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Donna v. Countrywide Mortgage

United States District Court, D. Colorado

December 28, 2015

COUNTRYWIDE MORTGAGE a.k.a. BOFA, BOFA, N.A., a Nationally Chartered Bank, and NATIONSTAR MORTGAGE, a Nationally Servicing Company, Defendants.


Craig B. Shaffer United States Magistrate Judge

This civil action comes before the court on: (1) “Defendant Nationstar Mortgage LLC'S Motion to Dismiss Plaintiff’s Second Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(6), ” and (2) Defendant Bank of America, N.A.’s Motion to Dismiss pursuant to Fed. R. Civ. P.12(b)(1) and (b)(6).[1] The case was directly assigned to this Magistrate Judge pursuant to 28 U.S.C. § 636(c) and D.C. COLO. LCivR 72.2. (See Order of Reference upon Consent to Jurisdiction of Magistrate Judge (Doc. # 51)). The court has reviewed the Motions, Ms. Donna’s Responses (filed June 29, 2015 and July 9, 2015) (Docs. # 41, # 43), Defendants’ Replies (filed July 16, 2015 and July 22, 2015) (Docs. # 45, # 46), the pleadings, the entire case file, and the applicable law, and is sufficiently advised in the premises.

I. Statement of the Case

Ms. Donna commenced this case in forma pauperis and in her pro se capacity on December 31, 2014. (See Doc. # 1 (Complaint), Application to Proceed in District Court without Paying Fees or Costs (Doc. # 3), “Order Granting Plaintiff Leave to Proceed Pursuant to 28 U.S.C. § 1915” (Doc. # 4)). At the court’s direction, Ms. Donna filed amended pleadings on February 2, 2015 and April 30, 2015. (See Orders (Docs. # 5, # 8), amended pleadings (Docs. # 6, # 14)). Counsel entered his appearance for Ms. Donna on March 30, 2015. (See Doc. # 11). With the court’s permission, Ms. Donna filed her Second Amended Complaint (“SAC”) on April 30, 2015 and May 5, 2015. (See Docs. # 14, # 16).[2] Ms. Donna alleges nine claims for: (1) “Breach of Contract Misapplication of Payments or Inaccurate Accounting” [sic] against both Defendants; (2) “Failure of Lender [BANA] to Honor Modification of Previous Lender and Servicer;” (3) Failure of Servicer Nationstar to Honor Modification of Previous Lender and Servicer;” (4) “Violation of the Colorado Consumer Protection Act” (“CCPA”) against Defendant Nationstar; (5) “Charging Unreasonable Fees” against Nationstar; (6) “Violation of the Fair Credit Reporting Act” (“FCRA”) against both Defendants; (7) “Negligence” against Nationstar; (8) “Colorado Elder Law Violation” against unspecified Defendants; and (9) “Wrongful Foreclosure” against both Defendants. (See SAC (Doc. # 16)).

II. Standard of Review

Defendants move to dismiss the SAC pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Rule 12(b)(1) empowers a court to dismiss a complaint for “lack of jurisdiction over the subject matter.” Defendant BANA’s assertion that Ms. Donna lacks standing to bring her claim under the FCRA constitutes a challenge to the allegations of subject matter jurisdiction in the SAC. See Hill v. Vanderbilt Capital Advisors, LLC, 702 F.3d 1220, 1222 (10th Cir. 2012) (“standing can be colorably characterized as an issue of subject matter jurisdiction”). As the party asserting jurisdiction, Ms. Donna bears the burden of establishing that this court has jurisdiction to hear her claims. See Celli v. Shoell, 40 F.3d 324, 327 (10th Cir.1994) (“Mere conclusory allegations of jurisdiction are not enough; the party pleading jurisdiction must allege in his pleading the facts essential to show jurisdiction.”) (internal quotation marks and citations omitted).

Rule 12(b)(6) states that a court may dismiss a complaint for "failure to state a claim upon which relief can be granted."

In reviewing a motion to dismiss, this court must look for plausibility in the complaint. Under this standard, a complaint must include enough facts to state a claim to relief that is plausible on its face. The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.

Corder v. Lewis Palmer School Dist. No. 38, 566 F.3d 1219, 1223-24 (10th Cir. 2009) (internal quotation marks and citations omitted). The burden is on the plaintiff to frame “a complaint with enough factual matter (taken as true) to suggest” that she is entitled to relief. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007).

III. Analysis

A. First, Second, and Third Claims for Relief

In her First Claim for Relief, Ms. Donna alleges that both Defendants “improperly applied funds (in violation of the terms in the mortgage contract), " "failed to credit funds to the account, " and refused payments "in violation of the terms of the mortgage contract." (See Doc. # 16 at 8-9 of 23). In her Second and Third Claims for Relief, she alleges that Defendants “refused to honor” and “failed to acknowledge” a loan modification allegedly made by a previous lender. (See Id. at 10-11 of 23). Nationstar has interpreted Ms. Donna’s claims for failure to honor a loan modification as breach of contract claims and Ms. Donna does not disagree. To prevail on her claims for breach of contract against Defendants, Ms. Donna must allege facts that would establish four elements: (i) the existence of a binding agreement; (ii) the plaintiff's performance of its obligations (or some justification for its non-performance); (iii) the defendant's failure to perform its obligations; and (iv) resulting damages. Xtreme Coil Drilling Corp. v. Encana Oil & Gas (USA), Inc., 958 F.Supp.2d 1238, 1243 (D. Colo. 2013) (citation omitted). See also Greenway Nutrients, Inc. v. Blackburn, 33 F.Supp.3d 1224, 1255 (D. Colo. 2014) (same).

The SAC does not specifically identify what "mortgage contract" or what specific terms have been breached. Ms. Donna's conclusory allegations are insufficient to state a claim plausible on its face as to Nationstar. See Twombley, 550 U.S. at 570 ("[C]onclusory allegations without supporting factual averments are insufficient to state a claim on which relief can be based."); Tatten v. Bank of America Corp., 912 F.Supp.2d 1032, 1040 (D. Colo. 2012) (plaintiff failed to provide factual allegations to support any one of the four elements necessary to state a breach of contract claim). Nor does Ms. Donna allege the second element: that she has performed her obligations or justification for her non-performance. She acknowledges that she was thirty five days behind on her loan and that her payments were insufficient to bring the loan current. (See Exhibit 3 to SAC (Doc. # 14-5 at 2 of 2)).[3] For these reasons, Ms. Donna’s breach of contract claims are properly dismissed. See Knowles v. Bank of America, N.A., No. 12-cv-00621-RBJ, 2012 WL 5882570, at *3 (D. Colo. Nov. 21, 2012) (dismissing borrowers’ breach of contract claim for failure to allege they paid their principal and interest payments).

Ms. Donna’s claims based on a purported loan modification implicate Colorado's Credit Agreement Statute of Frauds (“CCASF”), Colo. Rev. Stat. § 38-10-124. See Schoen v. Morris, 15 P.3d 1094, 1098, 1100 (Colo.2000) (holding that the credit agreement statute of frauds applies to promises between a lender and a third-party lender). The CCASF bars any claim by a debtor against a creditor relating to a credit agreement for a principal amount exceeding $25, 000 unless the credit agreement at issue is in writing and signed by the creditor. PayoutOne v. Coral Mortgage Bankers, 602 F.Supp.2d 1219, 1225 (D. Colo. 2009) (citing Colo. Rev. Stat. ยง 38-10-124(2)). The CCASF applies not only ...

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