United States District Court, W.D. Kentucky, Louisville
CHARLES R. SIMPSON, III, Senior District Judge.
This matter is before the court for consideration of the following motions:
(1) Motion of the defendants, SunTrust Mortgage, Inc., SunTrust Bank, and SunTrust Banks, Inc., (collectively herein, "SunTrust"), to dismiss the Complaint for failure to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 8, 9, and 12(b)(6). DN 4.
> (2) Motion of the defendants, SunTrust, to strike as untimely the plaintiffs' response to SunTrust's motion to dismiss. DN 11.
(3) Motion of the plaintiffs, David and Belinda Herzig (collectively herein, "Herzig"), for oral argument on the defendants' motion to dismiss, or, alternatively, for leave to amend the Complaint. DN 13.
In this action, the plaintiffs, David and Belinda Herzig, take issue with the handling of their mortgage obligations with respect to a home that they purchased in Miami Beach, Florida in 1998. The problems appear to have begun after SunTrust purportedly determined that the Herzigs' windstorm policy had lapsed and allegedly obtained "forced place windstorm coverage" on the property, adding the alleged cost to Herzig's mortgage payment. Herzig raises numerous issues with regard to his dealings with SunTrust, not the least of which was the filing of a foreclosure complaint in June, 2012 which SunTrust subsequently dismissed.
As an initial matter, the court notes that the motion of SunTrust to strike Herzig's response to the motion to dismiss as untimely recounts accurately that the response was filed well out of time. Pursuant to the Joint Local Rules for the Eastern and Western Districts of Kentucky, a response to a motion is due twenty-one days from the date of service of the motion. LR 7.1(c). Failure to timely respond may be grounds for granting the motion. Id. Herzig filed his response brief over ninety days after service of the motion to dismiss. He did not move for an extension of time. His response brief was unaccompanied by a motion for leave to file out of time. The Court has thus been offered no excuse for Herzig's complete disregard for the rules of this court, and dismissal would be justified.
However, it is the preference of this court to address fully briefed motions, and decide matters on more than mere technicalities. Therefore, the Court, in its discretion, will deny the motion to strike and will consider Herzig's response to the motion to dismiss.
Herzig filed a motion seeking oral argument on the motion to dismiss, or, alternatively, leave to amend the Complaint. Herzig states that "... if the court is inclined to grant the Defendant's Motion to Dismiss, oral arguments on the merits would be instructive and helpful." DN 13, p. 3. The Court finds that oral argument is unnecessary. The issues are uncomplicated, and the motion to dismiss has been fully briefed. Oral argument will be denied.
Herzig's motion alternatively seeks leave to amend the Complaint. The motion for leave to amend the Complaint is deficient. Herzig did not tender a proposed Amended Complaint. Herzig did not indicate what amendments he would make to the Complaint or how such amendments would cure any deficiencies. Rather, Herzig states that "In the event the court is persuaded by the Defendants' Motion, the Plaintiff should be granted leave to amend the complaint in accordance with the court's decision." Id., p. 4. He states that "an amended complaint would not be futile and we are at the earliest stage of litigation. For example, if the court believed that the Fraud count was not plead with specificity, then the Plaintiff should be granted leave to amend the complaint to plead the court with more factual allegations." Id. at 5. This motion for leave to amend was filed, in conjunction with the request for oral argument, twenty-one days after its response, and three days after SunTrust filed its reply. SunTrust filed a response in opposition to Herzig's motion, specifically calling to Herzig's attention that the motion stated no basis for leave to amend, nor referenced any tendered proposed amended pleading. Herzig filed no reply to SunTrust's opposition, nor moved for leave to tender a proposed Amended Complaint.
