United States District Court, N.D. Mississippi, Oxford Division
M. BROWN, UNITED STATES DISTRICT JUDGE
the Court are Joe Tubwell's “Motion to Strike
Defendant's Statement of Amendment of Allegations of
Jurisdiction, ” Doc. #35; and Morgan Stanley Mortgage
Capital Holdings LLC and Specialized Loan Servicing's
motion to dismiss, Doc. #7.
December 20, 2016, Joe Tubwell filed a “Verified
Complaint” in the Circuit Court of DeSoto County,
Mississippi, against “Specialized Loan Service LLC
(SLS), Agents and Successors, Loan No. 1012441108;” and
“Morgan Stanley Mortgage Capital Holdings LLC, Agents
and Successors.” Doc. #2. In his twelve-count
complaint, Tubwell alleges that the defendants collectively
own a home refinance loan made to him and Willie L.
Chalmer and that, in servicing the loan, the
defendants engaged in an array of wrongful conduct, including
wrongfully refusing to accept his payments and
“attempt[ing] to foreclose upon the property without
having provided adequate notice or opportunity to the owner
and co-borrower.” Id. at ¶¶ 13, 17,
23. Tubwell asserts numerous claims, including causes of
action brought under the “Fair Debt Collection
Act” and the Truth in Lending Act. Id. at
¶¶ 35, 48. Tubwell seeks (1) rescission of the
loan; (2) $69, 515.00 in damages “which defendants
caused plaintiff to loose [sic] in failing to acknowledge the
plaintiff's status as a co-borrower on the lone [sic] and
thereby prevented refinancing under lesser interest rate
which has thereby cause [sic] plaintiff to fall behind on
payments on home;” (3) injunctive relief; (4)
“Actual Damages;” (5) punitive damages; and (6)
attorney's fees, costs, and expenses. Id. at
January 20, 2017, the defendants, asserting diversity and
federal question jurisdiction, removed the action to this
Court. Doc. #1. Five days later, the defendants filed a
motion to dismiss. Doc. #7.
filed a motion to remand on January 26, 2017, arguing the
defendants' removal was untimely. Doc. #10. On February
1, 2017, Tubwell filed a motion for entry of default. Doc.
#12. The next day, Tubwell filed “Plaintiff's
Supplemental Motion to Remand and Response to Defendants'
Notice of Removal Filed in United States District
Court”-which the Court construes as a supplement to his
remand motion, Doc. #14; and a motion to strike the
defendants' motion to dismiss, Doc. #13. On February 6,
2017, Tubwell filed a motion to extend the deadline to
respond to the defendants' motion to dismiss, which this
Court granted in part on April 12, 2017. Doc. #17; Doc. # 28.
defendants responded in opposition to the motion for entry of
default on February 7, 2017, Doc. #18; to the motion to
remand on February 2, 2017, Doc. #15; to the supplement to
the motion to remand on February 16, 2017, Doc. #21; to the
motion to strike on February 16, 2017, Doc. #20; and to the
motion for extension on February 21, 2017, Doc. #23.
April 12, 2017, the Court denied Tubwell's motion to
remand. Doc. #28. The Court found that it had federal
question jurisdiction over the action but, because the
defendants failed to allege their citizenships, that it
lacked diversity jurisdiction. Id. at 4-7. The Court
allowed the defendants fourteen days to file a statement of
amendment pursuant to 28 U.S.C. § 1653 to adequately
allege diversity jurisdiction should they wish to re-assert
the existence of diversity jurisdiction. Id. at 10.
Based on its finding that the removal notice failed to
sufficiently allege complete diversity, the Court declined to
address the subject of amount in controversy but stated that
should the defendants re-assert diversity jurisdiction, the
Court would do so then. Id. at 7.
April 26, 2017, the defendants filed a statement amending
their allegations of diversity jurisdiction, alleging the
citizenship of their members and including additional
authority to establish the amount in controversy. Doc. #30.
Tubwell moved to strike the statement of amendment on April
28, 2017, to which the defendants responded on May 3, 2017.
Doc. #35; Doc. #38.
