United States District Court, S.D. West Virginia
DIANNA NIDY, individually and on behalf of others similarly situated, Plaintiff,
U.S. BANCORP GOVERNMENT LEASING AND FINANCE, INC., as Trustee for the benefit of the holders of COMM 2013-CCRE12 Mortgagee Trust Commercial Mortgage Pass-Through Certificates; and WELLS FARGO COMMERCIAL MORTGAGE SERVICING, Defendants.
MEMORANDUM OPINION AND ORDER
T. Copenhaver, Jr. Senior United States District Judge
is the motion to dismiss filed on August 31, 2018 by
defendants U.S. Bancorp Government Leasing and Finance, Inc.
(“U.S. Bank”) and Wells Fargo Commercial Mortgage
Servicing (“Wells Fargo”). Also pending is
the plaintiff's motion to refer this civil action to the
United States Bankruptcy Court for the Southern District of
West Virginia, filed September 7, 2018,  for ultimate
transfer to the United States Bankruptcy Court for the
Northern District of West Virginia where there is pending the
bankruptcy case of Tara Retail Group, LLC.
or about September 17, 2013, UBS Real Estate Securities, Inc.
(‘Original Lender') lent $13, 650, 000.00 (the
‘Loan') to Tara Retail Group, LLC.” Compl.
ECF No. 1, ¶ 5. As evidence of the Loan, Tara Retail
Group executed a promissory note (the “Note”) and
Loan Agreement (the “Loan Agreement”) on that
same date for the same amount in favor of the Original
Lender. Id. “As security for the repayment of
the Loan, ” the borrower executed a Deed of Trust and
Security Agreement (“Deed of Trust”) to a trustee
for the benefit of the Original Lender. Id. ¶
6. Under the Deed of Trust, the borrower “conveyed
certain real estate and personal property, . . . known as the
Crossings Mall located at 223 Crossings Mall Road, Elkview,
West Virginia 25071 for the benefit of Original
Lender.” Id. Also on September 17, 2013, Tara
Retail Group executed an Assignment of Leases and Rents
(“ALR”) in favor of the Original Lender.
Id. ¶ 8. The ALR granted to borrower a
“revocable license to collect, receive, use and enjoy
the Rents, as well as other sums due under the Lease
Guarantees, ” but that license is automatically revoked
upon the occurrence of an “Event of Default.”
ALR, ECF No. 8-3, at §§ 2.1, 3.1.
unspecified later time, the Original Lender assigned the
Note, the Deed of Trust, and the ALR to defendant U.S. Bank
“as Trustee for the Benefit of the Holders of Comm
2013-CCRE12 Mortgagee Trust Commercial Mortgage Pass-Through
Certificates.” Compl., ECF No. 1, ¶ 9.
alleged that defendant Wells Fargo “is holder of
certain escrow accounts, including the maintenance and repair
account held for the protection of the secured property,
‘Elk Crossings Mall.'” Id. ¶ 3.
The secured property is leased by Tara Retail Group, LLC, to
approximately twenty-one tenants such as “Kmart, Kroger
and McDonald's.” Id. ¶ 7. Wells Fargo
is named as Master Servicer in the Pooling and Servicing
Agreement. Id. ¶ 17.
plaintiff notes that the Pooling and Servicing Agreement
states that Wells Fargo “shall use reasonable efforts
consistent with the Servicing Standard to . . . advance the
amount of any shortfall as a Property Advance unless the
Master Servicer determines in accordance with the Servicing
Standard that such Advance would be a Nonrecoverable Advance
. . . .” Id. The Standard of Care in the
Pooling and Servicing Agreement also states that Wells Fargo
should act to “diligently service and administer the
Loans in the best interests of [and] for the benefit of all
Certificate Holders.” Id.
court notes that the Pooling and Servicing Agreement is one
between and for the benefit of those on the lender side of
the transaction described above and consists of the following
entities: Deutsche Mortgage and Asset Receiving Corporation
(the “Depositor”), Wells Fargo (the “Master
Servicer” and the “Certificate Administrator,
Paying Agent and Custodian”), U.S. Bank (the
“Trustee”), LNR Partners, LLC (the “Special
Servicer”), and Park Bridge Lender Services LLC (the
“Operating Advisor”). ECF No. 8-4, at 1.
plaintiff further alleges that there was a covenant under the
“lease agreement” between the debtor and one of
its tenants and “the Standard of Care in the Pooling
and Servicing Agreement” to maintain and preserve the
property and an “agreement to maintain the property so
as to ensure that the debt under the loan agreement would be
maintained.” Compl., ECF No. 1, ¶ 26. Plaintiff
also claims that “[u]nder the terms of the leases, the
common areas were to be maintained for the benefit of
customers, employees, licensees and invitees of the
tenants.” Id. The plaintiff attempts to
conflate the agreements between the debtor and the lender
with those between the debtor and its tenants, despite those
agreements having different purposes and parties.
Lease Agreement referenced by the plaintiff in her complaint
is between Tara Retail Group (Landlord) and Anytime Fitness
(Tenant) and states that the landlord “covenant[s] that
Tenant on paying the rent and performing the conditions and
covenants herein contained, shall and may peaceably and
quietly have, hold and enjoy the Premises.”
Id. ¶ 14. The Lease Agreement also prescribes
that the “Landlord shall keep the structural portions
of the premises and the Shopping Center, as applicable, in
reasonable repair.” Id.
or about January 16, 2016, the Defendant Wells Fargo, as
agent and holder of the maintenance escrow account, was
contacted by Gold Coast Partners LLC,  requesting the
expenditure of twenty four thousand dollars, for the repair
of the culvert over which the only entrance to the shopping
center passed, and the repair of the ‘dirt cliff'
behind K Mart.” Id. ¶ 11. This request
If these issues are not resolved immediately the only
entrance to the center could collapse and dirt could continue
falling behind Kmart both scenarios could expose us, the
Landlord, to personal and injury liability cases.
