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Riley v. Wells Fargo Bank N.A.

United States District Court, E.D. Kentucky, Central Division, Lexington

May 22, 2017

SALINA RILEY, Plaintiff,
WELLS FARGO BANK, N.A., Defendant.



         This matter is before the Court on Defendant's Motion for Judgment on the Pleadings [DE 13, Plaintiff's Response at ¶ 19; Defendant's Reply at ¶ 22] as well as Plaintiff's Motion to Amend Complaint [DE 23; Defendant's Response at ¶ 24]. The Court has considered these motions alongside one another, for they ask the Court to consider whether the averments made or proposed are legally sufficient to proceed toward trial at this point in the case.

         “The court should freely give leave [to amend] when justice so requires.” Fed.R.Civ.P. 15(a)(2). “[T]he thrust of Rule 15 is to reinforce the principle that cases ‘should be tried on their merits rather than the technicalities of pleadings.'“ Moore v. City of Paducah, 790 F.2d 557, 559 (6th Cir. 1986) (quoting Tefft v. Seward, 689 F.2d 637, 639 (6th Cir. 1982)). In exercising its broad discretion with respect to requests for leave to amend, the trial court may consider such factors as “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.”[1] Foman v. Davis, 371 U.S. 178, 182 (1962); General Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1130 (6th Cir. 1990).

         “A proposed amendment is futile if the amendment could not withstand a Rule 12(b)(6) motion to dismiss.” Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000) (citing Thiokol Corp. v. Dep't of Treasury, Revenue Div., 987 F.2d 376, 382-83 (6th Cir. 1993)). In determining whether dismissal on the basis of the legal sufficiency of the complaint is appropriate, a complaint must be construed in the light most favorable to the plaintiff, and all well-pleaded facts must be accepted as true. See Bower v. Fed. Express Corp., 96 F.3d 200, 203 (6th Cir. 1996). The United States Supreme Court has explained that “once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 546 (2007). This “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555. “Factual allegations must be enough to raise a right to relief above the speculative level....” Id. Accordingly, a complaint must be dismissed-and amending a complaint is futile-if the complaint does not plead “enough facts to state a claim to relief that is plausible on its face.” Id. at 570.

         With respect to Defendant's motion,

“For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment.” Southern Ohio Bank v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 479 F.2d 478, 480 (6th Cir.1973). But we “need not accept as true legal conclusions or unwarranted factual inferences.” Mixon v. Ohio, 193 F.3d 389, 400 (6th Cir. 1999). A Rule 12(c) motion “is granted when no material issue of fact exists and the party making the motion is entitled to judgment as a matter of law.” Paskvan v. City of Cleveland Civil Serv. Comm'n, 946 F.2d 1233, 1235 (6th Cir. 1991).

JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 566, 581-82 (6th Cir. 2007).

         I. Factual Averments

         In 2012, Riley obtained a mortgage loan from Primelending in the amount of $168, 550.00 with interest at 4.250% [DE 1, Compl. at ¶ 10, 11; DE 23-2, Tendered Amended Complaint (hereinafter, “Amend. Compl.”) at ¶¶ 11, 12], executing a promissory note in favor of Primelending.[2] Repayment of the loan was secured by a Mortgage, dated February 8, 2012, encumbering the real property in Richmond, Kentucky. Shortly after origination, the loan was transferred to Wells Fargo [Compl. at ¶ 12; Answer at ¶ 12; Amend. Compl. at ¶ 12.] About a year later, Plaintiff fell behind on her mortgage payments and entered into a Loan Modification Agreement with Wells Fargo in June 2013, curing her default, bringing the loan current, and reducing the interest rate to 3.750% and the monthly payment to $812.36. [Compl. at ¶ 13-14; Amend. Compl. At ¶¶ 13-14.]

         In relevant part, the mortgage provides in paragraph 9,

If (a) Borrower fails to perform the covenants and agreements contained in this Security Agreement . . . or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights . . . including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. . . . Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or danger conditions, and have utilities turned on or off.

