Walter v. Wells Fargo Bank, NA et al

Filing 21

ORDER granting 9 Defendant Wells Fargo's Motion to Dismiss and granting in part and denying in part 10 Defendant Love-Hadden's Motion to Dismiss. Signed by Judge Gregory L Frost on 2/28/12. (sem1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
THEODORE WALTER,
Plaintiff,

Case No. 2:11-cv-912
JUDGE GREGORY L. FROST
Magistrate Judge E.A. Preston Deavers

v.
WELLS FARGO BANK, NA, et al.,
Defendants.

OPINION AND ORDER
This matter is before the Court for consideration of the following filings:
(1) a motion to dismiss filed by Defendant Wells Fargo Bank, N.A. (ECF No. 9), a
memorandum in opposition filed by Plaintiff (ECF No. 16), and a reply memorandum filed by
Wells Fargo Bank, N.A. (ECF No. 18); and
(2) a motion to dismiss filed by Defendant Jeanette Love-Hadden (ECF No. 10), a
memorandum in opposition filed by Plaintiff (ECF No. 17), and a reply memorandum filed by
Love-Hadden (ECF No. 19).
For the reasons that follow, the Court finds that dismissal of this action is warranted.
I. Background
Plaintiff, Theodore Walter, has brought the instant action against Defendant Wells Fargo
Bank, N.A. (“Wells Fargo”) and Defendant Jeanette Love-Hadden, the Vice President Loan
Documentation for Wells Fargo. According to the complaint, Plaintiff purchased in 2003
residential real estate located in Delaware, Ohio with a note secured by a mortgage on the
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property. The note and mortgage were in favor of Gordon Lending Corporation. In 2009, Wells
Fargo filed a foreclosure action in the Delaware County Court of Common Pleas, asserting that
the bank was the holder of the note and that Plaintiff was in default. Plaintiff failed to file an
answer in the state court action, and Wells Fargo obtained a default judgment that was supported
in part by an affidavit by Love-Hadden that she signed in South Carolina.
Plaintiff subsequently filed this federal case, arguing that because the Love-Hadden
affidavit contained false statements and because Wells-Fargo had employed robo-signers, the
state court documents were fraudulent and invalid. Plaintiff’s complaint asserts thirteen claims
for relief. (ECF No. 2.) Defendants have each filed a motion to dismiss. (ECF Nos. 9, 10.) The
parties have completed briefing on the motions, which are now ripe for disposition.
II. Discussion
A. Standard Involved
Love-Hadden seeks dismissal under Federal Rule of Civil Procedure 12(b)(2), which
provides for dismissal for lack of personal jurisdiction. The party asserting that the Court has
personal jurisdiction has the burden of proving it. Theunissen v. Matthews, 935 F.2d 1454, 1458
(6th Cir. 1991); Weller v. Cromwell Oil Co., 504 F.2d 927 (6th Cir. 1974). If a defendant
supports a Rule 12(b)(2) motion to dismiss by affidavit, the plaintiff “by affidavit or otherwise
must set forth specific facts showing that the court has jurisdiction.” Weller, 504 F.2d at 930.
When presented with a properly supported Rule 12(b)(2) motion to dismiss, a court has the
discretion to decide the motion on the briefs and affidavits or it may permit discovery and an
evidentiary hearing. Theunissen, 935 F.2d 1458. In the absence of a preliminary evidentiary
hearing, the plaintiff need only make a prima facie showing of personal jurisdiction.
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Theunissen, 935 F.2d 1458; American Greetings Corp. v. Cohn, 839 F.2d 1164, 1168-69 (6th
Cir. 1988).
In diversity cases, courts look to the law of the forum state to determine whether personal
jurisdiction exists. See Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000); LAK,
Inc. v. Deer Creek Enterprises, 885 F.2d 1293, 1298 (6th Cir. 1989) (citing Southern Mach. Co.
v. Mohasco Indus., 401 F.2d 374, 376 n.2 (6th Cir. 1968)). A federal district court may exercise
personal jurisdiction only if the requirements of both the state long-arm statute and constitutional
due process are met. See Calphalon, 228 F.3d at 721; Nationwide Mut. Ins. Co. v. Tryg Int’l Ins.
Co., 91 F.3d 790, 793 (6th Cir. 1996); Reynolds v. Int’l Amateur Athletic Fed’n, 23 F.3d 1110,
1115 (6th Cir. 1994). See also Goldstein v. Christiansen, 70 Ohio St. 3d 232, 235, 638 N. E.2d
542, 543 (1994) (“When determining whether a state court has personal jurisdiction over a
