United States District Court, E.D. Virginia, Richmond Division
MEMORANDUM OPINION (DEFENDANT'S MOTION TO DISMISS)
HENRY E. HUDSON UNITED STATES DISTRICT JUDGE
Anne Reamer ("Plaintiff), brings this action against Deutsche Bank Trust Company Americas, as Trustee for RALI 2007QS9 ("Deutsche Bank"), seeking $125, 000 in compensatory damages for alleged breaches of contract that occurred in the process of foreclosure on Plaintiffs home. Plaintiffs Complaint was originally filed in the Circuit Court for the City of Richmond, Virginia and was removed to this Court on October 8, 2015. The matter is presently before the Court on Deutsche Bank's motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure (ECF No. 3). The underlying issues have been thoroughly briefed by the parties, and the matter is now ripe for decision. For the reasons discussed below, Deutsche Bank's Motion to Dismiss will be granted in part and denied in part.
On May 17, 2007, Plaintiff entered into the mortgage loan underlying this matter with First Savings Mortgage Company. (Compl. ¶ 5, ECF No. 1-1.) The loan was evidenced by a promissory note ("Note"), which was secured by a deed of trust ("Deed of Trust"). (Id.) The Deed of Trust appointed Larry F.Pratt as the original trustee. (Id.) Mortgage Electronic Registration System ("MERS") was identified as the "nominee" of the Lender and the "beneficiary" under the Deed of Trust. (Id. at ¶¶ 24-25.) At some point prior to the events in controversy, Deutsche Bank purchased ownership rights to the Note from First Savings Mortgage Company, thereby assuming the role and the rights of the "Lender" as to both the Note and the Deed of Trust. (Id. at ¶ 28.) Wells Fargo Bank, N.A., held physical possession of the Note, acting as custodian. (Id. at ¶ 19.) Deutsche Bank subsequently engaged GMAC Mortgage, LLC ("GMAC") as servicer for Plaintiffs mortgage loan. (Id. at ¶ 57.)
On April 12, 2010, MERS, acting as nominee of the Deutsche Bank, removed Pratt as trustee and replaced him with Executive Trustee Services, Inc. ("ETS"). (Id. at ¶ 18). On April 20, 2010, Plaintiff received notice from GMAC informing her that foreclosure proceedings had begun on her account but not stating any amount of default or setting forth a deadline to cure such a default and avoid foreclosure. (PL's Mem. in Opp. 3, n.l, ECF No. 9). On June 8, 2010, ETS conducted a foreclosure auction of Plaintiffs home, acting as substitute trustee and agent of Deutsche Bank. (Compl. 134.)
At the time of the foreclosure, Deutsche Bank was a participant in the federal Home Affordable Modification Program ("HAMP"), which incentivizes loan servicers to permit adjustments for struggling homeowners to their existing mortgage obligations. (Id. at ¶¶ 53, 55.) As a HAMP participant, Deutsche Bank executed a Servicer Participation Agreement ("SPA") with the federal government. (Id. at ¶ 52.) The SPA incorporated, among other things, all guidelines and supplemental letters and directives issued by the U.S. Department of the Treasury. (Id. at ¶ 54.) In 2009, the Treasury promulgated HAMP Supplemental Directive No. 09-01, prohibiting foreclosure during the pendency of a HAMP loan modification application. (Id. at ¶ 56.)
In 2010, Plaintiff filed an application with GMAC, Deutsche Bank's servicer, for a HAMP loan modification. (Id. at ¶ 59.) Plaintiff sent everything she was required and requested to send to be considered for a loan modification. (Id. at ¶ 60.) Plaintiff did not hear from Deutsche Bank or GMAC regarding the status of her loan modification application until June 11, 2010, three days after the foreclosure of her home. (Id. at ¶ 63.) The June 11 notice indicated that Plaintiffs application was denied on the grounds that foreclosure had already occurred. (Id. at f 63.) Deutsche Bank, through its servicer and agent GMAC, subsequently reported the foreclosure to credit reporting bureaus. (Id. at ¶ 40.) This suit followed.
In Counts One and Two of the Complaint, Plaintiff alleges that Deutsche Bank breached the applicable law provision of the Deed of Trust. (Id. at ¶¶ 41, 65.) Count One contends that Deutsche Bank breached by foreclosing on Plaintiffs home through a substitute trustee appointed contrary to applicable law. (Id. at ¶ 39.) Count Two alleges that Deutsche Bank, acting through GMAC, breached the applicable law provision by foreclosing on Plaintiffs home while Plaintiffs HAMP loan modification application was pending, contrary to HAMP Supplemental Directive No. 09-01. (Id. at ¶¶ 64-65.) Count Three of Plaintiff s Complaint alleges that Deutsche Bank breached the cure notice provisions found in both the Note and the Deed of Trust by foreclosing on Plaintiffs home without sending a proper cure notice. (Id. at ¶ 72.) Plaintiff alleges that she suffered actual damages as a result of Deutsche Bank's conduct, including loss of equity and damage to credit. (Id. at ¶¶ 44, 66, 73).
II. LEGAL STANDARD
"A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citation omitted). To survive a Rule 12(b)(6) challenge, a complaint must contain sufficient factual information 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 Fed. R. Civ. P. 8(a)(2) ("A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief."). Mere labels and conclusions declaring that the plaintiff is entitled to relief are not enough. Twombly, 550 U.S. at 555. Thus, the "[f]actual allegations must be enough to raise a right to relief above the speculative level, " to one that is "plausible on its face" rather than merely "conceivable." Id. at 555, 570 (citations omitted). In considering such a motion, a plaintiffs well-pleaded allegations are taken as true and the complaint is viewed in the light most favorable to the plaintiff. T.G. Slater, 385 F.3d at 841 (citation omitted). Legal conclusions enjoy no such deference. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Generally, the district court does not consider extrinsic materials when evaluating a complaint under Rule 12(b)(6). The court may, however, consider "documents incorporated into the complaint by reference." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007); see also Blankenship v. Manchin, 471 F.3d 523, 526 n. 1 (4th Cir. 2006); Fed.R.Civ.P. 10(c) ("A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes."). In addition, the court may consider documents attached to the defendant's motion to dismiss if those documents are central to the plaintiffs claim or "sufficiently referred to in the complaint, " so long as the plaintiff does not challenge their authenticity. Witthohn v. Fed Ins. Co., 164 Fed.App'x 395, 396-97 (4th Cir. 2006) (per curiam); see Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004).
As a general matter, Deutsche Bank argues that Plaintiffs claims are barred because she failed to provide notice prior to filing her complaint, as required by Paragraph 20 of the Deed of Trust. (Def.'s Mem. Support at 1-2, ECF No. 4.) However, this argument constitutes an affirmative defense to Plaintiffs claims of breach, and a court may only rule on an affirmative defense at the 12(b)(6) stage "if all facts necessary to the affirmative defense 'clearly appear on the face of the complaint.'" Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). Deutsche Bank is correct to point out that it is clearly apparent that the Deed of Trust contains a notice requirement. (Def.'s Reply at 3, ECF No. 11.) However, the Complaint does allege that Plaintiff in fact sent the required "grievance notice". (Compl. ¶ 8.) In light of the parties' conflicting assertions, the facts necessary to Deutsche Bank's affirmative defense are not clearly apparent on the face of the Complaint, and ...