Feil et al v. Bank of America, N.A. et al
Filing
18
MEMORANDUM OPINION AND ORDER ; for the reasons stated, the motion to dismiss 13 , is GRANTED, and plaintiffs' complaint is DISMISSED WITH PREJUDICE. Signed by District Judge J Ronnie Greer on 4/15/13. (KDO)
UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF TENNESSEE
AT GREENEVILLE
VICKI DAWN FEIL, Executrix of the
ESTATE OF BRADLEY JOHN FEIL,
Deceased, and VICKI D. FEIL, and
VICKI DAWN FEIL, TRUSTEE of the
BRADLEY AND VICKI FEIL LIVING
TRUST dated May 25, 2010,
Plaintiffs,
v.
BANK OF AMERICA, N.A., successor by
Merger to BAC Home Loans Servicing, LP,
FKA Countrywide Home Loans Servicing,
L.P., successor in interest to Countrywide
Home Loans, Inc.,
Defendants.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
NO: 2:12-CV-47
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the motion of Bank of America, N.A.,successor by Merger
to BAC Home Loans Servicing, LP (“BAC”) and Countrywide Home Loans, Inc. (“Countrywide”)1
to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon
which relief can be granted, [Doc. 12]. Plaintiffs have responded, [Doc. 15], and BAC and
Countrywide have replied, [Doc. 16]. For the reasons which follow, the motion will be GRANTED
and plaintiffs’ complaint will be DISMISSED.
I.
Background
Plaintiffs initially filed their complaint in the Carter County Chancery Court on September
15, 2011. After the state court issued a temporary injunction preventing the foreclosure by
1
Plaintiffs, in the caption of their complaint, name Countrywide as a predecessor entity to BAC. That,
however, is apparently incorrect according to defendants’ motion. The misnomer is irrelevant in determining the motion
before the Court.
defendants of certain real property located at 590 Laurels Road, Johnson City, Tennessee, the matter
was removed to this Court on February 10, 2012. A motion to dismiss was pending in the state court
at the time. Subsequent to the removal, plaintiffs filed a motion for leave to file an amended
complaint on March 12, 2012. The motion was granted and the amended complaint, [Doc. 11], was
filed on March 30, 2012.
II.
The Complaint’s Allegations
The amended complaint makes the following allegations.
The well-pleaded factual
allegations are accepted as true for the purposes of this motion.
On June 18, 2010, Bradley J. Feil and Vicki D. Feil (“the Feils”) quitclaimed real property
located at 590 Laurels Road, Johnson City, Carter County, Tennessee to themselves as Trustees of
the Bradley and Vicki Feil Living Trust dated May 25, 2010. On June 1, 2007, the Feils had
executed a deed of trust to Robert M. Wilson, Jr., Trustee, 2 to secure payment of a promissory note
in the amount of $158,000.00 signed by the Feils on the same date. The promissory note was
payable to Countrywide. BAC holds a “beneficial interest” under the note and deed of trust. At the
time of the loan closing in June, 2007, the Feils “were under the impression that the credit life
disability insurance available on the loan was provided and would be issued to both of them, rather
than just Plaintiff, Vicki D. Feil.” Since the closing, Bradley J. Feil became ill and died on
December 10, 2011. Plaintiffs “were advised that their was no credit life disability insurance issued
for Mr. Feil.” Because of Bradley Feil’s illness and lack of income, the Feils have defaulted on the
loan.
Had the credit life disability insurance been issued “as represented to the Plaintiffs,” the
2
Neither Wilson nor Substitute Trustee, Rubin Lublin Suarez Serrano TN, LLC, is a party to this suit.
2
insurance would have made the monthly mortgage payments and default would not have occurred.
The failure to issue the credit life disability policy was “due to the misrepresentation and faulty
practices” of the defendant. Plaintiffs attempted unsuccessfully to work out a compromise
settlement with BAC and consequently lost a purchaser for the property.
Plaintiffs ask the Court to require defendants “to credit the life disability payments as
represented to Plaintiffs as though said payments had been made,” seek monetary judgment in an
unspecified amount, attorney’s fees and costs, and an injunction “stopping said foreclosure until a
hearing in this cause.”
III.
