Rhynes v. Bank of America et al
Filing
21
ORDER granting in part and denying in part 8 Motion to Dismiss for Failure to State a Claim. Signed by Judge Samuel H. Mays, Jr on 03/26/2013.
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
SHIRLEY RHYNES,
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
BANK OF AMERICA, et. al,
Defendants.
No. 12-2683
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO
DISMISS FOR FAILURE TO STATE A CLAIM
Plaintiff Shirley Rhynes (“Rhynes”) brings suit for fraud
in the inducement of a loan, violation of the Truth in Lending
Act (“TILA”), violation of the Tennessee Consumer Protection Act
(“TCPA”), negligent and intentional misrepresentation, and
breach of contract.
(Compl., ECF No. 6.)
Before the Court is
Defendants Bank of America, BAC Home Loans Servicing, LP, Bank
of New York Mellon Corporation, and ReconTrust Company, N.A.’s
(collectively “Defendants”) August 13, 2012 Motion to Dismiss
for Failure to State a Claim.
(ECF No. 8.)
Response on October 22, 2012.
(ECF No. 12.)
Reply on November 2, 2012.
(ECF No. 13.)
Rhynes filed a
Defendants filed a
For the following
reasons, Defendants’ Motion to Dismiss is GRANTED in part and
DENIED in part.
I.
Background
The facts are those alleged in Rhynes’ Complaint unless
otherwise stated.
(Compl., ECF No. 6.)
Rhynes purchased real
property located at 2650 Forrestevan Cove, Eads, Tennessee, in
2003.
(Id. ¶ 52.)
In 2005, Rhynes sought to refinance the
mortgage on her property through Streamline Mortgage, an
affiliate of Countrywide Home Loans Servicing, LP
(“Countrywide”) in Nashville, TN.
(Id. ¶¶ 52-53.)
With the
assistance of Streamline Mortgage employee Catherine Holton
(“Holton”), Rhynes entered into an adjustable rate mortgage note
(the “Note”)
and deed of trust (the “Deed”) on June 23, 2005,
for a loan in an original principal amount of $501,500.00 at an
initial rate of 5.75% for thirty (30) years.
Note, ECF No. 1-3; Deed, ECF No. 8-3.)
(Id. ¶¶ 62, 65-66;
Rhynes’ monthly minimum
payment for the first year was $1,613.02.
(Id.)
Rhynes also
obtained a second line of credit from a related company, Full
Spectrum Lending, in the amount of $80,000.00 as a condition of
the Note.
(Id. ¶ 89.)
Rhynes alleges that Holton was induced by financial incentives
offered by Countrywide to mislead Rhynes into agreeing to a high
risk pay-option adjustable rate mortgage (“ARM”).
56.)
(Id. ¶¶ 53-
Rhynes claims that Holton misled her as to the terms of
the Note such that, despite her close reading of the loan
documents, she was unaware that her payments would increase
2
substantially at the end of the introductory period.
She also
claims she did not understand that the interest rate on her loan
would change monthly while her minimum payment was recalculated
annually, resulting in a high risk of negative amortization on
the principal balance of the Note.
(Id. ¶¶ 57-58, 71-73.)
For the years 2006, 2007, 2008, 2009, and 2010, Rhynes’
monthly payments increased but remained lower than the monthly
minimum interest rate, resulting in an increasing principal
balance.
(Id. ¶¶ 78-79, 83-85.)
In August of 2010, Rhynes’
Note converted to a fully amortizing loan.
(Id. ¶ 85.)
At the
time of the Complaint, Rhynes’ mortgage had a principal balance
of $529,469.00 with a monthly minimum payment of $3,426.00.
(Id. ¶¶ 86-87.)
In 2008, Bank of America (“BOA”) acquired Countrywide and
became the loan servicer for its mortgages.
(Id. ¶ 49.)
Rhynes
contacted BOA’s Loss Mitigation Department on numerous occasions
seeking modification or restructuring of her loan.
100.)
(Id. ¶¶ 98-
Rhynes alleges that she is entitled to modification under
the United States Treasury’s Home Affordable Mortgage Program
(“HAMP”), under the Agreed Final Judgment (“AFJ”) entered into
between the State of Tennessee and Countrywide resolving the
Tennessee Attorney General’s case against Countrywide, and under
a recent Settlement Agreement between the United States
Department of Justice and BOA, (the “DOJ Settlement”).
3
(Id. ¶¶
101-106.)
In 2009, BOA offered Rhynes a HAMP trial period loan
modification that reduced her monthly payments to $2,969.03.
(Id. ¶¶ 107, 114.)
Rhynes alleges that she was entitled to
receive a permanent modification after making three monthly
payments, but that after six payments at the trial rate she was
denied permanent modification.
(Id. ¶ 115.)
Rhynes subsequently defaulted on her mortgage payments.
¶ 116.)
(Id.
Rhynes alleges that she again contacted BOA and was
informed that she qualified for an “AG Modification” to her
mortgage.
(Id.)
On April 28, 2011, Rhynes received a letter
from BOA explaining how she could obtain the modification.
¶ 118.)
(Id.)
(Id.
Rhynes applied for the modification on May 28, 2011.
On September 16, 2011, BOA denied Rhynes’ application for
modification and recommended that she short sell or transfer the
deed to her property to avoid foreclosure.
(Id. ¶ 119.)
On
September 29, 2011, after attempting to reach BOA again on
multiple occasions, Rhynes received a second letter stating that
her property would be foreclosed if she did not enter into a
short sale by October 29, 2011.
(Id. ¶ 121-125.)
Rhynes continued to request modification of her loan from BOA.
(Id. ¶¶ 127-130.)
On October 21, 2011, Rhynes was informed that
the Tennessee Office of the Comptroller of the Currency (“OCC”)
had opened a case about her mortgage in its Customer Assistance
Group.
(Id. ¶ 26.)
In February of 2012, BOA entered into the
4
DOJ Settlement.
(Id. ¶ 131.)
Rhynes alleges that she is
entitled to relief under that settlement agreement.
132.)
(Id. ¶
On March 9, 2012, BOA denied Rhynes’ most recent request
for modification.
(Id. ¶ 133.)
On April 13, 2012, Rhynes
received a Notice of Acceleration and a Notice of Right to
Foreclose from ReconTrust Company, N.A. (“ReconTrust”).
136.)
(Id. ¶
At the time of the Notice of Acceleration and
Foreclosure, the principal balance on Rhynes’ mortgage was
$623,000.00 and the value of the property as assessed by BOA was
$379,000.00.
II.
(Id. ¶ 134.)
