May v. Nationstar Mortg., LLC.

• Decision Date: 19 November 2014
• Docket Number: Case number 4:14cv0578 TCM
• Court: U.S. District Court — Eastern District of Missouri
• Parties: JEANNIE K. MAY, Plaintiff, v. NATIONSTAR MORTGAGE, LLC., Defendant.

JEANNIE K. MAY, Plaintiff, v. NATIONSTAR MORTGAGE, LLC., Defendant.

Case number 4:14cv0578 TCM

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

November 19, 2014

MEMORANDUM AND ORDER

This matter is before the Court¹ on motions filed by Nationstar Mortgage, LLC ("Defendant") to dismiss, under Federal Rule of Civil Procedure 12(b)(6), Counts II, IV, V, VI, and IX of the second amended complaint filed by Jeannie K. May ("Plaintiff") [Docs. 18 and 58]. Plaintiff concedes that the claim in Count VI is moot and otherwise opposes the motions.

Plaintiff challenges Defendant's handling of a loan Plaintiff originally obtained from a different entity in 2007 to purchase her residence. After Plaintiff filed this action in state court, Defendant removed the lawsuit to this Court on the grounds that Plaintiff alleged, in her then-pending first amended petition, violations of federal statutes, which claims fall within this Court's federal question jurisdiction, 28 U.S.C. § 1331, and pursued related state law claims, over which this Court may exercise supplemental jurisdiction under 28 U.S.C. § 1367(a). Now before the Court is Plaintiff's ten-count second amended complaint, andDefendant's motions to dismiss five of the six state law claims in that complaint. In particular, Defendant moves for dismissal of the two claims that Defendant's challenged actions violated the Missouri Merchandising Practices Act ("MMPA"), Mo. Rev. Stat. §§ 407.010 et seq. (Counts II and IX), and seeks dismissal of the claims that Defendant is liable for slander of title (Count IV), invasion of privacy (Count V), and wrongful foreclosure (Count VI). The motions to dismiss do not challenge either Plaintiff's sixth state law claim for Defendant's alleged breach of contract (Count VII) or any of Plaintiff's four claims that Defendant's challenged conduct violates several federal statutes.

Discussion

Rule 12(b)(6) Standard. A motion filed under Federal Rule of Civil Procedure 12(b)(6) requests dismissal for "failure to state a claim upon which relief can be granted." When resolving such a motion, the court must take as true the alleged facts and determine whether they are sufficient to raise more than a speculative right to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007); accord Hager v. Arkansas Dep't of Health, 735 F.3d 1009, 1013 (8th Cir. 2013) (under Rule 12(b)(6), "the factual allegations in the complaint are accepted as true and viewed most favorably to the plaintiff"). The court does not, however, accept as true any allegation that is a legal conclusion. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); accord Hager, 735 F.3d at 1013 ("[c]ourts must not presume the truth of legal conclusions couched as factual allegations," citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).

A complaint must have "'a short and plain statement of the claim showing that the[plaintiff] is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Twombly, 550 U.S. at 555 (quoting Fed. R. Civ. P. 8(a)(2) and then Conley v. Gibson, 355 U.S. 41, 47 (1957), abrogated by Twombly, supra); see also Gregory v. Dillard's Inc., 565 F.3d 464, 473 (8th Cir. 2009) (en banc). While detailed factual allegations are not necessary, a complaint that contains "labels and conclusions," and "a formulaic recitation of the elements of a cause of action" is not sufficient. Twombly, 550 U.S. at 555; accord Iqbal, 556 U.S. at 678.

The complaint must set forth "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570; accord Iqbal, 556 U.S. at 678; Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009). "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." Iqbal, 556 U.S. at 678. "[T]he complaint should be read as a whole, not parsed piece by piece to determine whether each allegation, in isolation, is plausible." Braden, 588 F.3d at 594. If the claims are only conceivable, not plausible, the complaint must be dismissed under Rule 12(b)(6). Twombly, 550 U.S. at 570; accord Iqbal, 556 U.S. at 679.

With respect to Plaintiff's state claims, this Court applies Missouri law to ascertain the elements of those claims. See Walker v. Barrett, 650 F.3d 1198, 1203 (8th Cir. 2011) (Missouri law applies to state claims pursued under the federal court's supplemental jurisdiction). "When construing Missouri law, '[this Court is] bound by the decisions of theMissouri Supreme Court regarding issues of substantive state law.' Bockelman v. MCI Worldcom, Inc., 403 F.3d 528, 531 (8th Cir. 2005)." Id. Absent decisions of the Missouri Supreme Court, this Court considers "opinions from the Missouri Court of Appeals as 'particularly relevant' and must follow them when those opinions provide 'the best evidence of Missouri law.' [Bockelman, 403 F.3d at 531] (quotations and citations omitted)." Id.

