Rocha v. Wells Fargo Bank, N.A. DBA Wells Fargo Home Mortgage DBA America's Servicing Co. et al
Filing
53
MEMORANDUM AND ORDER granting in part and denying in part 48 Motion to Dismiss for Failure to State a Claim. So Ordered by Chief Judge William E. Smith on 4/24/2018. (Jackson, Ryan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
_____
)
ERNESTO ROCHA,
)
)
Plaintiff,
)
)
v.
)
C.A. No. 16-600 WES
)
WELLS FARGO BANK, N.A. D/B/A
)
WELLS FARGO HOME MORTGAGE d/b/a
)
AMERICA’S SERVICING COMPANY;
)
U.S. BANK N.A. AS TRUSTEE, FOR
)
RESIDENTIAL ASSET SECURITIES
)
CORPORATION, HOME EQUITY MORTGAGE )
ASSET-BACKED PASS-THROUGH
)
CERTIFICATES, SERIES 2006-EMX1;
)
HARMON LAW OFFICES P.C.; ALL
)
PERSONS UNKNOWN, CLAIMING ANY
)
LEGAL OR EQUITABLE RIGHT, TITLE,
)
ESTATE, LIEN OR INTEREST IN THE
)
PROPERTY DESCRIBED IN THE
)
COMPLAINT ADVERSE TO PLAINTIFF’S
)
TITLE THERETO; INDIVIDUALLY,
)
JOINTLY AND SEVERALLY,
)
)
Defendants.
)
)
MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
Before the Court is Defendants’, Wells Fargo Bank, N.A. d/b/a
Wells
Fargo
Home
Mortgage
d/b/a
America’s
Servicing
Company
(“Wells Fargo”) and U.S. Bank National Association as Trustee, for
Residential Asset Securities Corporation, Home Equity Mortgage
Asset-Backed Pass-Through Certificates, Series 2006-EMX1 (“U.S.
Bank”) (collectively, “Defendants”) Motion To Dismiss Plaintiff’s
First
Amended
Complaint
for
Damages
(“Motion”)
(ECF
No.
48)
pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.
Plaintiff Ernesto Rocha’s First Amended Complaint for Damages
(“Complaint”) (ECF No. 38) brings claims for breach of contract
and breach of fiduciary duty (Count I), initiation of wrongful
foreclosure (Count II), conversion and unjust enrichment (Count
III),
and
intentional
distress (Count IV).
or
negligent
infliction
of
emotional
For the reasons set forth below, the Court
GRANTS in part and DENIES in part Defendants’ Motion.
I.
Background 1
On November 18, 2005, Plaintiff purchased a house located at
63 Nellie Street, Providence, Rhode Island, which he financed by
taking out mortgage loans for $268,000 and $67,000 from Wells
Fargo.
(Compl. 11.)
In 2008, Plaintiff sought to modify his loan
with Wells Fargo, but was unsuccessful.
(Id. at 11–12.)
While
Plaintiff pursued this loan modification, an arrearage accumulated
on his mortgages, which resulted in Wells Fargo sending a letter
to Plaintiff stating that his home would be sold in foreclosure in
April 2009.
(Id. at 12.)
Subsequently, on April 9, 2009,
Plaintiff sought Chapter 13 bankruptcy protection in the United
States Bankruptcy Court for the District of Rhode Island.
1
(Id.)
The following facts are taken from Plaintiff’s complaint
and construed in his favor. See García–Catalán v. United States,
734 F.3d 100, 102 (1st Cir. 2013).
2
In January 2010, the bankruptcy court confirmed a Chapter 13
plan that reduced the principal of Plaintiff’s first mortgage loan
to $145,000 and “stripp[ed] off” the second loan.
(Id.)
Over the
next five years, Plaintiff made his Chapter 13 plan payments,
which, in March 2015, culminated in the Chapter 13 trustee issuing
a
notice
of
final
cure
mortgage
payment,
completion, and a final report and account.
during
the
bankruptcy
proceedings,
a
notice
(Id.)
