Calon v. Bank of America Corporation et al
Filing
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ORDER granting in part and denying in part 16 defendant's Motion to Dismiss. Plaintiff shall file his First Amended Complaint on or before 7/15/15. In his First Amended Complaint, plaintiff shall list in separate counts the claims which he i s asserting. Plaintiff shall also indicate specifically which claims he is asserting against which defendants. Signed on 6/29/15 by District Judge Fernando J. Gaitan, Jr. (Enss, Rhonda). Modified on 6/29/2015 to note copy of NEF and order sent to plaintiff by regular mail to address indicated on Docket Report (Enss, Rhonda).
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
WESTERN DIVISION
JOHN CALON,
Plaintiff,
vs.
BANK OF AMERICA CORPORATION,
ET AL.,
Defendants.
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No. 14-00913-CV-W-FJG
ORDER
Currently pending before the Court is defendant=s Motion to Dismiss (Doc. # 16).
I. BACKGROUND
On December 9, 2014, plaintiff filed his Complaint asserting five causes of action
against defendants Bank of America Corporation (“BAC”), Bank of America Corporation,
N.A. (“BANA”) and Brian Moynihan (Bank of America’s CEO)1. The claims asserted
against the defendants include: Theft, Fraud, Extortion, Discrimination and Breach of
Contract.
Plaintiff states in his Complaint that in October 2001, he obtained a loan through
Countrywide Home Loans. As part of the loan package, plaintiff states he purchased a
product called the “Easy Rate Interest Rate Reduction Plan.” Plaintiff alleges that in
mid-December 2007, he notified Countrywide that he was going to exercise his rights
under the program. Plaintiff states that Countrywide started the process to lower the
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Plaintiff also initially named “Mr. BAC” as a defendant. However, in the Order granting plaintiff’s motion
for leave to proceed in forma pauperis, the Court dismissed this defendant, as plaintiff had failed to
specify whether Mr. BAC was a corporation or an actual person and because plaintiff had failed to specify
whether he was asserting claims against or on behalf of Mr. BAC.
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interest rate, when in January 2008, Bank of America took over Countrywide. In August
2008, Bank of America notified plaintiff that they did not have to honor this program and
have since that time continued to refuse to honor the program.
Plaintiff also alleges that he set up an escrow account to pay the taxes and
insurance for his mortgage. In October 2008, plaintiff alleges that BAC began
automatically making payouts from the escrow account without plaintiff’s authorization.
Plaintiff alleges that “in repeated communications with defendants, when Plaintiff spoke
of legal action over BAC’s unauthorized withdrawals, Plaintiff was threatened/extorted
by defendants . . .that the loan would be accelerated and put into foreclosure, and
would ruin plaintiff’s credit, should Plaintiff quit making payments to escrow account or
take the issue to court, to extort Plaintiff’s silence in the matter.” (Plaintiff’s Complaint, ¶
12).
Plaintiff also alleges that BAC repeatedly failed to pay the insurance on time. In
2012, plaintiff’s insurance company canceled his policy and BAC withheld this
information from plaintiff until March 2013. Plaintiff alleges that defendants then
replaced his insurance with a lender provided insurance. Plaintiff alleges that
defendants over insured the house and as a result have stolen/extorted or otherwise
fraudulently acquired thousands of dollars from plaintiff’s escrow account. (Plaintiff’s
Complaint, ¶ 13). Also with regard to insurance, plaintiff states that he discovered in
June 2014, that BAC had purchased no insurance for his home and it had been
uninsured for the past two years. Plaintiff alleges that BAC through deception has
stolen thousands of dollars from plaintiff’s escrow account for phony insurance policies
which do not exist. Plaintiff alleges that BAC has failed to provide an accounting for
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plaintiff’s missing escrow money. (Plaintiff’s Complaint, ¶ 14).
