Brichant v. Wells Fargo Bank, N.A. et al
Filing
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MEMORANDUM signed by District Judge Aleta A. Trauger on 9/25/2012. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(hb)
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
ANDREA BRICHANT,
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Plaintiff,
v.
WELLS FARGO BANK, N.A., et al.,
Defendants.
Case No. 3:12-cv-0285
Judge Trauger
MEMORANDUM
Pending before the court is the Motion to Dismiss Wilson & Associates, PLLC and
Shellie Wallace as Defendants (Docket No. 27), to which the plaintiff has responded (Docket No.
38), and the defendants have filed a reply (Docket No. 41). For the reasons discussed herein, the
defendants’ motion will be granted in part and denied in part.
BACKGROUND
The plaintiff, Andrea Brichant, signed a note and deed of trust (together, “the mortgage
instruments”) on March 9, 2006, encumbering real property located in Hendersonville, Tennessee
(“the subject property”) in favor of WMC Mortgage Corp. (“WMC”).1 The deed of trust granted
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Unless otherwise noted, the allegations are drawn from the plaintiff’s First Amended
Complaint (Docket No. 16) and the exhibits referenced therein, which are attached to the
plaintiff’s original Complaint (Docket No. 1). The court may consider such exhibits in ruling on
the pending motion to dismiss. See Barany-Snyder v. Weiner, 539 F.3d 327, 332 (6th Cir. 2008)
(noting that “matters of public record, orders, items appearing in the record of the case, and
exhibits attached to the complaint” may be considered when reviewing a Rule 12(b)(6) motion to
dismiss) (internal quotation marks omitted). Moreover, the defendants have raised no objections
to the exhibits attached to the plaintiffs’ Complaint.
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WMC, the lender, a security interest in the subject property. It also named defendant Mortgage
Electronic Registration Systems, Inc. (“MERS”) as the nominee for WMC and the beneficiary
under the security agreement. The trustee under the agreement was Arnold M. Weiss, an attorney
residing in Shelby County, Tennessee.
On the same day, WMC sold and transferred the mortgage instruments to Morgan Stanley
ABS Capital I Inc. (“Morgan Stanley”). On May 25, 2006, Morgan Stanley sold and transferred
these instruments to the following mortgage-backed securities trust: “Morgan Stanley ABS
Capital I Inc. Trust 2006-WMC2 (“the Trust”). The Trust is alleged to have been settled under
New York law and registered with the U.S. Securities and Exchange Commission (“the SEC”).
Defendant Wells Fargo Bank, N.A. (“Wells Fargo”) acted as the servicer of all of the mortgage
loans held by the Trust, while Deutsche Bank National Trust Company served as the trustee.
On January 29, 2007, less than one year after acquiring the mortgage instruments, the
Trust filed a Form 15-15D “Notice and Certificate of Termination” with the SEC. Just over two
months later, on April 2, 2007, the Trust filed its final Form 10-K Annual Report and was
terminated and dissolved. According to the plaintiff, there is no evidence that the Trust sold the
mortgage instruments to any other entity prior to its termination and dissolution.
The plaintiff alleges that, following these events, Wells Fargo, through its America’s
Servicing Company division, falsely held itself out to the plaintiff as the servicer of the mortgage
instruments and wrongly sent bills for collection. Relying on Wells Fargo’s allegedly false
representations, the plaintiff paid several of these mortgage bills.
On approximately March 22, 2010, the defendant law firm, Wilson & Associates, PLLC
(“Wilson & Associates”), through an individual named Robert Wilson, prepared an Assignment
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of Deed of Trust (“the assignment”) that was executed by John Kennerty on behalf of MERS.
The plaintiff alleges that Kennerty was a known robosigner. It appears from the First Amended
Complaint’s allegations that this document assigned the deed of trust to Wells Fargo. According
to the plaintiff, the assignment “does not deed any conveyance of interest in [the subject
property] at law, and does not demonstrate any authority to transfer interest from the dissolved
Trust.” The plaintiff alleges that the assignment is forged.
On July 15, 2011, Wells Fargo appointed its attorney, defendant Shellie Wallace, as a
successor trustee of the deed of trust.2 By this date, the plaintiff had already ceased paying the
allegedly wrongful bills from Wells Fargo. Following her appointment, Wallace sent the plaintiff
a document entitled “Notice of Trustee’s Sale,” which scheduled a foreclosure sale on August 10,
2011. According to the plaintiff, this sale has since been postponed several times.
The plaintiff commenced the instant action on March 20, 2012. (Docket No. 1.) On
March 29, 2012, she filed her First Amended Complaint, which asserts claims under the Fair
Debt Collection Practices Act (“FDCPA”) 15 U.S.C. § 1692, et seq., the Tennessee Consumer
Protection Act (“TCPA”), Tenn. Code Ann. § 47-18-101, et seq. (2001), and state common law
for unjust enrichment. (Docket No. 16, at 9-15.) The plaintiff seeks both declaratory and
monetary relief. (Id. at 6-15.) Wilson & Associates and Wallace filed the pending motion on
June 1, 2012. (Docket No. 27.)
