Powell v. Bank of America, N.A. et al
Filing
7
OPINION AND ORDER that Powell has failed to state a claim for relief upon which relief can be granted. Therefore, Defendants' 5 Motion to Dismiss is GRANTED, and the case is DISMISSED WITH PREJUDICE. Powell's request for a preliminary injunction is DENIED AS MOOT. Signed by District Judge Arenda L. Wright Allen and filed on 12/8/2011. (rsim)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRG! NIA
Norfolk Division
DEC
8 2011
Cl Fl-X 'i.R DiST-:"
PAMELA POWELL,
Plaintiff,
v.
Civil Action No. 2:1 Icv438
BANK OF AMERICA, N.A., and
RECONTRUST COMPANY, N.A.,
Defendants.
OPINION AND ORDER
This matter comes before the Court on a motion to dismiss. Doc. 5. On June 12, 2011,
Plaintiff Pamela Powell ("Powell") filed this suit against Defendants Bank of America, N.A.
("Bank of America") and Recontrust Company, N.A. ("Recontrust") in the Circuit Court for the
City of Norfolk.
Doc. 1-1.
Powell's Complaint claims that Bank of America breached an
alleged contract to modify Powell's mortgage and was negligent in handling her attempt to
modify the mortgage. Id at paras. 18-37. Powell further alleges that Recontrust breached this
alleged contract between Powell and Bank of America and that it tortuously interfered with
Powell's relationship with the owner of her mortgage.
Id at paras. 38-42.
Powell seeks a
preliminary injunction against foreclosure, an injunction banning foreclosure and requiring
modification, and $74,500 in compensatory and punitive damages.
Id at paras. 43-48, Prayer
for Relief.
Defendants removed this case to this Court on August 8, 2011. Doc. 1. On August 12,
2011, Defendants filed this Motion to Dismiss pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure.
Doc. 5.
Powell did not respond to this motion by the deadline of August 26,
2011, as required by the Local Rules. L.R. 7(F)(1).
Therefore, this motion is ripe for decision.
I. FACTUAL BACKGROUND
In a motion to dismiss under Rule 12(b)(6), the Court accepts the plaintiffs allegations as
true. Rg,, Edwards v. City of Goldsboro. 178 F.3d 231, 243-44 (4th Cir. 1999). Powell alleges
the following:
In September, 2007, Powell took out a $199,400 mortgage from Bank of America on real
property in the City of Norfolk ("the Property"). Doc. 1-1 at paras. 1-2. Powell lost her job on
May 9, 2009, and fell behind on the loan in March 2010. Id. at paras. 5-6. Powell alleges that
she then contracted with Bank of America to modify her loan and provided all requested
documents. Id. at paras. 7-8.
On February 8, 2011, Powell resubmitted her application for a modification due to
changed circumstances.
Id at para. 10.
On February 28, 2011, Bank of America denied
Powell's first modification request on the grounds that she had not provided all requested
documents. Id at para. 9. Bank of America also denied Powell's second modification request.
Id at para. 11.
On June 3, 2011, Powell secured counsel to file a third modification package. Id at para
13.
Bank of America has not responded to Powell's requests for information regarding this
application, despite four attempts by Powell to contact the loan negotiator assigned to her case.
Id. at paras. 14-15. Powell's home was in foreclosure status at the time she filed this suit. Id. at
para. 17.
II. POWELL'S CLAIMS
Defendants have moved to dismiss this case under Federal Rule of Civil Procedure
12(b)(6), arguing that Powell has not stated a claim upon which relief can be granted.
Doc. 5.
Powell's claims stem from several violations of the federal Home Affordable Modification
Program ("HAMP") allegedly committed by Bank of America.
Powell attempts to state four
state-law claims against Defendants:
II.1 Bank of America entered into a contract to modify Powell's mortgage according to
certain terms, and then breached that contract. Doc. 1-1 at paras. 18-29.
III. Bank of America committed negligence per se by violating the federal Home Affordable
Modification Program ("HAMP"). Id. at paras. 30-37.
IV. Recontrust also breached the alleged contract between Bank of America and Powell. IcL
at paras. 38-39.
V. Bank of America and Recontrust tortiously interfered with Powell's contract with the
holder of her mortgage. Id at paras. 40-42.
III. STANDARD OF LAW
Defendants move to dismiss the case under Rule 12(b)(6) of the Federal Rules of Civil
Procedure, arguing that Powell has not stated a claim upon which relief can be granted. Doc. 5.