April 28, 2017, Tubwell filed a response to the
defendants' motion to dismiss and the defendants replied
on May 8, 2017. Doc. #37; Doc. #39. On June 2, 2017, the
defendants filed an answer and affirmative defenses to
Tubwell's complaint. Doc. #41.
argues the defendants' statement amending their
allegations of diversity jurisdiction should be stricken
because it (1) “contains citations of case law in
violation of L.U. Civ[.]R. 7(b)(2), ” and (2) was
untimely filed. Doc. #35 at 1.
Court's April 12, 2017, order, the Court allowed the
defendants fourteen days to file a statement of amendment to
adequately allege diversity jurisdiction. Because the
defendants filed their statement fourteen days later on April
26, 2017, the statement was not untimely.
Civil Rule 7(b)(2)(B) provides that “a motion may not
exceed four pages, excluding exhibits, may contain only the
grounds for the request and may not contain legal argument or
citations to case law or other secondary authority.”
The defendants' statement was filed pursuant to 28 U.S.C.
§ 1653, which states that “[d]efective allegations
of jurisdiction may be amended, upon terms, in the trial or
appellate courts.” Because the defendants'
statement is directed to amending their jurisdictional
allegations as permitted by the Court, the statement of
amendment is not a motion under the local rules.
Tubwell's motion to strike will be denied.
to Dismiss for Failure to State a Claim
defendants move to dismiss on grounds that Tubwell failed to
state a claim for each count pled in his complaint. As a
general matter, “[a] pleading that states a claim for
relief must contain … a short and plain statement of
the claim showing that the pleader is entitled to
relief.” Fed.R.Civ.P. 8(a)(2). When a complaint falls
short of this directive, a defendant may move to dismiss for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). In considering the
interplay between Rule 8 and Rule 12, the United States
Supreme Court has explained:
To survive a motion to dismiss [for failure to state a
claim], a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is
plausible on its face. 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. The plausibility standard is not
akin to a probability requirement, but it asks for more than
a sheer possibility that a defendant has acted unlawfully.
Where a complaint pleads facts that are merely consistent
with a defendant's liability, it stops short of the line
between possibility and plausibility of entitlement to
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(internal citations and punctuation omitted) (citing Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555-58 (2007)).
Under this standard, a “court must accept all
well-pleaded facts as true and view those facts in the light
most favorable to the plaintiff.” Harold H. Huggins
Realty, Inc. v. FNC, Inc., 634 F.3d 787, 803 n.44 (5th
Cir. 2011) (internal quotation marks and punctuation
“Count 1 - Gross Negligence”
alleges the defendants were grossly negligent in failing to
report his loan payments to credit reporting agencies. Doc.
#2 at ¶¶ 26-27. The defendants argue Tubwell's
gross negligence claim must fail because (1) his claim is
preempted by the Fair Credit Reporting Act
(“FCRA”) for failure to allege the defendants
reported him delinquent with malice or willful intent to
injure him; (2) his allegations are too vague and conclusory
to state a claim; and (3) his negligence claim should be
rejected because his breach of contract claims stem from the
same alleged conduct. Doc. #8 at 5.
preemption is an affirmative defense that a defendant must
plead and prove.” Fisher v. Halliburton, 667
F.3d 602, 609 (5th Cir. 2012) (citing Met. Life Ins. Co.
v. Taylor, 481 U.S. 58, 63 (1987) (other citations
omitted)). “Unless the complaint itself establishes the
applicability of a federal-preemption defense-in which case
the issue may properly be the subject of a Rule 12(b)(6)
motion-a defendant should ordinarily raise preemption in a
Rule 12(c) motion for judgment on the pleadings or a Rule 56
motion for summary judgment.” Id. (internal
FCRA was enacted “to ensure fair and accurate credit
reporting, promote efficiency in the banking system, and
protect consumer privacy.” Safeco Ins. Co. of Am.
v. Burr, 551 U.S. 47, 52, (2007). “The FCRA
preempts state law ... negligent reporting claims unless the
plaintiff consumer proves ‘malice or willful intent
to injure' h i m . ” Young v. Equifax
Credit Info. Servs., Inc., 294 F.3d 631, 638 (5th Cir.