Standard of Review
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits dismissal of a lawsuit
for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). Rule 8(a)(2)
instructs that a pleading should be “a short and plain statement of the claim showing that the pleader
is entitled to relief.” The purpose of a complaint is to “give the defendant fair notice of what the
plaintiff’s claim is and the ground upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957).3
“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual
allegations, a plaintiff’s obligation to provide the ‘grounds’ of [her] ‘entitle[ment] to relief’ requires
more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will
not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted). “To
avoid dismissal under Rule 12(b)(6), a complaint must contain either direct or inferential allegations
with respect to all the material elements of the claim.” Wittstock v. Mark A. Van Sile, Inc., 330 F.3d
3
Bell Atlantic v. Twombly overruled Conley, specifically disapproving of the proposition from Conley that “a
complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove
no set of facts in support to his claim which would entitle him to relief.” See Twombly, 550 U.S. at 560.
3
899, 902 (6th Cir. 2003).
In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the United States Supreme Court explained that
analysis under Rule 12(b)(6) requires a two-pronged approach. First, the reviewing court should
determine what allegations within the complaint can be classified as “legal conclusions” and
disregard them for purposes of deciding the motion. Id. at 678. Second, the court should evaluate
the remaining portions of the complaint, i.e. the well-pleaded facts, and ascertain whether it gives
rise to a “plausible claim for relief.” Id. at 679. At the second stage, the court “must accept as true
all of the factual allegations contained in the complaint,” Erickson v. Pardus, 551 U.S. 89 (2007)
(per curiam), and “a well-pleaded complaint may proceed even if it strikes a savvy judge that actual
proof of those facts is improbable, and ‘that a recovery is very remote and unlikely.’” Twombly, 550
U.S. at 556. “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.” Iqbal, 556 U.S. at 678.
IV.
Analysis
Defendants argue two bases for dismissal of plaintiffs’ complaint: (1) Plaintiffs fail to allege
the necessary elements of any recognizable cause of action; and (2) plaintiffs factual allegations,
such as they are, are not facially plausible. Plaintiffs’ response to the motion is so woefully
inadequate as to constitute no response at all. As best the Court can glean from that response,
plaintiffs assert that their pleading is sufficient under Tennessee state law and that federal pleading
requirements require no more. As explained below, they are mistaken.
As an initial matter, it is virtually impossible from the face of plaintiffs’ amended complaint
to determine what claim or claims for relief they assert, and they make no attempt to identify the
nature of their claims in their response. As a result, the Court can only guess about the nature of the
4
claims. It is clear, however, that plaintiffs do not assert a breach of contract claim because they do
not assert the existence of any contract.
As defendants suggest, plaintiffs’ allegation of “misrepresentations and faulty practices” of
the defendant could mean that plaintiffs are attempting to state a claim for either negligent or
intentional misrepresentation. To the extent they are, defendants appear to be correct that such claim
is barred by the three year statute of limitations of Tennessee law. See Medical Education
Assistance Corp. v. State, 19 S.W.3d 803, 817 (Tenn. Ct. App. 1999) (“The statute of limitations for
negligent misrepresentation is three years from the accruing of the cause of action”); Prescott v.
Adams, 627 S.W.2d 134, 137 (Tenn. Ct. App. 1981). A cause of action accrues when plaintiffs
knew or reasonably should have known of their injury. Medical Education Assistance Corp., 19
S.W.3d at 817. Presumably, plaintiffs would have received documents from which to determine
whether they had coverage and the extent of the coverage at the time of closing in June, 2007,
although they do not make specific allegations on that issue. If so, however, the statute of
limitations expired long before September 15, 2011, the date of the filing of the state court
complaint.
There is a more fundamental reason, however, why plaintiffs claims fail. They do not plead
the elements of a cause of action for either negligent or intentional misrepresentation, nor do they
allege any facts from which the Court can infer the necessary elements. Furthermore, plaintiffs’
counsel appears to misapprehend the practical effect of the Supreme Court’s Twombly and Iqbal
decisions on pleading requirements in the federal courts. Counsel cites Webb v. Nashville Area
Habitat For Humanity, Inc., 346 S.W.3d 422 (Tenn. 2011) in which the Tennessee Supreme Court
addressed the question of “the proper standard for Tennessee courts to apply in ruling on a Rule
5
12.02(6) motion to dismiss in light of the United States Supreme Court’s recent decisions in Bell
Atlantic Corp. v. Twombly . . . and Ashcroft v. Iqbal . . .” Id. at 424. While noting that the United
States Supreme Court, in considering Federal Rule of Civil Procedure 8, had “made it clear in Iqbal
that the Twombly plausibility standard applies in all federal civil actions,” id. at 428, the Tennessee
Supreme Court “declined to reinterpret Rule 8” of the Tennessee Rules of Civil Procedure to require
the plausibility pleading standard of Twombly and Iqbal in civil actions filed in the Tennessee state
courts. Id. at 437. Despite plaintiffs’ insistence otherwise, the requirements of Rule 8 of the Federal
Rules of Civil Procedure are different from the requirements of Rule 8 of the Tennessee Rules. This
Court must apply the federal rule and the Tennessee Supreme Court’s decision in Webb is therefore
irrelevant. See Hanna v. Plumer, 380 U.S. 460, 470-71 (1965) (holding that federal courts should
apply the relevant rule from the Federal Rules of Civil Procedure in diversity cases); Dickenson v.
