United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
RICHARD WEBBER, SENIOR UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendant Bank of America,
N.A.'s Motion to Dismiss Plaintiffs' First Amended
Complaint [ECF No. 16].
Laura Hill and Johnny Hill (“Plaintiffs”)
initiated this lawsuit by filing a petition against Defendant
Bank of America, N.A. on December 28, 2015 in the
Twenty-First Judicial Circuit Court, in St. Louis County,
Missouri [ECF Nos. 1, 1-1]. On April 1, 2016, Defendant
removed the action to this Court [ECF No. 1]. On May 12,
2016, Defendant filed a motion to dismiss, alleging
Plaintiffs failed to state a claim upon which relief can be
granted [ECF No. 10]. On Jun 18, 2016, Plaintiffs filed a
first amended complaint [ECF No. 14]. On July 8, 2016,
Defendant filed this Motion to Dismiss for failure to state a
claim upon which relief can be granted pursuant to FRCP
12(b)(6), seeking to dismiss all counts of Plaintiffs'
first amended complaint [ECF No. 16]. For purposes of this
Motion to Dismiss, the Court accepts the following facts
alleged in Plaintiffs' complaint as true. Great
Rivers Habitat Alliance v. Fed. Emergency Mgmt. Agency,
615 F.3d 958, 988 (8th Cir. 2010).
obtained a loan secured by a mortgage on their real property
commonly known as 2326 Wallis Avenue, St. Louis, Missouri, in
St. Louis County, Missouri, (“Real Property”)
from Defendant. In connection with the loan, Plaintiffs
executed a Note on October 12, 2001. On March 18, 2008,
Plaintiffs and Defendant entered into a loan modification
agreement where Plaintiffs were obliged to pay $830.18 plus
interest per month, with the first payment due on May 1,
2008. Plaintiffs continued to make their scheduled monthly
payment, after agreeing to the Loan Modification Agreement.
When Plaintiffs attempted to make their October 28, 2008
payment, Defendant refused to accept the payment and informed
Plaintiffs their loan was in default. Plaintiffs claim they
made all the required payments and were not otherwise in
default. Further, Plaintiffs claim Defendant failed to apply
several payments made by Plaintiffs, including insurance
proceeds, to Plaintiffs' loan account. Plaintiffs
contacted Defendant several times to urge Defendant to apply
the payments to Plaintiffs' loan balance, e but Defendant
allegedly never applied these payments. On or about February
23, 2011, Defendant foreclosed on Plaintiff's home. On
June 12, 2011, Plaintiffs repurchased the real property for
Plaintiffs' Complaint, Plaintiffs allege nine counts
against Defendant. In Count I, Plaintiffs allege Defendant
wrongfully foreclosed on the real property by refusing
Plaintiffs' payments and by failing to properly apply
those payments towards the loan balance, despite Plaintiffs
making all the required payments and not otherwise being in
default at the time of the foreclosure. In Count II,
Plaintiffs allege Defendant fraudulently misrepresented
Plaintiffs by instructing them to stop making loan payments
and assuring Plaintiffs they were eligible for a loan
modification. In Count III, Plaintiffs allege Defendant
breached the deed of trust in not properly applying payments
received from Plaintiffs. In Count IV, Plaintiffs allege
Defendant negligently misrepresented Plaintiffs by providing
them with false information and instructions. In Count V,
Plaintiffs allege a claim of money had and received, where
they argue Defendant's acceptance and retention of
Plaintiffs' loan payment was unjust, because Defendant
did not properly apply these payments to Plaintiffs' loan
balance. In Count VI, Plaintiffs allege Defendant was
unjustly enriched since Defendant retained Plaintiffs'
loan payments without applying the payments to
Plaintiffs' loan balance. In Count VII, Plaintiffs allege
Defendant engaged in conversion of funds by diverting money,
paid by Plaintiffs for the specific purpose of satisfying
monthly mortgage payments, to a different purpose. In Count
VIII, Plaintiffs allege Defendant violated the Missouri
Merchandising Practice Act (“MMPA”) by engaging
in unfair practices in not applying Plaintiffs' loan
payments to their loan balance and making false promises and
misrepresentations to Plaintiffs. In Count IX, Plaintiffs
allege Defendant's conduct was grossly negligent, and
warrants punitive damages to deter Defendant from like
conduct in the future. Plaintiffs request the Court award
Plaintiffs compensatory damages in a fair and reasonable
amount in the excess of Twenty-Five Thousand Dollars ($25,
000) for each count except for Count IX. Defendant now seeks
to dismiss all of Plaintiffs' claims pursuant to FRCP
12(b)(6) for failure to state a claim upon which relief can
FRCP 12(b)(6), a party may move to dismiss a claim for
“failure to state a claim upon which relief can be
granted.” The notice pleading standard of FRCP 8(a)(2)
requires plaintiffs to give “a short and plain
statement showing that the pleader is entitled to
relief.” To meet this standard and to survive a FRCP
12(b)(6) 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) (internal quotations
and citation omitted). This requirement of facial
plausibility means the factual content of Plaintiffs'
allegations must “allow the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Cole v. Homier Distrib.