Id. Wells Fargo did not authorize the repairs as
requested, and no other defendant independently offered to
pay for the repairs. Id. ¶ 12. The plaintiff
asserts that the tenants were required to pay into that
maintenance escrow account. See Id. ¶ 30.
23, 2016, the Elk Crossings Mall and the surrounding area was
flooded. Id. ¶ 19. “The only point of
access to the Crossings Mall shopping center was asphalt
covered, dirt and gravel fill over a culvert. During the
flood . . . the culvert, fill and paving were washed
away.” Id. ¶ 20. “The culvert was
replaced with a bridge and the tenants began restoration of
their businesses and equipment in August, 2017.”
Id. ¶ 21.
plaintiff and class representative, Dianna Nidy, was employed
by Kmart Corporation, a tenant of the Crossings Mall shopping
center. Id. ¶ 1. She lost her employment when
the center closed as a result of the loss of access.
Id. Ms. Nidy represents the proposed class of
plaintiffs who consist of “employees of tenants who
suffered loss of income and benefits as a result of flooding
caused or contributed to by the Defendants.”
Id. at 15, ¶ 26-27.
plaintiff initiated this action in this court on June 21,
2018. In her complaint, plaintiff asserts four causes of
action against both defendants: (1) “Breach of Duty
Under Loan Documents Including the Servicing Standard”;
(2) “Breach of Fiduciary Duty Under the Power of
Attorney Provision of the Assignments of Leases and Rents and
the Structure of the Financing Transaction”; (3)
“Tortious Interference with a Business
Relationship”; and (4) “Breach of General Duty of
Care.” A fifth claim is simply a request for punitive
damages. Id. at 11-15. Each of these causes of
action is based on plaintiff's belief that defendants
breached a duty by failing to distribute money, out of a
maintenance fund into which the tenants of Elk Crossings Mall
were obligated to contribute, which led to the closing of the
businesses on the premises, thereby harming the plaintiff and
those similarly situated to her.
defendants have moved to dismiss each of plaintiff's
claims on the grounds that she has failed to state a claim
upon which relief might be granted. Before responding to
defendants' motion, the plaintiff moved to refer this
civil action to the United States Bankruptcy Court. Both
motions have been fully briefed.
plaintiff neglected to include in her complaint the basis for
federal jurisdiction in this case. However, there are
sufficient facts available for the court to assert
jurisdiction over this matter pursuant to 28 U.S.C. §
1332. First, it appears that Ms. Nidy is a West Virginia
resident inasmuch as it is claimed she worked in Kanawha
County, West Virginia at the time of the incident. Next, the
plaintiff states that U.S. Bank's legal address is in
Ohio, see Compl., ECF No. 1, ¶ 4, and Wells Fargo does
not assert that it is principally located or was incorporated
in West Virginia. For these reasons, it appears as though
there is complete diversity between the parties.
the amount in controversy, the plaintiff asserts that she
lost income and benefits from her employment while the
businesses at Elk Crossings Mall were closed from June 2016
until August 2017. See Id. ¶¶ 19, 21, 47.
She also asserts a claim for punitive damages against the
defendants. Id. ¶ 45. Accordingly, it is
apparent that the amount in controversy exceeds $75, 000. For
these reasons, the court will rule on the defendants'
motion to dismiss inasmuch as it has jurisdiction over this
civil action pursuant to 28 U.S.C. § 1332.
Rule of Civil Procedure 8(a)(2) requires that a pleader
provide “a short and plain statement of the claim
showing . . . entitle[ment] to relief.” Fed.R.Civ.P.
8(a)(2); Erickson v. Pardus, 127 S.Ct. 2197, 2200
(2007). Rule 12(b)(6) correspondingly permits a defendant to
challenge a complaint when it “fail[s] to state a claim
upon which relief can be granted . . . .” Fed.R.Civ.P.
required “short and plain statement” must provide
“‘fair notice of what the . . . claim is and the
grounds upon which it rests.'” Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 545 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957), overruled
on other grounds, Twombly, 550 U.S. at 563); see
also Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th
Cir. 2007). In order to survive a motion to dismiss, “a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Twombly, 550 U.S. at 570);
see also Monroe v. City of Charlottesville, 579 F.3d
380, 386 (4th Cir. 2009).
of the Rule 12(b)(6) standard requires that the court
“‘accept as true all of the factual allegations
contained in the complaint. . . .'” Erickson, 551
U.S. at 94 (quoting Twombly, 550 U.S. at 555-56); see also
S.C. Dept. of Health and Envt'l Control v. Commerce
and Indus. Ins. Co., 372 F.3d 245, 255 (4th Cir. 2004)
(quoting Franks v. Ross, 313 F.3d 184, 192 (4th Cir.
motion to dismiss tests the sufficiency of a complaint,
” Occupy Columbia v. Haley, 738 F.3d 107, 116
(4th Cir. 2013), “and [the court's] evaluation is
thus generally limited to a review of the allegations of the
complaint itself. However, [the court] also consider[s]
documents that are explicitly incorporated into the complaint
by reference . . . .” Goines v. Valley Cmty. Servs.
Bd., 822 F.3d 159, 165-66 (4th Cir. 2016) (citing
Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 322 (2007)).
“Breach of Duty Under Loan Documents Including the
not clear from the complaint what cause of action is being
asserted here, the plaintiff, in her response to the
defendants' motion to dismiss, acknowledges that this
first count is “a claim ...