Biles, et al v. Nationstar Mortgage LLC, et al
Filing
59
ORDER granting in part and denying in part 32 Defendants' Motion for Judgment on the Pleadings. Signed by Judge Samuel H. Mays, Jr on 9/19/2018.
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
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ALFONZIA BILES and TONYA
BILES,
Plaintiffs,
v.
NATIONSTAR MORTGAGE LLC and
NATIONSTAR MORTGAGE HOLDINGS,
INC.,
Defendants.
No. 2:17-cv-2625-SHM-tmp
ORDER
Before the Court is Defendants’ Motion for Judgment on the
Pleadings on Plaintiffs’ Second Amended Complaint, filed on May
24, 2018 (“Second Motion for Judgment on the Pleadings”).
No. 32.)
(ECF
On July 18, 2018, the Court entered an Order granting
the Second Motion in part and reserving a decision on the
remaining part.
(ECF No. 45.)
The Court ordered the parties
to brief whether Plaintiffs’ remaining claims were barred by
the statute of limitations.
(Id.)
The parties filed their
supplemental briefs on July 23, 2018, and July 25, 2018.
Nos. 46-47.)
50.)
Plaintiffs responded on August 1, 2018.
(ECF
(ECF No.
For the following reasons, Defendants’ Second Motion for
Judgment on the Pleadings on Plaintiffs’ claim for Intentional
Infliction of Emotional Distress (“IIED”) is GRANTED.
claim is DISMISSED as time-barred.
That
Defendants’ Second Motion
for Judgment on the Pleadings on Plaintiffs’ § 1981 and § 1691
claims is DENIED.
I.
Background
Plaintiffs are African-American residents of Tennessee.
(Second Am. Compl., ECF No. 30 ¶ 1.)
Plaintiffs built a
structure at 8804 Brunswick Farms Drive, Arlington, Tennessee
(the “Property”).
(Id. ¶ 4.)
They financed that structure
with a loan evidenced by a promissory note and secured by a
deed of trust.
(Id. ¶ 5.)
On May 28, 2014, Plaintiffs “submitted a facially complete
loan
modification
Defendants
did
application”
not
acknowledge
within five days of receipt.
to
Defendants.
receipt
(Id.)
of
the
(Id.
¶
6.)
application
They did not evaluate the
application within 30 days of receipt.
(Id.)
Defendants sent Plaintiffs letters on June 3, 2014, July
10, 2014, and July 31, 2014, that purport to show that the
application had no deficiencies.
2
(Id. ¶ 8.)
On
or
about
September
25,
2014,
Defendants
foreclosure proceedings on Plaintiffs’ Property.
The Property was foreclosed on October 28, 2014.
continued
(Id. ¶ 9.) 1
(Id. ¶ 10.)
US Bank purchased the Property at the foreclosure auction.
See Biles v. Roby, No. W201602139COAR3CV, 2017 WL 3447910, at
*1 (Tenn. Ct. App. Aug. 11, 2017), appeal denied (Jan. 22,
2018).
US
Bank
November 2014.
action
recorded
Id.
against
its
substitute
trustee’s
deed
in
In December 2014, US Bank filed a detainer
Plaintiffs
in
Shelby
County
Circuit
Court
because Plaintiffs refused to vacate the Property (the “2014 US
Bank Action”).
Id.
In February 2015, Tiffany Roby purchased the Property from
US Bank.
Roby, 2017 WL 3447910, at *1.
US Bank conveyed the
Property to Roby by special warranty deed, which was promptly
recorded.
Id.
Because Plaintiffs remained in possession of
the Property, Roby filed a detainer action against them in
Shelby County General Sessions Court (the “2015 Roby Action”).
Id.
The court found that Roby was entitled to possession of
the Property.
Id.
Plaintiffs filed a petition for writs of certiorari and
supersedeas seeking de novo review in Shelby County Circuit
Court.
Id.
Plaintiffs
asserted
claims
for
wrongful
foreclosure and alleged numerous violations of provisions of
1
Plaintiffs do not allege whether foreclosure proceedings began on
September 25, 2014, or on an earlier date.
3
the deed of trust and federal regulations.
Id.
They also
argued that Roby had never acquired valid title and that Roby’s
detainer action should be dismissed on the basis of the US Bank
detainer action, which was pending at the time.
Id.
