Bryan v. Bank of America, N.A. et al

Filing 34

MEMORANDUM AND ORDER... IT IS HEREBY ORDERED that Defendant Bank of America, N.A., as Successor by Merger to BAC Home Loans Servicing, L.P.'s Motion to Dismiss Plaintiffs First Amended Complaint for Failure to State a Claim (ECF No. 25 ) is G RANTED as to the tort damages claim for wrongful disclosure in Count I and DENIED as to the equitable claim for wrongful disclosure in Count I. IT IS FURTHER ORDERED that Defendant's Motion to Dismiss Count II, construed as a Motion for More D efinite Statement, is GRANTED. IT IS FURTHER ORDERED that Plaintiff shall have twenty (20) days from the date of this Memorandum and Order to amend his First Amended Complaint in accordance with the foregoing. IT IS FURTHER ORDERED that Defendant&# 039;s Motion to Dismiss Plaintiffs Petition for Failure to State a Claim (ECF No. 8 ) is DENIED as MOOT. IT IS FINALLY ORDERED that Plaintiffs Motion for Leave of court to Request Order Referring Case to Alternate Dispute Resolution (ECF No. 32 ) is DENIED. The parties are free to suggest an early mediation date in their Joint Scheduling Plan when the Court sets a Rule 16 conference. Signed by District Judge Ronnie L. White on 1/18/2018. (NEP)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
ROY SCOTT BRYAN,
Plaintiff,
v.
BANK OF AMERICA, N.A., AS
SUCCESSOR BY MERGER TO
BAC HOME LOANS SERVICING, L.P.,
Defendant.

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No. 4:17CV1616 RLW

MEMORANDUM AND ORDER
This matter is before the Court on Defendant Bank of America, N.A., as Successor by
Merger to BAC Home Loans Servicing, L.P.' s Motion to Dismiss Plaintiff's First Amended
Complaint for Failure to State a Claim (ECF No. 25). The motion is fully briefed and ready for
disposition.
I. Background
Plaintiff Roy Scott Bryan originally filed this action in state court on March 7, 2017,
alleging wrongful foreclosure; violation of the Missouri Merchandising Practices Act
("MMPA"), Mo. Rev. Stat.§ 407.101; a claim for quiet title; and slander of title. The Petition
named Bank of America, N.A., as Successor by Merger to BAC Home Loans Servicing, L.P.
("BANA''), Jay Scott Hoskins, and Kimberly Ann Hoskins (collectively "Hoskins") as
Defendants. After Plaintiff dismissed the Hoskins, BANA removed the Petition to federal court
based on diversity jurisdiction on June 2, 2017. (ECF No. 1) On July 14, 2017, Plaintiff Bryan
filed a First Amended Complaint in Wrongful Foreclosure, alleging that Defendant BANA
foreclosed on his property at 628 Yeddo A venue, St. Louis, Missouri 63119 ("Property") even

though Plaintiff was not in default. (First Am. Compl. ["FAC"]

if 3, ECF No. 21) Plaintiff

alleges that on July 1, 2011, he entered into a HAMP modification, commonly referred to as a
"Making Home Affordable Program Request for Modification and Affidavit" and tendered a
payment of $3,471.00. (Id. at if 5) According to Plaintiff, he submitted multiple HAMP
applications but Defendant refused to accept any subsequent payments. (Id.) Plaintiff contends
that BANA assured him that the ownership status of his home was not in jeopardy while his
HAMP application was being evaluated. (Id. at if 7) However, on March 12, 2012, Plaintiffs
home at 628 Yeddo Avenue was foreclosed. (Id. at if 8) Plaintiff claims that the foreclosure of
the Property was wrongful because BANA was precluded from foreclosing on the property while
the HAMP application was being evaluated; BANA was to provide a permanent loan
modification because Plaintiff completed the Trial Period Plan and made payments; foreclosure
was not an event that could terminate the HAMP application evaluation and instead could only
take place after the application was denied; and Plaintiff was not in default because he tendered
mortgage payments. (Id. at if 12) Plaintiff further claims that no recorded power of attorney
exists such that the foreclosure was wrongful. (Id. at iii! 13-19) Plaintiff alleges that he has been
damaged in loss of equity, loss of his home music studio, loss oftitle, credit damage,
embarrassment, trauma, and attorney's fees. (Id. at if 21) He seeks a court order declaring the
foreclosure sale to be void and awarding damages. Plaintiff also asserts a claim for violation of
the Missouri Merchandising Practices Act ("MMP A") based on his purchase of an initial
extension of credit and bundle of related services under the Note and Deed of Trust and the
alleged wrongful foreclosure on the Property. (Id. at iii! 22-26)
On August 7, 2017, Defendant BANA filed a Motion to Dismiss Plaintiffs First
Amended Complaint for Failure to State a Claim. Defendant asserts that Plaintiff is unable to