Wells
of
plan
At some point
Fargo
submitted
a
statement that Plaintiff had paid the arrearage in full and was
current
on
charges.
all
post-petition
(Id. at 13.)
payments,
the
expenses,
and
Plaintiff ultimately obtained a discharge
order from the bankruptcy court.
While
fees,
bankruptcy
(Id.)
proceedings
were
ongoing,
Plaintiff
alleges that Wells Fargo failed to pay property taxes on his home
to the City of Providence.
(Id. at 15.)
According to Plaintiff,
the agreements between him and Wells Fargo gave him the right to
rely – and he alleges he did rely – on Wells Fargo to use the money
he provided in escrow to pay the property taxes.
(Id.)
Plaintiff
further alleges that all of the mortgage payments he made included
an escrow amount to pay the property taxes.
(Id.)
Although it
did not use the escrow funds to pay property taxes, Wells Fargo
did use them to purchase force-placed property insurance, despite
Plaintiff repeatedly sending Wells Fargo evidence that he had
obtained his own insurance.
(Id. at 17.)
3
In August of 2011, as a result of Wells Fargo’s failure to
pay property taxes, the Providence City Tax Collector informed
Plaintiff that his home had been sold at a tax sale on June 15,
2011.
(Id. at 15–16.)
In May 2012, Plaintiff received another
notice that his home would be sold for unpaid taxes that were owed
as of December 2011.
(Id. at 16.)
Plaintiff again, in April 2013,
received a notice that his home would be sold at a tax sale,
despite a mortgage statement issued by Wells Fargo that stated it
had paid $5,903.04 to the Providence City Tax Collector and Wells
Fargo’s representations that it had made regular payments of
$1,407.51 to the City throughout 2013.
sales
forced
Plaintiff
purchased three times.”
to
“redeem
(Id.)
[his
home]
These three tax
when
it
[was]
(Id. at 2.)
In addition to failing to pay taxes in accordance with the
mortgage agreement, Wells Fargo issued mortgage statements showing
inexplicable “late fees, a negative escrow balance and a large
amount of mon[ey] held in suspense, not applied to the principal
balance or escrow.”
alleges
that
Plaintiff
was
a
(Id. at 16–17.)
statement
more
than
For example, Plaintiff
dated
March
16,
2015,
$166,000
in
arrears
on
showed
his
that
mortgage
payments between June 2009 and March 2015; however, three days
after Wells Fargo issued this statement, the company represented
to the bankruptcy court that Plaintiff was “current on all postpetition payments.”
(Id. at 17.)
4
Plaintiff also complains that Wells Fargo issued mortgage
statements indicating that he had “not paid his mortgage in years
and that his escrow account [was] tens of thousands of dollars
short.”
(Id. at 12.)
According to Plaintiff, this was because
“all of the payments made to Wells Fargo [were] placed in a
suspense account.”
these
events,
(Id.)
Plaintiff
contained over $100,000.
At various times during the course of
alleges
that
(Id. at 18.)
the
suspense
account
Plaintiff specifically
alleges that the suspense account contained more than “$123,000 at
a time close to entry of the Discharge Order in Bankruptcy Court.”
(Id.)
Moreover, Wells Fargo allegedly charged interest on the
unpaid balance of the mortgage while it held funds in the suspense
account and used the funds in the suspense account to earn and
retain money.
(Id.)
Plaintiff allegedly suffered “debilitating” health issues
brought on by Wells Fargo’s conduct.
(Id. at 19.)
And in January
2016, unsure of how to extricate himself from the situation, and
believing his mortgage had been paid in full, Plaintiff stopped
making payments, which he felt was “the only way left to get
someone at Wells Fargo to address the problems” with the company’s
handling of his account.
issuing
a
notice
that
(Id. at 2.)
a
foreclosure
5
Wells Fargo responded by
sale
was
scheduled
for
Plaintiff’s
home.
(Id.
at
3.)
In
an
effort
to
stave
off
foreclosure, Plaintiff brought the instant suit. 2
II.
Legal Standard
On a motion to dismiss, the Court must decide whether the
complaint has made “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
8(a)(2).
