Rider v. HSBC Mortg. Corp. (USA)
| Decision Date | 13 March 2013 |
| Docket Number | Case No. 2:12-cv-925 |
| Parties | Linda Rider, Plaintiff, v. HSBC Mortgage Corporation (USA), et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
This is an action brought by plaintiff Linda Rider against defendants HSBC Mortgage Corporation (USA) ("HSBC Mortgage") and HSBC Bank USA, N.A. ("HSBC Bank"), alleging violations of the Real Estate Settlement Procedures Act ("RESPA") and the Truth in Lending Act ("TILA"). This matter is before the court on the defendant's motion pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss plaintiff's first amended complaint for failure to state a claim for which relief may be granted.
In ruling on a motion to dismiss under Rule 12(b)(6), the court must construe the complaint in a light most favorable to the plaintiff, accept all well-pleaded allegations in the complaint as true, and determine whether plaintiff undoubtedly can prove no set of facts in support of those allegations that would entitle him to relief. Erickson v. Pardus, 551 U.S. 89, 94 (2007); Bishop v. Lucent Technologies, Inc., 520 F.3d 516, 519 (6th Cir. 2008); Harbin-Bey v. Rutter, 420 F.3d 571, 575 (6th Cir. 2005). To survive a motion to dismiss, the "complaint must contain either direct or inferential allegations with respect to all materialelements necessary to sustain a recovery under some viable legal theory." Mezibov v. Allen, 411 F.3d 712, 716 (6th Cir. 2005). Conclusory allegations or legal conclusions masquerading as factual allegations will not suffice. Id.
While the complaint need not contain detailed factual allegations, the "[f]actual allegations must be enough to raise the claimed right to relief above the speculative level," Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007), and must create a reasonable expectation that discovery will reveal evidence to support the claim. Campbell v. PMI Food Equipment Group, Inc., 509 F.3d 776, 780 (6th Cir. 2007). A complaint must contain facts sufficient to "state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Where a complaint pleads facts that are merely consistent with a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief. Id. Determining whether a complaint states a plausible claim for relief is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. Where the facts pleaded do not permit the court to infer more than the mere possibility of misconduct, the complaint has not shown that the pleader is entitled to relief as required under Fed.R.Civ.P. 8(a)(2). Id.
Plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action willnot do." Twombly, 550 U.S. at 555; see also Ashcroft, 129 S.Ct. at 1949 (); Association of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007).
"When a court is presented with a Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein." Bassett v. National Collegiate Athletic Ass'n 528 F.3d 426, 430 (6th Cir. 2008); see also Nixon v. Wilmington Trust Co., 543 F.3d 354, 357 (6th Cir. 2008)(a court may consider a document not formally incorporated by reference in a complaint when the complaint refers to the document and the document is central to the claims).
On or about September 27, 2002, plaintiff and her then husband, John Rider, executed a promissory note and mortgage in favor of Homestead Mortgage Company. See Doc. 9-5. On that date, the mortgage and note were assigned to HSBC Mortgage. See Complaint, Ex. B. On or about March 8, 2010, HSBC Mortgage filed a forfeiture action against the Riders in the Common Pleas Court of Franklin County, Ohio, seeking to recover $141,548.61 plus interest on the note. See Docs. 9-1, 9-4. On October 19, 2010, HSBC Mortgage filed a motion for summary judgment in the forfeiture action. See Doc. 9-2. The matter was referred twice for mediation. See Doc. 9-1. On August 12, 2011, during the pendencyof the forfeiture action, the Riders' mortgage was assigned to HSBC Bank by a corporate assignment of mortgage which was recorded on August 17, 2011. See Complaint, Ex. B. However, HSBC Bank was not made a party to the forfeiture action. After mediation proved to be unsuccessful, HSBC Mortgage asked the court to return the case to the active docket because "there are no retention options available for the homeowner." See Doc. 9-4. The court granted HSBC Mortgage's motion for summary judgment and entered a decree of foreclosure in favor of HSBC Mortgage on January 3, 2012. The Riders pursued an appeal from that judgment, and in a decision rendered on August 2, 2012, the Court of Appeals for the Ohio Tenth Appellate District affirmed the judgment of the lower court. See Doc. 9-4.
