Stanley v. JPMorgan Chase Bank, N.A.
Filing
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MEMORANDUM OPINION AND ORDER: granting Defendant JPMorgan Chase Bank, N.A.'s 5 Partial Motion to Dismiss Plaintiff's Complaint. Signed by Judge Irene C. Berger on 6/29/2017. (cc: attys; any unrepresented party) (btm)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
BECKLEY DIVISION
ELVIN STANLEY and
SANDRA G. STANLEY,
Plaintiffs,
v.
CIVIL ACTION NO. 5:17-cv-01231
JPMORGAN CHASE BANK, N.A.,
Defendant.
MEMORANDUM OPINION AND ORDER
The Court has reviewed the Plaintiffs’ Complaint (Document 1-2), Defendant JPMorgan
Chase Bank, N.A.’s Partial Motion to Dismiss Plaintiffs’ Complaint (Document 5), Defendant
JPMorgan Chase Bank, N.A.’s Memorandum of Law in Support of Its Partial Motion to Dismiss
Plaintiffs’ Complaint (Document 6), the Plaintiffs’ Response in Opposition to Defendant’s Partial
Motion to Dismiss (Document 8), and Defendant JPMorgan Chase Bank, N.A.’s Reply in Support
of Its Partial Motion to Dismiss Plaintiffs’ Complaint (Document 11). For the reasons stated
herein, the Court finds that the motion should be granted.
FACTUAL ALLEGATIONS
The Plaintiffs, Elvin and Sandra Stanley, have a mortgage serviced by JPMorgan Chase
Bank (Chase). Their home is located in Rupert, Greenbrier County, West Virginia, within Special
Flood Hazard Area Zone A. They maintained flood insurance until December 2010. At that
time, Chase “cancelled the flood insurance policy on Plaintiffs’ property and refunded them the
amount of the premiums they had paid.” (Compl. at ¶ 6.) Chase indicated that their property
was in flood zone X, and flood insurance was not required. However, “no flood map amendment
has occurred, and their home, in fact, remained in zone A,” where flood insurance was required.
(Id. at ¶ 8.)
In June 2016, the Plaintiffs’ home was flooded, causing extensive damage to the home and
to their possessions. FEMA denied the Plaintiffs’ application for assistance because they failed
to maintain required flood insurance. Without either flood insurance or FEMA assistance, the
Plaintiffs have been unable to fully repair their home. The three-count complaint contains the
following causes of action: Count One – Misrepresentations; Count Two – Unconscionable
Conduct; and Count Three – Fraud. The Defendant has moved to dismiss Counts One and Two,
both of which rely on the West Virginia Consumer Credit and Protection Act (WVCCPA).
STANDARD OF REVIEW
A motion to dismiss filed pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the
legal sufficiency of a complaint. Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009);
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). “[T]he legal sufficiency of a complaint
is measured by whether it meets the standard stated in Rule 8 [of the Federal Rules of Civil
Procedure] (providing general rules of pleading) . . . and Rule 12(b)(6) (requiring that a complaint
state a claim upon which relief can be granted.)” Id. Federal Rule of Civil Procedure 8(a)(2)
requires that a pleading must contain “a short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
In reviewing a motion to dismiss under Rule 12(b)(6) for failure to state a claim, the Court
must “accept as true all of the factual allegations contained in the complaint.” Erikson v. Pardus,
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551 U.S. 89, 93 (2007). The Court must also “draw[ ] all reasonable factual inferences from those
facts in the plaintiff’s favor.” Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).
However, statements of bare legal conclusions “are not entitled to the assumption of truth” and are
insufficient to state a claim. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Furthermore, the Court
need not “accept as true unwarranted inferences, unreasonable conclusions, or arguments.” E.
