint.
I.
Background
On June 27, 2017, over 70 plaintiffs sued Bank of America in
one action in the Middle District of Florida. Torres, et al. v.
Bank of America, N.A., No. 8:17-cv-1534, (M. D. Fla. June 27,
2017), Doc. # 1. Plaintiffs Liubert Machado and Ileana Acosta were
two of the many plaintiffs in the original lawsuit. Plaintiffs
alleged Bank of America (BOA) committed common law fraud in its
administration of the Home Affordable Modification Program. HAMP
was implemented by the Federal Government in March of 2009, to
help homeowners facing foreclosure. (Doc. # 26 at ¶ 9). BOA entered
into
a
Servicer
Participation
Agreement
with
the
Federal
Government in which BOA was required to use reasonable efforts to
effectuate any modification of a mortgage loan under HAMP. (Id. at
¶ 10). The Federal Government, in exchange for BOA’s participation
in HAMP, agreed to compensate BOA for part of the loss attributable
to each modification. (Id. at ¶ 11). Plaintiffs’ claims were all
based on their attempts to secure a loan modification with BOA
under HAMP.
In the original lawsuit, BOA filed a Motion to Dismiss under
Fed. R. Civ. P. 12(b)(6), (Torres Doc. # 12), and Plaintiffs
amended their complaint. (Torres Doc. # 16). Following BOA’s second
Motion to Dismiss, (Torres Doc. # 17), the presiding judge severed
the claims and required Plaintiffs to sue separately. (Torres Doc.
#
19).
Plaintiffs
Liubert
Machado
and
Ileana
Acosta
filed
a
separate complaint on October 30, 2017. (Doc. # 1). Three months
later, on March 7, 2018, Plaintiffs filed an Amended Complaint.
(Doc. # 26). Thus, the operative complaint in this matter is
Plaintiffs’ fourth attempt to properly plead their cause of action.
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The Amended Complaint alleges BOA committed four fraudulent
acts: (1) falsely telling Plaintiffs that “they can’t be current
on their mortgage to qualify for a HAMP loan modification” and
failing to tell Plaintiffs that they could qualify for HAMP if
default was reasonably foreseeable (“HAMP Eligibility Claim”); (2)
falsely
telling
documents
Plaintiffs
Plaintiffs
had
the
requested
submitted
to
supporting
BOA
financial
were
missing
(“Supporting Documents Claim”); (3) falsely telling Plaintiffs
that they were approved for a HAMP modification and needed to start
making
trial
payments
(“HAMP
Approval
Claim”);
and
(4)
fraudulently omitting how inspection fees charged to Plaintiffs’
account would be applied (“Inspection Fee Claim”). (Doc. # 26 at
¶¶ 38, 41, 48, 55).
In its Motion to Dismiss, BOA argues that Plaintiffs’ fraud
claims are barred by the statute of limitations and banking statute
of frauds. (Doc. # 33 at 6, 11). BOA also contends that Plaintiffs’
Amended
Complaint
violates
Rule
9(b)
by
failing
to
allege
circumstances constituting fraud with sufficient particularity.
(Id. at 14). These arguments are addressed in turn.
II.
Legal Standard
On a Rule 12(b)(6) motion to dismiss, this Court accepts as
true all the allegations in the Complaint and construes them in
the light most favorable to the plaintiff. Jackson v. Bellsouth
Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004). Further, the
3
Court favors the plaintiff with all reasonable inferences from the
allegations in the Complaint. Stephens v. Dep’t of Health & Human
Servs., 901 F.2d 1571, 1573 (11th Cir. 1990) (“On a motion to
dismiss, the facts stated in [the] complaint and all reasonable
inferences therefrom are taken as true.”). However, the Supreme
Court explains that:
While a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, a
plaintiff’s obligation to provide the grounds of his
entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements
of a cause of action will not do. Factual allegations
must be enough to raise a right to relief above the
speculative level.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal
citations omitted). In addition, courts are not “bound to accept
as true a legal conclusion couched as a factual allegation.”
Papasan
v.
Allain,
478
U.S.
265,
286
(1986).
Furthermore,
“[t]hreadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009).
Generally, “[t]he scope of review must be limited to the four
corners of the complaint.” St. George v. Pinellas Cty., 285 F.3d
1334, 1337 (11th Cir. 2002). “There is an exception, however, to
this general rule. In ruling upon a motion to dismiss, the district
court may consider an extrinsic document if it is (1) central to
the plaintiff’s claim, and (2) its authenticity is not challenged.”
4
SFM Holdings, Ltd. v. Banc of Am. Sec., LLC, 600 F.3d 1334, 1337
(11th Cir. 2010).
III. Analysis
A. Statute of Limitations
Under Florida law, there is a four-year statute of limitations
for any “legal or equitable action founded on fraud.” Fla. Stat.