Jurisdiction and Choice of Law
Jurisdiction in this Court is proper under 28 U.S.C § 1332.
The parties are completely diverse and the amount in
controversy, exclusive of interest and costs, exceeds $75,000.
In a diversity action, state substantive law governs.
See
Brocklehurst v. PPG Indus., Inc., 123 F.3d 890, 894 (6th Cir.
1997)
(citing
(1938)).
To
Erie
R.R.
determine
Co.
the
v.
Tompkins,
governing
304
state
U.S.
law,
a
64,
78
federal
district court must apply the choice-of-law rules of the state
in which it sits.
See Klaxon Co. v. Stentor Electric Mfg. Co.,
313 U.S. 487, 496 (1941); Montgomery v. Wyeth, 580 F.3d 455, 459
(6th Cir. 2009) (citation omitted).
For contract claims, Tennessee follows the rule of lex loci
contractus, which provides that “a contract is presumed to be
5
governed by the law of the jurisdiction in which it was executed
absent a contrary intent.”
Vantage Tech., LLC v. Cross, 17
S.W.3d 637, 650 (Tenn. Ct. App. 1999) (citing Ohio Cas. Ins. Co.
v. Travelers Indem. Co., 493 S.W.2d 465, 467 (Tenn. 1973)); see
also Southeast Tex. Inns, Inc. v. Prime Hospitality Corp., 462
F.3d 666, 672 n.8 (6th Cir. 2006) (observing that “Tennessee
adheres to the rule of lex loci contractus.”).
manifest
an
intent
to
instead
apply
the
“If the parties
laws
of
another
jurisdiction, then that intent will be honored provided certain
requirements are met”: (1) the choice of law provision must be
executed in good faith, (2) the chosen jurisdiction must bear a
material connection to the transaction, (3) the basis for the
choice of law must be reasonable, and (4) the choice of “another
jurisdiction’s law must not be ‘contrary to a fundamental policy
of a state having a materially greater interest and whose law
would
otherwise
govern.’”
Vantage
Tech.
17
S.W.3d
at
650
(citations omitted).
The Note and Deed were entered into in Tennessee and do not
manifest an intent to apply the laws of another jurisdiction.
(Note, ECF No. 1-3.)
All contract claims will be decided under
the substantive law of Tennessee.
For tort claims, Tennessee follows the “most significant
relationship” rule, which provides that “the law of the state
where the injury occurred will be applied unless some other
6
state has a more significant relationship to the litigation.”
Hicks v. Lewis, 148 S.W.3d 80, 86 (Tenn. Ct. App. 2003) (quoting
Hataway v. McKinley, 830 S.W.2d 53, 59 (Tenn. 1992)).
The
alleged injuries in this case occurred in Tennessee, Rhynes is a
citizen of Tennessee, and the Defendants do not contend that
another state’s law should apply.
Tennessee substantive law
governs all tort claims.
III. Standard of Review
In addressing a motion to dismiss for failure to state a claim
under Federal Rule of Civil Procedure 12(b)(6), the court must
construe
the
complaint
in
the
light
most
favorable
to
the
plaintiff and accept all well-pled factual allegations as true.
League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523,
527
(6th
Cir.
2007).
A
plaintiff
can
support
a
claim
“by
showing any set of facts consistent with the allegations in the
complaint.”
(2007).
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563
This standard requires more than bare assertions of
legal conclusions.
Bovee v. Coopers & Lybrand C.P.A., 272 F.3d
356, 361 (6th Cir. 2001).
“[A] formulaic recitation of the
elements of a cause of action will not do.”
at 555.
Twombly, 550 U.S.
Any claim for relief must contain “a short and plain
statement of the claim showing that the pleader is entitled to
relief.”
curiam).
Erickson
v.
Pardus,
551
U.S.
89,
93
(2007)
(per
“Specific facts are not necessary; the statement need
7
only ‘give the defendant fair notice of what the . . . claim is
and the grounds upon which it rests.’”
Id. (quoting Twombly,
550 U.S. at 555).
Nonetheless, a complaint must contain sufficient facts “to
‘state a claim to relief that is plausible on its face’” to
survive a motion to dismiss.
678
(2009)
(quoting
plausibility
Ashcroft v. Iqbal, 556 U.S. 662,
Twombly,
standard
is
550
not
U.S.
akin
at
to
570).
a
“The
‘probability
requirement,’ but it asks for more than a sheer possibility that
a defendant has acted unlawfully.”
U.S. at 556).
of
action,
suffice.”
Id. (citing Twombly, 550
“Threadbare recitals of the elements of a cause
supported
by
mere
conclusory
Id. (citation omitted).
statements,
do
not
A plaintiff with no facts
and “armed with nothing more than conclusions” cannot “unlock
the doors of discovery.”
IV.
Id. at 679.
Analysis
Rhynes’ Complaint asserts claims against the Defendants based
on two separate transactions, the original Note and the trial
modification, and a third independent claim under the TILA for
Defendants’ alleged failure to notify Rhynes of the change in
ownership of her mortgage.
suit
for
fraud
in
misrepresentation,
rescission
of
the
the
and
For the original Note, Rhynes brings
inducement,
violation
Note
and
of
Deed,
8
negligent
the
and
TCPA.
permanent
intentional
She
seeks
injunction
of
collection and foreclosure, and damages under the TCPA.
For the
trial modification, Rhynes brings suit for breach of contract
and
violation
of
the
TCPA.
She
seeks
an
order
requiring
Defendants to modify or restructure her loan and damages under
the TCPA.
For the failure to notify her of the change in
ownership of her mortgage, Rhynes brings suit under Regulation
Z, promulgated under the TILA, and seeks actual and statutory
damages and a complete history of the ownership of her mortgage
loan.
A. The Original Mortgage
1. Fraud in the Inducement
Rhynes alleges that she was induced to agree to the Note by
“a complex scheme to mislead consumers...about the real nature
of Pay Option ARMs,” and that she “reasonably relied on active
misrepresentations and concealment...which fraudulently induced
her to enter into a very toxic and exploitative loan agreement.”
(Compl. ¶ 139-140.)
Defendants argue that Rhynes’ claim is
barred by the three-year statute of limitations under Tenn. Code
Ann. § 28-3-105, which applies to property tort actions.
to
Dismiss.)
Rhynes
contends
that
her
claim
is
(Mot.
actually
governed by the seven-year statute of limitations under Tenn.
Code Ann. §28-2-103, which applies to fraudulent conveyances and
adverse possession.
Dismiss, ECF No. 12.)
(Pl.’s Resp. in Opp. to Defs.’ Mot. to
Rhynes entered into the Note on June 23,
9
2005, and filed her Complaint in the Chancery Court on June 22,
2012,
one
occurred.
