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Bryan v. Bank of America, N.A.

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

January 18, 2018

ROY SCOTT BRYAN, Plaintiff,
v.
BANK OF AMERICA, N.A., AS SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, L.P., Defendant.

          MEMORANDUM AND ORDER

          RONNIE L. WHITE UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendant Bank of America, N.A., as Successor by Merger to BAC Home Loans Servicing, L.P.'s Motion to Dismiss Plaintiffs First Amended Complaint for Failure to State a Claim (ECF No. 25). The motion is fully briefed and ready for disposition.

         I. Background

         Plaintiff Roy Scott Bryan originally filed this action in state court on March 7, 2017, alleging wrongful foreclosure; violation of the Missouri Merchandising Practices Act ("MMPA"), Mo. Rev. Stat. § 407.101; a claim for quiet title; and slander of title. The Petition named Bank of America, N.A., as Successor by Merger to BAC Home Loans Servicing, L.P. ("BANA"), Jay Scott Hoskins, and Kimberly Ann Hoskins (collectively "Hoskins") as Defendants. After Plaintiff dismissed the Hoskins, BANA removed the Petition to federal court based on diversity jurisdiction on June 2, 2017. (ECF No. 1) On July 14, 2017, Plaintiff Bryan filed a First Amended Complaint in Wrongful Foreclosure, alleging that Defendant BANA foreclosed on his property at 628 Yeddo Avenue, St. Louis, Missouri 63119 ("Property") even though Plaintiff was not in default. (First Am. Compl. ["FAC"] ¶ 3, ECF No. 21) Plaintiff alleges that on July 1, 2011, he entered into a HAMP modification, commonly referred to as a "Making Home Affordable Program Request for Modification and Affidavit" and tendered a payment of $3, 471.00. (Id. at ¶ 5) According to Plaintiff, he submitted multiple HAMP applications but Defendant refused to accept any subsequent payments. (Id.) Plaintiff contends that BANA assured him that the ownership status of his home was not in jeopardy while his HAMP application was being evaluated. (Id. at ¶ 7) However, on March 12, 2012, Plaintiffs home at 628 Yeddo Avenue was foreclosed. (Id. at ¶ 8) Plaintiff claims that the foreclosure of the Property was wrongful because BANA was precluded from foreclosing on the property while the HAMP application was being evaluated; BANA was to provide a permanent loan modification because Plaintiff completed the Trial Period Plan and made payments; foreclosure was not an event that could terminate the HAMP application evaluation and instead could only take place after the application was denied; and Plaintiff was not in default because he tendered mortgage payments. (Id. at ¶ 12) Plaintiff further claims that no recorded power of attorney exists such that the foreclosure was wrongful. (Id. at ¶¶ 13-19) Plaintiff alleges that he has been damaged in loss of equity, loss of his home music studio, loss of title, credit damage, embarrassment, trauma, and attorney's fees. (Id. at ¶ 21) He seeks a court order declaring the foreclosure sale to be void and awarding damages. Plaintiff also asserts a claim for violation of the Missouri Merchandising Practices Act ("MMPA") based on his purchase of an initial extension of credit and bundle of related services under the Note and Deed of Trust and the alleged wrongful foreclosure on the Property. (Id. at ¶¶ 22-26)

         On August 7, 2017, Defendant BANA filed a Motion to Dismiss Plaintiffs First Amended Complaint for Failure to State a Claim. Defendant asserts that Plaintiff is unable to plead and prove that he was not in default at the time of the foreclosure.[1] Further, Defendant contends that the HAMP modification negotiations cannot form the basis of Plaintiff s MMPA claim because they were not in connection with the sale of any merchandise in trade or commerce. In addition, Defendant asserts that Plaintiff is unable to show an ascertainable loss that is the result of an alleged MMPA violation.

