ORDER
Pending before the Court are (1) Defendant Franklin Credit Management Corporation’s Motion to Dismiss Plaintiffs’ Seventh Amended Complaint (Doc. No.
The Court also considers plaintiffs’ (1) Omnibus Suggestions in Opposition to Motions to Dismiss the Seventh Amended Complaint for Failure to State a Claim (Doc. No. 376); (2) Omnibus Suggestions in Opposition for Lack of Standing (Doc. No. 377); and (3) Omnibus Suggestions in Opposition to Motions to Dismiss Seventh Amended Complaint on Limitations Grounds (Doc. No. 378). The Court also considers the various defendants’ reply suggestions (Doc. Nos. 381, 382, 383, 384, 385, 386, 387, and 388). So that the issues may be considered more efficiently, the Court -will organize its discussion of the pending motions into the three issues identified by plaintiffs: (1) standing, (2) statute of limitations, and (3) failure to state a claim.
1. Background
Plaintiffs John and Jeannette Schwartz and James G. Wong filed their original petition in this matter on October 31, 2000. See Doc. No. 47, Ex. I.
Plaintiffs are suing (1) Bann-Cor, the originating lender (and the lender in common for all the second mortgage loans at issue in this case); and (2) all of BannCor’s “downstream” assignees which purchased the loans on the “secondary mar
On March 25, 2008, Judge John M. Torrance of the Circuit Court of Jackson County, Missouri, entered an order certifying a plaintiff class, which was defined as “All individuals who, on or after October 31, 1994, obtained a ‘Second Mortgage Loan’ as defined by § 408.231.1 RSMo, from Bann-Cor Mortgage, secured by real property located in Missouri.” Doc. No. 47, Ex. 2, p. 19.
On September 21, 2010, plaintiffs requested leave to file a Sixth Amended Petition, which was granted on September 22, 2010. The Sixth Amended Petition added as a named plaintiff Terry M. Lovett (f/k/a Terry M. Brooks). Plaintiffs also named the following defendants, besides the ones listed in the Fifth Amended Petition: US Bank, NA; US Bank, NA N.D.; Wilmington Trust Company; First-plus Home Loan Owner Trusts 1997-1, 1997- 2, 1997-3, 1997-4, 1998-1, 1998-2, 1998- 3, 1998-4, and 1998-5; Empire Funding Home Loan Owner Trusts 1997-1, 1997-2, 1997-3, 1997-4, 1998-1, 1998-2, 1998-3, and 1999-1; Countrywide Home Loans, Inc.; Countrywide Home Loan Trust 2001-HLV1; Cityscape Home Loan Owner Trusts 1997-2, 1997-3, and 1997-4; Cityscape Home Equity Loan Trusts Series 1997 B and 1997 C; US Bank Trust, N.A.
On October 22, 2010, defendant Wells Fargo removed the action pursuant to the Class Action Fairness Act (“CAFA”). On April 18, 2011,
On June 24, 2011, plaintiffs and various defendants
On November 22, 2011, plaintiffs and defendant Sovereign Bank filed a joint motion to stay, indicating that they had reached a settlement. See Doc. No. 371. The Court granted the motion to stay (see Doc. No. 373), and the case remains stayed as to defendant Sovereign Bank.
On May 14, 2012, defendants Residential Funding Company, LLC and GMAC Mortgage, LLC filed a Notice of Bankruptcy and Effect of Automatic Stay (Doc. No. 392). On June 5, 2012, the Court entered its order staying the matter as to defendants Residential Funding Company, LLC and GMAC Mortgage, LLC. Doc. No. 393.
On September 2, 2011, plaintiffs filed their motion for leave to file Seventh Amended Complaint (Doc. No. 341), purportedly clarifying their claims against the defendants named in the Sixth Amended Petition. On October 4, 2011,- the Court granted the motion. Plaintiffs filed their Seventh Amended Complaint (Doc. No. 344) on October 6, 2011. Now pending are various defendants’ motions to dismiss.
II. Motions to Dismiss the Seventh Amended Complaint for Lack of Standing (Doc. Nos. 353, 361)
Defendants Wells Fargo Bank, N.A., in its individual capacity (“Wells Fargo”), Wells Fargo Bank, NA. as trustee of the Countrywide Home Loan Trust 2001-HLV1 (“Countrywide Trust”) and Wells Fargo Bank, N.A. as trustee of the PSB Lending Home Loan Owner Trust 1997-4 (“PSB 1997-4 Trust”) move to dismiss for lack of standing (Doc. No. 353). Defendant CitiMortgage, Inc. (“CitiMortgage”), joins in this motion (see Joinder, Doc. No. 361).
These defendants note that although plaintiffs have filed eight versions of their complaint over the last eleven years, they still have not connected these defendants to a named plaintiff (or, even to a putative class member, in some instances). The moving defendants assert that, although the Court directed plaintiffs to designated additional named class representatives in order to ensure the requirements of Article III and Rule 23 were met (see Order, Doc. No. 311, p. 13), plaintiffs have failed to designate named class representatives who have a connection with any of these defendants.
A. Standard
To have Article III standing, plaintiffs must show (1) they have suffered an
B. Analysis
In the Seventh Amended Complaint, defendants argue there is no specific connection pled between them and a named plaintiff.
