Johnson v. J.P. Morgan Chase Nat'l Corporate Servs., Inc.
| Decision Date | 04 August 2014 |
| Docket Number | CIVIL ACTION NO: 3:13-CV-678-MOC-DSC |
| Court | U.S. District Court — Western District of North Carolina |
| Parties | LEE S. JOHNSON, Plaintiff, v. J.P. MORGAN CHASE NATIONAL CORPORATE SERVICES, INC., et. al., Defendants. |
THIS MATTER is before the Court on Defendants' respective "Motion[s] to Dismiss (documents ##21 and 26), as well as the parties' briefs and exhibits. See documents ##16, 21, 26-1, 27-1, 30, 31, 33, 35-37, 39 and 40.
This matter has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1), and these Motions are now ripe for the Court's consideration.
Having fully considered the arguments, the record, and the applicable authority, the undersigned respectfully recommends that the Motions to Dismiss be granted, as discussed below.
Accepting the allegations of the Amended Complaint as true, Plaintiff Lee Johnson obtained a mortgage loan from RBC Centura Bank that he claims was sold to Chase Home Finance, LLC ("CHF"), in or around January 2005. Plaintiff claims CHF notified him that he was in default on his mortgage in April 2009. He contacted CHF the next month about apossible loan modification under the federal government's Home Affordable Modification Program ("HAMP"). Plaintiff attached several letters to his Amended Complaint that he received from CHF about a possible modification. The first letter advised Plaintiff that he might be eligible for a HAMP modification if he met several requirements, including making three trial-period payments. The deadline for responding was June 23, 2009.
Plaintiff alleges that he made the three trial-period payments. On September 10, 2010, CHF wrote Plaintiff advising that he was ineligible because his loan was not a first-lien mortgage and his housing expense was less than or equal to thirty-one percent of his gross monthly income. Plaintiff alleges that he contacted CHF sometime later and was told he had been approved for a modification and would receive notification by mail. Plaintiff alleges that he received a letter dated March 22, 2011 informing him that he had a trial payment due but failing to specify the amount. According to the Amended Complaint, Plaintiff was never notified of an amount for the trial payment.
On March 20, 2013, CHF sent Plaintiff another letter advising that he was approved for a "trial period payment plan" and specifying the amount and due dates of the payments. Plaintiff does not allege that he made any of those payments. On March 21, 2013, CHF sent Plaintiff a letter advising that he was ineligible for a modification.
On December 20, 2013, Plaintiff filed his Complaint, which as amended, asserts claims citing breach of contract, breach of covenant of good faith and fair dealing, fraud, negligent misrepresentation, unfair and deceptive trade practices, the Fair Debt Collection Practices Act ("FDCPA") 15 U.S.C. §§ 1692, et seq., the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C § 2601, et seq., mail and wire fraud, the Consumer Financial Protection Act ("CFPA") 12 U.S.C. §§ 5481, et seq., predatory lending, the Truth in Lending Act ("TILA"), 15 U.S.C §1601, et seq., the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and civil conspiracy.
In their Motions to Dismiss, Defendants contend, inter alia, that six of Plaintiffs' claims are barred by the applicable statutes of limitations and that the remaining claims fail to allege facts sufficient to support them.
Defendants' Motions to Dismiss have been fully briefed and are ripe for determination.
In reviewing a Rule 12(b)(6) motion, "the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff." Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The plaintiff's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Id. at 563. A complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains enough facts to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. 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." Id.
In Iqbal, the Supreme Court articulated a two-step process for determining whether a complaint meets this plausibility standard. First, the court identifies allegations that, because they are no more than conclusions, are not entitled to the assumption of truth. Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do notsuffice." Id. (citing Twombly, 550 U.S. at 555) (allegation that government officials adopted challenged policy "because of" its adverse effects on protected group was conclusory and not assumed to be true). Although the pleading requirements stated in "Rule 8 [of the Federal Rules of Civil Procedure] mark[] a notable and generous departure from the hyper-technical, code-pleading regime of a prior era ... it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79.
