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Cota v. U.S. Bank N. A.

United States District Court, D. Maine

March 10, 2016



George Z. Singal, United States District Judge.

Before the Court is the Motion to Dismiss and for a More Definite Statement with Incorporated Memorandum of Law filed by Defendants U.S. Bank National Association (“U.S. Bank”) and Wells Fargo Home Mortgage, Inc. (“Wells Fargo” and, together with U.S. Bank, “Defendants”) (ECF No. 8) (the “Motion”). For the reasons explained herein, the Court GRANTS IN PART AND DENIES IN PART the Motion.


The Federal Rules of Civil Procedure require only that a complaint contain “a short and plain statement of the grounds for the court’s jurisdiction . . . a short and plain statement of the claim showing that the pleader is entitled to relief; and a demand for the relief sought[.]” Fed.R.Civ.P. 8(a)(1)-(3). The Court assumes the truth of the complaint’s well-pleaded facts and draws all reasonable inferences in plaintiffs’ favor. Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). Under Rule 12(b)(6), the Court “may consider only facts and documents that are part of or incorporated into the complaint.” United Auto., Aero., Agric. Impl. Workers of Am. Int’l Union v. Fortuno, 633 F.3d 37, 39 (1st Cir. 2011) (internal citations omitted).

A viable complaint need not proffer “heightened fact pleading of specifics, ” but in order to survive a motion to dismiss it must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). In considering a motion to dismiss, the Court should “begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Plaintiffs must include enough facts supporting a claim for relief that “nudge[] their claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 570. “If the factual allegations in the complaint are too meager, vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the complaint is open to dismissal.” Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011) (quoting SEC v. Tambone, 597 F.3d 436, 442 (1st Cir. 2010)); see also Iqbal, 556 U.S. at 678 (stating that the Court need not accept “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements”). At this point in the litigation, “the determination of whether an issue is trialworthy simply is not the same as the determination of whether a plaintiff states a claim upon which relief can be granted.” Bodman v. Maine, Dept. of Health & Human Servs., 720 F.Supp.2d 115, 121 (D. Me. 2010) (denying motion to dismiss a hostile work environment claim).

Under Rule 12(e), a defendant may move for a more definite statement if the complaint is “so vague or ambiguous that the party cannot reasonably prepare a response.” Fed.R.Civ.P. 12(e). Rule 12(e) motions, however, are “not favored ‘in light of the availability of pretrial discovery procedures.’” Haghkerdar v. Husson Coll., 226 F.R.D. 12, 14 (D. Me. 2005) (quoting Cox v. Me. Mar. Acad., 122 F.R.D. 115, 116 (D. Me. 1988)). “Such motions are designed to strike at unintelligibility, rather than at lack of detail in the complaint and accordingly properly are granted only when a party is unable to determine the issues he must meet.” Hawkins v. Kiely, 250 F.R.D. 73, 74 (D. Me. 2008) (internal quotations omitted).


For the purposes of this Motion, the Court considers the facts as alleged in the complaint filed by plaintiffs Julie A. Cota and William A. Cota (“Plaintiffs”) in the Superior Court of the State of Maine in York County on October 22, 2015 (ECF No. 1-1) (the “Complaint”).

Plaintiffs are the owners of the real property located at 8 Harrison Avenue, York, Maine 03909 (the “York Property”). (Compl. ¶¶ 4 & 6.) Plaintiffs executed a promissory note (the “Note”) and a mortgage over the York Property (the “Mortgage”) and delivered both instruments to Wells Fargo Bank, N.A. on July 12, 2004. (Compl. ¶¶ 8 & 9.) Commencing on that date and continuing at least until the date of the Complaint, Wells Fargo has acted as the servicer of the Note and Mortgage. (Compl. ¶ 11.)

Wells Fargo sent a notice of default and right to cure, dated December 17, 2012, to Plaintiffs. (Compl. ¶ 14.) Plaintiffs then entered into discussions and negotiations with Defendants, and executed a document described in the Complaint as the “Loan Modification”[1] on April 1, 2013.[2] (Compl. ¶¶ 10 & 14.) At least while these discussions and negotiations were ongoing, U.S. Bank was the owner of the Note and Mortgage. (Compl. ¶ 13.) Defendants represented to Plaintiffs that the Loan Modification would change the monthly payments of Plaintiffs’ loan without negative financial consequences to Plaintiffs. (Compl. ¶ 37.) Plaintiffs allege further that they relied upon the terms of the Loan Modification and explanations provided by agents and employees of Defendants when they forewent their regular monthly mortgage payments by making payments under the Loan Modification. (Compl. ¶ 43.) However, Defendants did not credit the payment or payments under the Loan Modification as regular monthly payments, but rather placed such payment or payments in a “suspense” account. (Compl. ¶ 44.) Plaintiffs allege that Defendants intentionally misrepresented the terms and effect of the Loan Modification in order to obtain payments from Plaintiffs under the pretense that the payments would be credited as regular mortgage payments. (Compl. ¶ 46.)

Plaintiffs made the first payment required under the Loan Modification, but Wells Fargo did not credit Plaintiffs’ Note and Mortgage account for such payment. (Compl. ¶¶ 15-16.) This payment was considered a late payment by Defendants, and late fees and costs were assessed. (Compl. ¶ 30.) The payment was reported as a late payment to three credit reporting agencies. (Compl. ¶ 35.) Wells Fargo subsequently refused to accept any other payments under the Loan Modification. (Compl. ¶ 17.) Defendants ultimately canceled the Loan Modification, though Plaintiffs assert that the terms of the Loan Modification did not provide for its cancellation by Defendants “at any time.” (Compl. ¶¶ 61 & 41.)

