Tomlin v. Bank of N.Y. Mellon (In re Tomlin), Case No. 15-20852

• Decision Date: 31 March 2016
• Docket Number: Adversary No. 15-2029,Case No. 15-20852
• Parties: IN RE MICHAEL W. TOMLIN, Debtor. MICHAEL W. TOMLIN, Plaintiff, v. THE BANK OF NEW YORK MELLON, et al., Defendant.
• Court: U.S. Bankruptcy Court — Eastern District of Kentucky

IN RE MICHAEL W. TOMLIN, Debtor.MICHAEL W. TOMLIN, Plaintiff, v. THE BANK OF NEW YORK MELLON, et al., Defendant.

Case No. 15-20852

Adversary No. 15-2029

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF KENTUCKY COVINGTON DIVISION

March 31, 2016

Chapter 13

Judge Tracey N. Wise

MEMORANDUM OPINION AND ORDER

In this adversary proceeding, pro se Plaintiff/Debtor, Michael W. Tomlin ("Tomlin") asserts causes of action for defamation, violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. ("FCRA" or "Act"), breach of contract, fraud, intentional infliction of emotional distress, and tortious interference with contractual relationships against multiple defendants.¹ Tomlin bases his causes of action on allegations that the defendants (i) furnished false, erroneous or unsubstantiated negative credit reports to credit reporting agencies regarding Tomlin, (ii) failed to correct such inaccurate reports, including failing to furnish positive reports when Tomlin made payments, (iii) filed unwarranted foreclosure actions against Tomlin, (iv) made false reports to hishomeowner's insurer, and/or (v) fraudulently induced Tomlin to enter into a settlement agreement and then breached the settlement agreement.

Two defendants, Bank of New York Mellon, as Successor in interest to JPMorgan Chase Bank as Trustee for the registered holders of NovaStar Mortgage Funding Trust 2004-3 NovaStar Home Equity Loan Asset-backed Certificates, Series 2004-3 ("BONY") and Ocwen Loan Servicing, LLC ("Ocwen" and together with BONY, the "BONY Defendants") jointly filed a Motion to Dismiss Adversary Complaint [ECF No. 26] ("Motion to Dismiss") on the bases that:

1. The Complaint fails to state a claim upon which relief can be granted;

2. Tomlin's causes of action for violation of the FCRA are precluded by the statute of limitations set forth therein at § 1681p;

3. Tomlin's state law causes of action are preempted by the FCRA and/or barred by the applicable state statutes of limitation; and

4. The Complaint should be dismissed as "an impermissible shotgun pleading."

A hearing on the Motion to Dismiss was held on October 13, 2015, and the matter was taken under submission.

The other two other defendants, Saxon Mortgage Services, Inc. ("Saxon") and Rosio Duran ("Duran" and together with Saxon, the "Saxon Defendants") filed a joint Motion for Summary Judgment [ECF No. 51] and Memorandum in Support of Motion for Summary Judgment [ECF No. 53] ("Saxon Memorandum") on the bases that:

1. Tomlin's causes of action for violation of the FCRA are precluded by the Act's statute of limitations, 15 U.S.C. § 1681p, and/or he does not have a private right of action to bring those claims; and 2. Tomlin's state law causes of action are preempted by the FCRA, barred by the state statutes of limitation, and/or have been released and are barred by the doctrine of res judicata.²

The Motion for Summary Judgment has been fully briefed, and the Court having determined that oral argument is not necessary, is also ripe for decision.

JURISDICTION

The Court has jurisdiction of this matter pursuant to 28 U.S.C. § 1334(b). The allegations against BONY, Ocwen, Saxon and Duran (collectively, the "Defendants") are related-to, non-core proceedings which this Court is authorized to hear. 28 U.S.C. § 157(c)(1). Tomlin and the Saxon Defendants expressly consent to this Court entering final orders and judgments. 28 U.S.C. § 157(c)(2). The Court will order the BONY Defendants to state whether they consent to entry of final orders and judgments by this Court. FED. R BANKR. P. 7012(b). Venue is proper pursuant to 28 U.S.C. § 1409.

