Wallace v. Suntrust Mortg., Inc.

• Decision Date: 26 September 2013
• Docket Number: Civil No. 12–587–CG–B.
• Citation: 974 F.Supp.2d 1358
• Parties: Margaret R. WALLACE, Plaintiff, v. SUNTRUST MORTGAGE, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Alabama

974 F.Supp.2d 1358

Margaret R. WALLACE, Plaintiff,

v.SUNTRUST MORTGAGE, INC., et al., Defendants.

Civil No. 12–587–CG–B.

United States District Court,

S.D. Alabama,

Southern Division.

Sept. 26, 2013.

Robert A. Wills, Bay Minette, AL, for Plaintiff.

Michael Jay Clemmer, Rik Stanford Tozzi, Burr & Forman LLP, Birmingham, AL, for Defendants.

ORDER

CALLIE V.S. GRANADE, District Judge.

On August 16, 2013, Magistrate Judge Bivins submitted a report and recommendation (Doc. 24) on Defendants' motion to dismiss (Doc. 10). Judge Bivins recommended that the court dismiss all Plaintiff's claims except her claim for breach of contract. Plaintiff did not object, but Defendants did. The matter comes before the court on Defendants' objection to Judge Bivins's recommendation on the contract claim. (Doc. 25.)

The contract at issue is a forbearance agreement between Plaintiff and Defendant SunTrust dated May 23, 2009. The way Judge Bivins read that agreement, SunTrust agreed not to foreclose on Plaintiff's home so long as Plaintiff made four timely payments of $1,400. Although Plaintiff allegedly made all four payments on time, the complaint says that Defendants foreclosed on her home anyway. Judge Bivins found that those facts stated a claim for breach of contract and denied the motion to dismiss that count.

Defendants object to that conclusion, arguing that the forbearance agreement was only valid until the end of September 2009. If that's the case, then they couldn't have breached the agreement by foreclosing on Plaintiff's home when they did, “nearly seven ... months after the forbearance agreement expired by its stated terms.” (Doc. 25 ¶ 4.)

The problem with that argument is that no “stated terms” in the agreement set an expiration date—by all appearances the agreement's term was indefinite. To argue otherwise, Defendants rely on a provision of the agreement that is literally nonsense: “ *Note: On or before [––––]; you must send updated [––––]. At that time, your account will be reviewed for a possible Loss Mitigation workout.” (Doc. 25–1 at 2 (bracketed blanks indicate empty space in the agreement).) Perhaps if there were a date supplied after the words “on or before,” then there would be something to Defendants' argument. But there wasn't one, so Judge Bivins was quite correct to find the forbearance agreement had not expired when Plaintiff's home was foreclosed upon.

Likewise, Defendants' objection based on the statute of frauds is without merit. As Judge Bivins correctly noted, “[b]ecause the parties' forbearance agreement was in writing, it does not run afoul of the Statute of Frauds.” (Doc. 24 at 1368 n. 6.)

Therefore, after due and proper consideration of all portions of this file deemed relevant to the issues raised, and a de novo determination of those portions of the Report and Recommendation to which objection is made, the Report and Recommendation of the Magistrate Judge made under 28 U.S.C. § 636(b)(1)(B) is ADOPTED as the opinion of this Court, and it is ORDERED that Defendants' motion to dismiss is GRANTED in part and DENIED in part as follows:

(1) With respect to Plaintiff's claims for wrongful foreclosure (Count I), fraud (Count II), breach of implied covenant of good faith and fair dealing (Count IV), intentional infliction of emotional distress (Count V), negligence (Count VI), wantonness (Count VII), slander of title (Count VIII), and transfer of title (Count IX), the motion to dismiss is GRANTED;

(2) With respect to Plaintiff's claim for breach of contract (Count III), the motion to dismiss is DENIED.

Report and Recommendation

SONJA F. BIVINS, United States Magistrate Judge.

This matter is before the Court on Defendants SunTrust and Federal National Mortgage Association's Motion to Dismiss Plaintiff's Complaint (Doc. 10). The motion has been fully briefed and has been referred to the undersigned Magistrate Judge for entry of a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). For the reasons set forth below, the undersigned RECOMMENDS that Defendants' motion be GRANTED, in part, and DENIED, in part.

