Bryant v. Bank of Am., N.A., CIVIL ACTION NO. 3:15-CV-3818-B
| Decision Date | 27 June 2016 |
| Docket Number | CIVIL ACTION NO. 3:15-CV-3818-B |
| Parties | LARRY R. BRYANT and LAURA BRYANT, Plaintiffs, v. BANK OF AMERICA, N.A., and RUSHMORE LOAN MANAGEMENT SERVICES, LLC, Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Before the Court is Defendant Bank of America, N.A.'s Rule 12(b)(6) Motion to Dismiss (Doc. 12). For the following reasons, the Court GRANTS in part and DENIES in part Defendant's Motion.
As best it can, the Court draws its factual account from the allegations in Plaintiffs' Second Amended Complaint (Doc. 10). See Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 725 (5th Cir. 2002) (). But Plaintiffs omit certain details regarding their initial purchase of the property at issue in this suit and their 2010 bankruptcy, so the Court—to flesh out its background section—must turn to the exhibits Defendant Bank of America, N.A. attached to its Motion to Dismiss.1
This is a suit for failure to comply with certain statutory requirements imposed upon mortgage servicers. Plaintiffs Larry R. Bryant and Laura Bryant (the Bryants) obtained a loan from Bank of America, N.A. (BANA) for $209,600.00 on August 27, 2003, to purchase the property located at 14104 Bridle Trail, Forney, Texas 75126 (the Property). Doc. 10, Second Am. Compl. ¶¶ 4-5; Doc. 12-2, Def.'s App. 2, Ex. A, Adjustable Rate Note. The Bryants secured the loan by contemporaneously executing a Deed of Trust on the Property in BANA's favor. Doc. 10, Second Am. Compl. ¶ 5; Doc. 12-2, Def.'s App. 9-25, Ex. B, Deed of Trust.
About seven years later, the Bryants filed for Chapter 13 Bankruptcy here in the Northern District of Texas. Doc. 12-2, Def.'s App. 72-73, Ex. I, Bankr. Docket Sheet. During those proceedings, they scheduled $219,562.00 in debt and $25,611.00 in arrears, due to BAC Home Loan Servicing (BAC) as servicer for BANA, and secured by the Property. Id. at 67, Ex. G, Schedule D - Creditors Holding Secured Claims. Five years later, on November 24, 2015, the Bankruptcy Court entered an order denying the Bryants' request for a discharge, and on December 31, 2015, it closed the case. Id. at 69-70, Ex. H, Order Denying Discharge; id. at 83, Ex. I, Bankr. Docket Sheet.
It was during their bankruptcy, on or about January 13, 2014, that Larry R. Bryant (Mr.Bryant) allegedly sent BANA a first complete loss mitigation application for a loan modification. Doc. 10, Second Am. Compl. ¶ 6. After five weeks without a response, the Bryants say he sent a second application, and, after four more weeks without a response, a third. Id. In total, the Bryants say they submitted four applications to BANA between January and November 2014, never receiving a written response to inform them whether their request had been approved or denied. Id. ¶ 7.
After the Bryants allegedly sent their last application to BANA, in November 2014, BANA transferred servicing on the loan to Rushmore Loan Management Services, LLC (Rushmore). Doc. 10, Second Am. Compl. ¶ 7; Doc. 12, Def.'s Mot. to Dismiss Pl.'s Second Am. Compl. ¶ 1 [hereinafter Def.'s Mot. to Dismiss].2 According to the Bryants, Rushmore then requested they send a fifth loss mitigation application, which they say they did in June 2015, again, receiving no response within the statutory time period. Doc. 10, Second Am. Compl. ¶ 8. The Bryants allege they then sent Rushmore a sixth application, plus "subsequent additional requested supporting documents," on or about August 17, 2015.3 Id. ¶ 9. Again, they claim they received no response, only a Notice of Sale indicating the Property would be foreclosed upon on November 3, 2015. Id.