2
Letters attached to the plaintiff’s original Complaint identify Wallace as an attorney
affiliated with Wilson & Associates. (See Docket No. 1, Ex. J.)
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ANALYSIS
Wilson & Associates and Wallace seek dismissal from this case on the ground that the
First Amended Complaint fails to state claims upon which relief can be granted pursuant to
Federal Rule of Civil Procedure 12(b)(6).
I.
Standard of Review
In deciding a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court
will “construe the complaint in the light most favorable to the plaintiff, accept its allegations as
true, and draw all reasonable inferences in favor of the plaintiff.” Directv, Inc. v. Treesh, 487
F.3d 471, 476 (6th Cir. 2007); Inge v. Rock Fin. Corp., 281 F.3d 613, 619 (6th Cir. 2002). The
Federal Rules of Civil Procedure require that a plaintiff provide “‘a short and plain statement of
the claim’ that will give the defendant fair notice of what the plaintiff’s claim is and the grounds
upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957) (quoting Fed. R. Civ. P. 8(a)(2)).
The court must determine whether “the claimant is entitled to offer evidence to support the
claims,” not whether the plaintiff can ultimately prove the facts alleged. Swierkiewicz v. Sorema
N.A., 534 U.S. 506, 511 (2002) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
The complaint’s allegations, however, “must be enough to raise a right to relief above the
speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To establish the
“facial plausibility” required to “unlock the doors of discovery,” the plaintiff cannot rely on
“legal conclusions” or “[t]hreadbare recitals of the elements of a cause of action,” but, instead,
the plaintiff must plead “factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678-79
(2009).
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II.
The Defendant’s Motion
Wilson and Associates and Wallace contend that their dismissal from this case is
warranted pursuant to Tennessee Code Annotated Section 35-5-116 because the plaintiff failed
to file a verified response to their verified denial. (Docket No. 27, Ex. 1, at 3.) In addition, both
defendants contend that the plaintiff’s First Amended Complaint fails to state claims for
violations of the FDCPA and TCPA, unjust enrichment, and declaratory relief. (Id. at 6-11.)
The court will address each of the defendants’ contentions in turn.
A.
Tennessee Code Annotated Section 35-5-116
Tennessee Code Annotated section 35-5-116 allows any trustee named in a suit relating to
a sale of real property under a trust deed or mortgage to plead, by means of a verified denial in an
answer, that the trustee is not a necessary party. Tenn. Code Ann. § 35-5-116(a) (2007). The
verified denial must state “the basis for the trustee’s reasonable belief that the trustee was named
as a party solely in the capacity as a trustee under a deed of trust.” (Id.) Within 30 days after the
filing of a verified denial, “a verified response is due from all parties to the suit or proceeding
setting forth all matters, whether in law or fact, that rebut the trustee’s verified denial.” Tenn.
Code Ann. § 35-5-116(b). The statute further provides that, if a party fails to object or otherwise
file a timely verified response to the verified denial, “the trustee shall be dismissed from the suit
or proceeding without prejudice.” Tenn. Code Ann. § 35-5-116(c).
Wilson & Associates and Wallace argue that they should be dismissed from this case
because the plaintiff failed to file a verified response to their verified denial. (Docket No. 27, Ex.
1, at 3.) The court agrees in part. The record reveals that, on April 23, 2012, these two
defendants jointly filed a Verified Denial and Answer, noting that the First Amended Complaint
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lacked any allegations against either party concerning any activities outside their role as trustee.
(Docket No. 22 ¶ 2.) It also reveals that no party has either objected to or otherwise timely filed
any verified response to the previously filed verified denial. Accordingly, by operation of the
statute, the trustee, Shellie Wallace, will be dismissed from this action without prejudice.3
Wilson & Associates, however, is not similarly entitled to dismissal under section 35-5116 because it is not a named trustee. Indeed, the Amended Complaint does not identify it as a
trustee of the mortgage instruments. Likewise, the document appointing Wallace as the successor
trustee in her individual capacity fails to vest any trustee powers in Wilson & Associates.4
Accordingly, the court finds Wilson & Associates’ argument for dismissal pursuant to section 355-116 to be without merit.
