ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT WELLS FARGO BANK, N.A.’S MOTION TO DISMISS
THIS CAUSE is before the Court upon Defendant Wells Fargo Bank, N.A. (“Wells Fargo”)’s Motion to Dismiss Plaintiffs Amended Complaint [DE 20], filed herein on January 13, 2012. The Court has carefully considered the Motion, Response [DE 23], Reply [DE 30], and is otherwise fully advised in the premises.
I. BACKGROUND
Plaintiff Michael Foley filed a Complaint [DE 1] against Defendant in state court on October 6, 2011. [DE 1-1] at pp. 5-7. Defendant removed the action to this Court on October 27, 2011 on the basis of federal question jurisdiction. See 28 U.S.C. §§ 1331, 1441. On December 30, 2011, Plaintiff filed his Amended Complaint [DE 19], alleging a single cause of action for violations of the Truth in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq.
Plaintiffs Amended Complaint alleges as follows:
At all times material hereto, Plaintiff owned a home, which is Plaintiffs primary residence, located at
In Count I — Violation of TILA § 131(g) [15 U.S.C. § 1641(g)], Plaintiff alleges that, at all relevant times, Wells Fargo was and is the creditor of the subject note and mortgage. ¶ 10. Additionally, at all relevant times, [non-party] Wells Fargo Home Mortgage, Inc. was and is the servicer of the subject note and mortgage. ¶ 11. At some time on or about October 7, 2010, the subject Note and mortgage securing same were sold or otherwise transferred to the Defendant by virtue of an Assignment of Mortgage and/or an indorsement on the note specifically indorsed without recourse to Wells Fargo. ¶ 12. Plaintiff alleges that Defendant did not send Plaintiff notice of the October 7, 2010 sale or transfer of the mortgage loan within 30 days pursuant to TILA § 131(g) [15 U.S.C. § 1651(g)]. Plaintiff alleges that pursuant to 15 U.S.C. § 1640(a), he is entitled to actual damages, statutory damages, costs, and attorney’s fees. ¶ 14. Plaintiff also demands a trial by jury on all issues so triable. See [DE 19] at p. 4.
Defendant Wells Fargo moves to dismiss Plaintiffs Amended Complaint, asserting that Plaintiff fails to state a claim upon which relief can be granted. Defendant also moves to strike Plaintiffs jury trial demand.
A. Motion to Dismiss Standard
Until the Supreme Court decision in Bell Atlantic Corp. v. Twombly,
B. Defendant’s Motion
In its Motion to Dismiss, Defendant argues that Plaintiffs claim “mischaracterizes the nature of an assignment of mortgage to Wells Fargo by Mortgage Electronic Registration Systems (“MERS”) which was executed on October 7, 2010.” To its Motion, Defendant attaches two exhibits: an Assignment of Mortgage dated October 7, 2010 [DE 20-1] and a copy of the Mortgage dated January 22, 2007 [DE 20-2], Defendant argues that these documents may be considered by the Court on a motion to dismiss because they are referenced in the Amended Complaint and are central to the claim, even though they are not attached to the Amended Complaint. See Brooks v. Blue Cross & Blue Shield of Fla., Inc.,
A. Failure to state a claim for violation of TILA § 131(g) [15 U.S.C. § rni(g)]
Plaintiffs only claim against Defendant is for violation of TILA § 131(g) [15 U.S.C. § 1641(g) ]. TILA is a consumer protection statute that seeks to “avoid the uninformed use of credit” through the “meaningful disclosure of credit terms,” thereby enabling consumers to become informed about the cost of credit. 15 U.S.C. § 1601(a). In addition to empowering the Federal Trade Commission to enforce its provisions, 15 U.S.C. § 1607(c), and imposing criminal liability on persons who wilfully and knowingly violate the statute, 15 U.S.C. § 1611, TILA creates a private cause of action for actual and statutory damages for certain disclosure violations, 15 U.S.C. § 1640(a). In particular, § 1641(g) reads as follows:
(g) Notice of new creditor
(1) In general
In addition to other disclosures required by this subchapter, not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of thedebt shall notify the borrower in writing of such transfer, including—
(A) the identity, address, telephone number of the new creditor;
(B) the date of transfer;
(C) how to reach an agent or party having authority to act on behalf of the new creditor;
(D) the location of the place where transfer of ownership of the debt is recorded; and
(E) any other relevant information regarding the new creditor.
