Reitz v. Nationstar Mortg., LLC.

• Citation: 954 F.Supp.2d 870
• Decision Date: 27 June 2013
• Docket Number: Case No. 4:12CV117SNLJ.
• Parties: Donise REITZ, Plaintiff, v. NATIONSTAR MORTGAGE, LLC., et. al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

954 F.Supp.2d 870

Donise REITZ, Plaintiff,

v.NATIONSTAR MORTGAGE, LLC., et. al., Defendants.

Case No. 4:12CV117SNLJ.

United States District Court,

E.D. Missouri,

Eastern Division.

June 27, 2013.

Randall S. Crompton, Eric D. Holland, Holland and Groves, L.L.C., St. Louis, MO, Charles E. Schaffer, Levin and Fishbein, Philadelphia, PA, Christopher M. Ellis, Bolen and Pobinson, Decatur, IL, for Plaintiff.

Brett J. Natarelli, Harry N. Arger, Richard E. Gottlieb, Dykema and Gossett PLLC, Chicago, IL, John M. Hongs, Hinshaw and Culbertson, LLP, St. Louis, MO, for Defendants.

MEMORANDUM

STEPHEN N. LIMBAUGH, JR., District Judge.

Plaintiff has filed this putative class action seeking recovery for defendant Nationstar Mortgage's failure to permanently modify her home mortgage loan under the federal government's Home Affordable Modification Program (HAMP). Plaintiff seeks redress for herself and the putative class pursuant to claims for breach of contract (Count I), promissory estoppel (Count II), breach of the implied covenant of good faith and fair dealing (Count III), and violations of the Missouri Merchandising Practices Act (MMPA)(Count IV). This matter is before the Court on defendant Nationstar Mortgage's (hereinafter simply referred to as Nationstar) Rule 12(b)(6) motion to dismiss [13], filed March 23, 2012.¹ After several extensions of time and numerous responsive pleadings and supplementation of same, this matter is now ripe for disposition.

The purpose of a Rule 12(b)(6) motion to dismiss is to test the legal sufficiency of a complaint so as to eliminate those actions “which are fatally flawed in their legal premises and designed to fail, thereby sparing litigants the burden of unnecessary pretrial and trial activity.” Young v. City of St. Charles, 244 F.3d 623, 627 (8th Cir.2001)quoting Neitzke v. Williams, 490 U.S. 319, 326–27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). A complaint must be dismissed for failure to state a claim upon which relief can be granted if it does not plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (abrogating the prior “no set of facts” standard set forth in Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). Courts “do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.” Id., 550 U.S. at 555, 127 S.Ct. 1955. A complaint must set forth factual allegations which are enough to “raise a right to relief above the speculative level.” Id., 550 U.S. at 555, 127 S.Ct. 1955. However, where a court can infer from those factual allegations no more than a “mere possibility of misconduct,” the complaint must be dismissed. Cole v. Homier Distributing Co., Inc., 599 F.3d 856, 861 (8th Cir.2010) ( citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009)).

In passing on a motion to dismiss, a court must view the allegations of the complaint in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Kottschade v. City of Rochester, 319 F.3d 1038, 1040 (8th Cir.2003). While a complaint challenged by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff must still provide the grounds for relief, and neither “labels and conclusions” nor “a formulaic recitation of the elements of a cause of action” will suffice. Bell Atlantic Corp. v. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. (internal citations omitted). “Although the pleading standard is liberal, the plaintiff must allege facts—not mere legal conclusions—that, if true, would support the existence of the claimed torts.” Moses.com Securities v. Comprehensive Software Systems, Inc., 406 F.3d 1052, 1062 (8th Cir.2005)citing Schaller Tel. Co. v. Golden Sky Systems, 298 F.3d 736, 740 (8th Cir.2002). In viewing the complaint in the light most favorable to the plaintiff, the court should not dismiss it merely because the court doubts that the plaintiff will be able to prove all of the necessary allegations. Bennett v. Berg, 685 F.2d 1053, 1058 (8th Cir.1982). The primary issue for a court to consider is not whether the plaintiff will ultimately prevail in the lawsuit, but whether the complaint adequately states a claim; and therefore, the plaintiff is entitled to present evidence in support of that claim. A complaint may not be dismissed based upon a district court's assessment that the plaintiff will fail to present evidentiary support for the complaint's allegations or will ultimately fail to prove one or more claims to the satisfaction of the factfinder. Bell Atlantic Corp. v. Twombly, 550 U.S. at 556, 127 S.Ct. 1955;Neitzke v. Williams, 490 U.S. at 327, 109 S.Ct. 1827 (“What Rule 12(b)(6) does not countenance are dismissals based upon a judge's disbelief of a complaint's factual allegations.”) However, “[w]here the allegations show on the face of the complaint there is some insuperable bar to relief, dismissal under Rule 12(b)(6) is appropriate.” Benton v. Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir.208). Further, courts “ ‘are not bound to accept as true a legal conclusion couched as a factual allegation.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009) ( quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). When considering a motion to dismiss, a court can “begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Ashcroft v. Iqbal, 129 S.Ct. at 1950. Legal conclusions must be supported by factual allegations to survive a motion to dismiss. Ashcroft v. Iqbal, 129 S.Ct. at 1950. With this plausibility standard in mind, this Court turns to an examination of the plaintiff's complaint.