Fed. R. Civ. P.
That is, the Court must decide whether the claim is
“plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570
(2007)).
In conducting this inquiry, the Court “accept[s] the
truth of all well-pleaded facts and draws all reasonable inferences
therefrom in the pleader’s favor.”
García–Catalán, 734 F.3d at
102 (quoting Grajales v. P.R. Ports Auth., 682 F.3d 40, 44 (1st
Cir. 2012)).
The complaint need not include “a high degree of
factual specificity.”
Grajales, 682 F.3d at 47.
But it “must
contain more than a rote recital of the elements of a cause of
action.”
Rodríguez–Reyes v. Molina-Rodríguez, 711 F.3d 49, 53
(1st Cir. 2013) (citations omitted).
2
In addition to these pleaded facts, the Court considers
Plaintiff’s mortgage agreement, which Defendants attached to their
motion.
See Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993)
(finding that, at motion to dismiss stage, courts may consider
“documents central to plaintiffs’ claim; or for documents
sufficiently referred to in the complaint”).
6
Discussion 3
III.
A.
Breach of Contract and Fiduciary Duty
Plaintiff bases his claims for breach of contract and breach
of fiduciary duty on Wells Fargo’s negligent servicing practices;
misuse of escrow funds and suspense accounts; failure to provide
an accurate accounting that explains how Plaintiff’s payments were
applied;
and
unnecessary
purchase
of
forced-place
insurance.
(Compl. 15–17.)
1.
Breach of Contract
“To succeed on a breach of contract claim under Rhode Island
law, a plaintiff must prove that (1) an agreement existed between
the parties, (2) the defendant breached the agreement, and (3) the
breach caused (4) damages to the plaintiff.”
Barkan v. Dunkin’
Donuts, Inc., 627 F.3d 34, 39 (1st Cir. 2010) (first citing
Petrarca v. Fid. & Cas. Ins. Co., 884 A.2d 406, 410 (R.I. 2005);
and then citing Zuromski v. Lukaszek, 20 A.2d 685, 686 (R.I.
1941)).
Plaintiff claims Wells Fargo misused escrow funds, (Compl.
15–16), in particular, that despite his inclusion of escrow funds
to pay for his property taxes in his payments to Wells Fargo, and
3
According to the Paragraph 16 of Plaintiff’s mortgage, the
mortgage is “governed by federal law and the law of the
jurisdiction in which the [p]roperty is located.” (Mortgage 10,
ECF No. 48-2.)
Since the property is located in Rhode Island,
Rhode Island law and federal law governs the instant motion. (See
id. at 3, 10.)
7
mortgage statements from Wells Fargo that showed Wells Fargo paying
the property taxes to the City of Providence, the City failed to
receive the funds, which resulted in Plaintiff’s home thrice being
sold at a tax sale.
(See id.)
Defendants argue, however, that
Plaintiff’s claim fails because Plaintiff does not identify the
specific mortgage provision that required Wells Fargo to pay the
property taxes and that Plaintiff has not adequately pleaded
damages.
(Defs.’ Mem. of Law in Supp. of their Mot. to Dismiss
Pl.’s First Am. Compl. For Damages (“Defs.’ Memo”) 10, ECF No. 481.) 4
It
is
true
that
Plaintiff
does
not
cite
to
a
specific
provision of the mortgage agreement, but a glance at that document
shows that Plaintiff was obligated to pay Wells Fargo “amounts due
for . . . taxes,” 5 among other things, and that Wells Fargo was
4
Plaintiff did not file an opposition to the Motion, but that
does not change the Court’s analysis.
See Vega-Encarnación v.
Babilonia, 344 F.3d 37, 41 (1st Cir. 2003) (“The problem is that
when deciding a motion to dismiss on the merits, a district court
is obliged to accept the factual allegations contained in the
complaint as true. If the merits are at issue, the mere fact that
a motion to dismiss is unopposed does not relieve the district
court of the obligation to examine the complaint itself to see
whether it is formally sufficient to state a claim.”) (citations
omitted)).