As to Wells Fargo in its individual capacity, it is quite difficult to determine from the Seventh Amended Complaint whether certain putative class members are connected to Wells Fargo “individually as the purchaser, assignee, owner, holder and servicer of Second Mortgage Loans,” or whether the connection is through Wells Fargo serving as the trustee and paying agent for certain trusts; in paragraph 117, plaintiffs do not differentiate the capacity in which Wells Fargo has been sued to argue that it is connected to loans made to named plaintiffs David and Stacy Plocek, as well as other class members including Paula and Leticia Stegner and Timothy Thomason.
Further, as to the Countrywide Trust, plaintiffs allege that they have sued it “as a purchaser, assignee, owner, holder and servicer of one or more Second Mortgage Loans, having purchased, acquired and serviced ... the Second Mortgage Loans from Bann-Cor ... and which include, upon information and belief, one or more of the persons identified in paragraph 114 below. Doc. No. 344, ¶¶ 42 and 114. Paragraph 114 identifies numerous alleged members of the putative class,
As to PSB Trust 1997-4, plaintiffs allege it “is being sued as a purchaser, assignee, owner, holder and servicer of one or more Second Mortgage Loans, having purchased, acquired, and serviced ... more than 76 loans secured by residential real estate located in Missouri, ... and which include, upon information and belief, one or more of the persons identified in paragraph 100 above.” Doc. No. 344, ¶ 104. Paragraph 100 identifies four loans (two of which are to named plaintiffs), but does not indicate the connection between the PSB 1997-4 Trust and those individuals.
Defendant CitiMortgage notes that it is referred to only twice in the Seventh Amended Complaint, at paragraphs 25 and 26. Paragraph 25 provides CitiMortgage’s place of business. Paragraph 26 states: “CitiMortgage is being sued as a purchaser, assignee owner, holder, and servicer of one or more Second Mortgage- Loans, having purchased, acquired and serviced an as-yet undetermined number of Second Mortgage Loans from Bann-Cor or an intervening' purchaser or assignee.” Doc. No. 344, ¶ 26. Defendant CitiMortgage indicates that it has not been connected with any of the named plaintiffs, and the substance of paragraph 26 does not even identify the capacity in which it has been
[T]he relief sought in plaintiffs’ pending discovery dispute statement submitted to the Court on August 26, 2011, will be DENIED without prejudice to reassertion at a later date if plaintiffs are able to identify a- loan held or serviced by defendant Citimortgage (or, stated differently, if plaintiffs’ case against defendant Citimortgage survives defendant Citimortgage’s likely motion to dismiss related to plaintiffs’ proposed amended complaint).
Doc. No. 337, August 31, 2011, at p. 3.
Defendants suggest that, as plaintiffs did not comply with the Court’s June 9, 2011 Order which counseled that prudence required them to file a motion for leave to file an amended complaint designating additional class representatives who have a connection to the moving defendants, dismissal of the Seventh Amended Complaint is proper.
Plaintiffs respond, noting first that the Court has already rejected the moving defendants’ standing arguments in its June 9, 2011, Order (Doc. No. 311, pp. 12-13), wherein the Court cited Judge Smith’s order in Gilmor v. Preferred Credit Corp.,
Plaintiffs further argue that they have pled enough of a connection between the defendants and members of the plaintiff class to satisfy Article Ill’s standing requirements, citing the paragraphs in the Seventh Amended Complaint that defendants argue are deficient. Further, with respect to defendant CitiMortgage, plaintiffs assert, “CitiMortgage candidly admits that the limited discovery it has so far provided to Plaintiffs does establish a factual connection between CitiMortgage and a Bann-Cor originated loan made to one of the known class members in this case, namely Jerri Gaither,” (Doc. No. 377, p. 10), but that plaintiffs “did not make specific reference to CitiMortgage’s connection to the Gaither loan in the Seventh
In reply, defendants Wells Fargo, Countrywide Trust and PSB 1997-4 Trust indicate that (1) plaintiffs failed to add named plaintiffs with a connection to them, and thus have not cured the problem identified in the Court’s June 9, 2011 Order; (2) plaintiffs misinterpret the Court’s June 9, 2011 ruling as suggestive rather than mandatory, as the Court would not have entered an Order instructing plaintiffs to “designate[] additional class representatives” if plaintiffs did not need to connect a named plaintiff to each defendant; and (3) plaintiffs do not explain why they added named plaintiffs connected to certain defendants in their Seventh Amended Complaint, but why they did not add named plaintiffs connected to these moving defendants.
