Willis, et al v. US Bank NA

Filing 16

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that defendant's motion to dismiss [# 7 ] is granted, and this case is dismissed in its entirety. Signed by District Judge Catherine D. Perry on July 25, 2012. (BRP)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

ANDRE WILLIS, et al.,
Plaintiffs,
vs.
US BANK NA,
Defendant.

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Case No. 4:12CV854 CDP

MEMORANDUM AND ORDER
Plaintiffs Andre and Lori Willis filed a complaint in the Circuit Court of St.
Louis County, Missouri against defendant US Bank NA. The Complaint sought a
declaratory judgment of superior title on a piece of real property along with an
injunction restraining, enjoining, and prohibiting US Bank from removing them
from the property by any legal or illegal means. It also alleged fraud and violation
of the Missouri Merchandising Practices Act, Mo. Rev. Stat. § 407.010 et seq. US
Bank has moved to dismiss each count of the Complaint. Because the Complaint
fails to state a claim upon which relief may be granted, I will grant US Bank’s
motion and dismiss this case in its entirety.
Legal Standard
A defendant may move to dismiss a claim “for failure to state a claim upon
which relief can be granted” under Fed. R. Civ. P. 12(b)(6). The purpose of such a

motion is to test the legal sufficiency of the complaint. A complaint is only
required to contain “a short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a). Unless, of course, the plaintiff
is alleging fraud or mistake, in which case the complaint must “state with
particularity the circumstances.” Fed. R. Civ. P. 9(b). When considering a
12(b)(6) motion, the court should assume all factual allegations of a complaint are
true and construe them in favor of the plaintiff. Neitzke v. Williams, 490 U.S. 319,
326 (1989). While the complaint need not contain detailed factual allegations, the
plaintiff must set forth “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Id. As such, a
complaint will not suffice if it contains naked assertions devoid of factual
enhancements. Bell Atlantic v. Twombly, 550 U.S. 544, 556 (2007); see also
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1944 (2008).
Bell Atlantic established the “plausibility standard,” which replaced the “no
set of facts” jurisprudence, and it requires the plaintiff to plead factual content that
will allow the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged. Bell Atlantic, 550 U.S. at 556. Plausibility requires
more than a mere possibility that a defendant has acted unlawfully, but does not
require a showing of probability; it simply calls for enough facts to raise a
reasonable expectation that discovery will reveal evidence of illegality. Id. A
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complaint should not be dismissed merely because the court doubts a plaintiff will
be able to prove all the necessary allegations. Parnes v. Gateway 2000, Inc., 122
F.3d 539, 546 (8th Cir. 1997). The issue is not whether the plaintiff will
ultimately prevail, but whether she is entitled to present evidence to support her
claims. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).
“When ruling on a motion to dismiss under Rules 12(b)(6) or 12(c), a
district court generally may not consider materials outside the pleadings.” Noble
Sys. Corp. v. Alorica Cent., LLC, 543 F.3d 978, 982 (8th Cir. 2008) (quoting
Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999)).
Generally, if “matters outside the pleadings are presented to and not excluded by
the court,” a motion to dismiss must be treated as one for summary judgment. Fed.
R. Civ. P. 12(d). Courts “may, however, consider some public records, materials
that do not contradict the complaint, or materials that are ‘necessarily embraced by
the pleadings.’” Noble Sys. Corp., 543 F.3d at 982 (internal citations and
quotations omitted); see also 5B Charles A. Wright & Arthur R. Miller, Federal
Practice and Procedure: Civil 3d § 1357, at 376 (2004) (opining that a court may
consider “matters of public record, orders, items appearing in the record of the
case, and exhibits attached to the complaint” without converting the motion to
dismiss into a motion for summary judgment).