         Riley is a Master Sergeant in the United States Army Reserves and was called to active duty and deployed to Fort Bliss, Texas, on March 18, 2015, where she served as the non-commissioned officer in charge of Operations for Civilians.[3] [Id. at ¶¶ 16-17; Amend. Compl. at¶¶2, 16-17.] During this time, in mid-2015, she struggled to make her monthly mortgage payments as she maintained her residence in Richmond, Kentucky, and her residence in Ft. Bliss [Compl. ¶¶17-19, 21, 60; Amend. Compl. at ¶¶ 18-19]. In late spring 2015, Riley fell victim to identity theft, becoming aware of it in August 2015, when her automated ACH withdrawals arranged for her payments for her bi-monthly mortgage payments could not be processed from her USAA account and were returned “NSF.” [Compl. at ¶¶ 21-22; Amend. Compl. at ¶¶21-22.] As soon as she realized that her withdrawals were not being processed, she contacted Defendant and made a full month (i.e., two bi-monthly) payments on September 17, 2016 [Compl. at ¶ 23; Amend. Compl. at ¶ 23 .]. She intended to make another such payment prior within a few weeks, but was advised by Defendant's agent when she called that Defendant was accelerating her loan and would not accept anything but full payment of all arrearages. [Compl. at ¶¶ 24, 28; Amend. Compl. at ¶¶ 24, 28.] Riley was unable to make a large lump-sum payment to catch up her loan for the month that she had missed and, instead, applied for another loan modification or forbearance agreement, which was provided by Defendant in December 2015: a three-month forbearance agreement under which she would pay $300/month until the end of her deployment in March 2016. [Compl. at ¶ 31; Amend. Compl. at ¶ 30.] Plaintiff made these payments in February, March, and April, renewing her application for permanent modification upon her return from active duty. [Compl. at ¶ 49; Amend. Compl. at ¶ 30, 58.]

         Riley avers that Wells Fargo, through its agent or an independent contractor engaged for such purposes, entered her home around December 21, 2015, then again on January 10, 2016, and a third time in the spring of 2016. [Compl.. at ¶ 31, 41, 50; Amend. Compl. at ¶ 42, 43, 50.] In doing so, she avers that Defendant caused property damage to the doors, plumbing, and appliances when they forced entry by prying open the doors, changed the locks, and shut off utilities. [Compl. at ¶ 36; Amend. Compl. at ¶¶ 43, 45, 50, 63-66.] Wells Fargo's agent or the independent contractor also rifled through the personal property in every single room in her home and posted conspicuous vacancy notices on the front door, effectively giving notice that she was away to anyone who happened by the home. [Compl.. at ¶¶ 36-37; Amend. Compl. at ¶¶ 45-46, 62] Defendant's agent or the independent contractor also left the back door open and unsecured. [Compl. at ¶ 36; Amend. Compl. at ¶45.] Riley's family noticed that outside patio items, including a gas grill and law furniture, began disappearing from her home after the notices were placed on the doors. [Compl. at ¶ 47; Amend. Compl. at ¶¶ 4, 53] She later discovered that tools and ammunition were missing from the home. [Id. at ¶ 58, 68-69.]

         Plaintiff avers that she spent many hours on the phone with Defendant's agents, explaining that she was on active duty and that her family and friends were monitoring her home. [Id. at ¶ 39.] She forbade further entry to Defendant after the first entry into the home, and her family changed the locks and resecured the home and removed the notices [Compl. at 39-40; Amend. Compl. at ¶ 49.] Defendant's agents or the indepdent contractor entered the home at least twice more after the initial intrusion, again breaking into a secured door and changing the locks. She returned home at the end of her active duty service, on March 17, 2016. She avers that during Wells Fargo's agent or its independent contractor's third entry into her home in the spring of 2016, it turned the utilities back on, and “un-winteriz[ed]” her home. [Compl. at ¶ 51; Amend. Compl. at ¶ 59.] She does not aver that she was prevented from or had issues with accessing the Property when she returned to Kentucky in March 2016. [Compl. at ¶¶52-58; Amend. Compl. at ¶ 61] She complains that she experienced “severe stress and overwhelming anxiety about what was happening at [her] home . . . while . . . completing her mission unable to do anything to stop it” and avers in her tendered Amended Complaint that she would try to hide her tears as she sat in her car on the phone trying to prevent Defendant from physically interfering with her home, trying to avoid the appearance that she was distracted from her mission at Ft. Bliss by the events unfolding in Richmond, Kentucky. [Compl. at ¶ 45; Amend. Compl. at ¶¶ 54, 57.]

         II. Servicemembers Civil Relief Act, 50 ...

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