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plead and prove that he was not in default at the time of the foreclosure. 1 Further, Defendant
contends that the HAMP modification negotiations cannot form the basis of Plaintiffs MMP A
claim because they were not in connection with the sale of any merchandise in trade or
commerce. In addition, Defendant asserts that Plaintiff is unable to show an ascertainable loss
that is the result of an alleged MMP A violation.
II. Legal Standard
Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed if it fails
to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 570 (2007) (abrogating the "no set of facts" standard set forth in
Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). While the Court cautioned that the holding does

not require a heightened fact pleading of specifics, "a plaintiffs obligation to provide the
'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do." Id. at 555. In other words,
"[f]actual allegations must be enough to raise a right to relief above the speculative level .... "
Id. This standard simply calls for enough facts to raise a reasonable expectation that discovery

will reveal evidence of the claim. Id. at 556.
Courts must liberally construe the complaint in the light most favorable to the plaintiff
and accept the factual allegations as true. See Id. at 555; see also Schaaf v. Residential Funding

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Defendant BANA has attached the Deed of Trust and the foreclosure documents as exhibits to
the motion to dismiss. Courts "may consider materials that necessarily are embraced by the
pleadings or that are part of the public record and do not contradict the complaint." Mickelson v.
Cty. of Ramsey, 823 F.3d 918, 923 (8th Cir. 2016) (citation omitted). "For example, courts may
consider 'matters of public record, orders, items appearing in the record of the case, and exhibits
attached to the complaint.'" Greenman v. Jessen, 787 F.3d 882, 887 (8th Cir. 2015) (quoting
Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir.1999) (internal quotation
omitted)). As Plaintiffs Complaint references these documents, the Court finds they are
necessarily embraced by the pleadings such that the Court may consider such materials.
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Corp., 517 F.3d 544, 549 (8th Cir. 2008) (stating that in a motion to dismiss, courts accept as

true all factual allegations in the complaint); Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th
Cir. 2008) (explaining that courts should liberally construe the complaint in the light most
favorable to the plaintiff). Further a court should not dismiss the complaint simply because the
court is doubtful that the plaintiff will be able to prove all of the necessary factual allegations.
Twombly, 550 U.S. at 556. However, "[w]here the allegations show on the face of the complaint

there is some insuperable bar to relief, dismissal under Rule l 2(b )( 6) is appropriate." Benton v.
Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir. 2008) (citation omitted).

III. Discussion
Defendant BANA argues that Plaintiffs First Amended Complaint should be dismissed
because the Complaint fails to state a claim for wrongful foreclosure either in equity or to
recover tort damages. In addition, BANA contends that Plaintiff has failed to state a claim under
the MMP A such that dismissal is warranted.
A. Tort Action for Wrongful Foreclosure
First, BANA asserts that Plaintiff Bryan is unable to show that he is entitled to tort
damages for wrongful foreclosure because he has failed to plead and prove that he was not in
default at the time the foreclosure proceeding began. "The term 'wrongful foreclosure' has been
used both in relation to suits in equity as a ground to set aside a sale and suits at law as a ground
to recover tort damages." Dobson v. Mortg. Elec. Registration Sys., Inc./GMAC Mortg. Corp.,
259 S.W.3d 19, 22 (Mo. Ct. App. 2008). Under Missouri law, "what constitutes a 'wrongful
foreclosure' sufficient to set aside a sale and what constitutes a 'wrongful foreclosure' sufficient
to recover damages in tort are not the same." Id. "A wrongful foreclosure action seeking
damages requires plaintiff to prove that he was not in default and, thus, there was no right to

