United States District Court, W.D. Missouri, Western Division
KELLY W. KENT, Plaintiff,
SETERUS, INC., et al., Defendants.
ORDER GRANTING IN PART DEFENDANT QUICKEN LOAN,
INC.'S MOTION TO DISMISS
KAYS, CHIEF JUDGE UNITED STATES DISTRICT COURT.
case arises out of unpaid real estate taxes. Plaintiff Kelly
Kent (“Kent”) alleges that he made payments to
his mortgage company, including amounts for real estate
taxes, but that the taxes were never paid to the taxing
authority. Kent is suing two lenders, a loan servicer, and a
company that provided property tax reporting and monitoring
services on his loan.
before the Court is Defendant Quicken Loan, Inc.'s
(“QLI”) motion to dismiss (Docs. 65 & 97). As
explained below, the motion is GRANTED IN PART.
third amended complaint (Doc. 92) alleges the following:
purchased a condo in Cook County, Illinois in 2007. On July
19, 2012, he refinanced his loan and in doing so, obtained a
mortgage loan (the “Loan”) through QLI. Kent
arranged an escrow account with QLI for payment of the
property taxes and insurance (“Escrow Items”) on
the condo. The escrow agreement requires Kent to pay QLI for
the Escrow Items and that QLI would apply those payments to
the underlying obligation. The escrow agreement states QLI
has the ability to waive Kent's obligation to pay for any
or all of the Escrow Items and that QLI would provide Kent an
annual accounting of the Escrow Items.
27, 2012, QLI sold or assigned its rights and interest in the
Loan to Defendant Federal National Mortgage Association
(“Fannie Mae”). On September 1, 2012, QLI sold or
assigned the servicing rights in the Loan to Defendant
Seterus, Inc. (“Seterus”). Plaintiff alleges that
Seterus was outsourcing the property tax reporting and
monitoring services to Defendant Lereta, LLC
(“Lereta”) during this time.
the relevant time, Kent made timely payments on his loan and
the Escrow Items. He received yearly mortgage statements
reflecting the beginning and ending balance of his loan,
beginning and end balance of his escrow account, and the real
estate taxes paid. Nevertheless, on November 10, 2016, Kent
learned his tax year 2012 real estate taxes owed to Cook
County, Illinois, had been sold to ATCF II Illinois, LLC
(“ATCF”) at the county's annual tax sale, due
to nonpayment. Later, Kent learned that his real estate taxes
for tax years 2013, 2014, and 2015 also had not been paid,
despite his yearly mortgage statements indicating they had.
estate taxes in Cook County, Illinois, are payable in two
installments. The first installment is due the first business
day in March, and the second due date is generally sometime
in August or September.
alleges that when QLI sold its interest in the Loan to Fannie
Mae and/or sold its servicing rights in the Loan to Seterus,
it provided the incorrect property account number PIN,
thereby causing his real estate taxes to go unpaid. Kent also
alleges this error went unnoticed for years by the other
December 8, 2016, Kent received an escrow account statement
indicating the account had a deficiency of $4, 252.86. Then
on January 3, 2017, Fannie Mae, Seterus, and/or Lereta
redeemed the delinquent real estate taxes, including those
sold to ATCF, for $9, 782.70. This redemption payment
included penalties of $1, 176.56. Kent continued to receive
statements claiming the escrow account had a shortage. Kent
alleges Defendants increased his escrow payment to cover the
shortfall caused, at least in part, by the penalties assessed
for the late payment of his taxes.
Kent sued Lereta and Seterus, but on October 23, 2017,
amended his complaint to add QLI as a party.
third amended complaint, Kent alleges seven counts against
Defendants for breach of contract, breach of fiduciary duty,
and various common law negligence claims. QLI moved to
dismiss the claims against it. After the motion was fully
briefed, Kent moved to amend the complaint to clarify certain
facts alleged. In granting the motion to amend his ...