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Mayo v. Wells Fargo Bank, N.A.

United States District Court, E.D. Virginia, Newport News Division

April 11, 2014

BONNIE J. MAYO, Plaintiff,

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[Copyrighted Material Omitted]

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For Bonnie J. Mayo, Plaintiff: Christopher E. Brown, LEAD ATTORNEY, Brown Brown & Brown, Alexandria, VA; Jessica M Carter, LEAD ATTORNEY, Brown Brown & Brown PC, Alexandria, VA.

For Wells Fargo Bank, N.A., Samuel I. White, Federal Home Loan Mortgage Corporation, Defendants: Christy Lee Murphy, LEAD ATTORNEY, Kaufman & Canoles PC (Norfolk), Norfolk, VA; Hunter Wilmer Sims, Jr., LEAD ATTORNEY, Kaufman & Canoles PC, Norfolk, VA.

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Raymond A. Jackson, United States District Judge.

Before the Court is Defendants Wells Fargo Bank, Federal Home Loan Mortgage Corporation, and Samuel White P.C.'s Motion to Dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 16. Plaintiff Bonnie Mayo raises five state law claims against Defendants pertaining to the refinancing of her since-foreclosed home. For the reasons stated below, Defendants' Motion to Dismiss is GRANTED IN PART AND DENIED IN PART.


Plaintiff Bonnie Mayo alleges the following relevant facts in the Amended Complaint. ECF No. 12. In December 2009, Plaintiff executed a refinancing of the mortgage on her home in Williamsburg, Virginia, which reduced the loan's interest rate by 0.5%. Am. Compl. ¶ ¶ 2-6; id., Ex. B. The Refinance Note required monthly payments of $1,251.96 for interest and principal, to begin in February 2010. Am.

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Compl. ¶ 5; id., Ex. B. The named lender was Defendant Wells Fargo Bank, N.A. and the named trustee was Defendant Samuel I. White, P.C. Am. Compl. ¶ 8. Plaintiff also executed a Deed of Trust to secure repayment of the Refinance Note. Am. Compl. ¶ 7; id., Ex. C. At some point thereafter, the loan was sold to Defendant Federal Home Loan Mortgage Corporation (" FHLMC" ) (otherwise known as Freddie Mac). Am. Compl. ¶ 52. Plaintiff alleges that she understood that the loan would not require escrow payments because she did not receive proper disclosure statements when she finalized the refinancing. Am. Compl. ¶ ¶ 9-10. For that reason, she did not make escrow payments billed to her by Wells Fargo and in June 2010, Wells Fargo declared her in default. Am. Compl. ¶ ¶ 15, 23. The latest payment towards interest and principal that Plaintiff alleges making was in May, 2010. Am. Compl. ¶ 22. The home was foreclosed a year later, in June 15, 2011, and purchased by Wells Fargo. Am. Compl. ¶ ¶ 31-32.

Plaintiff twice declared bankruptcy: once before the foreclosure, and once after. Both proceedings were ultimately dismissed. Defts' Mem. in Opp. to Pltf's Req. for TRO, ECF No. 22, at 1-2. After the United States Court of Appeals for the Fourth Circuit denied Plaintiff's appeals from the second bankruptcy proceeding on October 4, 2012, Defendant FHLMC filed an unlawful detainer action in state court on November 20, 2012. Id. at 2. The York County General District Court granted possession to FHLMC on December 18, 2012, and Plaintiff appealed to the York County Circuit Court. Id. Nearly a year later, on December 11, 2013, that court also granted possession to FHLMC, and its judgment became final on January 12, 2014. Id. at 2-3.

In the meantime, Plaintiff had filed the first iteration of the instant complaint in state court. Defendants ultimately removed the case to this Court in December 6, 2013, pursuant to 12 U.S.C. § 1452(f), which allows removal to federal court " at any time before trial" in cases in which FHLMC is a party. Plaintiff filed an Amended Complaint on December 30, 2013. ECF No. 12. On January 9, 2014, Defendants filed the instant Motion to Dismiss, ECF No. 16, and accompanying Memorandum, ECF No. 17 (hereinafter " Mot. to Dismiss" ). Plaintiff filed her Opposition on January 23, 2014, ECF No. 18 (hereinafter " Opp." ), and Defendants filed their Reply on January 28, 2014, ECF No. 19. The matter is accordingly ripe for disposition.

This is not the first order that the Court has entered in this case. On February 3, 2014, Plaintiff was served with a notice of eviction in execution of the state court's judgment of possession. ECF No. 21, at 1-2. Arguing that the eviction should be stayed pending the outcome of her pending suit, Plaintiff requested that this Court grant a Temporary Restraining Order or a Preliminary Injunction. The Court held a hearing on February 6, 2014 and denied Plaintiff's requested TRO the following day. ECF No. 24.


Rule 12(b)(6) provides for dismissal of actions that fail to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(6). The United States Supreme Court has stated that in order " [t]o 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotations omitted)). Specifically,

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" [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. Moreover, at the motion to dismiss stage, the Court is bound to accept all of the factual allegations in the Complaint as true. Id. However, " [t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Assessing the claim is a " context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679.

In considering a Rule 12(b)(6) Motion to Dismiss, the Court cannot consider " matters outside the pleadings" without converting the motion to a summary judgment proceeding. Fed. R. Civ. P. 12(d). Nonetheless, the Court may still " consider documents attached to the complaint, see Fed. R. Civ. P. 10(c), as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Sec'y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007). See also Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008) (" When a court is presented with a Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein." ).

The parties agree that Virginia substantive law applies to Plaintiff's claims, all of which are state common law claims. See, e.g., Opp. at 3 (relying on Virginia case law); Mot. to Dismiss at 14 (same). Nonetheless, the Court will apply federal rules that are procedural, such as the standards for a Rule 12(b)(6) motion discussed above. Rowland v. Patterson, 852 F.2d 108, 110 (4th Cir. 1988).


A. Count I: Breach of Contract

Plaintiff raises her breach of contract claim against Defendants Wells Fargo and FHLMC, whom she alleges were the lenders during the relevant time period. Specifically, Plaintiff says that the ownership of her loan changed from Wells Fargo to FHLMC at some point, but that Wells Fargo remained the agent of the subsequent lender. Am. Compl. ¶ 52. She claims that the Deed of Trust dated December 14, 2009 is the relevant contract and that it was improperly breached in six different ways:

1) Wells Fargo required Plaintiff to submit monthly payments in an amount that exceeded the agreed-upon amount.
2) Wells Fargo required Plaintiff to make payments into an escrow account although the loan was to be without escrow.
3) Wells Fargo invoked the power of sale even though the contract gives that sole power to the actual lender and it only may be ...

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