Dixon v. Countrywide Home Loans, Inc.

• Decision Date: 07 May 2010
• Docket Number: Case No. 10-80216-CIV
• Parties: Roy DIXON, Plaintiff, v. COUNTRYWIDE HOME LOANS, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

710 F.Supp.2d 1325

Roy DIXON, Plaintiff,

v.COUNTRYWIDE HOME LOANS, INC., et al., Defendants.

Case No. 10-80216-CIV.

United States District Court,

S.D. Florida.

May 7, 2010.

Roy Dixon, Royal Palm Beach, FL, pro se.

William Patrick Heller, Nathaniel Dwight Callahan, Akerman Senterfitt, Akerman Senterfitt & Eidson, Fort Lauderdale, FL, for Defendant Countrywide Home Loans, Inc.

ORDER GRANTING MOTION TO DISMISS AMENDED COMPLAINT; DISMISSING COUNTRYWIDE HOME LOANS, INC.

WILLIAM P. DIMITROULEAS, District Judge.

THIS CAUSE is before the Court upon Countrywide's Motion to Dismiss AmendedComplaint [DE-14], filed herein on March 31, 2010. The Court has carefully considered the Motion, Plaintiff's Traverse to Countrywide's Motion to Dismiss [DE-15] ("Response"), Countrywide's Reply [DE-16], and is otherwise fully advised in the premises.

I. BACKGROUND

Plaintiff Roy Dixon ("Dixon") filed the above-styled action on January 20, 2010, in the Circuit Court in and for the Fifteenth Judicial Circuit, Palm Beach County, Florida, alleging claims against Countrywide Home Loans, Inc. ("Countrywide"), Bank of America ("BAC") and Angelo R. Mozlio ("Mozlio"). Countrywide thereafter removed the action on February 10, 2010 [DE-1] pursuant to 28 U.S.C. § 1332, as there is diversity of citizenship and the amount in controversy exceeds $75,000.00. On February 22, 2010, Plaintiff filed its Motion for Leave to File Second Amended Complaint [DE-7], which was granted by the Court on February 23, 2010 [DE-8]. The Amended Complaint named only Countrywide and Mozlio as Defendants. There is no evidence that Mozlio has been served with a summons or copy of the Amended Complaint. Accordingly, it appears to the Court that only Countrywide has been served in this matter and, therefore, the action is presently only at issue as to Countrywide.¹

In the Amended Complaint, Plaintiff alleges that he contacted Defendants on January 20, 2007, regarding refinancing a subprime adjustable 5% interest rate loan that he held with Homecoming Financial Corporation that was due to balloon in December of 2007. Plaintiff alleges Defendants promised during the preparation of his uniform residential home loan application ("URLA") [DE-10, Ex. A] over the phone that Plaintiff would receive a fixed interest rate of 6.375% for 30 years and that the rate would be locked-in for 30-days from the application date. Plaintiff alleges that on January 25, 2007, Defendants came to Plaintiff's home to close on the loan and at that time advised Plaintiff that the loan would be changed from a 6.375% fixed interest rate to an adjustable interest only rate of 6.875% due to Plaintiff's credit score. Plaintiff further alleges he informed Defendants that their agreement was for a 6.375% fixed interest rate for 30 years and that the rate was locked-in for 30-days. Plaintiff contends that Defendants deceived and misrepresented to Plaintiff that the 6.875% interest only adjustable rate would be reduced to a 6.250% fixed interest rate after six (6) years and that Plaintiff would not find a better rate. Nevertheless, Plaintiff claims he did not cancel the loan because he already paid the appraisal fees and Defendants represented that the 6.875% interest rate would be reduced in six (6) years.

Plaintiff alleges he subsequently made his mortgage payments for two years. However, in January of 2009 Plaintiff notified Defendants that he needed a modification on his loan because he could not afford to make full monthly mortgage payments due to an increase in his taxes and insurance. Plaintiff alleges that he also asked Defendants if they had any records on file that stated the 6.875% interest rate would be reduced to a fixed interest rate of 6.250% after six (6) years. Plaintiff claims Defendants indicated they had no such records on file and that the rate of 6.875% would continue to increaseafter ten (10) years. Again, in April of 2009, Plaintiff alleges he notified Defendants that he could not afford to make his full monthly mortgage payments and that he needed a modification of his loan.