The Court is troubled by plaintiffs’ failure to identify named plaintiffs with a specific connection to each of the four moving defendants. The Court is particularly concerned because it appears that as to defendants PSB 1997-4 Trust, Wells Fargo, and Countrywide Trust, plaintiffs know which loans are (or may be) connected to these particular defendants, but continue to assert, “on information and belief’ the names of the plaintiffs connected to each defendant, and then plaintiffs fail to specify what that connection might be. For instance, with respect to the PSB 1997-4 Trust,, plaintiff indicates that it is responsible for certain of the loans pled at paragraph 100 of the Seventh Amended Complaint. Only four loans are mentioned at paragraph 100. Surely it would not be too much of a burden for plaintiffs to indicate which of those four loans are connected to defendant PSB 1997-4 Trust, and in what capacity they believe defendant held or serviced those loans. Similarly, as to defendant Wells Fargo, paragraph 117 of the Seventh Amended Complaint lists only three loans. Again, plaintiffs should be able to plead the connection between Wells Fargo in its individual capacity and a named plaintiff with specificity. With respect to defendant Countrywide Trust, plaintiffs have given a lengthy list of loans, one or more of which might be connected to defendant, but none of the loans are connected to a named plaintiff. Finally, with respect to defendant CitiMortgage, plaintiffs do not attempt to connect said defendant with a particular loan or named plaintiff in their Seventh Amended Complaint, but request leave to file an Eighth Amended Complaint if their Seventh Amended Complaint is found to be deficient.
At this point in time, plaintiffs have not pled sufficient facts for the Court to find constitutional standing exists as to these defendants. In the alternative, the Court finds that plaintiffs’ failure to plead a specific factual connection between these defendants and a named plaintiff means that plaintiffs have failed to state a plausible claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6). The Court believes that plaintiffs have had enough time and direction from the Court, such
III. Motions to Dismiss on Statute of Limitations (Doc. Nos. 355, 356, 357, 359, and 362)
Defendants JPMorgan Chase Bank, N.A. as successor by merger to Bank One, N.A. (“Bank One”) (Doc. No. 355); PSB Lending Corp. (“PSB”) (Doc. No. 356); Wells Fargo Bank, N.A. in its capacity as trustee of the PSB Lending Home Loan Owner Trust 1997-3 (the “PSB 1997-3 Trust”) (Doc. No. 357); Real Time Resolutions, Inc. (“Real Time”) and Old Republic Financial Acceptance Corporation (“Old Republic”) (Doc. No. 359); and CitiMortgage, Inc. (“CitiMortgage”) (Doc. No. 362) have moved to dismiss the claims against them in plaintiffs’ Seventh Amended Complaint as barred by the statute of limitations. The Court will consider each defendant’s argument, below.
A. Standard
A motion to dismiss pursuant to Rule 12(b)(6) properly raises the defense of the statute of limitations when it “appears from the face of the complaint itself that the limitation period has run.” Varner v. Peterson Farms,
B. Analysis
1. Defendant Bank One
Defendant Bank One indicates in its motion (Doc. No. 355) that plaintiffs have sued it based on a loan that BannCor Mortgage allegedly made to newly-named plaintiffs Patrick and Natalie Nasi more than 11 years ago. Plaintiffs did not sue defendant Bank One until October 6, 2011, upon the filing of the Seventh Amended Complaint (Doc. No. 344).
In their response, plaintiffs argue that their claims were filed within six years of their discovery of the facts necessary to impose liability under the MSMLA, noting that under Missouri law the statute of limitations begins to accrue when damages are capable of ascertainment. Business Men’s Assur. Co. v. Graham,
Plaintiffs argue that an actionable wrong occurred each time Bann-Cor or the Assignee Defendants collected, billed, or received a monthly loan payment from plaintiffs, as the payment and receipt of the illegal charges are separate, recurring transactions.
Defendants further argue that the continuing tort exception does not apply to plaintiffs’ claims because (1) the continuing tort argument has been rejected by this and other courts analyzing the doctrine in second mortgage cases (see Schwartz v. Bann-Cor Mortgage, Case No. 00-CV-226639-01, Order dated January 28, 2005, attached as Doc. No. 386 Ex. 1 (finding “the continuing violation theory was wrong”); D’Arcy & Associates, Inc. v. KPMG,
Upon consideration of this matter, the Court finds that questions remain as to when the cause of action accrued as to defendant Bank One. It is unclear from the face of the Seventh Amended Complaint when Bank One was assigned the loan in question (in fact, defendant Bank One asserts that it has no record of the Nasi loan), and the Court believes that the date of assignment (and when a reasonable person would have known of the assignment) may be relevant to this inquiry. Further
2. Defendant PSB
Similarly, Defendant PSB argues that it was twice sued but dismissed by plaintiffs in 2002 (when plaintiffs added PSB as a defendant in May and voluntarily dismissed it in July) and 2003-05 (when plaintiffs filed their companion case in state court in September 2003 “because the one year savings statute on dismissals is soon to expire as to those defendants dismissed without prejudice from Schwartz I,” and then voluntarily dismissed the companion case in February 2005). Until the Seventh Amended Complaint, plaintiffs did not allege a connection between PSB and any of their loans. In the Seventh Amended Complaint, plaintiffs allege claims based on two loans, to named plaintiffs Celia and Plocek, which were made in 1997. In particular, with respect to the Celia loan, plaintiffs allege: (1) Celia obtained a Second Mortgage Loan from Bann-Cor on or about May 14, 1997; (2) certain fees were “charged, contracted for or received by Bann-Cor in connection with the loan”; (3) each of the fees “was payable at closing” and “Celia paid the fees by financing them as part of the principal loan amount”; (4) the fees were disclosed on a Settlement Statement; (5) the fees allegedly violated the MSMLA; (6) Celia “made the payments due on his Second Mortgage Loan, paying the same to Bann-Cor, PSB Lending, Wells Fargo and/or a PSB Trust”; and (7) Celia made payments on the loan until in or about January 2000. See Doc. No. 344, ¶¶ 175-81.
