99 F. Supp. 3d 1372
S.D. Ind.2015Background
- Plaintiff obtained a residential mortgage from Countrywide; the loan was later owned by The Bank of New York Mellon and serviced first by Countrywide, then Bank of America, and later by Green Tree Servicing.
- Plaintiff alleges defendants wrongfully force-placed hazard insurance (late 2011 by Bank of America; April 2014 by Green Tree), charged related premiums despite Plaintiff’s coverage, and improperly handled or refused credit for payments, leading to acceleration and a pending state-court foreclosure.
- Plaintiff sent a Qualified Written Request (QWR) under RESPA to Green Tree on Feb. 11, 2014; Plaintiff alleges Green Tree failed to investigate or respond properly.
- Complaint asserts five counts: FDCPA violation (against Green Tree Servicing), RESPA violation (against Green Tree Servicing), Negligence (against Green Tree Servicing), Negligence (against Bank of America), and Tortious Interference with Contract/Business Relationship (against Green Tree Servicing and Green Tree Insurance).
- Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6); Bank of America also argued Colorado River abstention because of the ongoing state foreclosure.
- Court denied Colorado River abstention, dismissed both negligence counts (against Bank of America and Green Tree Servicing) as requiring contract-based claims or independent tort allegations, allowed the tortious interference claim to proceed, partially limited the FDCPA statutory damages request, and permitted amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court should abstain under Colorado River because of parallel state foreclosure | Plaintiff implicitly opposes abstention and proceeds in federal court | Bank of America: state foreclosure is parallel and judicial-administration favors abstention | Abstention declined; Colorado River factors weighed against abstention |
| Validity of negligence claims against Bank of America and Green Tree Servicing | Negligence for improperly force-placing insurance and failing to correct account / investigate QWR | Defs: duties arise from mortgage/escrow contract; negligence is barred absent independent tort beyond contract breach | Negligence claims dismissed without prejudice; plaintiff must plead independent tort or bring contract claim |
| Tortious interference with business relationship by Green Tree Servicing and Green Tree Insurance | Wrongful force-placement intentionally interfered with Plaintiff’s relationship with mortgage holder | Defs: no separate contract breach required; servicer acting as agent precludes liability | Claim sufficiently pleaded; tortious interference survives dismissal |
| FDCPA/RESPA damages and pleading adequacy | Alleges statutory and actual damages from FDCPA and RESPA violations tied to QWR and foreclosure harm | Defs: FDCPA statutory damages alleged exceed $1,000 cap; RESPA damages are not plausibly tied to QWR | FDCPA claim dismissed to extent it seeks > $1,000 statutory damages; RESPA and remaining FDCPA allegations survive pleading challenge |
Key Cases Cited
- Colorado River Water Conserv. Dist. v. United States, 424 U.S. 800 (1976) (establishes narrow circumstances for federal abstention where parallel state proceedings exist)
- Ambrosia Coal & Constr. Co. v. Pages Morales, 368 F.3d 1320 (11th Cir. 2004) (sets Eleventh Circuit framework and six-factor test for Colorado River abstention)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (federal courts’ obligation to exercise jurisdiction; abstention disfavored)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for pleadings under Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (applies and clarifies Twombly pleading standard)
- Tiara Condominium Ass’n, Inc. v. Marsh & McLennan Cos., 110 So.3d 399 (Fla. 2013) (negligence claims cannot rest on mere breach of contract absent independent tortious conduct)
- Florida Dep’t of Corr. v. Abril, 969 So.2d 201 (Fla. 2007) (elements required to plead negligence under Florida law)
- Hamilton v. SunTrust Mortg., Inc., 6 F. Supp. 3d 1300 (S.D. Fla. 2014) (similar force-placement and abstention analysis relied upon by the court)