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Hayden v. Fifth Third Bank, Inc.

United States District Court, Sixth Circuit

May 21, 2013

LORI HAYDEN, Plaintiff,


JOHN G. HEYBURN, II, District Judge.

Plaintiff, Lori Hayden, has filed a class action complaint against her former employer, Defendant, Fifth Third Bank, Inc. ("Fifth Third").[1] Plaintiff asserts two counts arising from the company's fee charge-back policy: 1) that Fifth Third's policy violated her rights, and the rights of those similarly situated, under the Truth in Lending Act, Title I of the Consumer Credit Protection Act, Pub. L. 90-321, 82 Stat. 146 ("TILA"), and its corresponding regulations at 12 C.F.R. ยง226.1, et seq. ("Regulation Z"); and 2) that Fifth Third breached its contract with Plaintiff, and those similarly situated, in implementing the policy.[2]

Fifth Third moves to dismiss the complaint in part for two reasons. First, it says that Plaintiff, and the putative class members, have no standing to assert the TILA claim. Second, it says that the contractual limitations period governing claims arising out of Plaintiff's employment with Fifth Third bars claims against Fifth Third for events occurring more than six months before Plaintiff filed this suit. For the following reasons, the Court will sustain Fifth Third's motion in part and deny the motion in part.


According to Federal Rule of Civil Procedure 12(b)(6), courts will dismiss complaints "only if it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Garcia v. City of Oakwood, 99 F.3d 1138, *2 (6th Cir. 1996) (table opinion) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Therefore, to overcome a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Court must view the allegations in a light most favorable to the nonmoving party, treating all well-pleaded facts as true, but the Court need not accept bare conclusions. See Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009).

Rule 12 provides that if "matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment and disposed of as provided in Rule 56." FED. R. CIV. P. 12(d). "Under certain circumstances, however, a document that is not formally incorporated by reference or attached to a complaint may still be considered part of the pleadings. This occurs when a document is referred to in the complaint and is central to the plaintiff's claim." Greenberg v. Life Ins. Co. of Va., 177 F.3d 507, 514 (6th Cir. 1999) (internal citations omitted). In Greenberg, the Sixth Circuit did not consider the plaintiffs' insurance policies "matters outside the pleadings", because they were referenced in the complaint and central to the plaintiff's claims relating to those policies. Id. Similarly, Fifth Third's employee incentive compensation plan (the "Plan") and Mortgage Loan Pricing Agreement and Prepayment of Settlement Costs Policy (the "Policy") are referenced in the complaint and central to Plaintiff's claims.[3] The Court will consider these documents when determining whether the motion to dismiss should be granted.


The Court construes the facts in the light most favorable to Plaintiff. Fifth Third employed Plaintiff as a mortgage loan originator ("MLO"). MLOs solicit mortgage loan applications for loans that Fifth Third will finance. The loan solicitation process works as follows: Fifth Third first generates contact information for potential mortgage loan customers and provides that information to the MLOs. The MLOs then contact the potential customers and obtain their financial information to determine their eligibility for a mortgage loan financed by Fifth Third. The MLOs will discuss possible loan options with these potential customers. If and when the potential customer selects a product, the MLOs compile relevant loan documents and forward them to an underwriter or loan processor.

The Plan, a contract between the MLOs and Fifth Third, in large part defines the employment relationship at issue. The Plan includes the following fee charge-back policy:

It is the responsibility of the Employee to collect any fees required for that product, but not limited to [sic], the Processing, Underwriting, and/or Application fees. The Application fee may not be collected in pricing or yield.
Uncollected application fees will be charged back to the MLO for non-originated applications (e.g. denied, withdrawn, etc.).

ECF No. 14-2. In other words, where MLOs are unable to collect an application fee from a potential customer, Fifth Third would charge the MLOs that fee if Fifth Third denied or withdrew the loan. The pertinent fee for this case is the $350 loan application fee. Plaintiff emphasizes that the language in the Plan only obligates MLOs to collect application fees required for the product, and construes the provision to require only those application fees accruing lawfully.

Also relevant here, Fifth Third required MLOs to bind prospective borrowers to the Policy, which provided pricing options concerning the borrowers' loan application. One such option provided borrowers the choice of checking "yes" or "no" to the following provision:

I/we acknowledge that we are applying for a pre-approval and that a fee is due upon the borrower receipt of the initial Truth in Lending Disclosure (TIL). The fee will be non-refundable if I do not close on a loan with Fifth Third Mortgage Company. If I close on a loan then the fee will be credited towards my total costs due at closing. I further acknowledge that the rate and points cannot be locked until I/we ...

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