BIGGS v. OCWEN LOAN SERVICING, LLC
MEMORANDUM OPINION AND ORDER. Signed by CHIEF JUDGE WILLIAM L. OSTEEN, JR. on 8/5/2015, that Defendant Ocwen's Motion to Dismiss (Doc. 8 ) is GRANTED and that this case as to Defendant Ocwen is DISMISSED WITH PREJUDICE. FURTHER that this case as to Defendants DOES 1 through 20 is DISMISSED WITHOUT PREJUDICE. FURTHER that Defendant's Motion to Disregard Plaintiff's Opposition to Motion to Dismiss (Doc. 12 ) is DENIED. A judgment in accordance with this Memorandum Opinion and Order will be entered contemporaneously herewith. (Daniel, J)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
FREDERICK MICHAEL BIGGS,
OCWEN LOAN SERVICING, LLC,
and DOES 1 through 20,
MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
Plaintiff Frederick Michael Biggs (“Plaintiff”),
proceeding pro se, has asserted two claims against Defendant
Ocwen Loan Servicing, LLC (“Ocwen” or “Defendant”) regarding a
foreclosure proceeding.1 This matter comes before this court on
Defendant’s Motion to Dismiss Plaintiff’s Complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6) for failure to state a
claim upon which relief can be granted. (Doc. 8.) This court has
carefully considered Defendant’s Motion and supporting
Plaintiff also asserted the same claims against Does 1
through 20. To date, Does 1 through 20 have not been named and
Plaintiff asserts no independent basis for liability against
them. Therefore, for the same reasons this court will grant
Ocwen’s Motion to Dismiss, this court will dismiss Plaintiff’s
Complaint as to Does 1 through 20 without prejudice.
Memorandum, Plaintiff’s responses in opposition2 (Docs. 11, 13),
and Defendant’s Reply (Doc. 12). For the reasons stated fully
below, this court will grant Defendant’s Motion to Dismiss (Doc.
8) and dismiss the present action for failure to state a claim.
Plaintiff commenced the present action in Rockingham County
Superior Court on August 11, 2014, against Defendants Ocwen Loan
Servicing, LLC, and Does 1 through 20, inclusive. Defendant
Ocwen Loan removed this action to this court on September 12,
Defendant filed a Motion to Disregard Plaintiff’s
Opposition to Motion to Dismiss, or, in the Alternative, Reply
to Plaintiff’s Opposition to Motion to Dismiss (Doc. 12).
Defendant alleges that Plaintiff’s response (Doc. 11) was not
filed until four days after the filing deadline in violation of
Local Rule 7.3(f). This court declines to disregard Plaintiff’s
response and will deny Defendant’s motion. First, this court
notes that Plaintiff is proceeding pro se and this court gives
great deference to that fact. Second, the filing was only four
days late and neither party suffered any harm as a result.
“[T]he general sanctions provision of the Court's Local Rules
leaves the decision about whether and/or how to address
violations of the Local Rules to the discretion of the Court.”
Macko v. Disaster Masters, Inc., No. 1:10CV424, 2011 WL 1458504,
at *2 (M.D.N.C. Apr. 15, 2011)(citing M.D.N.C. R. 83.4).
- 2 -
2014, pursuant to diversity jurisdiction.3 (Notice of Removal
(Doc. 1).) On September 19, 2014, Defendant filed a Motion to
Dismiss and a corresponding Brief in support of that motion.
(Docs. 8, 9.) Plaintiff filed a Response in Opposition to Motion
to Dismiss on October 14, 2014 (Doc. 11), and on October 22,
2014, Defendant filed a Reply (Doc. 12).
On October 31, 2014,
Plaintiff filed an Objection to Defendant’s Reply (Doc. 13).
Defendant’s motion is thus ripe for review.
The present action stems from a threatened foreclosure of
Plaintiff’s property in Rockingham County, North Carolina
(“Property”). (Complaint (“Compl.”) (Doc. 2) at 1-2.) Plaintiff
asserts that he obtained a loan for his Property on May 11, 2009
from Defendant. (Id. ¶ 7.)
According to the Complaint,
Plaintiff suffered “economic hardship as a result of the
faltering economy” in 2013 and 2104 and fell behind on his loan
payments. (Id. ¶ 8.) Plaintiff made inquiries to Defendant in an
effort to “explore option[s]” and “avoid foreclosure.” (Id.)
The parties in the present action are completely diverse.