MOTION TO DISMISS STANDARD

The BONY Defendants asserts that the Complaint fails to state a claim upon which relief can be granted and accordingly should be dismissed as to them pursuant to Federal Rule of Civil Procedure 12(b)(6), made applicable in adversary proceedings pursuant to Federal Rule of Bankruptcy Procedure 7012(b).³

Civil Rule 8(a)(2), made applicable in adversary proceedings pursuant to Bankruptcy Rule 7008(a), requires "a short and plain statement of the claim showing that the pleader is entitled to relief." In analyzing the pleading requirements of Civil Rule 8(a)(2) in connection with a Civil Rule 12(b)(6) motion to dismiss, the Supreme Court has stated, "[t]o survive a [Civil Rule12(b)(6)] motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Twombly, 550 U.S. at 555, 557). In defining the "plausibility" standard, the Supreme Court stated,

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. 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. 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.'"

. . . .

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.

Id. at 678-79 (citations omitted) (quoting Twombly, 550 U.S. at 556, 557). Thus, as to each count, the Court must determine whether the Complaint contains sufficient factual matter as to each element necessary to state a claim to relief that is plausible on its face.

In determining whether a complaint states a plausible claim for relief, the Court may consider the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the pleadings, and matters of which the Court may take judicial notice.

Haney v. Educ. Credit Mgmt. Corp. (In re Haney), Ch. 13 Case. No. 97-70937, Adv. No. 11-7024, 2011 WL 6000886, at *2 (Bankr. E.D. Ky. Nov. 30, 2011) (citations omitted), appeal dismissed as untimely, 2012 WL 3683533 (E.D. Ky. Aug. 27, 2012).

Including the contracts with [defendant's] motion to dismiss did not convert that motion into a motion for summary judgment under Federal Rule of Civil Procedure 12(d) because [plaintiff] expressly referenced those contracts in its complaint. See Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008) ("When a court is presented with a Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto . . . 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.") (citing Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001)).

Northampton Rest. Grp., Inc. v. FirstMerit Bank, N.A., 492 F. App'x 518, 522 n.1 (6th Cir. 2012).

The BONY Defendants assert that certain of Tomlin's claims are preempted by the FCRA or barred by various state statutes of limitation—both of which are affirmative defenses. FED. R. CIV. P. 8(c)(1) (affirmative defenses include statutes of limitations); Byrne v. CSX Transp., Inc., 541 F. App'x 672, 674-75 (6th Cir. 2013) (federal preemption is affirmative defense). Tomlin is not required to negate affirmative defenses in his Complaint. However, a motion filed pursuant to "Rule 12(b)(6) will be granted if . . . the claim shows on its face that relief is barred by an affirmative defense." Riverview Health Inst. LLC v. Med. Mut. of Ohio, 601 F.3d 505, 513 (6th Cir. 2010).

Further, although the statute of limitations and res judicata are affirmative defenses, "[i]n an appropriate case, an affirmative defense may be adjudicated on a motion to dismiss for failure to state a claim." In particular, dismissal on the basis of an affirmative defense is appropriate where "the facts that establish the defense [are] definitively ascertainable from the allegations of the complaint, the documents (if any) incorporated therein, matters of public record, and other matters of which the court may take judicial notice," and "the facts so gleaned . . . conclusively establish the affirmative defense."

Hudson v. Genesee Intermediate Sch. Dist., No. 14-11939, 2015 WL 128030, at *2 (E.D. Mich. Jan. 8, 2015) (alterations in original) (quoting Banco Santander De Puerto Rico v. Lopez-Stubbe (In re Colonial Mortg. Bankers. Corp.), 324 F.3d 12, 16 (1st Cir. 2003)); see also La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004) ("a Rule 12(b)(6) dismissal on statute oflimitations grounds is appropriate only if it is apparent from the face of the complaint that the claim is time-barred." (citation omitted) (internal quotation marks omitted)).

BACKGROUND AND FACTS ALLEGED IN THE COMPLAINT

AND EXHIBITS TO COMPLAINT

I. The Defendants.

The Complaint alleges the roles of the Defendants as follows. Although Tomlin alleges BONY has never established its rights therein, BONY asserts it is the current owner of the Note described below. The date BONY acquired the Note is not alleged in the Complaint or exhibits thereto, but the events giving rise to the allegations against BONY started in October 2007. Saxon serviced the Note for BONY from October 2007 through May 2011. In May 2011, Ocwen began servicing the Note for BONY. Other than naming Duran as a Defendant and...