On August 30, 2012, plaintiff filed a complaint in the Court of Common Pleas of Franklin County, Ohio, asserting claims for violations of RESPA and TILA and for breach of contract under Ohio law. On October 8, 2012, defendants filed a notice of removal of the action to this court based on diversity and federal question jurisdiction. On October 15, 2012, defendants filed a motion pursuant to Rule 12(b)(6) to dismiss the complaint. On November 6, 2012, plaintiff submitted an unopposed motion for a 21-day extension of time in which to respond to the motion to dismiss. On November 26, 2012, plaintiff filed her first amended complaint.
In Count I of the first amended complaint, plaintiff asserted a RESPA violation under 12 U.S.C. §2605(c) against HSBC Bank. Section 2605(c) requires a "transferee servicer" of a mortgage loan to notify the borrower of the assignment, sale, or transfer of the loan within 15 days of the effective date of the transfer.
In Count II, plaintiff alleged a TILA violation under 15 U.S.C. §1641(g) against HSBC Bank. Section 1641(g) requires that no later than 30 days after a mortgage loan is sold, transferred or assigned, the "creditor that is the new owner or assignee of the debt" must notify the borrower in writing of the transfer or assignment, provide contact information for the new owner, and provide the date of the transfer or assignment and the location where the debt is recorded.
In Count III, plaintiff alleged a RESPA violation under 12 U.S.C. §2605(b) against HSBC Mortgage. Section 2605(b) requires the servicer of a mortgage loan to notify the borrower in writing of any assignment, sale or transfer of the servicing of the loan to another person within 15 days of the effective date of the transfer.1
On December 7, 2012, defendants filed a motion pursuant to Rule 12(b)(6) to dismiss the first amended complaint.
In their reply memorandum, defendants request that the first amended complaint be stricken as untimely. Plaintiff argues in response that under Fed. R. Civ. P. 15, she was permitted to amend her complaint as a matter of course before service of a responsive pleading, and cites cases for the proposition that a motion to dismiss under Rule 12(b)(6) is not a responsive pleading. However, Rule 15 was amended in 2009, and now provides:
The current version of Rule 15(a)(1)(B) clearly requires that an amended complaint be filed within 21 days of the filing of a motion under Rule 12(b)(6), and that an amended complaint filed outside that time frame requires leave of court. In her motion of November 6, 2012, plaintiff only sought an extension of time to respond to the motion to dismiss, and did not request an extension of time in which to file an amended complaint. Nonetheless, the court will treat that motion as a motion to extend the time to file an amended complaint, and will grant leave to file the amended complaint.
Defendants argue that plaintiff's claims are barred by the doctrine of res judicata. State-court judgments are given the same preclusive effect under the doctrine of res judicata as they would receive in courts of the rendering state. Ohio ex rel. Susan Boggs v. City of Cleveland, 655 F.3d 516, 519 (6th Cir. 2011). Under Ohio law, a valid final judgment rendered on the merits bars all subsequent actions based upon any claim arising out of the transaction or occurrence that was the subject matter of the previous action. Grava v. Parkman Township, 73 Ohio St.3d 379, 382, 653 N.E.2d 226 (1995). An existing final judgment or decree between the parties to litigation is conclusive as to all claimswhich were or might have been litigated in the first lawsuit. Id. "For the purpose of a res judicata analysis, a 'transaction' is defined as a 'common nucleus of operative facts.'" U.S. Bank Nat'l Ass'n v. Gullotta, 120 Ohio St.3d 399, 899 N.E. 2d 987, 991 (2008).
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