Ferguson v. Loans, Case No.: 5:17-cv-458-MHH

• Decision Date: 26 January 2018
• Docket Number: Case No.: 5:17-cv-458-MHH
• Parties: DANNY FERGUSON, Plaintiff, v. QUICKEN LOANS, Defendant.
• Court: U.S. District Court — Northern District of Alabama

DANNY FERGUSON, Plaintiff, v. QUICKEN LOANS, Defendant.

Case No.: 5:17-cv-458-MHH

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

January 26, 2018

MEMORANDUM OPINION AND ORDER

In this action, pro se plaintiff Danny Ferguson contends that an employee of defendant Quicken Loans coerced him to sign a promissory note. Mr. Ferguson asserts state law claims against Quicken Loans for breach of contract and void contract.¹ Pursuant to Federal Rule of Civil Procedure 12(b)(6), Quicken Loans asks the Court to dismiss Mr. Ferguson's claims. For the reasons explained below,the Court dismisses Mr. Ferguson's claims without prejudice and offers Mr. Ferguson an opportunity to amend his complaint.

I. STANDARD OF REVIEW

Rule 12(b)(6) enables a defendant to move to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint against the "liberal pleading standards set forth by Rule 8(a)(2)." Erickson v. Pardus, 551 U.S. 89, 94 (2007). Pursuant to Rule 8(a)(2), a complaint 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). "Generally, to survive a [Rule 12(b)(6)] motion to dismiss and meet the requirement of Fed. R. Civ. P. 8(a)(2), a complaint need not contain 'detailed factual allegations,' but rather 'only enough facts to state a claim to relief that is plausible on its face.'" Maledy v. City of Enterprise, 2012 WL 1028176, *1 (M.D. Ala. March 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)). "Specific facts are not necessary; the statement need only 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Erickson, 551 U.S. at 93 (quoting Twombly, 550 U.S. at 555).

"Thus, the pleading standard set forth in Federal Rule of Civil Procedure 8 evaluates the plausibility of the facts alleged, and the notice stemming from acomplaint's allegations." Keene v. Prine, 477 Fed. Appx. 575, 583 (11th Cir. 2012). "Where those two requirements are met . . . the form of the complaint is not significant if it alleges facts upon which relief can be granted, even if it fails to categorize correctly the legal theory giving rise to the claim." Id.

This is particularly true with respect to pro se complaints. Courts must liberally construe pro se documents. Erickson, 551 U.S. at 94. "'[A] pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.'" Id. (quoting Estelle v. Gamble, 429 U.S. 97, 106 (1976)); see also Tannenbaum v. United States, 148 F.3d 1262, 1263 (11th Cir. 1998) ("Pro se pleadings are held to a less stringent standard than pleadings drafted by attorneys and will, therefore, be liberally construed."). Cf. Fed. R. Civ. P. 8(e) ("Pleadings must be construed so as to do justice."). Still, the Court may not "serve as de facto counsel for a party, or ... rewrite an otherwise deficient pleading" to "sustain an action." Campbell v. Air Jamaica Ltd., 760 F.3d 1165, 1168-69 (11th Cir. 2014) (internal quotations and citations omitted).

When evaluating a Rule 12(b)(6) motion to dismiss, a district court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. See Brophy v. Jiangbo Pharms. Inc., 781 F.3d 1296, 1301 (11th Cir. 2015).

II. FACTUAL ALLEGATIONS

In his complaint, Mr. Ferguson alleges that an employee of defendant Quicken Loans "coerced" him to sign a promissory note "without providing full disclosure." (Doc. 1, p. 8, ¶¶ 1-2). According to Mr. Ferguson, the Quicken Loans employee who "induced" him into the contract "read over the promissory note and its clause stating the [p]romissory note was a negotiable instrument covering the full estimated amount of alleged credit of $162,975.00." (Doc. 1, p. 8, ¶ 2). Mr. Ferguson asserts that he "never saw the alleged amount of the required consideration alleged by whomever is alleging the right to respond on the behalf of the alleged HOLDER of the note." (Doc. 1, p. 8, ¶ 3) (emphasis in complaint). Mr. Ferguson contends that Quicken Loans used deceptive business practices to induce him to promise to repay the promissory note. (Doc. 1, p. 9, ¶ 5). According to Mr. Ferguson, Quicken Loans has tried to enforce the promissory note, but Quicken Loans has not provided evidence that it is the holder of the promissory note. (Doc. 1, p. 9, ¶ 5).

Mr. Ferguson alleges that the promissory note is separated from an accompanying mortgage because Mortgage Electronic System or MERS holds the mortgage or deed. (Doc. 1, p. 9, ¶ 6). Mr. Ferguson contends that separating the promissory note from the mortgage demonstrates Quicken Loans's "lack of good faith in violating the UCC which [Mr. Ferguson] ha[s] followed" to "make [his]decision in regards to [his] commercial contracting with companies such as Quicken Loans." (Doc. 1, pp. 9-10, ¶ 9).