Defendants commenced a civil action to foreclose on the York Property on October 18, 2013 without providing a new notice of default reflecting the payments made by Plaintiffs under the Loan Modification. (Compl. ¶ 20.) Defendants’ complaint in the foreclosure action did not make any reference to the Loan Modification or to payments made by Plaintiffs under the Loan Modification. (Compl. ¶¶ 22-23.) Plaintiffs assert that the primary purpose of the foreclosure action was “to collect additional sums of money from Plaintiffs upon the false pretext that Defendants agreed to a loan modification.” (Compl. ¶ 67.) On November 14, 2014, the foreclosure action was dismissed without prejudice by stipulation of the parties. (Compl. ¶ 27.)

Plaintiffs filed the present litigation in the Superior Court of the State of Maine in York County. The suit was removed to this Court by Defendants. (Notice of Removal (ECF No. 1) at PageID # 1.) As of the date of the filing of the Complaint, Plaintiffs remained the owners of the York Property. (Compl. ¶ 6.)


The Complaint contains twelve separate claims, eleven against both Defendants and one against Defendant Wells Fargo: unlawful late fees and costs (Count I), violation of the Maine Fair Debt Collection Practices Act (Count II), violation of the Maine Fair Credit Reporting Act (Count III), intentional misrepresentation (Count IV), negligent misrepresentation (Count V), fraud (Count VI), breach of contract (Count VII), wrongful use of civil proceedings without probable cause (Count VIII), intentional infliction of emotional distress (Count IX), tort as to Defendant Wells Fargo (Count X), violation of the Maine Unfair Trade Practices Act (Count XI), and punitive damages (Count XII). In the Motion, Defendants seek the dismissal of Counts II, III, VIII, IX, X, and XI and a more definite statement of Counts I, IV, V, VI, VII, and XII. The Court addresses each of the twelve counts below. For the reasons set forth below, the Court GRANTS the Motion with respect to Counts II, III, VIII, IX, and X, and DENIES the Motion with respect to Counts I, IV, V, VI, VII, XI, and XII.

A. Count I: Unlawful Late Fees and Costs

Plaintiffs allege in Count I that Defendants “charged unlawful late fees and costs for a late payment that were [sic] not late.” (Compl. ¶ 30.) Defendants seek a more definite statement, arguing that Plaintiffs’ claim for unlawful late fees and costs is not a cause of action, and that “Plaintiffs have not identified any document or rule that would give rise to a cause of action for assessing unlawful late fees and costs.” (Mot. at PageID # 91.)

Defendants are correct that the Complaint’s pleadings concerning Count I lack great specificity as to Plaintiffs’ theory of recovery, but they are incorrect in their conclusion that an order of a more definite statement under Rule 12(e) is the appropriate procedural response. Rule 12(e) is disfavored precisely because pretrial discovery procedures readily provide Defendants with the opportunity to obtain the greater detail they seek. See Haghkerdar, 226 F.R.D. at 14; see also Leahy-Lind v. Maine Dept. of Health and Human Services, 2014 WL 4681033, at *23 (D. Me. Sept. 19, 2014) (denying a Rule 12(e) motion and observing that “the parties will shortly have at their disposal the many methods of available discovery to both flesh out and nail down the details surrounding the claims”).

The Court DENIES the Motion as to Count I.

B. Count II: Violation of the Maine Fair Debt Collection Practices Act

Plaintiffs allege in Count II that “Defendant . . . attempted collection of a fraudulent claim in violation of the Maine Fair Debt Collection Practices Act.” (Compl. ¶ 33.) The Maine Fair Debt Collection Practices Act, 32 M.R.S.A. §§ 11001 et seq. (the “MFDCPA”) specifies certain practices in which “debt collectors” are prohibited from engaging. 32 M.R.S.A. § 11013. Defendants seek the dismissal of Count II, arguing that neither U.S. Bank nor Wells Fargo falls within the statutory definition of a “debt collector.” The MFDCPA generally defines a “debt collector” as a person or entity “who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” Id. at § 11002(6). Excluded is “[a]ny person whose collection activities are confined to and directly related to the operation of a business other than that of a debt collector” and “[a]ny person collecting or attempting to collect any debt owed or due, or asserted to be owed or due, to another to the extent that the activity . . . [c]oncerns a debt which was not in default at the time it was obtained by that person.” Id. at § 11003(8) & (7). The MFDCPA further provides that, notwithstanding the foregoing, “‘debt collector’ includes any creditor who, in the process of collecting the creditor’s own debts, uses any name other than the creditor’s that would indicate that a 3rd person is collecting or attempting to collect these debts.” Id. at § 11002.

Courts analyzing the MFDCPA and the analogous provisions of the federal Debt Collection Practices Act have held that loan servicers who take on loans only after they are in default may fall under the definition of “debt collector.” See, e.g., Bridge v. Ocwen Federal Bank, FSB, 681 F.3d 355, 359 (6th Cir. 2012); Hamilton v. Fed. Home Loan Mortg. Corp., 2014 WL 4594733, at *18-*19 (D. Me. Sept. 15, 2014); Yarney v. Ocwen Loan Servicing, LLC, 929 F.Supp.2d 569, 575 (W.D. Va. 2013) (explaining that ā€œmortgage servicers are considered ...

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