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foreclose on the property." Lackey v. Wells Fargo Bank, NA., 747 F.3d 1033, 1037(8th Cir.
2014) (citing Fields v. Millsap & Singer, P.C., 295 S.W.3d 567, 572 (Mo. Ct. App. 2009)). "A
plaintiff must 'plead and prove such compliance with the terms of the deed of trust as would
avoid lawful foreclosure."' Dobson, 259 S.W.3d at 22 (quoting Spires v. Lawless, 439 S.W.2d
65, 71 (Mo. Ct. App. 1973)).
Here, while Plaintiff baldly claims that he was not in default by virtue of the HAMP
modification application, he fails to allege that he was not in default under the terms of the Note
and Deed of Trust or that he was current on his mortgage payments at the time of the foreclosure
sale. See Simms v. Nationstar Mortg., LLC, 44 F. Supp. 3d 927, 932 (E.D. Mo. 2014) ("Here,
plaintiffs Petition does not state a claim for the tort of wrongful foreclosure, because he does not
allege that the mortgage was not in default or that his compliance with the terms of the deed of
trust was sufficient to avoid a lawful foreclosure when the foreclosure proceedings began.");

White v. BAC Home Loans Servicing, L.P., No. 4:10-CV-2094 CAS, 2011WL1483901, at *9
(E.D. Mo. Apr. 19, 2011) ("[P]laintiffs do not allege in their petition that their mortgage was not
in default when the foreclosure proceeding began. Accordingly, plaintiffs fail to state a claim for
a tort action for damages for wrongful [foreclosure]."). Thus, the Court finds that to the extent
Count I of the First Amended Complaint alleges a claim to recover tort damages for wrongful
foreclosure, Plaintiff fails to state a claim, and the claim will be dismissed.
B. Equitable Action for Wrongful Foreclosure
With respect to wrongful foreclosure in equity, '"[i]f the mortgagee did have the right to
foreclose, but the sale was otherwise void or voidable, then the remedy is a suit in equity to set
the sale aside."' Berrigner v. JPMorgan Chase Bank, NA., 16 F. Supp. 3d 1044, 1049 (E.D.
Mo. 2014) (quoting Dobson, 259 S.W.3d at 22). '"A mortgagor []can invoke the aid of equity

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to set aside a foreclosure sale only if fraud, unfair dealing or mistake was involved in the
trustee's sale."' Ice v. IB Prop. Holdings, LLC, No. 09-3232-CV-S GAF, 2010 WL 1936175, at
*3 (W.D. Mo. May 13, 2010) (quoting Am. First Fed., Inc. v. Battlefield Ctr., L.P., 282 S.W.3d
1, 8-9 (Mo. Ct. App. 2009)).
In this case, Defendant BANA contends that Plaintiff has failed to allege that he will pay
on the loan, thus the foreclosure was not wrongful. Review of case law from this district,
however, requires only that a plaintiff sufficiently allege the foreclosure sales were void or
voidable. See Berringer, 16 F. Supp. 3d at 1050. Here, Plaintiff claims that the foreclosure of
the Property was void because BANA was precluded from foreclosing while the HAMP
application was being evaluated.2 Further, Plaintiff has attached to his First Amended Complaint
an Affidavit from Christopher Dickey, a loan administrative manager who assisted Plaintiff with
his HAMP modification. (Dickey Aff., ECF No. 21-1) Mr. Dickey contends that no more than
10 days prior to the foreclosure, Defendant assured Plaintiff that his house was not in
foreclosure. (Id. at if 18) In addition, Plaintiff avers that his request for a HAMP loan
modification was ultimately denied on the basis that the property had been sold through a
foreclosure sale. (Pl.'s Ex. 5, ECF No. 21-2 p. 7) At this stage of the litigation, the Court finds
that Plaintiffs allegation that the foreclosure sale was void because Plaintiff was led to believe
that his home would not be foreclosed during the HAMP evaluation process are sufficient to

