Jones v. Bank of Am., N.A., Case No. 2:18-cv-0012-JEO

• Decision Date: 28 August 2018
• Docket Number: Case No. 2:18-cv-0012-JEO
• Parties: DOROTHY JONES, Plaintiff, v. BANK OF AMERICA, N.A., Defendant.
• Court: U.S. District Court — Northern District of Alabama

DOROTHY JONES, Plaintiff, v. BANK OF AMERICA, N.A., Defendant.

Case No. 2:18-cv-0012-JEO

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

August 28, 2018

MEMORANDUM OPINION

On December 1, 2017, Plaintiff Dorothy Jones filed this action in the Circuit Court of Jefferson County, Alabama, Birmingham Division, asserting fraud claims under Alabama law against Defendant Bank of America, N.A. ("BOA"). (Doc.¹ 1-1 at 3-21 ("Complaint" or "Compl.")). BOA removed the action pursuant to 28 U.S.C. §§ 1441 and 1446, invoking this court's diversity jurisdiction.² (Doc. 1). The cause now comes to be heard on BOA's motion to dismiss for failure to state aclaim under Fed. R. Civ. P. 12(b)(6). (Doc. 4). Because that motion and Plaintiff's response in opposition (Doc. 9) included documentary evidence beyond the original complaint, the court entered an order giving notice that it intended to treat BOA's pending motion as one for a Fed. R. Civ. P. 12(b)(6) dismissal or, in the alternative, for summary judgement under Fed. R. Civ. P. Rule 56. (Doc. 15). Both Plaintiff and Defendant have responded. (Doc. 16, 18). For the reasons explained below, the court³ concludes that BOA's dispositive motion is due to be granted and that this action is due to be dismissed with prejudice.

I. REVIEW STANDARDS

Although this action was originally filed in state court, since it has been removed, procedural matters are now governed by the Federal Rules of Civil Procedure, including as they relate to pleading standards and dismissal for failing to meet them. See Rule 81(c)(1), Fed. R. Civ. P.; Willy v. Costal Corp., 503 U.S. 131, 134 (1992); Duncan v. Citimortgage, Inc., 617 F. App'x 958, 960 (11th Cir. 2015). In particular, Rule 12(b)(6), Fed. R. Civ. P., authorizes a motion to dismiss a plaintiff's complaint in whole or in part on the ground that its allegations fail to state a claim upon which relief can be granted. That provision, in turn, is read in light of Rule 8(a)(2), Fed. R. Civ. P., which requires only "a short and plainstatement 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 (1957). The court is required to accept the well-pled factual allegations of the complaint as true and give the plaintiff the benefit of all reasonable factual inferences. See Hazewood v. Foundation Financial Group, LLC, 551 F.3d 1223, 1224 (11th Cir. 2008) (per curiam). However, "courts 'are not bound to accept as true a legal conclusion couched as a factual allegation.'" Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009) ("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."). Nor is it proper to assume that the plaintiff can prove facts he or she has not alleged or that the defendants have violated the law in ways that have not been alleged. Twombly, 550 U.S. at 563 n.8 (citing Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519, 526 (1983)).

"While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id., 550 U.S. at 555(citations, brackets, and internal quotation marks omitted). "Factual allegations must be enough to raise a right to relief above the speculative level ...." Id. Thus, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face,'" i.e., its "factual content ... allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678 (citations omitted).

Further, because Plaintiff's Complaint seeks to recover for fraud, it implicates Rule 9(b), Fed. R. Civ. P., which imposes heightened pleading standards by requiring a party to "state with particularity the circumstances constituting fraud." Generally, this occurs where the pleading alleges

(1) precisely what statements were made in what documents or oral representations or what omissions were made, and

(2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) same, and

(3) the content of such statements and the manner in which they misled the plaintiff, and

(4) what the defendants obtained as a consequence of the fraud.

Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1371 (11th Cir. 1997) (internal quotations omitted). However, allegations relating to "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Id.