Plaintiff is a North Carolina resident. Defendant is a limited
liability company whose sole member is Ocwen Mortgage Servicing,
Inc. Ocwen Mortgage Servicing, Inc., is a corporation
incorporated in the U.S. Virgin Islands and whose principal
place of business is in the U.S. Virgin Islands. The amount in
controversy exceeds the statutory minimum for diversity. (Notice
of Removal (Doc. 1) at 1-2.)
- 3 -
On January 18, 2014, Plaintiff mailed a loan modification
package to Defendant. (Id. ¶ 10.) Plaintiff mailed the same
package again to Defendant on January 29, 2014. (Id.) When
Plaintiff inquired whether or not Defendant had received the
loan modification package, Plaintiff was told that it was under
review. (Id.) Subsequently, Defendant told Plaintiff that
Defendant needed proof of new income and that the Property was
qualified for a loan modification. (Id. ¶ 11.) After that,
Plaintiff was given conflicting information regarding the loan
modification, ranging from the Property qualifying to Defendant
had not received Plaintiff’s loan modification package. (Id.
¶ 12.) Defendant did not alter the loan and scheduled a
foreclosure sale.4 (Id. ¶ 9.) There is no evidence presently
before this court of any written communication or documentation
regarding any loan modification.
“To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’”
Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. V. Twombly,
550 U.S. 544, 570 (2007)).
A claim is facially plausible
Plaintiff does not give any dates for communication or the
- 4 -
provided the plaintiff provides enough factual content to enable
the court to reasonably infer that the defendant is liable for
the misconduct alleged.
The pleading setting forth the
claim must be “liberally construed” in the light most favorable
to the nonmoving party, and allegations made therein are taken
Jenkins v. McKeithen, 395 U.S. 411, 421 (1969).
However, the “requirement of liberal construction does not mean
that the court can ignore a clear failure in the pleadings to
allege any facts [that] set forth a claim.”
Estate of Williams-
Moore v. Alliance One Receivables Mgmt., Inc., 335 F. Supp. 2d
636, 646 (M.D.N.C. 2004).
Rule 12(b)(6) protects against meritless litigation by
requiring sufficient factual allegations “to raise a right to
relief above the speculative level” so as to “nudge the
claims across the line from conceivable to plausible.” Twombly,
550 U.S. at 570; see Iqbal, 556 U.S. at 678. Under Iqbal, the
court performs a two-step analysis. First, it separates factual
allegations from allegations not entitled to the assumption of
truth (i.e., conclusory allegations, bare assertions amounting
to nothing more than a “formulaic recitation of the elements”).
Iqbal, 556 U.S. at 681.
Second, it determines whether the
factual allegations, which are accepted as true, “plausibly
- 5 -
suggest an entitlement to relief.” Id. “At this stage of the
litigation, a plaintiff's well-pleaded allegations are taken as
true and the complaint, including all reasonable inferences
therefrom, are liberally construed in the plaintiff's favor.”
Estate of Williams-Moore, 335 F. Supp. 2d at 646.
When a party is proceeding pro se, that party’s filings are
“to be liberally construed and a pro se complaint, however
inartfully pleaded, must be held to less stringent standards
than formal pleadings drafted by lawyers.” Erickson v. Pardus,
551 U.S. 89, 94 (2007) (internal citations and quotation marks
omitted). It is important to note that, in the case of a pro se
plaintiff, the United States Court of Appeals for the Fourth
Circuit has “not read Erickson to undermine Twombly's
requirement that a pleading contain more than labels and
conclusions.” Giarratano v. Johnson, 521 F.3d 298, 304 n.5 (4th
Cir. 2008) (internal quotation marks omitted) (dismissing pro se
Plaintiff asserts two causes of action: (1) breach of
contract and (2) promissory estoppel. Plaintiff’s breach of
contract action stems from the alleged “wrongful foreclosure” of
his Property. (Compl. (Doc. 2) ¶ 20.) Plaintiff’s action for
- 6 -
promissory estoppel is based on Plaintiff’s asserted reliance on
Defendant’s promises regarding a loan modification. (Id.
¶¶ 25-28.) This court will address each cause of action in turn.
Breach of Contract
This court is sitting in diversity and must apply North
Carolina substantive law to Plaintiff's breach of contract
claim. See Homeland Training Ctr., LLC v. Summit Point Auto.
Research Ctr., 594 F.3d 285, 290–91 (4th Cir. 2010).
