2012 WL 763581
D. Minn.2012Background
- Tatone sued SunTrust, Nationstar, and others in state court; case removed to federal court.
- Tatone alleged a massively interconnected set of loan transactions around properties on Rushmore Road, Hastings, Minnesota, including a 2358 Rushmore Rd property financed with multiple loans.
- Nationstar acquired the loan via assignment after SunTrust originated it; Nationstar began servicing and Foreclosure occurred in 2011.
- Tatone asserted TILA, RESPA, CFA/DPTA, FCRA and other claims seeking declarations, injunctions, rescission, damages and other relief.
- Defendants moved to dismiss (with prejudice) or for summary judgment; SunTrust also argued abandonment of several claims and improper pleading.
- Court treated Nationstar’s motion as one for summary judgment and addressed multiple counts for dismissal or judgment, as well as claims against non-served entities.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether counts were abandoned and should be dismissed | Tatone did not address several counts; claims may be revived with discovery. | Counts 1-6, 8, 10, 12 abandoned; should be dismissed with prejudice. | Counts 1-6, 8, 10, 12 dismissed with prejudice. |
| Whether Count Seven fraud claims against SunTrust meet Rule 9(b) pleading | Fraud adequately pled against SunTrust and agents. | Fraud pleadings are vague, conclusory, and improperly lumped; must be dismissed. | Count Seven against SunTrust dismissed without prejudice; must plead with particularity if re-pled; and no blanket agency theory. |
| Whether Count Eight unfair business practices survives against SunTrust | DPTA/CFA claims alleged; private attorney general relief sought. | No private right of action; single-borrower dispute lacks public benefit; standards not met. | Count Eight dismissed with prejudice as to SunTrust; Nationstar granted summary judgment on this claim. |
| Whether Count Nine breach of fiduciary duty exists given lender-borrower relationship | Lender owed fiduciary duties due to special circumstances. | No fiduciary duty absent special circumstances; no facts pleaded to show such a relationship. | Count Nine dismissed with prejudice as to SunTrust; Nationstar granted summary judgment. |
| Whether Count Eleven civil conspiracy is properly pleadable | Defendants conspired to defraud Tatone for economic gain. | Conspiracy requires underlying tort and plausible agreement; pleadings are deficient. | Count Eleven dismissed with prejudice as to SunTrust; Nationstar entitlement to summary judgment acknowledged. |
Key Cases Cited
- Barzingus v. Wilheim, 306 F.3d 17 (10th Cir. 2010) (motion to compel arbitration standard is similar to summary judgment standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must show plausible claims, not mere speculation)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (heightened pleading standard; bare assertions insufficient)
- Klein v. First Edina Nat'l Bank, 196 N.W.2d 623 (Minn. 1973) (fiduciary duty requires special circumstances)
- Toombs v. Daniels, 361 N.W.2d 801 (Minn. 1985) (fiduciary relationship requires special circumstances)
- Davis v. Merrill Lynch, Pierce, Fenner & Smith, 906 F.2d 1206 (8th Cir. 1990) (federal law uses state-law fiduciary analyses for certain relationships)
- Segelbaum v. MW Capital, LLC, 673 F.Supp.2d 875 (D. Minn. 2009) (civil conspiracy pleading requires specific facts and agreement)