Sirote v. BBVA Compass Bank

• Decision Date: 29 December 2010
• Docket Number: Civil Action No. CV–10–S–2698–NE.
• Citation: 857 F.Supp.2d 1213
• Parties: Jerome SIROTE, Plaintiff, v. BBVA COMPASS BANK, Amy L. Shehan, and Lisa D. Williams, Defendants.
• Court: U.S. District Court — Northern District of Alabama

857 F.Supp.2d 1213

Jerome SIROTE, Plaintiff,

v.BBVA COMPASS BANK, Amy L. Shehan, and Lisa D. Williams, Defendants.

Civil Action No. CV–10–S–2698–NE.

United States District Court,

N.D. Alabama,

Northeastern Division.

Dec. 29, 2010.

Mitchell John Howie, S. Mitchell Howie, Law Office of Mitchell J. Howie, Huntsville, AL, for Plaintiff.

A. Kelly Brennan, Adam Kent Israel, Balch & Bingham, LLP, Richard F. Ogle, William L. Thuston, Jr., Christian Small LLP, Birmingham, AL, for Defendants.

MEMORANDUM OPINION AND ORDER

C. LYNWOOD SMITH, District Judge.

Plaintiff, Jerome Sirote, filed this case on October 5, 2010, against defendants BBVA Compass Bank (“Compass” or “Compass Bank”), Amy L. Shehan (“Shehan”), and Lisa D. Williams (“Williams”). The individual defendants are either employees or former employees of Compass. Plaintiff's original complaint asserted claims for violations of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., and the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., as well as state law claims for breach of contract, breach of fiduciary duty, fraud, and deceit.¹

Defendants have moved to dismiss plaintiff's original complaint for failure to state a claim upon which relief can be granted.² Plaintiff responded to the motions to dismiss,³ and also moved for leave to amend his complaint to cure some of the deficiencies alleged in the motions to dismiss. ⁴ Plaintiff attached a proposed amended complaint to his motion for leave to amend. Defendants oppose plaintiff's motion for leave to amend, asserting that any amendment would be futile because, even as amended, plaintiff's complaint still would fail to state a claim upon which relief could be granted.⁵ Plaintiff then filed a motion to exclude Exhibits C, D, and E to defendants' response to plaintiff's motion for leave to amend.⁶ Defendants' motions to dismiss, plaintiff's motion for leave to amend, and plaintiff's motion to strike defendants' exhibits are presently before the court.

I. STANDARDS OF REVIEW

A. Motion to Dismiss

Federal Rule of Civil Procedure 12(b) permits a party to move to dismiss a complaint for, among other reasons, “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6).⁷ This rule must be read together with Rule 8(a), which requires that a pleading contain only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). While that pleading standard does not require “detailed factual allegations,” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 550, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), it does demand “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citations omitted). The Supreme Court elaborated this standard in its Iqbal opinion, as follows:

A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” [Twombly, 550 U.S. at 555, 127 S.Ct. at 1965]. Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of “further factual enhancement.” Id., at 557, 127 S.Ct. 1955.

To survive a motion to dismiss [founded upon Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted], a complaint must contain sufficient factual matter, accepted as true, to “state a claim for relief that is plausible on its face.” Id., at 570, 127 S.Ct. 1955. 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. Id., at 556, 127 S.Ct. 1955. 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. Ibid. 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., at 557, 127 S.Ct. 1955 (brackets omitted).

Two working principles underlie our decision in Twombly. First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id., at 555, 127 S.Ct. 1955 (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we “are not bound to accept as true a legal conclusion couched as a factual allegation” (internal quotation marks omitted)). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556, 127 S.Ct. 1955. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. [ Iqbal v. Hasty], 490 F.3d [143], at 157–158 [ (2d Cir.2007) ]. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not “show[n]”—“that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

Iqbal, 556 U.S. at 679, 129 S.Ct. at 1949–50 (emphasis added).

B. Motion for Leave to Amend Complaint

Federal Rule of Civil Procedure 15 provides, in pertinent part, that “[t]he court should freely give leave [to amend a pleading] when justice so requires.” Fed.R.Civ.P. 15(a)(2). The Eleventh Circuit has held that a complaint generally may not be dismissed for failure to state a claim without notice to the plaintiff and an opportunity to respond. See Jefferson Fourteenth Associates v. Wometco de Puerto Rico, Inc., 695 F.2d 524, 526 (11th Cir.1983); see also, e.g., Welch v. Laney, 57 F.3d 1004, 1009 (11th Cir.1995) (“Where a more carefully drafted complaint might state a claim upon which relief could be granted, the district court should allow the plaintiff [an opportunity] to amend the complaint rather than dismiss it.”) (citing Bank v. Pitt, 928 F.2d 1108, 1112 (11th Cir.1991) (“Where a more carefully drafted complaint might state a claim, a plaintiff must be given at least one chance to amend the complaint before the district court dismisses the action with prejudice.”) (emphasis supplied)). Even so, the court may refuse the amendment and dismiss the complaint if amendment would be futile due to legal or factual inadequacies in the pleading, or if it is “patently obvious” that the plaintiff could not prevail. Byrne v. Nezhat, 261 F.3d 1075, 1127 n. 99 (11th Cir.2001) (discussing a Rule 12(c) motion); see also Burger King Corp. v. Weaver, 169 F.3d 1310, 1319 (11th Cir.1999) (futility is an adequate basis for denying leave to amend).

II. ALLEGATIONS OF PLAINTIFF'S PROPOSED AMENDED COMPLAINT⁸

In his amended complaint, plaintiff conceded the dismissal of his claim under the Fair Debt Collection Practices Act.⁹ Therefore, only his claims under the federal Truth in Lending Act, the federal Real Estate Settlement Procedures Act, as well as his claims for breach of contract, breach of fiduciary duty, fraud, and deceit under Alabama law, remain under consideration.

Plaintiff, Jerome Sirote, has been a customer of Compass Bank since 1976. ¹⁰ On March 21, 2003, his signature was, “without his knowledge, consent or presence, forged on a note and Deed of Trust.” ¹¹ Defendant Lisa D. Williams, an employee of Compass Bank, notarized the forged signature on the Deed of Trust, despite the fact that the signature did not resemble plaintiff's actual signature, a sample of which was on file at the bank. ¹² On July 19, 2006, plaintiff's signature

was again forged on A Modification of Deed of Trust, without his knowledge, consent or presence, and notarized as his actual signature by yet another [Compass] employee, agent or designee DEFENDANT AMY L. SHEHAN, even though the forged signature bore absolutely no resemblance to Mr. Sirote's actual signature which the bank had on file at the time.¹³

Compass filed the forged Deeds of Trust in Giles County, Tennessee, which resulted in a lien being placed on plaintiff's residence. Plaintiff did not discover the lien until 2010, when he attempted to sell his residence. In order to effect the sale, on May 14, 2010, plaintiff was required to pay the principal balance of $92,028.76, plus interest in the amount of $11,131.73 and late charges in the amount of $1,040.78.¹⁴

III. DISCUSSION

A. Truth in Lending Act Claim

To support his Truth in Lending Act claim, plaintiff alleges:

20. Mr. Sirote's right to relief under count three, the Truth in Lending Act, arises from the failure of the Defendant, BBVA COMPASS bank, to make required disclosures to him for loans fraudulently made in his name on the above named Deeds of Trust and subsequent modification. Mr. Sirote was required to pay interest, penalties and principal on loans that he did not authorize or sign for. The Defendant made no disclosures to Mr. Sirote on any of these loans or extensions of credit which were the result...