15 U.S.C. § 1641(g).
Plaintiff alleges that Wells Fargo was and is the creditor of the subject note and mortgage. ¶ 10. At some time on or about October 7, 2010, the subject Note and mortgage securing same were sold or otherwise transferred to the Defendant by virtue of an Assignment of Mortgage and/or an indorsement on the note specifically indorsed without recourse to Wells Fargo. ¶ 12. Plaintiff alleges that Defendant did not send Plaintiff notice of the October 7, 2010 sale or transfer of the mortgage loan within 30 days pursuant to TILA § 131(g) [15 U.S.C. § 1651(g) ].
Defendant argues that Plaintiff is relying upon an assignment that is not subject to 15 U.S.C. § 1641(g). First, Defendant asserts that the October 2010 Assignment of Mortgage [DE 20-1] did not assign ownership of the debt to Wells Fargo, and therefore was not a transfer of the debt which would trigger the notice requirements under § 1641(g). Rather, Defendant claims that the October 2010 Assignment of Mortgage [DE 20-1] was merely a “transfer of the MERS interest in the Plaintiffs mortgage.” See [DE 20] at p. 2. According to Defendant, the October 7, 2010 Assignment of Mortgage [DE 20-1] assigns MERS’s interest in the mortgage (a lien), not the Note (the debt). See [DE 20] at p. 4. Additionally, Defendant contends that the Note (the debt) was initially transferred to Wells Fargo prior to the May 2009 enactment of 15 U.S.C. § 1641(g). Defendant argues that § 1641(g) does not apply retroactively, and therefore any § 1641(g) claim arising from an assignment occurring prior to May 2009 must be dismissed. See Michel v. Deutsche Bank Trust Company,
In Reply, Defendant raises a new argument not raised in its Motion [DE 20], contending that Plaintiffs allegations in his Amended Complaint in this action regarding Wells Fargo’s ownership of the Note directly contradict Foley’s representations in concurrent state court litigation with Wells Fargo. Defendant argues that Plaintiff cannot provide any good reason for taking such diametrically opposed positions. Because it is improper for Defendant to raise this new argument in its Reply brief, the argument will not be considered. See, e.g., Herring v. Secretary, Dep’t of Corrections,
The Court finds the reasoning of Squires persuasive in this case. Here, in his Amended Complaint, Plaintiff alleges that, at all relevant times, Wells Fargo was and is the creditor of the subject note and mortgage. ¶ 10. (emphasis added). At some time on or about October 7, 2010, the subject Note and mortgage securing same were sold or otherwise transferred to the Defendant by virtue of an Assignment of Mortgage and/or an indorsement on the note specifically indorsed without recourse to Wells Fargo. ¶ 12. (emphasis added). The Court is not free to disregard that factual allegation' — which yields a plausible inference under Twombly and Iqbal that Defendant Wells Fargo, in fact, became Plaintiffs creditor when it obtained beneficial interest in both mortgage and note — merely because Defendant disputes it. Moreover, the Assignment of Mortgage [DE 20-1] certainly does not contradict Plaintiffs allegations in the Amended Complaint that both the note and the mortgage were transferred to Defendant. Additionally, the Court declines Defendant’s invitation to speculate that
Accordingly, Defendant’s motion to dismiss Plaintiffs § 1641(g) claim pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim shall be denied.
B. Failure to state a claim for damages under 15 U.S.C. § 1611(g)
Second, Defendant argues that Plaintiff has also failed to plead damages sufficient to state a claim under § 1641(g).
15 U.S.C. § 1640(a) provides for civil liability for certain TILA violations. In particular, that section states that any creditor that fails to comply with the notice requirement imposed by § 1641(g) “is liable to such person in an amount equal to the sum of—
“(1) any actual damage sustained by such person as a result of such failure; [and]
“(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, ... or (iv) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $400 or greater than $4,000.”
15 U.S.C. § 1640(a). In the Amended Complaint, Plaintiff alleges that, pursuant to 15 U.S.C. § 1640(a), he is entitled to actual damages, statutory damages, costs, and attorney’s fees. [DE 19] at ¶ 14.