In
day
of
seven
years
after
the
transaction
(See Note; Compl.)
Tennessee,
determined
alleged.
short
by
the
the
appropriate
gravamen
of
statute
the
of
complaint
limitations
and
the
is
injury
Mike v. Po Group, 937 S.W.2d 790, 793 (Tenn. 1996).
To ascertain the gravamen of the action, the Court must look to
the basis for which damages are sought.
Id.
A plaintiff who is
fraudulently induced to enter into an agreement may elect to (1)
treat the agreement as voidable and sue for rescission, or to
(2) treat the agreement as existing and sue for damages at law
under
a
tort
theory
based
on
deceit.
See,
e.g.,
Davis
v.
Conner, No. M2008-00661-COA-R3-CV, 2009 Tenn. App. LEXIS 705, at
*22-23 (Tenn. Ct. App. Oct. 26, 2009).
for
Relief
is
somewhat
Although Rhynes’ Prayer
contradictory,
when
addressing
the
original mortgage transaction she explicitly seeks rescission.
(Compl., Prayer for Relief ¶ 2.)
By its terms § 28-2-103 does not apply to Rhynes’ cause of
action
for
fraud
in
the
inducement.
Section
28-2-103
establishes the limitations period for actions seeking recovery
of lands from adverse possessors.
See Tenn. Code Ann. §§ 28-2-
101, et seq.
Rhynes’ fraud in the inducement claim is not a
claim
an
against
recovery of lands.
adverse
possessor
and
does
not
seek
the
It does not appear from Rhynes’ Complaint,
10
which asks the Court to enjoin the Defendants from foreclosing
on 2650 Forrestevan Cove, that the Defendants are in possession
of the property.
If they were, it would be by foreclosure sale
and
possession.
not
adverse
Rhynes
recover title to the property.
also
does
not
seek
to
If Rhynes’ claim for rescission
were granted, she would be relieved of her burden of making
payments
on
the
loan
and
amounts already paid.
receive
restitution
equal
to
the
(Compl., Prayer for Relief ¶ 2); see
Stonecipher v. Estate of M.E. Gray, No. M1998-00980-COA-R3-CV,
2001 Tenn. App. LEXIS 326, at *16 (Tenn. Ct. App. May 4, 2001)
(“[T]he purpose of rescission is to return the parties to the
position
they
existed.”).
would
The
have
been
seven-year
in
statute
had
of
the
contract
limitations
is
not
not
applicable in this case.
See Humphreys v. Bank of Am. Corp.,
No.
U.S.
11-2514-STA-tmp,
2012
Dist.
LEXIS
40954,
at
*25-26
(W.D. Tenn. Mar. 26, 2012).
The
appropriate
limitations
period
for
fraud
in
the
inducement of a contract for real property is three years under
§ 28-3-105.
see
also
Humphreys, 2012 U.S. Dist. LEXIS 40954, at *22, 26;
Vance
v.
Schulder,
547
S.W.2d,
927,
931-32
(Tenn.
1977); Am. Fid. Fire Ins. Co. v. Tucker, 671 S.W.2d 837, 841
(Tenn. Ct. App. 1983); Dale v. B & J Enterprises, No. E201101790-COA R9-CV, 2012 Tenn. App. LEXIS 298, at *26 (Tenn. Ct.
App.
May
10,
2012)
(“[W]here
a
11
homebuyer
sued
the
seller,
alleging fraud in the inducement of a contract...[l]ooking to
the
gravamen
causes
of
of
the
action
complaint,
were
the
subject
to
Court
the
held
that...these
three-year
statute
of
limitations for injuries to real property found at Tenn. Code
Ann. § 28-3-105.”)
Because of the nature of Rhynes’ claim, any
fraudulent acts must have occurred on or before June 23, 2005,
when she entered into the original Note and Deed.
Application of the three-year limitation period does not
mean that Rhynes’ claim fails as a matter of law because it was
not
filed
on
or
before
June
23,
applies to claims for fraud.
2008.
The
discovery
rule
The “discovery rule tolls the
statute of limitations until the plaintiff, in the exercise of
reasonable
diligence,
should
have
been
aware
of
the
facts
sufficient to put [her] on notice that [she] suffered an injury
as a result of wrongful conduct.”
Humphreys, 2012 U.S. Dist.
LEXIS 40954, at *26.
Rhynes’ facts must be accepted as true for the purpose of
deciding her Motion to Dismiss.
Rhynes alleges that a fraud was
perpetrated when Defendants’ agent, Holton, misled her as to the
facts
that
her
each
year,
that
mortgage
the
payment
interest
would
rate
on
increase
substantially
her
would
loan
change
monthly while the payment amount would change yearly resulting
in a high risk of negative amortization, and that the loan would
convert to a fully amortized mortgage after five years.
12
(Compl.
¶¶ 71-74.)
Given the nature of the alleged fraud, Rhynes, in
the exercise of reasonable diligence, should have been on notice
about the nature of her injury as early as August of 2006, when
she
received
her
first
monthly
payment
adjustment
statement showing that her principal had increased.
78.)
and
a
(Compl. ¶
At the latest, Rhynes should have been on notice in August
of 2007, when she received her second monthly payment adjustment
and
a
statement
showing
that
her
principal
had
increased.
(Compl. ¶ 79.); see Humphreys, 2012 U.S. Dist. LEXIS 40954, at
*27-28.
Although
Rhynes’
Complaint
does
not
give
specific
dates, she alleges that, “when [she] began to get notices of
payment increases,” she realized that her loan was not what she
understood it to be and began contacting BOA repeatedly, seeking
an explanation and modification of her loan.
(Compl. ¶ 94.)
It is clear based on Rhynes’ alleged facts that she was or
should have been on notice that she had suffered an injury as a
result of Defendants’ alleged wrongful conduct no later than
August 31, 2007.
For Rhynes’ fraud in the inducement claim to
survive under the three-year statute of limitations, she had to
file her claim on or before August 31, 2010.
Rhynes’ claim is
untimely.
Rhynes’ fraud in the inducement claim is time-barred.
As a
matter of law, Rhynes cannot state a claim on which relief can
13
be granted.
Rhynes’ claim against the Defendants for fraud in
the inducement of a contract is DISMISSED.
2. Negligent and Intentional Misrepresentation
Rhynes brings separate claims for negligent and intentional
misrepresentation.
negligent
She
alleges
misrepresentations
that
when
the
they
Defendants
“supplied
made
false
information regarding the nature and terms of the Pay Option ARM
loan,” and “failed to exercise reasonable care or competence in
communicating this information” to her.