2002) (citing 15 U.S.C. § 1681h(e) (emphasis added));
see Morris v. Equifax Info. Servs., LLC, 457 F.3d
460, 471 (5th Cir. 2006) (referencing “the
‘malice' exception to preemption under section
1681h(e)”). Therefore, for Tubwell's gross
negligence claim to survive, he must have pled that the
defendants acted with malice or willful intent to injure him
in their failure to report his payments to the credit bureau.
Allegations of malice and willful intent to injure
“the FCRA does not define malice, ” the Fifth
Circuit has “applied the common-law standard, ”
which requires the plaintiff to show that the defendant
“published the false statements about [him] knowing the
statements were false or with reckless disregard of whether
they were false.” Morris, 457 F.3d at 471
(citing Cousin v. Trans Union Corp., 246 F.3d 359,
375 (5th Cir. 2001)). Reckless disregard means that
“the defendant in fact entertained serious doubts as to
the truth of his publication.” St. Amant v.
Thompson, 390 U.S. 727, 731 (1968). Accordingly,
“[n]egligence, lack of investigation, or failure to act
as a reasonably prudent person are insufficient to show
actual malice.” Duffy v. Leading Edge Prods.,
Inc., 44 F.3d 308, 313 (5th Cir. 1995) (citation
omitted). Lastly, “[t]he term ‘willful' in
[the FCRA] context has been interpreted to require that a
defendant knowingly and intentionally commit an act in
conscious disregard to the rights of others.”
Rivera v. Countrywide Fin. Corp., No. 1:04-cv-103,
2006 WL 2431391, at *4 (S.D.Miss. Aug. 21, 2006) (citation
alleges that the defendants knew he and Chalmer jointly
entered into the loan and that Tubwell made all loan payments
but that the defendants “intentionally and negligently
failed to report such actions to the credit bureau which
negligence caused plaintiff harm [and] disqualified him from
securing refinancing and a lower interest rate.” Doc.
#2 at ¶ 27. In his plea for damages, Tubwell alleges the
defendants' actions were “wrongful, intentional and
malicious.” Id. at ¶ 54. Based on these
allegations, Tubwell has sufficiently alleged specific facts
to support an inference that the defendants acted with
malice. Because Tubwell alleges the defendants knew he made
all loan payments, any reporting that Tubwell was not making
payments implies the defendants knew the reporting was false.
Construing the complaint liberally and taking Tubwell's
allegations as true, Tubwell's gross negligence claim is
sufficiently pled and not preempted.
Same conduct as breach of contract claims
breach of a contract (whether described as
‘negligent' or not) is not actionable in tort under
an ordinary negligence theory unless breaching the contract
also breached a duty of care recognized by tort law. There
must be a duty of care ‘fixed by law and independent of
the contract.'” Clausell v. Bourque, 158
So.3d 384, 391 (Miss. Ct. App. 2015) (en banc) (quoting
Hazell Mach. Co. v. Shahan, 161 So.2d 618, 624
review of Tubwell's contract claims leads the Court to
conclude that his gross negligence allegations are not
founded on his breach of contract claims. Tubwell's
negligence claim is based on the defendants' independent
duty under the FCRA to accurately report his loan payments to
credit reporting agencies; thus, the defendants' duty is
fixed by law and independent of any contract. Accordingly,
the defendants' motion to dismiss will be denied as to
Tubwell's gross negligence claim in Count 1.
“Count 2 - Fraud and Misrepresentation”
grounds for the dismissal of Tubwell's “fraud and
misrepresentation” count, the defendants argue Tubwell
has failed to plead such claims with particularly as required
by Federal Rule of Civil Procedure 9(b). Specifically, the
defendants argue Tubwell has not alleged a misrepresentation
by SLS or Morgan Stanley, the individual responsible for the
misrepresentation, and when or where the misrepresentation
was made. Doc. #8 at 5-6.
does not specify whether Count 2 includes a claim for
negligent misrepresentation or whether his misrepresentation
claim is the same as his fraud claim. He simply
“re-asserts” each preceding paragraph of the
complaint, adding that the defendants' actions constitute
a misrepresentation. Doc. #2 at ¶ 30. Whether negligent
and/or fraudulent misrepresentation is alleged, Tubwell's
Count 2 claims fail.