June 16, 2019

Tenth Circuit: Dismissal of Plaintiffs’ Claims in Foreclosure Action Affirmed

The Tenth Circuit issued its opinion in Toone v. Wells Fargo Bank on Friday, March 8, 2013.

Bryan and JoLynne Toone executed a promissory note (the Note) secured by a deed of trust on their home (the Trust Deed). The Note was assigned several times. After the Toones defaulted on the Note, their home was scheduled to be sold at a trustee’s foreclosure sale. They filed suit to halt the foreclosure and to obtain damages and declaratory relief based on alleged violations of statutory and common law duties by numerous parties who had current or prior interests in the Note and Trust Deed or were involved in the foreclosure efforts. Defendants filed separate motions to dismiss under Fed. R. Civ. P. 12(b)(6), which the district court granted. The Toones appealed.

“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.” Fed. R. Civ. P. 8(a)(2). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

The heart of the Toones’ claims was the challenge to the various assignments of the Note. The gravamen of their complaint was the allegation that the purported endorsements on the Note were defective for many reasons, such that subsequent banks never legally became the owner/endorsee of the Note. The problem for the Toones is that their complaint did not adequately allege that the endorsements were improper. It asserted that the endorsements were invalid because the first was signed by an underwriting assistant for the assignee instead of the assignor, and the remaining ones were “robosigned.” However, the face of the Note contradicted the Toones’ allegations. Accordingly, the factual predicate of most of the Toones’ arguments on appeal is undermined.

Toones’ opening brief on appeal also asserted that the defendants committed multiple acts that constituted violations of the Fair Debt Collection Practices Act (FDCPA). The brief failed, however, to specify what those acts were. The issue was so inadequately treated in the argument sections of opening briefs, the Tenth Circuit concluded it did not deserve its attention.

The Toones next claimed that Wells Fargo violated the Real Estate Settlement Procedures Act  (RESPA) by not responding to their written requests for information. To survive a Rule 12(b)(6) motion to dismiss a claim under § 2605(e) of RESPA, plaintiffs must plead actual damages stemming from the failure to respond to requests or a pattern or practice of misconduct. See Hintz v. JPMorgan Chase Bank, N.A., 686 F.3d 505, 510–11 (8th Cir. 2012).  The Tenth Circuit held this claim must fail due to the conclusory nature of the complaint.


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