West v. Ditech Financial LLC
Filing
15
ORDER granting 5 Ditech's Motion to Dismiss and Incorporated Brief in Support Thereof, dismissing plaintiff's unjust enrichment, violation of the OCPA, fraud, and IIED claims against Ditech, and granting plaintiff leave to amend her fraud claim on or before July 8, 2016 (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 6/8/2016. (ks)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
LISA WEST,
Plaintiff,
v.
DITECH FINANCIAL LLC, f/k/a
GREEN TREE SERVICING LLC
Defendant.
)
)
)
)
)
)
)
)
)
)
Case No. CIV-16-213-M
ORDER
Before the Court is defendant Ditech Financial LLC’s (“Ditech”) Motion to
Dismiss and Incorporated Brief in Support Thereof, filed March 10, 2016. On March 30,
2016, plaintiff responded, and on April 13, 2016, Ditech replied. Based on the parties’
submissions, the Court makes its determination.
I.
Introduction 1
In November 2012, an earthquake caused significant damage to plaintiff’s
property. Plaintiff notified her insurer, State Farm, of the damage. After an inspection,
State Farm made an initial payment of $597.13 in September of 2013, a supplemental
payment of $2,422.86 in November of 2013, and a final payment of $15,556.73 in July of
2014. The final payment check included both of plaintiff’s mortgagee companies –
National Mortgage and Ditech as payees. Plaintiff sent the check to National Mortgage
first for endorsement, which National Mortgage promptly endorsed and sent back.
1
The alleged facts set forth are taken from plaintiff’s Petition. For purposes of this Order,
the Court will refer to plaintiff’s Petition as Complaint.
On August 12, 2014, plaintiff sent the check to Ditech for endorsement. Along
with the check, plaintiff sent a copy of the Certification of Intent to Repair indicating that
all of the insurance claim funds would be used to repair the property. On August 26,
2014, plaintiff followed up with Ditech regarding the status of the check endorsement.
Ditech confirmed that it had received the check and informed plaintiff that additional
documentation was needed. Plaintiff sent the additional documentation and requested
immediate reimbursement of the funds necessary to repair her property. Plaintiff alleges
that since that time she has received letters from Ditech requesting additional information
and that plaintiff advised Ditech of the status of the repairs. Plaintiff further alleges that
she consistently informed Ditech that she needed the funds to begin the repairs. Initially,
upon filing her petition, plaintiff alleged that Ditech returned approximately $8,500 of the
insurance money but refused to return the balance of $7,000 despite her demands. 2
Further, plaintiff alleges that she has completed the repairs, and, therefore, Ditech has no
basis to continue to retain the funds.
Plaintiff filed this action in the District Court of Pottawatomie County, State of
Oklahoma. Plaintiff alleges the following causes of actions against Ditech: (1) breach of
contract; (2) unjust enrichment; (3) violation of the Oklahoma Consumer Protection Act
(“OCPA”); (4) fraud/constructive fraud (“fraud”); and (5) intentional infliction of
emotional distress (“IIED”). On March 4, 2016, Ditech removed this action to this Court
and now moves this Court to dismiss plaintiff’s unjust enrichment, violation of the
2
In plaintiff’s response, plaintiff advises the Court that on February 9, 2016, Ditech
returned the remaining balance of her insurance check.
2
OCPA, fraud, and IIED claims, pursuant to Federal Rules of Civil Procedure 12(b)(6) and
9(b). 3
II.
Standard of Dismissal 4
Regarding the standard for determining whether to dismiss a claim pursuant to
Federal Rule of Civil Procedure 12(b)(6), the United States Supreme Court has held:
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. 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.
The
plausibility standard is not akin to a “probability
requirement,” but it asks for more than a sheer possibility that
a defendant has acted unlawfully. Where a complaint pleads
facts that are merely consistent with a defendant’s liability, it
stops short of the line between possibility and plausibility of
entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations and citations omitted).
Further, “where the well-pleaded facts do not permit the court to infer more than the mere
3
Since plaintiff has advised the Court that Ditech has returned the remaining
balance of her insurance proceeds, the Court finds that plaintiff’s unjust enrichment claim
should be dismissed as moot. Further, plaintiff does not address Ditech’s assertion that
her IIED claim fails to state a claim upon which relief can be granted; therefore, the
Court deems Ditech’s contention confessed and dismisses plaintiff’s IIED claim.