Carolina, “[t]he elements of a claim for breach of contract are
(1) existence of a valid contract and (2) breach of the terms of
that contract.” Becker v. Graber Builders, Inc., 149 N.C. App.
787, 792, 561 S.E.2d 905, 909 (2002) (quoting Poor v. Hill, 138
N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000)).
The contract Plaintiff asserts was breached is the Deed of
Trust dated May 11, 2009, between Frederick Michael Biggs and
Jetta B. Biggs and First Financial Services, Inc. (Deed of Trust
(“Deed”) (Doc. 2-1).) The Deed relates to the Property being
foreclosed by Defendant. (Id. at 6.)5 Pertinent to Plaintiff’s
All citations in this Memorandum Opinion and Order to
documents filed with the court refer to the page numbers located
at the bottom right-hand corner of the documents as they appear
- 7 -
breach of contract claim is Section 9 of the Deed entitled
“Grounds for Acceleration of Debt.” Section 9 states:
(a) Default. Lender may, except as limited by
regulations issued by the Secretary in the case of
payment defaults, require immediate payment in full of
all sums secured by this Security Instrument if:
(i) Borrower defaults by failing to pay in full
any monthly payment required by this Security
Instrument prior to or on the due date of the
next monthly payment.
(Id. at 8.) Section 18 of the Deed details the foreclosure
rights of Defendant:
Foreclosure Procedure. If Lender requires immediate
payment in full under paragraph 9, Lender may invoke
the power of sale and any other remedies permitted by
(Id. at 10.) “[T]he law does not typically impose upon lenders a
duty to put borrowers' interests ahead of their own. Rather,
borrowers and lenders are generally bound only by the terms of
their contract and the Uniform Commercial Code.”
Bank of America, N.A., 367 N.C. 363, 368, 760 S.E.2d 263, 267
(2014). There is nothing in the Deed creating an affirmative
duty on the part of Defendant to facilitate a loan modification.6
The terms of the Deed explicitly allow Defendant to accelerate
Plaintiff alleges that “[d]efendant failed to follow the
contract’s provision to abide by Federal and North Carolina law
by allowing Plaintiff to modify the loan pursuant to Federal and
State law,” but does not give evidence of action creating a duty
to modify the loan on the part of Defendant. (Compl. (Doc. 2)
- 8 -
the loan payments and foreclose on the property subject to the
Deed if the borrower (here Plaintiff) defaults, and Plaintiff
admits that he fell behind on loan payments. (Compl. (Doc. 2)
¶ 8.) In addition, Plaintiff has not pled any facts to show that
the loan was ever actually modified and a new contract created.
Absent such a showing, the Deed is the contract this court must
rely on in assessing Plaintiff’s breach claim.
As stated earlier, the Deed creates no duty on the part of
Defendant to modify Plaintiff’s loan, even if Plaintiff advised
Defendant that Plaintiff could not pay on the mortgage. The Deed
explicitly allows for acceleration of the debt if Plaintiff was
in default on loan payments. Plaintiff does not deny he was in
default on his loan; to the contrary, Plaintiff admits that he
fell “behind on the payments that were purportedly due under the
Loan.” (Id.) Plaintiff has not alleged sufficient facts to allow
this court to find that the loan was modified. On the evidence
submitted, Plaintiff has not presented a viable claim against
Defendant for breach of contract.
Plaintiff’s second cause of action is one for promissory
estoppel. (Compl. (Doc. 2) at 6.) “The doctrine of promissory
estoppel is an equitable doctrine wherein a party that has
- 9 -
reasonably relied on the promise of another may enforce the
promise, absent valuable consideration, in order to avoid
injustice.” Norman v. Tradewinds Airlines, Inc., 286 F. Supp. 2d
575, 591 (M.D.N.C. 2003). Plaintiff’s promissory estoppel claim
is based on Plaintiff’s alleged reliance “on promises of
Ocwen . . . that the property would be modified and Defendant
would not precede [sic] with foreclosure.” (Compl. (Doc. 2)
¶ 25.) Plaintiff generally cites “fail[ure] to abide by North
Carolina law” as the basis for his action, but does not cite any
specific North Carolina law that has been violated.7 (Id. at 1.)
“It is established law that an agreement to modify the
terms of a contract must be based on new consideration or on
evidence that one party intentionally induced the other party's
In subsequent filings, Plaintiff cites New York law to
bolster his claims of alleged statutory duty of the Defendant.
