Fed. Home Loan Mortg. Corp. v. Anchrum

• Decision Date: 10 April 2015
• Docket Number: Case No. 2:14-cv-2129-TMP
• Parties: FEDERAL HOME LOAN MORTGAGE CORPORATION, Plaintiff-Counterclaim Defendant, v. NORMAN D. ANCHRUM, JR., and ANDREA ANCHRUM, Defendants-Counterclaimants, v. WELLS FARGO BANK NATIONAL ASSOCIATION; UNITED GUARANTY RESIDENTIAL INSURANCE COMPANY; UNITED GUARANTY RESIDENTIAL INSURANCE COMPANY OF NORTH CAROLINA, Counterclaim Defendants.
• Court: U.S. District Court — Northern District of Alabama

FEDERAL HOME LOAN MORTGAGE CORPORATION,Plaintiff-Counterclaim Defendant, v. NORMAN D. ANCHRUM, JR., andANDREA ANCHRUM, Defendants-Counterclaimants, v. WELLS FARGO BANK NATIONAL ASSOCIATION; UNITED GUARANTY

RESIDENTIAL INSURANCE COMPANY; UNITED GUARANTY RESIDENTIAL

INSURANCE COMPANY OF NORTH CAROLINA, Counterclaim Defendants.

Case No. 2:14-cv-2129-TMP

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

April 10, 2015

REPORT AND RECOMMENDATION

This cause is before the court on the motion for partial dismissal filed by the plaintiff-counterclaim defendant Federal Home Loan Mortgage Corporation ("Freddie Mac") and counterclaim defendant Wells Fargo Bank N.A. ("Wells Fargo") on November 7, 2014 (Doc. 10). The motion was joined and adopted by counterclaim defendants United Guaranty Residential Insurance Company and United Guaranty Residential Insurance Company of North Carolina (collectively "UGC") on November 11, 2014. (Doc. 12). The motion seeks the dismissal of some, but not all, counts of the counterclaim filed by Norman and Andrea Anchrum on September 21, 2014, in the Circuit Court of Shelby County, Alabama, prior to the removal ofthe case on October 31, 2014. The motion has been fully briefed by the parties. (See Docs. 25, 26, and 27). The parties have not consented to the exercise of dispositive jurisdiction by the undersigned magistrate judge.

I. Procedural History and Facts Alleged

On August 7, 2014, plaintiff Freddie Mac sued the Anchrums in the Circuit Court of Shelby County, Alabama, for ejectment, alleging that Freddie Mac became the owner of property located at 552 North Grande View Trail, Alabaster, Alabama, following foreclosure of a mortgage on the property by Wells Fargo. Attached to the complaint was a copy of the foreclosure deed to Freddie Mac dated December 5, 2011. The Anchrums filed their answer and counterclaim on September 21, 2014, joining as additional counterclaim defendants, Wells Fargo and UGC. The counterclaim alleges seven causes of action for breach of contract (Count One), wrongful foreclosure (Count Two), unjust enrichment (Count Three), slander of title (Count Four), breach of covenant of good faith and fair dealing (Count Five), declaratory judgment (Count Six), and violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692k et seq. (Count Seven). In support of these claims, the Anchrums' counterclaim alleged factually that they purchased their home in Alabaster on September 5, 2003, financing it with a loan from Wells Fargo in the amount of $305,790.00. On that date, Norman Anchrum (but not Andrea Anchrum) executed a promissory note in favor of Wells Fargo. The note was secured by a mortgage on the property executed by both Norman and Andrea Anchrum. (See Doc. 10-1).¹As part of the loan agreement, Wells Fargo required the Anchrums to purchase and pay for private mortgage insurance covering 25% of the mortgage balance, which PMI was purchased from UGC. The counterclaim alleges that on October 17, 2011, the Anchrums received a "default letter" from Wells Fargo. (Counterclaim, ¶ 16, Doc. 1-3).² During this same time period, the Anchrums appear to have been in discussions with Wells Fargo about restructuring their mortgage to prevent foreclosure. By October 25, 2011, Wells Fargo acknowledged that the Anchrums had submitted documentation sufficient to allow Wells Fargo to decide upon possible restructuring. (See Counterclaim Ex. C, Doc. 1-4). In correspondence dated November 28, 2011, however, Wells Fargo notified the Anchrums that they did not qualify for mortgage debt relief under the Home Affordable Modification Program ("HAMP"). (Counterclaim, Ex. E, Doc. 1-4).³ The mortgage foreclosure sale proceeded on December 5, 2011, resulting in Freddie Mac purchasing the property and receiving a foreclosure deed.

