Pohl et al v. Citimortgage, Inc.
Filing
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ORDER granting 3 Motion to Dismiss/General; dismissing [1} Complaint without prejudice. (Written Opinion). Signed by Judge Richard H. Kyle on 05/18/12. (kll) cc: Robert Pohl, Melissa Pohl. Modified on 5/18/2012 (lmb).
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Robert Pohl and Melissa Pohl,
Plaintiff,
Civ. No. 12-535 (RHK/FLN)
MEMORANDUM OPINION
AND ORDER
v.
CitiMortgage, Inc., as Trustee,
Defendant.
________________________________________________________________________
This case arises from Plaintiffs Robert and Melissa Pohl’s inability to obtain a
loan modification for their mortgage and the subsequent foreclosure by Defendant
CitiMortgage, Inc. (“CitiMortgage”). Plaintiffs brought suit in the Wright County,
Minnesota District Court, and CitiMortgage removed the action to this Court; it now
moves to dismiss. For the reasons that follow, the Motion will be granted.
BACKGROUND
Plaintiffs live at 1011 Loveland Circle, Montrose, Minnesota (“the Property”).
(Compl. at ¶¶ 3, 6.) When they fell behind on their mortgage payments, they were unable
to obtain a loan modification and CitiMortgage foreclosed. (Id. at ¶¶ 7, 8.) CitiMortgage
purchased the sheriff’s certificate at a foreclosure sale on August 18, 2011. (Id. at ¶¶ 5,
8.)
Plaintiffs then filed suit in Wright County, Minnesota, asserting three causes of
action: (1) quiet title; (2) unjust enrichment; and (3) breach of implied
agreement/specific performance. CitiMortgage removed the action to this Court, and it
now moves to dismiss under Federal Rules of Civil Procedure 8 and 12(b)(6). Plaintiffs
have not responded to the Motion and failed to appear at a hearing on May 15, 2012.
STANDARD OF DECISION
To avoid dismissal, a complaint must include “enough facts to state a claim to
relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 547
(2007). A “formulaic recitation of the elements of a cause of action” will not suffice. Id.
at 555; accord Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009). Rather, the complaint must
set forth sufficient facts to “nudge[] the[] claim[] across the line from conceivable to
plausible.” Twombly, 550 U.S. at 570. Stated differently, the plaintiff must “assert facts
that affirmatively and plausibly suggest that [he] has the right he claims . . . , rather than
facts that are merely consistent with such a right.” Stalley v. Catholic Health Initiatives,
509 F.3d 517, 521 (8th Cir. 2007) (citing Twombly, 550 U.S. at 554–57). The complaint
must be construed liberally, and any reasonable inferences arising from the complaint
must be interpreted in the light most favorable to the plaintiff. Twombly, 550 U.S. at
554-56. “Ultimately, evaluation of a complaint upon a motion to dismiss is ‘a contextspecific task that requires the reviewing court to draw on its judicial experience and
common sense.’” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009)
(quoting Iqbal, 556 U.S. at 679).
ANALYSIS
As an initial matter, CitiMortgage argues that this action should be dismissed
because the Complaint fails to satisfy Federal Rule of Civil Procedure 8, which requires
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“a short and plain statement of the claim showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2). Although Rule 8 is not a requirement for “detailed factual
allegations,” it does require “more than an unadorned, the-defendant-unlawfully-harmedme accusation.” Iqbal, 556 U.S. at 678. A complaint that “tenders ‘naked assertion[s]’
devoid of ‘further factual enhancements’” will not survive. Id. (quoting Twombly, 550
U.S. at 557).
Plaintiffs’ claims all rest on the assertion that CitiMortgage’s refusal to enter into a
loan-modification agreement violated a duty that it owed them. (See Compl. ¶¶ 12-14,
16-17, 20-23.) However, none of the claims allows the Court to determine what exactly
constituted CitiMortgage’s unlawful act. Furthermore, there does not appear to be any
authority for the proposition that Plaintiffs have a right to a loan modification. See Cox
v. Mortg. Elec. Registration Sys., Inc., 794 F. Supp. 2d 1060, 1064 (D. Minn. 2011)
(Doty, J.).
In any event, even if Plaintiffs had satisfied their Rule 8 obligations, the
Complaint must still state a claim for which this Court may grant relief. Plaintiffs’ first
claim arises under Minn. Stat. § 559.01, which provides:
Any person in possession of real property personally or through the
person’s tenant, or any other person having or claiming title to . . . real
property, may bring an action against another who claims an estate or
interest therein, or a lien thereon, adverse to the person bringing the action,
for the purpose of determining such adverse claim and the rights of the
parties, respectively.