5
To be precise, Plaintiff was obligated to pay “taxes . . .
which can attain priority over [the Mortgage] as a lien . . . on
the Property.” (Mortgage 4.) Under Rhode Island law, city taxes
like those assessed against Plaintiff have priority over
mortgages. See R.I. Gen. Laws § 44-9-1 (“The [tax] lien shall be
superior to any other lien, encumbrance, or interest in the real
estate whether by way of mortgage . . . .”); First Bank & Tr. Co.
8
obligated to pay the taxes “no later than the time specified under
[the Real Estate Settlement Procedures Act (RESPA)].”
4–5.)
(Mortgage
RESPA specifies that such payments must be made “in a timely
manner as such payments become due.”
12 U.S.C. § 2605(g).
plain,
had
therefore,
that
Wells
Fargo
an
obligation
It is
to
pay
Plaintiff’s property taxes out of the escrow funds that Plaintiff
alleged he paid to Wells Fargo, at least sometime before Providence
put the property up for sale. Furthermore, contrary to Defendants’
argument that Plaintiff failed to plead damages, Plaintiff did
allege he had to take steps to “redeem [his home] when it [was]
purchased
three
undertaking.
(1st
Cir.
times,”
(Compl.
2)
–
surely
not
a
costless
See Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 77
2014)
(“Given
the
allegations
in
the
complaint,
[plaintiff]’s damages are obvious . . . .”).
Therefore, accepting all his well-pleaded facts and drawing
all inferences in his favor, Plaintiff has sufficiently pleaded a
plausible breach of contract claim with respect to Wells Fargo’s
alleged failure to pay Plaintiff’s property taxes from the escrow
funds paid by Plaintiff.
See García–Catalán, 734 F.3d at 103;
v. City of Providence, 827 A.2d 606, 610 (R.I. 2003) (“In general,
‘taxes that are assessed against a person’s real or personal
property are a lien against his [or her] real estate . . .’ and,
other than an easement or restriction of record ‘is superior to
any other lien, encumbrance or interest in the property [.]’”
(alterations in original) (quoting Picerne v. Sylvestre, 324 A.2d
617, 618 (1974))).
9
Barkan, 627 F.3d at 39; see also Akers v. Beal Bank, 668 F. Supp.
2d 197, 200 (D.D.C. 2009) (denying motion to dismiss in a situation
similar to that here, notwithstanding “defects in the plaintiff’s
complaint”).
Plaintiff
contract
by
provisions
further
misusing
of
the
claims
that
“suspense
contract[]”
Wells
accounts
and
by
Fargo
in
breached
violation
failing
“to
of
provide
the
the
an
accurate accounting that explains how Plaintiff’s payments were
applied.”
(Compl. 16.)
Defendants make no argument as to the
latter, but to the former, say that the mortgage authorized them
to hold funds in a suspense account if payments were insufficient
to bring the loan current.
(Defs.’ Memo 11–12.)
Despite Defendants’ non-response, Plaintiff fails to state a
breach of contract claim based on Wells Fargo’s failure to provide
an accurate accounting of how his payments were applied because
there is no provision of the mortgage that requires Wells Fargo to
provide him an accurate accounting.
(See Mortgage.)
Plaintiff
regards
does
state
a
claim
with
to
application of the funds it held in suspense.
Wells
However,
Fargo’s
Defendants are
correct that the mortgage authorized them to hold payments that
are insufficient to bring the loan current.
(Id. at 4.)
But
Plaintiff alleges that the loan was current as of March 2015, when
as part of Plaintiff’s bankruptcy proceeding, Wells Fargo stated
that Plaintiff “had paid in full the amount required to cure the
10
default on the creditor’s claim and that the debtor was current on
all post-petition payments.”
(Compl. 17.)
Indeed, Wells Fargo
began applying suspense-account funds to Plaintiff’s principal
balance,
but
not
until
months
later,
in
September
2015
plausible breach of Paragraph 1 of the mortgage agreement.
id. at 2; Mortgage 4.)
–
a
(See
Additionally, while Plaintiff did not
explicitly plead damages in regard to this claim, his damages are,
like those stemming from his unpaid taxes, obvious.
