SHARION AYCOCK, District Judge.
Sandra Cummings, individually and on behalf of all of those similarly situated, filed suit in this Court on April 20, 2018, alleging various claims related to the origination and servicing of a mortgage loan entered into on March 23, 2012. Now before the Court is Defendant Wells Fargo's Motion to Dismiss for failure to state a claim [7] pursuant to the Federal Rules of Civil Procedure 12(b)(6).
On March 23, 2012, the Plaintiff's husband entered into a mortgage loan with Homeowner's Mortgage of America, Inc. The Loan was secured by the real property located at 1200 Cummings Road, Eupora, Mississippi 39744. The Plaintiff's husband executed the Note as the sole signatory, while both the Plaintiff and her husband executed the Deed of Trust. The Plaintiff alleges that at the time the Loan was entered into she and her husband believed that the Loan would contain a credit-life-insurance provision that would pay off the balance on the mortgage-note if either of them died prior to the term of the Loan.
On March 23, 2017, five years after executing the Loan, the Plaintiff's husband died. On July 11, 2017, the Plaintiff received correspondence from Wells Fargo notifying the Plaintiff that it was initiating foreclosure proceedings against the property.
Based on these facts, the Plaintiff asserts individual and putative class claims relating to the Loan, which the Plaintiff asserts she and her late husband entered into with Homeowner's Mortgage of America, Inc., which was later serviced by Wells Fargo. The Plaintiff also claims that she and her husband were provided inaccurate disclosure documents, which failed to include the credit-life-insurance provision and misrepresented the true term of the Loan. Finally, the Plaintiff claims that the Defendants misapplied payments from the Loan's escrow account to the homeowner's insurance carrier, which resulted in Wells Fargo force-placing unnecessary and overpriced homeowner's insurance on the mortgage property.
The Plaintiff, individually and on behalf of those similarly situated, asserts federal claims against Wells Fargo for violations of the: (1) Truth in Lending Act ("TILA"), (2) Real Estate Settlement Procedures Act ("RESPA"), (3) Fair Debt Collection Practices Act ("FDCPA"), and (4) Fair Credit Reporting Act ("FCRA"). The Plaintiff also asserts various state law claims including: (5) violations of Mississippi's S.A.F.E. Mortgage Act, (6) numerous fraud claims, (7) violations of Mississippi Code § 81-19-1, (8) violations of Mississippi Code § 8-18-55, (9) breach of implied faith and fair dealing, (10) negligence, (11) infliction of emotional distress, and (12) wrongful foreclosure.
On May 25, 2018, the Defendant filed its Motion to Dismiss [7], arguing that the Plaintiff lacks standing to bring her TILA, RESPA, and FCDPA claims. Similarly, the Defendant argues that the Plaintiff lacks standing to bring her S.A.F.E. Act claim because it provides no private right of action. Next, the Defendant argues that the Plaintiff's fraud based claims fail as a matter of law, as the Plaintiff failed to meet the heightened pleading standard required under Rule 9 of the Federal Rules of Civil Procedure. As to the Plaintiff's remaining claims, the Defendant argues that the Plaintiff wholly failed to satisfy federal pleading standards and thus failed to state a claim for declaratory or injunctive relief.
In deciding the Defendant's Motion to Dismiss, the Court must read the Complaint in the light most favorable to the Plaintiff and all well-pleaded, material allegations in the Complaint must be taken as true. Estelle v. Gamble, 429 U.S. 97, 112, 97 S.Ct. 285, 50 L. Ed. 2d 251 (1976). It is the purpose of a Rule 12(b)(6) motion to test the formal sufficiency of the statement for relief. Murray v. Amoco Oil Co., 539 F.2d 1385 (5th Cir. 1976). When deciding a Rule 12(b)(6) motion to dismiss, the Court is limited to the allegations set forth in the complaint and any documents attached to the complaint. Walker v. Webco Indus., Inc., 562 Fed. Appx. 215, 216-17 (5th Cir. 2014) (per curiam) (citing Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 839 (5th Cir. 2004)). However, "[d]ocuments that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim." Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th Cir. 2004).
A legally sufficient complaint must establish more than a "sheer possibility" that the plaintiff's claim is true. Ashcroft v. Iqbal, 556 U.S. 662, 678-79, 129 S.Ct. 937, 173 L. Ed. 2d 868 (2009). It need not contain detailed factual allegations, but it must go beyond labels, legal conclusions, or formulaic recitations of the elements of a cause of action. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L. Ed. 2d 929 (2007). In other words, a "[plaintiff's] complaint therefore must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955. If there are insufficient factual allegations to raise a right to relief above the speculative level, the claim must be dismissed. Id. at 555, 127 S.Ct. 1955. "[C]onclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss." Fernandez-Montes v. Allied Pilots Assn., 987 F.2d 278, 284 (5th Cir. 1993).