With respect to the Plocek loan, the Seventh Amended Complaint alleges: (1) the Ploceks obtained a Second Mortgage Loan from Bann-Cor on or about June 20, 1997; (2) certain “fees were charged, contracted for or received by Bann-Cor in connection with the loan”; (3) each of the fees “was payable at closing” and the “Ploceks paid the fees by financing them as part of the principal loan amount”; (4) the fees were disclosed on a Settlement Statement; (5) the fees allegedly violated the MSMLA; (6) the Ploceks “made the payments due on their Second Mortgage Loan, paying the same to Bánn-Cor, PSB Lending, Wells Fargo, PSB Trust 1997-3 and/or Real Time”; and (7) the Ploceks continue to make payments on their loan. See Doc. No. 344, ¶¶ 197-204. Defendant PSB indicates the claims are time-barred, as the claims accrued either (1) in 1997, when the loans closed; or (2) October 2000, when plaintiffs filed their original petition.
Plaintiffs respond that the previous voluntary dismissals without prejudice entirely irrelevant. Doc. No. 378, p. 10, n. 8. Plaintiffs instead argue that they previously dismissed PSB Lending from the action based on discovery provided to them that was subsequently determined to be incomplete or incorrect, and that these previous dismissals “only show that class counsel have always acted ethically and in good faith in naming each defendant in this
In reply, PSB Lending Corp. notes specifically that an objective knowledge standard should be used as to when plaintiffs’ claims accrued, but even if a subjective knowledge standard was used, plaintiffs’ claims against PSB should be dismissed because (1) plaintiffs sued PSB in 2002 and 2003-2005, but voluntarily dismissed their claims; and (2) plaintiffs Celia and the Ploceks expressly allege that after their loans closed in 1997, they made payments to PSB (see PSB’s Motion to dismiss, Doc. No. 356, at pp. 2-4, citing the record and allegations in plaintiffs’ Seventh Amended Complaint). Therefore, the only inference is that plaintiffs knew PSB’s identity, if not in 1997, at least by 2002 when plaintiffs sued PSB, and most certainly more than six years before they sued PSB for the third time in September 2010 (6th Amended Complaint) and the fourth time in October 2011 (7th Amended Complaint). Defendant PSB further argues that the continuing violation theory should not apply, but even if it did, it would not save the Celia’s claim.
The Court finds that, under any theory, the statute of limitations has run on the Celia claim. Given that (1) the Celia loan closed in May 1997 (Doc. No. 344, ¶ 175), (2) plaintiffs allege that Celia made payments due to PSB Lending (among others), and (3) Celia stopped making payments on the loan in 2000 (Doc. No. 344, ¶ 181), the Court cannot find that Celia “discovered” the problems with the loan over ten years after Celia stopped making payments on the loan, just so as to reignite the statute of limitations.
However, with respect to the Plocek loan, the Court (as with defendant Bank One) cannot determine when the loan was transferred or assigned to defendant PSB, and so the Court does not have before it sufficient evidence to grant the motion to dismiss. Again, this argument would be better presented on summary judgment. Thus, defendant PSB’s motion (Doc. No. 356) is GRANTED IN PART as it relates to the Celia loan, and DENIED IN PART as it relates to the Plocek loan.
3. Defendant PSB 1997-3 Trust
PSB 1997-3 Trust argues similarly (Doc. Nos. 357-58) that it is alleged to have been involved with the Plocek loan, which the Ploceks closed on or about June 30, 1997. The PSB 1997-3 Trust asserts that it was first named in plaintiffs’ Second Amended Petition on or about May 20, 2002, and was voluntarily dismissed without prejudice on July 30, 2002. PSB 1997-3 Trust asserts that the Plocek claim accrued at the closing of their loan in 1997, or at the latest in October 2000 when plaintiffs’ filed the original petition.
In response, plaintiffs argue that the Ploceks first learned of the facts necessary to bring their claims against the PSB 1997-3 Trust on June 3, 2011, when the PSB 1997-3 Trust filed its response to interrogatory responses in June 3, 2011. Therefore, plaintiffs argue that their claims against the PSB 1997-3 Trust accrued in 2011. (Notably, the PSB 1997-3 Trust was added back in as a defendant in the Sixth Amended Petition, which was filed in September 2010.)
Although the Court agrees with defendant that it is dubious to assert that the statute of limitations began to run after the filing of the Sixth Amended Petition naming defendant PSB 1997-3 Trust as a party, the Court finds that it cannot determine. from the face of the complaint when the PSB 1997-3 Trust was transferred or assigned the loans at issue in this case. Consequently, the Court finds that this issue is one that would be better presented on summary judgment, and defendant PSB 1997-3 Trust’s motion to dismiss (Doc. No. 357) will be DENIED.
