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Ware v. U.S. Bank National Association

United States District Court, Fifth Circuit

December 20, 2013

ADRIAN D. WARE, et al., Plaintiffs,
U.S. BANK NATIONAL ASSOCIATION, Defendants, as Trustee, purported Successor in Interest to Bank of America, National Association, as purported Successor by Merger to LaSalle Bank, National Association, as purported Trustee for Washington Mutual Mortgage Pass-Through Certificates WMALT Series 2006-5, et al.


DANIEL P. JORDAN, III, District Judge.

This removed case is before the Court on the motion of defendants U.S. Bank National Association ("U.S. Bank"), JPMorgan Chase Bank, N.A. ("Chase"), and Mortgage Electronic Registration Systems, Inc. ("MERS") (collectively, "the Defendants") to dismiss [8].[1] For the reasons that follow, the motion is granted in part as to all but the negligence/gross negligence claim against Chase, and Plaintiffs will be given an opportunity to seek leave to amend.

I. Facts and Procedural History

Plaintiffs Adrian and Tonya Ware purchased a house in the Bridgewater neighborhood of Ridgeland, Mississippi, in December 2004. To finance the purchase, the Wares executed two promissory notes and two deeds of trust in favor of defendant Metrocities Mortgage, LLC. The initial loan amount was $980, 000.00, and the loan was re-financed twice through Metrocities. In connection with a March 2006 refinance, the Wares signed two new deeds of trust in favor of MERS as beneficiary, with Metrocities as lender. The deeds secured loans from Metrocities of $1, 000, 000.00 and $260, 000.00. The Wares ultimately paid off the smaller loan, and MERS cancelled the deed of trust associated with that loan in February 2012.

As to the remaining loan, the Wares experienced financial difficulty in late 2011 and approached Chase, the servicer of the loan, about the possibility of modifying or refinancing the loan to lower the monthly payments. They allege that

[r]epresentatives of Chase advised the Wares, who were, at the time, current in their obligations on the 2006 loan, that Chase could not modify the obligation unless the Wares were behind on their note payments. Representatives of Chase further advised the Wares that they should stop making payments to Chase and call back after they were in default, which occurred over the next several months.

Compl. [1-1] ¶ 18. The Wares in fact stopped making payments on their loan. In April 2012, MERS assigned the outstanding deed of trust to U.S. Bank, which appointed a substitute trustee. On May 22, 2013, the substitute trustee issued a notice of sale, setting a foreclosure sale for June 20, 2013.

Plaintiffs filed their lawsuit in the Circuit Court of Madison County, Mississippi, on June 12, 2013. Their Complaint alleges claims for Temporary Restraining Order, Preliminary and Permanent Injunction; Breach of Covenant of Good Faith and Fair Dealing; Negligence and Gross Negligence; Recission and Cancellation of the Deed of Trust; Unjust Enrichment; Cancellation and Removal of Clouds to Title; Recission and Cancellation of the Deed of Trust; and Other Equitable Claims. Compl. [1-1] ¶ 25. U.S. Bank, Chase, and MERS moved to dismiss, plaintiffs responded in opposition, and the Defendants filed a reply. The Court has personal and subject-matter jurisdiction and is prepared to rule.

II. Standard

In considering a motion under Rule 12(b)(6), the "court accepts all well-pleaded facts as true, viewing them in the light most favorable to the plaintiff.'" Martin K. Eby Constr. Co. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999)). But "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To overcome a Rule 12(b)(6) motion, a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 555 (citations and footnote omitted). "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." Iqbal, 556 U.S. at 678.

III. Analysis

The Defendants have moved to dismiss all the Wares' claims against them with prejudice. In response, the Wares focus entirely on their claims for breach of the covenant of good faith and fair dealing and negligence, which they assert includes claims for wrongful foreclosure and negligent misrepresentation. The motion to dismiss will be granted as to the claims the Wares overlooked in their response. See Teeuwissen v. JP Morgan Chase Bank, N.A., 902 F.Supp.2d 826 (S.D.Miss. 2011) (Lee, J.) (granting motion to dismiss on claim as to which "plaintiffs have not acknowledged, much less responded to [defendant's] argument"). The Court will focus on the claims the Wares addressed.

A. Breach of the Covenant of Good Faith and Fair Dealing

The Wares allege that Chase breached the covenant of good faith and ...

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