In her Complaint, the Plaintiff alleges that she brings the instant action on behalf of herself and as a class action, pursuant to Federal Rule of Civil Procedure 23(b)(2). She provides allegations relating to numerosity, commonality, typicality, adequacy of representation, and declaratory and injunctive relief. The Plaintiff requests the Court to declare that this action may be maintained as a class action and to certify four individual classes and four separate sub-classes.
Before addressing the Plaintiff's motion for class certification, the Advisory Committee Notes to the 2003 Amendments to Rule 23 allow a court to first decide the dispositive motions pending before the Court. The Advisory Committee Notes recognize "the many valid reasons that may justify deferring the initial certification decision," including the possibility that "[t]he party opposing the class may prefer to win dismissal or summary judgment as to the individual plaintiff without certification and without binding the class that might have been certified." FED. R. CIV. P. 23 Advisory Committee's Note to 2003 Amendment.
"In essence, the question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues. This inquiry involves both constitutional limitations on federal-court jurisdiction and prudential limits on its exercise." Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L. Ed. 2d 343 (1975). "From Article III's limitation of the judicial power to resolving `Cases and Controversies,' and the separation-of-powers principles underlying that limitation, we have deduced a set of requirements that together make up the `irreducible constitutional minimum of standing.'" Lexmark Intern, Inc. v. Static Control Components, Inc., 572 U.S. 118, 125, 134 S.Ct. 1377, 188 L. Ed. 2d 392 (2014) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L. Ed. 2d 351 (1992). To establish an Article III case or controversy, the Plaintiff must establish three elements: (1) an "injury in fact" that is "distinct and palpable," (2) traceability, and (3) redressability. Whitmore v. Arkansas, 495 U.S. 149, 155, 110 S.Ct. 1717, 109 L. Ed. 2d 135 (1990).
Apart from this minimum constitutional mandate, the Supreme Court also recognizes prudential "limits on the class of persons who may invoke the courts' decisional and remedial powers." Warth, 422 U.S. at 499, 95 S.Ct. 2197. First, courts have held that a harm resulting in a "generalized grievance" does not warrant the exercise of federal-court jurisdiction. Id. (citing Schlesinger v. Reservists to Stop the War, 418 U.S. 208, 221-227, 94 S.Ct. 2925, 41 L. Ed. 2d 706 (1974)). Second, "Even when the plaintiff has alleged injury sufficient to meet the `case or controversy' requirement, this Court has held that the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties." Id. at 221-227, S. Ct. 2925 (citing generally, Tileston v. Ullman, 318 U.S. 44, 63 S.Ct. 493, 87 S.Ct. 603 (1943)).
In its Motion to Dismiss, the Defendant does not argue that the Plaintiff lacks constitutional standing, but instead argues that the Plaintiff lacks prudential standing to bring her TILA, RESPA, and RDCPA claims. Prudential standing asks whether "this particular class of persons ha[s] a right to sue under this substantive statute." Lexmark Intern, Inc. v. Static Control Components, Inc., 572 U.S. at 127 (citation omitted). The Defendant argues that the Plaintiff lacks standing because she did not execute the Note and is therefore not obligated on the Loan. Thus, the question this case presents at this stage is whether the Plaintiff falls within the class of plaintiffs Congress authorized to bring suit under TILA, RESPA, and FDCPA.
The Plaintiff argues that even though she did not execute the Note, she is identified as a "Borrower" on the Deed of Trust and is therefore authorized to bring her claims under TILA, RESPA, and FDCPA. The Deed of Trust executed by the Plaintiff states:
The disclosure provisions set forth in TILA are clear: creditors are only required to "disclose to the person who is obligated on a consumer lease or a consumer credit transaction the information required under this subchapter."
Additionally, the Plaintiff provides no authority for the proposition that signing the Deed of Trust was sufficient to establish her as an "obligor" on the Loan. Instead, the Plaintiff argues in the alternative that even if she is not a "Borrower" or obligated on the Loan, she is certainly a third-party beneficiary with standing to bring suit under TILA, RESPA, and FDCPA. "For a thirdparty beneficiary to exist, a valid contract must first exist." GNSC Batesville, LLC v. Johnson, 109 So.3d 562 (Miss. 2013). While it is undisputed that the credit-life-insurance provision was not included in the written Loan documents, the Plaintiff argues that a valid oral contract exists due to the oral representations made by the Loan salesman prior to the execution of the Loan. However, the Mississippi Supreme Court has repeatedly held that:
Stephens v. Equitable Life Assur. Society of U.S., 850 So.2d 78, 82 (Miss. 2003) (citing Godfrey, Bassett & Kuykendall Architects, Ltd. v. Huntington Lumber & Supply Co., 584 So.2d 1254, 1257 (Miss. 1991).