On October 29, 2015, the Bryants sued BANA and Rushmore in state court. See Doc. 1-1, Original Pet.4 BANA then removed the case to this Court, where the Bryants amended theircomplaint. Doc. 1, Notice of Removal; Doc. 10, Second Am. Compl. In their Second Amended Complaint, the Bryants bring claims against Defendants for:
The Bryants also seek:
(7) a declaratory judgment against Rushmore for violating 12 C.F.R. § 1024.41(d) by failing to respond to a loan modification application with written notice, asking the Court to declare that Rushmore is prohibited from foreclosing upon the Property until it gives such notice, as required by 12 C.F.R. § 1024.41(c)(1)(ii). Id. ¶¶ 35-36.5
BANA moved to dismiss the Bryants' Second Amended Complaint on January 25, 2016, (Doc. 12), the Bryants responded on February 15, 2016, (Doc. 16), and BANA replied on February 29, 2016, (Doc. 15). Therefore, BANA's Motion is now ready for review.
Federal Rule of Civil Procedure 12(b)(6) authorizes a court to dismiss a plaintiff's complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In considering a Rule 12(b)(6) motion to dismiss, "[t]he court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff." In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir. 2007) ). The Court will "not look beyond the face of the pleadings to determine whether relief should be granted based on the alleged facts." Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999). The Court will, however, examine "[d]ocuments that a defendant attaches to a motion to dismiss," because these "are considered part of the pleadings," so long as "they are referred to in the plaintiff's complaint and are central to her claim." Collins, 224 F.3d at 498-99 (internal citations omitted). The Court will also take judicial notice of matters of public record, such as bankruptcy filings and dockets. See Norris, 500 F.3d at 461 n.9; In re Cortez, 217 B.R. at 538.
To survive a motion to dismiss, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. When well-pleaded facts fail to achieve this plausibility standard, "the complaint has alleged—butit has not shown—that the pleader is entitled to relief." Id. at 679 (internal quotation marks and alterations omitted).
BANA first moves to dismiss the Bryants' claim that it failed to respond to their loan modification requests in violation of 12 C.F.R. § 1024.41.
Section 1024.41 of the Code of Federal Regulations specifies the procedures lenders must follow when reviewing borrowers' loss mitigation applications. Obazee v. The Bank of New York Mellon, No. 15-CV-1082, 2015 WL 4602971, at *2-3 (N.D. Tex. July 31, 2015) (discussing 12 C.F.R. § 1024.41). One such requirement calls for a servicer to notify a borrower, in writing, within 30 days after it receives a complete loss mitigation application, "which loss mitigation options, if any, it will offer the borrower, or the specific reasons for denying a complete loss mitigation application." Id. at 2 (citing 12 C.F.R. § 1024.41(c), (d)).
BANA contends that the Bryants have not sufficiently pled their claim here for two reasons. First, it says the Bryants' allegations are not specific enough. While the Bryants allege they sent BANA multiple modification applications between January and November 2014—and that BANA never responded—BANA says the Bryants "do not allege any facts relating to their purported applications or 'modification requests,' such as when they were submitted, how they were submitted, and/or whether the applications were submitted with supporting financial information." Doc. 12, Mot. to Dismiss at ¶ 7 ).
In response, the Bryants point to "numerous specific facts, including number of applications,dates and estimated time periods during which the applications were submitted, and time between applications when BANA failed to give the necessary responses." Doc. 14, Pls.' Resp. ¶ 26 ). They also argue that all they must allege is that "they sent the loss mitigation applications and that BANA failed to provide the lawful responses," given the regulation imposes no heightened pleading standard. Id. ¶¶ 26-27 (citing Obazee, 2015 WL 4602971, at *3; 12 C.F.R. § 1024.41(c)(1)(ii)).
BANA replies by reiterating its lack-of-specificity argument, and by contending that the Bryants misstate the law when they argue that all they "must allege is . . . that...
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