The instant motion to dismiss challenges only Counts Three, Five, and Seven of the counterclaim, for unjust enrichment, breach of the covenant of good faith and fair dealing, and violations of the FDCPA. Freddie Mac, Wells Fargo, and UGC contend that, under the factsalleged in the counterclaim, Alabama law simply does not recognize causes of action for unjust enrichment and breach of a covenant of good faith and fair dealing. Moreover, they argue that none of them can be liable under the FDCPA because none of them is a debt collector.

II. Standards for Assessing Motions to Dismiss

On a motion to dismiss a pleading seeking relief, the court must analyze the pleading pursuant to the pleading standards set forth in Fed. R. Civ. P. 8(a), as construed by the Supreme Court of the United States in Bell Atlantic Corporation v. Twombly, 550 U.S. 554, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009). These standards replace and enhance those outlined in Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957), which allowed a claim to survive a motion to dismiss unless it could be shown "beyond doubt that the Plaintiff can prove no set of facts in support of his claim that would entitled him to relief." Id. at 45-46. According to Twombly, Conley has been put out to "retirement," Twombly at 563, or "interred," id. at 577 (Stevens, J., dissenting).

The Supreme Court commented in 2007 on Rule 12(b)(6) dismissals, saying:

Federal Rule of Civil Procedure 8(a)(2) requires only "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). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ibid.; Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (C.A.7 1994), a plaintiff's obligation to provide the "grounds" of his "entitle[ment] to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do, see Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 92 L.Ed.2d 209 (1986) (on a motion to dismiss, courts "are not bound to accept as true a legal conclusion couched as a factual allegation"). Factual allegations must be enough to raise a right to relief above the speculative level, see 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216 pp. 235-236 (3d ed. 2004) (hereinafterWright & Miller) ("[T]he pleading must contain something more . . . than . . . a statement of facts that merely creates a suspicion [of] a legally cognizable right of action), on the assumption that all the allegations in the complaint are true (even if doubtful in fact), ....

. . .

The need at the pleading stage for allegations plausibly suggesting (not merely consistent with) [the alleged claims] reflect the threshold requirement of Rule 8(a)(2) that the "plain statement" possess enough heft to "sho[w] that the pleader is entitled to relief."

Bell Atlantic Corp. v. Twombly, 550 U.S. 544-70, 127 S. Ct. 1955, 1964-74, 167 L. Ed. 2d 929 (2007) (internal footnotes omitted). In Twombly, the Supreme Court clearly raised the threshold for factual allegations in a complaint from "conceivable" to "plausible." Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir. 2010); Rivell v. Private Health Care Systems, Inc., 520 F.3d 1308, 1309 (11th Cir. 2008); Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1261 (11th Cir. 2009); Financial Securities Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282 (11th Cir. 2007)). Mere legal conclusions are insufficient substitutes for factual allegations.

Two years after the Twombly decision, the Supreme Court again discussed pleading requirements in the Ashcroft v. Iqbal decision. 556 U.S. 662, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009):

Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id., at 555, 127, S. Ct. 1955 (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we "are not bound to accept as true a legal conclusion couched as a factual allegation" (internal quotation marks omitted)). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556, 127 S. Ct. 1955. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific taskthat requires the reviewing court to draw on its judicial experience and common sense. 490 F.3d, at 157-158. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not "show[n]" - "that the pleader is entitled to relief." Fed. Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusion can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

Iqbal, 556 U.S. at 667-84, 129 S. Ct. at 1949-52. The Eleventh Circuit Court of Appeals has applied Iqbal, noting that "a claim has facial plausibility when the plaintiff pleads factual content that allows the court to...