4
In her response, plaintiff contends that the standard of dismissal upon removal to
this Court should be based on Oklahoma pleading standards. However, the Court finds
that it is well settled law that upon removal to federal court, the Federal Rules of Civil
Procedure apply. See Federal Rule of Civil Procedure 81(c)(1) (“These rules apply to a
civil action after it is removed from a state court.”); see also Granny Goose Foods, Inc. v.
Bhd. of Teamsters & Auto Truck Drivers Local No. 70 of Alameda Cnty., 415 U.S. 423,
438 (1974) and generally Erie R. Co. v. Tompkins, 304 U.S. 64 (1938).
3
possibility of misconduct, the complaint has alleged – but it has not shown – that the
pleader is entitled to relief.” Id. at 679 (internal quotations and citations omitted).
Additionally, “[a] pleading that offers labels and conclusions or a formulaic recitation of
the elements of a cause of action will not do. Nor does a complaint suffice if it tenders
naked assertion[s] devoid of further factual enhancement.” Id. at 678 (internal quotations
and citations omitted). “While the 12(b)(6) standard does not require that Plaintiff
establish a prima facie case in her complaint, the elements of each alleged cause of action
help to determine whether Plaintiff has set forth a plausible claim.” Khalik v. United Air
Lines, 671 F.3d 1188, 1192 (10th Cir. 2012).
Finally, “[a] court reviewing the
sufficiency of a complaint presumes all of plaintiff’s factual allegations are true and
construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d
1106, 1109 (10th Cir. 1991).
III.
Discussion
A.
OCPA
To recover under the Oklahoma Consumer Protection
Act (“OCPA”), a consumer must show: “(1) that the
defendant engaged in an unlawful practice as defined at 15
O.S. (1991), § 753; (2) that the challenged practice occurred
in the course of defendant's business; (3) that the plaintiff, as
a consumer, suffered an injury in fact; and (4) that the
challenged practice caused the plaintiff's injury.” Patterson v.
Beall, 19 P.3d 839, 846 (Okla. 2000). An unlawful practice
includes “a misrepresentation, omission or other practice that
has deceived or could reasonably be expected to deceive or
mislead a person to the detriment of that person. Such a
practice may occur before, during or after a consumer
transaction is entered into and may be written or oral.” 15
Okla. Stat. §§ 752(13); 753(20).
4
Passenger Transp. Specialists Inc. v. Caterpillar Inc., No. CIV-12-0732-HE, 2014 WL
5092470, slip op., at *5 (W.D. Okla. Oct. 9, 2014). “‘Consumer transaction’ means the
advertising, offering for sale or purchase, sale, purchase, or distribution of any services or
any property, tangible or intangible, real, personal, or mixed, or any other article,
commodity, or thing of value wherever located, for purposes that are personal, household,
or business oriented.” Okla. Stat. tit. 15, § 752(3). “‘Unfair trade practice’ means any
practice which offends established public policy or if the practice is immoral, unethical,
oppressive, unscrupulous or substantially injurious to consumers.” Okla. Stat. tit. 15, §
752(14). Further, the following are exempted from the OCPA:
1. Publishers, broadcasters, printers or other persons insofar
as an unlawful practice as defined in Section 3 of this act
involves information that has been disseminated or
reproduced on behalf of others without knowledge that it is an
unlawful practice.
2. Actions or transactions regulated under laws administered
by the Corporation Commission or any other regulatory body
or officer acting under statutory authority of this state or the
United States, or to acts done by retailers or other persons
acting in good faith on the basis of information or matter
supplied by others and without knowledge of the deceptive
character of such information or matter.
Okla. Stat. tit. 15, § 754.
Ditech contends that plaintiff has failed to sufficiently plead a claim under the
OCPA because: (1) the OCPA does not apply to loan transactions and (2) plaintiff failed
to identify which specific provisions of the OCPA Ditech violated. Specifically, Ditech
contends that plaintiff’s claim against it is premised on an alleged breach of contract
regarding the terms of plaintiff’s mortgage, and that plaintiff cannot identify any
5
consumer transaction between the parties in which a good or service was purchased.
Plaintiff contends that her allegations involve Ditech’s improper loan servicing practices;
practices which meet the definition of unfair trade practice. Further, plaintiff contends
that mortgage services are not listed within the exemptions set forth in the OCPA.