In her opposition brief, the plaintiff contends that her May 2, 2012 filing of an affidavit
by Terri Petit, a forensic loan auditor, constituted a timely verified response for purposes of
section 35-5-116. (Docket No. 38, Ex. 1, at 2.) This contention is unavailing. First, Terri Petit is
not a party to this action, and thus the affidavit plainly cannot constitute a verified response made
by the plaintiff. Second, the affidavit does not even mention the verified denial, let alone attempt
to rebut its assertion that the First Amended Complaint lacks any allegations concerning Wallace
outside of her role as trustee. Indeed, as the affidavit is dated February 16, 2012, the court fails
to see how it could constitute a response to the verified denial filed on April 23, 2012.
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Section 35-5-116 provides that the dismissal of the trustee “shall not prejudice a party’s
right to seek injunctive relief to prevent the trustee from proceeding with a foreclosure sale.”
Tenn. Code Ann. § 35-5-116(e) (2007).
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This document was attached as Exhibit I to the original Complaint. (See Docket No. 1,
Ex. I.)
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The plaintiff next argues that the court should nonetheless grant her leave to amend and
provide her instructions on what would constitute an acceptable verified response. (Docket No.
38, Ex. 1, at 2.) As Wallace notes in her reply brief, the plaintiff essentially requests this court to
issue her an advisory opinion. (Docket No. 40, at 4.) The court declines this invitation.
Moreover, the statutory deadline for filing a verified response has since lapsed, making futile the
plaintiff’s attempts to correct her previous failure to respond.
Finally, the plaintiff contends that Wallace failed to follow statutory procedures when she
demanded only that the plaintiff, as opposed to all of the parties in this action, file a verified
response. (Docket No. 38, Ex. 1, at 3.) In particular, the plaintiff relies on section 35-5-116(b),
which provides, in pertinent part, that “a verified response is due from all parties to the suit or
proceeding.” However, as Wallace notes in her reply brief, she never demanded that the plaintiff,
or any other party for that matter, file a verified response. (Docket No. 40, at 4.) Nor does the
statute require that she do so. Indeed, it merely provides that, once a verified denial is filed by
the trustee, a verified response is due from all of the parties within 30 days. Tenn. Code Ann. §
35-5-116(b). The plaintiff’s contention is without merit.
B.
Fair Debt Collection Practices Act
Wilson & Associates next contends that the First Amended Complaint fails to state a
claim under the FDCPA. (Docket No. 27, Ex. 1, at 7.) Specifically, it contends that the FDCPA
count is only directed at defendant Wells Fargo. (Id.) The court agrees. Indeed, all but one of
the paragraphs comprising the FDCPA count raise allegations pertaining solely to Wells Fargo’s
purported debt collection activities. (See Docket No. 16 ¶¶ 43-58.) The single paragraph
mentioning any other defendants only vaguely alleges that Wells Fargo and “other named
[d]efendants’ communications to the [p]laintiff falsely represented that [d]efendants Wells Fargo
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and/or [America’s Servicing Company] had standing and authority to foreclose the home.” (Id. ¶
48.) Apart from this allegation, the FDCPA count fails to specifically identify any activities
undertaken by Wilson & Associates that violate the statute. Instead, it only alleges that Wells
Fargo committed statutory violations that caused damages to the plaintiff. (Docket No. 16 ¶¶ 44,
58.)
However, even if the First Amended Complaint could be construed to allege an FDCPA
claim against Wilson & Associates, that claim would nonetheless fail because the firm cannot be
held liable as a debt collector. As previously mentioned, the only paragraph in the FDCPA count
pertaining to defendants other than Wells Fargo states that the defendants made false
representations to the plaintiff concerning Wells Fargo’s standing and authority to foreclose on
her home. (Docket No. 16 ¶ 48.) While the plaintiff does not say as much, to the extent this
paragraph alleges a claim against Wilson & Associates, it appears to do so under 15 U.S.C. §
1692e, which generally prohibits debt collectors from making false or misleading
representations. Thus, to be held liable under this section, Wilson & Associates must be a “debt
collector” for purposes of the statute. The FDCPA defines a “debt collector” as:
[A]ny person who uses any instrumentality of interstate commerce or
the mails in any business the principal purpose of which is the
collection of any debts, or who regularly collects or attempts to
collect, directly or indirectly, debts owed or due or asserted to be
owed or due another. . . . For the purpose of section 1692f(6)5 of this
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Section 1692f(6) prohibits a debt collector from:
Taking or threatening to take any nonjudicial action to effect
dispossession or disablement of property if –
(A) there is no present right to possession of the property claimed as
collateral through an enforceable security interest;
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title, such term also includes any person who uses any instrumentality
of interstate commerce or the mails in any business the principal
purpose of which is the enforcement of security interests.
15 U.S.C. § 1692a(6).
In the present case, the First Amended Complaint’s FDCPA count is devoid of any
allegation that Wilson & Associates is a debt collector under the statute. Indeed, it fails to allege
that Wilson & Associates is a business whose principal purpose is to collect debts, or that it
regularly collects or attempts to collect debts owed to another. Moreover, contrary to her
assertions otherwise, the plaintiff does not articulate a claim under section 1692f(6), let alone
allege in her FDCPA count that Wilson & Associates’ principal purpose is to enforce security
interests. Therefore, any conceivable FDCPA claim alleged in the First Amended Complaint
against Wilson & Associates must necessarily fail.
