Fiecke-Stifter v. MidCountry Bank
| Docket Number | 22-cv-3056 (ECT/DTS) |
| Decision Date | 11 September 2023 |
| Parties | Sandra K. Fiecke-Stifter and The Estate of Doris M. Fasching, by and through Personal Representative Sandra Fiecke-Stifter, on behalf of themselves and all others similarly situated, Plaintiffs, v. MidCountry Bank and Taft Stettinius & Hollister LLP, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Carl E. Christensen and Christopher Wilcox, Christensen Law Office PLLC, Minneapolis, MN, and Thomas J. Lyons, Jr., Consumer Justice Center P.A., Vadnais Heights, MN, for Plaintiffs Sandra K. Fiecke-Stifter and The Estate of Doris M. Fasching.
Jason R. Asmus, Justin P. Weinberg, and Schaan Barth, Taft Stettinius & Hollister LLP, Minneapolis, MN, for Defendants MidCountry Bank and Taft Stettinius & Hollister LLP.
Plaintiff Sandra K. Fiecke-Stifter alleges that Defendants unlawfully foreclosed on a home that had been owned by Sandra's late mother, Doris M. Fasching. Defendant MidCountry Bank was the lender, note holder, and mortgagee. Defendant Taft Stettinius & Hollister represented MidCountry Bank in the foreclosure. Sandra asserts claims against the bank for breach of contract and under the federal Truth in Lending Act (“TILA”). She asserts a claim against the law firm under the Fair Debt Collection Practices Act (“FDCPA”).
Defendants seek judgment on the pleadings under Federal Rule of Civil Procedure 12(c), and their motion will be granted in part. The breach-of-contract claim rests on implausible interpretations of the at-issue contract, so it will be dismissed. The TILA claim also will be dismissed because, as pleaded, there is a disconnect between the specific statutory provision on which the claim relies and claim's supporting allegations. This means MidCountry will be dismissed from the case. The FDCPA claim against Taft will be dismissed to the extent it relies on legally unavailable theories. The claim will be allowed to proceed only to the extent that Taft's arguments for dismissal require construing facts in Taft's favor.
I[1]
Doris had a home and a mortgage. Doris owned a home in Hutchinson, Minnesota. Am. Compl. [ECF No. 31] ¶¶ 17, 21. In December 1998, Doris and her husband, Harold secured a credit line from MidCountry. Id. ¶ 19; see Note [ECF No. 9-1]. The credit line was secured by a mortgage against the home. Am. Compl. ¶ 20; see Mortgage [ECF No. 9-2]. The Note and Mortgage were subsequently amended three times-first in October 2003, then in February 2008, and finally in February 2013. See ECF Nos. 9-3 through 9-8.
Doris died a widower on September 21, 2021. Am. Compl ¶¶ 11-12. Harold predeceased Doris. Id. ¶ 12. When she died, Doris was current on all payments and “in good standing” with the MidCountry credit line. Id. ¶ 23. Three of Doris's children- Sandra and her two brothers-were Doris's “only heirs.” Id. ¶ 16. “A probate matter was commenced to probate [Doris's] estate on December 6, 2021.” Id. ¶ 14. Sandra was the personal representative of Doris's estate and continued to reside in the home after Doris's death. Id. ¶¶ 15, 24.
MidCountry, represented by Taft, foreclosed on the home in early 2022. MidCountry started a foreclosure-by-advertisement proceeding on February 1, 2022. Id. ¶ 30. Sandra was served with a notice of the foreclosure sale on February 18, 2022. Id. ¶ 38. The home was sold at a sheriff's auction on April 7, 2022. Id. ¶ 41. Sandra paid $77,159.29 to redeem the property. Id. ¶ 44. The parties disagree regarding MidCountry's justification for the foreclosure.