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Attached to Plaintiffs First Amended Complaint is a copy of Frequently Asked Questions
pertaining to the HAMP program. The form states, "[i]f your loan has been previously referred
to foreclosure, we will continue the foreclosure process while we evaluate your loan for the
Home Affordable Modification Program. However, no foreclosure sale will be conducted and
you will not lose your home during the Home Affordable Modification Program evaluation."
(Pl.'s Ex. 3, ECF No. 21-2 p. 5)
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allege an equitable claim for wrongful disclosure. 3 See Luckett v. Wells Fargo Bank, NA., No.
4:14-CV-93 RLW, 2014 WL 5489300, at *5 (E.D. Mo. Oct. 30, 2014) (finding plaintiffs
sufficiently alleged a claim for wrongful disclosure where, based on a letter from the bank,
average consumers could have believed that they did not need to make loan payments while
repairing their home).
C. Claim under the Missouri Merchandising Practices Act

In Count II, Plaintiff Bryan alleges that Defendant violated the Missouri Merchandising
Practices Act ("MMPA"). Specifically, Plaintiff maintains that he purchased merchandise,
namely an extension of credit and the continuing bundle of services under the Note and Deed of
Trust. (FAC

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23(a)) Plaintiff maintains that the Note and Deed of Trust were for personal and

family use, and BANA's conduct was "wrongful, unfair, and deceptive, and in violation of the
duties ... which arose out of the original loan and Deed of Trust for 628 Yeddo Avenue." (Id. at
~~

23(b), 24) Defendant argues that Plaintiffs MMPA claim should be dismissed for failure to

state a claim because he has failed to plead sufficient facts to recover under the MMP A.
The MMPA prohibits "[t]he 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 .... " Mo. Rev. Stat.§ 407.020.1. "To state a claim under
the MMP A, Plaintiff must show that (1) [he] purchased the merchandise in question; (2) [he]

Plaintiff also alleges that the foreclosure was void because Millsap & Singer, PC had no right to
act as successor Trustee. (FAC ~~ 19, 20) Defendant maintains that the foreclosure documents
refute Plaintiffs allegations. Because the Court finds that Plaintiff may proceed on his equitable
claim for wrongful disclosure, the Court declines to address the additional arguments made by
Defendant in support of its motion to dismiss. M & K Rest. LLC v. Farmers Ins. Co., Inc., 29 F.
Supp. 3d 1204, 1230 (E.D. Ark. 2014).

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purchased the merchandise for personal, family, or household use; (3) [he] suffered an
ascertainable loss; and (4) the ascertainable loss was the result of an unfair practice."

Thompson v. Allergan USA, Inc., 993 F. Supp. 2d 1007, 1011-12 (E.D. Mo. 2014) (citations
omitted). "To satisfy the fourth element, the plaintiff is required 'to allege facts establishing that
defendants used or employed a deception, fraud, false pretense, false promise, misrepresentation,
unfair practice, concealment, suppression, or omission in connection with the lease' or purchase
of the product." Snelling v. HSBC Card Servs., Inc., No. 4:14CV431CDP,2015 WL 457949, at
*9 (E.D. Mo. Feb. 3, 2015) (quoting Chochorowski v. Home Depot US.A., Inc., 295 S.W.3d
1194, 197-98 (Mo. Ct. App. 2009)).
Defendant argues that because the MMP A sounds in fraud, it triggers the heightened
pleading requirements of Rule 9(b). Defendant BANA asserts that Plaintiffs vague and
conclusory allegations are insufficient to establish that BANA used, inter alia, deception, fraud,
or misrepresentation in connection with the HAMP modification application or the Deed of
Trust. Defendant further argues that Plaintiff is unable to plead facts showing a causal
connection between an ascertainable loss and a specific MMP A violation. In his response,
Plaintiff does not address the heightened pleading standard for fraud under Rule 9(b) but insists
that he has stated a claim under the MMP A because the foreclosure was in connection with the
sale of the loan, which resulted from Defendant BANA's fraudulent acts.
The Supreme Court of Missouri has construed the term "'in connection'" under the
MMPA to broadly mean "'to have a relationship."' Snelling, 2015 WL 457949, at *10 (quoting

Conway, 438 S.W.3d at 414). The MMPA "prohibits the use of the enumerated deceptive
practices if there is a relationship between the sale of the merchandise and the alleged unlawful
action. According to the statute, the unlawful action may occur at any time before, during or