While leave to amend should be granted "when justice so requires, " pursuant to Fed.R.Civ.P. 15(a)(2), the court simply has been provided nothing with which to make that determination. A finding of deficiencies in the Complaint on a motion to dismiss does not establish that "justice so requires" that the plaintiff be afforded a blanket opportunity to replead the Complaint; or, in the words of the Fourth Circuit, "a "do over." Francis v. Giacomelli, 588 F.3d 186, 197 (4th Cir. 2009). As stated in Louisiana School Employees' Retirement System v. Ernst & Young, LLP, 622 F.3d 471, 485-86 (6th Cir. 2010),
In their opposition to Ernst & Young's motion to dismiss,  plaintiff asked the district court to allow them the opportunity to move for amendment should the court "grant any portion" of the motion to dismiss... As stated in PR Diamonds, Inc., "a bare request in an opposition to a motion to dismiss-without any indication of the particular grounds on which amendment is sought... does not constitute a motion within the contemplation of Rule 15(a)." Id. .. As the Belaga decision stated in affirming the district court's dismissal of the plaintiffs' complaint with prejudice:
Had plaintiffs filed a motion to amend the complaint prior to th[e] Court's consideration of the motions to dismiss and accompanied that motion with a memorandum identifying the proposed amendments, the Court would have considered the motions to dismiss in light of the proposed amendments to the complaint... Absent such a motion, however, Defendant was entitled to review of the complaint as filed pursuant to Rule 12(b)(6). Plaintiffs were not entitled to an advisory opinion from the Court informing them of the deficiencies of the complaint and then an opportunity to cure those deficiencies.
622 F.3d at 485-486 (emphasis in original), quoting Belaga v. PNC Bank, Ohio, National Assoc., 214 F.3d 776, 783-84 (6th Cir. 2000); see also, Delfrate v. Shanner, 229 F.3d 1151, 2000 WL 1206584, *2 (6th Cir. Aug. 17, 2000)(unpubl.)("... even if the district court should have considered the plaintiffs' request to amend as a formal motion... amendment would not be warranted. The plaintiffs did not indicate how amendment would cure the deficiencies of their complaint or tender a proposed amended complaint for the district court's review."). Thus, for the foregoing reasons, leave to amend the complaint will be denied.
The court will address the sufficiency of the claims seriatim.
To overcome a motion to dismiss, a complaint must contain sufficient facts to state a claim for relief that is "plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). As explained in Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009),
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. [ Twombly, supra . ] at 556, 127 S.Ct. 1955. The plausibility standard is not akin to a "probability requirement, " but it asks for more than a sheer possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of entitlement to relief.'" Id.., at 557, 127 S.Ct. 1955 (bracket omitted).
This matter was filed in this court under our diversity jurisdiction. The Complaint alleges that Herzig is a citizen of Kentucky, and SunTrust, in its various forms, is a citizen of Georgia and Virginia. Herzig further alleges that the amount in controversy exceeds $75, 000.00.
With respect to venue, Herzig alleges that "[v]enue is proper because although, the underlying obligations are governed by Florida law, the execution of the documents were [sic] in Florida, the loan originated in Florida, the underlying collateral is in Florida and Defendant conducted substantial business dealings with Plaintiff in Florida, Defendant additionally had another loan and mortgage relationship with Herzig in Kentucky. Further, Defendant's acts that substantially give rise to this cause of action are that Defendant via email, mailings, and telephone calls fraudulently induced Plaintiff to make improper payments to Defendants." DN 1, ¶ 8.
Apparently, SunTrust concedes that this court has personal jurisdiction over it. In its motion to dismiss, it has not disputed Herzig's assertion that the court can exercise personal jurisdiction via the Kentucky long-arm statute, KRS 454.210, as SunTrust allegedly conducts business in Kentucky. DN 1, ¶ 7. See King v. Taylor, 694 F.3d 650 (6th Cir. 2012)(test for finding forfeiture of a personaljurisdiction defense through conduct: defendant given plaintiff a reasonable expectation that defendant will defend suit or caused court to go to effort that would be wasted if personal jurisdiction lacking).
Florida substantive law applies to the state law claims in this case. The Mortgage states that federal law and the law of the jurisdiction in which the property is located govern. DN 4-2, p. 12, ¶ 16. The complaint alleges that the property is located in Florida, the loan originated and the documents were executed in Florida. DN 1, ¶ 8. Herzig also alleged that the obligations are governed by Florida law. Id. For some unknown and unstated reason, Herzig cites exclusively to Kentucky cases in his brief. Herzig's brief in opposition to SunTrust's motion to dismiss is nonresponsive inasmuch as he has failed to address and distinguish any of the caselaw relied upon by SunTrust. Despite the fact that the motion therefore stands virtually unopposed, the court will address each claim and the applicable law relating to it. As Kentucky law does not apply, the court will disregard those state cases.