Having carefully reviewed plaintiff’s Complaint, and presuming all of plaintiff’s
factual allegations are true, and construing them in the light most favorable to plaintiff,
the Court finds that plaintiff has not set forth sufficient factual allegations to establish a
plausible claim that Ditech violated the OCPA. Regarding her OCPA claim, plaintiff
specifically alleges: “[t]he conduct of Defendant constitutes an unfair and deceptive trade
practice. . . [t]he conduct occurred in the course of the business of Defendant.” Compl. ¶¶
23 – 24. While plaintiff asserts in her response brief the conduct she is referencing in her
Complaint is related to Ditech’s loan servicing practices, she fails to allege this fact in her
Complaint. Further, the OCPA is related to consumer transactions, and plaintiff has failed
to present any authority to this Court finding that the scope of the OCPA encompasses
mortgage services; therefore, the Court finds that plaintiff’s claim that Ditech violated the
OCPA should be dismissed.
B.
Fraud Claim
Rule 9(b) provides, in pertinent part: “In alleging fraud or mistake, a party must
state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P.
9(b). “At a minimum, Rule 9(b) requires that a plaintiff set forth the ‘who, what, when,
where, and how’ of the alleged fraud . . . and must set forth the time, place, and contents
of the false representation, the identity of the party making the false statements and the
6
consequences thereof.” U.S. ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah,
472 F.3d 702, 726-27 (10th Cir. 2006) (internal quotations and citations omitted).
Further,
Rule 9(b) does not . . . require the pleading of detailed
evidentiary matter, nor does it require any particularity in
connection with an averment of intent, knowledge, or
condition of mind. It only requires identification of the
circumstances constituting fraud or mistake.
That
requirement means . . . that individual plaintiffs should
identify particular defendants with whom they dealt directly .
. . ; that individual plaintiffs should designate the occasions
on which affirmative statements were allegedly made to them
- and by whom; and that individual plaintiffs should designate
what affirmative misstatements or half-truths were directed to
them – and how.
Seattle-First Nat’l Bank v. Carlstedt, 800 F.2d 1008, 1011 (10th Cir. 1986).
Defendant contends that plaintiff has failed to plead her fraud claim because it is
based on the same conduct as plaintiff’s claim of breach of contract and it lacks the
necessary particularity as required by Rule 9(b). Plaintiff contends that her fraud claim is
distinct from her breach of contract claim and has pled separate damages as result of her
fraud claim. See Wade v. Emcasco Ins. Co., 483 F.3d 657, 675 (10th Cir. 2007) (“To
maintain a fraud claim . . . the basis of the claim must be different from the conduct upon
which a breach of contract claim is based. . . . Furthermore, the fraud must have resulted
in damages greater than those caused by the breach of contract alone.”) (internal citation
omitted). Plaintiff further requests leave to file an amended complaint as to her fraud
claim, in the event the Court finds her fraud claim is inadequately pled.
7
Having carefully reviewed plaintiff’s Complaint, and presuming all of plaintiff’s
factual allegations are true, and construing them in the light most favorable to plaintiff,
the Court finds that plaintiff has failed to sufficiently plead her fraud claim. Plaintiff
specifically alleges:
Defendant’s refusal to return the insurance proceeds to
Plaintiff constitutes fraud and/or constructive fraud under the
circumstances of this case. Plaintiff believes Ditech’s conduct
is part of a pattern or practice, or is so widespread as to
constitute a general business practice.
Plaintiff has suffered damages as a result of Defendant’s
conduct.
Defendant has acted willfully, wantonly, and or with reckless
disregard for the rights of others. Punitive damages should be
awarded against Defendant to punish it and deter others.
Compl. ¶¶ 27-29. The Court finds that while plaintiff has set forth the who, what/how,
when, and where necessary to plead a claim of fraud, plaintiff has failed to allege any
facts relating to the contents of Ditech’s alleged false representations. Therefore the
Court finds that, as presently pled, plaintiff’s fraud claim against Ditech should be
dismissed; however, in the interest of justice, plaintiff should be granted leave to
specifically allege facts regarding her fraud claim, including the contents of Ditech’s
alleged false representations.
IV.
Conclusion
Accordingly, for the reasons set forth above, the Court GRANTS Ditech’s Motion
to Dismiss and Incorporated Brief in Support Thereof [docket no. 5], DISMISSES
8
plaintiff’s unjust enrichment, violation of the OCPA, fraud, and IIED claims against
Ditech, and GRANTS plaintiff leave to amend her fraud claim on or before July 8, 2016.
IT IS SO ORDERED this 8th day of June, 2016.
9
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?