Rhynes
alleges
misrepresentations
that
when
the
(Compl. ¶¶ 151-153.)
Defendants
made
intentional
“supplied
false
information
they
regarding the nature and terms of the Pay Option ARM loan,” and
that they “knew the falsity of the information furnished” to
her.
(Id. ¶¶ 155-157.)
Rhynes claims that she “justifiably
relied upon these representations” when electing to enter into
the original mortgage agreement.
(Id. ¶¶ 152, 156.)
Defendants
argue that Rhynes’ claim is barred by the three-year statute of
limitations
Dismiss.)
under
Tenn.
Code
Ann.
§
28-3-105.
(Mot.
to
Rhynes does not explicitly contest the application of
§ 28-3-105 to her misrepresentation claims,1 but contends that
1
Rhynes states that she “disagrees that the three-year statute of
limitations...applies to action for recission and restitution based on fraud
in the inducement of a loan transaction.” (Pl.’s Resp.) To the extent that
this can be read as a an argument in favor of applying the seven-year statute
of limitations in § 28-2-103 to her misrepresentation claims, it is erroneous
for the reasons given in section IV(A)(1) above.
14
her claims were brought within three years of her discovery of
the alleged misrepresentations.
(Pl.’s Resp.)
Rhynes correctly asserts that the discovery rule applies to
claims
cause
for
of
negligent
action
and
accrues
intentional
for
either
misrepresentation.
intentional
or
“‘A
negligent
misrepresentation when a plaintiff discovers or in the exercise
of reasonable care and diligence, should have discovered, his
injury and the cause thereof.’”
Harris v. Nationwide Mut. Fire
Ins. Co., No. 3:11-0412, 2012 U.S. dist. LEXIS 97158, at *8
(M.D. Tenn. July 12, 2012) (quoting Med. Educ. Assistance Corp.
v. State, 19 S.W.3d 803, 817 (Tenn. Ct. App. 1999)).
Rhynes
contends that her claim is timely because, when she contacted
BOA for information about her loan before 2009, BOA did not
respond.
(Resp.; Compl. ¶¶ 94-97.)
She claims that she was not
aware
the
injury
of
full
extent
of
her
until
her
mortgage
converted to a fully amortized note in August of 2010, and that
she was not aware of her right to recovery until the AFJ was
entered into between Countrywide and the State of Tennessee on
January 22, 2009.
(Resp.; Compl. ¶¶ 87-89.)
Under the discovery rule, “a cause of action accrues and
the statute of limitations begins to run...when the plaintiff
has actual knowledge of ‘facts sufficient to put a reasonable
person on notice that [she] has suffered an injury as a result
of
wrongful
conduct.’”
Redwing
15
v.
Catholic
Bishop
for
the
Diocese of Memphis, 363 S.W.3d 436, 459 (Tenn. 2011) (quoting
Carvell v. Bottoms, 900 S.W.2d 23, 29 (Tenn. 1995)).
Rhynes
need not have had knowledge of the exact extent of the injury
she suffered or access to all of the information she sought from
BOA explaining the terms of her mortgage.
“The discovery rule
does
of
not
delay
the
accrual
of
a
cause
action
and
the
commencement of the statute of limitation until the plaintiff
knows the full extent of the damages....The discovery rule is
not intended to permit a plaintiff to delay filing suit until
the discovery of all the facts that affect the merits of his or
her claim.”
Redwing, 363 S.W.3d at 459 (internal quotations and
citations omitted).
Rhynes’ cause of action under the AFJ has
no bearing on whether she should have been aware that she had
accrued a common law cause of action against Defendants for
negligent or intentional misrepresentation. Even if it did, the
AFJ
was
entered
more
than
3
years
before
Rhynes
filed
her
Complaint.
Like the acts Rhynes alleges fraudulently induced her to
enter into the loan, all of the misrepresentations that she
alleges must have occurred on or before the signing of the Note
on June 23, 2005.
notice
that
she
The same analysis applies.
had
suffered
an
injury
as
Rhynes was on
a
result
of
Defendants’ alleged wrongful actions no later than August 31,
2007.
Rhynes’
claims
for
16
negligent
and
intentional
misrepresentation are untimely under the three-year statute of
limitations.
Rhynes’ negligent and intentional misrepresentation claims
are time-barred.
As a matter of law, Rhynes cannot state a
claim on which relief can be granted.
Rhynes’ claims against
the Defendants for negligent and intentional misrepresentation
are DISMISSED.
3. Violation of the TCPA
The
under
Court
the
understands
TCPA,
one
Rhynes
based
on
to
bring
two
Defendants’
separate
alleged
claims
wrongful
actions during the original loan transaction and one based on
Defendants’
alleged
wrongful
actions
during
the
trial
modification of Rhynes’ monthly payments under the Note.
Rhynes
alleges that the Defendants “committed deceptive acts, or made
material misrepresentations or omissions in violation of Tenn.
Code Ann. § 47-18-104(a), (b)(5), and (b)(27),” and that the
violation of the TCPA was “willful and knowing.”
146-147.)
(Compl. ¶¶
Defendants argue that Rhynes’ claims under the TCPA,
insofar as they relate to alleged unfair or deceptive practices
during the original loan transaction, are barred by the statute
of
limitations
at
Tenn.
Code
Ann.
§47-18-110.
(Mot.
to
Dismiss.)
Section 47-18-110 states that “[a]ny action commenced pursuant
to [the private right of action under the TCPA] shall be brought
17
within one (1) year from a person’s discovery of the unlawful
act or practice, but in no event shall an action under [the
private right of action] be brought more than five (5) years
after the date of the consumer transaction giving rise to the
claim for relief.”
As discussed above, Rhynes should have been
on notice that she had suffered an injury as a result of the
alleged wrongful actions of the defendant no later than August
31, 2007, and her claim is therefore untimely.
Even if, as
Rhynes contends, her discovery of the wrongful actions of the
Defendants was as late as August of 2010, her TCPA claim is
untimely because her suit was filed almost seven years after the
date of the mortgage transaction.
Rhynes’ TCPA claims based on the original mortgage transaction
are time-barred.
As a matter of law, Rhynes cannot state a
claim on which relief can be granted.
Rhynes’ claims against
the
TCPA
Defendants
for
violation
of
the
in
the
original
mortgage transaction are DISMISSED.
B. The Trial Modification
1. Breach of Contract
Rhynes alleges that, by “giving [her] a trial modification
with the express understanding that it would become a permanent
modificiation
modification
upon
period
successful
and
then
completion
failing
to
of
grant
the
the
trial
permanent
modification, the Defendants...have breached their contract with
18
[her].”
is
not
Defendants contend that the alleged trial modification
contained
in
a
writing
signed
by
Defendants
and
is
therefore unenforceable under the Tennessee Statute of Frauds.