I. Background Facts

Plaintiff Margaret Wallace (hereinafter “Plaintiff” or “Wallace”) brought this action against SunTrust Mortgage, Inc. (hereinafter “SunTrust”) and Federal National Mortgage Association (hereinafter “Fannie Mae”) following the foreclosure on her home located at 69 South Julia Street in Mobile, Alabama. ¹ Wallace purchased her home on January 12, 2007 with an adjustable rate mortgage secured by SunTrust. (Doc. 1–1, ¶ 4). Around March or April 2009, Plaintiff fell behind on her mortgage payments and “contacted SunTrust and received a response from their loss mitigation department suggesting a method by which the loan could be brought current.” ( Id. at ¶ 5). According to Wallace, she entered into a forbearance agreement with SunTrust on May 23, 2009 in order to bring her loan current ². ( Id.). The forbearance agreement required four monthly payments in the amount of $1400. ( Id. at 13). The agreement also provided as follows:

I*we understand that my*our monthly payment is based on escrow collection as of today's date. Any changes to the monthly payment amount after today's date may cause the payment plan amount to increase or decrease. I*we will receive a separate notice if this occurs and must contact SunTrust Mortgage to confirm any changes in my/our payment plan amount(s).

All of the provisions of the note and security instrument, except as herein provided, shall remain in full force and effect. Upon the breach of any provision of this agreement, SunTrust Mortgage may terminate this agreement and institute foreclosure proceedings in accordance with the terms of the security instrument without regard to this agreement.

( Id.).³

Wallace contends that she made all the payments pursuant to the terms of the forbearance agreement, and although she occasionally contacted SunTrust to ensure that she was in compliance with their requirements and to ensure that the loan modification procedure was ongoing, no SunTrust employee ever informed her that her monthly payments made pursuant to the forbearance agreement were not being applied to her loan, or that her loan was in delinquent status. ( Id. at ¶ 6).

Wallace avers that she continued to make her monthly payments, and that on May 22, 2010, without notice or explanation, SunTrust sent her a letter along with a refund check in the amount of $2582.02. ( Id. at ¶ 7). According to Wallace, the letter advised her that her loan was delinquent, that $2582.02 was being refunded to her because it was not sufficient to bring her loan current and that $19,494.99 was required in order to bring her loan current. ( Id.). Wallace avers that over an unspecified two-year period, she and her legal counsel have communicated with SunTrust and its various representatives in an effort to obtain information about the status of her loan and the steps necessary to bring her loan current, and have further provided any and all information SunTrust and its representatives have requested. ( Id. at ¶ 8). Wallace contends that SunTrust and its representatives promised to work with her to bring her loan current; however, they provided her inconsistent information about the status of her loan, and foreclosed on her house on April 21, 2011. ( Id. at ¶¶ 9–10). Fannie Mae filed an eviction proceeding against Wallace in state court on July 13, 2012 in an effort to dispossess her of the subject property; however, Wallace remains in possession of the property. ( Id. at ¶¶ 10–11).

In her complaint, Wallace asserts the following claims against SunTrust: (I) wrongful foreclosure, (II) fraud, (III) breach of contract, (IV) breach of implied covenant of good faith and fair dealing (V) intentional infliction of emotional distress, (VI) negligence (VII) wantonness and (VIII) slander of title. Wallace has asserted a single claim against Fannie Mae for transfer of title (XI).

Pending before the Court is Defendants' motion to dismiss Wallace's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Defendants assert that Wallace's negligence, wantonness, and fraud claims are barred by the applicable statutes of limitation and the Statute of Frauds. Defendants further assert that all of Wallace's tort claims are substantively deficient. Additionally, Defendants assert that Wallace's breach of contract claim fails because SunTrust did not breach the forbearance agreement and any allegations regarding an unwritten permanent modification agreement are barred by the Statute of Frauds. In opposition to Defendants' motion, Wallace has submitted a brief conclusory response that is wholly devoid of any case authority.

II. Analysis

A. Legal Standard for Fed. R. Civ. Pro. 12(b)(6).

Rule 8(a) of the Federal Rules of Civil Procedure requires that a plaintiff present “a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests,” Bell Alt. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007) (citing Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)) (internal citations omitted). To survive a motion to dismiss, a plaintiff must plead “only enough facts to state a claim to relief that is plausible on its face.” Id., 550 U.S. at 570, 127 S.Ct. 1955.

In considering a Rule 12(b)(6) motion to dismiss, the court accepts the non-moving party's allegations as true; however, the court is not required to accept a plaintiff's legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (noting “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions”). In evaluating the sufficiency of a plaintiff's pleadings, the court makes reasonable inferences in the plaintiff's favor, “but [is] not required...