Tauss v. Midland States Bank
5:16-cv-00168
W.D.N.C.Aug 30, 2017Background
- Pro se plaintiff Calvin Tauss sued Midland States Bank under RESPA (12 U.S.C. § 2605), alleging the servicer failed to timely pay insurance premiums and taxes from an escrow account, causing an insurance lapse and tax delinquency.
- Plaintiff filed an original complaint (Sept. 2016), an amended complaint within 21 days (Oct. 2016), and a supplemental/second amended pleading (Feb. 2017) reporting later tax issues; the court treated the Feb. filing as a Rule 15(d) supplement and granted leave.
- Key factual allegations: borrower paid into escrow; insurance lapsed (Sept. 2015) and storm damage was not covered; borrower sent a February 1, 2016 letter characterized as a RESPA “qualified written request” (QWR); defendant sent a March 21, 2016 “Confirmation of Payment” letter stating it would pay $10,650.98 as "full and final settlement."
- Defendant moved to dismiss under Rule 12(b)(6) arguing plaintiff failed to plead actual damages and that any disputes were resolved by accord and satisfaction; also moved to strike an April 2017 “Memorandum Act of RESPA” letter as irrelevant/impertinent.
- The court denied the motion to dismiss (finding plaintiff adequately pleaded plausible § 2605(g) and § 2605(e) claims and alleged actual damages), and granted the motion to strike the April 2017 memorandum as non-pleading or irrelevant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has jurisdiction/timeliness | Tauss filed within 3 years of alleged violations; property located in this district | N/A (defendant did not dispute venue/timeliness) | Jurisdiction proper; claims timely filed under 12 U.S.C. § 2614 |
| RESPA §2605(g) — escrow administration (failure to pay insurance/taxes) | Alleged loan required escrow payments, servicer failed to pay premiums/taxes causing lapse of insurance and tax delinquency; pleads repair costs and other losses | Argues plaintiff did not allege actual damages and defendant paid for repairs | Plaintiff pleaded sufficient factual matter to state a plausible § 2605(g) claim and alleged actual damages; denial of dismissal |
| RESPA §2605(e) — response to QWR | February 1, 2016 letter labeled a QWR; alleged inadequate/tardy response by servicer | Argues servicer responded and acted quickly (March 21 letter) | Timing of servicer's response not resolvable on 12(b)(6); complaint plausibly alleges § 2605(e) claim and survives dismissal |
| Accord and satisfaction affirmative defense | N/A (plaintiff disputes settlement effect) | Defendant contends March 21 letter and repairs establish accord and satisfaction resolving claims | Accord and satisfaction not proven on the face of the pleadings; affirmative defense cannot dispose of case at motion-to-dismiss stage |
| Motion to strike April 2017 memorandum | Plaintiff submitted a letter describing later gas/water incidents and injuries | Defendant says the filing was not a pleading, was unauthorized, and is irrelevant/impertinent | Court struck the memorandum as not a proper pleading or as irrelevant; motion to strike granted |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must contain factual matter to state a plausible claim)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must plead facts raising claim above speculative level)
- Erickson v. Pardus, 551 U.S. 89 (2007) (pro se filings are liberally construed)
- Goodman v. Praxair, Inc., 494 F.3d 458 (4th Cir. 2007) (affirmative defenses may be resolved on 12(b)(6) only if facts establishing the defense clearly appear on the face of the complaint)
- Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244 (4th Cir.) (Rule 12(b)(6) tests legal adequacy of complaint, not merits of affirmative defenses)
- Giarratano v. Johnson, 521 F.3d 298 (4th Cir. 2008) (limits on liberal pro se construction do not excuse pleading facts beyond labels and conclusions)