(Mot.
to
Dismiss.)
Rhynes
contends
that
her
claim
is
not
subject to the requirements of the Statute of Frauds because it
satisfies
the
requirements
estoppel.
(Pl.’s Resp.)
of
the
exception
of
equitable
She also argues that she can state a
breach of contract claim based on the Temporary Payment Plan
(“TPP”)
she
received
modification.
(Id.)
when
she
took
part
in
the
trial
Defendants contend that the TPP cannot
form the basis of a breach of contract claim because it is an
agreement to agree, that Rhynes has not alleged sufficient facts
to show that she was in compliance with the terms of the TPP,
and that equitable estoppel cannot apply to future events or
promises.
(Defs.’ Reply, ECF No. 13.)
a. TPP
The TPP is not properly before the Court.
“When the court
is presented with a Rule 12(b)(6) motion, it may consider the
Complaint and any exhibits attached thereto, public records,
items appearing in the record of the case and exhibits attached
to defendant’s motion to dismiss as long as they are referred to
in the Complaint and are central to the claims contained
therein.”
Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir. 2008)).
If “on a motion under Rule 12(b)(6)...matters outside the
19
pleadings are presented to and not excluded by the court, the
motion must be treated as one for summary judgment under Rule
56.
All parties must be given a reasonable opportunity to
present all the material that is pertinent to the motion.”
Fed.
R. Civ. P. 12(d).
Rhynes’ Complaint does not specifically mention the TPP or
any written agreement that evidences the trial modification.
Rhynes alleges only that she was “offered...a HAMP Trial Period
Agreement for a Loan Modification with payments of $2969.03,
[but] these terms did not meet those to which she is entitled,”
that she was “offered a trial modification under the HAMP
program,” and that “[s]he was promised that if she made
scheduled payments for three months under the trial
modification, she would receive a permanent loan modification.”
(Compl. ¶¶ 107, 114-115.)
Rhynes’ Complaint implies, at best,
an oral agreement, and no documentation of the alleged offer or
her acceptance of the offer is attached.
The Defendants’ Motion
to Dismiss does not mention the TPP and, as discussed below,
seeks to dismiss Rhynes’ breach of contract claim on the ground
that it is barred by the Statute of Frauds.
Rhynes first advances an argument based on the TPP in her
Response, with a separate argument alleging that she is not
subject to the statute of frauds based on the doctrine of
equitable estoppel.
Rhynes never submitted the TPP into the
20
record.
In their Reply to Rhynes’ Response to Defendants’
Motion to Dismiss, Defendants submitted a copy of the TPP that
was not signed by either party.
Even if properly before the
Court, an unsigned copy could not serve as evidence of a written
agreement under the Tennessee Statute of Frauds.
Ann. § 29-2-101(b)(1).
See Tenn. Code
The TPP is a matter outside the
pleadings, and the Court cannot consider it without converting
Defendants’ Motion to a Motion for Summary Judgment.
Fed. R.
Civ. P. 12(d).
The Court has the discretion to decide, in the
circumstances of a particular case, whether it is appropriate to
exclude matters outside the pleadings or to convert the Motion.
Id.
It would not be appropriate to convert the Motion on this
record, which does not include reliable evidence.
b. Statute of Frauds and Equitable Estoppel
“In a breach of contract action, claimants must prove the
existence of a valid and enforceable contract, a deficiency in
the performance amounting to a breach, and damages caused by the
breach.”
Fed. Ins. Co. v. Winters, 354 S.W.3d 287, 291 (Tenn.
2011).
In
Tennessee,
certain
types
of
contracts
are
not
considered valid and enforceable unless they are memorialized in
a writing.
Shah v. Racetrac Petroleum Co., 338 F.3d 557, 573
(6th Cir. 2003).
The Tennessee Statute of Frauds provides that:
21
No action shall be brought against a lender or creditor...
upon any promise or commitment to alter, amend, renew,
extend or otherwise modify or supplement any written
promise, agreement or commitment to lend money or extend
credit, unless the promise or agreement, upon which such
action shall be brought, or some memorandum or note
thereof, shall be in writing and signed by the lender or
creditor, or some other person lawfully authorized by such
lender or creditor.
Tenn. Code Ann. § 29-2-101(b)(1).
Rhynes does not allege that she has a writing signed by
Defendants
memorializing
their
alleged
existing mortgage loan agreement.
promise
to
modify
her
She contends that she is
exempt from the requirements of the Statute of Frauds under the
doctrine of equitable estoppel.
Rhynes argues that she “was led
to believe that she would receive a permanent loan modification
if she complied with the temporary loan payments,” and that
“[i]nstead of getting a permanent modification she was kept in
limbo
believing
that
she
would
eventually
receive
payment
modification until she eventually defaulted on her payments.”
(Pl.’s Resp.)
Insofar as Rhynes states an estoppel defense, it is one for
promissory, rather than equitable, estoppel.
“In the typical
equitable estoppel situation, the defendant has represented an
existing or past fact to the plaintiff, who reasonably and in
ignorance relied upon the representation to his detriment.
Equitable estoppel necessarily preclude[s] the claimant’s
reliance on the defendant’s present or future intention, which
22
initiate[s] the development of promissory estoppel.”
Hood Land
Trust v. Hastings, No. M2009-02625-COA-R3-CV, 2010 Tenn. App.
LEXIS 623, at *17 (Tenn. Ct. App. Oct. 5, 2010) (internal
citations omitted) (emphasis in original).
Presuming for
purposes of deciding this Motion that Defendants expressly
promised they would modify Rhynes’ loan, Tennessee law “do[es]
not consider a promise alone sufficient to constitute a
representation of material fact for purposes of equitable
estoppel.”
Id. at *18.
Even treating Rhynes’ argument as a properly alleged
defense of promissory estoppel, her breach of contract claim
cannot survive.
“Promissory estoppel is a sword, based on the
failure to deliver on a promise, while equitable estoppel is a
shield a plaintiff can raise against the defense of the statute
of frauds.”
Seramur v. Life Care Ctrs. of Am., Inc., No. E2008-
01364-COA-R3-CV, 2009 Tenn. App. LEXIS 126, at *14, (Tenn. Ct.
App. Apr. 2, 2009).
The Tennessee Supreme Court has rejected
promissory estoppel as an exception to the statute of frauds.
See Southern Indus. Banking Corp. v. Delta Properties, Inc., 542
S.W.2d 815 (Tenn. 1976); see also, e.g., Seramur, 2009 Tenn.