4. Defendants Real Time and Old Republic .
Defendants Real Time and Old Republic note that they were first added on September 22, 2010 in the Sixth Amended Petition, and the Court’s Order denying plaintiffs motion to remand (Doc. No. 269, p. 19) indicates that as to defendants first added in the Sixth Amended Petition (such as Real Time and Old Republic), the lawsuit “should be considered ‘commenced’ ... on September 22, 2010.” Plaintiffs allege that Real Time received payments on the Plocek loan, which closed on June 30, 1997. Doc, No. 344, ¶ 197. Plaintiffs allege that Old Republic received payments on a loan issued to named plaintiff Vicki Musgrave, Doc. No. 344, ¶ 187, which was originated by. Bann-Cor on May 10, 1997 (id. at ¶ 182), and on which Musgrave allegedly made her last payment in March 1999 (id. at 11188)., Defendants assert that the triggering event for the lawsuit occurred either in 1997 (when the loans were originated) or in 2000 (when the case was filed). Further, Old Republic argues that the statute of limitations on the Musgrave claim was triggered in 1999 at the latest, as Musgrave made the last payment on her loan in March 1999.
The Court finds that the claims against Old Republic must be dismissed, as under any theory, the statute of limitations has run on the Musgrave claim. Given that the Musgrave loan closed in 1997 and Musgrave made her last payment in 1999, the statute of limitations for Musgrave’s claim for damages under the MSMLA ran long ago. The Court cannot find that Musgrave “discovered” the problems with her loan over ten years after she stopped making payments on ,the loan, so as to somehow toll the statute of limitations. Additionally, as noted by defendant Old Republic in its reply suggestions, public records from St. Charles County indicate that Old Republic was the owner of the Musgrave loan when it was paid off, and thus plaintiffs could have determined that Old Republic .was a proper party to this suit before it was even filed in 2000. See Doc. No. 388, Ex. B, file stamped March 21, 1999. As plaintiffs have not pled a connection between Old Republic and any other loan at issue in this matter, all claims against Old Republic must be DISMISSED.
As for defendant Real Time, however, the Court cannot determine from the com
5. Defendant CitiMortgage
Given that the Court has already found that defendant CitiMortgage should be dismissed for lack of standing and for failure to state a claim, defendant CitiMortgage’s motion to dismiss on statute of limitations grounds (Doc. No. 362) is DENIED AS MOOT.
IV. Motions to Dismiss the Seventh Amended Complaint for Failure to State a Claim (Doc. Nos. 351, 353, 359, and 362)
Various of the defendants have filed motions under Rule 12(b)(6) of the Federal Rules of Civil Procedure, renewing arguments made in the previous round of motions to dismiss that plaintiffs have failed to assert sufficient factual allegations stating a plausible claim for relief against them. Notably, in Section II, above, the Court has already found that the claims against defendants Countrywide Trust, PSB 1997-4 Trust, and Wells Fargo in its individual capacity should be dismissed for failure to state a claim under Rule 12(b)(6), and therefore their motion to dismiss (Doc. No. 353) is GRANTED. Additionally, as the Court has found in Section II, above, that the claims against defendant CitiMortgage should be dismissed for failure to state a claim upon which relief can be granted, the Court will GRANT defendant CitiMortgage’s additional motion to dismiss (Doc. No. 362) for the same reasons. The Court will now consider the remaining motions.
A. Standard
Pursuant to Federal Rule of Civil Procedure 8(a)(2), a complaint must present “a short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of a short and plain statement is to provide defendants with “fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly,
B. Analysis
In the Court’s June 9, 2011, Order (Doe. No. 311), the Court held:
The use or “and/or” phraseology and lumping of all defendants together into one category results in the reader being unable to determine the exact theory of liability as to each separate defendant. Although plaintiffs complain that they would have to assert 50 separate sets of allegations as to each defendant, the Court believes that this may be necessary under the facts of this case.
*1005 Instead of granting the motion to dismiss, however, the Court finds the better course of action would be to allow plaintiffs to file a motion for leave to file an amended complaint, setting out in specific detail (in compliance with Iqbal and Twombly) their theory of the case as to each defendant.
Doc. No. 311, p. 21. Various defendants complain that the plaintiffs’ Seventh Amended Complaint fails to comply with the above edict.
1. Defendant Franklin Credit Management Corporation (Doc. No. 351)
Defendant Franklin Credit Management Corporation (“FCMC”) argues that plaintiffs’ Seventh Amended Complaint still fails to include factual allegations against FCMC that are sufficient to meet the pleading standards of Bell Atlantic Corp. v. Twombly,
Further, FCMC argues that plaintiffs’ use of the phrase “upon information and belief’ is improper, as a plaintiff should only be allowed to make allegations upon information and belief when “the facts are peculiarly within the possession and control of the defendant” or “when the belief is based on factual information that makes the inference of culpability plausible.” See Arista Records, LLC v. Doe 3,
[P]laintiffs counsel have been involved with this matter from its initial filing, approximately eleven years ago. Surely plaintiffs’ counsel must have had a reason why they named defendant Citimortgage in their sixth amended petition filed in 2010. The Court believes it is up to them to provide that reason in their pleadings in this matter; in short, they need to plead the connection between defendant Citimortgage and members of the putative class.