In analyzing a motion to dismiss under Rule 12(b)(6), the court is generally limited to examining the allegations of the complaint itself, but it may also look to documents attached or referred to the complaint that are central to the plaintiff's claims and whose authenticity is unchallenged. See SFM Holdings, Ltd. v. Banc of Amer. Securities, LLC, 600 F.3d 1334, 1337 (11th Cir. 2010); Day v. Taylor, 400 F.3d 1272, 1275-76 (11th Cir. 2005); Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002). To the extent that such documents are considered and they contradict the allegations of the complaint, the documents control. Friedman v. Market Street Mortg. Corp., 520 F.3d 1289, 1295 n. 6 (11th Cir. 2008); Griffin Indust., Inc. v. Irvin, 496 F.3d 1189, 1206 (11th Cir. 2007). If a district court considers materials beyond the above scope, however, it is required to treat the motion as one for summary judgment under Fed. R. Civ. P. 56. See Fed. R. Civ. P. Rule 12(d); SFM Holdings, 600 F.3d at 1337; Harper v. Lawrence County, Ala., 592 F.3d 1227, 1232 (11th Cir. 2010).

Pursuant to Rule 56, the "court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. Proc. 56(a). The party moving for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion," relying on submissions "which it believes demonstrate the absence of a genuine issue of material fact." CelotexCorp. v. Catrett, 477 U.S. 317, 323 (1986); see also Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991); Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970). Once the moving party has met its burden, the nonmoving party must "go beyond the pleadings" and show there is a genuine issue for trial. Celotex Corp., 477 U.S. at 324.

Both the party "asserting that a fact cannot be," and a party asserting that a fact is genuinely disputed, must support their assertions by "citing to particular parts of materials in the record," or by "showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. Proc. 56(c)(1)(A), (B). In its review of the evidence, a court must credit the evidence of the non-movant and draw all justifiable inferences in the non-movant's favor. Stewart v. Booker T. Washington Ins., 232 F.3d 844, 848 (11th Cir. 2000). At summary judgment, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

II. BACKGROUND

Plaintiff's cause of action relates to BOA's participation in the Home Affordable Modification Program ("HAMP"), which was created by the United States Department of the Treasury pursuant to authority granted by the EmergencyEconomic Stabilization Act of 2008, 12 U.S.C. §§ 5201-5261. See Miller v. Chase Home Finance, LLC, 677 F.3d 1113, 1116 (11th Cir. 2012). HAMP is a federal program "designed to prevent avoidable home foreclosures by incentivizing loan servicers to reduce the required monthly mortgage payments for certain struggling homeowners." Id. Plaintiff alleges that, in April 2009, BOA, the nation's largest mortgage servicer, entered into a Servicer Participation Agreement with the federal government to participate in HAMP (see Doc. 1-1 at 22-50) in exchange for a commitment by the government to infuse BOA with hundreds of millions of dollars. (Compl. ¶¶ 11, 12). Plaintiff says that, despite the federal funds it would receive under the Servicer Participation Agreement, BOA knew that conforming to its obligations, "in providing screening for HAMP applications and accepting homeowners who meet the requirements," would cost BOA millions of dollars. (Compl. ¶ 16). As such, Plaintiff claims, BOA

made a calculated decision ... to permit just enough HAMP modifications to create a defense ... against Federal Government agencies ... [and to convince] Congressional skeptics and the public that BOA was making best efforts to comply with [the] Agreement. Simultaneously, however, BOA chose to develop methodical business practices designed to intentionally prevent scores of [qualified] homeowners from become eligible or staying eligible for a permanent HAMP modification.

(Id. ¶ 17). To that end, Plaintiff says, BOA "developed systems and procedures that deliberately obfuscated, misled, and otherwise deceived ... homeowners and regulators, resulting in ineligibility through no fault of the homeowner." (Id. ¶ 18).

In this vein, Plaintiff has attached to her Complaint unsworn declarations, see 28 U.S.C. § 1746, of five former BOA employees who have outlined their alleged experiences with BOA's purported scheme...