US Bank dismissed its detainer action without prejudice on
August 14, 2015.
(ECF No. 31-3.)
The Circuit Court tried the case on September 2, 2015.
Id.
It concluded that US Bank had validly acquired title to
the Property and that title to the Property vested in the
subsequent
purchaser,
Roby.
Id.
The
Circuit
Court
also
concluded that Roby was entitled to possession of the Property
as the valid owner of the fee simple interest in the Property.
Id.
Plaintiffs appealed.
On
August
11,
Id.
2017,
the
Tennessee
Court
of
Appeals
addressed, inter alia, whether “the foreclosure sale [was] void
due to the lack of evidence that US Bank transmitted a valid
acceleration letter to Mr. and Mrs. Biles;” whether “US Bank
[had] the right to enforce the promissory note;” whether “the
foreclosure
sale
[was]
void
due
to
the
loan
modification
package submitted by Mr. and Mrs. Biles;” and whether “Ms. Roby
[was] in privity with US Bank such that her detainer action was
barred by the prior suit pending doctrine[.]”
Id. at *2.
The
Court of Appeals concluded that the Circuit Court did not err
when it held that initiating the foreclosure process before
4
evaluating Plaintiffs’ loan modification application did not
render the foreclosure auction void.
Id. at *3-4.
On August 28, 2017, Plaintiffs filed a complaint against
Defendants in this Court.
(ECF No. 1.)
amended complaint the same day.
Plaintiffs filed an
(ECF No. 2.)
Plaintiffs
brought four causes of action against Defendants: (1) violation
of 12 U.S.C. § 2605, (2) violation of 15 U.S.C. § 1691, (3)
violation of 42 U.S.C. § 1981, and (4) intentional infliction
of emotional distress.
(See id.)
Plaintiffs sought actual and
statutory damages pursuant § 2605, § 1024.41, § 1988(b), and
§ 1691e(d), and punitive damages pursuant to § 1691e(b).
at 16.)
Defendants answered on October 2, 2017.
(Id.
(ECF No. 14.)
On November 29, 2017, Plaintiffs filed a Motion to Amend,
seeking
to
include
new
allegations
to
support
Plaintiffs’
claims under 12 U.S.C. § 2605, 15 U.S.C. § 1691, and 42 U.S.C.
§ 1981.
2017.
(ECF No. 17.)
Defendants responded on December 12,
(ECF No. 21.)
On February 28, 2018, Defendants filed the First Motion
for Judgment on the Pleadings.
(ECF Nos. 25-26.)
On April 25, 2018, the Court granted in part and denied in
part Plaintiffs’ Motion to Amend.
granted
amendments
to
Plaintiffs’
(ECF No. 29.)
claims
under
The Court
12
§ 2605(f), 15 U.S.C. § 1691e, and 42 U.S.C. § 1981.
5
U.S.C.
(Id. at
137.)
The Court denied amendments to Plaintiffs’ claim under
12 U.S.C. § 2605(k).
On
May
10,
(Id.)
2018,
Plaintiffs
filed
a
Second
Amended
Complaint that complied with the Court’s April 25, 2018 Order.
(Second Am. Compl., ECF No. 30.)
responded
to
Pleadings.
Defendant’s
First
(ECF No. 31.)
The same day, Plaintiffs
Motion
for
Judgment
on
the
Because Plaintiffs’ Second Amended
Complaint had become the operative complaint, Defendants’ First
Motion for Judgment on the Pleadings was DENIED as MOOT.
On May 24, 2018, Defendants filed their Second Motion for
Judgment
on
the
Pleadings.
responded on June 27, 2018.
(ECF
Nos.
32-33.)
Plaintiffs
(ECF No. 38.)
On July 18, 2018, the Court entered an Order granting in
part
and
reserving
in
part
Judgment on the Pleadings.
Defendants’
(ECF No. 45.)
Second
for
Defendants’ Second
Motion was granted on Plaintiffs’ RESPA claims.
were dismissed.
Motion
Those claims
(Id. at 256.) A decision was reserved on
Plaintiffs’ 15 U.S.C. § 1691 and 42 U.S.C. § 1981 claims.
(Id.)
The parties were ordered to brief whether Plaintiffs’
§ 1981, § 1691, and IIED claims are barred by the statute of
limitations.
(Id.)