nonresident defendant, the court is obligated to (1) determine whether the state’s ‘long-arm’
statute and the applicable Civil Rule confer personal jurisdiction, and if so, (2) whether granting
jurisdiction under the statute and rule would deprive the defendant of the right to due process of
law pursuant to the Fourteenth Amendment to the United States Constitution.”).
This analysis is not conflated into one step because Ohio’s long-arm statute does not
reach to the limits allowed by the Constitution. Cole v. Mileti, 133 F.3d 433, 436 (6th Cir.
1998). Although Ohio’s long-arm statute “does not extend to the constitutional limits of the Due
Process Clause, [the] central inquiry is whether minimum contacts are satisfied so as not to
offend ‘traditional notions of fair play and substantial justice.’” Calphalon, 228 F.3d at 721
(citing Cole, 133 F.3d at 436). When jurisdiction is founded on the long-arm statute, the claim
asserted must arise from at least one of the nine criteria listed in the statute. See Ohio Revised
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Code § 2307.382(A)(1)-(9); Berning v. BBC, Inc., 575 F. Supp. 1354, 1356 (S.D. Ohio 1983).
Among those criteria are transacting business in Ohio, contracting to supply goods or services in
Ohio, causing tortious injury in Ohio, and having a real property interest in Ohio. Ohio Rev.
Code § 2307.382(A)(1)-(9).
Both Love-Hadden and Wells Fargo also move for dismissal under Federal Rule of Civil
Procedure 12(b)(6), which requires an assessment of whether Plaintiff has set forth claims upon
which this Court may grant relief. The Court must construe the complaint in favor of Plaintiff,
accept the factual allegations contained in that pleading as true, and determine whether the
factual allegations present plausible claims. See Bell Atlantic Corp. v. Twombly, 550 U.S. 554,
570 (2007). The Supreme Court has explained, however, that “the tenet that a court must accept
as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Thus, “[t]hreadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do not suffice.” Id. Consequently,
“[d]etermining whether a complaint states a plausible claim for relief will . . . be a contextspecific task that requires the reviewing court to draw on its judicial experience and common
sense.” Id. at 1950.
To be considered plausible, a claim must be more than merely conceivable. Bell Atlantic
Corp., 550 U.S. at 556; Ass’n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d
545, 548 (6th Cir. 2007). What this means is that “[a] claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at 1949. The factual
allegations “must be enough to raise a right to relief above the speculative level . . . .” Twombly,
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550 U.S. at 555. See also Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291, 295 (6th Cir.
2008).
B. Analysis
1. Withdrawn Claims
In his memoranda in opposition to the motions to dismiss, Plaintiff states that he
withdraws Counts I, III, VI, VII, VIII, IX, XII, and XIII. Effectuating the withdrawal of these
claims by a motion under Federal Rule of Civil Procedure 15 or 21 would have been a more
precise mechanism to achieve voluntarily dropping these claims from this litigation. See Mondo
Polymers Tech., Inc. v. Monroeville Indus. Moldings, Inc., No. 2:07-cv-1054, 2009 WL
3698432, at *5 (S.D. Ohio Nov. 3, 2009). Despite the technicality, what matters is that the
parties agree that the claims are dismissed, which obviates the need for discussion of the
substantive merits of Defendants’ arguments for the dismissal of these claims. See Tolstih v.
L&G Elecs., U.S.A., Inc., No. 2:07-cv-582, 2009 WL 3241665, at *7 (S.D. Ohio Oct. 2, 2009)
(construing a memorandum in opposition representation of a voluntary withdrawal as seeking
amendment of the complaint, granting the amendment, and recognizing that those aspects of
defendants’ motion targeting the withdrawn components of the pleading were moot); Lee v. City
of Columbus, No. 2:07-cv-1230, 2009 WL 2929439, at *2 (S.D. Ohio Aug. 31, 2009) (accepting
withdraw of claim via memorandum in opposition). Consequently, the Court dismisses these
claims.
2. Rule 12(b)(2)
In her role as an employee and agent of Wells Fargo, Love-Hadden executed an affidavit