Shore Mkts., v. J.D. Assocs. Ltd. P’ship, 213 F.3d 175, 180 (4th Cir. 2000). “Threadbare recitals
of the elements of a cause of action, supported by mere conclusory statements, do not suffice…
[because courts] ‘are not bound to accept as true a legal conclusion couched as a factual
allegation.’” Iqbal, 556 U.S. at 678 (quoting Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007)).
To survive a motion to dismiss, “a complaint must contain sufficient factual matter,
accepted as true, ‘to state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678
(quoting Twombly, 550 U.S. at 570.) In other words, this “plausibility standard requires a plaintiff
to demonstrate more than ‘a sheer possibility that a defendant has acted unlawfully.’” Francis v.
Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 570.) In the
complaint, a plaintiff must “articulate facts, when accepted as true, that ‘show’ that the plaintiff
has stated a claim entitling him to relief.” Francis, 588 F.3d at 193 (quoting Twombly, 550 U.S.
at 557.) “Determining whether a complaint states [on its face] a plausible claim for relief [which
can survive a motion to dismiss] will ... be a context-specific task that requires the reviewing court
to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.
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DISCUSSION
The Defendant argues that the WVCCPA claims should be dismissed because the
allegations do not involve misconduct related to debt collection. The Plaintiffs argue that the
Defendant’s actions—telling them flood insurance was not required and cancelling their flood
insurance—took place in the context of debt collection because it occurred in the course of
servicing the Plaintiffs’ mortgage.
West Virginia Code Section 46A-12-127 provides: “No debt collector shall use any
fraudulent, deceptive or misleading representation or means to collect or attempt to collect claims
or to obtain information concerning consumers.” Section 46A-2-128 provides: “No debt collector
may use unfair or unconscionable means to collect or attempt to collect any claim.” Both provide
non-exclusive lists of conduct that would constitute a violation. The WVCCPA defines a “debt
collector” as “any person or organization engaging directly or indirectly in debt collection.”
W.Va. Code § 46A-2-122(d). “Debt collection” is defined as “any action, conduct or practice of
soliciting claims for collection or in the collection of claims owed or due or alleged to be owed or
due by a consumer.” § 46A-2-122(c).
The Plaintiffs allege that the Defendant acted wrongfully by cancelling their flood
insurance and incorrectly advising them that they did not need flood insurance. The Defendant
serviced the Plaintiffs’ mortgage, and was therefore involved in ensuring that they maintained
necessary insurance.
The Court finds that the Defendant’s actions were not undertaken in an
attempt to collect a claim or information concerning a consumer. The Defendant returned funds
the Plaintiffs had paid to purchase flood insurance, as opposed to making any claim for payment.
The complaint does not contain any allegations that could support a finding or inference that the
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cancellation of the flood insurance was designed to collect a debt.1 Because the provisions of the
WVCCPA relied upon by the Plaintiffs prohibit use of misrepresentations and/or unconscionable
behavior to collect debts, the Plaintiffs have not set forth allegations sufficient to state a cause of
action under the WVCCPA. Accordingly, the Court finds that the motion to dismiss Counts One
and Two should be granted.
CONCLUSION
Wherefore, after thorough review and careful consideration, the Court ORDERS that
Defendant JPMorgan Chase Bank, N.A.’s Partial Motion to Dismiss Plaintiffs’ Complaint
(Document 5) be GRANTED.
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and to
any unrepresented party.
ENTER:
June 29, 2017
1 Indeed, a mortgage holder has an interest in the maintenance of required flood insurance to insure that the property
securing the mortgage maintains its value. Thus, it cannot be reasonably inferred that Chase deliberately misled the
Plaintiffs about the flood insurance to somehow help in collecting their mortgage payments. Minimal statutory
research prior to filing a complaint would reveal the legal nullity of such a claim. Similarly, minimal legal research
could lead counsel to legal claims more suited to redress a Plaintiff’s factual allegations. Claims of this nature, so
obviously lacking legal support, inhibit efficient resolution of cases and waste valuable judicial and other resources.
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