On July 23, 2018, Plaintiffs filed a supplemental brief,
arguing that Plaintiffs’ § 1981 claims are subject to a fouryear statute of limitations, their § 1691 claims are subject to
6
a five-year statute of limitations, and their IIED claims are
subject to a one-year statute of limitations that has been
tolled.
(ECF No. 46.)
Defendants filed a supplemental brief
on July 25, 2018, arguing that Plaintiffs’ IIED and § 1981
claims are time-barred by a one-year statute of limitations.
(ECF
No.
claims
47.)
are
not
Defendants
concede
time-barred.
that
(Id.)
Plaintiffs’
On
August
§
1,
1691
2018,
Plaintiffs filed a response to Defendants’ supplemental brief.
(ECF No. 50.)
II.
Standard of Review
The standard of review for a judgment on the pleadings
under Federal Rule of Civil Procedure 12(c) is the same as the
standard for a motion to dismiss under Rule 12(b)(6).
EEOC v.
J.H. Routh Packing Co., 246 F .3d 850, 851 (6th Cir. 2001)
(citation omitted.)
Rule
12(b)(6)
allows
dismissal
of
a
complaint
that
“fail[s] to state a claim upon which relief can be granted.”
A
Rule 12(b)(6) motion permits the “defendant to test whether, as
a matter of law, the plaintiff is entitled to legal relief even
if everything alleged in the complaint is true.”
Mayer v.
Mylod, 988 F.2d 635, 638 (6th Cir. 1993) (citing Nishiyama v.
Dickson Cnty., 814 F.2d 277, 279 (6th Cir. 1987)).
A motion to
dismiss is designed to test whether the plaintiff has pled a
cognizable claim and allows the court to dismiss meritless
7
cases
that
would
waste
unnecessary discovery.
judicial
resources
and
result
in
See Scheid v. Fanny Farmer Candy Shops,
Inc., 859 F.2d 434, 436 (6th Cir. 1988).
When evaluating a motion to dismiss for failure to state a
claim, the Court must determine whether the complaint alleges
“sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’”
Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)).
If a court decides, in light of its
judicial experience and common sense, that the claim is not
plausible, the case may be dismissed at the pleading stage.
Iqbal, 556 U.S. at 679.
The “[f]actual allegations must be
enough to raise a right to relief above [a] speculative level.”
Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d
545, 548 (6th Cir. 2007) (quoting Twombly, 550 U.S. at 555).
A
claim is plausible on its face if “the plaintiff pleads factual
content that allows the court to draw the reasonable inference
that
the
defendant
is
liable
for
the
misconduct
alleged.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556).
complaint
need
not
contain
detailed
factual
A
allegations.
However, a plaintiff's “[t]hreadbare recitals of the elements
of a cause of action, supported by mere conclusory statements,
do not suffice.”
dismiss,
the
court
Id.
may
When deciding a 12(b)(6) motion to
look
to
8
“matters
of
public
record,
orders, items appearing in the record of the case and exhibits
attached to the complaint” for guidance.
Barany-Snyder v.
Weiner, 539 F.3d 327, 332 (6th Cir. 2008) (quoting Amini v.
Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001)).
A Rule 12(c) motion “is granted when no material issue of
fact exists and the party making the motion is entitled to
judgment as a matter of law.”
Paskvan v. City of Cleveland
Civil Serv. Comm'n, 946 F.2d 1233, 1235 (6th Cir. 1991).
III. Analysis
Defendants argue that Plaintiffs’ IIED and § 1981 claims
are time-barred.
(ECF No. 46.)
Defendants also argue that
Plaintiffs’ § 1981 and § 1691 claims are legally deficient.
(ECF No. 33 at 180-81.)
A. Statute of Limitations
1. IIED
The parties agree that claims for IIED are subject to a
one-year statute of limitations.
(ECF No. 46 at 260 n.3; ECF
No. 47 at 278.)
Defendants contend that Plaintiffs’ IIED claim is timebarred because “Plaintiffs filed their Original Complaint on
August 28, 2017 -- almost three (3) years after the Property
had
been
2014. . . .
sold
in
foreclosure
Plaintiffs
knew,
or
9
on
or
should
around
have
October
known,
28,
about
[Defendants’]
alleged
wrongdoings
injury by October 24, 2014.”
and
Plaintiffs’
alleged
(ECF No. 47 at 279.)