Plaintiff also alleges that the defendants have discriminated against him because of
his racial, religious, origin, and disabled status. Plaintiff alleges that the defendants
have continually refused to provide plaintiff a copy of the alleged insurance policy or to
provide him with information about his loan. Plaintiff also claims that since September
2014, he has been trying to payoff his loan early, using the money left in the escrow
account. However, plaintiff asserts that the defendants have refused to release the
leftover escrow funds. Additionally he asserts that BAC now claims that he must pay an
“early payoff fee” of $5,000, even though his loan agreement with Countrywide
contained no such fee.
II. STANDARD
To survive a motion to dismiss under 12(b)(6), Aa complaint must contain
sufficient factual matter, accepted as true, to state a claim for relief that is plausible
on its face.@ Ashcroft v. Iqbal, 556 U.S. 662,129 S.Ct. 1937, 1949, 173 L.Ed.2d 868
(2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955,
167 L.Ed.2d 929 (2007)). A pleading that merely pleads Alabels and conclusions@ or
a Aformulaic recitation@ of the elements of a cause of action, or Anaked assertions@
devoid of Afurther factual enhancement@ will not suffice. Id. (quoting Twombly).
ADetermining whether a complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw on its judicial
experience and common sense.@ Id. at 1950. Under Fed. R. Civ. P. 12(b)(6) we must
accept the plaintiff=s factual allegations as true and grant all reasonable inferences in
the plaintiff=s favor. Phipps v. FDIC, 417 F.3d 1006, 1010 (8th Cir. 2005).
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In Allen v. Bank of America Corp., No. 10-4205 (MJD/JSM), 2011 WL
3837150, (D.Minn. July 22, 2011), the Court stated:
The Court will liberally construe the pleadings of an unrepresented
party. . . . Pro se complaints, however inartfully pleaded are held to less
stringent standards than formal pleadings drafted by lawyers. . . . [I]f the
court can reasonably read the pleadings to state a valid claim on which
the [plaintiff] could prevail, it should do so despite the [plaintiff’s] failure to
cite proper legal authority, his confusion of various legal theories, his poor
syntax and sentence construction, or his unfamiliarity with pleading
requirements. . . .The court’s liberal construction does not extend to
allowing defective and insufficiently pled claims to proceed. . . .Neither
may the courts, in granting the deference owed to pro se parties, assume
the role of advocate for the pro se litigant.
Id. at *5 (internal citations and quotations omitted).
III. DISCUSSION
A. Defendants Moynihan
Defendants argue that it is improper under Missouri law to sue a corporate officer
or a director simply because of their position in an organization. Defendants argue that
while Brian Moynihan is listed as a defendant and grouped with the other defendants
throughout the Complaint, there are no allegations which are specific to Moynihan
himself. In response, plaintiff argues that Moynihan is “claiming, because he is some
kind of corporate ultra citizen, that he is responsible to no one but himself, and that
someone like the Plaintiff, a pauper, has no right, to dare attempt, to hold him
accountable for his actions. Defendant Moynihan as an employee and now CEO and
Chairman of the Board of Bank of America, has during his tenure, to varying degrees,
overseen, directed, collaborated and worked to cover up the greatest criminal financial
disaster in human history . . ..” (Suggestions in Opposition, p. 2). Plaintiff then goes into
great detail to list various cases that Countrywide and Bank of America have settled
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over the past six years. Plaintiff adds that “[a]s a result of Defendant Moynihan’s
leadership, oversight, direction and other criminal activities of the Bank of America
Corporation and its various subsidiaries, he is the person that is ultimately responsible
for the crimes committed against Plaintiff.” (Suggestions in Opposition, p. 7).