Importantly, a court considering a Rule 12(b)(6) motion to dismiss "is not limited to the allegations in the complaint, but may also consider 'materials that do not contradict the complaint, or materials that are necessarily embraced by the pleadings.' Noble Sys. Corp. v. Alorica Cent., LLC, 543 F.3d 978, 982 (8th Cir. 2008)." Smithrud v. City of St. Paul, Minn., 746 F.3d 391, 397 (8th Cir.), cert. denied, 135 S. Ct. 361 (2014). Here, Plaintiff provided forty-one exhibits with her first amended petition, which was filed upon removal of this case from state court. The second amended complaint contains references to those exhibits.² Because those materials are "necessarily embraced" by the second amended complaint, the Court may consider those exhibits in resolving the pending motions to dismiss.

Defendant provided as exhibits to its second motion to dismiss a copy of the note and a copy of the deed of trust pertaining to Plaintiff's purchase of her home. While thesematerials were not provided as part of or with either the first amended petition or the second amended complaint, the deed of trust may be considered a public record in that it was filed with the St. Louis County Recorder of Deeds office. In Noble Sys. Corp., the United States Court of Appeals for the Eighth Circuit stated that "[w]hen ruling . . . a motion to dismiss under Rule[] 12(b)(6) . . . , a district court . . . may . . . consider some public records." Noble Sys. Corp., 543 F.3d at 982 (finding a financing statement that was "on file with the state of Minnesota" was "a public record that can be considered" in resolving a Rule 12(b)(6) motion "even if not mentioned expressly in the pleadings"). Under the circumstances, because the deed of trust is a public record and because both the note and the deed of trust are "necessarily embraced" by the allegations in the second amended complaint, the Court may consider those documents to resolve the issues presented by Defendant's motions to dismiss.

Based on the standard applicable to the consideration of Rule 12(b)(6) motions, the factual allegations in the second amended complaint, taken as true, reveal in relevant part that Jeannie K. May ("Plaintiff"), a single person, purchased her home in St. Louis County, Missouri, in May 2007, with a $100,000 loan financed by Cornerstone Mortgage, Inc. (Pl. Second Am. Compl. ¶¶ 1, 4, 8, 9.) After the closing, the servicing of the loan was transferred to CitiMortgage and then, in November 2010, to Defendant. (Id. ¶¶ 5, 10, 19.) Plaintiff alleges that the transfer to Defendant was subject to a contract, specifically, a pooling and servicing agreement ("PSA"), that set forth Defendant's duties and responsibilities in servicing Plaintiff's note and mortgage. (Id. ¶¶ 11, 12.)

Plaintiff began having financial difficulties in 2007, fell behind in her mortgagepayments, and filed on November 7, 2007, a voluntary petition for relief under Chapter 13 of the United States Bankruptcy Code ("Bankruptcy Proceeding"). (Id. ¶¶ 14, 15.) CitiMortgage filed in the Bankruptcy Proceeding a proof of claim, including a claim for $1,709.70 in prepetition charges. (Id. ¶ 18.) The Chapter 13 Plan ("Plan"), which was confirmed by the Bankruptcy Court Judge, required in relevant part both Plaintiff's payment to the Bankruptcy Trustee of at least $395.00 per month for sixty months, as well as Plaintiff's monthly payment of $833.93 to CitiMortgage, Inc. (and then Defendant) for the loan on her home. (Id. ¶¶ 16, 17; see also Ex. B [Doc. 7-2].)

In April 2011, Defendant filed a motion for relief from the bankruptcy stay unless Plaintiff paid a total of $4,838.38 for five post-petition mortgage payments she had reportedly not made. (Pl. Second Am. Compl. ¶ 20 [Doc. 56].) Plaintiff then tendered, and Defendant negotiated, a cashier's check in that amount; and Defendant withdrew its motion for relief from the bankruptcy stay. (Id. ¶¶ 21, 22.) Defendant did not file in Plaintiff's bankruptcy proceeding any notice or demand for payment of any other amount or fee. (Id. ¶ 23.)

On November 15, 2012, the Bankruptcy Trustee filed a notice under Bankruptcy Rule 3002.1(f) reporting that the full amount of the pre-petition default amount of $1,709.70 claimed by Defendant and its predecessor, CitiMortgage, had been paid by the Trustee, and that all post-petition monthly payments had been made by Plaintiff. (Id. ¶ 24.) In its response to that notice, Defendant "admitted that [Plaintiff] had paid" in full the pre-petition amount due of $1,790.70, as well as "all post-petition amounts due to Defendant . . . as of the date of the Trustee's . . . notice." (Id. ¶ 25.)

Plaintiff made timely payments of $859.38 to Defendant in December 2012, January 2013, and February 2013. (Id. ¶ 27.) During this time, customer service representatives for Defendant orally confirmed for Plaintiff that she was current on her mortgage. (Id. ¶ 28; see also ¶...