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Statebridge Co., LLC v. Martin-Powell, LLC

United States District Court, D. Colorado

July 3, 2019

MARTIN-POWELL, LLC, d/b/a Accumatch, Defendant.



         This matter is before the Court on Defendant's Motion to Dismiss Pursuant to F.R.C.P. 12(b)(6) [#8][1] (the “Motion”). Plaintiff filed a Response [#14] in opposition to the Motion, and Defendant filed a Reply [#18]. Pursuant to 28 U.S.C. § 636(c), the parties have consented to the undersigned for all proceedings in this matter. See Consent [#15]; Order of Reference [#16]. The Court has reviewed the Motion, the Response, the Reply, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the foregoing reasons, the Motion [#8] is DENIED.

         I. Background [2]

         This case was filed in Denver County District Court on July 27, 2018, and removed to this Court pursuant to 28 U.S.C. § 1441(a) on September 4, 2018. See Notice of Removal [#1]. Plaintiff asserts one claim for breach of contract against Defendant with respect to a Property Tax Intelligence Service Agreement (the “Agreement”) entered between the parties on or about January 23, 2015.[3] Compl. [#4] ¶¶ 11, 126-129.

         Plaintiff is a loan servicer in the mortgage industry. Id. ¶ 7. Defendant provides tax-payment processing services and tax matching services to loan servicers by ensuring that property taxes are correctly and timely paid on the real property that secures the loans serviced. Id. ¶ 8. Pursuant to the parties' January 23, 2015 Agreement, Defendant agreed to, among other things, provide tax payment services on numerous loans serviced by Plaintiff. Id. ¶ 12. Under the terms of the Agreement, Defendant “was responsible for sending the appropriate property tax payments and the appropriate back up information to remit applicable tax payments to the appropriate taxing authorities for each loan serviced by [Plaintiff] and assigned to [Defendant] under the Agreement for tax services.” Id. ¶ 13.

         In order for Defendant to perform services under the Agreement, Plaintiff was required to provide Defendant with access to Plaintiff's online imaging system known as Plaintiff's “Security Connections Incorporated” system (the “SCI system”). Id. ¶¶ 14-15. The SCI system is an electronic database that contains the information and records related to each loan Plaintiff services, including the loan documents, street addresses, and each parcel's tax identification number. Id. ¶¶ 16, 17. Defendant was obligated to review and retrieve all relevant information from the SCI system on each loan assigned under the Agreement. Id. ¶¶ 17-18. If Defendant had a reasonable belief that any information contained in the SCI system was inaccurate or insufficient, Defendant agreed to notify Plaintiff of the issue within two business days after conducting the review. Id. ¶ 19.

         Central to the instant Motion [#8] is Section 9 of the Agreement, entitled “Liability, ” which provides in full:

The liability of Accumatch [(Defendant's business name)] is strictly limited to those liabilities arising from its failure to perform the services described in this Agreement. Except as specifically stated, Accumatch and its affiliates, officers, directors, shareholders, employees, agents, successors or assigns are not liable for any indirect, special or incidental or consequential damages of any kind (including, but not limited to, loss of profits, interest, earnings or use) whether arising in contract, tort or otherwise, for the following: (i) any damages and/or losses resulting from inaccurate or incomplete data provided by [Statebridge] or its previous tax service vendor; (ii) errors attributed to changes in the taxing authority's assessment data made after Accumatch enters the loan information into its system and for which Accumatch does not receive written or electronic notice from [Statebridge], including property address changes, legal description changes, split parcels and inactivated parcels; (iii) any losses in excess of the lesser of the total amount due on the mortgage, the value of the property, or the purchase price of the loan by the investor; (iv) any losses that occurred prior to the set-up completion date onto the Accumatch system; and, (v) on any property where Accumatch presented delinquent taxes to the client and no action was taken at the time delinquent taxes were originally identified.
All claims from [Statebridge] must be presented in writing to Accumatch and must identify the specific loan along with a copy of the most recent tax bill or statement issued since the error was discovered, or other proof if a tax bill or statement is not available. All claims must be presented within 30 days of discovery by [Statebridge]. In no event shall a claim be presented after [Statebridge] terminates this Agreement without cause[.] Furthermore, the latest any claim may be presented is the later of the next tax installment due date for the property to which the error is attributable or within six (6) months of the date the error was committed by Accumatch.
Accumatch agrees to maintain errors and omissions coverage of no less than $5, 000, 000 in coverage. Accumatch agrees to provide a copy of the related policy to [Statebridge] within 15 days of execution of this Agreement and at any time upon [Statebridge's] written request.

[#1-2] at 18-19. The parties do not appear to dispute that the Agreement, including Section 9, was “bilaterally negotiated by legal counsel.” See Motion [#8] at 9, Response [#14].

         In the Complaint [#4], Plaintiff generally alleges that Defendant breached the Agreement by failing to disburse funds and pay property taxes on the covered loans and associated properties, and never notified Plaintiff of any inaccuracies regarding the information stored on the SCI system. See generally Compl. [#4] ¶¶ 20-127. Plaintiff asserts one breach of contract claim which primarily concerns three specific loans that were subject to the Agreement: (1) Loan 11671 (the “Smith Loan”); (2) Loan 25604 (the “McDonald Loan”); and (3) Loan 18781 (the “LaFountain Loan”). Id. ¶¶ 21-123. Plaintiff further alleges that Defendant breached the Agreement as to 110 other loans which Plaintiff itemizes in Exhibit 2 of the Complaint. Id. ¶¶ 124-27; [#1-2] at 21-26.

         In the Motion, Defendant seeks to dismiss Plaintiff's breach of contract claim in its entirety pursuant to Rule 12(b)(6), on the grounds that Plaintiff failed to comply with, or allege compliance with, the notice requirement set forth in Section 9 (paragraph three) of the Agreement. [#8] at 2. Defendant further argues that Plaintiff “makes no attempt whatsoever to allege any facts to support any claim for damage as to any of the properties listed in Exhibit 2.” Id. at 9.

         II. Standard of Review

         A. Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6)

         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test “the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994); Fed.R.Civ.P. 12(b)(6) (stating that a complaint may be dismissed for “failure to state a claim upon which relief can be granted”). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999) (citation omitted). To withstand a motion to dismiss pursuant to Rule 12(b)(6), “a complaint must contain enough allegations of fact to state a claim for relief that is plausible on its face.” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Shero v. City of Grove, Okla., 510 F.3d 1196, 1200 (10th Cir. 2007) (“The complaint must plead sufficient facts, taken as true, to provide ‘plausible grounds' that discovery will reveal evidence to support the plaintiff's allegations.” (quoting Twombly, 550 U.S. at 570)).

         “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertion[s] devoid of further factual enhancement.” Id. (brackets in original; internal quotation marks omitted).

         The Court's function in deciding a Rule 12(b)(6) motion is to determine whether the complaint has pled “sufficient facts” which, “taken as true, . . . provide ‘plausible grounds' that discovery will reveal evidence to support the plaintiff's allegations.” Shero, 510 F.3d at 1200 (quoting Twombly, 550 U.S. at 570). To survive a motion to dismiss pursuant to Rule 12(b)(6), the factual allegations in the complaint “must be enough to raise a right to relief above the speculative level.” Christy Sports, LLC v. Deer Valley Resort Co., 555 F.3d 1188, 1191 (10th Cir. 2009). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ” a factual allegation has been stated, ...

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