Diaz v. First Horizon Home Loan Corporation

Filing 11

MEMORANDUM AND ORDER granting Defendant's 5 Motion to Dismiss Complaint. So Ordered by Chief Judge Mary M. Lisi on 10/12/2012. (Duhamel, John)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND

STEPHANIE DIAZ,
Plaintiff,
v.

C.A. No. 12-178 ML

FIRST HORIZON HOME LOAN
CORPORATION,
Defendant.

MEMORANDUM AND ORDER
This matter is before the Court on Defendant’s, First Tennessee Bank National Association
(“Defendant”), motion to dismiss.1 For the reasons stated, Defendant’s motion is granted.2
I. Standard of Review
Under Rule 12(b)(6), the Court must construe the complaint in the light most favorable to
Plaintiff taking all well-pleaded facts as true and giving Plaintiff the benefit of all reasonable inferences.
Arruda v. Sears, Roebuck & Co., 310 F.3d 13 (1st Cir. 2002). If under any theory the allegations are
sufficient to state a cause of action in accordance with the law, the motion to dismiss must be denied.

1

First Tennessee Bank National Association is a successor-in-interest to First Horizon Home Loan
Corporation.
2

Plaintiff filed this matter pro se; therefore the Court reads the complaint and Plaintiff’s papers liberally.
Boivin v. Black, 225 F.3d 36 (1st Cir. 2000). Having reviewed Plaintiff’s memorandum of law in opposition to
Defendant’s motion to dismiss, the Court questions whether Plaintiff authored the memorandum. “If a brief is
prepared in any substantial part by a member of the bar, it must be signed by him [or her]. We reserve the right,
where a brief gives occasion to believe that the petitioner has had legal assistance, to require such signature, if such,
indeed, is the fact.” Ellis v. M aine, 448 F.2d 1325, 1328 (1st Cir. 1971); see also M akreas v. Moore Law Group, A.P.C.,
No. C-11-2406 M M C, 2012 WL 1458191 at *3 (N.D. Cal. April 26, 2012) (“numerous courts have held the practice of
ghostwriting is not permitted in the federal courts”); Liguori v. Hansen, No. 2:11-cv-00492-GM N-CWH, 2012 WL
760747 (D. Nev. M arch 6, 2012) (noting several reasons why ghostwriting is inappropriate).

