Brunk v. Conseco Bank, Inc. et al

Filing 43

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that U.S. Banks motion to dismiss (#15) is DENIED as to Count VI. Signed by District Judge Stephen N. Limbaugh, Jr on 10/31/19. (CMH)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
SOUTHEASTERN DIVISION
GLENDA BRUNK,

)
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Plaintiff,
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v.
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CONSECO BANK INC. and U.S.
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BANK N.A. AS TRUSTEE FOR
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CONSECO FINANCE HOME EQUITY )
LOAN TRUST 2002-A,
)
)
Defendants.
)

Case No. 1:17-CV-188-SNLJ

MEMORANDUM AND ORDER
This matter comes before the Court on the supplemental briefing of the parties as
previously ordered by this Court. See Brunk v. Conseco Bank, Inc., 2018 WL 3109081
(E.D. Mo. June 25, 2018). In that Order, which granted in part and denied in part
defendant U.S. Bank’s motion to dismiss while reserving judgment on Count VI, this
Court stated:
[T]he parties are ordered to submit supplemental briefing on the issue
whether Homeowner has stated a claim upon which relief can be granted
under § 1641(g). By its express terms, § 1641(g)(a) requires the new owner
or assignee of the debt to notify the debtor. As such, to recover for a
violation of § 1641(g), ... Homeowner must allege that U.S. Bank was
indeed the transferee of the note and deed of trust and hence was obligated
under the statute to give notice of such. But Homeowner’s lawsuit is based
on the opposite claim: she repeatedly alleges that the [Conseco Finance
Home Equity Loan] Trust never owned the Note and that any assignment
from the Trust [to U.S. Bank] was void.
Id. at *7 (internal citations and quotations omitted). The underlying facts are more fully
stated in this Court’s prior decisions. Id. at *1; Brunk v. Conseco Bank, Inc., 2019 WL
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1532576 (E.D. Mo. Apr. 9, 2019). But, for purposes here, it is important to note that two
counts remain. Count V seeks a declaratory judgment, in part, that U.S. Bank does not
own plaintiff’s mortgage (and thus could not have appointed the Milsap law firm to
initiate foreclosure proceedings). By contrast, Count VI asserts a claim under Section
1641(g) of the Truth in Lending Act (TILA), which is predicated on the “new owner or
assignee of the debt”—U.S. Bank—failing to notify the debtor of the
ownership/assignment change. Such a failure, if proven, would entitle plaintiff to a
statutory damages award between $400 and $4,000 (or more if actual damages can be
proven). See 15 U.S.C. § 1640(a)(1), (a)(2)(A)(iv).
The wrinkle in this case, then, is that Count V and Count VI are logically
inconsistent. Indeed, U.S. Bank’s supplemental brief primarily focuses on the fact that
plaintiff’s claims “conflict entirely with any right plaintiff has under TILA,” and thus, the
bank argues, Count VI should be “dismissed … with prejudice.” Still, plaintiff says she
validly pled her TILA claim against U.S. Bank “in the alternative pursuant to FRCP §
8(d)(2).”
This Court concludes plaintiff has the better argument. A similar case involving
U.S. Bank is instructive. In Fowler v. U.S. Bank N.A., 2 F.Supp.3d 965, 978-979 (S.D.
Tex. 2014), “plaintiffs sought to determine whether U.S. Bank was assigned the Note but
were unable to do so.” Id. at * 979. Therefore, plaintiffs elected to “plead[] their claims in
the alternative”—some arguing U.S. Bank was not the assignee, others embracing that it
was. The court explained that Rule 8(d) permits inconsistent alternative pleadings. Id.

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Therefore, it held that plaintiffs had stated a claim under Section 1641(g) notwithstanding
competing factual allegations that U.S. Bank was not the assignee of the note. Id. at 980.
The result is the same here. Count V is premised on the idea that the assignment to
U.S. Bank never happened—that is plaintiff’s core theory. Brunk, 2018 WL 3109081 at
*5 (“[a]s this Court understands the Complaint, … Homeowner is simply saying the
assignment never happened[.]”). But, that does not mean plaintiff is disallowed from
alternatively pleading a TILA claim under Count VI as a fallback position. Count VI is
essentially premised on the idea that if the facts eventually reveal U.S. Bank is the holder
of her mortgage note then U.S. Bank nonetheless failed to notify plaintiff of that change.
This Court finds no reason to disagree with the result of Fowler. Though plaintiff’s
claims are inconsistently pled, that fact alone is not fatal to their viability. See FED. R.
CIV. P. 8(d)(3).
Accordingly,
IT IS HEREBY ORDERED that U.S. Bank’s motion to dismiss (#15) is
DENIED as to Count VI.
So ordered this 31st day of October 2019.

STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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