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that was filed and relied upon in the state foreclosure case. Assuming arguendo that the
corporate shield doctrine does not apply here, the conduct by Love-Hadden falls within the scope
of Ohio’s long-arm statute. See Fox v. GMAC Mortg., LLC, No. 2:10-cv-1023, 2011 WL
4091848, at *2-3 (S.D. Ohio Sept. 14, 2011) (holding that a defendant’s executing a document
with the knowledge that it would be filed and relied upon in a foreclosure action in an Ohio court
fell within the scope of Ohio’s long-arm statute); Ohio ex rel. DeWine v. GMAC Mortg. LLC,
No. 10 CV 2537, 2011 WL 1884543, at *2 (N.D. Ohio May 18, 2011) (holding that the filing of
an allegedly false affidavit in an Ohio foreclosure action meet the standard for transacting
business under Ohio’s long-arm statute). The exercise of personal jurisdiction over LoveHadden comports with constitutional due process. Fox, 2011 WL 4091848 at *3 (holding that
the exercise of personal jurisdiction over a defendant comports with constitutional due process
where the defendant executed a document with the knowledge that it would be filed and relied
upon in a foreclosure action and would affect the outcome of that action); DeWine, 2011 WL
1884543, at *3 (holding that “[i]t stretches the bounds of logic to argue that” a mortgage
company employee signing an affidavit knowing that it would be filed in an Ohio foreclosure
action “would not qualify as causing a consequence in Ohio”). Accordingly, the Court
concludes that denial of the Rule 12(b)(2) component of Love-Hadden’s motion to dismiss is
appropriate.
3. Rule 12(b)(6)
In Count II of the complaint, Plaintiff asserts a claim under the Ohio Consumer Sales
Practices Act, Ohio Revised Code § 1345.01 et seq. Because Defendant Wells Fargo is a
national bank, it is a financial institution under the OCSPA and is therefore exempt from liability
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here. See McCubbins v. BAC Home Loans Servicing, L.P., No. 2:11-cv-547, 2012 WL 140218,
at *6-7 (S.D. Ohio Jan. 18, 2012); Wells Fargo Bank, N.A. v. Favino, No. 1:10 CV 571, 2011
WL 1256771, at *8-9 (N.D. Ohio Mar. 31, 2011). Additionally, Plaintiff wholly fails to explain
how or why the OCSPA applies to Love-Hadden. The Court therefore dismisses Plaintiff’s
OCSPA claim.
Plaintiff then asserts in Count IV of the complaint a claim for abuse of process arising
from the common pleas court foreclosure case. Dismissal is warranted for want of an identified
ulterior purpose in the underlying foreclosure action, as discussed in McCubbins v. BAC Home
Loans Servicing, L.P., 2012 WL 140218, at *6-7, and Fox v. GMAC Mortgage, LLC, 2011 WL
4091848, at *5.
In Count V of the complaint, Plaintiff asserts a claim for conspiracy. Because there is no
allegation that any corporate employee was acting outside the scope of his or her employment,
application of the intra-corporate conspiracy doctrine compels the dismissal of this conclusory
claim. McCubbins, 2012 WL 140218, at *7 (holding that a complaint that asserts a conspiracy
claim involving only employees or agents of a bank fails to state a claim upon which a court may
grant relief); Fox v. GMAC Mortgage, LLC, 2011 WL 4091848, at *5.
Plaintiff asserts a claim for negligent supervision in Count X of the complaint. Similar to
the plaintiffs in McCubbins v. BAC Home Loans Servicing, L.P., however, Plaintiff here has
failed to plead sufficiently the elements of a requisite underlying tort to present a negligent
supervision claim. 2012 WL 140218, at *8. Additionally, Love-Hadden of course cannot be
held accountable under this theory of relief for supervising herself, and there is no allegation that
she supervised anyone else. Dismissal of Count X is warranted.
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This leaves for disposition Count XI of the complaint in which Plaintiff asserts a claim
for breach of the covenant of good faith and fair dealing. The claim fails for both core reasons
set forth in McCubbins v. BAC Home Loans Servicing, L.P.: one, that under Ohio law, “a claim
for a violation of the duty of good faith and fair dealing cannot stand alone as a separate cause of
action apart from a claim for breach of contract” and two, that “the doctrine of good faith and fair
dealing cannot be used to add new duties or obligations into a contract” as Plaintiff seeks to do
here. 2012 WL 140218, at *5. Additionally, the complaint fails to assert that Love-Hadden was
a party to any contract.
Having determined that dismissal of all claims is warranted on at least the foregoing
grounds, the Court need not and does not address Defendants’ alternative arguments for
dismissal.
III. Conclusion
For the foregoing reasons, the Court GRANTS Wells Fargo’s motion to dismiss (ECF
No. 9) and GRANTS IN PART and DENIES IN PART Love-Hadden’s motion to dismiss
(ECF No. 10). The Clerk shall enter judgment accordingly and terminate this action on the
docket records of the United States District Court for the Southern District of Ohio, Eastern
Division.
IT IS SO ORDERED.
/s/ Gregory L. Frost
GREGORY L. FROST
UNITED STATES DISTRICT JUDGE

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