See Foley,
772 F.3d at 77.
Finally, Plaintiff claims that Wells Fargo breached the terms
of the mortgage by purchasing force-placed insurance, even though
he repeatedly provided proof to Wells Fargo that he had property
insurance.
(Compl. 17.)
This claim fails because, as Defendants
argue, pursuant to Paragraph 5 of the mortgage, Wells Fargo had
the right to disapprove of Plaintiff’s choice of insurance, so
long as Wells Fargo does not exercise this right unreasonably.
(Mortgage 6.) And Plaintiff has not alleged that Wells Fargo acted
unreasonably in disapproving of Plaintiff’s choice of insurance
and securing its own coverage. 6
(See Compl. 17.)
6
Plaintiff also claims that Wells Fargo engaged in “negligent
servicing practices,” violating “RESPA” and the Fair Debt
Collection Practices Act. (Compl. 15.)
Plaintiff, however,
alleges nothing more. (See id.) And without further explanation
or any citation to the relevant provisions in the statutes, this
claim “is too vague and conclusory” to survive a motion to dismiss.
See Galvin v. U.S. Bank, N.A., 852 F.3d 146, 160 (1st Cir. 2017)
11
2.
Breach of Fiduciary Duty
Plaintiff claims a breach of fiduciary duty against Wells
Fargo premised on the same grounds as his breach of contract
claims.
(See id. 15–17).
“[A] fiduciary relationship arises when
one party ‘rightfully reposes trust and confidence’ in another.”
T.G. Plastics Trading Co. v. Toray Plastics (Am.), Inc., 958 F.
Supp. 2d 315, 327 (D.R.I. 2013) (quoting A. Teixeira & Co., Inc.
v. Teixeira, 699 A.2d 1383, 1387 (R.I. 1997)).
Defendants are
right that Plaintiff has failed to allege facts demonstrating a
fiduciary relationship between him and Wells Fargo.
Nat’l
Bank
v.
Liuzzo,
766
F.
Supp
61,
68–69
See Fleet
(D.R.I.
1991).
Therefore, Defendants’ Motion with respect to Plaintiff’s breach
of fiduciary duty claim is granted.
B.
Initiation of Wrongful Foreclosure
Plaintiff
claims
that
foreclosure on the property.
Wells
Fargo
(Compl. 16.)
wrongly
initiated
This claim fails
because the Court finds – and Plaintiff has pointed to – no
applicable Rhode Island law countenancing such a claim. Therefore,
Defendants’
Motion
with
respect
to
Plaintiff’s
initiation
of
wrongful foreclosure claim is granted.
C.
Conversion and Unjust Enrichment
Plaintiff claims conversion and unjust enrichment by Wells
(citing Freeman v. Town of Hudson, 714 F.3d 29, 35 (1st Cir.
2013)).
12
Fargo because Wells Fargo “allowed funds to remain in a suspense
account, not applied to the mortgage or to escrow, for years” from
which Wells Fargo “used the funds in the suspense account to earn
money,”
retained
this
earned
money,
and
“charged
Plaintiff
interest on the entire balance of the mortgage, which continued to
increase due to funds in suspense not applied to the loan.”
(Id.
at 18.)
1.
Under
Conversion
Rhode
conversion,
[a]
Island
law,
plaintiff
“[t]o
must
maintain
establish
an
that
action
[it]
was
for
in
possession of the personalty, or entitled to possession of the
personalty, at the time of conversion.”
Carbone,
898
A.2d
87,
97
(R.I.
Narragansett Elec. Co. v.
2006)
(quoting
Mandarelli, 682 A.2d 918, 928 (R.I. 1996)).
action
for
conversion
lies
in
the
Montecalvo
v.
“[T]he gravamen of an
defendant’s
taking
the
plaintiff’s personalty without consent and exercising dominion
over it inconsistent with the plaintiff’s right to possession.”
Id. (quoting Fuscellaro v. Indus. Nat’l Corp., 368 A.2d 1227, 1230
(R.I. 1977)).
