Ligon v. BAC Home Loans Servicing, LP

• Decision Date: 13 August 2012
• Docket Number: CIVIL ACTION FILE NO. 1:11-CV-03811-RWS-JFK
• Court: U.S. District Court — Northern District of Georgia
• Parties: ROBERT LIGON, et al., Plaintiffs, v. BAC HOME LOANS SERVICING, LP, aka BANK OF AMERICA, N.A. CORPORATION & BANK OF AMERICA, Defendant.

ROBERT LIGON, et al., Plaintiffs,

v. BAC HOME LOANS SERVICING, LP,aka BANK OF AMERICA, N.A. CORPORATION& BANK OF AMERICA, Defendant.

CIVIL ACTION FILE NO. 1:11-CV-03811-RWS-JFK

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

Date: August 13, 2012

FINAL REPORT AND RECOMMENDATION

The named Plaintiffs in this putative class action, Robert Ligon and Kadiji Townsend, each have, or had, a loan serviced by BAC Home Loans Servicing, LP, and have filed this action on behalf of all "mortgagee, homeowner(s)" allegedly damaged by Defendant's handling of the loan modification process on their residential mortgage loans. [Doc. 1 at 1 ("Complaint - Class Action")]. Bank of America, N.A. ("BANA"), in its own capacity and as successor by merger to BAC Home Loans Servicing, LP,¹ has filed a motion to dismiss the complaint based on Rules 12(b)(5), 12(b)(6) and 23 of the Federal Rules of Civil Procedure.

Plaintiffs are proceeding pro se and have filed a "Motion to Strike Defendants (sic) Request to Dismiss." [Doc. 13]. The Clerk of Court is DIRECTED to amend the docket to reflect that [Doc. 13] is construed by the court to be Plaintiffs' response to the motion to dismiss. BANA filed a reply. [Doc. 14].

I. Rule 12(b)(5)

In its motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(5), BANA contends that it was only served with the summons and not the complaint. [Doc. 7 at 8, 10, 12]. The court must address the sufficiency of service of process before addressing the merits of BANA's Rule 12(b)(6) motion. "'Service of process is a jurisdictional requirement: a court lacks jurisdiction over the person of a defendant when the defendant has not been served.' . . . Therefore, where a court finds insufficient service, it is 'improper for the district court to . . . reach[ ] the merits in th[e] case and to . . . issue[ ] a dismissal with prejudice.'" Pelmore v. Pinestate Mortg. Corp., 2010 WL 520767, at *2 (N.D. Ga. February 8, 2010) (quoting Jackson v. Warden, FCC Coleman-USP, 259 Fed. Appx. 181, 182-83 (11th Cir. 2007); Pardazi v. Cullman Med. Ctr., 896 F.2d 1313, 1317 (11th Cir. 1990)).

"The plaintiff is responsible for having the summons and complaint served within the time permitted under Rule 4(m)," Fed. R. Civ. P. 4(c)(1), and, ultimately, the plaintiff "bears the burden of establishing proof of service of process[,]" Adventure Outdoors, Inc. v. Bloomberg, 519 F. Supp. 2d 1258, 1270 (N.D. Ga. 2007), rev'd on other grounds, 552 F.3d 1290 (11th Cir. 2008). However, the defendant challenging service via a Rule 12(b)(5) motion "first bears the burden of producing affidavits that, in non-conclusory fashion, demonstrate the absence of jurisdiction." Lowdon PTY Ltd. v. Westminster Ceramics, LLC, 534 F. Supp. 2d 1354, 1360 (N.D. Ga. 2008) (citation omitted) (emphasis added); accord Hollander v. Wolf, 2009 WL 3336012, at *3 (S.D. Fla. October 14, 2009) (citation omitted).

Plaintiff filed a return of service using Local Form 440 (12/09) Summons in a Civil Action. [Doc. 2]. "Under the Federal Rules of Civil Procedure, a signed return of service constitutes prima facie evidence of valid service, which can be overcome only by strong and convincing evidence; once such a prima facie showing is made, the burden shifts to the defendant to demonstrate that service was not received." 62B Am. Jur. 2d, Process § 294 (2012) (citation omitted). Although the summons refers to an "attached complaint," the proof of service form does not state that the complaint was attached, and BANA contends that it was only served with the summons. [Doc. 7 at8, 10, 12]. BANA has, however, not demonstrated by affidavits, such as an affidavit from the bank officer on whom service was made or from the process server, that the complaint was not served with the summons. Therefore, BANA has not met its burden of proof to demonstrate the absence of jurisdiction. Lowdon PTY Ltd., 534 F. Supp. 2d at 1360 (citation omitted). The court therefore RECOMMENDS that the Rule12(b)(5) motion be DENIED without prejudice.

