Davis v. CitiMortgage, Inc.
| Decision Date | 28 July 2016 |
| Docket Number | CIVIL ACTION NO. 0:15-CV-04643-MGL |
| Court | U.S. District Court — District of South Carolina |
| Parties | WALTER DAVIS, SR., Plaintiff, v. CITIMORTGAGE, INC., Defendant. |
This case presents state causes of action for claims of fraud, breach of contract accompanied by a fraudulent act, and defamation of credit, as well as statutory violations of the Federal Trade Commission Act (FTCA), 15 U.S.C. § 45, and the South Carolina Unfair Trade Practices Act (SCUTPA), S.C. Code Ann. § 39-5-20. The Court has jurisdiction over the matter under 28 U.S.C. §§ 1331, 1332, and 1367. Pending before the Court is Defendant CitiMortgage, Inc.'s, motion for judgment on the pleadings. Having carefully considered the motion, the response, the reply, the record, and the applicable law, it is the judgment of the Court that Defendant's motion will be granted.
Sometime prior to October 22, 1999, Plaintiff Walter Davis, Sr., a former railroad employee on disability, claims to have obtained a mortgage on his South Carolina property from Defendant. ECF No. 13 at 1. Plaintiff states that on October 22, 1999, his wife forged a deed conveying an undivided one-half interest in his property to her and refinancing his mortgage without his consent. Id. at 2. Thereafter, Plaintiff fell behind on his monthly mortgage payments, and Defendant brought a foreclosure action on January 29, 2003. Id.; ECF No. 8-1 at 5. The foreclosure complaint contained the names of Plaintiff and his wife and information regarding his wife's forged deed. ECF No. 8-1 at 2. With help, Plaintiff was able to redeem his property from foreclosure. ECF No. 13 at 1.
Ten years later, in 2013, issues arose concerning Plaintiff's property boundaries, leading Plaintiff to research his title and allegedly discover the 1999 deed containing his forged signature. Id. at 2. Plaintiff contacted Defendant the following year to determine the status of his loan but states that he failed to receive a response. Id. On October 24, 2014, Plaintiff's by-then ex-wife conveyed her undivided one-half interest in the property back to Plaintiff. Id.
Plaintiff filed this case on October 7, 2015, in the Fairfield County Court of Common Pleas in South Carolina, alleging, as noted above, claims of fraud, breach of contract accompanied by a fraudulent act, and defamation of credit, as well as violations of the FTCA and the SCUTPA. ECF No. 1-1. On November 18, 2015, Defendant removed the case to this Court. ECF No. 1. Defendant filed a motion for judgment on the pleadings on December 4, 2015. ECF No. 8. Plaintiff submitted his response in opposition on January 4, 2016, ECF No. 13, and on January 12, 2015, Defendant filed its reply, ECF No. 16. The Court, having been fully briefed on the relevant issues, is now prepared to discuss the merits of the motion.
The defense of failure to state a claim upon which relief can be granted, set forth under Fed. R. Civ. P. 12(b)(6), can also be made via a motion for judgment on the pleadings under Fed. R. Civ. P. 12(c). Burbach Broad Co. of Del. v. Elkins Radio Corp., 278 F.3d 401, 405 (4th Cir. 2002). Stated differently, a Rule 12(c) motion for judgment on the pleadings is subject to the same standard as a motion to dismiss made under Rule 12(b)(6). Independence News, Inc. v. City of Charlotte, 568 F.3d 148, 154 (4th Cir. 2009).
"The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). To survive the motion, a complaint must have "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), and contain more than "an unadorned, the-defendant-unlawfully-harmed-me accusation," Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In considering a Rule 12(b)(6) motion, the court assumes the factual allegations in the complaint are true and draws all reasonable factual inferences in favor of the nonmoving party. Burbach, 278 F.3d at 406. Conclusory allegations pled in the complaint are undeserving of an assumption of truth and should be accepted only to the extent "they plausibly give rise to an entitlement to relief." Iqbal, 556 U.S. at 679.
A defendant can raise a statute of limitations affirmative defense in a Rule 12(b)(6) motion as long as the complaint clearly alleges all of the facts sufficient to rule on the defense. Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007).