Plaintiff’s
conversion
claims
fail
because
they
are
improper repackaging of a breach of contract claim as a tort.
an
See
DeChristofaro v. Machala, 685 A.2d 258, 264 (R.I. 1996); see also
Clifton v. Nationstar Mortg., LLC, No. 3:12-CV-02074-MBS, 2015 WL
1549108, at *3 (D.S.C. Apr. 6, 2015) (holding plaintiff’s assertion
13
that that defendant’s misapplication of funds in suspense account
in a manner contrary to the settlement agreement is a breach of
contract issue, not conversion).
Furthermore, Plaintiff can and
does argue a breach of contract for what he alleges was Wells
Fargo’s misuse of funds, but he nowhere alleges that Wells Fargo
obtained these funds without his consent.
See Wood v. Nationstar
Mortg. LLC, No. 6:16-CV-2061-MC, 2017 WL 3484664, at *9 (D. Or.
Aug. 14, 2017) (holding a contractual issue and not a conversion
claim where the only alleged converted money was late fees charged
under the Note).
2.
Unjust Enrichment
A claim for unjust enrichment is an equitable claim, and “it
is permissible under Rhode Island law to plead an equitable cause
of action in the alternative where an express contract exists.”
Cappali v. BJ’s Wholesale Club, Inc., 904 F. Supp. 2d 184, 197–98
(D.R.I. 2012) (citation omitted).
However, “[u]njust enrichment,
like other quasi-contractual remedies, is a vehicle for equitable
recovery
where
no
rights
on
an
enforceable
contract
exist.”
Hasbro, Inc. v. Mikohn Gaming Corp., 491 F. Supp. 2d 256, 264
(D.R.I. 2007) (citing 26 Richard A. Lord, Williston on Contracts
§ 68:5 (4th ed. 2004)).
Here, as Defendants correctly point out,
Plaintiff’s claim is premised solely on Defendants’ handling of
Plaintiff’s funds held in a suspense account under the terms of
the mortgage.
(See Defs.’ Memo 16; Mortgage 4.)
14
This claim,
therefore, is based on the terms of the contract, not on an
allegation that the contract is unenforceable, which is necessary
to support a claim based on unjust enrichment.
491 F. Supp. 2d at 264.
See Hasbro, Inc.,
Thus, Plaintiff’s claim for unjust
enrichment fails and Defendant’s Motion To Dismiss with respect to
this claim is granted.
See Lister v. Bank of Am., N.A., 790 F.3d
20, 23 (1st Cir. 2015).
D.
Intentional or Negligent Infliction of Emotional Distress
Plaintiff’s final causes of action are for the intentional
and negligent infliction of emotional distress allegedly caused by
the initiation of “[t]wo wrongful foreclosure[s] . . . threatening
Plaintiff’s home” and the sale of Plaintiff’s home at a tax sale
three times “because of Defendants’ actions and failure to act,”
which have caused Plaintiff to “experience debilitating health
issues.”
(Compl. 19.)
Plaintiff alleges that his “debilitating
health issues” have a “regular negative impact on his ability to
engage in activities he enjoyed in the past and to fully enjoy his
artistic, musical, and spiritual life as he did before Defendants
caused this harm.” (Id.) Moreover, Plaintiff alleges that “[m]ost
of his family, friends, and co-workers and persons he supervised
on the job have the ads for tax or foreclosure sale that include
[his] full name and his address,” which “is likely to impact any
opportunity for advancement in the near future” because of the
“responsibilities of his position and the concerns that are created
15
when
someone
responsible.”
appears
to
have
an
inability
to
be
financially
(Id. at 19–20.)
1. Intentional Infliction of Emotional Distress
Rhode Island law has recognized a claim for the intentional
infliction
of
emotional
distress
for
creditor
debtor
relationships, which has four elements: “(1) the conduct must be
intentional or in reckless disregard of the probability of causing
emotional distress, (2) the conduct must be extreme and outrageous,
(3) there must be a causal connection between the wrongful conduct
and the emotional distress, and (4) the emotional distress in
question must be severe.”
