United States District Court, E.D. Virginia, Richmond Division
JONATHAN LOWE and JENNIFER LOWE. Plaintiffs,
WELLS FARGO BANK, N.A., Defendant.
Roderick C. Young United States Magistrate Judge.
matter is before the Court on Defendant's Motion to
Dismiss (ECF No. 3) and Plaintiffs Motion to Remand (ECF No.
18). Jonathan and Jennifer Lowe ("Plaintiffs")
bring this action against Wells Fargo Bank, N. A.
("Defendant") alleging a breach of a loan
modification offer in Count I and violation of the Truth in
Lending Act ("TILA"), 15 U.S.C. § 1601 et
seq., in Count II. Defendant removed this case to
federal court and moves to dismiss the action. Plaintiff
moves to remand the action to Chesterfield County Circuit
Court. The motions have been fully briefed, and the Court
dispenses with oral argument because the facts and legal
contentions are adequately presented in the materials before
the Court and oral argument would not aid in the decisional
process. E.D. Va. Loc. Civ. R. 7(J). For the reasons stated
below, the Motion to Dismiss will be granted as to Count II
and denied as moot as to Count I. The Motion to Remand will
be granted as to Count I and denied as moot as to Count II.
are the record owners of property in Chesterfield County
located at 8100 Fallbrook Drive, North Chesterfield, Virginia
23225 (the "Property"). (Compl. ¶ 2, ECF No
1-2.) Defendant holds the promissory note (the
"Note") executed by Plaintiffs to secure the
mortgage on the Property. (Id. ¶ 3.) Plaintiffs
owe arrearages on the Property, although the amount owed is
the subject of this litigation. (Id.)
2011, Plaintiffs could not meet their payment obligations
under the Note and worked with Defendant to modify the terms
of the Note (the "First Modification").
(Id. ¶ 4.) Plaintiffs still could not meet
their payment obligations under the First Modification and
subsequently filed a petition for Chapter 13 bankruptcy in
the United States Bankruptcy Court for the Eastern District
of Virginia on July 15, 2011. (Id.)
October 23, 2013, Defendant offered Plaintiffs a new trial
modification plan while their petition was pending in the
United States Bankruptcy Court. (Id. ¶ 5.) The
trial plan required Plaintiffs to make three consecutive
payments to secure a permanent modification of the Note.
(Id.) Plaintiffs allege that they accepted
Defendant's offer, completed the payments, and Defendant
offered Plaintiffs a permanent modification (the "Second
Modification") on February 19, 2013. (Id.)
letter dated June 7, 2013, Defendant notified Plaintiffs that
Defendant rescinded the Second Modification because the
Bankruptcy Court did not approve of the plan. (Id.
¶ 7.) Nonetheless, and pursuant to the Second
Modification's terms, Plaintiffs' bankruptcy attorney
filed a petition to modify the plan (the "Amended
Plan") on June 12, 2013. (Id. ¶ 6.)
Defendant responded on July 17, 2013 by filing an Objection
to the Plaintiffs' Amended Plan with the Bankruptcy
Court, claiming the Amended Plan "fail[ed] to provide
for pre-petition arrearages." (Id. ¶8.)
March 2013 through August 2013, Plaintiffs made monthly
payments of $816.65, as required by the trial modification
plan, under the assumption that the Second Modification was
in effect. (Id. ¶ 9.) After this time period,
Plaintiffs ceased making payments on the Note, vacated the
Property, notified Defendant thereafter, and asked Defendant
to take ownership of the Property through a deed in lieu.
(Id.) Defendant never responded. (Id.) On
November 9, 2016, Plaintiffs' counsel again mailed a
letter to Defendant offering a deed in lieu, but Defendant
did not respond. (Id. ¶ 12.)
7, 2017, Plaintiffs filed their Complaint in Chesterfield
County Circuit Court, Chesterfield, Virginia. In Count I of
the Complaint, Plaintiffs advance a state law breach of
contract claim, arguing that Defendant breached the Second
Modification by refusing to honor its terms. (Id.
¶¶ 16-18.) In Count II of the Complaint, Plaintiffs
allege that Defendant "willfully failed to properly
credit the Plaintiffs' payments of the Note."
(Id. ¶ 20.) As Plaintiffs request relief under
15 U.S.C. § 1640, the Court presumes the predicate of
Count II arises under TILA. (Id. ¶ 21.)
MOTION TO DISMISS
TILA claim alleged in the Complaint would allow the Court to
exercise supplemental jurisdiction over the state law breach
of contract claim because all claims arise out of the same
nucleus of operative facts. See United Mine Workers Am.
v. Gibbs, 383 U.S. 715, 725 (1966); 28 U.S.C. §
1367. The existence of Plaintiff s TILA claim has direct
bearing on the disposition of the Motion to Remand.
Accordingly, the Court addresses the Motion to Dismiss with
respect to the TILA claim first.
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). Dismissals
under Rule 12(b)(6) are generally disfavored by the courts
because of their res judicata effect.
Fayetteville Investors v. Commercial Builders, Inc.,936 F.2d 1462, 1471 (4th Cir. 1991). The Federal Rules of
Civil Procedure only require that a complaint set forth
'"a short and plain statement of the claim showing
that the pleader is entitled to relief, ' in order to
'give the defendant fair notice of what the . . . claim
is and the grounds upon which it rests.'" Bell
Atl Corp. v. Twombly,550 U.S. 544, 555 (2007) (omission
in original) (quoting Conley v. Gibson,355 U.S. 41,
47 (1957)). While the complaint's "[f]actual
allegations must be enough to raise a right to relief above
the speculative level, " "detailed factual
allegations" are not required in order to satisfy the
pleading requirement of Federal Rule 8(a)(2). Id.
(emphasis added). In considering a motion to dismiss for