Wong v. Bann–Cor Mortg.

• Decision Date: 10 July 2012
• Docket Number: No. 10–1038–CV–W–FJG.,10–1038–CV–W–FJG.
• Citation: 878 F.Supp.2d 989
• Parties: James G. WONG, Daniel R. and Wanda D. Jensen, Terry M. Lovett (f/k/a Terry M. Brooks), Bradley and Paula Beal, Alfred Celia, Vicki Musgrave, Patrick and Natalie Nasi, David and Stacy Plocek, and Terry and Lesa Rapaich, individually and on behalf of all those similarly situated, Plaintiffs, v. BANN–COR MORTGAGE, et al., Defendants.
• Court: U.S. District Court — Western District of Missouri

878 F.Supp.2d 989

James G. WONG, Daniel R. and Wanda D. Jensen, Terry M. Lovett (f/k/a Terry M. Brooks), Bradley and Paula Beal, Alfred Celia, Vicki Musgrave, Patrick and Natalie Nasi, David and Stacy Plocek, and Terry and Lesa Rapaich, individually and on behalf of all those similarly situated, Plaintiffs,

v.BANN–COR MORTGAGE, et al., Defendants.

No. 10–1038–CV–W–FJG.

United States District Court,

W.D. Missouri,

Western Division.

July 10, 2012.

David M. Skeens, Garrett Mark Hodes, J. Michael Vaughan, Kip D. Richards, Matthew Robert Crimmins, R. Frederick Walters, Bruce V. Nguyen, Eric M. Shimamoto, Karen Wedel Renwick, R. Keith Johnston, Walters Bender Strohbehn & Vaughan, Kansas City, MO, for Plaintiffs.

Paul R. Dieseth, Peter W. Carter, Dorsey & Whitney LLP, Minneapolis, MN, Mark A. Olthoff, Polsinelli Shughart PC, Daniel L. McClain, Michele F. Sutton, Scharnhorst, Ast & Kennard, PC, Catesby Ann Major, Craig S. O'Dear, Irvin Victor Belzer, W. Perry Brandt, Jennifer A. Donnelli, J. Loyd Gattis, III, Lara Pabst, Leslie A. Greathouse, Spencer Fane Britt & Browne LLP, Randolph G. Willis, Rasmussen, Willis, Dickey & Moore, LLC, Kansas City, MO, Louis F. Bonacorsi, Bryan Cave, LLP, Brian Lamping, Maria G. Zschoche, W. David Wells, Thompson Coburn, LLP, Scott Greenberg, Sandberg Phoenix & Von Gontard, Andrew R. Kasnetz, Natalie J. Kussart, St. Louis, MO, Roy Arnold, Thomas L. Allen, Reed Smith, LLP, Anthony S. Newman, Pittsburgh, PA, for Defendants.

ORDER

FERNANDO J. GAITAN, JR., Chief Judge.

Pending before the Court are (1) Defendant Franklin Credit Management Corporation's Motion to Dismiss Plaintiffs' Seventh Amended Complaint (Doc. No. 351); (2) Moving Defendants' ¹ Motion to Dismiss Plaintiffs' Seventh Amended Complaint (Doc. No. 353); (3) Motion to Dismiss and Suggestions in Support of Defendant JPMorgan Chase Bank, N.A. as Successor by Merger to Bank One, N.A., Based upon the Expiration of the Statute of Limitations (Doc. No. 355); (4) Motion to Dismiss and Suggestions in Support of Defendant PSB Lending Corp., Based upon the Expiration of the Statute of Limitations (Doc. No. 356); (5) the PSB 1997–3 Trust's Motion to Dismiss Plaintiffs' Seventh Amended Complaint (Doc. No. 357); (6) Real Time Resolutions, Inc.'s and Old Republic Financial Acceptance Corporation's Motion to Dismiss Plaintiffs' Seventh Amended Complaint (Doc. No. 359); (7) CitiMortgage, Inc.'s Joinder in Motion to Dismiss for Lack of Standing or, in the Alternative, Motion for More Definite Statement and Suggestions in Support of Motion (Doc. No. 361); and (8) Defendant CitiMortgage, Inc.'s Joinder in Motion to Dismiss Seventh Amended Complaint (Doc. No. 362).