Doc. No. 337, p. 2. Defendant FCMC states that this reasoning is applicable to
Plaintiffs respond that they have asserted a plausible claim for relief under the MSMLA, noting that they have pled facts establishing that (1) each of the plaintiffs obtained a second mortgage loan within the meaning of the MSMLA from BannCor (Doe. No. 344, ¶¶ 1, 134-35, 143, 152, 160, 168, 176, 183, 190, 198, 206); (2) an unlawful interest rate was charged for these loans (Doc. No. 344, ¶¶ 134, 142, 147, 151, 156, 159, 164, 167, 172, 175, 179, 182, 186, 189, 194, 197, 202, 205, 209); and (3) a variety of fees “not permitted by Section 408.233.1” were “directly or indirectly charged, contracted for or received interest in violation of § 408.236.” Doc. No. 344, ¶¶ 139, 140, 146, 155, 163, 171, 184, 193, 201, 207.
Plaintiffs further assert that the Seventh Amended Complaint alleges facts sufficient to draw a reasonable inference that each of the moving defendants violated the MSMLA with respect as to at least one Bann-Cor originated loan. As to each Assignee Defendant (which plaintiffs assert encompass all the moving defendants), plaintiffs allege:
137. Since acquiring the Second Mortgage Loans, the Assignee Defendants, individually and/or through one or more trustees, servicers or other agents, directly or indirectly charged, contracted for, collected or received (and continue to directly or indirectly charge, collect, or receive) payments of principal and interest on the loans from the Second Mortgage Class, as alleged herein.
139. In connection with each of the second mortgage loans made to Plaintiffs, the Assignee Defendants that purchased and received Plaintiffs’ loans directly or indirectly charged, contracted for, collected or received interest in violation of § 408.236 and one or more fees in violation of § 408.233.1, in that the fees were either not permitted by § 408.233.1 or were in excess of the amount permitted by the MSMLA, § 408.233.1. Plaintiffs allege upon information and belief that each of the Assignee Defendants similarly charged, contracted for, collected or received the same or similar unlawful interest and fees in connection with the other Second Mortgage Loans.
141. The Second Mortgage Loans made to Plaintiffs and, upon information and belief, based on the dates and terms of the. other Second Mortgage Loans, the remaining members of the Second Mortgage Class, were “highcost” mortgages within the meaning of 15 U.S.C. § 1602(aa) in that the annual percentage*1007 rate and/or the total amount of the points and fees charged or assessed for the loans satisfied the statutory “triggers” and were such that the Assignee Defendants are liable to Plaintiffs and the members of the Second Mortgage Class as provided in 15 U.S.C. § 1641(d)(1).
Doc. No. 344, ¶¶ 137, 139, 141. Plaintiffs further allege that the specific facts to support these general allegations are set forth as to each Named Plaintiffs loan. See Doc. No. 344, ¶¶ 159 (the Brooks loan, on which plaintiffs allege the Brooks made the payments due to defendant FCMC, among others) and 197 (the Plocek loan, on which plaintiffs allege the Ploceks made payments to defendant Real Time, among others). Plaintiffs assert that all of these allegations allow the Court to draw a reasonable inference that each defendant violated the MSMLA with respect to at least one Bann-Cor originated loan.
With respect to the “and/or” issue, plaintiffs indicate that such phrase only appears 69 times in the Seventh Amended Complaint. Seventeen of those uses are in the three paragraphs used to allege this Court’s jurisdiction and venue (Doc. No. 344, ¶¶ 128-130), and plaintiffs argue that many more of those uses make their allegations more clear and concise. Plaintiffs further argue that, significantly, most of the “and/or” phrases were removed in the paragraphs describing the capacity in which defendants were being sued, specifically to make the Seventh Amended Complaint comply with the Court’s June 9, 2011 Order. Compare Doc. No. 1-1 ¶ 53 with Doc. No. 344 ¶¶ 77-78 (FCMC) and Doc. No. 1-1 ¶ 67 with Doc. No. 344 ¶¶ 107-08 (Real Time).
To the extent that defendants argue that replacing “and/or” with “and” makes the allegations ambiguous (see Doc. No. 354 at 9, n. 2), plaintiffs note that the term “and” is an inclusive conjunction indicating that all terms apply to the moving defendants, and thus leaves no ambiguity as to what is being alleged. Plaintiffs also argue that their use of the phrase “upon information and belief’ was justified, as such allegations in their Seventh Amended Complaint reflect the fact that the named plaintiffs currently have limited but imprecise factual information regarding the details of the 135 or so remaining loans at issue in this case. Plaintiffs further argue that none of the “upon information and belief’ allegations is so vague and conclusory that defendants cannot discern their meaning.
Plaintiffs also assert that they provided specific allegations explaining each moving defendants' role and connection to this case. With respect to FCMC, plaintiffs assert they have alleged a connection between FCMC and as many as ten loans and as many as sixteen class members (Doc. No. 344, ■ at ¶ 78) (wherein plaintiffs allege that FCMC “purchased and took assignment of what FCMC reported to be a portfolio of ‘scratch and dent’ loans ... on or after September 24, 2004,” and such loans were made to sixteen identified class members, including named plaintiff Brooks).