App. LEXIS 126, at *14 (“promissory estoppel is not recognized
as an exception to the statute of frauds.”); Regions Bank v.
Lost Cove Campgrounds, Inc., No. M2009-02389-COA-R3-Cv, 2010
Tenn. App. LEXIC 699, at *7 (Tenn. Ct. App. Nov. 9, 2010); but
23
see Carbon Processing & Reclamation, LLC v. Valero Mktg. &
Supply Co., 823 F. Supp. 2d 786, 820-23 (W.D. Tenn. 2011)
(certifying to the Tennessee Supreme Court the question of
whether promissory estoppel can operate as an exception to the
Statute of Frauds) (certification denied by the Tennessee
Supreme Court on grounds that the question was overbroad and was
rendered moot by the decision of the District Court).
Rhynes has not alleged sufficient facts to plead a valid
and enforceable contract between her and the Defendants.
has
not
properly
alleged
an
exemption
based
on
She
equitable
estoppel and cannot, as a matter of law, allege an exemption
based on promissory estoppel.
Rhynes has failed to plead the
elements of a claim for breach of contract and, as a matter of
law,
cannot
Rhynes’
state
claim
a
claim
against
for
which
Defendants
relief
for
can
be
granted.
of
a
contract
breach
modifying her original mortgage loan is DISMISSED.
2. Violation of the TCPA
Rhynes
acts,
or
violation
alleges
made
of
that
material
Tenn.
the
Defendants
“committed
misrepresentations
Code
Ann.
§
or
47-18-104(a),
deceptive
omissions
in
(b)(5),
and
(b)(27),” and that their violation of the TCPA was “willful and
knowing.”
Defendants
practices
(Compl.
¶¶
“concealed
from
[her]
146-147.)
their
and
the
unfair
acts
24
She
and
further
alleges
deceptive
continued
to
acts
the
that
and
present
because of their prolonged pretense of consideration of a loan
modification, thereby discouraging [her] from seeking redress,”
and
that
“[t]hese
acts
also
include
failure
to
advise
the
Plaintiff of her eligibility for relief through the Agreed Final
Judgment.”
(Id. ¶¶ 148-149.)
Rhynes bases her claims on her
assertion that she is entitled to loan modification under HAMP,
the AFJ, and the DOJ Settlement.
The Defendants argue that
Rhynes has no private right of action under any of the alleged
statutes or agreements, that the TCPA does not apply because the
conduct at issue is a foreclosure transaction, and that Rhynes
fails
to
pleading
allege
standard
sufficient
of
Rule
facts
to
9(b).
satisfy
(Mot.
to
the
elevated
Dismiss.)
As
discussed above, any unfair or deceptive practices related to
the origination of Rhynes’ mortgage are time-barred and cannot
be the basis of a claim for relief against the Defendants.
To state a claim for relief under the TCPA, a plaintiff
must allege that she has “suffer[ed] an ascertainable loss of
money or property...as a result of the use or employment of an
unfair
or
deceptive
practice
described
Tenn. Code Ann. § 27-18-109(a)(1).
TCPA
is
a
claim
of
fraud,
and
in
§
27-18-104(b).”
A claim for violation of the
it
must
be
alleged
with
particularity under the elevated pleading standard of Federal
Rule of Civil Procedure 9(b).
No.
11-2816-STA-dkv,
2012
Asemota v. Suntrust Mortg., Inc.,
U.S.
25
Dist.
LEXIS
83744,
at
*37-38
(W.D. Tenn. June 18, 2012). “To plead fraud with particularity,
the plaintiff must allege (1) the time, place, and content of
the alleged misrepresentation, (2) the fraudulent scheme, (3)
the
defendant's
injury.”
fraudulent
intent,
and
(4)
the
resulting
Chesbrough v. VPA, P.C., 655 F.3d 461, 467 (6th Cir.
2011).
a. Foreclosure Dispute
Defendants contend that Rhynes cannot state a claim for
which
relief
Defendants’
can
be
alleged
granted
wrongdoing
foreclosure dispute.
under
was
the
in
TCPA
the
because
context
the
of
a
To state a claim under the TCPA, alleged
unfair or deceptive acts must affect trade or commerce.
Code Ann. § 47-18-104(a).
Tenn.
Trade and commerce are defined by the
TCPA as “the advertising, offering for sale, lease or rental, or
distribution of any goods, services, or property, tangible or
intangible,
real,
personal,
or
mixed,
and
other
commodities, or things of value wherever situated.”
Ann. § 47-18-103(19).
articles,
Tenn. Code
In Pursell v. First American National
Bank, the Tennessee Supreme Court held that trade and commerce
did not include a “dispute [arising] over repossession of the
collateral
securing
[a]
loan.”
937
S.W.2d
838,
false
and
842
(Tenn.
1996).
Rhynes’
TCPA
claim
asserts
misleading
representations and actions by the Defendants in response to her
26
attempts to secure a modification of her mortgage loan and to
prevent
foreclosure.
She
contends
that
the
Pursell
Court
expressly limited its holding to the facts of the case and that
even assuming it did intend to exempt foreclosure litigation
generally,
her
claim
relates
to
Defendants’
loan
servicing
practices and offers of loan modification before any attempt to
repossess her property.
The
Court
understands
Rhynes’
argument
to
be
that
Defendants’ actions were unfair and deceptive because Defendants
led her to believe she would be granted a loan modification that
would allow her to escape foreclosure when in reality she was
maneuvered into a position where her only options were to allow
foreclosure or submit to a short sale of her property.
Based on
that understanding of Rhynes’ claim, Defendants’ contention that
their actions are exempt under the reasoning of Pursell is welltaken although, at the time of the Complaint, foreclosure had
not occurred.
Federal courts in all three districts of Tennessee have
adopted the reasoning of Pursell in a number of cases.
See,
e.g., Gray v. Bank of Am., N.A., No. 3:12-CV-105, 2012 U.S.
Dist.
LEXIS
109536,
at
*12-13
(E.D.
Tenn.
Aug.
6,
2012);
Vaughter v. BAC Home Loans Servicing, LP, No. 3:11-cv-00776,
2012
U.S.
Dist.
LEXIS
6066,
at
*17-18
(M.D.
Tenn.
Jan.
19,
2012); Peoples v. Bank of Am., No. 11-2863-STA, 2012 U.S. Dist.
27
LEXIS 22208, at *33-35 (W.D. Tenn. Feb 22, 2012).
Many of these
cases explicitly state that the TCPA does not apply to “the
manner in which Defendants negotiate[] the loan modification or
forbearance agreement” while simultaneously pursuing foreclosure
proceedings.