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after the sale and by any person." Conway, 438 S.W.3d at 414. The Court finds that, at this
stage of the litigation, Plaintiff may be able to maintain an action against Defendant under the
MMPA based upon the original loan and the foreclosure. See Conway v. CitiMortgage, Inc., 438
S.W.3d 410, 415 (Mo. 2014) ("A loan is composed of both the initial extension of credit and the
bundle ofrelated services .... A party's right to collect a loan is part of that sale and is,
therefore, 'in connection with' the loan."); Williams v. HSBC Bank USA, NA., 467 S.W.3d 836,
843 (Mo. Ct. App. 2015) (stating that losing a home to foreclosure may be an ascertainable loss
that is the basis for an MMP A claim but finding at the summary judgment stage the undisputed
material facts showed that defendant's alleged MMP A violations did not cause the loss).
However, the Court also finds that Plaintiff has failed to state his MMPA claim consistent
with the heightened pleading standard required by Rule 9(b ). "Allegations of fraud or mistake
under the MMPA must meet the heightened pleading requirements of Rule 9(b), Fed.R.Civ.P."

Myers v. Sander, No. 4:13CV2192 CDP, 2014 WL 409081, at *6 (E.D. Mo. Feb. 3, 2014)
(citation omitted). Under this heightened pleading requirement, "the complaint must plead such
facts as the time, place, and content of the defendant's false representations, as well as the details
of the defendant's fraudulent acts, including when the acts occurred, who engaged in them, and
what was obtained as a result." Mattingly v. Medtronic, Inc. 466 F. Supp. 2d 1170, 1174 (E.D.
Mo. 2006) (citations omitted). "Simply put, the complaint must plead the who, what, where,
when, and how of the fraud." Myers, 2014 WL 409081, at *7 (citation omitted).
Plaintiffs First Amended Complaint does not provide the requisite detailed information
regarding Defendant's allegedly fraudulent acts but instead refers to BANA "declaring Plaintiff
in default," "publishing that Plaintiff was in default," and "wrongfully foreclosing on Plaintiffs
properties." (F AC

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24) However, instead of dismissing the claim, the Court will construe

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Defendant's motion to dismiss the MMPA count as one for a motion for more definite statement
and allow Plaintiff time to amend Count II of the First Amended Complaint. See Pfitzer v. Smith
& Wesson Corp., No. 4:13-CV-676-JAR, 2014 WL 636381, at *3-*4 (E.D. Mo. Feb. 18, 2014)

(construing the motions to dismiss claims under the MMP A as motions for more definite
statement and granting plaintiff time to file an amended complaint to bring MMP A claims into
conformity with Rule 9(b) heightened pleading requirements); see also Snelling, 2015 WL
457949, at *11 (granting plaintiff leave to amend the complaint for the limited purpose of
bringing his MMP A claim into conformity with the heightened pleading requirements of rule
9(b)). As such, the Court will construe Defendant's motion to dismiss as a motion for more
definite statement with respect to Count II and will allow Plaintiff twenty (20) days to file an
amended complaint with an MMP A claim that conforms to Rule 9(b ).
Accordingly,

IT IS HEREBY ORDERED that Defendant Bank of America, N.A., as Successor by
Merger to BAC Home Loans Servicing, L.P.' s Motion to Dismiss Plaintiffs First Amended
Complaint for Failure to State a Claim (ECF No. 25) is GRANTED as to the tort damages claim
for wrongful disclosure in Count I and DENIED as to the equitable claim for wrongful
disclosure in Count I.

IT IS FURTHER ORDERED that Defendant's Motion to Dismiss Count II, construed
as a Motion for More Definite Statement, is GRANTED.

IT IS FURTHER ORDERED that Plaintiff shall have twenty (20) days from the date of
this Memorandum and Order to amend his First Amended Complaint in accordance with the
foregoing.

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IT IS FURTHER ORDERED that Defendant's Motion to Dismiss Plaintiffs Petition

for Failure to State a Claim (ECF No. 8) is DENIED as MOOT.
IT IS FINALLY ORDERED that Plaintiffs Motion for Leave of court to Request

Order Referring Case to Alternate Dispute Resolution (ECF No. 32) is DENIED. The parties
are free to suggest an early mediation date in their Joint Scheduling Plan when the Court sets a
Rule 16 conference.
Dated this 18th day of January, 2018.

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RONNIE L. WHITE
UNITED STATES DISTRICT JUDGE

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