Hutchison v. JPMorgan Chase Bank, N.A.
Filing
31
ORDER & REASONS granting 23 Motion to Dismiss for Failure to State a Claim. Signed by Judge Martin L.C. Feldman on 12/11/2013. (caa, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ELLEN BELCHIC HUTCHINSON
CIVIL ACTION
v.
13-5513
JPMORGAN CHASE BANK, N.A.
SECTION "F"
ORDER AND REASONS
Before the Court is defendant's partial motion to dismiss
under Rule 12(b)(6).
For the reasons that follow, the motion is
GRANTED.
Background
This case arises out of the foreclosure of plaintiff's home
for nonpayment of a promissory note.
Plaintiff asserts the
following allegations in her complaint:
After her house was damaged by Hurricane Katrina, Ellen
Belchic Hutchinson took out a loan from JPMorgan Chase Bank, N.A.
to fund the necessary repairs.
In April 2007, Hutchinson executed
a promissory note payable to Chase in the principal amount of
$154,000, secured by a mortgage on the house. Hutchinson regularly
made payments on the note through January 2010.
In June 2010, Chase filed a Petition for Executory Process
against Hutchinson in the Civil District Court for the Parish of
Orleans, instituting foreclosure proceedings and alleging that
Hutchinson had failed to make payments on the promissory note after
January
2010.
After
receiving
1
notice
of
the
foreclosure
proceedings, Hutchinson began negotiating with Chase through her
accountant, Bobby Matthews, in an attempt to bring her payments
current, reinstate the promissory note, and stop the foreclosure
proceedings.
In
September
"Reinstatement
2012,
Quote,"
Chase
which
provided
stated
reinstate the loan was $26,497.87.
Mr.
that
Matthews
the
amount
with
due
a
to
That same day, Matthews wired
that full amount to Chase; however, Chase returned the funds to
Hutchinson's checking account.
A few days later, Matthews again
wired the full amount to Chase, and Chase again returned the
payment.
Throughout September, October, November, and December 2012,
Matthews
corresponded
with
Chase
attempting to resolve the matter.
on
behalf
of
Hutchinson,
However, on December 13, 2012,
without prior notice to Hutchinson, her house was sold at a
Sheriff's sale for $155,000. Upon discovering the sale, Hutchinson
immediately repurchased the house from the buyer for $185,000.
In January 2013, Hutchinson filed suit in state court against
Chase, alleging both federal and state law claims. In August 2013,
Chase removed the case to this Court, invoking both federal
question and diversity jurisdiction.
complaint
to
include
only
claims
1
Hutchinson then amended her
of
negligence,1
material
Hutchinson's amended complaint asserts two negligence
claims:
one based on Chase's alleged returns of payments, and
another predicated on the discussions of the parties occurring
2
misrepresentation, and detrimental reliance.
Chase now moves to
dismiss for failure to state a claim under Rule 12(b)(6).2
I.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted.
Such a motion is rarely
granted because it is viewed with disfavor.
See Lowrey v. Tex. A
& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).
In considering a Rule 12(b)(6)
motion, the Court “accepts ‘all well-pleaded facts as true, viewing
them in the light most favorable to the plaintiff.’” See Martin K.
Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464 (5th Cir.
2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir.
1999)). But, in deciding whether dismissal is warranted, the Court
will not accept conclusory allegations in the complaint as true.
Kaiser, 677 F.2d at 1050.
Indeed, the Court must first identify
allegations that are conclusory and, thus, not entitled to the
assumption of truth.
(2009).
Ashcroft v. Iqbal, 556 U.S. 662, 678-79
A corollary: legal conclusions “must be supported by
factual allegations.” Id. at 678.
Assuming the veracity of the
after the allegedly returned reinstatement payments.
2
Chase moves to dismiss all of Hutchinson's claims except
for her claim of negligence based on the alleged returns of
payments.
3
well-pleaded factual allegations, the Court must then determine
“whether they plausibly give rise to an entitlement to relief.”
Id. at 679.
“‘To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.’” Gonzalez v. Kay, 577 F.3d
600, 603 (5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal
quotation marks omitted).
“Factual allegations must be enough to
raise a right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true (even
if doubtful in fact).”
Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (citations and footnote omitted). “A claim has facial
plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (“The
plausibility standard is not akin to a ‘probability requirement,’
but it asks for more than a sheer possibility that a defendant has
acted
unlawfully.”).
This
is
a
“context-specific
task
that
requires the reviewing court to draw on its judicial experience and
common sense.”
Id. at 679.
“Where a complaint pleads facts that
are merely consistent with a defendant’s liability, it stops short
of the line between possibility and plausibility of entitlement to
relief.” Id. at 678 (internal quotations omitted) (citing Twombly,
550 U.S. at 557).
“[A] plaintiff’s obligation to provide the
4
‘grounds’ of his ‘entitle[ment] to relief’”, thus, “requires more
than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.”
Twombly, 550 U.S. at
555 (alteration in original) (citation omitted).
In deciding a motion to dismiss, the Court may consider
documents that are essentially “part of the pleadings.”
That is,
any documents attached to or incorporated in the plaintiff’s
complaint that are central to the plaintiff’s claim for relief.
Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th
Cir. 2004) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d
496, 498-99 (5th Cir. 2000)).
Also, the Court is permitted to
consider matters of public record and other matters subject to
judicial notice without converting a motion to dismiss into one for
summary judgment.
See United States ex rel. Willard v. Humana
Health Plan of Tex. Inc., 336 F.3d 375, 379 (5th Cir. 2003).
II.
The Louisiana Credit Agreement Statute, La. R.S. 6:1121, et
seq., operates as a "statute of frauds" for the credit industry.
King v. Parish Nat'l Bank, 885 So. 2d 540, 546 (La. 2004).
Its
purpose is "to prevent potential borrowers from bringing claims
against lenders based on oral agreements."
Jesco Const. Corp. v.
Nationsbank Corp., 830 So. 2d 989, 992 (La. 2002). La. R.S. 6:1122
provides: "A debtor shall not maintain an action on a credit
agreement
unless
the
agreement
5
is
in
writing,
expresses
consideration, sets forth the relevant terms and conditions, and is
signed by the creditor and the debtor."
La. R.S. 6:1121 defines a
"credit agreement" as "an agreement to lend or forbear repayment of
money or goods or to otherwise extend credit, or to make any other
financial accommodation."
Chase contends that Hutchinson's claims are based on an
alleged oral forbearance agreement.
Because Hutchinson fails to
allege that the forbearance agreement was committed to a writing
signed by both parties, her claims are barred by La. R.S. 6:1122.
The Court agrees.
Hutchinson's claims are based on her allegation
that Chase agreed to reinstate her promissory note and suspend
foreclosure efforts or otherwise forbear collection on the account.
Such an agreement is plainly a "credit agreement," as defined by
La. R.S. 6:1121, and Hutchinson's claims are therefore barred by
La. R.S. 6:1122.
No.
13-4734,
See, e.g., Loraso v. JP Morgan Chase Bank, N.A.,
2013
WL
5755638,
at
*6-*7
(E.D.
La.
Oct.
23,
2013)(oral promise to modify, forbear, or refinance a loan not
enforceable); Bass v. Chase Home Fin., LLC, No. 09-3339, 2010 WL
3922709, at *3 (E.D. La. Oct. 1, 2010)(oral agreement to modify
mortgage loan through a short sale not enforceable).
Hutchinson's claims are barred notwithstanding the fact that
she has framed her claims as sounding in negligence, material
misrepresentation, and detrimental reliance. "The Louisiana Credit
Agreement Statute precludes all actions for damages arising from
6
oral credit agreements, regardless of the legal theory of recovery
asserted."
Jesco, 830 So. 2d at 992.
Although Hutchinson argues that her agreement with Chase is
evidenced by writings, including email correspondence and a written
Reinstatement Quote, there is nothing in her complaint noting that
the agreement itself was in writing, expressing consideration,
setting forth the relevant terms and conditions, and was signed by
both her and Chase.
La. R.S. 6:1122.
Hutchinson quite simply
fails to state a claim for relief that is plausible on its face.
Iqbal, 556 U.S. at 678.
Accordingly, Chase's partial motion to dismiss is GRANTED.
New Orleans, Louisiana, December 11, 2013
____________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?