Plaintiff alleges that Defendants' agent Daniel Rydzewski drafted a fraudulent URLA for Plaintiff that contained a false base employment income, included a false checking account with funds Plaintiff did not have, and included an inaccurate total asset amount for Plaintiff. Plaintiff alleges that he did not discover these inaccuracies until he reviewed the loan contract several days after closing. Plaintiff claims Defendants ignored their own underwriting standards and mislead Plaintiff into accepting the 6.875% adjustable interest rate loan while concealing or misrepresenting that much larger rates would become due. Plaintiff further alleges that Defendants violated the Truth in Lending Act, 15 U.S.C. § 1635(b) ("TILA") by inflating the settlement charges and the amount financed, and that Defendants provided unlawful kickbacks to the title company. Moreover, Plaintiff alleges that Defendants failed to provide Plaintiff with the Good Faith Estimate and the HUD special information booklet within three business days of the loan application process. Plaintiff alleges that Mozlio knew of and controlled the activities of Countrywide.

Plaintiff asserts eight counts in his Second Amended Complaint.² Count I is for predatory lending. In count II Plaintiff asserts a claim for violation of Florida's Deceptive and Unfair Trade Practices Act ("FDUTPA"). Count III is a claim for fraud and deceit and count IV alleges negligent misrepresentation. Counts V through VII purport to be statutory claims under the Equal Credit Opportunity Act ("ECOA"), the Real Estate Settlement Procedures Act ("RESPA"), and the Home Ownership and Equity Protection Act ("HOEPA"). Finally, in count VIII Plaintiff purports to assert a claim under TILA. Thereafter, Defendant Countrywide filed the instant Motion on March 31, 2010. [DE-14].

II. DISCUSSION

A. Standard of Review

To adequately plead a claim for relief, Federal Rule of Civil Procedure 8(a)(2) requires "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Under Federal Rule of Civil Procedure 12(b)(6), a motion to dismiss should be granted only if the plaintiff is unable to articulate enough facts "to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1959, 167 L.Ed.2d 929 (2007) (abrogating Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). The allegations of the claim must be taken as true and must be read to include any theory on which the plaintiff may recover. See Linder v. Portocarrero, 963 F.2d 332, 334-36 (11th Cir.1992) (citing Robertson v. Johnston, 376 F.2d 43 (5th Cir.1967)). Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint, and "a district court weighing a motion to dismiss asks 'not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.' " Id. at n. 8 (quotingScheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), overruled on other grounds, Davis v. Scherer, 468 U.S. 183, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984)).

B. Motion to Dismiss

Countrywide moves to dismiss the Amended Complaint in its entirety on the following grounds: (1) the credit agreement statute of frauds bars the fraud-based claims; (2) the fraud-based claims fail as a matter of law since the written loan documents contradict the purported oral representations making reliance upon such purported statements unreasonable; (3) the fraud-based claims are inadequately plead to the extent they rely upon representations in the URLA; (4) the fraud-based TILA claim is not cognizable and time-barred; and (5) the FDUTPA claim is conclusory and inadequately pled.³

In Plaintiff's Response, Plaintiff concedes that counts V through VII, claims under the ECOA, RESPA, and HOEPA, should be dismissed. [DE-15, pgs. 1, 10]. The Court agrees. Specifically, Plaintiff's RESPA claim in count VI fails as a matter of law since Defendant is correct that Section 2604 (which requires the provision of the Good Faith Estimate and the HUD special information booklet) does not provide a private cause of action. See Bedasee v. Fremont Inv. & Loan, Case No. 09-111-Ftm-29SPC, 2010 WL 98996, at *2 (M.D.Fla. Jan. 6, 2010) (citing Collins v. FMHA-USDA, 105 F.3d 1366, 1368 (11th Cir.1997) ("That Congress eliminated the provision when it amended the statute strongly suggests Congress intended that there no longer be a private damages remedy for violation of § 2604(c).")). Further, to the extent Plaintiff alleges claims for kickbacks and unearned fees, such claims are time barred as RESPA requires that such claims be brought within one year from the date of occurrence of the violation. 12 U.S.C. § 2614. As such, the RESPA claim is dismissed with prejudice.

Likewise, the HOEPA claim is subject to dismissal as Plaintiff fails to indicate what provision was violated or what remedy is sought in order to meet the pleading requirements of Rule 8. To the extent Plaintiff's HOEPA claim is a non-rescission claim, such a claim is dismissed with prejudice as being time barred by the one-year statute of limitation. See Thielen v. GMAC Mortg. Corp., 671 F.Supp.2d 947, 953 (E.D.Mich.2009) ("TILA's one-year statute of limitations, codified at 15 U.S.C. § 1640(e), also applies to HOEPA claims."). And, to the extent the HOEPA claim is a rescission claim, such a claim is dismissed with prejudice under the three-year statute of repose. See 15 U.S.C. § 1635(f); Thielen, 671 F.Supp.2d at 953-54. ⁴ Finally, the ECOA claim is subject to dismissal with prejudice as Plaintiff has not alleged any discrimination and such a claim is...