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In the present case, CitiMortgage foreclosed on Plaintiffs mortgage in August 2011, and
purchased the sheriff’s certificate for $79,900. The redemption period expired five weeks
after the date of sale, under Minn. Stat. § 580.07, subd. 2.
Even viewing the Complaint in a light most favorable to Plaintiffs, it contains no
legal or factual allegations that establish their right to a loan modification or entitle them
to possession or title of the Property. CitiMortgage purchased the sheriff’s certificate on
August 18, 2011, and the statutory period of redemption expired five weeks later. See id.
Plaintiffs do not allege that they exercised their right of redemption. The quiet-title claim
rests on the erroneous assertion that Plaintiffs had a right to modify their loan with
CitiMortgage. Cox, 794 F. Supp. 2d at 1064; Williams v. Geithner, Civ. No. 09-1959,
2009 WL 3757380, at *6-7 (D. Minn. Nov. 9, 2009) (Montgomery, J.).
Plaintiffs also assert a claim for unjust enrichment. However, “unjust enrichment
claims do not lie simply because one party benefits from the efforts or obligations of
others, but instead it must be shown that a party was unjustly enriched in the sense that
the term ‘unjustly’ could mean illegally or unlawfully.” First Nat’l Bank of St. Paul v.
Ramier, 311 N.W.2d 502, 504 (Minn. 1981). CitiMortgage asserts that because none of
Plaintiffs’ other claims is viable, their unjust-enrichment claim must be dismissed.
Plaintiffs have provided no facts suggesting that they are entitled to a loan modification,
or that CitiMortgage is required to modify their loan. Nothing in the complaint asserts
that CitiMortgage has taken anything unjustly. Indeed, the only act that CitiMortgage
undertook according to the complaint was to refuse to modify Plaintiffs’ loan. Choosing
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not to modify a loan is not illegal or unlawful per se, and Plaintiffs have alleged no facts
to establish that they were entitled to such a modification.
Plaintiffs’ final claim is styled as a “Breach of Implied Agreement/Specific
Performance.” However, Plaintiffs plead no facts regarding the existence of an implied
contract. Moreover, a claim based on an implied agreement to modify a loan is governed
by Minnesota’s statute of frauds, Minn. Stat. § 513.33, subd 2, which provides that a
debtor “may not maintain an action on a credit agreement unless the agreement is in
writing, expresses consideration, sets forth the relevant terms and conditions, and is
signed by the creditor and the debtor.”
Plaintiffs do not allege the existence of a written agreement to modify their
mortgage, nor do they offer any evidence that necessarily implies the existence of one.
The have alleged no stated consideration or material terms. In short, nothing in the
Complaint supports this claim.
Lastly, the Court notes that, in Paragraph 22 of the Complaint, Plaintiffs assert “a
superior claim to the interest in the subject property because of their Fee Simple Absolute
and Unjust Enrichment, Breach of Implied Agreement, Misrepresentation, Fraud and
Constructive Trust 1 on the part of Defendants.” Even reading the Complaint liberally
such that Plaintiffs assert each of the claims stated, the facts alleged in the Complaint do
not support these claims.
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A constructive trust is a judicially created remedy imposed to prevent unjust enrichment.
Wright v. Wright, 311 N.W.2d 484, 485 (Minn. 1981). In the absence of a valid claim
for unjust enrichment or fraud, a constructive trust would be inappropriate.
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As stated above, no facts support claims of unjust enrichment and breach of
implied agreement. And at common law, both fraud and misrepresentation claims require
a showing of fraudulent intent, or an intent to mislead. See Am. Sharecom, Inc. v. LDB
Intern. Corp., 553 N.W.2d 433, 434 (Minn. Ct. App. 1996) (citing Burns v. Valene, 214
N.W.2d 686, 689 (Minn. 1974)); Specialized Tours, Inc. v. Hagen, 392 N.W.2d 520, 532
(Minn. 1986). With respect to these two “claims,” the Complaint lacks any facts showing
that CitiMortgage behaved falsely or dishonestly at any time. Plaintiffs simply state that
they were unable to negotiate a settlement or modify their loan. Mentioning a cause of
action in a complaint is insufficient to fulfill Plaintiffs’ obligation to plead claims with
specificity.
CONCLUSION
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
ORDERED that CitiMortgage’s Motion to Dismiss (Doc. No. 3) is GRANTED, and the
Complaint (Doc. No. 1) is DISMISSED WITHOUT PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: May 18, 2012
s/Richard H. Kyle
RICHARD H. KYLE
United States District Judge
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