Mr. Ferguson believed that Quicken Loans would access a strawman account "to access the credit of [Mr. Ferguson's] [s]trawman 'Danny Ferguson.'" (Doc. 1, p. 10, ¶ 8). According to Mr. Ferguson, Quicken Loans acted as a third party lender "only in the sense that Quicken Loans accessed the [strawman] account in order to complete the loan between DANNY FERGUSON and Danny: Of the family name 'Ferguson' (Nul Tiel Corporation)." (Doc. 1, p. 10, ¶ 8).

Based on these facts, Mr. Ferguson asserts state law contract claims against Quicken Loans. (Doc. 1, p. 11-12). Under the heading "breach of contract," Mr. Ferguson states:

Due to all information listed above [Quicken Loans] is guilty of breach of contract due to failing to provide full disclosure, good faith and fair dealing in regards to the negotiations, contract/Promissory Note possessing legalese not used in initial negotiations as required by law, no evidence of loss, damages, injury, or standing as Quicken Loans or alleged Owner not being present upon entering of any contracts or negotiations between Danny: Of the family name "Ferguson" and those alleging to act on behalf of the alleged company.

(Doc. 1, p. 12, ¶ 11). Under the "void contract" heading, Mr. Ferguson states:

Due to all information listed above the contract is void due to failing to provide full disclosure, good faith and fair dealing in regards to the negotiations, contract/Promissory Note possessing legalese not used in initial negotiations as required by law, no evidence of loss, damages, injury, or standing as Quicken Loans or alleged Owner not being present upon entering of any contracts or negotiations betweenDanny: Of the family name "Ferguson" and those alleging to act on behalf of the alleged company.

(Doc. 1, p. 13, ¶ 12).

Mr. Ferguson seeks "relief of Mortgage termination/void contract, compensatory relief of $100,000.00 for damages as well as any reliefs/remedies seen fit by the court." (Doc. 1, p. 12, ¶ 13). Quicken Loans argues that the Court must dismiss Mr. Ferguson's claims pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure because the claims fail to state a claim upon which the Court may grant relief.

III. ANALYSIS

A. Breach of Contract

To state a claim for breach of contract under Alabama law, a plaintiff must allege: (1) a valid contract binding the parties in the action, (2) performance by the party seeking relief, (3) nonperformance by the breaching party, and (4) damages. City of Gadsden v. Harbin, 148 So. 3d 690, 696 (Ala. 2013). Mr. Ferguson's complaint does not state a claim for breach of contract because Mr. Ferguson does not allege that he has performed under the terms of the promissory note. Mr. Ferguson alleges that his conduct has conformed to the UCC (Doc. 1, p. 10, ¶ 9), but Mr. Ferguson's complaint provides no facts concerning his performance with respect to the promissory note.

In addition, Mr. Ferguson does not allege that Quicken Loans has breached the terms of the promissory note. Mr. Ferguson contends that Quicken Loans did not "provid[e] full disclosure," but Mr. Ferguson does not explain how or why Quicken Loans was obligated under the terms of the promissory note to disclose certain information. In a response that he filed in opposition to Quicken Loans's motion to dismiss, Mr. Ferguson states that Quicken Loans violated the "Federal Trade Commission[] Act by fraudulently collecting payments without satisfying the contractual requirements needed to enforce or collect on an alleged obligation." (Doc. 7-1, p. 2). This statement does not help Mr. Ferguson. Assuming that Mr. Ferguson may assert a new cause of action in response to a motion to dismiss, the Federal Trade Commission Act does not create a private of action. See, e.g., American Airlines v. Christensen, 967 F.2d 410, 414 (10th Cir. 1992) ("[T]here is no private right of action" under the Federal Trade Commission Act.); Sefa v. Kentucky, 2013 WL 69337, *2 (6th Cir. Jan. 7, 2013) ("[T]he provisions of the Federal Trade Commission Act may be enforced only by the Federal Trade Commission.") (citation omitted); Norris v. Fairbanks Capital Corp., 2006 WL 1169849, *1 (5th Cir. May 3, 2006) (plaintiff has "no private right of action under the Federal Trade Commission Act").

Moreover, in his response in opposition to Quicken Loans's motion to dismiss, Mr. Ferguson states that he has "not entered into a contract with thealleged Defendant sitting across the table from me, no full disclosure, no meeting of the minds." (Doc. 7-1, p. 2).² Mr. Ferguson's assertion that there was "no meeting of the minds" undermines his breach of contract claim because under Alabama law, there is no contract where there is no meeting of the minds. Walker v. Walker, 144 So. 3d 359, 364 (Ala. Civ. App. 2013) ("'The rule is that the minds of the parties must meet as to all essential features of a contract.'") (quoting Air Conditioning Engineers v. Small, 65...