SLOAN et al v. Flagstar Bank FSB et al

Filing 11

ORDER granting 5 Motion to Dismiss for Failure to State a Claim. Ordered by Judge Hugh Lawson on 7/16/2013. (nbp)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
VALDOSTA DIVISION

WILLIAM SLOAN and
LINDA M. SLOAN,
Plaintiffs,
Civil Action No. 7:13-CV-68 (HL)
v.
FLAGSTAR BANK, FSB and
U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT,
Defendants.

ORDER
This case is before the Court on a Motion to Dismiss (Doc. 5) filed by
Defendant Flagstar Bank, FSB. Plaintiffs did not file a response, which makes the
motion unopposed. For the reasons discussed below, Flagstar’s motion is
granted.
I.

MOTION TO DISMISS STANDARD
On a motion to dismiss, the Court must accept as true all well-pleaded

facts in a plaintiff’s complaint. Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1260
(11th Cir. 2009). To avoid dismissal pursuant to Federal Rule of Civil Procedure
12(b)(6), “a complaint must contain specific factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S.
662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim
is plausible where the plaintiff alleges factual content that “allows the court to
draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Id. The plausibility standard “calls for enough fact to raise a reasonable
expectation that discovery will reveal evidence” of the defendant’s liability.
Twombly, 550 U.S. at 556.
II.

FACTS
The facts in the light most favorable to Plaintiffs are as follows. On May 30,

2007, the real property located at 147 Apache Drive, Moultrie, Georgia (the
“Property”) was conveyed to Plaintiffs through a quitclaim deed. (Compl. ¶ 6, Ex.
1). Also on May 30, 2007, Plaintiffs executed a Promissory Note in favor of
Greater United Home Funding in the amount of $88,254. (Compl. ¶ 7). The
Promissory Note was secured by a Security Deed that identifies Mortgage
Electronic Registration System, Inc. (“MERS”) as “nominee” for Greater United
Home Funding and its successors and assigns. (Compl. ¶ 9, Ex. 2). The Property
was pledged as collateral to secure the Promissory Note. In September of 2011,
Plaintiffs defaulted on their mortgage. (Compl. ¶ 10). On February 23, 2012,
MERS assigned the Security Deed to Flagstar. (Compl. Ex. 3).
Plaintiffs allege that the default made them eligible for assistance under
the Home Affordable Modification Program (“HAMP”), which would have required

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Flagstar to attempt various measures to modify their loan. Plaintiffs assert that
they made multiple contacts with Flagstar to request that Flagstar process their
application for a mortgage loan modification through HAMP. Flagstar sent the
necessary forms to Plaintiffs. Plaintiffs allege that they met all the requirements
for a HAMP modification and that Flagstar had a duty to process the application.
On March 6, 2012, while Flagstar was processing Plaintiffs’ HAMP application,
Flagstar foreclosed on the Property. Flagstar now holds title to the Property.
On March 18, 2013, Plaintiffs filed a complaint against Flagstar and the
United States Department of Housing and Urban Development in the Superior
Court of Colquitt County, in which they alleged a breach of contract claim.1
Plaintiffs seek injunctive relief and an order setting aside the foreclosure.
On May 16, 2013, Flagstar timely removed the action to this Court and
filed its Motion to Dismiss. Flagstar requests that the Court dismiss the action
against it with prejudice.
III.

DISCUSSION
Plaintiffs allege a breach of contract claim based upon their request to

Flagstar to process the application for the HAMP loan modification. Flagstar
asserts that Plaintiffs fail to state a claim against it upon which relief can be
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While the complaint is titled “Complaint for Wrongful Foreclosure and for Equitable
Relief,” Plaintiffs have not pled a wrongful foreclosure claim in the complaint. Their sole
claim is a breach of contract claim, and the Court will restrict its analysis to the breach
of contract claim alone.
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granted for three reasons. First, Flagstar argues that the purported contract does
not satisfy the statute of frauds. Second, Flagstar argues that the alleged
contract lacks the necessary elements under Georgia law. Finally, Flagstar
argues that Plaintiffs have no private right of action against Flagstar under
HAMP. It is not necessary for the Court to address Flagstar’s first two
arguments,2 because the law in the Eleventh Circuit is clear that there is no
private right of action, express or implied, under HAMP.
In Miller v. Chase Home Finance, LLC, 667 F.3d 1113, 1116 (11th Cir.
2012), the Eleventh Circuit found that the plaintiff “lack[ed] standing to pursue
breach of contract, breach of implied duty of good faith and fair dealing, and
promissory estoppel claims insofar as they are premised on an alleged breach of
[Defendant’s] HAMP obligations.” Here, Plaintiffs’ breach of contract claim is
clearly premised on an alleged breach of Flagstar’s HAMP obligations. The
breach of contract claim is nothing more than an effort to assert a private right
under HAMP, which is not allowed. Like the plaintiff in Miller, Plaintiffs lack
standing to pursue their claim for breach of contract.
IV.

CONCLUSION
Flagstar’s Motion to Dismiss (Doc. 5) is granted.

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Nevertheless, it is clear to the Court that there was no valid contract between Plaintiffs
and Flagstar to modify the loan.
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SO ORDERED, this the 16th day of July, 2013.
s/ Hugh Lawson_______________
HUGH LAWSON, SENIOR JUDGE

mbh

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