(See Pl.’s Opp’n (Doc. 11).) New York law is not binding on this
court or this controversy. However, Plaintiff also generally
cites HAMP. (Id. at 2.) HAMP is the Home Affordable Modification
Program established by the Treasury Department under the
Troubled Asset Relief Program (“TARP”). “The purpose of HAMP was
to help ‘3 to 4 million at-risk homeowners — both those who are
in default and those who are at imminent risk of default’ avoid
foreclosure ‘by reducing monthly payments to sustainable
levels.’” Allen v. CitiMortgage, Inc., Civil No. CCB-10-2740,
2011 WL 3425665, at *1 (D. Md. Aug. 4, 2011) (internal citation
omitted). Other than a single mention of HAMP (Pl.’s Opp’n (Doc.
11) at 2), Plaintiff offers no evidence of Defendant offering
such a modification or being under an obligation to do so. See,
e.g., Allen, 2011 WL 3425665, at *4 (Numerous courts have held
that borrowers do not have an express or implied private right
of action under HAMP.”).
- 10 -
Clifford v. River Bend Plantation, Inc.,
312 N.C. 460, 466, 323 S.E.2d 23, 27 (1984) (internal citations
and quotation marks omitted). Plaintiff claims to have relied on
Defendant’s promise to his detriment by “not seek[ing] funding
option to Tender or otherwise solve the problem.” (Compl. (Doc.
2) ¶ 26.)
Generally, a loan modification must be in writing. “Because
the contract in this case is a contract for the sale of land, it
must be in writing to comply with the Statute of Frauds. When
the original agreement comes within the Statute of Frauds,
subsequent oral modifications of the agreement are ineffectual.”
Clifford, 312 N.C. at 465, 323 S.E.2d at 26. Plaintiff has
provided no evidence of any written memorialization of a
modification or promise of modification to satisfy the statute
However, promissory estoppel can be an exception to the
statute of frauds.8 Promissory estoppel is limited and the
exception does not apply to the present facts. “North
“[T]he law of North Carolina includes, and where
appropriate applies, the doctrine of promissory estoppel.” Allen
M. Campbell Co., Gen. Contractors, Inc. v. Virginia Metal
Indus., Inc., 708 F.2d 930, 931 (4th Cir. 1983). “[T]he fact
that the promise was entirely oral would not bar recovery.” Id.
- 11 -
Carolina . . . does not recognize promissory estoppel as an
affirmative cause of action. The clear law in North Carolina
prohibits the use of promissory estoppel in an offensive
manner.” Rudolph v. Buncombe Cty. Gov’t, 846 F. Supp. 2d 461,
477 (W.D.N.C.) (internal citations and quotation marks omitted),
aff’d, 474 Fed. Appx. 931 (4th Cir. 2012).
Plaintiff is attempting to use promissory estoppel in an
offensive manner by asking this court to find that some sort of
binding loan modification exists despite no written modification
being submitted or claimed. Even if Plaintiff’s claim was
presented in a defensive manner, this court finds that, based on
the record, Plaintiff’s promissory estoppel request is not
supported by the proffered facts. Plaintiff has not introduced
any evidence of an actual loan modification or any terms of a
modification. In addition, Plaintiff has not pled facts to
indicate that he detrimentally relied on the promise of a loan
modification in such a way that would rise to the level
necessitating equitable relief. Plaintiff defaulted on his loan.
Defendant is within its rights pursuant to the Deed to
foreclose. Absent any indication of a modification that alters
the rights of Defendant to foreclose on Plaintiff’s Property
- 12 -
after Plaintiff defaulted on his loan, this court finds that
Plaintiff has not stated a claim for promissory estoppel.
For the reasons set forth herein, IT IS HEREBY ORDERED that
Defendant Ocwen’s Motion to Dismiss (Doc. 8) is GRANTED and that
this case as to Defendant Ocwen is DISMISSED WITH PREJUDICE.
IT IS FURTHER ORDERED that this case as to Defendants DOES
1 through 20 is DISMISSED WITHOUT PREJUDICE.
IT IS FURTHER ORDERED that Defendant’s Motion to Disregard
Plaintiff’s Opposition to Motion to Dismiss (Doc. 12) is DENIED.
A judgment in accordance with this Memorandum Opinion and
Order will be entered contemporaneously herewith.
This the 5th day of August, 2015.
United States District Judge
- 13 -
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?