The Court also considers plaintiffs' (1) Omnibus Suggestions in Opposition to Motions to Dismiss the Seventh Amended Complaint for Failure to State a Claim (Doc. No. 376); (2) Omnibus Suggestions in Opposition for Lack of Standing (Doc. No. 377); and (3) Omnibus Suggestions in Opposition to Motions to Dismiss Seventh Amended Complaint on Limitations Grounds (Doc. No. 378). The Court also considers the various defendants' reply suggestions (Doc. Nos. 381, 382, 383, 384, 385, 386, 387, and 388). So that the issues may be considered more efficiently, the Court will organize its discussion of the pending motions into the three issues identified by plaintiffs: (1) standing, (2) statute of limitations, and (3) failure to state a claim.

I. Background

Plaintiffs John and Jeannette Schwartz and James G. Wong filed their original petition in this matter on October 31, 2000. See Doc. No. 47, Ex. 1.² The original petition brought claims under the Missouri Second Mortgage Loan Act (“MSMLA”), RSMo. §§ 408.231 et seq., alleging certain subordinate lien loans originated by Bann–Cor Mortgage (“Bann–Cor”) and secured by Missouri real estate violate the MSMLA. Plaintiffs allege that Bann–Cor violated the MSMLA, § 408.233.1, in the course of making its Missouri loans by “charg[ing], contract[ing] for and/or receiv[ing]” loan origination fees in excess of the applicable statutory cap, in addition to charging a number of other fees that the MSMLA, § 408.233.1, prohibited. (Doc. No. 344, ¶¶ 135–136). Named plaintiffs assert they were charged illegal fees that were wrapped up into their loan principal for the loans they entered into, using their Missouri residences for collateral. Plaintiffs assert these loans were then sold or assigned to other entities.

Plaintiffs are suing (1) Bann–Cor, the originating lender (and the lender in common for all the second mortgage loans at issue in this case); and (2) all of Bann–Cor's “downstream” assignees which purchased the loans on the “secondary market”from BannCor, or an intervening assignee, after Bann–Cor made the loans. Plaintiffs seek to recover all of the interest paid in connection with the loans and damages for the losses resulting from the violations of the MSMLA pursuant to RSMo. § 408.236 and/or § 408.562.

On March 25, 2008, Judge John M. Torrance of the Circuit Court of Jackson County, Missouri, entered an order certifying a plaintiff class, which was defined as “All individuals who, on or after October 31, 1994, obtained a ‘Second Mortgage Loan’ as defined by § 408.231.1 RSMo, from Bann–Cor Mortgage, secured by real property located in Missouri.” Doc. No. 47, Ex. 2, p. 19.³ Additionally, on May 9, 2009, plaintiffs obtained a grant of partial summary judgment on certain liability issues against Bann–Cor (among others). See Doc. No. 95, Exs. 2 and 3.