Plaintiffs contend that:
Pursuant to Rule 41.01(3), statutes of limitation are
tolled until the final order is entered.
Any
previous
order
would
be
unenforceable
as
interlocutory.
Discover Bank v. Morgan, 363 S.W.3d
479, 488 (Tenn. 2012). The final order was entered
on October 30, 2017 and thus the IIED state law
claims will not expire until October 30, 2018.
(ECF No. 46 at 260 (footnote omitted).)
This
Court
Plaintiffs’
has
federal
federal-question
claims
under
28
jurisdiction
U.S.C.
§
1331
over
and
supplemental jurisdiction over their related state law claims
under 28 U.S.C. § 1367.
at 126.)
(See April 25, 2018 Order, ECF No. 29
State law governs the timeliness of state claims
based on supplemental jurisdiction.
v. Cohill, 484 U.S. 343, 351 (1988).
whether
a
statute
of
Plaintiffs’ IIED claims.
limitations
See Carnegie–Mellon Univ.
Tennessee law determines
has
been
tolled
for
Id.
Tennessee Rule of Civil Procedure 41.01(3) provides: “A
voluntary nonsuit to dismiss an action without prejudice must
be followed by an order of voluntary dismissal signed by the
court and entered by the clerk.
The date of entry of the order
will govern the running of pertinent time periods.”
To the extent Plaintiffs argue that their IIED claims
against Defendants were tolled by their voluntary dismissal of
10
counter claims against US Bank in the US Bank Action, that
argument fails.
Court
entered
On October 17, 2017, the Tennessee Circuit
an
Order
Dismissing
Counter-Complaint
Case
Without Prejudice based on Plaintiffs’ voluntary dismissal of
those claims.
(US Bank v. Biles et al, No. CT-005419-14 (Tenn.
Cir. Ct. 30th D. Mem. Oct. 30, 2017)).
Plaintiffs asserted no
IIED claims against Defendants in that action.
No IIED claims
against Defendants could have been tolled by Rule 41.01(3).
Discover
proposition.
Bank
does
not
support
Plaintiffs’
tolling
Discover Bank addressed relief from a default
judgment and did not discuss tolling of the statute on tort
claims.
See 363 S.W.3d at 479.
Because Plaintiffs’ IIED claims are subject to a one-year
statute of limitations, and because the statute was not tolled,
Plaintiffs’ IIED claims are time-barred.
Those claims are
DISMISSED.
2. 42 U.S.C. § 1981
Defendants
argue
that
Plaintiffs’
§
1981
claims
are
subject to a one-year statute of limitations because those
claims arise under a pre-1990 version of 42 U.S.C. § 1981.
(ECF No. 47 at 280-81.)
claims
are
subject
to
Plaintiffs argue that their § 1981
a
four-year
statute
of
limitations
because their claims arise under a post-1990 version.
46 at 459.)
11
(ECF No.
In 1990, Congress added a new subsection to § 1981 --subsection (b) -- expanding § 1981 to reach a universe of postcontract-formation conduct that was previously non-actionable.
Compare Patterson v. McLean Credit Union, 491 U.S. 164, 177
(1989) (concluding that pre-amendment § 1981 did not cover
“post-formation conduct . . . implicat[ing] the performance of
established
contract
obligations
continuing
employment.
. . .”),
and
with
the
42
conditions
U.S.C.
§
of
1981(b)
(“[T]he term ‘make and enforce contracts’ includes the making,
performance, modification, and termination of contracts, and
the
enjoyment
of
all
benefits,
privileges,
conditions of the contractual relationship.”).
terms,
and
Because the
amendment to § 1981 was an expansion and not a clarification of
existing law, Rivers v. Roadway Exp., Inc., 511 U.S. 298, 313
(1994), some conduct will arise under pre-amended § 1981 -subsection
amendment
(a)
§
--
1981
and
--
some
conduct
subsection
identifying
will
(b).
the
arise
The
under
post-
distinction
applicable
statute
is
dispositive
in
of
limitations.
If a claim arises under subsection (a), the court
must select the most appropriate or analogous state statute of
limitations. If a claim arises under subsection (b), the fouryear “catchall” statute of limitations for any claim arising
under a federal statute enacted after December 1, 1990, is
12
triggered.
See 28 U.S.C. § 1658(a); Anthony v. BTR Auto.
