Billingsley v. Indymac Financial Services/One West et al

Filing 59

ORDER: Defendants' Motion to Dismiss 50 is GRANTED. Billingsley's First Motion to Dismiss 57 is DENIED. Billingsley's First Amended Complaint is DISMISSED. (Written Opinion) Signed by Judge Joan N. Ericksen on July 9, 2013. (CBC)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Ruby Billingsley,
Plaintiff,
v.

Civil No. 13-cv-129 (JNE/JJK)
ORDER

OneWest Bank, FSB Indymac
Mortgage Services, HSBC Bank
USA, NA,
Defendants.
This case is before the Court on Defendants’ motion to dismiss Plaintiff Ruby
Billingsley’s First Amended Complaint. For the reasons stated below, the Court grants
Defendants’ motion.
I.

BACKGROUND1

According to her complaint, Billingsley purchased a home and fell behind on her loan
payments. She applied for and was accepted into a Home Affordable Modification Trial Period
Plan (“Plan”) in January 2010. She made three on-time monthly payments pursuant to the Plan
and continued to make monthly payments until October 2010, when Defendants rejected a
payment. Defendants told Billingsley that she had understated her income and denied her request
for a permanent loan modification. Eventually, Billingsley’s home was sold at a sheriff’s sale.
Billingsley sued Defendants, and in the First Amended Complaint she alleges four causes
of action: breach of contract, violation of the Minnesota Deceptive Trade Practices Act,
conversion, and promissory estoppel. Essentially, Billingsley asserts that Defendants improperly
denied her request for a permanent loan modification and improperly kept her loan payments.

1

Defendants have provided the Court with Billingsley’s mortgage and the sheriff’s
certificate of foreclosure sale. The Court will not consider these documents because they are
unnecessary for the determination of Billingsley’s claims.
1

Defendants moved to dismiss the complaint, and Billingsley failed to respond to Defendants’
motion within the 21-day period mandated by Local Rule 7.1(c)(2). But 26 days after Defendants
filed their motion, Billingsley filed a document titled “Plaintiff’s Responsive Motion to
Defendants’ Motion to Dismiss.” That one-page document reads, “Said Responsive Motion is
based upon the [sic] all of the files, records, and proceedings herein and upon the forthcoming
Memorandum and Exhibits and arguments of counsel.” (Dkt. 57.) No memorandum or exhibits
were ever filed. Despite Billingsley’s failure to substantively respond to any of the arguments
made in Defendants’ motion to dismiss, the Court will address the motion on its merits.
II.

ANALYSIS

When ruling on a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6),
a court must accept the facts alleged in the complaint as true and grant all reasonable inferences
in favor of the plaintiff. Mulvenon v. Greenwood, 643 F.3d 653, 656 (8th Cir. 2011). Although a
complaint is not required to contain detailed factual allegations, “[a] pleading that offers ‘labels
and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007)). “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.’” Id. (quoting Twombly,
550 U.S. at 570).
In her breach of contract claim, Billingsley appears to assert that Defendants failed to
perform under the Plan when they did not permanently modify her mortgage.2 But courts in this

2

The First Amended Complaint specifically references the Plan and purports to attach it to
the complaint as Exhibit A, but no Exhibit A is attached. After examining the record, the Court
discovered that Billingsley attached the Plan to an opposition to an earlier motion to dismiss
(Dkt. 23) and that Defendants also attached the Plan to an affidavit filed with the earlier motion
to dismiss (Dkt. 8, Exh. 3). The Court will consider the Plan because it is necessarily embraced
2

district have consistently rejected borrowers’ claims that lenders breached a Home Affordable
Modification Trial Period Plan when the lenders did not permanently modify mortgages because
no enforceable contract to permanently modify the mortgage was formed. See, e.g., Swanson v.
GMAC Mortg., LLC, Civ. No. 11-944 (DSD/JSM), 2012 WL 1110549, at *3–4 (D. Minn. Apr. 3,
2012), appeal dismissed, No. 12-2085 (8th Cir. Feb. 5, 2013); Racutt v. U.S. Bank, N.A., Civ.
No. 11-2948 (PAM/JJK), 2012 WL 1242320, at *2 (D. Minn. Feb. 23, 2012); Laurent v. Mortg.
Elec. Registration Sys., Inc., Civ. No. 11-2585 (ADM/JJG), 2011 WL 6888800, at *2 (D. Minn.
Dec. 30, 2011); Wittkowski v. PNC Mortg., Civ. No. 11-1602 (MJD/JJG), 2011 WL 5838517, at
*3–4 (D. Minn. Nov. 18, 2011). The Court concludes that Billingsley’s breach-of-contract claim
fails.
The Court also dismisses Billingsley’s promissory-estoppel claim, because claims based
an oral agreement to modify a loan or to suspend a foreclosure fail as a matter of law. See
Brisbin v. Aurora Loan Servs., LLC, 679 F.3d 748, 752–53 (8th Cir. 2012); Tharaldson v. Ocwen
Loan Servicing, LLC, 840 F. Supp. 2d 1156, 1162–63 (D. Minn. 2011); Ming’ate v. Bank of Am.,
N.A., Civ. No. 11-1787 (ADM/TNL), 2011 WL 4590431, at *4–5 (D. Minn. Sept. 30, 2011).
Billingsley’s claim under the Minnesota Deceptive Trade Practices Act fails because the
cursory allegation that Defendants’ conduct harmed her and “Minnesota consumers” is
insufficient to allege a public benefit. See Olivares v. PNC Bank, Civ. No. 11-1626 (ADM/JJK),
2011 WL 4860167, at *7–8 (D. Minn. Oct. 13, 2011).

by the complaint, and even though it is not physically attached to the pleading, no party seems to
question its authenticity because both parties have previously submitted the same document to
the Court. See Ashanti v. City of Golden Valley, 666 F.3d 1148, 1151 (8th Cir. 2012) (noting that
on a motion to dismiss, courts may consider documents outside the pleadings that are necessarily
embraced by the complaint and not physically attached to the complaint).
3

For her conversion claim, Billingsley asserts that after she made the required three
monthly payments to Defendants under the Plan, she continued to make payments to Defendants
until the end of 2010, and Defendants never returned those payments. According to the
complaint, the sheriff’s sale occurred in May 2012. “Under Minnesota law, conversion is ‘an act
of willful interference with [the personal property of another], done, without lawful justification,
by which any person entitled thereto is deprived of use and possession.’” Damon v. Groteboer,
Civ. No. 10-92 (JRT/FLN), 2013 WL 1332009, at *17 (D. Minn. Mar. 29, 2013) (quoting
Christensen v. Milbank Ins. Co., 658 N.W.2d 580, 585 (Minn. 2003)). Under the Plan, “all terms
and provisions of the [original] Loan Documents remain[ed] in full force and effect.” [Docket
No. 8, Exh. 3 at ¶ 4.D.] Billingsley has made no allegations that Defendants were not entitled to
her loan payments under the original loan documents, and consequently her conversion claim
fails. See generally Bohnhoff v. Wells Fargo Bank, N.A., 853 F. Supp. 2d 849, 858 (D. Minn.
2012). Based on the files, records, and proceedings, IT IS ORDERED THAT:
1. Defendants’ Motion to Dismiss [Docket No. 50] is GRANTED.
2. Billingsley’s First Motion to Dismiss [Docket No. 57] is DENIED.
3. Billingsley’s First Amended Complaint is DISMISSED.
LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: July 9, 2013

s/Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge

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