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Davis v. Bank of America, N.A.

United States District Court, D. Maryland

October 8, 2019

CLARENCE V. DAVIS, et al., Plaintiffs,
v.
BANK OF AMERICA, N.A., Defendant.

          MEMORANDUM OPINION

          Ellen L. Hollander United States District Judge

         Plaintiffs Clarence and Beverly Davis filed a two-count Complaint against defendant Bank of America, N.A. (“BANA” or the “Bank”), alleging negligence and fraud in connection with their home mortgage loan. ECF 3 (“Complaint”).[1] In Count One, plaintiffs assert that BANA “negligently serviced” the loan by changing its terms without plaintiffs' knowledge or consent, resulting in “the collection of excess monies” by the Bank. Id. ¶ 19. Count Two alleges that BANA “fraudulently serviced” plaintiffs' loan, by “altering the loan terms, without authorization or right.” Id. Plaintiffs submitted five exhibits with the Complaint. ECF 3-1 to ECF 3-5.[2]

         BANA has moved to dismiss for failure to state a claim, pursuant to Fed.R.Civ.P. 8(a), 9(b), and 12(b)(6). ECF 16. The motion is supported by a memorandum of law. ECF 16-1 (collectively, the “Motion”). Plaintiffs oppose the Motion. ECF 17 (“Opposition”).[3] And, plaintiffs submitted several documents with the Opposition. See Id. at 9-17. Defendant has replied. ECF 18 (“Reply”).

         No hearing is necessary to resolve the matter. See Local Rule 105(6). For the reasons that follow, I shall grant the Motion in part and deny it in part. ECF 16.

         I. Background[4]

         The dispute centers on a “Home Refinance Agreement” pertaining to plaintiffs' home on Hammaker Street in Thurmont, Maryland. ECF 3, ¶ 1. On February 16, 1999, plaintiffs executed a Home Refinance Agreement (the “Agreement”) with NationsBank, N.A. (“NB”), in the amount of $119, 721.50. Id. ¶ 2; see ECF 3-2 (“Promissory Note”). The loan was secured by a Deed of Trust, which was duly recorded in the land records for Frederick County, Maryland. ECF 3, ¶ 3; see ECF 3-1 (“Deed of Trust”).

         The terms of the loan provided for 179 monthly payments of $1, 202.76, beginning on April 2, 1999, with a final payment due on March 2, 2014, in the amount of $1, 202.31. ECF 3, ¶¶ 4, 7; see also ECF 3-2. Payments were due the second of each month. ECF 3-2 at 1. Pursuant to the Federal Truth-in-Lending Disclosure included in the Promissory Note, plaintiffs would repay the lender a total of $216, 496.35, of which $85, 294.81 represented finance charges. ECF 3, ¶ 6; see ECF 3-2 at 1.

         In or about 1998, NB merged with BANA. ECF 3, ¶ 8. As a result, BANA became the servicer of plaintiffs' loan. Id. According to plaintiffs, BANA “altered” the terms of plaintiffs' loan “without [their] request, authorization, consent, or even . . . knowledge[.]” Id. ¶ 9. When plaintiffs contacted BANA regarding their mortgage, they were told that the loan “was a [sic] interest only obligation, in direct contradiction of the loan papers[.]” Id. ¶ 10. Further, although BANA stated that it would assign a loan counselor to plaintiffs to address their concerns, plaintiffs were instead “passed through numerous customer services representatives, ” who, they allege, had “no real intention of correcting the matter.” Id. ¶ 11.

         A 2017 Statement Summary indicates that plaintiffs have a principal balance of $119, 545.95 on the loan. Id. ¶ 12; see ECF 3-3 (“2017 Statement Summary”). According to plaintiffs, the principal balance is only $167.55 less than the original loan balance in 1999. ECF 3, ¶ 13. Yet, plaintiffs allege that since the origination of the loan in 1999, they have paid “approximately $145, 624.52 in interest, ” which they assert amounts to a “$60, 392.00 overpayment” in interest, as compared to the interest amount set forth under the loan's original terms. Id. ¶¶ 14, 15. Further, plaintiffs allege that they are “forced to continue” making payments “or risk placing their home into foreclosure.” Id. ¶ 16.

         On or about February 9, 2017, plaintiffs, through counsel, raised their concerns with the Bank's Customer Service Department and requested an accounting. Id. ¶ 17; ECF 3-5 (“BANA Customer Service Request”). On July 19, 2017, BANA acknowledged plaintiffs' inquiry but stated that it needed additional time to research the matter. ECF 3, ¶ 18; ECF 3-5.

         This lawsuit followed on December 4, 2018. ECF 1.

         II. Standard of Review

         A. Rule 12(b)(6)

         A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom., McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law “to state a claim upon which relief can be granted.”

         Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). That rule provides that a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the rule is to provide the defendants with “fair notice” of the claims and the “grounds” for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint must contain facts sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (citation omitted) (“Our decision in Twombly expounded the pleading standard for ‘all civil actions' . . . .”); see also Paradise Wire & Cable Defined Benefit Pension Plan v. Weil, 918 F.3d 312, 317 (4th Cir. 2019); Willner v. Dimon, 849 F.3d 93, 112 (4th Cir. 2017). To be sure, a plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules “do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted.” Johnson v. City of Shelby, Miss., 574 U.S. 10, 10 (2014) (per curiam). But, mere “‘naked assertions' of wrongdoing” are generally insufficient to state a claim for relief. Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (citation omitted).

         In other words, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action, ” it is insufficient. Twombly, 550 U.S. at 555. “[A]n unadorned, the-defendant-unlawfully-harmed-me accusation” does not state a plausible claim of relief. Iqbal, 556 U.S. at 678. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth “enough factual matter (taken as true) to suggest” a cognizable cause of action, “even if . . . [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely.” Twombly, 550 U.S. at 556 (internal quotation marks omitted).

         In reviewing a Rule 12(b)(6) motion, a court “must accept as true all of the factual allegations contained in the complaint” and must “draw all reasonable inferences [from those facts] in favor of the plaintiff.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Semenova v. MTA, 845 F.3d 564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). But, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986); Glassman v. Arlington Cty., 628 F.3d 140, 146 (4th Cir. 2010). “A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer” that the plaintiff is entitled to the legal remedy sought. A Society Without a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011), cert. denied, 566 U.S. 937 (2012).

         Courts ordinarily do not “‘resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses'” through a Rule 12(b)(6) motion. Edwards, 178 F.3d at 243 (quoting Republican Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)). However, “in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint, the defense may be reached by a motion to dismiss filed under Rule 12(b)(6).” Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc); accord Pressley v. Tupperware Long Term Disability Plan, 553 F.3d 334, 336 (4th Cir. 2009). Because Rule 12(b)(6) “is intended [only] to test the legal adequacy of the complaint, ” Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993), “[t]his principle only applies . . . if all facts necessary to the affirmative defense ‘clearly appear[ ] on the face of the complaint.'” Goodman, 494 F.3d at 464 (quoting Forst, 4 F.3d at 250) (emphasis added in Goodman).

         “Generally, when a defendant moves to dismiss a complaint under Rule 12(b)(6), courts are limited to considering the sufficiency of allegations set forth in the complaint and the ‘documents attached or incorporated into the complaint.'” Zak v. Chelsea Therapeutics Int'l, Ltd., 780 F.3d 597, 606 (4th Cir. 2015) (quoting E.I. du Pont de Nemours & Co., 637 F.3d at 448). Ordinarily, the court “may not consider any documents that are outside of the complaint, or not expressly incorporated therein . . . .” Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013); see Bosiger v. U.S. Airways, Inc., 510 F.3d 442, 450 (4th Cir. 2007).

         But, under limited circumstances, when resolving a Rule 12(b)(6) motion, a court may consider documents beyond the complaint without converting the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Balt., 791 F.3d 500, 508 (4th Cir. 2015). In particular, a court may properly consider documents that are “explicitly incorporated into the complaint by reference and those attached to the complaint as exhibits.” Goines, 822 F.3d at 166 (citation omitted); see also Six v. Generations Fed. Credit Union, 891 F.3d 508, 512 (4th Cir. 2018); Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); U.S. ex rel. Oberg v. Pa. Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014); Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979 (2004); Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999).

         However, “before treating the contents of an attached or incorporated document as true, the district court should consider the nature of the document and why the plaintiff attached it.” Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 455 (7th Cir. 1998)). Of import here, “[w]hen the plaintiff attaches or incorporates a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the contents of the document, crediting the document over conflicting allegations in the complaint is proper.” Goines, 822 F.3d at 167. Conversely, “where the plaintiff attaches or incorporates a document for purposes other than the truthfulness of the document, it is inappropriate to treat the contents of that document as true.” Id.

         A court may also “consider a document submitted by the movant that [is] not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and there is no dispute about the document's authenticity.” Goines, 822 F.3d at 166 (citations omitted); see also Woods v. City of Greensboro, 855 F.3d 639, 642 (4th Cir. 2017), cert. denied, __U.S. __, 138 S.Ct. 558 (2017); Oberg, 745 F.3d at 136; Kensington Volunteer Fire Dep't. v. Montgomery Cty., 684 F.3d 462, 467 (4th Cir. 2012). To be “integral, ” a document must be one “that by its ‘very existence, and not the mere information it contains, gives rise to the legal rights asserted.'” Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F.Supp.2d 602, ...


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