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Fowler v. Bac Home Loans Servicing, LP

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

May 26, 2015

MIMI FOWLER, individually and on behalf of all others similarly situated, Plaintiff,


RONNIE L. WHITE, District Judge.

This matter is before the court on Bank of America, N.A.'s Motion to Dismiss Plaintiff's Complaint (ECF No. 39) and Defendant Kozeny & McCubbin, L.C.'s Motion to Dismiss Plaintiff's Complaint (ECF No. 43). These matters are fully briefed and ready for disposition.


Defendant BAC Home Loans Servicing, L.P. ("BAC")[2] and Kozeny Lenders 1-100 ("Lenders") are in the business of making, purchasing, or participating in home loans in the State of Missouri. (Petition for Individual and Class Action Relief ("Complaint" or "Compl.", ECF No. 5, ¶ 1). Lenders are represented by Kozeny & McCubbin, L.C. ("Kozeny") as outside counsel. (Compl., ¶ 2). Each deed of trust allows for appointment of a successor trustee. (Compl., ¶ 3). Generally, Lenders appoint Kozeny as successor trustee under their deeds of trust. (Compl., ¶ 3).

Each Lender and the Trustee, as agent for the Lender, charge the borrower with the attorney's fees for Trustee's legal services incurred in initiating foreclosure on the deed of trust ("Attorney's Fees"). (Compl., ¶ 4). As a general business practice, Lender, or Trustee on Lender's behalf, provide borrowers with a Reinstatement Quote that requires the borrower (here, Plaintiff Mimi Fowler ("Fowler")) to pay Attorney's Fees to avoid foreclosure and reinstate the borrower's mortgage with Lender. (Compl., ¶ 4).

In the falls of 2010, BAC appointed Kozeny as successor trustee under the BAC's deed of trust signed by Fowler. (Compl., ¶ 8). On or around December 15, 2010, Trustee published a Notice of Foreclosure Sale of Borrower's property located at 817 Tiffin, St. Louis County, Missouri. On or about December 17, 2010, BAC sent Fowler a Reinstatement Quote, which required payment of attorney's fees of $520 to reinstate her mortgage. On or about December 29, 2010, Fowler paid $9, 584.88, including attorney's fees, to avoid foreclosure of her property. ( Id. )

This action is brought by Fowler against Trustee and Lenders to recover for herself and for all others similarly situated all Attorney's Fees paid by the borrower and members of the class to Trustee and Lenders. (Compl., ¶ 6). Fowler contends that it is unlawful for Lenders and Trustee, as attorney and agent for Lenders, to charge or collect from the borrowers in the class any compensation for Trustee's services in foreclosure in excess of the statutory commission permitted under Missouri law, specifically § 443.360, R.S. Mo. (Compl., ¶ 6). Defendants filed motions to dismiss all three counts of Fowler's Complaint. (ECF Nos. 39, 43).


In ruling on a motion to dismiss, the Court must view the allegations in the Complaint liberally in the light most favorable to Plaintiff. Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir. 2008) (citing Luney v. SGS Auto Servs., 432 F.3d 866, 867 (8th Cir. 2005)). Additionally, the Court "must accept the allegations contained in the complaint as true and draw all reasonable inferences in favor of the nonmoving party." Coons v. Mineta, 410 F.3d 1036, 1039 (8th Cir. 2005) (citation omitted). To survive a motion to dismiss, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (abrogating the "no set of facts" standard for Fed.R.Civ.P. 12(b)(6) found in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief "requires 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; Huang v. Gateway Hotel Holdings, 520 F.Supp.2d 1137, 1140 (E.D. Mo. 2007).


A. Count I: § 443.360, R.S. Mo.

Fowler argues that she properly alleges a claim under Missouri law because Kozeny collected a "Foreclosure Attorney/Trustee Fee" in the amount of $520. (ECF No. 47 at 5 (citing 47-1)). Fowler alleges that compensation of trustees is governed by Section 443.360, "Compensation of trustees under trust deeds, " which states:

As a compensation for his services, any person selling property at auction under any writing, instrument or deed made or executed for securing the payment of any debt shall receive a commission on the amount of sales not exceeding two percent on the first one thousand dollars, and one percent on all sums over that amount and under five thousand dollars, and one-half of one percent on all sums over that amount.

Section 443.360, R.S. Mo. Fowler argues that this provision means that "a trustee is entitled to compensation if, and only if, the property securing payment of the mortgage is sold at auction." (ECF No. 47 at 6 (citing Condict v. Flower, 47 Mo.App. 415 (Mo. App. 1892)). Fowler argues that Condict establishes that "a trustee appointed under a deed of trust is compensated for his services solely out of the proceeds of a foreclosure sale. If there is no sale of the property, the trustee receives no compensation for his services." (ECF No. 47 at 6). In sum, Fowler maintains that the statutory trustee's ...

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