In reply, FCMC asserts that plaintiffs are pleading legal conclusions dressed up like facts. Defendant FCMC indicates that plaintiffs have simply set forth the elements of a claim under the MSMLA, but have not pled a specific connection between FCMC and a relevant loan. Instead, FCMC states that plaintiffs’ argument that the complicated loan history has thwarted their efforts to plead more concretely is incredulous, as plaintiffs have had over eleven years to discover the necessary facts as to FCMC. In particular, FCMC notes that plaintiffs subpoenaed FCMC’s loan files in September 2009, and pursuant to the subpoena FCMC produced
FCMC is being sued as the purchaser, assignee, owner, holder and servicer of an as-yet undetermined number of Second Mortgage Loans including, without limitation, the Second Mortgage Loans made to Brooks and, upon information and belief, the following additional members of the Second Mortgage Class: Mildred C. Carbin, Donna L. Dittrich, Jeffrey P. and Dianna L. Duke, William J. and Robbin Harrison, Jason A. and Carolyn S. Rodriguez, Robert C. and Tina Ruffin Jr., Louis S. and Tina .Schmidt, Ronald J. Sommer, and Laura A. and Raymond Taylor.
Doc. No. 344, ¶ 78 (emphasis added).
Upon consideration of defendant FCMC’s arguments, the Court concludes that plaintiffs have sufficiently pled a cause of action against defendant FCMC. Plaintiffs have pled a plausible connection between defendant and multiple loans, including one made to a named plaintiff. Furthermore, the Court does not find plaintiffs’ use of “and/or” and “upon information and belief’ to be as offensive as does defendant. In this case, plaintiffs’ Seventh Amended Petition is sufficient, and defendant FCMC’s motion to dismiss (Doc. No. 351) will be DENIED.
2. Defendants Real Time and Old Republic (Doc. No. 359)
Defendants Real Time Resolutions, Inc. (“Real Time”) and Old Republic Financial Acceptance Corporation (“Old Republic”) similarly move to dismiss this action, incorporating the arguments made by defendant FCMC. See Doc. No. 359.
In response, plaintiffs assert that the Seventh Amended Complaint alleges a connection between Real Time and as many as four loans and as many as seven class members. See Doc. No. 344, ¶¶ 108 and 203. Plaintiffs further assert that Real Time “is being sued as the purchaser, assignee, owner, holder and servicer of the Second Mortgage Loan made to David and Stacey Plocek ... Angela D. Blank, John and Elisa Gaddy, and William and Loyola Harvey.” Doc. No. 344, % 98. In reply, Real Time argues that plaintiffs “ignored an express order from this Court and did not cure defects in their pleading and do not meet the standards set forth” in Iqbal and Twombly. See Reply, Doc. Nos. 382.
. As discussed above in relation to defendant FCMC, the Court finds that plaintiffs have sufficiently stated a plausible claim against defendant Real Time. Plaintiffs have pled a connection between a loan held by a named plaintiff (as well as other members of the putative class) and defendant Real Time. Accordingly, defendant Real Time’s motion to dismiss (Doc. No. 359) will be DENIED on these grounds.
V. Conclusion
Therefore, for the foregoing reasons:
(1) Defendant Franklin Credit Management Corporation’s Motion to Dismiss Plaintiffs’ Seventh Amended Complaint (Doc. No. 351) is DENIED;
*1009 (2) Moving Defendants’17 Motion to Dismiss Plaintiffs’ Seventh Amended Complaint (Doc. No. 353) is GRANTED;
(3) Motion to Dismiss and Suggestions in Support of Defendant JPMorgan Chase Bank, N.A. as Successor by Merger to Bank One, N.Á., Based upon the Expiration of the Statute of Limitations (Doc. No. 355) is DENIED;
(4) Motion to Dismiss and Suggestions in Support of Defendant PSB Lending Corp., Based upon the Expiration of the Statute of Limitations (Doc. No. 356) is GRANTED IN PART as it relates to the Celia loan, and DENIED IN PART as it relates to the Plocek loan;
(5) the PSB 1997-3 Trust’s Motion to Dismiss Plaintiffs’ Seventh Amended Complaint (Doc. No. 357) is DENIED;
(6) Real Time Resolutions, Inc.’s and Old Republic Financial Acceptance Corporation’s Motion to Dismiss Plaintiffs’ Seventh Amended Complaint (Doc. No. 359) is DENIED IN PART as it relates to Real Time Resolutions, Inc., and GRANTED IN PART on statute of limitations grounds as to Old Republic Financial Acceptance Corporation;
(7) CitiMortgage, Inc.’s Joinder in Motion to Dismiss for Lack of Standing or, in the Aternative, Motion for More Definite Statement and Suggestions in Support of Motion (Doc. No. 361) is GRANTED; and
(8) Defendant CitiMortgage, Inc.’s Joinder in Motion to Dismiss Seventh Amended Complaint (Doc. No. 362) is-GRANTED IN PART as it relates to failure to state a claim and DENIED AS MOOT IN PART as it relates to1 the statute of limitations defense.
IT IS SO ORDERED.