Sealing Sys., Inc., 339 F.3d 506, 514 (6th Cir. 2003).
Formation claims under § 1981(a) are subject to the oneyear statute of limitations in Tenn. Code Ann. § 28-3-104.
Anthony, 339 F.3d at 512.
See
Formation claims under § 1981(b) are
subject to the federal four-year statute of limitations.
See
Jones v. R.R. Donnelly & Sons, 541 U.S. 369, 372-73 (2004).
Defendants
subsection
argue
(a)
that
because
Plaintiffs’
Plaintiffs
claim
allege
arises
that
under
Defendants
“interfered with [Plaintiffs’] right to contract for a loan
modification . . . because of their race.”
81.)
Plaintiffs
constitute
argue
post-formation
that
“[l]oan
activity
and
(ECF No. 47 at 280-
modifications
resulting
subject to the 4-year statute of limitation.”
259
(footnote
omitted).)
Plaintiffs
contend
clearly
claims
are
(ECF No. 46 at
that
“[l]oan
modifications are distinct transactions from loan refinancings”
because “[r]efinancings occur when an old mortgage is cancelled
and a new one is made” and loan modifications do not.
(ECF No.
50 at 287.)
The dispute turns on whether Plaintiffs’ claim that they
were denied the opportunity for a loan modification based on
race addresses discrimination pre-formation or discrimination
post-formation.
parties
cite
no
Few courts have addressed the question.
authority,
and
13
the
Court
finds
none,
The
that
resolves the issue.
One court acknowledged the issue, but
failed to reach the merits.
Thomason v. One W. Bank, FSB, No.
2:12-cv-604-MHT, 2017 WL 4341863, at *6 (M.D. Ala. Mar. 1,
2017)
(applying
§ 1981
claim
two-year
for
Alabama
discrimination
statute
of
in
loan
the
limitations
to
modification
process), report and recommendation adopted with exceptions and
caveats, No. 2:12CV604-MHT, 2017 WL 1095042 (M.D. Ala. Mar. 22,
2017) (declining to dismiss § 1981 claims based on statute of
limitations
based
on
plaintiff’s
objection
that
four-year
statute of limitations under 42 U.S.C. § 1658 applies, and
reserving issue for summary judgment). 2
Because
transaction,
a
loan
Plaintiffs’
formation discrimination.
modification
§
1981
is
claim
a
post-formation
arises
from
post-
See 42 U.S.C. § 1981(b) (“[T]he term
‘make and enforce contracts’ includes the making, performance,
modification, and termination of contracts, and the enjoyment
of
all
benefits,
privileges,
contractual relationship.”).
terms,
and
conditions
of
the
Plaintiffs’ claims are subject to
a four-year statute of limitations and are not time-barred.
B. Legal Sufficiency & Failure to State a Claim
2 On summary judgment, plaintiff’s § 1981 claims were dismissed for
“fail[ing] to meet his prima facie burden[.]” Thomason v. One W. Bank,
FSB, No. 2:12-cv-604-MHT-tfm, 2018 WL 1474908, at *8 (M.D. Ala. Feb 12,
2018), report and recommendation adopted sub nom. Thomason v. One W. Bank,
No. 2:12-cv-604-MHT, 2018 WL 1474537 (M.D. Ala. Mar. 26, 2018).
14
Defendants argue that Plaintiffs’ claims under 15 U.S.C
§ 1691 and 42 U.S.C § 1981 are legally insufficient or fail to
state a claim.
(ECF No. 33 at 180-81.)
1. 15 U.S.C. § 1691
Defendants
concede
that
Plaintiffs’
race-based
discrimination claim under the Equal Credit Opportunity Act
(“ECOA”), 15 U.S.C. §§ 1691, et seq., is not time-barred (ECF
No. 47 at 280), but argue that it is “conclusory and factually
deficient” (ECF No. 33 at 180).
The
ECOA
prohibits
a
creditor
from
taking
an
adverse
action against any credit applicant “on the basis of race,
color, religion, national origin, sex or marital status, or
age.”
15 U.S.C. § 1691(a)(1).
“To establish a prima facie
case of discrimination under . . . the ECOA, a plaintiff must
demonstrate that: (1) he is a member of a protected class; (2)
he applied for and was qualified for a loan; (3) the loan
application was rejected despite his or her qualifications; and
(4) the lender continued to approve loans for applicants with
qualifications similar to those of the plaintiff.”