In sum, the allegations of the First Amended Complaint, as construed by the court, fail to
state a claim for relief against Wilson & Associates. Accordingly, Wilson & Associates’ motion
to dismiss with respect to the plaintiff’s FDCPA claim will be granted.
C.
Tennessee Consumer Protection Act
The First Amended Complaint vaguely alleges that all of the defendants engaged in
unfair and deceptive acts prohibited by the TCPA when they made misrepresentations
concerning the rights to the subject property. (Docket No. 16 ¶ 60.) However, the only
(B) there is no present intention to take possession of the property; or
(C) the property is exempt by law from such dispossession or
disablement.
15 U.S.C. § 1692f(6).
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misrepresentation alleged in the First Amended Complaint concerning Wilson & Associates is
that it falsely represented to the plaintiff that Wells Fargo possessed standing and authority to
foreclose on the plaintiff’s home. (Id. ¶ 48.) In its motion, Wilson & Associates contends that
the plaintiff has failed to state a claim under the TCPA. (Docket No. 27, Ex. 1, at 10-11.)
To state a claim under the Act, the plaintiff must allege: “(1) that the defendant engaged
in an unfair or deceptive act or practice declared unlawful by the TCPA[;] and (2) that the
defendant’s conduct caused an ‘ascertainable loss of money or property.’” Tucker v. Sierra
Builders, 180 S.W.3d 109, 115 (Tenn. Ct. App. 2005) (quoting Tenn. Code Ann. § 47-18109(a)(1)). While the First Amended Complaint broadly alleges that Wilson & Associates made
false representations to the plaintiff concerning Wells Fargo’s standing and authority to foreclose
on the subject property, it lacks any allegation that the plaintiff suffered an ascertainable loss of
money or property as a result of such conduct. Indeed, in her TCPA count, the plaintiff only
alleges that she suffered an ascertainable loss at the hands of Wells Fargo, as she made payments
to the bank in reliance on its purported representations that it owned the plaintiff’s mortgage
loan. (Docket No. 16 ¶ 61.) Accordingly, the plaintiff’s TCPA claim against Wilson &
Associates will be dismissed.
D.
Unjust Enrichment
In Tennessee, the elements of an unjust enrichment claim are: (1) “[a] benefit conferred
upon the defendant by the plaintiff; 2) appreciation by the defendant of such benefit; and 3)
acceptance of such benefit under such circumstances that it would be inequitable for him to retain
the benefit without payment of the value thereof.” Freeman Indus., LLC v. Eastman Chem. Co.,
172 S.W.3d 512, 525 (Tenn. 2005) (internal quotation marks and citation omitted).
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Wilson & Associates contends that the First Amended Complaint fails to state a claim for
unjust enrichment because the plaintiff fails to allege that she conferred any benefit upon it.
(Docket No. 27, Ex.1, at 7.) The court finds this argument well taken. The Amended Complaint
only alleges that the plaintiff made mortgage payments to Wells Fargo in justifiable reliance on
its false representations. (Docket No. 16 ¶ 36.) These payments are the only benefits alleged to
have been unjustly obtained by any of the defendants. Accordingly, because the First Amended
Complaint fails to identify any benefit conferred by the plaintiff upon Wilson & Associates, her
unjust enrichment claim against this defendant must be dismissed.
E.
Declaratory Relief
Finally, Wilson & Associates seeks dismissal of the plaintiff’s count requesting
declaratory relief. In this count, the plaintiff requests the court to declare that none of the
defendants possesses legal ownership or equitable interest in the mortgage instruments. (Docket
No. 16 ¶ 34.) Wilson & Associates asserts that the plaintiff cannot obtain declaratory relief
against it because it does not claim any interest in the subject property outside of acting as the
successor trustee under the deed of trust. (Docket No. 27, Ex. 1, at 6.) The court, however, has
already concluded that Wilson & Associates was not named as a successor trustee or otherwise
granted any trustee powers in the instrument appointing Wallace. Given these circumstances, as
well as the fact that it has dismissed each of the plaintiff’s substantive claims against Wilson &
Associates, the court finds that there is no discernible controversy remaining between the two
parties. Accordingly, the plaintiff’s request for declaratory relief against this defendant will be
dismissed as moot.
CONCLUSION
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For all of the reasons discussed herein, the Motion to Dismiss Wilson & Associates,
PLLC and Shellie Wallace as Defendants (Docket No. 27) will be GRANTED.
An appropriate order will enter.
_______________________________
ALETA A. TRAUGER
United States District Judge
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