Baker et al v. Carolina First Bank n/k/a TD Bank, N.A. et al

Filing 73

ORDER - The court GRANTS in part and DENIES in part the following motions. Counsel should read order in its entirety for further instructions and deadlines. Denying 38 Motion to Dismiss; denying 40 Motion to Dismiss; denying 45 Motion to Dismiss and denying 58 Motion to Dismiss. Adopting in part Report and Recommendation re 67 Memorandum and Recommendation. Signed by Senior Judge Malcolm J. Howard on 9/6/2011. (Heath, D.)

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NORTH CAROLINA

SOUTHERN DIVISION

WILLIAM K. AND LORRAINE ANGEL,
et al.,

)

Plaintiffs,

)
)

v.

)

)

No. 7:10-CV-28-H(3)

)

BANK OF AMERICA, et al.,

)
)

Defendants.

)

-------------- )
)

JAMES BAKER, JR. and LESLIE BAKER, )

et al.,
)

)

Plaintiffs,

)

v.

)
)

)

CAROLINA FIRST BANK n/k/a TD
BANK, N.A., et al.,

No. 7:10-CV-227-H(3)

)

)
)

Defendants.

)

-------._--------

)

ORDER

Before the court are twenty-eight motions to dismiss filed by
various defendants in these companion cases, as well as motions for
judgment on the pleadings filed by two defendants and two motions to
amend plaintiffs'
CV-28-H. l

complaint in Angel v.

Bank of America,

No.

7:10­

These motions are the subject of two separate recommended

decisions issued by United States Magistrate JUdge William A. Webb.

lAngeI was originally styled 2433 South Blvd., LLC v. Bank of
America, No. 7:10-CV-28-H (E.D.N.C), and that caption has been used
by the parties and the court in a number of prior filings.

On

February

24,

Recommendation (M&R)
v.

Bank

of

America,

2011,

Judge

Webb

issued

a

Memorandum

in Angel and a third companion case,
No.

7:09-CV-89-H,

in

which

he

and

Thompson

recommended

dismissal of various claims on the ground that the plaintiffs had
"fail [ed]

to plead sufficient facts to state a claim for relief that

is plausible on its face."

(Feb.

further

of plaintiffs'

recommended denial

complaints,

as

well

as

the

24,

2011 M&R at 14.)

plaintiffs'

motions
motion

voluntary dismissal of a defendant in Thompson.
at 43-47.)

On March 30,

Thompson,2

adopting

in

2011,
part

to
to

Judge Webb
amend their
vacate

(Feb. 24,

their

2011 M&R

the undersigned entered an order in
Judge

Webb's

recommendation

and

dismissing the following claims:
1.
Plaintiffs' [Interstate Land Sales Act ("ILSA")]
claims against Branch Banking and Trust Company, Bank of
America, Carolina First Bank, RBC Bank (USA) and SunTrust
Bank;
2.
Plaintiffs' negligent misrepresentation claims
against Branch Banking and Trust Company, Bank of America,
Maryville Partners, Inc., R.A. North Development, Inc.,
R. A. North Development I, Inc., Randolph Allen, William
Allen, Southeastern Waterfront Marketing, Inc., Carolina
First Bank, RBC Bank (USA), Craven's Grant Homeowner's
Association, Inc., and SunTrust Bank;
3.
Plaintiffs' North Carolina Mortgage Lending Act
claims against Branch Banking and Trust Company, Bank of
2NO decision was reached in Angel at that time because the
court had granted the Angel plaintiffs' motion for an extension of
time to file objections to the M&R.

2

America, Maryville Partners, Inc., R.A. North Development,
Inc., R.A. North Development I, Inc., Randolph Allen,
William Allen, Southeastern Waterfront Marketing, Inc.,
Carolina First Bank, RBC Bank (USA),
Craven's Grant
Homeowner's Association, Inc., and SunTrust Bank;
4.
Plaintiffs' South Carolina Licensing of Mortgage
Brokers Act claim against defendant Maryville Partners,
Inc.; and
Plaintiffs'
negligence claim against Branch
Banking and Trust Company, Bank of America, Carolina First
Bank, RBC Bank (USA) and SunTrust Bank.
5.

The court declined to dismiss the remaining claims for failure to
state a plausible claim,

instead granting the Thompson plaintiffs

"one final opportunity to amend their complaint in order to restate
any

remaining

Thompson v.

claims

with

Bank of America,

sufficient
No.

particularity."

7:09-CV-89-H

(E.D.N.C.

Order,
Mar.