II. Standard of Review

The court may properly consider a Rule 12(b)(6) motion to dismiss the complaint for failure to state a claim for relief without first resolving the issue of class certification under Fed. R. Civ. P. 23. See 32B Am. Jur. 2d, Federal Courts § 1782 (2012). Ruling on the motion to dismiss prior to class certification binds only the named plaintiffs. Id.; and see In re Diamond Multimedia Sys., Inc. Sec. Litig., 1997 WL 773733, at *6 (N.D. Cal. October 15, 1997). Accord Gonzalez v. Asset Acceptance, LLC, 308 Fed. Appx. 429, 431 (11th Cir. 2009) (affirming district court's denial of class certification and dismissal for failure to state a claim where the plaintiff did not allege specific facts that supported his claims); Hoving v. Transnation Title Ins. Co., 545 F. Supp. 2d 662, 664 (E.D. Mich. 2008) (ruling on a motion to dismiss before class certification).

On a motion to dismiss under Rule 12(b)(6), the complaint's factual allegations are assumed true and construed in the light most favorable to the plaintiff. Hardy v. Regions Mortg., Inc., 449 F.3d 1357, 1359 (11th Cir. 2006); M.T.V. v. DeKalb County School Dist., 446 F.3d 1153, 1156 (11th Cir. 2006). "However, conclusory allegations, unwarranted deductions of facts or legal conclusions masquerading as facts will not prevent dismissal." Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002) (citations omitted). The Federal Rules of Civil Procedure include no requirement that a plaintiff detail the facts upon which the plaintiff bases a claim. Rule 8(a)(2) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2) (as amended 2007).

"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 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do[.]" Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007) (citations omitted); accord Financial Sec. Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282-83 (11th Cir. 2007) (recognizing that "while notice pleading may not require that the pleader allege a specific fact tocover every element or allege with precision each element of a claim, it is still necessary that a complaint contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory") (citations and internal quotation marks omitted).

"Factual allegations must be enough to raise a right to relief above the speculative level," i.e., they must do more than merely create a "'suspicion [of] a legally cognizable right of action,' on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 127 S. Ct. at 1965 (citations omitted) (emphasis omitted). "Stated differently, the factual allegations in a complaint must 'possess enough heft' to set forth 'a plausible entitlement to relief[.]'" Stephens, 500 F.3d at 1282 (quoting Twombly, 127 S. Ct. at 1966-67).

The court's inquiry at this stage of the proceedings focuses on whether the challenged pleadings "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Erickson v. Pardus, 127 S. Ct. 2197, 2200 (2007) (citations and internal quotation marks omitted). And a court reviewing a motion to dismiss must keep in mind that a "motion to dismiss for failure to state a claim upon which relief can be granted merely tests the sufficiency of the complaint; it does not decide the merits of the case." Wein v. American Huts, Inc., 313 F. Supp. 2d 1356,1359 (S.D. Fla. 2004) (citing Milburn v. United States, 734 F.2d 762, 765 (11th Cir. 1984)).

"Regardless of the alleged facts, however, a court may dismiss a complaint on a dispositive issue of law." Bernard v. Calejo, 17 F. Supp. 2d 1311, 1314 (S.D. Fla. 1998) (citing Marshall County Bd. of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174 (11th Cir. 1993) ("[T]he court may dismiss a complaint . . . when, on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action.")). See also Glover v. Liggett Group, Inc., 459 F.3d 1304, 1308 (11th Cir. 2006); Aque v. Home Depot U.S.A., Inc., 629 F. Supp. 2d 1336, 1350 (N.D. Ga. 2009).

The law establishes that "[a] document filed pro se is 'to be liberally construed' . . . and 'apro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers[.]'" Erickson, 127 S. Ct. at 2200 (citations omitted). Nevertheless, nothing in that leniency excuses a plaintiff from compliance with threshold requirements of the Federal Rules of Civil Procedure. "Even though a pro se complaint should be construed liberally, a pro se complaint still must state a claim upon which the Court can grant relief." Grigsby v. Thomas, 506 F. Supp. 2d 26, 28 (D. D.C. 2007).

The court will apply these standards in ruling on BANA's motion to dismiss the complaint.

III. Facts

Plaintiffs Robert Ligon and Kadiji Townsend each obtained a loan from Pine State Mortgage Corporation. The loans were apparently serviced by BAC Home Loans Servicing, LP (BANA), and after defaulting on the loans, Plaintiffs signed Loan Modification Agreements with BANA which modified the loans by capitalizing the past-due interest (i.e., adding the interest past-due to the principal amount owed) and lowering the monthly payments by reducing the interest rate and extending the length of the loan. The exhibits attached to BANA's motion provide the details.²

The Ligon Loan

Ligon's loan was executed on September 28, 2007, for $256,642 plus interest. [Doc. 7, Exhibit A]. The Note was stamped (undated) by Pine...