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Luther v. Wells Fargo Bank, N.A.

United States District Court, W.D. Virginia, Danville Division

November 17, 2014

JAMES T. LUTHER, Plaintiff,
v.
WELLS FARGO BANK, N.A., and ATLANTIC LAW GROUP, LLC, Defendants.

MEMORANDUM OPINION

MICHAEL F. URBANSKI, District Judge.

This matter is before the court on defendants' motion to dismiss plaintiff's amended complaint for failure to state a claim. (Dkt. # 44.) For the reasons set forth below, the motion will be granted in part, converted into a motion for summary judgment in part, and referred to the magistrate judge for further proceedings.

I.

This is Luther's fourth attempt to state a valid claim against defendant Wells Fargo Bank, N.A., in an effort to avoid foreclosure of his Fieldale, Virginia home. Luther filed his first complaint against Wells Fargo in December 2011, [1] alleging fraud and violations of the Truth in Lending Act (TILA) and the Real Estate Settlement and Procedures Act (RESPA). See No. 4:11cv00057, Dkt. # 3. The United States Magistrate Judge, to whom the matter had been referred, determined that Luther's complaint failed to state any cause of action upon which relief could be granted and gave Luther leave to amend. Luther filed an amended complaint on May 24, 2012, further detailing his fraud, TILA and RESPA claims. See No. 4:11cv00057, Dkt. # 31. Finding once again that Luther failed to state a valid claim for relief, the court dismissed Luther's action with prejudice pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure by Order entered September 25, 2012.

Over a year later, faced with the imminent foreclosure of his home, Luther filed the instant action against Wells Fargo, also naming Atlantic Law Group, LLP as a defendant.[2] In his complaint, Luther raised allegations of fraud, mail fraud, wrongful foreclosure, and violations of the Fair Debt Collection Practices Act (FDCPA). Upon the defendants' motion, and at the recommendation of the magistrate judge, the court dismissed the complaint pursuant to Rule 12(b)(6) and once again gave Luther an opportunity to cure the deficiencies in his complaint. On August 12, 2014, Luther filed an amended complaint in which he raises seven claims. Count One seeks declaratory relief that "Defendant willfully contracted with Plaintiff's unlimited power of attorney." Count Two seeks declaratory relief that "Plaintiff signed agreement that Defendant would keep note in local branch office, " which both parties had agreed "would be good for the community." Count Three asks the court to "vitilate [sic] all agreements and contracts with Defendant from the beginning, " and seeks the return of all notes and payments made by Luther. Count Four alleges breach of good faith and fair dealing. Count Five alleges breach of fiduciary duty. Count Six alleges simply that Luther has been harmed in various ways, and Count Seven alleges defendants "misinformed the court on a crucial fact in this case." Defendants have moved to dismiss the amended complaint under Rule 12(b)(6).

II.

Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a dismissal when a plaintiff fails "to state a claim upon which relief can be granted." To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain sufficient "facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). The complaint's "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id. at 555.

A court should construe factual allegations in the nonmoving party's favor and will treat them as true but is "not so bound with respect to [the complaint's] legal conclusions." Dist. 28, United Mine Workers, Inc. v. Wellmore Coal Corp., 609 F.2d 1083, 1085-86 (4th Cir. 1979). Indeed, a court will accept neither "legal conclusions drawn from the facts" nor "unwarranted inferences, unreasonable conclusions, or arguments." E. Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000). Further, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Only after a claim is stated adequately may it then "be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 550 U.S. at 546.

Because Luther is proceeding pro se, his pleadings must be "liberally construed" and "held to less stringent standards than formal pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations omitted). "While pro se complaints may represent the work of an untutored hand requiring special judicial solicitude, ' a district court is not required to recognize obscure or extravagant claims defying the most concerted efforts to unravel them.'" Weller v. Dep't of Soc. Servs. for City of Baltimore, 901 F.2d 387, 391 (4th Cir. 1990) (quoting Beaudett v. City of Hampton, 775 F.2d 1274, 1277 (4th Cir. 1985)). Indeed, "[t]he special judicial solicitude' with which a district court should view such pro se complaints does not transform the court into an advocate. Only those questions which are squarely presented to a court may be properly addressed." Id.

III.[3]

A.

Counts One and Two of Luther's amended complaint seek declaratory relief. Specifically, in Count One, Luther asserts that the "Defendant willfully contracted with Plaintiff's unlimited power of attorney and Plaintiff requests the court order declaratory relief in this matter." Am. Compl., Dkt. # 40, at 4. In Count Two, Luther claims that "Plaintiff signed [an] agreement that Defendant would keep note in local branch office, " which both parties had agreed "would be good for the community." Id . Luther avers that "[n]otes have been sold mutiple [sic] times by notice given to Plaintiff, " resulting in breach of contract and entitling Luther to declaratory relief. Id.

"[A] federal court may properly exercise jurisdiction in a declaratory judgment proceeding when three essential elements are met: (1) the complaint alleges an actual controversy' between the parties of sufficient immediacy and reality to warrant issuance of a declaratory judgment;' (2) the court possesses an independent basis for jurisdiction over the parties (e.g., federal question or diversity jurisdiction); and (3) the court does not abuse its discretion in its exercise of jurisdiction." Volvo Const. Equip. N. Am., Inc. v. CLM Equip. Co., Inc., 386 F.3d 581, 592 (4th Cir. 2004). Although defendants concede the court has an independent basis for jurisdiction over the parties in this matter, see Defs.' Mot. to Dismiss Br., Dkt. # 45, at 5, there is no actual controversy here. An actual controversy exists when "the facts alleged... show that there is a substantial controversy... of sufficient immediacy and reality to warrant issuance of a declaratory judgment." Maryland Cas. Co. v. P. Coal & Oil Co., 312 U.S. 270, 273 (1941). With respect to Count One, Luther appears to allege that by not responding to his Qualified Written Request, [4] Wells Fargo "willfully agreed to the provision of Plaintiff's Power of Attorney." Am. Compl., Dkt. # 40, at 2. He fails to explain what authority this power of attorney gave him, although he seems to suggest it somehow required Wells Fargo to release his deed of trust and clear title. See Am. Compl., Dkt. # 40, at 2-3. In any event, Virginia law requires a principal to sign a power of attorney. Va. Code Ann. ยง 64.2-1603. Luther has neither attached a valid, signed Power of Attorney to his amended complaint nor alleged that either defendant ever signed such a document. Accordingly, Luther fails to allege the existence of an actual controversy and fails to state a claim for which relief can be granted in Count One.

In Count Two, Luther alleges he "signed [an] agreement that Defendant would keep note in local branch office." Am. Compl., Dkt. # 40, at 4. Because the "[n]otes have been sold multiple [sic] times, " Luther claims defendants breached the parties' contract. The three elements required to establish breach of contract under Virginia law are: "(1) a legally enforceable obligation of a defendant to a plaintiff; (2) the defendant's violation or breach of that obligation; and (3) injury or damage to the plaintiff caused by the breach of obligation." Ulloa v. QSP, Inc., 271 Va. 72, 79, 624 S.E.2d 43, 48 (2006). Luther did not attach the agreement to which he refers to his amended complaint, and his allegation that he signed an agreement is insufficient to establish the existence of a legally enforceable contract. "For a contract to be enforceable, there must be mutual assent of the contracting parties to terms reasonably certain under the circumstances.'" Cyberlock Consulting, Inc. v. Information Experts, Inc., 876 F.Supp.2d 672, 678 (E.D. Va. 2012) (citing Allen v. Aetna ...


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