Given the well-established law surrounding this issue, the Plaintiff's third-party beneficiary argument must fail. Even if the parties had a valid oral agreement prior to the execution of the Loan, such an agreement would not alter the terms of the later written contract executed on March 23, 2012. Further, Mississippi law clearly states that "insureds are bound as a matter of law by the knowledge of the contents of a contract in which they entered notwithstanding whether they actually read the policy." Id. Accordingly, any error in the contract could have been discovered by due diligence prior to the Loan's execution. Therefore, there is no valid contract as to the creditlife-insurance policy because the written Loan documents control and the Plaintiff cannot claim to be a third-party beneficiary to a non-existent contract.
After due consideration of the facts and evidence presented, the Court finds that the Plaintiff is not obligated on the Loan and is in no way considered a "Borrower." The Plaintiff does not have standing, as a third-party beneficiary or otherwise, to bring claims pursuant to TILA, RESPA, or FDCPA and these claims are dismissed with prejudice.
Even if the Plaintiff did have standing to bring her claims pursuant to TILA, RESPA, or FDCPA, the statute of limitations governing each cause of action has run,
The Plaintiff's TILA claim cannot be equitably tolled based on the facts and evidence provided. First, the Plaintiff did not diligently pursue her TILA claim, as reading the Loan documents would have immediately revealed that the credit-life-insurance provision was not included in the terms of the Loan. See Moor v. Travelers Ins. Co., 784 F.2d 623 (5th Cir. 1986) ("To clothe [herself] in the protective garb of the tolling doctrine, a plaintiff must show that the defendants concealed the reprobated conduct and despite the exercise of due diligence, he was unable to discover that conduct."). Second, the Plaintiff failed to point to any extraordinary circumstance that prevented her from discovering the non-inclusion of the credit-life-insurance provision to the terms of the Loan. Instead the Plaintiff merely asserts that her cause of action pursuant to TILA "only became discoverable, practically speaking, following the death of George Cummings." Without more, the Plaintiff's TILA claim cannot be equitably tolled and is dismissed with prejudice. See Id.
Similarly, the Plaintiff's RESPA claim cannot be equitably tolled. First, the Plaintiff did not diligently pursue her RESPA claim, as a diligent reading of the Loan documents would have revealed the allegedly improper disclosure documents. Second, the Plaintiff has failed to provide any extraordinary circumstances that prevented her from discovering that the Defendant allegedly failed to provide the mandated REPSA or Integrated TILA/RESPA Disclosure Forms. The Plaintiff merely claims that she had no way of discovering allegedly improper disclosures until her husband's death. The Plaintiff has failed to meet her burden to justify a claim for equitable tolling, as the facts provided do not give rise to the extraordinary circumstances required to toll the statute of limitations. See generally Menominee, 136 S. Ct. at 756, 193 L. Ed. 2d 652. Therefore, the statute of limitations for the Plaintiff's RESPA claim cannot be tolled and is dismissed with prejudice.
Finally, the Court cannot determine whether the Plaintiff's FDCPA claim can be equitably tolled, as the Plaintiff wholly failed to provide any facts regarding this claim. Therefore, even if the FDCPA claim was equitably tolled, it would be dismissed pursuant to 12(b)(6) for failure to state a claim. Accordingly, the Plaintiff's FDCPA claim is dismissed with prejudice.
The Plaintiff asserts that Wells Fargo violated the S.A.F.E. Mortgage Act by failing to mail a proper foreclosure notice at least 45 days prior to the foreclosure sale. However, it is well-settled that there is no private right of action for a S.A.F.E. Mortgage Act violation. See Ishee v. Federal Nat. Mortg. Assn., 641 Fed. Appx. 438, 444 (5th Cir. 2016); Griffin v. HSBC Mortg. Services, Inc., 4:14-CV-00132-DMB, 2016 WL 1090578, at *15 (N.D. Miss. Mar. 18, 2016). The Plaintiff has agreed to voluntarily dismiss her S.A.F.E. Act claim, and it is dismissed with prejudice.
In her Complaint the Plaintiff alleges that the Defendant willfully violated the FCRA. The FCRA was enacted "to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52, 127 S.Ct. 2201, 167 L. Ed. 2d. 1045 (2007). To bring a claim under the FCRA, a plaintiff must show that the 1) credit reporting agency had notice of a consumer dispute, 2) credit reporting agency notified the furnisher of the alleged dispute, and 3) furnisher failed to properly investigate the dispute. 15 U.S.C. § 1681s-2(a); see also 15 U.S.C. § 1681i(a)(2)(A).