Peoples, 2012 U.S. Dist. LEXIS 22208, at *35; see
also, e.g., Knowles v. Chase Home Fin., No. 1:11-cv-01051-JDBegb, 2012 U.S. Dist. LEXIS 1666748, at *23-24 (W.D. Tenn. Aug.
2, 2012) (“courts have consistently held that a lender’s actions
related to foreclosure and debt-collection, even when it is also
pursuing loan modification, are not covered under the TCPA.”).
Defendants’
regarding
the
alleged
trial
unfair
modification
and
deceptive
offered
to
practices
Rhynes
are
not
covered under the TCPA.
Rhynes cannot state a claim for which
relief
under
can
be
granted
the
TCPA,
and
her
claim
is
DISMISSED.
b. Rule 9(b)
Even if Rhynes’ TCPA claim were not exempt, she would fail
to state a claim on which relief can be granted because her
Complaint does not satisfy the elevated pleading standard of
Rule 9(b).
A plaintiff seeking to bring a claim under the TCPA
must allege with particularity that the defendant (1) “engaged
in an unfair or deceptive act or practice declared unlawful by
the TCPA,” (2) that the plaintiff suffered “an ascertainable
loss
of
money
or
property,”
and
28
(3)
that
“the
defendant’s
conduct caused” the loss.
Asemota, 2012 U.S. Dist. LEXIS 83744,
at *35 (internal citations omitted).
Rhynes cannot allege any entitlement to recovery under §
47-18-104(b)(27)
or
the
AFJ.
Section
47-18-104(b)(27)
explicitly states that “enforcement of this subdivision (b)(27)
is vested exclusively in the office of the attorney general and
reporter and the director of the division.”
See Malone v. Nat’l
Bank Assoc., No. 12-3019-STA, 2013 U.S. Dist. LEXIS 12231, at
*22 (W.D. Tenn. Jan. 30, 2013).
Rhynes cannot state a claim
under subdivision 104(b)(27) because there is no private right
of action under that subdivision.
Rhynes also cannot state a claim for relief under the AFJ.
The AFJ is a settlement reached by Countrywide and the Attorney
General of the State of Tennessee.
is not a party to the AFJ.
incidental
third-party
(AFJ, ECF No. 6-1.)
Rhynes
Rhynes is also not an intended or
beneficiary
of
the
AFJ.
The
AFJ
explicitly states that it “is not intended to confer upon any
person
any
rights
beneficiary.”
or
remedies,
(AFJ, ¶ 106)
including
as
a
third
party
The AFJ is “not intended to create
a private right of action on the part of any person or entity
other than the Parties.”
maintain
that
the
(Id.)
Defendants
Rhynes cannot successfully
committed
unfair
and
deceptive
practices by failing to advise her of her entitlement to relief
under
the
AFJ
or
by
failing
to
29
grant
a
loan
modification
consistent with the AFJ because she has no entitlement to relief
under the AFJ.
Rhynes fails to plead any claim under the DOJ Settlement or
HAMP sufficiently.
alleges
only
Although she invokes the DOJ Settlement, she
that,
“[u]pon
information
and
belief
[she]
qualifies for assistance under the newly announced Settlement
Agreement,” and that she has suffered a loss “[d]ue to BOA’s
continuous
wrongful
Agreement.”
denial
(Compl.
to
132.)
comply
Such
under...the
conclusory
Settlement
statements
of
entitlement to relief are insufficient to state a claim under
the ordinary pleading standard and clearly do not rise to the
level required by Rule 9(b)’s elevated standard.
See Iqbal, 556
U.S. at 678.
Rhynes does not claim that she is entitled to relief under
the
terms
of
HAMP.
She
and
the
Defendants
agree
that
individuals have neither a private right of action nor a thirdparty
beneficiary
claim
under
HAMP.
(Pl.’s
Resp.)
Rhynes
argues instead that the Court should adopt the reasoning of the
Northern
District
of
Illinois,
interpreting
the
Illinois
Consumer Fraud Act, and find that conduct that violates the
standards set forth in an applicable best practices guideline,
such as HAMP, can constitute unfair and deceptive practices for
purposes of “little FTC laws.”
(Id.); Boyd v. U.S. Bank, N.A.,
787 F. Supp. 2d 747, 752-54 (D. Ill. 2011).
30
Defendants cite
precedents
from
several
other
districts
holding
that
HAMP
creates no private right of action and that state law claims
that
are
merely
(Defs.’ Reply.)
Rhynes
fails
including
disguised
HAMP
claims
cannot
be
maintained.
The Court need not decide this question because
to
allege
violating
any
any
unfair
HAMP
or
deceptive
regulations,
with
practices,
sufficient
particularity to meet the elevated pleading standard of Rule
9(b).
To meet the Rule 9(b) standard when asserting a TCPA claim,
“at
minimum,
place,
and
actions.”
[p]laintiffs
content
of
Asemota,
are
the
2012
required
allegedly
U.S.
Dist.
to
allege
deceptive
LEXIS
the
and
83744,
at
time,
unfair
*
38.
Rhynes alleges that she “believed that she was eligible to get a
loan modification through [HAMP]” and that BOA’s creation of a
loss
mitigation
[her],
to
department
believe
their
(Compl. ¶¶ 98, 101.)
“led
loan
disgruntled
problems
customers,
would
be
like
addressed.”
She alleges that, “[d]espite numerous
contacts,” she was unable “to get any meaningful response to
requests for loan modification” and that representatives of the
Defendants “did not formally deny or reject her attempts to get
her mortgage loan modified.”
(Id. ¶¶ 99-100.)
She claims that
she was initially told by a BOA employee that she could not
receive HAMP assistance unless she was three months in default
and
that
“she
was
advised
to
31
stop
making
her
monthly
note
payments.”
(Id. ¶ 113.)
on that advice.
Rhynes does not allege that she relied
She alleges that “in or about 2009 [she] was
offered a trial modification under the HAMP program.”
114.)
(Id. ¶
She alleges that “[s]he was promised that if she made
scheduled payments for three months under the trial modification
she
would
receive
a
permanent
loan
modification,”
and
that,
although she made the payments, her loan was not permanently
modified.
(Id. ¶ 115.)
Rhynes also alleges that on several
occasions after she defaulted on her loan she contacted BOA and
was told that she qualified for a loan modification or was asked
to
send
in
financial
documentation
considered for modification.
to
allow
her
loan
to
(Id. ¶¶ 116-118, 121, 129.)
be
She
alleges that, despite her compliance with BOA’s requests, she
was denied a loan modification and Defendants moved forward with
their foreclosure.