Cardiac and Thoracic Surgery of Eastern Tennessee, 388 F.3d 976, 983 (6th Cir. 2004) (“The
Federal Rules of Civil Procedure . . . apply to civil actions in the federal courts . . .”).
Tennessee has adopted § 552 of the Restatement (Second) of Torts “as the guiding principle
in negligent misrepresentation actions against other professionals and business persons.” Robinson
v. Omer, 952 S.W.2d 423, 427 (Tenn. 1997) (quoting Bethlehem Steel Corp. v. Ernst & Whinney,
822 S.W.2d 592, 595 (Tenn. 1991)). Section 552 provides in pertinent part:
(1) One who, in the course of his business, profession or
employment, or in any other transaction in which he has a
pecuniary interest, supplies false information for the guidance
of others in their business transactions, is subject to liability
for pecuniary loss caused to them by their justifiable reliance
upon the information, if he fails to exercise reasonable care
or competence in obtaining or communicating the
information.
(2) Except as stated in Subsection (3), the liability stated in
6
Subsection (1) is limited to loss suffered
(a) by the person or one of a limited group of persons for
whose benefit and guidance he intends to supply the
information or knows that the recipient intends to supply it;
and
(b) through reliance upon it in a transaction that he intends
the information to influence or knows that the recipient so
intends or in a substantially similar transaction.
Cummins v. Opryland Productions, 2001 WL 219696, at *6 (Tenn. Ct. App. Mar. 7, 2001) (citing
Restatement (Second) of Torts, § 552 (1977)).
Thus, a plaintiff seeking damages for negligent misrepresentation must prove the following
elements:
(1) That the defendant was acting in the course of its business,
profession, or employment, or in a transaction in which it had a
pecuniary (as opposed to gratuitous) interest;
(2) That the defendant supplied faulty information meant to guide
others in their business transactions;
(3) That the defendant failed to exercise reasonable care in obtaining
or communicating the information; and
(4) That the plaintiff justifiably relied upon the information provided
by the defendant.
American Cable Corp. v. ACI Management, Inc., 2000 WL 1291265, at *6 (Tenn. Ct. App. Sept. 14,
2000) (citing Robinson, 952 S.W.2d at 427; Ritter v. Custom Chemicides, Inc., 912 S.W.2d 128, 130
(Tenn. 1995); John Martin Co. v. Morse/Diesel, Inc., 819 S.W.2d 428, 431 (Tenn. 1991)).
“The elements of intentional misrepresentation are based on the common law action for fraud
and deceit.” Ogle v. Runion, 1992 WL 9438, at *2 (Tenn. Ct. App. Jan. 24, 1992). An action for
intentional or fraudulent misrepresentation contains four elements: (1) an intentional
misrepresentation of material fact, (2) knowledge of the representation’s falsity, (3) an injury caused
7
by reasonable reliance on the representation, and (4) the misrepresentation involves a past or
existing fact. Axline v. Kutner, 863 S.W.2d 421, 423 (Tenn. Ct. App. 1993). The elements of fraud
must be “stated with particularity.” Kincaid v. SouthTrust Bank, 221 S.W.3d 32, 41 (Tenn. Ct. App.
2006).
In short, plaintiffs’ complaint alleges none of the elements of either a claim of negligent
misrepresentation or of intentional or fraudulent misrepresentation. It only identifies the alleged
misrepresentation as a representation that “the credit life disability insurance [had] been issued” and
would have made the monthly mortgage payments. It gives no other detail. It does not allege the
identity of the person who made the alleged misrepresentation, when it was made, or that the person
who made the alleged misrepresentation was related to the defendant. Plaintiffs do not allege any
specific acts of fraud. The complaint lacks sufficient factual detail to allow the Court “to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 677.
For these reasons, the motion to dismiss is GRANTED, [Doc. 13], and plaintiffs’ complaint
is DISMISSED WITH PREJUDICE.
So ordered.
E N T E R:
s/J. RONNIE GREER
UNITED STATES DISTRICT JUDGE
8
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?