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The Complaint
According to the Complaint, on January 30, 1989, the plaintiffs became
owners in fee simple of real property located at 645 Kehrs Mill Road, Ballwin,
Missouri 63011. On August 21, 2006, plaintiff Lori Willis executed an Adjustable
Rate Note in favor of Accredited Home Lenders, Inc. and both plaintiffs, Andre
and Lori Willis, executed a Deed of Trust in favor of Accredited. The Complaint
also alleges that plaintiffs were never in default to Accredited, and that, “on
information and belief” Accredited is the legal holder of the Note and Deed of
Trust. The Complaint further claims that US Bank was not involved in the
financing transaction that lead to the plaintiffs’ purchase of the property, US Bank
was not the legal holder of any Note or Deed of Trust executed by plaintiffs, no
valid and legally enforceable document exists that transfers or assigns the
plaintiffs’ Note or Deed of Trust to US Bank, and US Bank had no standing to
foreclose on plaintiffs’ property.
Note, Deed of Trust, and Assignment1
US Bank has presented evidence that the Adjustable Rate Note in favor of
Accredited Home Lenders, Inc. shows that plaintiff Lori Willis borrowed and
agreed to repay $243,000. The Note is endorsed in blank. It states that Ms. Willis

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The Note and Deed are referenced in the Complaint. The Deed is also a matter of public
record. And the Assignment is necessarily embraced by the Complaint’s reference to the Deed
itself and is also a matter of public record.
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“understand[s] that Lender may transfer the Note” and that “[t]he Note or a partial
interest in the Note (together with the Security Interest) can be sold one or more
times without prior notice to the Borrower.” The Note also expressly waives any
right of presentment that might otherwise have been granted by Missouri statute.
Further, the Deed of Trust that both plaintiffs signed in favor of Accredited was
recorded in the Office of the Recorder of Deeds of St. Louis County. The Deed
also states that “[t]he Note or a partial interest in the Note (together with the
Security Interest) can be sold one or more times without prior notice to the
Borrower” and that “any Borrower who co-signs his Security Instrument but does
not execute the note . . . is co-signing the Security Instrument only to mortgage,
grant and convey the co-signer’s interest in the property under the terms of the
Security Instrument.”
On October 27, 2011, the Deed was assigned to US Bank. On December
19, 2011, the assignment was recorded in the Office of the Recorder of Deeds of
St. Louis County. US Bank, by and through it agents, informed the plaintiffs that
US Bank would not pursue foreclosure if the plaintiffs complied with requests for
documents and other information, that it was US Bank’s practice to work with
borrowers who wished to explore work out options, and that the plaintiffs were
being considered for a loan modification. Later, US Bank commenced foreclosure
proceedings. This lawsuit followed.
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Discussion
The initial count of the four count Complaint seeks a declaratory judgment
of superior title. Under Missouri law, any person claiming title, estate, or interest
in real property “may institute an action against any person or persons having or
claiming to have any title, estate or interest in such property. . ..” Mo. Rev. Stat. §
527.150(1). To state a cause of action to quiet title, a plaintiff must allege: (1)
ownership in the described real estate; (2) that the defendant claims some title,
estate or interest to or in said premises; and (3) said claim is adverse and
prejudicial to plaintiff. Howard v. Radmanesh, 586 S.W.2d 67, 67 (Mo. Ct. App.
1979) (citing Randall v. St. Albans Farms, Inc., 345 S.W.2d 220, 221 (Mo. 1961)).
Although the plaintiffs allege that US Bank was not the legal holder of the Note
and Deed of Trust and that those were not legally transferred or assigned to US
Bank, those legal conclusions are refuted by the evidence referenced in the
Complaint and existing in the public record. US Bank has presented evidence that
it is the legal holder of the Note and Deed of Trust, and the plaintiffs have failed to
supply any meaningful response to that evidence. The plaintiffs have failed to
state a plausible claim of superior title to the property in question, and so Count I
of the Complaint must be dismissed.

