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Vuyyuru v. Bank of North America, N.A.

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

July 9, 2019

LOKESH B. VUYYURU, et al Plaintiffs,
BANK OF AMERICA, N.A., et al, Defendants.


          Henry E. Hudson Senior United States District Judge

         This matter comes before the Court on a motion under Fed.R.Civ.P. 12(b)(6) for failure to state a claim, filed on April 23, 2019, by Defendants Bank of America, Inc. ("BANA"), Caliber Home Loans, Inc. ("Caliber"), LSF9 Master Participation Trust, Inc. ("LSF9"), and U.S. Bank and Trust, Inc. (collectively, "Defendants"). (Mot. Dismiss, ECF No. 36.) On May 7, 2019, Lokesh B. Vuyyuru ("Vuyyuru") and Virginia Gastroenterology Associates (collectively, "Plaintiffs") filed a Response. (Mem. Opp'n Mot. Dismiss, ECF No. 38.) The Court will dispense 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. See E.D. Va. Local Civ. R. 7(J). For the reasons that follow, the Court will grant Defendants' Motion.

         I. BACKGROUND

         According to the Amended Complaint, on August 30, 2004, Vuyyuru obtained a home equity loan for $225, 000 from BANA, using property at 12200 Ganesh Lane, Chester, VA 23836 as collateral. (Am. Compl. ¶ 7, ECF No. 34.) Vuyyuru stopped making payments on the home equity loan in 2009. (Id. ¶ 10.) Thereafter, BANA allegedly requested that Vuyyuru "submit documentation of loan every three to four months in order to qualify for loan modification." (Id. ¶ 11.) According to Vuyyuru, he provided BANA with loan modification documents on multiple occasions, however he received no response. (Id. ¶¶ 11-12.) Vuyyuru also claims that a BANA representative promised to "reinstate the loan ... but never sent approved loan modification documents." (Id. ¶ 14.)

         In 2014, BANA appointed Caliber to represent BANA on loan modifications and informed Vuyyuru that Caliber was the principle contact. (Id. ¶ 17.) Plaintiffs claim Caliber received the documents required for a loan modification but did not act on them. (Id. ¶ 19.) In 2015, LSF9 allegedly acquired the deed of trust and "appointed Caliber as substitute trustee for loan modifications." (Id. ¶ 18.)

         On January 6, 2016, LSF9 allegedly foreclosed on the property, while Vuyyuru was hospitalized in India. (Id. ¶ 22.) At the time of foreclosure, Vuyyuru owed $265, 988 on the loan. (Id. ¶ 23.) After foreclosure, U.S. Bank and Trust, Inc. was allegedly appointed as substitute trustee for LSF9. (Id. ¶ 24.) LSF9 allegedly purchased the home for $361, 233 through the foreclosure process. (Id. ¶ 25.) Vuyyuru alleges that LSF9 also acquired some of his personal belongings, although they are not identified. (Id. ¶ 26.)

         Plaintiffs filed their Amended Complaint against Defendants on April 9, 2019. This filing represents Vuyyuru's third attempt to sue Defendants with respect to this transaction. Notably, Vuyyuru previously filed two related complaints, both of which were dismissed at the motion to dismiss stage for failure to state a claim. See Vuyyuru v. Bank of Am., N.A., No. 3:16-CV-638-HEH, 2017 WL 1740020 (E.D. Va. May 3, 2017) ("Vuyyuru F); Vuyyuru v. Bank of Am., N.A., No. 3:17-CV-746-HEH (E.D. Va. Jan. 3, 20\S) ("Vuyyuru II).


         "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). The Federal Rules of Civil Procedure "require[] only '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.'" BellAtl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not assert "detailed factual allegations," but must contain "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555 (citations omitted). Thus, the "[f]actual allegations must be enough to raise a right to relief above the speculative level," id. (citation omitted), to one that is "plausible on its face," id. at 570, rather than merely "conceivable." Id. 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 & Son, Inc. v. Donald P. & Patricia Brennan LLC, 385 F.3d 836, 841 (4th Cir. 2004) (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 (2007), as well as documents attached to a motion to dismiss, so long as they are integral to or explicitly relied upon in the complaint, and the authenticity of such documents is not disputed. Philips v. Pitt Cnty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009); Phillips v. LCI Int'l, Inc., 190 F.3d 609, 618 (4th Cir. 1999).


         Plaintiffs lodge three counts against Defendants pursuant to the Truth in Lending Act ("TILA"), the Real Estate Settlement Procedures Act ("RESPA"), and Virginia contract law. (Am. Compl. ¶¶ 27-40.) The Court will address each count in turn.

         First, Plaintiffs contend that Defendants have violated TILA. They present two theories under which Defendants violated the statute: (1) by "failing to communicate with Plaintiffs and provide statutorily required disclosures" pertaining to "a rescission within [a] three year period to which the lender consented, or alternatively that the Court should grant, that indicated plaintiffs ability to enter into the new contract" and (2) by failing "to disclose assignments of the loans or trust deeds" in violation of 15 U.S.C. § 1641(g). (Id. ¶¶ 29-31.) Plaintiffs fail to state a claim under either theory.

         Plaintiffs' first theory fails because they do not allege that Vuyyuru attempted to rescind within the statutorily permitted period. Defendants direct the Court to 15 U.S.C. § 1635, which permits a borrower to rescind a loan, under certain circumstances, and establishes the procedural requirements for doing so. Importantly, the relevant portion of the statute provides that the "right of rescission shall expire three years after the date of ...

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