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Sparks v. Fifth Third Mortgage Co.

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

December 6, 2018

LUNDY L. SPARKS, Plaintiff,
v.
FIFTH THIRD MORTGAGE COMPANY, Defendant.

          OPINION AND ORDER

          KAREN K. CALDWELL, CHIEF JUDGE.

         This matter is before the Court on the Defendant's motion for judgment on the pleadings. (DE 16). For the following reasons, the motion is GRANTED.

         I. INTRODUCTION

         This dispute arises out of a construction project gone awry. In 2006, Lundy Sparks contracted with B.A. Parker Custom Homes, LLC, to build a residence. Sparks simultaneously contracted with Fifth Third Bank to provide him a $671, 920.00 construction loan for the property. (DE 1-1 at 4). In the loan contract, Sparks authorized Fifth Third to disburse payments directly to Parker without Sparks first inspecting his new residence to ensure construction had progressed and the funds had been earned. Id. at 5. As the construction project continued, however, Parker failed to make or withheld payments to independent contractors, who filed liens being filed against the property. Sparks eventually settled those liens in state court at an expense of roughly $200, 000.00. Id. at 6.

         Here, Sparks seeks damages from Fifth Third for its alleged breach of contract. Id. at 7. Sparks alleges that Fifth Third was contractually obligated to ensure the subcontractors had been paid prior to disbursing funds to Parker, and that Sparks should be compensated for his costs in resolving the liens. Id. at 7-8. Additionally, Sparks seeks indemnity from Fifth Third for the amount he has paid to resolve liens and in an amount equal to his attorneys fees and costs incurred. Id. at 8-9.

         II. STANDARD OF REVIEW

         Federal Rule of Civil Procedure 12(c) provides that, “[a]fter the pleadings are closed- but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). The Sixth Circuit imposes the same pleading requirements on a party who files a Rule 12(c) motion for judgment on the pleadings as it does on a party who files a motion to dismiss pursuant to Rule 12(b)(6). See HDC, LLC v. City of Ann Arbor, 675 F.3d 608, 611 (6th Cir. 2012).

         Under Rule 12(b)(6), the Court must dismiss a complaint that does not state a claim for 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)). To state a plausible claim, a plaintiff must plead such facts so as to allow a court to draw a reasonable inference that the defendant is liable for the alleged misconduct. Id. (citing Twombly, 550 U.S. at 556). The Court views the complaint in the light most favorable to the plaintiff and must accept as true all well-pleaded factual allegations contained within it. Id. at 678 (citing Twombly, 550 U.S. at 570); see also City of Ann Arbor, 675 F.3d at 611 (“[T]he court must construe the complaint in the light most favorable to the plaintiff, accept all of the complaint's factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of its claim that would entitle relief.”); Ziegler v. IBP Hog Mkt., Inc., 249 F.3d 509, 511-12 (6th Cir. 2001).

         In that review, the Court looks at all the pleadings filed in the case. Gavitt v. Born, 835 F.3d 623, 640 (6th Cir. 2016); Rondigo LLC v. Twp. of Richmond, 641 F.3d 673, 680 (6th Cir. 2011). Assessment of the facial sufficiency of the complaint must ordinarily be undertaken without resort to matters outside the pleadings. Wysocki v. Int'l Bus. Mach. Corp., 607 F.3d 1102, 1104 (6th Cir. 2010). When resolving a motion to dismiss, then, a district court is limited to matters formally contained in the pleadings. However, “[i]f referred to in a complaint and central to the claim, documents attached to a motion to dismiss form part of the pleadings.” Armengau v. Cline, 7 Fed.Appx. 336, 344 (6th Cir. 2001) (quoting Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir. 1999)); see also Rondigo, L.L.C., 641 F.3d at 681 (citing Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008)) (A court may consider “exhibits attached [to the complaint], public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the [c]omplaint and are central to the claims contained therein.”).

         III. ANALYSIS

         A. Breach of Contract

         Sparks alleges that Fifth Third breached the loan contract by failing to make certain that each subcontractor had been paid prior to approving Parker's draw requests. (DE 1 at 7 ¶ 23). Specifically, Sparks claims (1) that the duty of good faith and fair dealing required Fifth Third to ensure that no liens were placed on Sparks' property prior to disbursing funds to Parker, (DE 23 at 1); (2) that Fifth Third breached the express terms of the loan contract by failing to withhold 10% of the loan proceeds for the final draw, id. at 2; and (3) that a confidential relationship between Fifth Third and Sparks created a fiduciary duty between Fifth Third and Sparks, which required Fifth Third to ensure Sparks' residence was being built properly without the attachment of liens, id.

         Resolution of all these claims hinges on the plain language of the contract between Sparks and Fifth Third. The interpretation of a contract is a question of law for the Court. Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 384 (Ky. Ct. App. 2002) (citing First Commonwealth Bank of Prestonsburg v. West, 55 S.W.3d 829, 835 (Ky. Ct. App. 2000)). In interpreting a contract, the Court's purpose “is to effectuate the intentions of the parties” in drafting the agreement. Id. In so doing, the Court relies on the plain language of the contract. “Absent an ambiguity in the contract, the parties' intentions must be discerned from the four corners of the instrument without resort to extrinsic evidence.” Id. at 385 (citing Hoheimer v. Hoheimer, 30 S.W.3d 176, 178 (Ky. 2000)). “The fact that one party may have intended different results [] is insufficient to construe a contract at variance with its plain and unambiguous terms.” Id. (citing Green v. McGrath, 662 F.Supp. 337, 342 (E.D. Ky. 1986)). Here, the plain language of the contract between Sparks and Fifth Third could not be clearer, and Sparks has failed to articulate any plausible ground for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         i. Duty of Good ...


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