However, despite making broad sweeping generalizations about Moynihan,
plaintiff never alleges in his Complaint or in his suggestions in opposition that Moynihan
took any specific action against him or that he was personally involved in handling
plaintiff’s loan. As the Court stated in DeJana v. Marine Technology, Inc., No. 4:11-CV1690-JAR, 2013 WL 6768407 (E.D.Mo. Dec. 20, 2013),
[i]t is well established that a corporate officer or director does not incur
personal liability for the corporation’s torts merely by reason of his official
status. His liability, if any, stems from his own tortious conduct. “A
corporate officer is individually liable for the torts he [or she] personally
commits [on behalf of the corporation] and cannot shield himself [or
herself] behind a corporation when he [or she] is an actual participant in
the tort.”
Id. at *2 (quoting U.S. v. Northeastern Pharmaceutical & Chemical Co., Inc., 810 F.2d
726, 744-45 (8th Cir.1986)). In the instant case, because plaintiff has not alleged in
either his Complaint or in his response any specific allegations against defendant Brian
Moynihan, the Court hereby GRANTS the Motion to Dismiss the Complaint as to this
defendant.
B. Defendant BAC
With regard to defendant BAC, defendants argue that the parent corporation has
been improperly named as a defendant. Defendants argue that BAC as BANA’s parent
corporation has had no involvement with this matter and cannot be held liable for any
actions of BANA. In opposition, plaintiff states only that BAC is the successor in interest
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to Countrywide and has assumed liability for the conduct of its subsidiary, BANA.
Defendants are correct that “a parent corporation is normally not liable for the acts of its
subsidiary corporations . . .The mere existence of a parent-subsidiary relationship,
without more, does not subject a parent corporation to liability for acts of the subsidiary.”
Blanks v. Fluor Corp., 450 S.W.3d 308 (Mo.App.2014). However, in Blanks, the Court
noted two exceptions to the rule that parent corporations are not generally liable for the
acts of their subsidiaries: 1) piercing the corporate veil and 2) liability under an agency
theory. “Piercing the corporate veil is an equitable doctrine used by the courts to look
past the corporate form and impose liability upon owners of the corporation – be they
individuals or other corporations – when the owners create or use the corporate form to
accomplish a fraud, injustice, or some unlawful purpose.” Id. at 375. The Court in
Blanks also noted:
Missouri law is in accord with that of a number of other states that
recognize that a traditional principal-agent relationship may be created
between two corporations, whereby one corporation may be held liable for
the activities of another corporation, such as its subsidiary. Weitz Co. v.
MH Washington, 631 F.3d 510, 522 (8th Cir. 2011)(noting that Missouri law
recognizes piercing the corporate veil, referred to there as “alter-ego”
liability, and agency liability as separate, distinct causes of action).
Id. at 379. In Fournier v. Bank of America Corporation, No. 5:13-CV-00702, 2014 WL
421295 (N.D.N.Y. Feb. 4, 2014), the defendant moved to dismiss BAC arguing that the
plaintiff had not alleged any facts regarding a relationship between BAC and herself or
any other wrongdoing on BAC’s part. The Court agreed and dismissed plaintiff’s
claims, but because plaintiff was proceeding pro se, the Court granted her leave to
replead her claims. The court noted,
In an amended complaint, Plaintiff could plausibly allege facts supporting
a valid claim or claims against BAC. Consequently, the Court will permit
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Plaintiff leave to replead specific allegations against BAC as they relate to
the claims not dismissed with prejudice in this Decision and Order. To
bring a valid claim against BAC that will survive a motion to dismiss, the
Plaintiff must allege additional facts that implicate BAC directly. Thus, a
proper amended complaint that includes BAC as a Defendant must allege
facts identifying actions taken directly by BAC, if such facts exist, and not
merely actions taken by the Defendants collectively.
Id. at *3.
Similarly, in the instant case, the Court finds that plaintiff has failed to state a
claim against defendant BAC. However, because it is possible for a parent corporation
to be liable for the acts of its subsidiary under certain circumstances enumerated above,
the Court hereby GRANTS the motion to dismiss, but will give plaintiff an opportunity to
replead allegations against defendant BAC if he has allegations which relate to BAC
directly.