30,

2011) at 7.
On July 18, 2011, Judge Webb submitted a second M&R addressing
a number of motions seeking dismissal of claims in the Angel and
Baker

cases,'

JUdge

Webb

recommended

that

plaintiffs'

claims

against the moving defendants be dismissed with prejudice and that
the Angel plaintiffs be denied leave to amend their complaint on the

'The M&R also addressed a motion to dismiss filed in Thompson
by
Cannonsgate
at
Bogue
Sound Homeowners
Association,
Inc.
("Cannonsgate HOA").
That motion has since been dismissed as moot
following the plaintiffs' voluntary dismissal of Cannonsgate HOA and
is, therefore, not addressed here.
See Order, Thompson v. Bank of
America, No. 7:09-CV-89-H (E.D.N.C. Aug. 4, 2011) (dismissing as
moot motion to dismiss by Cannonsgate HOA).

3

(July 18,

ground that amendment would be futile.
20.)

In the second M&R, Judge Webb relied,

reasoning set forth in his February 24,
Angel.

Specifically,

2011 M&R at 19­

in large part, upon the

2011 M&R in Thompson and

Judge Webb determined

that

Plaintiffs'

"1)

allegations do not meet the Twombly/Iqbal standard [requiring that a
complaint

contain

sufficient

facts

to

state

a

claim

that

is

plausible on its face]; 2) Plaintiffs fail to state a RICO claim; 3)
Plaintiffs fail to state an ILSA claim; 4) Plaintiffs fail to state
a

[North

Carolina

Carolina
Unfair

Lending Act]

Unfair

Trade

claim; 5)

or

Deceptive

Practices

Act

Acts

or

or

North

Practices,
Carolina

South

Mortgage

Plaintiffs fail to state either a negligent

misrepresentation or a general negligence claim; and 6)

Plaintiffs'

fraud and conspiracy to commit fraud based claims fail to satisfy
the heightened pleading requirements of Rule
Rules of civil

Procedure."

recommended that plaintiffs'
demonstrate

reasonable

Id.

at

9 (b)

the

Additionally,

5.

claims be dismissed

reliance"

of

upon

the

Federal

Judge Webb

"for failure to

allegedly

false

fraudulent representations upon which their claims are based.

or
Id.

at 5-7.
Now before the court are Judge Webb's recommendations
Angel,

as set forth in both the first M&R dated February 24,

and the second M&R dated July 18,

2011;

forth in the second M&R dated July 18,

4

and

2011.

(2)

in Baker,

(1)

in

2011,
as set

Plaintiffs object to

Judge Webb's recommendations and urge the court to grant them leave
to amend their complaints as was allowed in Thompson.

Acknowledging

the court's dismissal of certain claims in Thompson,

the plaintiffs

in both Angel and Baker consent to the dismissal of their ILSA and
negligence claims against the various lenders, as well as the North
Carolina

Mortgage

Lending

Act

and

South

Carolina

forth

court

in the

further

court's March 30,2011,

concludes

that

plaintiffs

order
have

of

For the reasons

Mortgage Brokers Act claims against all defendants.
set

Licensing

in Thompson,
failed

to

the

allege

sufficient facts to support a claim for negligent misrepresentation
against any of the lenders, homeowners' associations, "Allen Related
Entities" or any of the other alleged developers or subdevelopers.
As to the remaining claims,
that

they,

like

the

Thompson

the court agrees with plaintiffs
plaintiffs,

should

be

given

opportunity to remedy any deficiencies in their complaint.
Thompson,

the

court

warns

plaintiffs

assertions of wrongdoing will not suffice.

that

wholesale

an

As in
blanket

Plaintiffs are urged to

state with sufficient particularity the facts upon which they seek
to hold each of the defendants liable or suffer dismissal of their
claims.

Following plaintiffs'

amendment,

defendants will have an

opportunity to answer or otherwise respond to plaintiffs' claims as
provided by the Federal Rules of Civil Procedure.

5

CONCLUSION

For

the

foregoing

reasons,

the

court

enters

the

following

orders:
Angel v. Bank of America, No. 7:10-CV-28-H

1.

The court GRANTS in part and DENIES in part the various

motions before it.
2.

Pursuant

to

Rule

12(b) (6),

DISMISSED for failure to state a

the

following

claims

are

claim upon which relief can be

granted:
a.
Plaintiffs'
ILSA claims
defendants as set forth in Count 5;

against

the

lender

b.
Plaintiffs' negligence claims against the lender
defendants (Count 17);
Plaintiffs' North Carolina Mortgage Lending Act
c.
claims (Count 14);
d.
Plaintiffs' South Carolina Licensing of Mortgage
Brokers Act claims (Count 15); and
e.
Plaintiffs' negligent misrepresentation claims
against
the
lender defendants,
the
"Allen
Related
Entities," the "Sub-Developers" and any individual or
entity alleged to be a "developer" within the meaning of
the ILSA as set forth in Count 13.
3.
[DE #196,

Plaintiffs'
329,

405]

requests

for

leave to amend their complaint

are GRANTED insofar as plaintiffs shall have

thirty (3D) days from the date this order is entered to amend their
complaint under the terms set forth herein.

6

4.