Count I: R.E.S.P.A., 12 U.S.C. § 2605(e)
In Count I of the Complaint, Herzig alleges that "on or about June 7, 2011 and August 10, 2011, Plaintiff sent a qualified R.E.S.P.A. letter to the Defendant... That as of the date of this Complaint, the Defendants have failed to comply with the demand... That is in violation of R.E.S.P.A..." DN 1, ¶¶ 39-41. This constitutes the sum total of the claim, with the incorporation of paragraphs 1 through 37.
Under the "Facts Giving Rise to this Lawsuit" section of the Complaint, paragraphs 9, 10, 21, and 22 refer to "Qualified Written Requests" which are the subject of this claim. These paragraphs state:
9. On or about August 1998, Plaintiff purchased a home located in Miami Beach, Florida (the "Property"). Plaintiff, through a mortgage broker, secured a loan for the purchase of the Property. This loan was allegedly with SunTrust Mortgage. Despite repeated requests under two different Qualified Written Requests on or about June7, 2011 and August 10, 2011, (collectively the "QWRs")(a copy of which is attached as Exhibit A ) and multiple telephone and email requests, Defendants have failed to provide proof of an original loan agreement or mortgage.
10. Plaintiff believed that he refinanced the home with SunTrust Mortgage. Despite repeated requests under two different QWRs, and multiple telephone and email requests, Defendants have failed to provide proof of an original loan agreement or mortgage...
21. Plaintiff requested through the QWRs, telephone calls, emails and letters that SunTrust Mortgage provide the information necessary to resolve this dispute.
22. SunTrust Mortgage has failed to respond to either QWR as required within 60 days, so Plaintiff now has the statutory right under Federal law, R.E.S.P.A. 12 U.S.C. § 2605(e) to file a lawsuit for damages, attorneys' fees, and costs.
In Jensen v. Quality Loan Service Corp., 702 F.Supp.2d 1183, 1196-1197 (E.D.Cal. 2010), the court found a claim under § 2605 deficient:
To the extent the FAC attempts, however inartfully, to assert a claim under § 2605, the FAC fails to allege sufficient facts to state a claim. The FAC fails to allege that JPMorgan was a loan servicer under RESPA. The FAC also fails to allege facts indicating that the written correspondence served on JPMorgan concerned the servicing of Plaintiff's loan, which is required to qualify the correspondence as a "qualified written request" under RESPA. A conclusory allegation that the correspondence was a "Qualified Written Request" is insufficient. See Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (mere "labels and conclusions" are insufficient to state a claim); see also Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 683 (9th Cir. 2009).
Here, Herzig has not alleged that SunTrust is a "loan servicer, " as defined by the statute, nor has he alleged that his "QWRs" concerned the servicing of his loan. Rather, he stated that he requested "proof of an original loan agreement or mortgage, " and makes no mention of the servicing of his loan in any respect. He did not allege how or to what extent he was damaged by the purported breach of RESPA. He merely states that SunTrust has failed to respond to his requests, and he therefore had a statutory right to file a lawsuit for damages, attorneys' fees, and costs. "[I]t is clear that merely alleging a breach of RESPA duties alone does not state a claim under RESPA. Plaintiffs must, at a minimum, also allege that the breach resulted in actual damages.'" Straker v. Deutsche Bank National Trust, No. 3:09-CV-338, 2012 WL 7829989 (M.D.Pa. April 26, 2012), quoting Hutchinson v. Delaware Sav. Bank FSB, 410 F.Supp.2d 374, 383 (D.N.J. 2006); Saldate v. Wilshire Credit Corp., 711 F.Supp.2d 1126, 1134 (E.D.Cal. 2010). See also, Boston v. Ocwen Loan Servicing, LLC, No. 3:12CV451, 2013 U.S. Dist. LEXIS 3376, *13 (W.D. N.C. Jan. 9, 2013)(RESPA allegations insufficient under Twombly where alleged ...