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Count II of the Complaint alleges a violation of the Missouri Merchandising
Practices Act, Mo. Rev. Stat. § 407.010 et seq. Under Missouri Revised Statute §
407.020.1:
The act, use or employment by any person of any deception, fraud,
false pretense, false promise, misrepresentation, unfair practice or the
concealment, suppression, or omission of any material fact in
connection with the sale or advertisement of any merchandise in trade
or commerce . . . in or from the state of Missouri, is declared to be an
unlawful practice.
Recently, the Missouri Court of Appeals for the Eastern District stated, “[w]e are
not persuaded that actions occurring after the initial sales transaction, which do
not relate to any claims or representations made before or at the time of the initial
sales transaction, and which are taken by a person who is not a party to the initial
sales transaction, are made ‘in connection with’ the sale or advertisement of
merchandise as required by the MPA.” State of Missouri ex rel. Koster v. Prof’l
Debt Mgmt., LLC, 351 S.W.3d 668, 674 (Mo. Ct. App. 2011). In that case, the
plaintiff sued defendant debt collector for allegedly deceptive and unfair practices.
The court applied the statutory requirement “that an unfair trade practice must be
made in connection with the sale or advertisement of merchandise to violate the
MPA” in reaching its decision that a relationship must exist between the alleged
unfair practice or deception and the initial sale or advertisement of merchandise.
Id. at 675. Thus, the court declined to extend the reach of the MMPA to debt
collection by a third party. Id.
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Here, it is unclear whether the plaintiffs are attempting to allege a violation
of the MPA with the initial purchase of their property or with the alleged
advertisement of the loan modification, but either claim would fail. The
Complaint does not allege any deception, fraud, false pretense, false promise,
misrepresentation, or unfair practice, nor does it allege the concealment,
suppression, or omission of any material fact in connection with the initial
purchase of their property. As such, no MPA claim was properly alleged for that
sales transaction. Further, the plaintiffs never secured a loan modification, and so
there was no sales transaction at all associated with the loan modification. In fact,
the Complaint specifically notes that US Bank was not a party to the initial
purchase and supplied no money for the initial purchase. Because the alleged
advertisement of the loan modification was some twenty year after the plaintiffs
purchased the property, has nothing to do with the purchase, and US Bank was not
involved in the purchase, it cannot aid the plaintiffs in stating a claim under the
MPA.
Count III of the Complaint alleges fraudulent misrepresentation. “Under
Rule 9(b), a plaintiff must plead ‘such matters as the time, place and contents of
false representations, as well as the identity of the person making the
misrepresentation and what was obtained or given up thereby.’” BJC Health Sys.
v. Columbia Cas. Co., 478 F.3d 908, 917 (8th Cir. 2007) (quoting Abels v.
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Farmers Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001)). Under Missouri
law, a plaintiff must specifically plead a representation; that is false; that is
material; the speaker’s knowledge of its falsity or ignorance of its truth; the
speaker’s intent it be acted on; the hearer’s ignorance of the falsity of the
representation; the hearer’s reliance; the hearer’s right to rely on it; and injury.
State ex rel. PaineWebber, Inc. v. Voorhees, 891 S.W.2d 126, 128 (Mo. banc
1995) (citing Heberer v. Shell Oil Co., 744 S.W.2d 441, 443 (Mo. banc 1988)).
The plaintiff’s entire fraudulent misrepresentation claim hinges on the
Complaint’s allegation that US Bank and its agents falsely represented to the
plaintiffs that it was and is the holder of the Note and Deed. Nothing in the
Complaint states the basis for the plaintiff’s belief that US Bank’s representations
were false. Additionally, the documents encompassed in the Complaint and public
records associated with this case prove the alleged false misrepresentations are, in
fact, true. The plaintiffs, instead of responding to the documentary evidence or
rebutting US Bank’s assertions that it is the holder in any substantive way, point
me to the legal conclusions and the formulaic recitation of the elements of a cause
of action contained in the Complaint. The plaintiffs have failed to state a claim for
fraudulent misrepresentation.
The final count of the Complaint seeks injunctive relief, specifically, an
order restraining, enjoining, and prohibiting US Bank from removing plaintiffs
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from the property by legal or illegal means. For the same reasons the plaintiff’s
request for declaratory judgment must be denied, this claim, likewise, fails. Count
IV must also be dismissed.
Accordingly,
IT IS HEREBY ORDERED that defendant’s motion to dismiss [#7] is
granted, and this case is dismissed in its entirety.

CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 25th day of July, 2012.

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