Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Moss v. Manufacturers and Traders Trust Co.

United States District Court, E.D. Virginia, Richmond Division

March 13, 2018



          John A. Gibney, Jr., United States District Judge

         The complaint in this case makes astounding allegations. Wind and rain damaged Constance Moss's home in October 2015. Moss's homeowner's insurer soon issued a claim check for over $15, 000. In a move she has lived to rue, Moss sent the check to her mortgage company, Manufacturers and Traders Trust Company ("M&T"). M&T kept the money, but would not use it to fix her house. Moss also tried a second-best approach: she asked M&T to at least apply the money to her mortgage. M&T still kept the money, but did not apply it to the loan. Then, to rub salt in Moss's wounds, M&T told credit reporting agencies that the loan was delinquent, without telling them that Moss had disputed M&T's claim.

         But that's not all. At the direction of M&T's trustees on the deed of trust, ALG Trustee, LLC ("Atlantic") and Orlans, PC ("Orlans"), have initiated numerous foreclosure proceedings against Moss's property without proper authorization.

         The complaint does not say what happened to the $15, 000 insurance check. Reading the complaint in the light most favorable to Moss, it appears that the funds have gone, at best, to a bank controlled limbo. In any event, Moss does not have the money, no one has repaired her house, and the bank has not applied the money to her mortgage.

         Notwithstanding these allegations, M&T, Atlantic, and Orlans now move to dismiss the case on the ground that nothing bad happened to Moss. Moss has sufficiently alleged that M&T failed to perform its required duties under the terms of her mortgage and under the various statutes protecting consumers from creditors, and the Court denies its motion to dismiss. Moss alleges viable claims against Orlans and Atlantic, and the Court denies their motion. There are generally two sides to any story, and it may well prove true that the defendants have acted with contractual kindness, but they cannot prevail on a motion to dismiss.

         I. BACKGROUND

         Moss entered into a home mortgage in 2007. M&T now holds the note and services the loan. On October 2, 2015, wind and rain damaged Moss's roof. Moss then fell behind on her mortgage and, by November 20, 2015, had missed two payments. In December 2015, Moss received a claim check from her insurance company for $15, 826.81, to repair the roof damage.

         Moss's mortgage note says that if she defaults on her loan, the note holder may accelerate payments and demand the entire loan amount upon sending her a written notice 30 days before acceleration. The notice must inform Moss of the need to pay her outstanding balance and of the possible acceleration. The deed of trust contains a similar prerequisite as the note, and says that prior to acceleration or the initiation of foreclosure proceedings, M&T must send a notice that (1) specifies "the action required to cure the default" and (2) informs Moss of her "right to bring a court action to assert the non-existence of a default or any other defense." (Deed of Trust ¶ 22, Dk. No. 10-1.) On November 20, 2015, M&T sent Moss an acceleration notice that said "[i]n the event foreclosure proceedings are initiated, you have certain right(s), including the right to assert in the foreclosure proceedings the non-existence of default, the right to argue that you did keep the promises and agreements under the Note ... [and the right] to raise any other applicable defenses." (Am. Compl. ¶ 24, Dk. No. 10.) The notice also said that to cure the default, Moss had to pay $11, 730.26, "plus any additional payments, fees, and late charges that become due between the date of this letter and the time your payment is received." (Id. ¶ 31.)

         In January 2016, Moss endorsed the claim check to M&T. She also sent M&T an estimate from a contractor to fix the roof. Moss tried to contact M&T for a few months about the status of the repairs, and representatives told her that M&T was waiting for information from the contractor. Without making any repairs, M&T then initiated foreclosure but canceled the sale after Moss wrote a letter. M&T then sent another notice to Moss informing her that it planned to foreclose on her home but saying that M&T would give her 35 days to pay $12, 174.20 in arrearages. Moss then independently gathered the documents needed from the contractor and sent them to M&T. She says that M&T never did anything or tried to repair her home. According to the deed of trust, M&T would apply insurance proceeds to restoration or repair of the home "if the restoration or repair is economically feasible and [M&T's] security is not lessened." (Am. Compl. ¶ 55.) If M&T deemed the repairs infeasible, then the deed of trust requires M&T to apply the insurance proceeds to the loan principal. Due to M&T's failure to repair, Moss says that M&T effectively elected not to repair the home and should have applied the claim check to her balance.

         Moss also sent two Qualified Written Requests ("QWRs") to M&T in the spring of 2016, asking about a number of issues such as applying the insurance proceeds to her loan and about $7, 800 in unexplained fees on her billing statement. M&T quickly responded to her letters by saying that it would apply the proceeds to her loan, but it never answered her questions about the $7, 800. In March 2017, M&T then said that it would not apply the insurance proceeds to the mortgage because M&T needed them for necessary repairs. From the face of the amended complaint, it remains unclear whether M&T has foreclosed upon the home. Defendants Atlantic and Orlans initiated foreclosure proceedings on multiple occasions but stopped them after Moss's objections.

         II. DISCUSSION[1]

         Moss brings eleven counts in her amended complaint: Counts one through nine against M&T and Counts one, ten, and eleven against defendants Atlantic and Orlans. In Counts one and two Moss brings a breach of contract claim based on the defendants' failure to give proper notice prior to acceleration and foreclosure. She seeks a declaratory judgment in Count one that the defendants may not foreclose on her home and in Count two seeks compensatory damages. In Count three, Moss brings a breach of contract claim seeking a declaratory judgment for M&T's failure to apply her insurance proceeds to her loan; in Count four, she also seeks compensatory damages for this alleged breach. In Count five, Moss alleges a breach of the implied covenant of good faith and fair dealing. Count six brings an action for a violation of the federal Real Estate Settlement Procedures Act for failing to respond to her QWRs. Counts seven through nine allege that M&T violated the Fair Credit Reporting Act ("FCRA") by reporting a delinquency on Moss's mortgage and failing to properly investigate her disputes, failing to review all relevant information provided to it by the credit reporting agencies, and failing to disclose Moss's disputes to the credit reporting agencies. Count ten alleges that Atlantic and Orlans breached their fiduciary duties as trustees. Finally, Count eleven alleges violations of the Fair Debt Collection Practices Act ("FDCPA") against Atlantic and Orlans.

         A. Breach of Contract Claims

         In Virginia, "[t]he elements of a breach of contract action 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 (2006) (quoting Filak v. George,267 Va. 612, 619, 594 S.E.2d 610, 614 (2004)). Moss alleges plausible breach of contract claims based on M&T's ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.