Except as hereinabove granted,

DENIED WITHOUT

PREJUDICE

in light of

the

the

following motions are

court's

ruling allowing

plaintiffs leave to amend their complaint:

a.

Motion to dismiss

filed by Emily L.

Adams

[DE

#216] ;

b.
Motion to dismiss filed by Southeastern Land
Sales, Inc., Southeastern Waterfront Marketing, Inc., and
William G. Allen [DE #218] ;
c.
Motion to dismiss filed by SunTrust Banks,
[DE #199] ;

Inc.

d.
Motions to dismiss
[DE #155, 284 & 343] ;

Best

e.

Motion

to dismiss

filed by Berthadale R.

filed

by Jennifer

C.

Parker

[DE #169J ;
f.
Motions to dismiss filed by Maryville Partners,
Inc. [DE #143 & 349];
g.
Motion to dismiss filed by
Cannonsgate Investments, LLC [DE #167] ;
h.
Motion to dismiss
[DE #232] ;

Lanny

filed by Bank of

Wilson

the

and

Ozarks

i.

Motion to dismiss filed by Branch Banking and
Trust Company and Branch Banking and Trust Company of
South Carolina [DE #189] ;
j .

Motion to dismiss filed by Bank of America

[DE

#149] ;

k.
Motion
[DE #224]

to

dismiss

filed

1.
Motion to dismiss
Savings Bank [DE #203] ;

filed

by Richard Mace

by

m.
Motion for judgment on the
Maryville Partners, Inc. [DE #252];

7

Suburban

pleadings

Watts

Federal

filed

by

n.
Motion to dismiss filed by R. Douglas Therrell
and the R. Douglas Therrell Family Trust [DE #268] ;
Motion

o.
#282] ;

to

dismiss

filed

by Alan Sullivan

[DE

p.
Motion to dismiss filed by Charles Ruffin Poole
[DE #291] ;

q.
#313] ;

Motion to dismiss filed by Michael Woolard

[DE

r.
Motion
to
dismiss
filed
by
R.A.
North
Development I, Inc., R. A. North Development, Inc., and
Randolph Allen [DE #322]; and
s.
Motion to dismiss filed by Kenneth Bednar and
Santa Rosa Land Development Company [DE #331] .
Defendants

may

plaintiffs'

renew

amendment

their
of

motions,

their

if

complaint

appropriate,
or,

if

not

following
amended

as

allowed herein, upon expiration of the time for amendment.
5.

The

plaintiffs'

following
voluntary

motions

are

dismissal

of

DISMISSED
the

as

moving

moot

following

defendants

Voluntary Dismissal [DE #381]) :
a.
Motions to dismiss filed by Craven's
Homeowners Association, Inc. [DE #145 & 347] ;

Grant

b.
Motion for judgment on the pleadings filed by
Craven's Grant Homeowners Association, Inc. [DE #250];
c.
#368] .

Motion to dismiss filed by Cannons gate HOA

8

[DE

(see

Baker v. Carolina First Bank, No. 7:10-CV-227-H
6.

The court GRANTS in part and DENIES in part the motions to

dismiss

filed by Carolina First Bank,

RBC Bank,

Wachovia Bank,

and

First National Bank of the South.
Pursuant

7.

DISMISSED

for

to

failure

Rule
to

12 (b) (6),

state

a

the

following

claim upon which

claims

relief

are

can be

granted:
a.
Plaintiffs' ILSA claims against Carolina First
Bank, RBC Bank (USA), Wachovia Bank, and First National
Bank of the South;
b.
Plaintiffs' negligence claims against Carolina
First Bank, RBC Bank (USA), Wachovia Bank, and First
National Bank of the South (Count 13); and
c.
Plaintiffs' negligent misrepresentation claims
against Carolina First Bank, RBC Bank (USA), Wachovia
Bank, and First National Bank of the South.
Plaintiffs'

8.
#68]

request for leave to amend their complaint [DE

is GRANTED insofar as plaintiffs shall have thirty

(30)

days

from the date this order is entered to amend their complaint under
the terms set forth herein.
Except as hereinabove granted,

9.

DENIED

WITHOUT

PREJUDICE

in

light

of

the following motions are

the

court's

ruling

allowing

plaintiffs leave to amend their complaint:
a.

Motion to dismiss

filed by Carolina First Bank

Motion to dismiss

filed by RBC Bank

[DE #38] ;
b.
#40] ;

9

(USA)

[DE

#45],

c.
Motion
and

to dismiss

filed by Wachovia Bank

[DE

d.
Motion to dismiss filed by First National Bank
of the South [DE #58] .
Defendants
plaintiffs'

may

renew

amendment

their
of

motions,

their

if

complaint

appropriate,
or,

if

not

following
amended

allowed herein, upon expiration of the time for amendment.
This 6th day of September 2011.

At Greenville, NC
#31

10

as