Defendant contends that Plaintiffs failure to allege sufficient facts showing actual damages under § 1641(g), or to plead any finance charges associated with statutory damages, mandates dismissal of Plaintiffs claim. Defendant relies upon a handful of district court opinions, all outside of the Eleventh Circuit, that have addressed this issue in the few years that § 1641(g) has been in effect. See Byrd v. Guild Mortg. Co.,
Plaintiff counters that the failure to adequately allege actual damages or to allege finance charges are insufficient grounds for dismissal of a claim for violation of § 1641(g). Plaintiff notes that TILA is a remedial consumer protection statute that courts must construe liberally in the consumer’s favor in order to serve Congress’ intent. See Bragg v. Bill Heard Chevrolet, Inc.,
The parties concede that there are no circuit court of appeal decisions addressing this issue, and there is clearly a split amongst the district courts that have addressed it. Upon, consideration of the reasoning of the courts in the above-cited cases, the Court is persuaded by and adopts the analysis of the district court in Brown v. CitiMortgage, Inc.,
Next, the Brown court carefully reasoned that the plaintiffs were still eligible for the statutory damages sought in their complaint, even though they did not allege that a finance charge was levied related to the alleged § 1641(g) violation. See Brown,
The Court hereby adopts the reasoning of the district court in Brown. Accordingly, the Court finds Defendant’s position that Plaintiffs § 1641(g) must be dismissed for failure to allege sufficient facts showing actual damages, or to plead any finance charges associated with statutory damages, to be unavailing. Therefore, Defendant’s motion to dismiss on the basis that Plaintiff failed to set forth a sufficient claim for damages under § 1641(g) shall be denied.
C. Motion to Strike Plaintiff’s Jury Trial Demand
Third, Defendant argues that the Court should strike Plaintiffs jury trial demand pursuant to Federal Rule of Civil Procedure 12(f). Pursuant to Section 25 of the operative mortgage contract, Plaintiff expressly and affirmatively waived his right to a trial by jury “in any action, proceeding, claim, or counterclaim ... arising out of or in any way related to this Security Instrument or the Debt Instrument.”
Plaintiff concedes that his mortgage with his original lender contains such language; however, Plaintiff argues that the subject action for failure of Defendant to comply with the notice provisions of TILA does not arise out of the note or mortgage. Accordingly, Plaintiff argues that the jury waiver contained in the mortgage does not apply.
Defendant counters that Plaintiffs argument ignores the language of the waiver, which applies not only to actions “arising” out of the Note and Mortgage, but also to actions “in any way related” to the Note and Mortgage. Defendant argues that, because Plaintiff repeatedly references the Note in both his Amended Complaint [DE 19] and Response to Motion to Dismiss [DE 23], he cannot convince the Court that the instant action does not relate “in any way” to the subject loan documents.
The Court agrees with Defendant. The relationship between Plaintiff and Defendant arose from an alleged assignment of the subject loan documents. While Plaintiffs claim for violation of TILA likely does not “arise out of’ the loan documents, the Court concludes that the “in any way related to” provision of the jury trial waiver does encompass the instant action. Accordingly, the jury waiver necessarily applies. Defendant’s motion to strike Plaintiffs jury trial demand shall be granted.
III. CONCLUSION
Based upon the foregoing, it is ORDERED AND ADJUDGED that Defendant Wells Fargo Bank, N.A.’s Motion to Dismiss Plaintiffs Amended Complaint [DE 20] is hereby GRANTED IN PART AND DENIED IN PART as follows:
1. Defendant’s motion to dismiss Plaintiffs § 1641(g) claim pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim is hereby DENIED;
2. Defendant’s motion to dismiss Plaintiffs § 1641(g) claim for failure to sufficiently plead damages is hereby DENIED;
3. Defendant’s motion to strike Plaintiffs jury trial demand is hereby GRANTED.
Notes
. Plaintiff argues that Defendant's arguments regarding the bankruptcy of American Brokers Conduit are outside the four corners of the Amended Complaint. See [DE 23]. However, the Court may "take judicial notice of the bankruptcy court’s file and orders for the limited purpose of recognizing the judicial acts the orders represent and the subject-matter of the litigation.” Meruelo v. Robles,
. Based on the nonmovant’s lack of opportunity to rebut them, the Court will not consider arguments first raised in a Reply brief. Moreover, even if the Court were to consider Defendant’s argument, the Court would find that this argument is not appropriate for a motion dismiss, and is better considered at the summary judgment stage.
. Plaintiff also cites to state court cases addressing damages for TILA violations. See Manley v. Wichita Business College,