Normally, when reviewing a Rule 12(b)(6) motion, documents outside the pleadings are presented and not excluded, the motion must be treated as a motion for summary judgment. Rule 12(d) Fed.R.Civ.Pro. Documents that are necessarily embraced by the pleadings are not “matters outside the pleadings” for purposes of Rule 12(d). Enervations, Inc. v. Minnesota Mining & Mfg. Co., 380 F.3d 1066, 1069 (8th Cir.2004); see also, Zoltek Corp. v. Structural Polymer Group, 2008 WL 4921611, *2 (E.D.Mo. Nov. 13, 2008)rev. on other gds. Zoltek Corp v. Structural Polymer Group, 592 F.3d 893 (8th Cir.2010). A court need not convert a Rule 12(b)(6) motion to dismiss into on for summary judgment under Rule 12(d) if the matters presented are incorporated by reference, are integral to the claim, or are exhibits whose authenticity is unquestioned. Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 931 (8th Cir.2012); Brown v. Intelius, Inc., 2012 WL 5878230, *2, n. 3 (E.D.Mo. Nov. 21, 2012) ( citing Miller, supra.). The documents attached to the Complaint and responsive pleadings are necessarily embraced by the pleadings and can be considered under the instant 12(b)(6) motion without converting the instant dismissal motion to a motion for summary judgment. In making its ultimate decision, the Court has not considered any other exhibits that may have been filed by either party that are not necessarily embraced by the pleadings.

Finally, given the substance of this dispute, the Court has elected to take judicial notice of the operative HAMP Guidelines, as published by the United States Department of the Treasury, and set out in defendant Nationstar's Exhibits A–C (attached to the instant motion). See, Caha v. United States, 152 U.S. 211, 221–22, 14 S.Ct. 513, 38 L.Ed. 415 (1894) (“... that wherever, by the express language of any act of congress, power is intrusted to either of the principal departments of government to prescribe rules and regulations for the transaction of business in which the public is interested, and in respect to which they are to be controlled, the rules and regulations prescribed in pursuance of such authority become a mass of that body of public records of which the courts take judicial notice.”); see also, Kiluk v. Select Portfolio Servicing, Inc., 2011 WL 8844639, *1, n. 3 (D.Mass. Dec. 19, 2011) (district court takes judicial notice of the HAMP Guidelines as matter of public record and not necessitating converting a Rule 12(b)(6) motion to dismiss into a motion for summary judgment).

The following facts are taken from the plaintiff's class action complaint, documents attached, and those documents referenced above; and thus, are regarded as true for purposes of the instant motion to dismiss.

In 2009, in response to the failing economy's significant affect on the mortgage industry especially as to the rising number of mortgage loan defaults, the federal government instituted the Home Affordable Modification Program (hereinafter referred to as “HAMP”). Specific guidelines were established and published by the U.S. Department of the Treasury (HAMP Guidelines) which set forth the scope of the program, and more importantly, the participating loan servicer obligations under HAMP. See, Defendant's Exhibit A.

HAMP was designed to assist distressed homeowners by encouraging banks (loan servicers) to modify the terms of outstanding mortgage agreements, and thereby, making a homeowner's monthly mortgage payment more affordable. HAMP is funded by federal funds through the U.S. Treasury Department's Troubled Asset Relief Program (TARP). Loan servicers participating in HAMP receive financial incentives, via TARP, for each HAMP modification. See, CitiMortgage, Inc. v. Crawford, et al., 934 F.Supp.2d 942, 945, 2013 WL 1225387, *1 (S.D.Ohio, March 26, 2013); Williams, et al. v. Geithner, et al., 2009 WL 3757380, *2 (D.Minn. November 9, 2009). Defendant Nationstar voluntarily participated in HAMP receiving TARP funds for each HAMP modification.

Under HAMP, a loan servicer “will use a uniform loan modification process to provide a borrower with...