Notes
. "Moving Defendants” include Wells Fargo Bank, N.A., in its individual capacity (“Wells Fargo”), Wells Fargo Bank, N.A. as trustee of the Countrywide Home Loan Trust 2001-HLV1 ("Countrywide Trust”), and Wells Fargo Bank, N.A. as trustee of the PSB Lending Home Loan Owner Trust 1997-4 ("PSB 1997-4 Trust”).
. The Schwartz plaintiffs settled their claims against certain defendants in 2009, and are no longer parties to the case. See Doc. No. 1, p. 3, n. 1.
. At the time of class certification, it appears the only named defendants were Bann-Cor Mortgage, the Money Store, LLC f/k/a/The Money Store Inc., Wachovia Equity Servicing Corp., LLC, as successor to HomEqServicing Corp., Master Financial, and Master Financial Asset Securitization Trusts 1997-1, 1998-1, and 1998-2. See Doc. No. 47, Ex. 2.
. This defendant is.not named in the Seventh Amended Complaint. See Doc. No. 344.
. The defendants who reported they had settled the case on June 24, 2011 are: U.S. Bank National Association in its individual and trustee capacities as enumerated in the Sixth Amended Petition; U.S. Bank National Association ND; Wilmington Trust Company in its individual and trustee capacities as enumerated in the Sixth Amended Petition; Cityscape Home Equity Loan Trust Series 1997-B and 1997-C; FirstPlus Home Loan Owner Trusts 1997- 1, 1997-2, 1997-3, 1997-4, 1998-1, 1998- 2, 1998-3, 1998-4, and 1998-5; Empire Funding Home Loan Owner Trusts 1997-1, 1997- 2, 1997-3, 1997-4, 1998-1, 1998-2, 1998- 3, and 1999-1; and Cityscape Home Loan Owner Trusts 1997-2, 1997-3,. and 1997-4.
. It appears from the briefing that defendant Wells Fargo does not dispute that it is connected to the Plocek loan as trustee for the PSB 1997-3 Trust. This does not mean that plaintiffs have pled a claim against Wells Fargo in its individual capacity.
. It appears, however, that none of the class members mentioned in paragraph 114 are named plaintiffs or proposed class representatives. Compare Doc. No. 344, ¶¶ 3-11 (Named Plaintiffs) with ¶ 114.
. Plaintiffs further note that the Court indicated the motions to dismiss for lack of standing were denied, whereas the Court denied the Rule 12(b)(6) motions without prejudice. See Doc. No. 311. Plaintiffs argue that this means that the defendants are not allowed to reassert the arguments they raised in the first motions to dismiss considered by this Court. Plaintiffs argument does not take into account that they were ordered to file an amended complaint designating additional class representatives; when plaintiffs' amended complaint does not include named plaintiffs with a connection to the defendants, plaintiffs have not cured deficiencies identified in the original complaint, and defendants are within their rights to reassert th'eir motions to dismiss.
. In their Sixth Amended Complaint (Doc. No. 1-1), plaintiffs sued "Banc One, N.A.”, but did not allege that any named plaintiffs had a connection with "Banc One, N.A.”
. Notably, although plaintiffs indicate in
. Various defendants argue that a three-year statute of limitations ought to apply; however, that argument is foreclosed by the Missouri Court of Appeals decision in Schwartz v. Bann-Cor Mortg.,
. Plaintiffs further argue as to this point that the complicated nature of the transactions in this matter should serve to toll the statute of limitations. The Court rejects this argument. Instead, as noted by defendant Real Time, plaintiffs offer no Missouri state court authority for this proposition, and “[i]t defies logic and law that Plaintiffs should be allowed to avoid the statute of limitations merely because the underlying transactions were complicated.” Doc. No. 382, p. 2.
. Plaintiffs further suggest that Missouri's usury law supports their continuing violation theory, as the state’s usury laws establish the concept that the cause of action runs from the date of payment. See RSMo § 408.030.2 (usury claim must be "brought within five years from the time when said interest should have been paid”); § 408.052.4 (claim for points or fees beyond that allowed by statute must be "brought within five years of such payment”). The Court, however, finds that Missouri’s usury statutes have very limited applicability to this MSMLA case. If the Missouri legislature had wanted the same claim accrual provisions to apply to MSMLA claims as usury claims, the legislature could have provided such a reference within the MSMLA itself.
. Plaintiffs make a final argument that the MSMLA claims in this case against all the moving defendants are timely because their liability is derivative of the liability of BannCor {see Schwartz v. Bann-Cor Mortgage,
. Notably, all of these referenced allegations detail what defendant Bann-Cor did, not what any of the other parties did or how they are related to the loans at issue.
. As noted above, defendant Old Republic's motion to dismiss on statute of limitations grounds is granted, and therefore the Court finds it unnecessary to consider this alternative ground for dismissal as to Old Republic.
. "Moving Defendants” include Wells Fargo Bank, N.A., in its individual capacity ("Wells Fargo”), Wells Fargo Bank, N.A. as trustee of the Countrywide Home Loan Trust 2001-HLV1 ("Countrywide Trust”), and Wells Fargo Bank, N.A. as trustee of the PSB Lending Home Loan Owner Trust 1997-4 ("PSB 1997-4 Trust”).