C. Fraud
Defendants state that plaintiff has failed to set forth the time, place and contents of
the specific representations allegedly made to him by the defendants. In Tension
Envelope Corp. v. JBM Envelope Co., No. 14-567-CV-W-FJG, 2015 WL 893242
(W.D.Mo. Mar. 3, 2015), the Court noted that: the elements of a fraudulent
misrepresentation claim under Missouri law are:
(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's
knowledge of its falsity or ignorance of its truth; (5) the speaker's intent
that it should be acted on by the person in the manner reasonably
contemplated; (6) the hearer's ignorance of the falsity of the
representation; (7) the hearer's reliance on the representation being
true; (8) the hearer's right to rely thereon; and (9) the hearer's
consequent and proximately caused injury.
Id. at *10 (quoting Freitas v. Wells Fargo Home Mortg., Inc., 703 F.3d 436, 438–39 (8th
Cir.2013).
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The Court also noted that in pleading a claim of fraudulent misrepresentation, the
complaint must meet the heightened pleading standards of F.R.Civ.P. 9(b) for claims
alleging fraud. “The 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.’” Id. at *10, (quoting Freitas, 703 F.3d at
439)).
Plaintiff in response states that “[d]efendants’ employees since 2008, repeatedly
and fraudulently claimed to Plaintiff that they did not have to honor the convertible
option because of some alleged secret government agreement among other excuses
and other phony statements made to Plaintiff, from January 2008 through the present
day, as part of a scheme to steal interest money from Plaintiff.” (Plaintiff’s Suggestions
in Opposition, p. 9). However, plaintiff provides no additional details such as who made
the statements, when these statements were made and what specifically was said.
Because the Court finds that plaintiff’s fraud claim lacks the requisite specificity required
under Fed.R.Civ.P. 9, the Court will GRANT the Motion to Dismiss, but will give plaintiff
an opportunity to amend his Complaint to replead his fraud allegations with the level of
specificity required under Fed.R.Civ.P. 9(b).
D. Theft
Defendants state that they are assuming that plaintiff is asserting a cause of
action for conversion. However, defendants argue that although plaintiff alleges that the
defendants were making unauthorized payouts from plaintiff’s escrow account, plaintiff
never identifies the account, and does he explain how the defendants allegedly took the
money from his account.
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“Under Missouri law, ‘conversion may be proved in one of three ways: (1) by
showing a tortious taking, (2) a use or appropriation by the defendant indicating a claim
or right in opposition to the owner, or (3) a refusal to give up possession on demand.’”
Boswell v. Panera Bread Co., No. 4:14-CV-1833-AGF, 2015 WL 631259, *3 (E.D.Mo.
Feb. 12, 2015), (quoting Envirotech, Inc. v. Thomas, 259 S.W.3d 577, 592
(Mo.App.2008)). The Court in Boswell stated that “[c]onversion is not the appropriate
action when the claim is solely for the recovery of money.” Id. However, the Court
noted that “[s]pecific checks, drafts or notes will support a cause of action for conversion
where they can be described or identified as a specific chattel.” Id. (quoting Dayton
Constr., Inc. v. Meinhardt, 882 S.W.2d 206, 208-09 (Mo.App.1994)). The Court also
noted that the Missouri Supreme Court identified an exception “in cases where a plaintiff
placed funds ‘in the custody of another for a specific purpose,’ and the defendant diverts
those funds ‘for other than such specified purpose[.]’” Id. (quoting Dillard v. Payne, 615
S.W.2d 53,55 (Mo. banc 1981)). In his sur-reply, plaintiff states that “[n]or is there a
clause in the ‘Note’ giving the Lender a right to access Plaintiff’s escrow account .. .