In a motion to dismiss under Rule 12(b)(6), courts consider as true the properly pled allegations
contained in the Complaint. E.g.. Edwards. 178 F.3d at 243-44. Courts also consider as true any
documents that are "integral to and explicitly relied on in the [C]omplaint," so long as there is no
challenge to their authenticity. Phillips v. LCI Int'l. Inc.. 190 F.3d 609, 618 (4th Cir. 1999).
1 Section 1 of the Complaint lists the common factual allegations underlying Powell's claims and does not itself
assert any claims against Defendants. Therefore, the first Count of the Complaint is numbered "II," and so forth.
To be properly pled, the Complaint must show that the wrongdoing alleged was not
merely possible, but plausible.
Francis v. Giacomelli. 588 F.3d 186, 193 (4th Cir. 2009).
Conclusory allegations "necessitate some 'factual enhancement' within the complaint to cross
'the line between possibility and plausibility of entitlement to relief.'"
Id (quoting Bell Atl.
Corp. v. Twomblv. 550 U.S. 544, 555 (2007)). A mere '"formulaic recitation of the elements of
a cause of action will not do.'" Id (quoting Twomblv. 550 U.S. at 555).
IV. ANALYSIS
A. Breach of Contract
Powell argues that a contract existed between herself and Bank of America to modify her
loan. Doc. 1-1 at para. 18.
Powell alleges that Bank of America breached this contract and that
she suffered damages as a result. Id. at paras. 27-29. Powell further alleges that Recontrust also
breached this contract by initiating foreclosure proceedings at Bank of America's request. Id. at
paras. 38-39.
An enforceable contract requires mutual assent and mutual consideration.
Plaskitt v.
Black Diamond Trailer Co.. 164 S.E.2d 645, 653 (Va. 1968). Here, Powell has not alleged that
she provided Bank of America with consideration.
Powell alleges that she decided "to forego
other foreclosure avoidance options" in "reliance on the representations of the Defendants,"
thereby placing herself "in a more disadvantageous position than that which she would have
occupied except for the conduct of the Defendants."
Doc. 1-1 at paras. 22-24.
However,
"[m]ere forbearance, without an agreement to that effect, is not sufficient consideration for a
promise, even though the fact of forbearance was induced by the promise." Greenwood Assocs..
Inc. v. Crestar Bank. 448 S.E.2d 399, 402 (Va. 1994) (citing Saunders v. Bank of Mecklenbere.
71 S.E. 714, 717 (Va. 1911)).
'"Such an agreement is absolutely essential.'"
Id. (quoting
Saunders. 71 S.E. at 717). Because Powell has not alleged that she ever agreed to forego other
foreclosure avoidance options, she has not alleged any consideration for Bank of America's
alleged promises. See Albright v. Burke & Herbert Bank & Trust Co.. 457 S.E.2d 776, 778 (Va.
1995) (citing id.) ("Nor does a debtor's failure to seek financing elsewhere supply the necessary
consideration for a creditor's agreement to refinance a defaulted loan.").
Because Powell has alleged no consideration that might support her alleged contract with
Bank of America, she cannot state a claim against either Defendant for breach of that contract,
and Defendants' Motion to Dismiss is GRANTED as to Counts II & IV of the Complaint.
B. Negligence Per Se
Powell claims
that Bank of America's alleged violations of HAMP constituted
negligence per se. Doc. 1-1 at 34.
The elements of negligence per se are well-established. First, the plaintiff must
prove that the defendant violated a statute enacted for public safety. Second, the
plaintiff must belong to the class of persons for whose benefit the statute was
enacted, and demonstrate that the harm that occurred was of the type against
which the statute was designed to protect. Third, the statutory violation must be a
proximate cause of plaintiffs injury.
Kaltman v. All Am. Pest Control. Inc.. 706 S.E.2d 864, 872 (Va. 2011) (citations omitted). "The
first and second of these elements are issues of law to be decided by a trial court, while the third
element is generally a factual issue to be decided by the trier of fact." Id (citing Schlimmer v.
Poverty Hunt Club. 597 S.E.2d 43,46 (Va. 2004)).
In this case, Powell has not alleged that Bank of America has "violated a statute enacted
for the public safety." Duties under HAMP are not statutory, but contractual. See Bourdelais v.
J.P. Morgan Chase. No. 3:10CV670-HEH, 2011 WL 1306311, slip op. at 1 (E.D. Va. April 1,
2011) (explaining that servicers, other than government-sponsored organizations like Fannie
Mae and Freddie Mac, undertake their HAMP obligations voluntarily via a contract with the
government that expressly incorporates the HAMP guidelines).
