Paz v. Bank of America, N.A.

Filing 38

ORDER: Defendant Bank of America's Motion to Dismiss Plaintiff's Amended Complaint (Doc. # 34 ) 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
RAFAEL PAZ,
Plaintiff,
v.

Case No. 8:17-cv-2622-T-33AEP

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 Plaintiff’s
Amended Complaint (Doc. # 34), filed on March 28, 2018. Plaintiff
Rafael Paz filed his response in opposition on April 12, 2018.
(Doc. #

35).

The

Amended

Complaint,

(Doc.

#

25),

represents

Plaintiff’s 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, Plaintiff 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.

Plaintiff

Rafael

Paz

was

one

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. # 25 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). Plaintiff Rafael Paz filed a separate complaint on November
3, 2017. (Doc. # 1). Three months later, on March 7, 2018,
Plaintiff filed an Amended Complaint. (Doc. # 25). Thus, the
operative complaint in this matter is Plaintiff’s fourth attempt
to properly plead his cause of action.
The Amended Complaint alleges BOA committed four fraudulent
acts: (1) falsely telling Plaintiff that “he can’t be current on
2

his mortgage to qualify for a HAMP loan modification” and failing
to tell Plaintiff that he could qualify for HAMP if default was
reasonably foreseeable (“HAMP Eligibility Claim”); (2) falsely
telling Plaintiff the requested supporting financial documents
Plaintiff had submitted to BOA were missing (“Supporting Documents
Claim”); (3) falsely telling Plaintiff that he was approved for a
HAMP modification and needed to start making trial payments (“HAMP
Approval Claim”); and (4) fraudulently omitting how inspection
fees charged to Plaintiff’s account would be applied (“Inspection
Fee Claim”). (Doc. # 25 at ¶¶ 38, 41, 48, 55).
In its Motion to Dismiss, BOA argues that Plaintiff’s fraud
claims are barred by the statute of limitations and banking statute
of frauds. (Doc. # 34 at 6, 11). BOA also contends that Plaintiff’s
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
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
3

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.”
SFM Holdings, Ltd. v. Banc of Am. Sec., LLC, 600 F.3d 1334, 1337
(11th Cir. 2010).

4

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 Plaintiff’s claims
are barred by the statute of limitations. The Court disagrees;
only Plaintiff’s Inspection Fee Claim is time barred.
Arguing that Plaintiff should have discovered the basis for
his fraud claim “when the relevant statements were made,” BOA
submits that each of Plaintiff’s claims should be barred. (Doc. #
34 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 Plaintiff an
opportunity to discover with due diligence any facts giving rise
to fraud. (Doc. # 34 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 Plaintiff’s claims. “A document
attached to a motion to dismiss may be considered by the court
. . . only if the attached document is: (1) central to the
plaintiff’s claim; and (2) undisputed.” Horsley v. Feldt, 304 F.3d
5

1125, 1134 (11th Cir. 2002). The Supplemental Directive is not
attached

either

Furthermore,

the

to

the

Amended

Supplemental

Complaint,

Directive

is

nor
not

the

Motion.

central

to

Plaintiff’s fraud claims. Plaintiff’s claims are based on the
alleged false statements and omissions made by BOA to Plaintiff
through the HAMP process. While the Supplemental Directive may be
central to BOA’s statute of limitations defense, it is not central
to Plaintiff’s claims.
Even if the Supplemental Directive were to be considered
alongside the Amended Complaint, it is not clear that, with due
diligence, Plaintiff should have discovered the basis of his fraud
allegations. BOA argues that Plaintiff should have consulted this
document to understand the guidelines of HAMP and thus discover
any misrepresentations. (Doc. # 34 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 Plaintiff should have discovered the basis of his
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.
BOA has not met its burden of showing that Plaintiff knew, or
should

have

known,

that

the

statements
6

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

Plaintiff

knew,

or

should

have

known,

that

the

statements were false regarding HAMP’s eligibility requirements or
his HAMP approval. Additionally, BOA has failed to establish that
Plaintiff knew, or should have known, that the financial documents
he 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 Plaintiff’s 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). Plaintiff claims the inspection fees were last charged
in 2011. (Doc. # 25 at ¶ 55). Therefore, Plaintiff’s Inspection
Fee Claim is barred by the statute of limitations and thus, is
dismissed with prejudice.
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
money, goods, or things in action, to otherwise extend credit, or
7

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 Plaintiff’s HAMP Approval Claim involves
an oral statement regarding a credit agreement under the banking
statute of frauds. Because Plaintiff’s other claims do not involve
a credit agreement as defined by the statute, they are not barred.
Therefore,

Plaintiff’s

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
reliance thereon, and (4) the plaintiff’s injury was caused by
8

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 his attempt to obtain a loan modification, Plaintiff
alleges BOA falsely informed him that “he can’t be current on his
mortgage.” (Doc. # 25 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

his

Complaint, Plaintiff provides the name of the BOA representative
that told him the false statement, as well as the date the
statement

was

made.

(Id.).

According

to

Plaintiff,

the

BOA

representative made the false statement to induce Plaintiff’s
reliance, triggering his purposeful default on his mortgage. (Id.
at ¶¶ 38, 40). His loss of home equity and “money paid as trial
payments” to BOA demonstrate damage resulting from the false
9

statements. (Id.). At this juncture, Plaintiff has stated a claim
for HAMP Eligibility that survives the Motion to Dismiss.
2. Supporting Documents Claim
When applying for a HAMP loan modification, Plaintiff sent
financial documents to BOA and was then told that the documents
were missing. (Doc. # 25 at ¶ 42). While the Complaint alleges
this statement by BOA was false, (Id. at ¶ 43), Plaintiff has
failed to support the allegation with well-pleaded and specific
facts. Plaintiff states 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, Plaintiff has failed to satisfy Rule 9(b) and
thus, the Supporting Document Claim is dismissed with prejudice.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
(1)

Defendant Bank of America’s Motion to Dismiss Plaintiff’s
Amended Complaint (Doc. # 34) is GRANTED in part and DENIED
in part.

(2)

Plaintiff’s

Supporting

Documents

Claim

is

DISMISSED

WITH

PREJUDICE.
(3)

Plaintiff’s HAMP Approval Claim is DISMISSED WITH PREJUDICE.

(4)

Plaintiff’s Inspection Fee Claim is DISMISSED WITH PREJUDICE.

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(5)

Plaintiff’s 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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