In its motion to dismiss, Defendant avers that Plaintiff's two fraud claims and his breach of contract accompanied by a fraudulent act claim are time-barred by their three-year statutes of limitations, as well as being insufficiently pled with the particularity required by Rule 9 of the Federal Rules of Civil Procedure. Defendant further advances that Plaintiff's defamation of credit claim is barred by its two-year statute of limitations, preempted by the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, and barred by the doctrine of truth.
Defendant also posits that Plaintiff's claim of unfair debt collection practice under the FTCA fails as there is no private right of action under this act. Alternatively, Defendant avows that if the claim is construed as a Fair Debt Collection Practices Act (FDCPA) claim, 15 U.S.C. § 1692, it fails for three separate reasons: (1) the claim is time-barred by the one-year FDCPA statute of limitations, (2) Defendant is not a "debt collector" as defined in the FDCPA, and (3) the allegations are insufficient to give rise to a FDCPA claim.
Finally, Defendant contends that Plaintiff's SCUTPA claim is barred by the three-year statute of limitations provided in the SCUTPA and that this limitations period expired in 2006. Further, Defendant argues this claim is meritless as a matter of law, because Plaintiff failed to allege an impact on the public interest from the claim and the complaints are private in nature.
Plaintiff disputes each of these contentions.
Plaintiff alleges Defendant made fraudulent representations to Plaintiff "concerning the status of his mortgage, the necessity for redemption and the effected redemption by Defendantfor Plaintiff's benefit," as well as "concerning the status of his needing to make mortgage payments to Defendant after it was redeemed and to Plaintiff's continuing right to ownership of the subject property." ECF No. 8-1 at 6. Under Federal Rule of Civil Procedure 9, a party alleging fraud "must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). Further, fraud claims have a three-year statute of limitations under South Carolina law. S.C. Code Ann. § 15-3-530. The parties agree that these claims are governed by the discovery rule, which dictates that the statute of limitations starts to run "from the date the injured party either knows or should know, by the exercise of reasonable diligence," of a cause of action. Epstein v. Brown, 610 S.E.2d 816, 818 (S.C. 2005). The discovery rule is an "objective, rather than subjective" test, and until an "individual has inquiry or constructive notice," the statute of limitations does not yet begin to run. Berry v. McLeod, 492 S.E.2d 794, 799 (S.C. Ct. App. 1997) (citation omitted).
Plaintiff advances in his response in opposition to the motion that he has a disability that affects his ability to understand and cites S.C. Code Ann. § 15-3-40, which permits up to a five-year extension on a statute of limitations for an individual who was a minor or "insane" at both the time the cause of action accrued and during its pendency. Plaintiff is not a minor, and under South Carolina law, a showing of insanity requires "an over-all inability to function in society, or . . . to require care in a hospital." Wiggins v. Edwards, 442 S.E.2d 169, 170 (S.C. 1994) (quoting 54 C.J.S. Limitations of Actions § 117 at 159-169 (internal footnotes omitted)).
Here, Plaintiff has pled no facts in his complaint or his response in opposition, nor has he presented any evidence that show insanity either at present or at the time when the cause of action arose, in 1999 or 2003. Consequently, this Court holds that Plaintiff's insanity assertion is inapplicable. Moreover, even if the five-year extension applied, this action, filed in 2015, wouldnevertheless be time-barred by several years. Plaintiff was put on notice of these claims at the time of the foreclosure in 2003, so the three-year statute of limitations has long since run.
Further, even if there was no statute of limitations problem, Plaintiff's two fraud claims fail to meet the pleading standards of Rule 9(b). Additionally, although he might could have sufficiently pled these claims in an amended complaint, he failed to properly move the Court to file one. As such, Plaintiff's two fraud claims are unable to go forward and will be dismissed.
Plaintiff also challenges the loan origination, asserting that Defendant "added moneys to Plaintiff's mortgage, without Plaintiff's actual authorization" and further committed fraudulent acts in doing so. ECF No. 1-1 at 10. In South Carolina, a breach of contract action is subject to a three-year statute of limitations. See S.C. Code Ann. § 15-3-530. Breach of contract accompanied by a fraudulent act is considered contractual in nature, despite having tortious elements, and is thus governed by the limitation period for contracts actions. See Peeples v. Orkin Exterminating Co., 135 S.E.2d 845, 847 (S.C. 1964) (). Further, as an averment of fraud, a claim for breach of contract accompanied by a fraudulent act is...
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