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Harvey v. Bayview Loan Servicing LLC

United States District Court, S.D. West Virginia, Charleston

March 28, 2018

LA-VERNE HARVEY by her Daughter, and power of attorney, JEAN HARVEY, Plaintiff,
v.
BAYVIEW LOAN SERVICING LLC, and THE BANK OF NEW YORK MELLON d/b/a CWALT Inc. Alternative Loan Trust 2004-18CB, through its trustee Defendants.

          MEMORANDUM OPINION AND ORDER

          JOHN T. COPENHAVER, JR. UNITED STATES DISTRICT JUDGE

         Pending is defendants' partial motion to dismiss Count I of the amended complaint, filed on June 23, 2017.

         I. Introduction

         On April 24, 2017, La-Verne Harvey ("Ms. Harvey"), by her daughter, and power of attorney, Jean Harvey, instituted this action against Bayview Loan Servicing LLC ("Bayview") and The Bank of New York Mellon d/b/a CWALT Inc. Alternative Loan Trust 2004-18CB ("CWALT") in the Circuit Court of Kanawha County, West Virginia. Bayview and CWALT (together "defendants") timely removed the action to this court invoking federal question jurisdiction over several of the claims asserted in the complaint pursuant to 28 U.S.C. § 1331. Notice of Removal ¶¶ 11-13. Thereafter, defendants filed a partial motion to dismiss on May 25, 2017. Ms. Harvey then filed her amended complaint, as a matter of course under Fed.R.Civ.P. 15(a)(1)(B), prompting defendants to file the partial motion to dismiss Count I of the amended complaint now pending before the court.

         The amended complaint alleges nine causes of action against defendants for violations of state and federal law in the owning and servicing of Ms. Harvey's residential mortgage loan. See Am. Compl. ¶¶ 58-89.

         Ms. Harvey's mortgage loan was originated in West Virginia in 2004 by Countrywide Home Loan, Inc. ("Countrywide") d/b/a America's Wholesale Lender ("AWL"), neither of which is named as a party to this action. Id. at ¶ 6. At the time of the loan, both Countrywide and AWL were licensed to make residential mortgage loans pursuant to the requirements of the West Virginia Residential Mortgage Lender, Broker, and Servicer Act ("RMLBSA" or "the Act"), W.Va. Code § 31-17. Id. at § 7. In connection with the loan, Ms. Harvey granted AWL a deed of trust on her personal residence. Id. at ¶ 15. In 2010, ownership of Ms. Harvey's loan was transferred to CWALT, which is not licensed by the state of West Virginia under RMLBSA. Id. at ¶ 16. Though the loan was serviced by Bank of America on behalf of CWALT for a number of years, on September 16, 2015 the servicing of the loan was transferred to Bayview. Id. at ¶¶ 4, 23, 28.

         In early 2015, Jean Harvey negotiated an agreement with Bank of America to make up payments that her mother had missed due to her medical bills and disability. Id. at ¶ 19. According to that agreement, Ms. Harvey would make an extra payment and make increased payments for six months, after which the account would be current. Id. at ¶ 20. All of these payments were made until the final one, which was due in September 2015. Id. at ¶ 21. Ms. Harvey alleges that this final payment was tendered but refused by Bank of America and Bayview, both of whom were servicers of the loan for a portion of September 2015. Id. at ¶¶ 21-29.

         Having not accepted the payment for September, Bayview informed Ms. Harvey that she had not completed the catch-up agreement, and her mortgage was therefore several months in arrears. Id. at ¶ 30. Bayview further informed Ms. Harvey that hazard insurance had been force-placed on the home because she had not proven maintenance of her own coverage, despite the fact that she maintained proper coverage for decades. Id. at ¶¶ 31-32. Bayview agreed to cancel the force-placed insurance and credit the mortgage for the cost only when her account was made current. Id. at ¶ 33. Bayview Asset Manager, Reggie Miller, began contacting Ms. Harvey and Jean Harvey and informed them that Bayview would foreclose the property unless an immediate payment was made in the full outstanding amount. Id. at ¶¶ 37-39. In early 2017, Ms. Harvey learned that Bayview had sent the mortgage loan to a trustee for foreclosure sale. Id. at ¶ 43. Bayview has failed to offer any loss mitigation alternatives to Ms. Harvey in lieu of foreclosure. Id. at ¶¶ 41, 57.

         Count I is the only count that defendants seek to dismiss. Plaintiff asks in Count I that the court declare the mortgage loan and deed of trust unenforceable pursuant to W.Va. Code § 31-17-17. Id. at ¶ 59. In support of this request, plaintiff states: "West Virginia law prohibits the ownership of a mortgage loan secured by residential real estate located within West Virginia by any person other than one licensed under [RMLBSA], and defendant CWALT is not so licensed, " and "[t]he originator, its successors-in-interest, and its servicing agents have and continue willfully to impose fees and charges not expressly permitted by, and/or in excess of those permitted by W.Va. Code § 31-17-8(g) and W.Va. Code § 46A-3-109, including illegal tax service fees, courier fees; and processing fees." Id. In addition to the declaratory relief, Ms. Harvey further requests that the court "afford all other relief to which she may be entitled in law or equity, including under W.Va. Code § 31-17-17(a) and (b)." Id. at ¶ 60.

         Pursuant to Fed.R.Civ.P. 12(b)(6), defendants move to dismiss Count I of plaintiff s amended complaint because it fails to state a claim against defendants upon which relief may be granted. Defs.' Mot. Dismiss at 1.

         II. Governing Standard

         Federal Rule of Civil Procedure 8(a)(2) requires that a pleading "contain ... a short and plain statement of the claim showing that the pleader is entitled to relief." Correspondingly, Rule 12(b)(6) provides that a pleading may be dismissed for a "failure to state a claim upon which relief can be granted."

         To survive a motion to dismiss, a pleading must recite "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); see also Monroe v. City of Charlottesville, 579 F.3d 380, 386 (4th Cir. 2009) (quoting Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008)). In other words, the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citation omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) ("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."); Andrew v. Clark, 561 F.3d 261, 266 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 555).

         A district court's evaluation of a motion to dismiss is underlain by two principles. First, when considering a motion to dismiss, the court "must accept as true all of the factual allegations contained in the [pleading]." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citation omitted); see also Twombly, 550 U.S. at 555 ("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).") (citations omitted). In doing so, factual allegations should be distinguished from "mere conclusory statements, " which are not to be regarded as true. Iqbal, 556 U.S. at 678 ("[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions."). Second, the court must "draw[] all reasonable factual inferences ... in the [nonmovant's] favor." Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999); see also Jenkins v. McKeithen, 395 U.S. 411, 421 (1969) ("[T]he complaint is to be liberally construed in favor of plaintiff.").

         III. Analysis

         Count I of the amended complaint asks that the court declare the mortgage loan and deed of trust unenforceable pursuant to W.Va. Code § 31-17-17(a), which states "[i]f any primary or subordinate mortgage loan is made in willful violation of the provisions of this article, except as a result of a bona fide error, such loan may be canceled by a court of competent jurisdiction." See Am. Compl. at ΒΆ 59. As noted, Ms. Harvey further requests in Count I that the court "afford all other relief to ...


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