§ 95.11(3)(j). The time period to sue begins running when the
plaintiff discovers, or should have discovered with due diligence,
the facts giving rise to the fraud. Fla. Stat. § 95.031(2)(a). In
its Motion to Dismiss, BOA argues that all of Plaintiffs’ claims
are barred by the statute of limitations. The Court disagrees;
none of Plaintiffs’ claims are time barred.
Arguing that Plaintiffs should have discovered the basis for
their fraud claim “when the relevant statements were made,” BOA
submits that each of Plaintiffs’ claims should be barred. (Doc. #
33 at 6). BOA points to a document it calls the Supplemental
Directive posted on the Treasury Department’s website and posits
that the posted guidelines for HAMP eligibility gave Plaintiffs an
opportunity to discover with due diligence any facts giving rise
to fraud. (Doc. # 33 at 7-8).
But,
the
Court
is
not
convinced
that
the
Supplemental
Directive should be taken into account in determining whether the
statute of limitations has barred Plaintiffs’ claims. “A document
attached to a motion to dismiss may be considered by the court
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. . . only if the attached document is: (1) central to the
plaintiff’s claim; and (2) undisputed.” Horsley v. Feldt, 304 F.3d
1125, 1134 (11th Cir. 2002). The Supplemental Directive is not
attached
either
Furthermore,
to
the
the
Amended
Supplemental
Complaint,
Directive
is
nor
not
the
Motion.
central
to
Plaintiffs’ fraud claims. Plaintiffs’ claims are based on the
alleged false statements and omissions made by BOA to Plaintiffs
through the HAMP process. While the Supplemental Directive may be
central to BOA’s statute of limitations defense, it is not central
to Plaintiffs’ claims.
Even if the Supplemental Directive were to be considered
alongside the Amended Complaint, it is not clear that, with due
diligence, Plaintiffs should have discovered the basis of their
fraud
allegations.
BOA
argues
that
Plaintiffs
should
have
consulted this document to understand the guidelines of HAMP and
thus discover any misrepresentations. (Doc. # 33 at 7). But the
Supplemental
Directive
is
a
38-page
document
filled
with
complicated financial and legal requirements. This document, which
is intended to be used by banking professionals, does not establish
a reasonable expectation that Plaintiffs should have discovered
the basis of their fraud allegations earlier. See Order Granting
in Part and Denying in Part Motion to Dismiss, Carmenates, et al.
v. Bank of America, N.A., No. 8:17-cv-2635-T-23JSS, (M.D. Fla.
Feb. 1, 2018), Doc. # 12.
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BOA has not met its burden of showing that Plaintiffs knew,
or should have known, that the statements relating to the HAMP
Eligibility, HAMP Approval or Supporting Documents claims were
false. A statute of limitations defense is an affirmative defense
and BOA bears the burden of proof. La Grasta v. First Union
Securities, Inc., 358 F.3d 840, 845 (11th Cir. 2004). BOA has not
shown
that
Plaintiffs
knew,
or
should
have
known,
that
the
statements were false regarding HAMP’s eligibility requirements or
their HAMP approval. Additionally, BOA has failed to establish
that Plaintiffs knew, or should have known, that the financial
documents they submitted to BOA were not actually missing. Thus,
the statute of limitations has not run with respect to the HAMP
Eligibility, HAMP Approval or Supporting Documents claims.
Finally, with respect to the Inspection Fee Claim, the statute
of limitations began to run when Plaintiffs’ account was charged.
There is no reason that a diligent mortgagor would not and could
not check his or her bank account and notice the fees. (Carmenates
Order at 6). Plaintiffs claim the inspection fees were last charged
in 2014. (Doc. # 26 at ¶ 55). Therefore, Plaintiffs’ Inspection
Fee Claim is not barred by the statute of limitations.
B. Banking Statute of Frauds
Florida’s
Banking
Statute
of
Frauds
requires
credit
agreements to be signed and in writing. Fla. Stat. § 687.0304. A
credit agreement is “an agreement to lend or forbear repayment of
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money, goods, or things in action, to otherwise extend credit, or
to
make
any
other
financial
accommodation.”
Fla.
Stat.
§
687.0304(1)(a). As recognized by the Court in Bloch v. Wells Fargo
Home
Mortg.,
to
the
extent
verbal
conversations
add
“to
the
purported ‘promise’, such addition is barred by . . . ‘Florida’s
Banking Statute of Frauds.’” 755 F.3d 886, 889 (11th Cir. 2014).