(Id. ¶¶ 119, 122, 129, 136.)
Rhynes’ allegations lack the necessary specificity to state
a claim under the TCPA.
the
months
alleged
and
years
wrongful
acts
She does not allege the dates or even
when
took
the
majority
place.
of
More
the
Defendants’
importantly,
her
Complaint fails to allege with specificity the content of the
alleged wrongful acts because she does not indicate why the
Court
should
find
Defendants’
actions
unfair
or
deceptive.
Rhynes admits that she has no direct entitlement to relief under
HAMP.
The
mere
fact
that
her
32
repeated
demands
for
loan
modification were denied does not establish that the Defendants’
actions in considering modification were unfair or deceptive.
She
does
not
allege
which,
if
any,
HAMP
regulations
the
Defendants violated, or whether the Defendants were required to
comply with any of those regulations.
Rhynes’
deceptive
allegation
acts
in
that
violation
Defendants
of
the
committed
TCPA
as
unfair
to
the
and
trial
modification of her Note does not state a claim on which relief
can be granted.
and
is
not
Rhynes’ claim arises from a foreclosure dispute
within
the
established by the TCPA.
to
definition
of
trade
and
commerce
Rhynes’ Complaint also fails to allege
sufficient
facts
meet
the
Rule
9(b)’s
elevated
pleading
standard.
Rhynes’ TCPA claims based on the trial modification
of her mortgage loan are DISMISSED.
C. TILA
Rhynes brings suit for damages under Regulation Z, 12 C.F.R. §
226.39, alleging that the Defendants failed “to notify [her] of
the change in ownership of mortgage.”
Fifteen U.S.C. § 1641(g),
the statutory parallel to Regulation Z, states that:
In addition to other disclosures required by this title, not
later than 30 days after the date on which a mortgage loan is
sold or otherwise transferred or assigned to a third party,
the creditor that is the new owner or assignees of the debt
shall notify the borrower in writing of such transfer
including – (A) the identity, address, telephone number of the
new creditor; (B) the date of transfer; (C) how to reach an
agent or party having authority to act on behalf of the new
creditor; (D) the location of the place where transfer of
33
ownership of the debt is recorded; and (E) any other relevant
information regarding the new creditor.
15 U.S.C. § 1641(g).
Defendants
do
not
statutory requirement.
claim
that
they
complied
with
this
They contend that Rhynes cannot state a
claim for relief under Regulation Z because (1) she does not
allege any actual damages resulting from Defendants’ failure to
disclose, and (2) she does not allege sufficient facts about the
alleged
transfer
Rule
12(b)(6)
Defendants’ first objection is not well taken.
Fifteen
standard.
of
her
mortgage
to
meet
the
(Mot. to Dismiss.)
U.S.C. § 1640(a) provides that:
any creditor who fails to comply with any requirement under
this chapter...including any requirement under...subsection
(f) or (g) of section 131 [15 U.S.C. § 1641]...with respect
to any person is liable to such person in an amount equal
to the sum of – (1) any actual damage sustained by such
person as a result of the failure; (2)(A)(i) in the case of
an individual action twice the amount of any finance charge
in connection with the transaction;...or (2)(A)(iv) in the
case of an individual action relating to a credit
transaction not under an open end credit plan that is
secured by real property or a dwelling, not less than $400
or greater than $4,000.
15 U.S.C. § 1640(a).
“On
its
face,
the
statute
provides
that
if
a
creditor
violates the § 1640(g) notice requirement as to a mortgage loan,
it is liable to the consumer in the amount equal to the sum of
the consumer’s actual damages...and statutory damages of double
34
the finance charge, subject to lower and upper limits of $400
and $4000.” Brown v. CitiMortgage, Inc., 817 F. Supp. 2d 1328,
1330-31 (S.D. Ala. 2011).
recover
statutory
The “right of a TILA plaintiff to
damages,
irrespective
of
the
presence
or
absence of actual damages, is firmly entrenched in the case
law.”
Id.; see also, e.g.,
Purtle v. Eldridge Auto Sales, 91
F.3d 797, 800 (6th Cir. 1996)(“The purpose of the statutory
recovery is to encourage lawsuits by individual consumers as a
means
of
enforcing
creditor
compliance
with
the
Act....A
plaintiff in a TILA case need not prove that he or she suffered
actual
monetary
damages
in
order
to
recover
the
statutory
damages and attorney’s fees.” (internal citations omitted)).
If
Rhynes has alleged sufficient facts to show a violation of §
1640(g), she has stated a claim for which relief can be granted.
Defendants
sufficient
facts
contend
to
that
meet
Rhynes
the
has
standard
failed
under
Rule
to
plead
12(b)(6)
because she has not alleged when a change in ownership took
place, which defendant received the transfer and from whom, and
whether Defendants were subject to the requirements of § 1641 at
the time of any transfer.
(Mot. to Dismiss.)
Rhynes contends
that it would be impossible for her to provide exact dates and
transfer information because the gravamen of her claim is that
the Defendants did not provide the required information, which
was in their exclusive possession.
35
(Pl.’s Resp.)
Rhynes argues
that she has alleged generally “that most of the Pay Option ARMs
originated by Countrywide were sold onto the secondary market
and that Countrywide was acquired by the[] defendants,” and that
no
more
specific
discovery.
(Id.)
information
is
available
to
her
without
Under nearly identical facts in Humphreys,
the Court found that the plaintiff had stated a facial claim
under the TILA and that he was not required to plead specific
information which he did not have but which was likely to become
available during discovery.
2012 U.S. Dist. LEXIS 40954, at *
32.
Rhynes has alleged that her mortgage changed owners and
that she was not notified of the change as required under §
1641.
Accepting Rhynes’ allegations as true and making all
reasonable inferences in her favor, she has alleged sufficient
facts to state a claim for which relief could be granted under
the
TILA.
Therefore,
Defendants’
Motion
to
Dismiss
Rhynes’
claim for violation of Regulation Z is DENIED.
V.
Conclusion
For the foregoing reasons, Defendants’ Motion to Dismiss for
Failure to State a Claim is GRANTED in part and DENIED in part.
Rhynes’
claims
for
fraud
in
the
inducement
of
a
contract,
negligent and intentional misrepresentation, and violation of
the TCPA with regard to the original mortgage transaction are
DISMISSED as time-barred.
Rhynes’ claims for breach of contract
36
and violation of the TCPA with regard to the trial modification
are
DISMISSED.
The
Motion
to
Dismiss
Rhynes’
claim
for
violation the TILA is DENIED.
So ordered this 26th day of March, 2013.
s/ Samuel H. Mays, Jr._____
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE
37
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