On September 21, 2010, plaintiffs requested leave to file a Sixth Amended Petition, which was granted on September 22, 2010. The Sixth Amended Petition added as a named plaintiff Terry M. Lovett (f/k/a Terry M. Brooks). Plaintiffs also named the following defendants, besides the ones listed in the Fifth Amended Petition: US Bank, NA; US Bank, NA N.D.; Wilmington Trust Company; Firstplus Home Loan Owner Trusts 1997–1, 1997–2, 1997–3, 1997–4, 1998–1, 1998–2, 1998–3, 1998–4, and 1998–5; Empire Funding Home Loan Owner Trusts 1997–1, 1997–2, 1997–3, 1997–4, 1998–1, 1998–2, 1998–3, and 1999–1; Countrywide Home Loans, Inc.; Countrywide Home Loan Trust 2001–HLV1; Cityscape Home Loan Owner Trusts 1997–2, 1997–3, and 1997–4; Cityscape Home Equity Loan Trusts Series 1997 B and 1997 C; US Bank Trust, N.A.⁴; PSB Lending Corporation; PSB Lending Home Loan Owner Trusts 1997–3 and 1997–4; Residential Funding Company, LLC; GMAC Mortgage, LLC; J.P. Morgan Chase Bank, NA, individually and/or formerly or as successor to Banc One, NA and Chase Manhattan Bank; Home Loan Trust 1997–HI3; Amaximis Company, LLC; Amaximis Lending, LP; The Bank of New York Mellon Corporation (f/k/a The Bank of New York); CitiMortgage, Inc.; Comstar Mortgage Corporation f/k/a Accubanc Mortgage Corp.; Franklin Credit Management Company; Ocwen Loan Servicing, LLC; Old Republic Financial Acceptance Corporation; Realtime Resolutions Inc.; Sovereign Bank; Wells Fargo Bank, N.A., formerly and/or as successor to Norwest Bank Minnesota, NA, First Union National Bank and/or First Union Trust Company; and Does 47–100.

On October 22, 2010, defendant Wells Fargo removed the action pursuant to the Class Action Fairness Act (“CAFA”). On April 18, 2011, 2011 WL 1467665, the Court denied plaintiff's motion to remand. See Order, Doc. No. 269. Thereafter, on June 9, 2011, 2011 WL 2314198, the Court entered its Order (1) denying various parties' motions to dismiss for lack of personal jurisdiction, (2) denying various parties' motions to dismiss for lack of standing but directing plaintiffs to file an amended complaint designating additional class representatives, (3) denying defendant Sovereign Bank's motion to dismiss due to HOLA preemption, (4) denying without prejudice U.S. Bank National Association's motion to dismiss plaintiffs' complaint due to its generic/conclusory allegations, and (5) granting defendant Chase's motion for more definite statement and directing plaintiffs to file an amended complaint setting out their theory of the case as to each defendant. Order, Doc. No. 311.

On June 24, 2011, plaintiffs and various defendants ⁵, filed a joint motion to stay the case as to the claims against those named defendants only, indicating that they had reached a settlement. See Doc. No. 316. The Court granted the motion to stay ( see Doc. No. 325), and the case remains stayed as to these defendants.

On November 22, 2011, plaintiffs and defendant Sovereign Bank filed a joint motion to stay, indicating that they had reached a settlement. See Doc. No. 371. The Court granted the motion to stay ( see Doc. No. 373), and the case remains stayed as to defendant Sovereign Bank.

On May 14, 2012, defendants Residential Funding Company, LLC and GMAC Mortgage, LLC filed a Notice of Bankruptcy and Effect of Automatic Stay (Doc. No. 392). On June 5, 2012, the Court entered its order staying the matter as to defendants Residential Funding Company, LLC and GMAC Mortgage, LLC. Doc. No. 393.

On September 2, 2011, plaintiffs filed their motion for leave to file Seventh Amended Complaint (Doc. No. 341), purportedly clarifying their claims against the defendants named in the Sixth Amended Petition. On October 4, 2011, the Court granted the motion. Plaintiffs filed their Seventh Amended Complaint (Doc. No. 344) on October 6, 2011. Now pending are various defendants' motions to dismiss.

II. Motions to Dismiss the Seventh Amended Complaint for Lack of Standing (Doc. Nos. 353, 361)

Defendants Wells Fargo Bank, N.A., in its individual capacity (“Wells Fargo”), Wells Fargo Bank, N.A. as trustee of the Countrywide Home Loan Trust 2001–HLV1 (“Countrywide Trust”) and Wells Fargo Bank, N.A. as trustee of the PSB Lending Home Loan Owner Trust 1997–4 (“PSB 1997–4 Trust”) move to dismiss for lack of standing (Doc. No. 353). Defendant CitiMortgage, Inc. (“CitiMortgage”), joins in this motion ( see Joinder, Doc. No. 361).

These defendants note that although plaintiffs have filed eight...