United States District Court, E.D. Missouri, Eastern Division
JULIAN L. WITENGIER and MARCELINE M. WITENGIER, Plaintiffs,
U.S. BANK N.A., et al., Defendants.
MEMORANDUM AND ORDER
E. JACKSON, UNITED STATES DISTRICT JUDGE
matter is before the Court on the motion of defendant
SouthLaw, P.C. to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(6). Plaintiffs have responded to the motion,
and the issues are fully briefed.
January 21, 2010, defendant U.S. Bank issued a loan to
plaintiffs for the purchase of real property, secured by a
note and deed of trust. The parties recorded the deed of
trust with the St. Louis County Recorder of Deeds on February
2, 2010. Several years later, on August 1, 2014, the parties
purportedly entered into a loan modification
contend that plaintiffs defaulted on the loan, and plaintiffs
do not dispute that claim. On September 14, 2016, defendant U.S.
Bank appointed SouthLaw P.C. as the successor trustee under
the deed of trust. The Recorder of Deeds filed that
instrument on September 21, 2016. Id. Defendants
aver that defendant SouthLaw sent notice to plaintiffs on
September 26, 2016, that a trustee's sale would take
place on October 13, 2016. That notification also allegedly
identified defendant SouthLaw as the successor
trustee. Plaintiffs successfully halted the
foreclosure after filing for bankruptcy.
initiated this action pro se in the Twenty-First
Judicial Circuit Court of Missouri (County of St. Louis)
after the attempted foreclosure. Defendant U.S. Bank
subsequently removed the action to this Court on the basis of
diversity of citizenship jurisdiction, 28 U.S.C. § 1332.
In the complaint, plaintiffs assert claims of breach of
contract and breach of the covenant of good faith and fair
dealing. They also assert a quiet title claim.
base their claims on a number of alleged defects in the both
the security instruments and the attempted foreclosure
process. First, with regard to the security instruments,
plaintiffs allege that (1) they did not receive an executed
copy of the modified loan agreement, (2) defendant SouthLaw
was not properly designated as the successor trustee,
(3) defendant U.S. Bank fraudulently assigned the note and
concealed its “true” holder. Second,
plaintiffs argue that defendants did not provide adequate
notice of the trustee's sale. Specifically, defendants
allegedly directed notice to a “doe tenant, ”
sent notice fewer than twenty days before the scheduled
foreclosure sale, and did not record the notice in
“official records.” [Doc. #1-1 at 4].
See Mo. Rev. Stat. § 443.325. Furthermore,
plaintiffs claim that upon inquiry, defendants did not
provide a “single point of contact” and evaded
plaintiffs' attempts to ascertain the reinstatement
amount. Id. at 5-8. Finally, plaintiffs summarily
assert that U.S. Bank and SouthLaw perpetrated “a
series of fraudulent transactions” by “modifying
loan documents, manipulating property values and making loans
that were in violation of a multiplicity of [s]tate
laws.” Id. at 9.
instant motion, defendant SouthLaw argues that the
plaintiffs' claims against it should be dismissed under
Rule 12(b)(6). Specifically, defendant SouthLaw argues that
(1) plaintiffs do not adequately show that defendant SouthLaw
breached its duties under the deed of trust, (2) plaintiffs
arguments ultimately amount to claims sounding in attempted
wrongful foreclosure, and (3) defendant SouthLaw does not
claim any interest in the property at issue, and therefore is
not a proper party to an action to quiet title. [Doc. #15 at
purpose of a motion to dismiss under Rule 12(b)(6) of the
Federal Rules of Civil Procedure is to test the legal
sufficiency of the complaint. The factual allegations of a
complaint are assumed true and construed in favor of the
plaintiff, “even if it strikes a savvy judge that
actual proof of those facts is improbable.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007)
(citing Swierkiewicz v. Sorema N.A., 534 U.S. 506,
508 n.1 (2002)); Neitzke v. Williams, 490 U.S. 319,
327 (1989) (“Rule 12(b)(6) does not countenance . . .
dismissals based on a judge's disbelief of a
complaint's factual allegations”); Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974) (a well-pleaded
complaint may proceed even if it appears “that a
recovery is very remote and unlikely”). The issue is
not whether the plaintiff will ultimately prevail, but
whether the plaintiff is entitled to present evidence in
support of his claim. Id. A viable complaint must
include “enough facts to state a claim to relief that
is plausible on its face.” Bell Atlantic
Corp., 550 U.S. at 570; see also Id. at 563
(“no set of facts” language in Conley v.
Gibson, 355 U.S. 41, 45-46 (1957), “has earned its
retirement.”). “Factual allegations must be
enough to raise a right to relief above the speculative
level.” Id. at 555. A district court may
consider public records on a motion to dismiss. Stahl v.
United States Dep't of Agric., 327 F.3d 697 (8th
of Contract and Covenant of Good Faith and Fair
law provides that extrajudicial foreclosure is not a
statutory right, but rather “‘a contractual right
established by the power of sale provision in the deed of
trust.'” Mildfelt v. Circuit Court of Jackson
Cty., Mo., 827 F.2d 343, 346 (8th Cir. 1987) (quoting
Fed. Nat'l Mortg. Ass'n v. Howlett, 521
S.W.2d 428, 432 (Mo. 1975) (en banc)). And under Missouri
law, a breach of contract claim requires a showing of (1)
“the existence of an enforceable contract between the
parties, ” (2) “mutual obligations arising under
the terms of the contract, ” (3) “defendant did
not perform, ” and (4) “plaintiff was thereby
damaged from the breach.” Rice v. W. End Motors,
Co., 905 S.W.2d 541, 542 (Mo.Ct.App.
Missouri law implies a covenant of good faith and fair
dealing in every contract. Arbors at Sugar Creek
Homeowners Ass'n v. Jefferson Bank & Trust Co.,
Inc., 464 S.W.3d 177, 185 (Mo. 2015). To state a
claim for breach of the covenant, a plaintiff must allege
facts that defendant “acted, or exercised a judgment
conferred by the terms of the Note, in such a manner as to
evade the spirit of the transaction or to deny . . . the
expected benefit of the Note.” Reliance Bank v.
Paramont Props., LLC, 425 S.W.3d 202 (Mo.Ct.App.
2014). “This implied covenant, however,
is not ‘an overflowing cornucopia of wished-for legal
duties; indeed, the covenant cannot give rise to obligations
not otherwise contained in a contract's express
terms.” Sm ...