Sandra alleges that MidCountry foreclosed because of Doris's death. The MidCountry mortgage says that MidCountry “may, at its option, declare the entire balance of the Secured Debt to be immediately due and payable upon the creation of . . . any . . . transfer . . . of the Property.” Mortgage [ECF No. 9-2] ¶ 7. The mortgage also classifies any transfer of the property or a sole mortgagor's death as events of default. Id. ¶ 8. According to Sandra, MidCountry asserted that Doris's “death was a condition of default that accelerated the entire loan balance to be due and owing.” Am. Compl. ¶ 27. Sandra alleges specifically that a Taft attorney communicated this justification for MidCountry's default determination “during and after the foreclosure.” Id. ¶ 28. Sandra also alleges that MidCountry asserted this justification in the foreclosure proceeding. Id. ¶¶ 33-34. According to Sandra, the foreclosure could not have been based on a failure to make payment when due because, at least as of January 2022, Sandra had “continued to make payments” on the credit line, and a MidCountry representative had “confirmed that she was current on payments.” Id. ¶¶ 25, 37. Sandra alleges that in March 2022-just prior to the sheriff's sale-MidCountry “refunded” payments she had made on the credit line in the amount of $2,708.46. Id. ¶¶ 39-40.
MidCountry and Taft claim that foreclosure occurred because of a failure to make payments when due. In their Answer, MidCountry and Taft allege that “from October 2021 until MidCountry elected to terminate and accelerate payment of the Note in late December 2021, the Note was materially breached multiple times for failure to timely make monthly payments in full in October, November, and December 2021.” Answer [ECF No. 9] ¶ 22. To support these assertions, MidCountry and Taft attached to their Answer copies of billing statements, past-due notices, and a payment transaction record. See ECF Nos. 9-9 through 9-13. Taken at face value, these documents tend to show that timely, full payments had not been made during that period. See Id. Sandra brought this case in December 2022. She asserts three claims: (1) a breach-of-contract claim against MidCountry, Am. Compl. ¶¶ 72-91; (2) a TILA claim against MidCountry, id. ¶¶ 92-102; and (3) an FDCPA claim against Taft, id. ¶¶ 103-115. Sandra asserts the breach-of-contract and TILA claims on behalf of herself and Doris's estate. See id. ¶¶ 75-76, 94. It is not clear whether she asserts the FDCPA claim only on her own behalf or also on behalf of Doris's estate. See id. ¶¶ 104, 109, 111-112. Sandra also seeks to represent a class of individuals defined to include:
(i) all consumers statewide (ii) against whom Defendant MidCountry Bank asserted an event of default under a note or mortgage resulting from death of a borrower, against whom Defendant MidCountry Bank exercised a due-on-sale option in a mortgage, and whose Real Property Defendant Taft foreclosed; (iii) for which the exercise of the due-on-sale clause was prohibited under law or contract; (iv) in an attempt to accelerate debt secured by a mortgage and collect that debt, which is debt incurred for personal, family, or household purposes as shown by Defendant's or the creditors' records; and (v) allegedly due for a home mortgage.
II
The case's procedural posture deserves discussion in view of how MidCountry and Taft present their motion. “Judgment on the pleadings is appropriate where no material issue of fact remains to be resolved and the movant is entitled to judgment as a matter of law.” Lansing v. Wells Fargo Bank, N.A., 894 F.3d 967, 971 (8th Cir. 2018); Nat'l Union Fire Ins. Co. of Pittsburgh v. Cargill, Inc., 61 F.4th 615, 619 (8th Cir. 2023) (same). 5C Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1367 (3d ed. 2004).
A Rule 12(c) motion for judgment on the pleadings is assessed under the same standard as a Rule 12(b)(6) motion. Ashley Cnty. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009). In reviewing a motion to dismiss for failure to state a claim under Rule 12(b)(6), a court must accept as true all of the factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. Gorog v. Best Buy Co., Inc., 760 F.3d 787, 792 (8th Cir. 2014) (citation omitted). Although the factual allegations need not be detailed, they must be sufficient to “raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). The complaint must “state a claim to relief that is plausible on its face.” Id. at 570. “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
As with Rule 12(b)(6) motions, “courts are not strictly limited to the four corners of complaints,” when deciding Rule 12(c) motions but may consider other matters, including “matters incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders, items appearing in the record of the case and exhibits attached to the complaint whose authenticity is unquestioned[] without converting the motion into one for summary judgment.” Dittmer Props., L.P. v. F.D.I.C., 708 F.3d 1011, 1021 (8th Cir. 2013) (quotations omitted); Zean v. Fairview Health Servs., 858 F.3d 520, 526-27 (8th Cir. 2017) (). When a contract is the basis of the dispute, that contract is “necessarily embraced” by the pleadings and may be considered. Zean, 858...
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