Assuming Powell's allegations
to be true, Bank of America has not violated a statute enacted for the public safety, but rather
breached a contract whose terms incorporate guidelines that are codified in a statute.
Therefore, Powell cannot state a claim for negligence per se under HAMP, and
Defendants' Motion to Dismiss is GRANTED as to Count III of the Complaint.
C. Tortious Interference
Powell
also claims
that both
Defendants tortiously
expectancy from the holder of her mortgage.
interfered with her business
Doc. 1-1 at paras. 40-42.
This tort has four
elements:
(1) the existence of a valid contractual relationship or business expectancy; (2)
knowledge of the relationship or expectancy on the part of the interferor; (3)
intentional interference inducing or causing a breach or termination of the
relationship or expectancy; and (4) resultant damage to the party whose
relationship or expectancy has been disrupted.
Chaves v. Johnson. 335 S.E.2d 97, 103 (Va. 1985). Additionally, when the interference does not
cause a breach of contract, but only a termination of a business expectancy (including contracts
that are terminable at will), the plaintiff must show that the interference involved "improper
methods."
Maximus. Inc. v. Lockheed Info. Memt. Svs. Co.. Inc.. 493 S.E.2d 375, 378 (Va.
1997).
Powell cannot state a claim for tortious interference against Bank of America. Although
Bank of America is not directly mentioned in the loan contract, see Doc. 6-1, Powell has stated
that Bank of America is the servicer of the loan, Doc. 1-1 at para. 1. As a servicer of the loan,
Bank of America is vested with various rights and obligations under the loan contract.2 Doc. 6-1
2 Powell has stated that her relationship with "the note-holder" was interfered with, indicating that this relationship
is defined by the mortgage note. Doc 1-1 at para. 40. Therefore, the note is "integral to and explicitly relied on in
the [C]omplaint," and because Powell has not challenged the note's authenticity, it can be considered in deciding the
present motion. Phillips. 190 F.3d at 618.
at para. 20. Thus, Bank of America is a party to the loan agreement. Because Bank of America
is a party to the loan agreement, it cannot be sued for tortious interference with that agreement.
Fox v. Deese, 362 S.E.2d 699, 708 (Va. 1987) (citing Chaves, 335 S.E.2d at 102).
Powell also has failed to state a claim of tortious interference against Recontrust. Powell
has alleged that: (1) she had a business relationship with the holder of her mortgage (Doc. 1-1 at
para. 42); (2) Recontrust knew of this relationship (id. at para. 40); (3) Recontrust engaged in
foreclosure proceedings, which would terminate her contract (id at paras. 39, 41-42); and (4)
foreclosure would result in damages to Powell (icl at paras. 17,42).
However, Powell has not alleged that Recontrust used "improper methods" to interfere
with her contract with the note-holder. Although Powell does assert that Bank of America used
several potentially improper methods, her only allegation of impropriety regarding Recontrust is
that it breached Bank of America's contract with her. Doc. 1-1 at paras. 38-39. While a breach
of contract violates a "recognized common-law rule," as discussed above, Powell has not
adequately alleged that such a contract existed. Therefore, this Court must conclude that Powell
has failed to allege that Recontrust's alleged interference involved improper methods.
Because Powell has failed to state a claim for tortious interference against either
Defendant, the Motion to Dismiss is GRANTED as to Count V of the Complaint.
D. Conclusion
Even assuming that Powell's allegations are true, her claims are rooted in allegations that
Bank of America violated HAMP.
That statute provides no private cause of action.
Accordingly, Powell has sought redress by asserting other causes of action. "Clever pleading, of
course, is neither unethical nor illegal—it is, in fact, good lawyering."
Linnin v. Michielsens.
372 F. Supp. 2d 811, 825 (E.D. Va. 2005). "But good lawyering should not defeat good judging,
which requires a court to call things as it sees them."
Id
Because the causes of action that
Powell relies upon are inapplicable to this case, Powell has not stated a claim upon which relief
can be granted.
V. CONCLUSION
For the foregoing reasons, Powell has failed to state a claim for relief upon which relief
can be granted. Therefore, Defendants' Motion to Dismiss (Doc. 5) is GRANTED, and the case
is DISMISSED WITH PREJUDICE.
Because the case is dismissed with prejudice, Powell's request for a preliminary
injunction (Doc. 1-1 at paras. 43^8) is DENIED AS MOOT.
IT IS SO ORDERED.
C l^/<2^r>Z L
. WRIGHTALLEi
UNITED STATES DISTRICT JUDGE
Norfolk, Virgini
December Q
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