Co., 599 F.3d 856, 861 (8th Cir. 2010) (quoting
Iqbal, 556 U.S. at 678). Courts must assess the
plausibility of a given claim with reference to
plaintiffs' allegations as a whole, not in terms of the
plausibility of each individual allegation. Zoltek Corp.
v. Structural Polymer Group, 592 F.3d 893, 896 n.4 (8th
Cir. 2010) (internal citation omitted). This inquiry is
“a context-specific task that requires the reviewing
court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679. Court must
grant all reasonable inferences in favor of the nonmoving
party. Lustgraaf v. Behrens, 619 F.3d 867, 872-73
(8th Cir. 2010).
makes multiple arguments in its Motion to Dismiss, where it
generally argues each of Plaintiffs' counts in their
first amended complaint fails to state a claim for relief.
The Court will address each claim individually.
Plaintiffs' Wrongful Foreclosure Claim - Count I
Count I, Plaintiffs allege Defendant is liable for wrongful
foreclosure because Defendant did not apply Plaintiffs'
payment towards their loan balance and Plaintiffs were not
otherwise in default. Defendant asserts Plaintiffs'
wrongful foreclosure claim fails because multiple and
conflicting allegations in the complaint are inconsistent
with and contradictory to Plaintiffs' wrongful
foreclosure claim, because the other allegations state
Plaintiffs were in default at various times and Defendant had
a lawful right to foreclose [ECF No. 17 at 3]. Plaintiffs
respond Defendant never had a right to foreclose, because
Plaintiffs were up to date on their loan payments and even if
they were not, Defendant waived its right to insist on the
original payments in the first loan modification and its
instructions to Plaintiffs to stop making further payments
[ECF No. 20 at 4-5]. Defendant replies Plaintiffs'
allegations are too implausible and the timeline of the
complaint does not support a theory of waiver.
Missouri law, Plaintiffs can pursue a claim in equity as a
basis for setting aside a foreclosure sale, or they can let
the sale stand and file a tort action to recover damages for
wrongful foreclosure. Dobson v. Mortg. Electronic
Registration Sys., Inc./GMAC Mortg. Corp., 259 S.W.3d
19, 22 (Mo.Ct.App. 2008). What constitutes a “wrongful
foreclosure” sufficient to set aside a sale differs
from what constitutes a “wrongful foreclosure”
sufficient to recover damages in tort. Id. at 22.
Because Plaintiffs only request the Court enter a judgment
against Defendant for damages, and not set aside the
foreclosure sale, the Court will only examine Plaintiffs'
pleading to determine if it states a tort claim for wrongful
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.” Wivell v. Wells Fargo
Bank, N.A., 773 F.3d 887 (8th Cir. 2014) (quoting
Fields v. Millsap & Singer, P.C., 295 S.W.3d
567, 571 (Mo.Ct.App.2009)).
in their complaint, allege their mortgage was not in default
when the foreclosure proceeding began [ECF No. 14 at 40].
Plaintiffs also allege they complied with the original and
modified deed of trust agreement by making payments in the
amount of $830.18 plus interest every month and complied with
all obligations pursuant to the deed of the trust. Plaintiffs
allege sufficient factual matter, if true, could show there
was no default on Plaintiffs' part and Defendant had no
right to foreclose at the time foreclosure proceedings were
argues Plaintiffs' claims are internally inconsistent and
the Court does not need to accept such claims. Parties are
allowed to plead alternative and inconsistent theories in
their complaints under FRCP 8, and Defendant acknowledges
this, but avers Plaintiffs' claims are internally
inconsistent with each other and the Court need not accept
them. “The liberal policy reflected in Rule 8(d)
mandates that courts not construe a pleading ‘as an
admission against another alternative or inconsistent
pleading in the same case.'” Franke v.
Greene, No. 4:11CV1860 JCH, 2012 WL 3156577, at *5 (E.D.
Mo. Aug. 2, 2012) (quoting Molsbergen v. United
States, 757 F.2d 1016, 1019 (9th Cir. 1985)). Plaintiffs
are allowed to plead in the alternative, and the Court does
not find these pleadings to be internally inconsistent, other
than to the extent they may be alternative pleadings.
Adopting Defendant's position would stifle the liberal
alternative pleading policy of Rule 8(d). Plaintiffs have
stated a claim for wrongful foreclosure, and therefore, the
Court denies Defendant's motion with respect to count I.
Plaintiffs' Fraudulent Misrepresentation Claims - Count
allege Defendant engaged in fraudulent misrepresentation when
Defendant's agent instructed Plaintiffs to not make any
payments on their loan while it was being reviewed. [ECF No.
14 ¶¶ 43-48]. Defendant asserts Plaintiffs'
claims for fraudulent misrepresentation fail because: (1)
Plaintiffs have not pled sufficient facts; (2) the claims are
barred by the economic loss doctrine; (3) a misrepresentation
cannot relate to expectations and predictions concerning a
future event; and (4) Plaintiffs' claims are barred by
the statute of limitations. Plaintiffs respond the fraudulent
misrepresentation claims should not be dismissed, because,
inter alia, Plaintiffs have properly pled ...