Midwest
Sav.
Bank,
95
F.
App'x
768,
Hood v.
778
(6th
Cir.
2004)
make
only
threadbare,
(citations omitted).
Defendants
conclusory
argue
that
allegations
discrimination
based
on
Plaintiffs
that
race.
15
Defendants
(ECF
No.
engaged
33
at
in
179-81.)
Defendants
cite
two
cases
to
support
the
proposition
that
Plaintiffs’ ECOA claim is legally deficient: (1) In re Johnson,
No. 09-49420, 2014 WL 4197001 (Bankr. E.D.N.Y. Aug. 22, 2014);
and (2) Williams v. Wells Fargo Bank, N.A., No. CV161003PGSTJB,
2016 WL 4370033 (D.N.J. Aug. 10, 2016).
In In re Johnson, plaintiff alleged that:
Morgan
Stanley
routinely
purchased
loans
with
excessive debt-to-income ratios, dictated the types
of loans that Lend America issued, purchased and
securitized mortgage loans from Lend America where
the
loan-to-value
ratio
exceeded
100
percent,
required Lend America to issue loans with adjustable
rates
and
prepayment
penalties,
provided
the
necessary funding that allowed Lend America to remain
in business, and purchased loans that deviated
substantially from basic underwriting standards.
In re Johnson, 2014 WL 4197001, at *19.
Plaintiff argued that,
“because Lend America made loans in reliance on Wells Fargo and
Bank of America repurchasing them in the secondary market,
Wells Fargo's and Bank of America's policies of purchasing
mortgages in the secondary market had a disparate impact on
Lend America’s customers.”
Id.
The bankruptcy court dismissed
plaintiff’s ECOA claim, concluding that plaintiff
has not alleged facts -- as opposed to conclusions -sufficient to show that he was the victim of
discrimination in connection with his home loan
application. Nor has he alleged facts -- as opposed
to conclusions -- sufficient to show that the
Defendants’ implementation of the “Discretionary
Pricing
Policy”
had
a
racially
discriminatory
disparate impact that adversely affected African–
American applicants for credit.
16
Id. at *21.
have
Unlike the plaintiff in In re Johnson, Plaintiffs
alleged
discrimination
facts
in
application.
showing
the
that
treatment
(Second
Am.
of
Compl.,
they
were
their
loan
ECF
No.
victims
of
modification
30
¶¶ 6-11.)
Plaintiffs have also alleged facts showing that the disparate
treatment adversely affected them, leading to the foreclosure
of the Property.
In
(Id.)
Williams,
“Plaintiff
allege[d]
that
Defendant
discriminated against him when he applied to Wells Fargo for
mortgage lending from 2012-2016 and was rejected.”
4370033, at *3.
2016 WL
The court dismissed plaintiff’s ECOA claim
because “Plaintiff only makes conclusory allegations that Wells
Fargo provided lending on better terms to similarly-qualified
white borrowers.”
Id. at *4.
The court concluded that those
conclusory allegations were insufficient and were unsupported
by facts.
Id.
Williams is unpersuasive.
A claim is plausible on its
face if “the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.”
(citing
Twombly,
550
U.S.
at
556).
contain detailed factual allegations.
Iqbal, 556 U.S. at 678
A
complaint
need
not
Other courts have denied
motions to dismiss even where the complaint merely alleged the
lender
provided
better
terms
17
or
services
to
a
similarly-
qualified,
non-minority
borrower.
See,
e.g.,
Miller
v.
Countrywide Bank, N.A., 571 F. Supp. 2d 251, 259 (D. Mass.
2008); Floyd-Keith v. Homecomings Fin., LLC, No. 209-cv-769WKW, 2010 WL 231575, at *2 (M.D. Ala. Jan. 14, 2010).
Plaintiffs’ Second Amended Complaint alleges that they are
African
American.
Plaintiffs
(Second
allege
that
Am.
they
Compl.,
were
“at
ECF
all
No.
30
material
¶
1.)
times
qualified to receive a loan modification” under Defendants’
guidelines, policies, and procedures.
(Id. ¶ 6.)
They allege
that on May 28, 2014, Plaintiffs “submitted a facially complete
loan modification application to Defendant Nationstar Mortgage
LLC.”
(Id.)