         II. Legal Standard

         Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed if it fails to plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) (abrogating the "no set of facts" standard set forth in Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). While the Court cautioned that the holding does not require a heightened fact pleading of specifics, "a plaintiffs obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. In other words, "[f]actual allegations must be enough to raise a right to relief above the speculative level...." Id. This standard simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the claim. Id. at 556.

         Courts must liberally construe the complaint in the light most favorable to the plaintiff and accept the factual allegations as true. See Id. at 555; see also Schaafv. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir. 2008) (stating that in a motion to dismiss, courts accept as true all factual allegations in the complaint); Eckert v. Titan Tire Corp., 514 F.3d 801, 806 (8th Cir. 2008) (explaining that courts should liberally construe the complaint in the light most favorable to the plaintiff). Further a court should not dismiss the complaint simply because the court is doubtful that the plaintiff will be able to prove all of the necessary factual allegations. Twombly, 550 U.S. at 556. However, "[w]here the allegations show on the face of the complaint there is some insuperable bar to relief, dismissal under Rule 12(b)(6) is appropriate." Benton v. Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir. 2008) (citation omitted).

         III. Discussion

         Defendant BANA argues that Plaintiffs First Amended Complaint should be dismissed because the Complaint fails to state a claim for wrongful foreclosure either in equity or to recover tort damages. In addition, BANA contends that Plaintiff has failed to state a claim under the MMPA such that dismissal is warranted.

         A. Tort Action for Wrongful Foreclosure

         First, BANA asserts that Plaintiff Bryan is unable to show that he is entitled to tort damages for wrongful foreclosure because he has failed to plead and prove that he was not in default at the time the foreclosure proceeding began. "The term 'wrongful foreclosure' has been used both in relation to suits in equity as a ground to set aside a sale and suits at law as a ground to recover tort damages." Dobson v. Mortg. Elec. Registration Sys., Inc./GMAC Mortg. Corp., 259 S.W.3d 19, 22 (Mo.Ct.App. 2008). Under Missouri law, "what constitutes a 'wrongful foreclosure' sufficient to set aside a sale and what constitutes a 'wrongful foreclosure' sufficient to recover damages in tort are not the same." Id. "A wrongful foreclosure action seeking damages requires plaintiff to prove that he was not in default and, thus, there was no right to foreclose on the property." Lackey v. Wells Fargo Bank, N.A., 747 F.3d 1033, 1037(8th Cir. 2014) (citing Fields v. Millsap & Singer, P.C, 295 S.W.3d 567, 572 (Mo.Ct.App. 2009)). "A plaintiff must 'plead and prove such compliance with the terms of the deed of trust as would avoid lawful foreclosure.'" Dobson, 259 S.W.3d at 22 (quoting Spires v. Lawless, 439 S.W.2d 65, 71 (Mo.Ct.App. 1973)).

         Here, while Plaintiff baldly claims that he was not in default by virtue of the HAMP modification application, he fails to allege that he was not in default under the terms of the Note and Deed of Trust or that he was current on his mortgage payments at the time of the foreclosure sale. See Simms v. Nationstar Mortg, LLC, 44 F.Supp.3d 927, 932 (E.D. Mo. 2014) ("Here, plaintiffs Petition does not state a claim for the tort of wrongful foreclosure, because he does not allege that the mortgage was not in default or that his compliance with the terms of the deed of trust was sufficient to avoid a lawful foreclosure when the foreclosure proceedings began."); White v. BAC Home Loans Servicing, L.P., No. 4:10-CV-2094 CAS, 2011 WL 1483901, at *9 (E.D. Mo. Apr. 19, 2011) ("[P]laintiffs do not allege in their petition that their mortgage was not in default when the foreclosure proceeding began. Accordingly, plaintiffs fail to state a claim for a tort action for damages for wrongful [foreclosure]."). Thus, the Court finds that to the extent Count I of the First Amended Complaint alleges a claim to recover tort damages for wrongful foreclosure, Plaintiff fails to state a claim, and the claim will be dismissed.

         B. Equitable Action for ...


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