.Defendants since 2008 have repeatedly taken money out of Plaintiff’s escrow account
without his permission and refused to return it. When you take a person’s money, when
you have no right to, without their permission, to buy nonexistent insurance policies, that
the person was under no obligation to buy in the first place, its called theft.” (Plaintiff’s
Sur-Reply, p. 4). The Court finds that plaintiff has failed to state a cause of action for
theft and so therefore GRANTS the Motion to Dismiss as to this claim. However, the
Court finds that plaintiff may be able to state a claim for conversion of his escrow funds,
but finds that additional information is necessary. Accordingly, plaintiff is hereby
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directed to file an Amended Complaint which more clearly details the facts relating to
this claim.
E. Extortion
Defendants state that under Missouri law, extortion is a crime and not a civil
cause of action. Thus, defendants argue, plaintiff does not have standing to bring a
criminal charge of extortion. In his suggestions in opposition to the Motion to Dismiss,
plaintiff does not respond directly to the argument regarding whether he has standing to
bring a claim for extortion, but instead he describes how in September 2010, during a
phone call to defendants concerning the Easy Rate Reduction program and the closing
of his escrow account, plaintiff was threatened that his payments would disappear,
defendants would foreclose on his house and ruin his credit. Plaintiff alleges that his
mortgage payments were only restored when he agreed to drop the issue of the Easy
Rate Reduction.
The Missouri criminal code, Mo.Rev.Stat. § 570.010 defines “coercion” as: “a
threat, however communicated:
(e) [t]o harm the credit or business repute of any person; or
. ..
(g) [t]o inflict any other harm which would not benefit the actor.”
The editor’s notes to the statute state that the definition of “coercion” is new and
is “meant to codify and clarify related concepts used in defining blackmail-extortion type
offenses. The gravamen of the concept is a communicated threat of harm.” In Lafferty
v. Rhudy, 878 S.W.2d 833 (Mo.App.1994), the Court stated:
[c]riminal sanctions against doing or not doing some act do not
automatically include authority for civil actions . . .In fact, as the Missouri
Supreme Court stated in Christy v. Petrus, 365 Mo. 1187, 1192, 295
S.W.2d 122,126 (Mo. banc 1956):
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[A] statute which creates a criminal offense and provides a
penalty for its violation will not be construed as creating a
new civil cause of action independently of the common law,
unless such appears by express terms or by clear
implication to have been the legislative intent.
Id. at 835 (internal citations and quotations omitted).
In the instant case, the Court can find no authority either express or implied
which indicates that a private right of action is available for extortion. Accordingly, the
Court hereby GRANTS defendants’ Motion to Dismiss this claim.
F. Discrimination
With regard to his discrimination claims, plaintiff states that “[s]ince March 2013,
BAC, Mr. BAC and Moynihan did discriminate against Plaintiff because of his racial,
religious, origin and disabled status and refused service to Plaintiff, in his attempts to
get a copy of this alleged insurance policy.” (Complaint, ¶¶ 15, 21,22, 24). Plaintiff also
alleges that the defendants subjected him to racial epithets such as calling him “chief.”
(Complaint ¶ 25). Defendants argue that plaintiff has failed to specify the statutes which
he is alleging the defendants have violated, forcing them to guess as to which rights the
plaintiff believes they have violated.
In his sur-reply, plaintiff states that he did not get into the specifics in his
complaint regarding various racial indignities as he assumed these would be fleshed out
during discovery. With regard to his claims for religious and disability discrimination,
plaintiff states that because the defendants are refusing to allow him to pay off his loan
early, he is being forced to financially support defendants newly given political and
religious rights under two recent Supreme Court opinions. With regard to the disability
discrimination, plaintiff states that because the defendants knew he was disabled, they
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“pushed a policy that disabled people are stupid and poor (can’t hire lawyers) and
should be easy to take advantage of.” (Plaintiff Sur-Reply, p. 5).