In support of her FCRA claim, the Plaintiff provides a single conclusory allegation that the Defendant willfully violated the FCRA through "wrongful collection and credit-reporting activities." However, the Plaintiff wholly failed to point to any specific facts that could indicate that the credit reporting agency had notice of the dispute. Similarly, she failed to show that the credit reporting agency notified the Defendant. Most importantly, the Plaintiff failed to plead any facts showing that the Defendant failed to properly investigate the dispute. While detailed factual allegations are not required, a complaint "devoid of further factual enhancement" must be dismissed. Ashcroft, at 678, 129 S.Ct. 937 (quoting Bell Atlantic Corp., at 557, 127 S.Ct. 1955). Without more, the Plaintiff failed to state a claim for relief under the FCRA that is plausible on its face. Therefore, the Plaintiff's FCRA claim is dismissed with prejudice. See Bell Atlantic Corp., at 570, 127 S.Ct. 1955.
The Plaintiff asserts various fraud-based claims against the Defendant, including fraudulent misrepresentation, constructive fraud, fraudulent inducement, fraudulent deceit, and fraudulent conveyance. In addition to the standard articulated by the Supreme Court in Iqbal and Twombly,
While "[w]hat constitutes particularity will necessarily differ with the facts of each case," the Fifth Circuit has held that "Rule 9(b) requires the who, what, when, where, and how to be laid out." Benchmark Electronics, Inc. v. J.M. Huber Corp., 343 F.3d 719, 714, 724 (5th Cir. 2003) (citation omitted). Regarding the "how" requirement, "[t]he Fifth Circuit . . . and other district courts within [the circuit] have either held or strongly suggested that Rule 9(b)'s particularity requirement extends to allegations of actual reliance." In re BP P.L.C. Sec. Litig., No. 4:12-CV-1256, 2013 WL 6383968, at *39 (S.D. Tex. Dec. 5, 2013) (collecting cases). Meaning, "at a minimum, Rule 9(b) requires Plaintiffs to specify with particularity what actions [they took] or forewent in reliance upon Defendants' alleged misrepresentations." Id. at *41.
In her Complaint, the alleged acts giving rise to the misrepresentation are stated generally rather than with particularity, as the Plaintiff merely states that:
Without more, the Plaintiff's allegations fail the heightened pleading requirement of Rule 9(b). First, while the Plaintiff repeatedly mentions the Loan salesman, she failed to identify the salesman responsible for the alleged material misrepresentations or include any details related to the conversations that resulted in the misrepresentations. See Herrmann Holdings Ltd. v. Lucent Techs. Inc., 302 F.3d 552, 564-65 (5th Cir. 2002) (holding a plaintiff pleading fraud must identify the speaker and explain why the statements were fraudulent). Secondly, the Plaintiff failed to include any facts or details surrounding the timeline of the alleged misrepresentation or where the misrepresentation occurred. Finally, the Plaintiff wholly failed to meet the "how" requirement as interpreted by the Fifth Circuit.
The Plaintiff's fraud claims clearly fail to meet the particularity requirements necessary to satisfy Rule 9(b) because she has wholly failed to provide any facts that make relief from the alleged fraud conceivable — much less plausible. Thus, dismissal for failure to comply with Rule 9(b) is warranted. Alternatively, with no independent federal claims surviving, however, this Court "may decline to exercise supplemental jurisdiction" over the Plaintiff's remaining state law claims.
In her Complaint, the Plaintiff lists numerous state law claims including: violations of MCA § 81-18-55, MCA § 81-18-55, breach of implied conveyance of good faith and fair dealing, negligence, and infliction of emotional distress. However, the Plaintiff failed to address these claims in her Response [13] to the Defendant's Motion to Dismiss [7] and the Defendant correctly argues that, as a result, the Plaintiff has conceded these claims. See Jackson as Next Friend of Martin v. Town of Tutwiler, Mississippi, 2018 WL 6033596, *2 (N.D. Miss. Nov. 16, 2018); see also FED. R. CIV. P. Rule 12(b). Therefore, these claims are dismissed with prejudice.
Even if the Plaintiff properly addressed these claims in her Response, with no independent federal claims surviving the Court "may decline to exercise supplemental jurisdiction" over the Plaintiff's remaining state law claims pursuant to 28 U.S.C. § 1367.
Given the Court's finding that the Plaintiff lacks standing to bring her claims or has failed to state a claim upon which relief can be granted, the Plaintiff is disqualified as a proper class representative and the question of whether to certify the action as a class action is moot. The Plaintiff has not suffered injuries typical of all customers, as she is not in fact a customer, Borrower, or in anyway obligated on the Loan, and therefore would not adequately represent the class. Accordingly, the Plaintiff's request for class certification is dismissed without prejudice as moot.
Upon due consideration of all of the facts and evidence presented, the Defendant's Motion to Dismiss [7] is GRANTED. This case is DISMISSED with prejudice.
SO ORDERED.