Champlin v. Washington Trust Co., 478
A.2d 985, 989 (R.I. 1984). Plaintiff must also show the “existence
of resulting physical symptomatology.”
Clift v. Narragansett
Television L.P., 688 A.2d 805, 813 (R.I. 1996) (citing Reilly v.
United States, 547 A.2d 894 (R.I. 1988)).
“In general a creditor
will not be held liable when he has done no more than insist on
his legal rights in a permissible way, even though such insistence
is likely or even certain to annoy, disturb, or inconvenience the
debtor or even cause him to suffer some emotional distress.”
Champlin, 478 A.2d at 989 (citations omitted).
Plaintiff fails to plead sufficient factual matter to support
the elements of an intentional infliction of emotional distress
claim.
For example, Plaintiff fails to allege that Defendants
engaged in conduct that was “intentional” or “in reckless disregard
16
of the probability of causing emotional distress,” id. at 989,
instead relying on the conclusory allegation that he was harmed by
Defendants’ “willful and deliberate actions,” (Compl. 19).
See
Norton v. Hoyt, 278 F. Supp. 2d 214, 221 (D.R.I. 2003).
Plaintiff also fails to plead any physical symptomatology
associated
with
conclusory
allegations,
health
issues”
his
that
emotional
distress.
saying
have
that
impacted
he
his
Again
suffers
ability
he
relies
on
“debilitating
to
“artistic, musical, and spiritual life” he once had.
enjoy
the
(Compl. 19.)
These conclusory allegations, and Plaintiff’s failure to plead
specific
distress,
physical
are
not
symptoms
enough
to
caused
move
by
his
forward
infliction of emotional distress claim.
alleged
on
his
emotional
intentional
See Lisnoff v. Stein, 925
F. Supp. 2d 233, 241 (D.R.I. 2013).
2. Negligent Infliction of Emotional Distress
Rhode Island recognizes a cause of action for the negligent
infliction of emotional distress “in limited circumstances where
the plaintiff is either in the zone of physical danger, or is a
bystander to a tragic incident involving someone with whom he or
she is closely related, and the plaintiff suffers serious emotional
harm accompanied by some physical manifestations of his or her
distress as a result of the defendant’s negligence.”
Swerdlick v.
Koch, 721 A.2d 849, 864 (R.I. 1998) (first citing
Marchetti v.
Parsons, 638 A.2d 1047, 1052 (R.I. 1994); and then citing D’Ambra
17
v. United States, 338 A.2d 524, 531 (R.I. 1975)).
This claim fails because Plaintiff simply does not allege
that he was “in the zone of physical danger” or that he was “a
bystander to a tragic incident.”
See Swerdlick, 721 A.2d at 864;
Ward v. Lotuff, No. 09-357-ML, 2009 WL 3615970, at *3 (D.R.I. Nov.
2, 2009).
In other words, Plaintiff does not “fall within either
of the above-specified classes of persons who can bring claims for
negligent-infliction of emotional distress.” Jalowy v. Friendly
Home, Inc., 818 A.2d 698, 710 (R.I. 2003) (citations omitted).
IV.
Conclusion
For
the
reasons
discussed
above,
Defendants’
Motion
To
Dismiss Plaintiff’s First Amended Complaint (ECF No. 48) is DENIED
with respect to Plaintiff’s Count I breach of contract claim that
is based on Defendants’ misuse of Plaintiff’s escrow funds and
failure to pay Plaintiff’s property taxes, and on Defendants’
misuse of funds held in Plaintiff’s suspense account.
Motion
is
GRANTED
with
respect
to
all
Plaintiff’s Count I breach of contract claim.
Defendants’
remaining
bases
of
Defendants’ Motion
is also GRANTED with respect to Plaintiff’s Count I breach of
fiduciary duty, Count II initiation of wrongful foreclosure, Count
III conversion and unjust enrichment, and Count IV intentional or
negligent infliction of emotional distress claims.
18
IT IS SO ORDERED.
William E. Smith
Chief Judge
Date: April 24, 2018
19
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