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Butano v. Wells Fargo, N.A.

United States District Court, E.D. Missouri, Eastern Division

July 10, 2014

WELLS FARGO, N.A., Defendant.



This matter is before the Court on Defendant's Motion to Dismiss, [Doc. No. 5]. Plaintiff opposes the Motions. For the reasons set forth below, the Motion is denied.

Facts and Background[1]

Plaintiff's Complaint alleges the following facts:

On July 12, 2006, Plaintiff obtained a 30-year adjustable rate mortgage loan for his personal residence at 5203 Shetland Drive from Wells Fargo. The initial interest rate was 8.250%, with initial monthly payments to by $2, 231.27. By March 2010, due to increased interest, the monthly payments on Plaintiff's mortgage had risen to $2, 804.61. Plaintiff, unable to make this increased payment, contacted Defendant to request a mortgage modification.

On March 29, 2010, Defendant offered to modify the loan, in effect reducing the monthly payments to $2, 346.85. Plaintiff accepted and made the required payments.

Defendant did not make the offered modification. Instead, it accepted and applied the new monthly payments toward the principal and interest on the loan, but the amount paid did not cover the amount Defendant charged every month, creating a monthly "deficiency." Defendant also allowed the hazard insurance and county taxes to go unpaid. By January 2011, these "deficiencies" created additional unpaid mortgage shortage of $12, 704.93 and an escrow account in the amount of $7, 134.16.

Including the "deficiencies" created by Defendant's failure to modify the mortgage as offered, Plaintiff's monthly payments came to $3, 397.14. Again Plaintiff contacted Defendant to request a modification. On May 6, 2011, Defendant again agreed to a modification under forbearance, reducing Plaintiff's monthly payments to $2, 119.85. But again, when Plaintiff accepted, Defendant did not make the promised modification, resulting in further "deficiencies."

Defendant began foreclosure proceedings on the property.


The purpose of a motion to dismiss for failure to state a claim is to test the legal sufficiency of the complaint. To survive a motion to dismiss pursuant to Rule 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 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 plaintiff need not provide specific facts in support of its allegations, Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam), but "must include sufficient factual information to provide the grounds' on which the claim rests, and to raise a right to relief above a speculative level." Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir.2008) (citing Twombly, 550 U.S. at 555 & n. 3). This obligation requires a plaintiff to plead "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. A complaint "must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Id. at 562 (quoted case omitted). This standard "simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of [the claim or element]." Id. at 556.

Claims of fraud have a heightened pleading standard. The Federal Rules of Civil Procedure require a plaintiff to "state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). See also Abels v. Farmers Commodities Corp., 259 F.3d 910, 920 (8th Cir.2001). Although a pleading alleging fraud need not provide anything more than notice of the claim, it must contain "a higher degree of notice, enabling the defendant to respond specifically, at an early stage of the case, to potentially damaging allegations of immoral and criminal conduct." Id. Thus, a plaintiff must plead "such matters as the time, place and contents of false representations, as well as the identity of the person making the misrepresentation and what was obtained or given up thereby.'" Id. ( quoting Bennett v. Burg, 685 F.2d 1053, 1062 (8th Cir.), adhered to on reh'g, 710 F.2d 1361 (8th Cir.1982) (en banc)). "[C]onclusory allegations that a defendant's conduct was fraudulent and deceptive are not sufficient to satisfy the rule." Commercial Prop. v. Quality Inns, 61 F.3d 639, 644 (8th Cir.1995). See also Schaller Tel. Co. v. Golden Sky Sys., Inc., 298 F.3d 736, (8th Cir.2002).

On a motion to dismiss, the Court accepts as true all of the factual allegations contained in the complaint, even if it appears that "actual proof of those facts is improbable, " Twombly, 550 U.S. at 556, and reviews the complaint to determine whether its allegations ...

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