Moore v. Seterus, Inc.
| Decision Date | 15 August 2017 |
| Docket Number | NO. 4:16-CV-293-FL,4:16-CV-293-FL |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | GWENDA G. MOORE, and R. WILTON MOORE, Plaintiffs, v. SETERUS, INC.; FEDERAL NATIONAL MORTGAGE ASSOCIATION; THE BANK OF NEW YORK MELLON f/k/a THE BANK OF NEW YORK, and TRUSTEE SERVICES OF CAROLINA, LLC, Defendants. |
This matter is before the court on motion to dismiss pursuant to Federal Rule 12(b)(6) for failure to state a claim and pursuant to Rule 8(a) for failure to provide a short, plain statement of the claim. (DE 7). The motion has been fully briefed, and the issues presented are ripe for ruling. For the reasons that follow, the motion is granted.
Plaintiffs commenced this action November 18, 2016, in the General Court of Justice, Superior Court Division for Beaufort County, North Carolina, asserting breach of contract and various torts against defendants Seterus, Inc. ("Seterus"), Federal National Mortgage Association ("Fannie Mae"), and The Bank of New York Mellon ("Bank of New York") (collectively, "the lender defendants"). Plaintiffs' claims arise from an offer of modification to a promissory note secured by property located at 129 Goose Creek Drive, Washington, North Carolina ("Goose Creek Drive Property") and defendant Seterus's procurement of allegedly excessive insurance policies and inspection services pertaining to the Goose Creek Drive Property. Defendants removed the action to this court December 19, 2016. Plaintiffs seek compensatory and punitive damages from the lender defendants. Plaintiffs also seek declaratory judgment that documents attached to the complaint create a binding contract requiring the lender defendants to modify the note to require payments not in excess of $1529.55 per month and permitting plaintiffs to retain the Goose Creek Drive Property.1 The lender defendants filed the instant motion December 20, 2016, asserting that all claims fail as a matter of law and should be dismissed pursuant to Federal Rules of Civil Procedure 8(a) and 12(b)(6).
The facts alleged in the verified complaint may be summarized as follows. On or about May 10, 2002, plaintiff Gwenda Moore ("Gwenda") executed a promissory note ("the note") payable to the order of non-party RBC Centura Bank. Gwenda borrowed $220,000 at an interest rate of 6.875 percent per annum. (DE1-1 at 28). To secure payment of the note, plaintiffs concurrently signed a deed of trust conveying the Goose Creek Drive Property to non-party CB Services Corp. as trustee under the deed of trust. (Id. at 31). The initial monthly payment under the note was $1,445.24, exclusive of escrow fees, (id. at 28), later reduced to $1,220.49 beginning June 1, 2013, pursuant to a modification allowed by then-holder of the note, JP Morgan Chase Bank, N.C. (Id. at 46). Following modification, Gwenda defaulted on her repayment obligations. (DE 1-1 at 4 ¶ 14).
The lender defendants are engaged in the business of consumer lending. (Id. at 2-3 ¶¶ 2-4). Defendant Fannie Mae underwrites consumer loans and is current holder of the note. (Id. at 2-3 ¶ 3, 4 ¶ 17) Defendant Bank of New York is a banking institution and currently has custody of the original document evidencing the note. (Id. at 3 ¶ 4). Defendant Seterus services the note on behalf of Fannie Mae. (Id. at 1 ¶ 2, 4 ¶ 17). Seterus hired defendant Trustee Services to initiate and prosecute foreclosure against the Goose Creek Drive Property following Gwenda's default. (Id. at 9 ¶ 43).
On or about June 5, 2014, defendant Seterus sent to plaintiff Gwenda a document styled as an offer for a "Trial Period Plan" ("TPP"). (Id. at 52). The TPP consists of a three-page letter endorsed by Seterus, an accompanying three-page document titled "Fannie Mae Loan Modification - Frequently Asked Questions[,]" a one-page document titled "Fannie Mae Loan Modification - Important Program Information Additional Trial Period Plan Information and Legal Notices[,]" and two additional one-page documents including a table of miscellaneous definitions and information about avoiding credit and lending scams. (Id. at 52-60). The first page of the TPP includes the following information:
(Id. at 52). The second page includes a payment schedule and section titled "modification terms[,]" as follows:
(Id. at 53).
The third page includes defendant Seterus's endorsement appearing on the signature line. (Id. at 54). The "frequently asked questions" enclosure includes information about the nature of the trial period plan and contemplated permanent modification:
(id at 55), the purpose of the trial period:
(Id. at 56).
After receiving the TPP, plaintiff Gwenda began making payments pursuant to its terms. Gwenda paid the three required installments of $1,529.55 between July and September, 2014, and in addition, paid six additional installments in the same amount through March, 2015, each of which payments defendant Seterus accepted. (Id. at 5 ¶ 23).
Sometime between September and December 2014, defendant Seterus offered a permanent modification with proposed monthly payments of approximately $2,000 per month. (See id. at 5 ¶ 26, 8 ¶ 34). Plaintiffs rejected this offer while maintaining that the lender defendants were required to modify, and indeed modified, the note to include monthly payments of $1529.55 for the remainder of the note's payment term. Based on plaintiffs' rejection of the permanent modification offer, Seterus informed Gwenda by letter dated December 22, 2014, that a "Fannie Mae...
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