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Barr v. Flagstar Bank, FSB

United States District Court, D. Maryland

September 17, 2014

BRUCE BARR and ANNE BARR, Plaintiffs,
v.
FLAGSTAR BANK, F.S.B., Defendants.

MEMORANDUM OPINION

RICHARD D. BENNETT, District Judge.

Plaintiffs Bruce Barr and Anne Barr (the "Barrs") bring this action against Defendant Flagstar Bank, F.S.B. ("Flagstar"), alleging a violation of § 1641(g) of the Truth in Lending Act of 1968. 15 U.S.C. § 1641(g). The original complaint was filed in the District Court of Maryland for Queen Anne's County and the Defendant removed the case to this Court, pursuant to 28 U.S.C. §§ 1331 and 1441.

Pending before this Court is Defendant's Motion to Dismiss (ECF No. 6). The parties' submissions have been reviewed and no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons that follow, Defendant Flagstar Bank's Motion to Dismiss (ECF No. 6) is GRANTED.

BACKGROUND

In a ruling on a motion to dismiss, this Court must accept the factual allegations in the plaintiff's complaint as true and construe those facts in the light most favorable to the plaintiffs. See, e.g., Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).

On June 26, 2007, Plaintiffs Bruce and Anne Barr refinanced their home loan. Compl. ¶ 2, ECF No. 2. The Barrs then defaulted on the loan and foreclosure of the house ensued. Id. The Deed of Trust securing Plaintiffs' loan was assigned to Defendant Flagstar Bank on March 14, 2012.[1] Id .; see also Compl. Ex. A, at 6. Flagstar recorded the assignment of the Deed of Trust on November 20, 2012.[2] See Compl. Ex. A, at 6. Plaintiffs, however, did not learn of the assignment until November 2012. Compl. ¶ 3.

On August 9, 2013, Plaintiffs filed the instant Complaint in state court. Plaintiffs contended that Defendant's failure to disclose the execution of the assignment of the Deed of Trust violated the disclosure requirement of § 1641(g) of the Truth in Lending Act of 1968. Compl. ¶ 3. Shortly after removing the action to this Court, Defendant moved to dismiss Plaintiffs' Complaint with prejudice pursuant to Fed.R.Civ.P. 12(b)(6). Def.'s Mot. to Dismiss, ECF No. 6. Plaintiffs filed a Response in Opposition to Defendants' Motion to Dismiss (ECF No. 9). The Opposition however, fails to provide any cognizable argument against Defendant's Motion to Dismiss. Defendant subsequently filed a Reply in Support of their Motion to Dismiss (ECF No. 10).

STANDARD OF REVIEW

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P 8(a)(2). Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes the dismissal of a complaint if it fails to state a claim upon which relief can be granted. The purpose of Rule 12(b)(6) is "to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).

The Supreme Court's recent opinions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), "require that complaints in civil actions be alleged with greater specificity than previously was required." Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (citation omitted). In Twombly, the Supreme Court articulated "[t]wo working principles" that courts must employ when ruling on Rule 12(b)(6) motions to dismiss. Iqbal, 556 U.S. at 678. First, while a court must accept as true all the factual allegations contained in the complaint, legal conclusions drawn from those facts are not afforded such deference. Id. (stating that "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice" to plead a claim); see also Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 365 (4th Cir. 2012) ("Although we are constrained to take the facts in the light most favorable to the plaintiff, we need not accept legal conclusions couched as facts or unwarranted inferences, unreasonable conclusions, or arguments." (internal quotation marks omitted)).

Second, a complaint must be dismissed if it does not allege "a plausible claim for relief." Iqbal, 556 U.S. at 679. Under the plausibility standard, a complaint must contain "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555. Although the plausibility requirement does not impose a "probability requirement, " id. at 556, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678; see also Robertson v. Sea Pines Real Estate Cos., 679 F.3d 278, 291 (4th Cir. 2012) ("A complaint need not make a case against a defendant or forecast evidence sufficient to prove an element of the claim. It need only allege facts sufficient to state elements of the claim." (emphasis in original) (internal quotation marks and citation omitted)). In making this assessment, a court must "draw on its judicial experience and common sense" to determine whether the pleader has stated a plausible claim for relief. Iqbal, 556 U.S. at 679. "At bottom, a plaintiff must nudge [its] claims across the line from conceivable to plausible to resist dismissal." Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 365 (4th Cir. 2012) (internal quotation marks omitted).

ANALYSIS

Defendant bases its Motion to Dismiss upon two grounds. First, Flagstar argues that Plaintiffs fail to state a claim upon which relief may be granted because the assignment of the Deed of Trust did not trigger the disclosure requirement of § 1641(g) of the Truth in Lending Act. Def.'s Mot. to Dismiss at 3. Second, Flagstar asserts that, even if the assignment does fall under § 1641(g), Defendant's failure to notify is excused by the "safe harbor" protection of § 1641(f) of the same Act.[3] Id. at 3-4. Since an assignment of only the deed of trust does not trigger the § 1641(g) disclosure requirement, this Court will not reach the question of whether the "safe harbor" provided by § 1641(f) would apply.

Defendant does not dispute the Barrs' contention that it did not disclose to them the assignment of the Deed of Trust. Rather, Defendant argues that the disclosure requirement of § 1641(g) of the Truth in Lending Act does not apply to the assignment of the Deed of Trust. For Plaintiffs' claim to proceed, § 1641(g) must apply to transfers and assignments of deeds of trust. If § 1641(g) does not apply to such transfers or assignments, ...


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