Gladstein v. Aurora Loan Servs., LLC
| Decision Date | 02 August 2012 |
| Docket Number | CIVIL ACTION NO. 1:11-CV-02784-TWT-LTW |
| Parties | JEFFREY D. GLADSTEIN, Plaintiff, v. AURORA LOAN SERVICES, LLC and AURORA BANK, FSB, Defendants. |
| Court | U.S. District Court — Northern District of Georgia |
Pending before this Court are Defendants Aurora Loan Services, LLC and Aurora Bank, FSB's (collectively "Defendants") Motion to Dismiss and Plaintiff Jeffrey D. Gladstein's ("Plaintiff") Motion to Amend Complaint. Docket Entries [5, 10]. For the reasons set forth below, the undersigned RECOMMENDS that Defendants' Motion to Dismiss be GRANTED IN PART and DENIED IN PART. Docket Entry [5]. Specifically, the undersigned RECOMMENDS that Defendants' Motion to Dismiss be GRANTED with respect to:
(1) Plaintiff's breach of contract claim against Defendant Aurora Bank, FSB;
(2) Plaintiff's Fair Debt Collection Practices Act claim; (3) Plaintiff's Real Estate Settlement Procedures Act claim against Defendant Aurora Bank, FSB;
(4) Plaintiff's breach of the covenant of good faith and fair dealing claim against Defendant Aurora Bank, FSB; and
(5) Plaintiff's breach of the covenant of good faith and fair dealing claim against Defendant Aurora Loan Services, LLC with respect to Plaintiff's allegation that Aurora Loan Services, LLC breached the covenant by reporting to credit agencies that Plaintiff's loan was past due without conducting a proper investigation.
The undersigned also RECOMMENDS that Defendants' Motion to Dismiss be DENIED with respect to:
(1) Plaintiff's breach of contract claim against Defendant Aurora Loan Services, LLC;
(2) Plaintiff's Fair Credit Reporting Act claim;
(3) Plaintiff's Real Estate Settlement Procedures Act claim against Defendant Aurora Loan Services, LLC; and
(4) Plaintiff's breach of the covenant of good faith and fair dealing claim against Defendant Aurora Loan Services, LLC with respect to Plaintiff's allegations that Aurora Loan Services, LLC breached the covenant by: receiving four payments from Plaintiffon or before the applicable due date(s), but refusing to cash, negotiate, and/or post them; failing to make Plaintiff's homeowner's insurance premium payments, causing Plaintiff's coverage to be cancelled; wrongfully holding funds remitted by Plaintiff in a "suspense" account; and wrongfully instituting foreclosure proceedings.
The undersigned further RECOMMENDS that Defendants' Motion to Dismiss be DENIED AS MOOT with respect to Plaintiff's breach of fiduciary duty claim, negligence claim, wrongful foreclosure claim, and Fair Business Practices Act claim.
Additionally, the undersigned GRANTS Plaintiff's Motion to Amend Complaint, as Plaintiff is entitled to amend his Complaint as a matter of right. Docket Entry [10].
Plaintiff initiated the instant action by filing a Complaint on August 19, 2011. Docket Entry [1]. Defendants filed a motion to dismiss Plaintiff's Complaint on September 13, 2011. Docket Entry [5]. Fourteen days later, on September 27, 2011, Plaintiff filed a motion to amend his Complaint. Docket Entry [10].
Rule 15 of the Federal Rules of Civil Procedure provides that a plaintiff may amend his complaint once as a matter of course within twenty-one days after serving it or within twenty-one days after the earlier of service of the responsive pleading or service of a motion under Rule 12(b), (e), or (f). Fed. R. Civ. P. 15(a)(1). Thereafter,a plaintiff may amend his complaint only with the opposing party's written consent or the court's leave. Fed. R. Civ. P. 15(a)(2).
Here, Plaintiff filed his Amended Complaint within twenty-one days after Defendants served their Rule 12(b)(6) motion. Therefore, Plaintiff is permitted to file his Amended Complaint as a matter of right, without this Court's permission.1 Accordingly, the undersigned GRANTS Plaintiff's Motion to Amend Complaint as a matter of right. Docket Entry [10].
Before Plaintiff moved to amend his Complaint, Defendants filed their Motion to Dismiss Plaintiff's Complaint. With Plaintiff's Amended Complaint now before the Court, some of the arguments in Defendants' Motion to Dismiss are moot. Defendants argue for the dismissal of Plaintiff's breach of fiduciary duty, negligence, wrongful foreclosure, and Fair Business Practices Act claims, all of which Plaintiff has removed from his Amended Complaint. Therefore, the undersigned RECOMMENDS that Defendants' request to dismiss these claims be DENIED AS MOOT. Next, this Court must address the question of whether Plaintiff's breach of contract, Fair CreditReporting Act, Fair Debt Collection Practices Act, Real Estate Settlement Procedures Act, and breach of the covenant of good faith and fair dealing claims, as now amended, should survive dismissal.