They
allege
that
Defendants
reported
no
deficiencies in Plaintiffs’ application between June 3, 2014,
and July 31, 2014, but that on September 25, 2014, Defendants
“caused
the
transmission
and
publication
of
the
Notice
of
Trustee’s sale to continue the non-judicial foreclosure process
while
[Plaintiffs’]
(Id. ¶ 8.)
modification
application
was
pending.”
Plaintiffs allege that foreclosure was completed on
October 24, 2014, while their application was pending.
10.)
(Id. ¶
Defendants effectively rejected Plaintiffs’ application
by completing foreclosure proceedings.
Plaintiffs also allege
that, during this time, Defendants “continued to evaluate loan
modification
applications
of
similarly
18
situated
Caucasian
applicants and continued to consummate loan modifications with
similarly situated Caucasian applicants.”
(Id. ¶ 11.)
Plaintiffs sufficiently allege a claim for discriminatory
lending practices, in violation of the ECOA.
The alleged facts
give
Plaintiffs’
rise
to
a
fair
inference
that
loan
modification application was rejected, while similarly situated
Caucasians’
loan
modifications
were
not.
Whether
those
allegations are true is a question of proof rather than a
question of adequacy of the pleadings.
Defendants’ Second Motion for Judgment on the Pleadings on
Plaintiffs’ § 1691 claim is DENIED.
2. 42 U.S.C. § 1981
Defendants
argue
that
Plaintiffs’
race-based
discrimination claim under the 42 U.S.C. § 1981, is “conclusory
and factually deficient.”
contend
that
Plaintiffs
(ECF No. 33 at 181.)
have
failed
to
Defendants
“establish
that
Nationstar treated them ‘differently than others outside of the
protected class who were similarly situated.’”
(Id. (quoting
Williams, 2016 WL 4370033, at *11).)
To state a prima facie claim for relief under 42 U.S.C.
§ 1981, a plaintiff must allege: (1) that the plaintiff is a
member of a racial minority; (2) that the defendant intended to
discriminate
discrimination
on
the
basis
concerned
of
one
or
19
race;
more
and
of
(3)
the
that
the
activities
enumerated in § 1981.
King v. City of Eastpointe, 86 Fed.
Appx. 790, 800 (6th Cir. 2003); Hamby v. Parker, No. 3:17-cv01480, 2018 WL 1794729, at *6 (M.D. Tenn. Apr. 16, 2018).
Plaintiffs allege that they are African American and that
Defendants knew Plaintiffs were African American.
allege
an
contract.
to
activity
covered
by
§
1981,
Plaintiffs
modification
of
a
They allege that Defendants “extended modifications
similarly
situated
Caucasian
borrowers”
and
that
“Nationstar’s failure to consider or evaluate the application
was the proximate result of racial animus.” (Second Am. Compl.,
ECF No. 30 ¶ 17.)
Plaintiffs have sufficiently stated a claim
under § 1981.
Defendants argue that Plaintiffs must also allege that
they were treated differently than those similarly situated,
but outside the protected class.
(ECF No. 33 at 181.)
That is
a requirement under McDonnell Douglas Corp. v. Green, 411 U.S.
792 (1973).
The requirements under McDonnell Douglas are “an
evidentiary standard, not a pleading requirement,” and thus
unnecessary
to
survive
a
judgment on the pleadings.
motion
to
dismiss
or
motion
for
Swierkiewicz v. Sorema N. A., 534
U.S. 506, 511 (2002); Serrano v. Cintas Corp., 699 F.3d 884,
898 (6th Cir. 2012) (applying Swierkiewicz in the judgment on
the pleadings context).
20
Defendants’ Second Motion for Judgment on the Pleadings
on Plaintiffs’ § 1981 claim is DENIED.
IV.
Conclusion
For the foregoing reasons, Defendants’ Second Motion for
Judgment on the Pleadings on Plaintiffs’ claim for Intentional
Infliction of Emotional Distress is GRANTED.
DISMISSED.
Defendants’
Second
Motion
for
That claim is
Judgment
on
Pleadings on Plaintiffs’ § 1981 and § 1691 claims is DENIED.
So ordered this 19th day of September, 2018.
/s/ Samuel H. Mays, Jr.
SAMUEL H. MAYS, JR.
UNITED STATES DISTRICT JUDGE
21
the
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