As the Court has previously noted, these claims lack any specificity or detail
regarding exactly what actions plaintiff is complaining of. In Combs v. Cordish
Companies, Inc., No. 14-227-CV-W-ODS, 2015 WL 3716190, (W.D.Mo. June 15, 2015),
the Court stated:
Section 1981 declares that all persons in the United States “shall
have the same right. . . to make and enforce contracts . . . as is enjoyed
by white citizens.” 42 U.S.C.§1981(a). Congress defined the phrase
“make and enforce contracts” to “include[ ] the making, performance,
modification, and termination of contracts, and the enjoyment of all
benefits, privileges, terms, and conditions of the contractual relationship.”
Id. §1981(b). A claim under this statute has four elements: “(1)
membership in a protected class, (2) discriminatory intent on the part of
the defendant, (3) engagement in a protected activity, and (4) interference
with that activity by the defendant.” Gregory v. Dillards, Inc., 565 F.3d 464,
469 (8th Cir.)(en banc), cert. denied, 558 U.S. 1025 (2009).
Id. at *12. In the instant case, the Court does not find that plaintiff has sufficiently
alleged the elements of any type of racial, religious or disability discrimination claim.
Rather, plaintiff has offered only vague, conclusory statements regarding how he
believes he was discriminated against. The Court will GRANT the Motion to Dismiss
plaintiff’s discrimination claims, but will give plaintiff an opportunity to amend his
Complaint to replead these claims with a greater level of specificity as is required under
the Rules.
G. Breach of Contract Claim
With regard to plaintiff’s breach of contract claim, defendants state that plaintiff
appears to allege that BANA breached a contract with him by failing to honor an
agreement he had with his previous lender. Defendants argue that plaintiff has failed to
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allege that he had a contract with them. In opposition, plaintiff states that he has
properly plead the elements of a breach of contract claim, but he does not describe how
the conduct he complains of fits within that criteria. “In Missouri, to state a cause of
action for breach of contract, a plaintiff must plead: ‘(1) the existence and terms of a
contract; (2) that plaintiff performed or tendered performance pursuant to the contract;
(3) breach of the contract by the defendant; and (4) damages suffered by the plaintiff.”
Doug Volz v. Provider Plus, Inc., No. 4:15CV0256TCM, 2015 WL 3621113, *2 (E.D.Mo.
June 9, 2015)(quoting Rental Co., LLC v. Carter Group, Inc., 399 S.W.3d 63, 67
(Mo.App.2013)). Plaintiff argues in his sur-reply that:
[d]efendants have presented themselves to this court as ignorant of the
contract, they have the same “Note” as Plaintiff. Defendants claim they do
not know the Plaintiff’s escrow account number, yet they seemed to know
it, just fine, when they were stealing money out [of] it. Defendants claim
they do not know the dates when they stole money out [of] Plaintiff’s
escrow account, they have the same financial records as Plaintiff. . . .
Plaintiff has been, and continues to be held in financial servitude by
Defendants, for no other reason, than the continued mishandling of
plaintiff’s mortgage by Defendants, as a result of their ongoing criminal
and racist activities.
(Plaintiff’s Sur-Reply, p. 6). Rather than describing how he believes the defendants
have breached a contract, plaintiff in his response seems to simply reiterate his
previous claims against the defendants. Based on the allegations in his current
Complaint, the Court finds that plaintiff has failed to state a claim for breach of contract.
Therefore, the Court will GRANT the Motion to Dismiss plaintiff’s breach of contract
claim, but will give plaintiff an opportunity to amend his Complaint to replead these
claims with a greater level of specificity as required under the Rules.
IV. CONCLUSION
Accordingly, for the reasons stated herein, defendant=s Motion to Dismiss is
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hereby GRANTED IN PART and DENIED IN PART (Doc. # 16). Plaintiff shall file his
First Amended Complaint on or before July 15, 2015. In his First Amended Complaint,
plaintiff shall list in separate counts the claims which he is asserting. Plaintiff shall also
indicate specifically which claims he is asserting against which defendants.
Date: June 29, 2015
Kansas City, Missouri
S/ FERNANDO J. GAITAN, JR.
Fernando J. Gaitan, Jr.
United States District Judge
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