United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
CHARLES A. SHAW, District Judge.
This matter is before the Court on defendants Bank of America, N.A. and Bank of New York Mellon's ("defendants") motion to dismiss plaintiff's first amended complaint. Plaintiff opposes the motion and it is fully briefed. For the following reasons, the Court will deny the motion.
On March 15, 2007, plaintiff purchased real property located at 729 Sterling Terrace Court, St. Charles, Missouri. Plaintiff signed a promissory note and also signed a deed of trust encumbering the property. Defendant Bank of America ultimately foreclosed on the real property on October 18, 2013. Defendant Bank of New York Mellon was the successful purchaser.
On October 29, 2013, plaintiff filed a Petition in the Circuit Court of St. Charles County, Missouri, asserting state law claims of wrongful foreclosure and unjust enrichment. Defendants removed the case to this Court based on diversity of citizenship under 28 U.S.C. §§ 1332(a) and 1441(a). Plaintiff has since filed an amended complaint, alleging a tort claim for wrongful foreclosure (Count I) and an equitable claim for wrongful foreclosure (Count II). Defendants move to dismiss both counts for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).
II. Legal Standard
On a motion to dismiss, the Court accepts as true the factual allegations contained in the complaint and grants the plaintiff the benefit of all reasonable inferences that can be drawn from those allegations. See Lustgraaf v. Behrens , 619 F.3d 867, 872-73 (8th Cir. 2010). "To survive a 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 Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). "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.
A. Tort Action for Wrongful Disclosure (Count I)
"A tort action for damages for wrongful foreclosure lies against a mortgagee only when the mortgagee had no right to foreclose at the time foreclosure proceedings were commenced." Dobson v. Mortgage Elec. Registration Sys. Inc./GMAC Mortg. Corp. , 259 S.W.3d 19, 22 (Mo.Ct.App. 2008) (citing cases). "If there is a right to foreclose, there can be no tort cause of action for wrongful foreclosure." Id . "A plaintiff seeking damages in a wrongful foreclosure action must plead and prove that when the foreclosure proceeding was begun, there was no default on its part that would give rise to a right to foreclose." Id . "A plaintiff must plead and prove such compliance with the terms of the deed of trust as would avoid lawful foreclosure.'" Id . (quoting Spires v. Lawless , 493 S.W.2d 65, 71 (Mo.Ct.App. 1973)).
Plaintiff alleges in her first amended complaint that the foreclosure was wrongful because she was current on all payments under the promissory note and "there was no breach of condition or failure to perform" on her part. (1st Am. Compl. at ¶ 9).
Defendants argue that plaintiff cannot prevail on this cause of action in tort because plaintiff admits past defaults. Defendant points to paragraph 10 of plaintiff's first amended complaint, which states:
In the alternative, Plaintiff alleges that beginning in 2010 and continuing until about October, 2013, Defendants represented to Plaintiff that they would waive past defaults by Plaintiff under the note and deed of trust, and that they would not foreclose the deed of trust. In reliance on the representation of Defendants, Plaintiff made additional improvements to the real [e]state and made partial payments as ...