Dismissal is warranted under Rule 12(b)(6) if, assuming the truth of the factual allegations in the plaintiff's complaint, there is a dispositive legal issue that precludes relief. Neitzke v. Williams, 490 U.S. 319, 326-27 (1989); Brown v. Crawford Cnty., Ga., 960 F.2d 1002, 1010 (11th Cir. 1992). In ruling on a 12(b)(6) motion, the court accepts the factual allegations in the complaint as true and construes them in the light most favorable to the plaintiff. Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003) (per curiam). Although it must accept well-pled facts as true, the court is not required to accept a plaintiff's legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Similarly, "unwarranted deductions of fact" in a complaint are not admitted as true for the purpose of testing the sufficiency of the plaintiff's allegations. Aldana v. Del Monte Fresh Produce, N.A., Inc., 416 F.3d 1242, 1248 (11th Cir. 2005); see also Iqbal, 556 U.S. at 681 ().
A complaint must be dismissed if the facts as pled do not state a claim for relief that is plausible on its face. See Iqbal, 556 U.S. at 678. "A claim has facial plausibilitywhen the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Factual allegations in a complaint need not be detailed but "must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and emphasis omitted).
"When determining a motion to dismiss, a court may consider the complaint, its attachments, and documents attached to the defendant's motion to dismiss if the attached documents are central to the plaintiff's claims and referred to by the plaintiff without converting the motion to a motion for summary judgment." Brown v. One Beacon Ins. Co. Inc., 317 F. App'x 915, 917 (11th Cir. 2009) (citing Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1368-69 (11th Cir. 1997) (per curiam)).
Defendants argue that Plaintiff's Complaint is a shotgun pleading because Plaintiff makes no distinction between the conduct of Defendant Aurora Loan Services, LLC ("Aurora Loan Services") and Defendant Aurora Bank, FSB ("Aurora Bank"). This Court disagrees. Plaintiff alleges that "[u]pon information and belief, Aurora Bank FSB ('Aurora Bank') is a doing business as name for Aurora Loan Services, LLC."(Am. Compl. ¶ 3).2 Because Plaintiff alleges that Defendant Aurora Loan Services and Defendant Aurora Bank are the same entity and because this allegation must be accepted as true on a motion to dismiss, Plaintiff may link Defendants together in his Amended Complaint without converting his Amended Complaint into a shotgun pleading.
Plaintiff's breach of contract claim should survive dismissal with respect to Defendant Aurora Loan Services, but not with respect to Defendant Aurora Bank. To establish the existence of a contract, "[u]nder Fed. R. Civ. P. 8(a), a plaintiff must 'either attach a copy of an alleged contract to the complaint or plead it according to its legal effect.'" McClelland v. First Ga. Cmty. Bank, No. 5:09-CV-256 (CAR), 2010 WL 3199349, at *3 (M.D. Ga. Aug. 12, 2010) (internal citation omitted). In the Amended Complaint, Plaintiff alleges that "[o]n or around May 24, 2010, Aurora Loan Services, LLC was assigned a mortgage loan by Mortgage Electronic Registration Systems, Inc., relative to property located at 852 Greenwood Ave. #AN.E. Atlanta, GA 30306." (Am. Compl. ¶ 5). Plaintiff attaches a copy of the adjustable rate note agreement, the security deed between Plaintiff and Midtown Bank & Trust Company, the original lender, andthe Corporate Assignment of Mortgage to Defendant Aurora Loan Services, filed and recorded on May 24, 2010.3 . In the Corporate Assignment of Mortgage,4 Defendant Aurora Loan Services accepted:
The said Mortgage together with the Note or other evidence of indebtedness (the 'Note'), said Note having an original principal sum of $320,000.00 with interest, secured thereby, together with all moneys now owing or that may hereafter become due or owing in respect thereof, and the full benefit of all the powers and of all the covenants and provisos therein contained.
(Corporate Assignment of Mortgage, Docket Entry [10-5], p. 40). This assignment appears to have created a contractual relationship between Plaintiff and DefendantAurora Loan Services that is governed by the security deed and the adjustable rate note agreement. Thus, Plaintiff's Amended Complaint and the supporting exhibits suggest that a contract exists between Plaintiff and Defendant Aurora Loan Services.
The elements for a breach of contract claim are (1) the breach, (2) and the resultant damages, (3) to the party who has the right to complain about the contract...
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