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Harris v. Nationstar Mortgage, LLC

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

September 13, 2019

NATIONSTAR MORTGAGE, LLC, et al., Defendants.[1]



         This matter is before the Court on the Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) filed by Defendants Nationstar Mortgage, LLC ("Nationstar"), Federal National Mortgage Association ("Fannie Mae"), and Mortgage Electronic Registration Systems, Inc. ("MERS") (ECF No. 44) and the Motion to Dismiss Count I and to Join in Co-Defendants' Motion to Dismiss Counts II-IV filed by Defendant HSBC Bank USA, N.A., d/b/a HSBC Mortgage Corporation a/d/b/a/ HSBC Mortgage Services, Inc. ("HSBC") (ECF No. 59). Both motions are fully briefed.[2] After careful consideration, the Court grants Nationstar's motion and grants HSBC's motion, in part, and denies it, in part, without prejudice.


         In 2008, Plaintiff Therrie Harris obtained a home mortgage loan for the purchase of residential real estate located in the City of St. Louis. (First Am. Compl. ¶ 10, ECF No. 43) He executed a promissory note ("Note") in favor of HSBC in the principal amount of approximately $140, 000.00 and an accompanying Deed of Trust in favor of HSBC. (Id.) In or around February 2014, Plaintiff alleges he approached HSBC regarding a possible loan modification under the Home Affordable Modification Program ("HAMP"). (Id. at ¶ 11) According to Plaintiff, he provided all requested documents over the course of approximately two years while HSBC repeatedly represented to him that a loan modification would be prepared and submitted. (Id.) Despite these alleged representations, HSBC never provided or produced a loan modification and, at one point, stopped returning Plaintiffs phone calls. (Id. at ¶¶12-13)

         In 2016, HSBC purported to assign the Note to Nationstar. (Id. at ¶ 14) After the Note was assigned to Nationstar, Plaintiff alleges Nationstar failed to provide him with a loan number or a location where he should direct his payments. (Id. at ¶15) Despite phone calls with Nationstar, Plaintiff maintains he was never given a loan number or informed of "fundamental aspects of his loan." (Id.)

         In March 2017, Plaintiff originally filed this action pro se in state court against numerous defendants, including HSBC, Nationstar, Fannie Mae, and MERS. (ECF No. 7) Nationstar, Fannie Mae, and MERS removed the case to federal court on the basis of federal question and diversity jurisdiction. (ECF No. 1) Counsel entered an appearance on behalf of Plaintiff on June 5, 2017. (ECF No. 15) On August 17, 2017, the parties filed a Joint Motion to Stay Litigation, indicating that they were pursuing resolution of this matter and wished to avoid incurring unnecessary expenses. (ECF No. 21) On that same date, the Court granted the motion to stay and administratively closed the case pending further notice from the parties. (ECF No. 23) After several extensions of time to continue settlement negotiations, the parties filed a joint status report on August 2, 2018, stating that they were unable to reach a settlement and requested that the stay be lifted and the case be reopened. (ECF No. 37) The Court reopened the case and ordered Plaintiff to file his amended complaint by an agreed-upon deadline. (ECF No. 38)

         On August 31, 2018, Plaintiff filed his First Amended Compliant asserting five counts: violations of the Missouri Merchandising Practices Act ("MMPA"), Mo. Rev. Stat. § 407.010 et seq., against HSBC (Count I); violations of the MMPA against Nationstar (Count II); violations of the Truth in Lending Act ("TILA"), 15 U.S.C. § 1601, et seq., against Nationstar (Count III); breach of contract as a third-party beneficiary pursuant to the Home Affordable Modification Program ("HAMP") against HSBC and Nationstar (Count IV); and seeking declaratory judgment that Plaintiff is entitled to a loan modification and other relief. (ECF No. 43) Nationstar and HSBC then filed their respective motions to dismiss. (ECF Nos. 44 & 59)


         A complaint must be dismissed under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted if the complaint 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). "Factual allegations must be enough to raise a right to relief above the speculative level. . . ." Id. at 555. Courts must liberally construe the complaint in the light most favorable to the plaintiff and accept the factual allegations as true. See Schaaf v. 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).

         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). Courts "are not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). When considering a motion to dismiss, a court can "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 679. Legal conclusions must be supported by factual allegations to survive a motion to dismiss. Id.


         As an initial matter, Nationstar, Fannie Mae, and MERS argue Plaintiffs First Amended Complaint fails to state a claim against Fannie Mae or MERS. None of the five counts are directly asserted against Fannie Mae or MERS. In fact, the only time Plaintiff mentions Fannie Mae or MERS is in the introductory section of the First Amended Complaint listing the "Parties" (First Am. Compl. ¶¶ 3 & 5, ECF No. 43) and when explaining Nationstar and MERS removed the case to federal court (Id. at ¶ 8) Plaintiff did not address this argument in his response memorandum. Consequently, the Court grants the motion to dismiss with respect to any claims against Fannie Mae or MERS and dismisses them from this action.

         I. MMPA claims

         The MMPA is a broad statute that prohibits "[t]he act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce." Mo. Rev. Stat. § 407.020.1; see Blake v. Career Educ. Corp., No. 4:08CV00821 ERW, 2009 WL 140742, at *2 (E.D. Mo. Jan. 20, 2009). The MMPA, however, does not apply to the following:

Any institution, company, or entity that is subject to chartering, licensing, or regulation by the director of the department of insurance, financial institutions and professional registration under chapter 354 or chapters 374 to 385, the director of the division of credit unions under chapter 370, or director of the division of finance under chapters 361 to 369, or chapter 371, unless such directors specifically authorize the attorney general to implement the powers of this chapter or such powers are provided to either the attorney general or a private citizen by statute.

Mo. Rev. Stat. § 407.020.2(2) (emphasis added).

         HSBC and Nationstar argue Plaintiffs separate claims against them asserting violations of the MMPA (Counts I and II respectively) should be dismissed because the statute explicitly exempts them as entities that are licensed, chartered, and regulated by the Missouri division of finance. Specifically, Nationstar contends it is a "Lender" pursuant to section 367.100 of Missouri's Revised Statutes and is required to obtain a certificate of registration from the director of the division of finance pursuant to section 367.110. In support, Nationstar has attached a screenshot of its license information found on the website for the Missouri division of finance (ECF No. 45-1), of which the Court takes judicial notice. See Stahl v. U.S. Dep't of Agric, 327 F.3d 697, 700 (8th Cir. 2003) ("The district court may take judicial notice of public records and may thus consider them on a motion to dismiss."). Accordingly, Nationstar argues the exemption in section 407.020.2(2) applies and prevents Plaintiff from pursing his MMPA claims.

         Plaintiff argues the statute Nationstar cites is inapposite to its functions. "Lender" is defined as "any person engaged in the business of making consumer credit loans." Mo. Rev. Stat. § 367.100(3). According to Plaintiff, the same section defines "consumer credit loans" as unsecured loans or loans that are "[s]ecured by a security agreement or any other lien on tangiblepersonal property or by the assignment of wages, salary or other compensation." Id. § 367.100(1)(a) (emphasis added). Because Nationstar is a lender with respect to real property, ...

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