Second, to the extent there are well-pleaded factual allegations, the court should assume their truth and then determine whether they plausibly give rise to an entitlement to relief. Id. at 679. "Determining whether a complaint contains sufficient facts to state a plausible claim for relief "will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. "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,'" and therefore should be dismissed. Id. (quoting Fed. R. Civ. P. 8(a)(2)). In other words, if after taking the complaint's well-pleaded factual allegations as true, a lawful alternative explanation appears a "more likely" cause of the complained of behavior, the claim for relief is not plausible. Id.
Accepting the factual allegations of the Amended Complaint as true, Plaintiffs' claims for breach of contract, fraud, negligent misrepresentation, and violations of FDCPA, TILA and RESPA are barred by the applicable statutes of limitations. The factual basis for Plaintiff's claims is that Defendants failed to accept him into the HAMP program after he made the required trial payments. According to documents attached to his Amended Complaint, Plaintiffwas aware of this decision no later than September 2010.
Under North Carolina law, a claim for fraud and misrepresentation must be brought within three years of the time Plaintiff knew or reasonably should have known of the facts giving rise to the fraud and misrepresentation. N.C. Gen. Stat. § 1-52 (). "Where a person is aware of facts and circumstances which, in the exercise of due care, would enable him or her to learn of or discover the fraud, the fraud is discovered for the purposes of the statute of limitations." Jennings v. Lindsey, 69 N.C. App. 710, 715, 318 S.E.2d 318, 321 (1984) (citations omitted). Similarly, a breach of contract claim has a three year statute of limitations that runs from the date of breach. N.C. Gen. Stat. § 1-52(1). The FDCPA contains a one-year statute of limitations: "[a]n action to enforce any liability created by . . . [the FDCPA] may be brought . . . within one year from the date on which the violation occurs." 15 U.S.C. § 1692k(d). Plaintiff filed this action on December 20, 2013, more than three years after these claims arguably accrued.
TILA and RESPA relate to loan origination. Each has a one-year statute of limitations. See 15 U.S.C. § 1640(e) (TILA); 12 U.S.C. § 2614 (RESPA); Zaremski v. Keystone Title Associates, Inc., 1989 WL 100656, *1 (4th Cir. 1989). Plaintiff obtained the loan no later than sometime in 2005, more than seven years before he filed this lawsuit.
Accordingly, the undersigned respectfully recommends that the Defendants' Motions to Dismiss be granted as to Plaintiffs' breach of contract, fraud, negligent misrepresentation, FDCPA, TILA and RESPA claims.
The duty of good faith and fair dealing does not impose upon the lender a duty to modifyits borrower's mortgage loan, even if the borrower cannot make his monthly payments. James v. Vanderbilt Mortgage & Finance, Inc., No. 3:11-cv-498, 2012 U.S. Dist. LEXIS 16577 at 11 (W.D.N.C. Jan. 23, 2012), aff'd, 2012 U.S. Dist. LEXIS 16578 (W.D.N.C. Feb. 10, 2012) Such a duty would allow the court to re-write the terms of a loan. Id.
For this reason and the other reasons stated in Defendants' briefs, the undersigned respectfully recommends that Plaintiff's claim for breach of covenant of good faith and fair dealing be dismissed.
To state a claim under North Carolina's Unfair and Deceptive Trade Practices Act (the "UDTPA"), a plaintiff must allege three elements: "(1) the defendant committed an unfair or deceptive trade practice; (2) the action in question was in or affecting commerce; and (3) the act proximately caused injury to the plaintiff." Bob Timberlake Collection, Inc. v. Edwards, 176 N.C. App. 33, 41, 626 S.E.2d 315, 322, disc. rev. denied, 360 N.C. 531, 633 S.E.2d 674 (2006); "Whether an act or practice is unfair or deceptive is a question of law for the court." DiFrega v. Pugliese, 164 N.C. App. 499, 507,...
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