Vartanian v. Monsanto Co., 14 F.3d 697 (1st Cir. 1994). While Plaintiff need not plead factual
allegations in great detail, the allegations must be sufficiently precise to raise a right to relief beyond
mere speculation. Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (abrogating the “no set of
facts” rule of Conley v. Gibson, 355 U.S. 41 (1957)). “The complaint must allege a plausible
entitlement to relief in order to survive a motion to dismiss.” Thomas v. Rhode Island, 542 F.3d 944,
948 (1st Cir. 2008) (internal quotation marks and citation omitted); see also Ashcroft v. Iqbal, 556
U.S. 662, 679 (2009) (“[w]hen there are well-pleaded factual allegations, a court should assume their
veracity and then determine whether they plausibly give rise to an entitlement to relief”). The
“plausibility” requirement, however, is not akin to a “standard of likely success on the merits[,]” but
instead, “the standard is plausibility assuming the pleaded facts to be true and read in a plaintiff’s favor.”
Sepulveda-Villarini v. Department of Education of Puerto Rico, 628 F.3d 25, 30 (1st Cir. 2010).
II. Factual Background
On or about July 28, 2003, Plaintiff purchased investment property in Bucksport, Maine.
Complaint at ¶ 5. Plaintiff financed the property through a mortgage with Defendant. Id. at ¶ 6. After
she purchased the property, Plaintiff rented the premises. Id. at ¶ 10. Approximately two years later,
Plaintiff defaulted on the mortgage. Id. at ¶ 11. Plaintiff experienced “serious family medical and
financial issues and was forced to divert some of the rental payments . . . to the payment of those
medical and financial issues.” Id. Plaintiff notified Defendant of her financial hardship; Plaintiff alleges
that Defendant informed her that “she should apply for financial assistance with Defendant so as to
modify her payment obligation and her mortgage with Defendant.” Id. at ¶ 12. Plaintiff provided
Defendant with information to enroll in Defendant’s financial assistance programs “on numerous
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occasions due to the fact that Defendant lost many of Plaintiff’s papers and continuously requested
information already provided.” Id. at ¶ 13. “As time went on into 2005 and 2006, Plaintiff’s financial
circumstances improved and she became again able to service Defendant’s loan.” Id. at ¶ 13.
However, “sometime in 2005” Defendant commenced a foreclosure action against Plaintiff and
“boarded up the [property] making it impossible for the Plaintiff to rent out the property for the
provision of income.” Id. at ¶ 14. Plaintiff contends that Defendant’s action in boarding up the
property was “outrageous” considering that Plaintiff had “spent considerable sums fixing” the property
to make it “readily rentable.” Id. The complaint alleges that Defendant “completed the foreclosure”
of the property on March 15, 2006. Id. at ¶ 15. Plaintiff alleges that she “suffered damages including
loss of rent, loss of value of the . . . [p]remises and loss of the value of the sub dividable [sic] lot on the
property.” Id. at ¶ 17.
Plaintiff filed this action on March 13, 2012. She alleges that Defendant violated the covenant
of good faith and fair dealing and the Maine Unfair Trade Practices Act, Me. Rev. Stat. Ann. tit. 5, §§
205A to 214, by failing to treat Plaintiff “fairly, in connection with the [loan] modification process,” by
boarding up the property, and by seizing the property and depriving Plaintiff of rental income. Id. at ¶
16.
III. Analysis
Defendant argues that Plaintiff’s claims are time barred. The parties agree that Maine law
applies to this action. See Borden v. Paul Revere Life Insurance Co., 935 F.2d 370 (1st Cir. 1991)
(federal court sitting in diversity is free to forgo choice of law analysis and accept the parties’ agreement
about which state law controls). In Maine, “[a]ll civil actions shall be commenced within 6 years after
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the cause of action accrues . . . .” 14 Me. Rev. Stat. Ann. tit. 14, § 752; see also Campbell v. Machias
Savings Bank 865 F. Supp. 26 (D. Me. 1994) (claims under
Maine Unfair Trade Practices Act are subject to six-year statute of limitations). A cause of action
accrues at the “time judicially cognizable injury is sustained.” Gile v. Albert, 943 A.2d
599, 601 (Me. 2008) (internal quotation marks and citation omitted). In contract claims, this occurs
when a defendant breaches the contract. Id.; see also Fitzpatrick v. Teleflex, Inc., 763 F. Supp. 2d
224, 232 (D. Me. 2011) (“[u]sually a cause of action sounding in contract accrues when the contract
was breached. . .”) (internal quotation marks and citation omitted).
To decide the instant motion, the Court must first determine when Plaintiff’s causes of action
accrued. Plaintiff alleges that Defendant breached the covenant of good faith and fair dealing arising
from the contract that was allegedly formed when Defendant offered Plaintiff the possibility of
modifying her loan. Thus, Plaintiff’s breach of the covenant of good faith and fair dealing claim is a
contract action. See generally Crellin Technologies, Inc. v. Equipmentlease Corp., 18 F.3d 1, 10 (1st
Cir. 1994) (“[w]hen . . . a duty of good faith and fair dealing is alleged to arise from a contractual
relationship, a claim for breach of that duty sounds in contract rather than in tort”). Plaintiff’s Unfair
Trade Practices Act claim is a statutory claim. Under Maine law, both of Plaintiff’s claims accrued at
the time Plaintiff incurred a “judicially cognizable injury. . . .” Gile, 943 A.2d at 601. With respect to
both claims, it is clear that Plaintiff incurred a judicially cognizable injury “sometime in 2005 [when] . . .
Defendant boarded up the [property] making it impossible for . . . Plaintiff to rent out the property for
the provision of income.” Complaint at ¶ 14. Accordingly, because the six-year statute of limitations
would
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have expired, at best for Plaintiff, at the end of 2011, Plaintiff’s claims in this action are
untimely.3
IV. Conclusion
For the reasons noted above, Defendant’s motion to dismiss is granted.

SO ORDERED
/s/ Mary M. Lisi
Mary M. Lisi
Chief United States District Judge
October 12, 2012

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Plaintiff also argues that the limitations period should be extended under the “continuing tort theory . . . .”
Plaintiff’s Opposition to Defendant’s M otion to Dismiss at 21. Plaintiff, however, cites no M aine authority, and this
Court could find none, applying the “continuing tort theory” to a breach of the covenant of good faith and fair
dealing claim or a claim under the Unfair Trade Practices Act. See M cKinnon v. Honeywell International Inc., 977
A.2d 420, 425 (M e. 2009) (“[a]lthough we have discussed the possible applicability of the doctrine in the context of
employment discrimination cases . . . we have never adopted the continuing violations doctrine as a means of tolling
the statute of limitations. . .”) (citations omitted); see generally M urphy v. M aine, No. CV-06-62-B-W, 2006 WL
2514012 at *4 (D. M e. August 29, 2006) (noting that the continuing violation theory is “largely limited to Title VII
discrimination cases” and M aine courts have “not applied the common law continuing tort doctrine outside the
realm of trespass and nuisance law. . .”).

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