Cardenas et al v. Bank of America, N.A.

Filing 40

ORDER: Defendant Bank of America's Motion to Dismiss Plaintiffs' Amended Complaint (Doc. # 36 ) 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
FRANCISCO CARDENAS and
ELSA CARDENAS,
Plaintiffs,
v.

Case No. 8:17-cv-2629-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 Plaintiffs’
Amended Complaint (Doc. # 36), filed on March 28, 2018. Plaintiffs
Francisco Cardenas and Elsa Cardenas filed their response in
opposition on April 12, 2018. (Doc. # 37). The Amended Complaint,
(Doc. # 28), 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 Francisco Cardenas and Elsa Cardenas

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. # 28 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 are 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 Francisco and Elsa Cardenas filed a separate
complaint on November 3, 2017. (Doc. # 1). Three months later, on
March 7, 2018, Plaintiffs filed an Amended Complaint. (Doc. # 28).
Thus, the operative complaint in this matter is Plaintiffs’ fourth
attempt to properly plead their cause of action.

2

The Amended Complaint alleges BOA committed four fraudulent
acts: (1) falsely telling Plaintiffs that “in order to qualify for
a HAMP loan modification, they have to be behind on their mortgage”
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. # 28 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. # 36 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. #
36 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. # 36 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
5

. . . 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. # 36 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 2015. (Doc. # 28 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
7

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 have to be behind on
their mortgage.” (Doc. # 28 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
9

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. # 28 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. # 28 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. # 36) 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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