The banking statute of frauds is applicable to fraud claims
where the borrower has alleged that the lender orally agreed to
make financial accommodations to the borrower. Coral Reef Drive
Land Dev., LLC v. Duke Realty Ltd. P’ship, 45 So.3d 897, 902-03
(Fla. 3d DCA 2010). Only Plaintiffs’ HAMP Approval Claim involves
an oral statement regarding a credit agreement under the banking
statute of frauds. Because Plaintiffs’ other claims do not involve
a credit agreement as defined by the statute, they are not barred.
Therefore,
Plaintiffs’
HAMP
Approval
Claim
is
dismissed
with
prejudice.
C. Rule 9(b)
Rule 9(b) requires a plaintiff alleging fraud to “state with
particularity
the
circumstances
constituting
the
fraud
or
mistake.” Fed. R. Civ. P. 9(b). In Florida, to state a claim for
fraud, a “plaintiff must allege: (1) the defendant made a false
representation of material fact, (2) the defendant knew that the
representation
was
false,
(3)
the
defendant
made
the
representation for the purpose of inducing the plaintiff to act in
8
reliance thereon, and (4) the plaintiff’s injury was caused by
justifiable reliance on representation.” Berkey v. Pratt, 390 Fed.
Appx. 904, 909 (11th Cir. 2010).
Furthermore, Rule 9(b) requires that “a complaint identify
(1) the precise statements, documents or misrepresentations made;
(2)
the
time
and
place
of
and
persons
responsible
for
the
statement; (3) the content and manner in which the statements
misled the plaintiff; and (4) what the Defendants gain[] by the
alleged fraud.” W. Coast Roofing and Waterproofing, Inc. v. Johns
Manville, Inc., 287 Fed. Appx. 81, 86 (11th Cir. 2008) (citing
Ambrosia Coal & Const. Co. v. Pages Morales, 482 F.3d 1309, 131617 (11th Cir. 2007)).
1. HAMP Eligibility Claim
In their attempt to obtain a loan modification, Plaintiffs
allege BOA falsely informed them that “they can’t be current on
their mortgage.” (Doc. # 26 at ¶ 38). However, in order to qualify
for a HAMP loan modification, a mortgagor need not be in default,
as default need only be reasonably foreseeable. (Id.). In their
Complaint, Plaintiffs provide the name of the BOA representative
that told them the false statement, as well as the date the
statement
was
made.
(Id.).
According
to
Plaintiffs,
the
BOA
representative made the false statement to induce Plaintiffs’
reliance, triggering their purposeful default on their mortgage.
(Id. at ¶¶ 38, 40). Their loss of home equity and “money paid as
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trial payments” to BOA demonstrate damage resulting from the false
statements. (Id.). At this juncture, Plaintiffs have stated a claim
for HAMP Eligibility that survives the Motion to Dismiss.
2. Supporting Documents Claim
When applying for a HAMP loan modification, Plaintiffs sent
financial documents to BOA and were then told that the documents
were missing. (Doc. # 26 at ¶ 42). While the Complaint alleges
this statement by BOA was false, (Id. at ¶ 43), Plaintiffs have
failed to support the allegation with well-pleaded and specific
facts. Plaintiffs state only in a conclusory fashion that the
statement was false. But Rule 9(b) requires more than conclusory
statements. United States ex rel. Clausen v. Lab Corp. of America,
Inc., 290 F.3d 1301, 1313 (11th Cir. 2002). Despite multiple
pleading attempts, Plaintiffs have failed to satisfy Rule 9(b) and
thus, the Supporting Document Claim is dismissed with prejudice.
3. Inspection Fee Claim
In their fourth pleading attempt, Plaintiffs allege that BOA
acted fraudulently by omitting information regarding “fraudulent
inspection fees.” (Doc. # 26 at ¶¶ 56, 57). However, the Complaint
does not contain well-pleaded and specific facts to support this
allegation. Several key facts are absent from Plaintiffs’ claim,
including the date of the omission and the individual responsible.
While Plaintiffs state that BOA intended to apply their trial
payment funds to inspection fees, Plaintiffs do not allege that
10
this ever actually occurred. Therefore, the Inspection Fee Claim
violates Rule 9(b) and is dismissed with prejudice.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)
Defendant Bank of America’s Motion to Dismiss Plaintiffs’
Amended Complaint (Doc. # 33) is GRANTED in part and DENIED
in part.
(2)
Plaintiffs’
Supporting
Documents
Claim
is
DISMISSED
WITH
PREJUDICE.
(3)
Plaintiffs’ HAMP Approval Claim is DISMISSED WITH PREJUDICE.
(4)
Plaintiffs’ Inspection Fee Claim is DISMISSED WITH PREJUDICE.
(5)
Plaintiffs’ HAMP Eligibility Claim survives. BOA is directed
to file an answer to the surviving claim within 14 days.
DONE and ORDERED in Chambers in Tampa, Florida, this 15th day
of May, 2018.
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