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Wilkerson v. HSBC Mortgage Services, Inc.

United States District Court, M.D. North Carolina

November 20, 2014



JOE L. WEBSTER, Magistrate Judge.

This matter is before the court on Defendant Caliber Home Loan, Inc.'s ("Defendant" or "Caliber") motion to dismiss for failure to state a claim. (Docket Entry 13.) The motion has been fully briefed and the matter is ripe for disposition. For the reasons that follow, it is recommended that Defendant Caliber's motion be granted.


John Scott Wilkerson ("Plaintiff" or Wilkerson") filed this action in the Superior Court of Alamance County, North Carolina on February 7, 2014, against four defendants: HSBC Mortgage Services, Inc. ("HSBC"), Premier Mortgage Funding, Inc. ("Premier"), Caliber, and substitute trustee Trustee Services of Carolina, LLC ("Trustee Services") (Docket Entry 8.) After Plaintiff voluntarily dismissed non-diverse party Trustee Services on March 3, 2104, HSBC and Caliber jointly removed this action to this Court on April 1, 2014 pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. (Docket Entries 1, 1-5.) Plaintiff subsequently dismissed HSBC and Premier from this action. (Docket Entries 16, 23.) Plaintiff's claims against Caliber are all that remain of the present action.

In his complaint, Plaintiff alleges the following facts, which this Court must accept as true for purposes of the motion to dismiss. Giarrantano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008). In 2001, Plaintiff purchased a home in Mebane, North Carolina with proceeds from a mortgage loan. (Compl. ¶ 6.) In early 2006, Plaintiff experienced financial difficulties due to divorce and debt, and refinanced his mortgage loan with assistance from Premier. ( Id. ¶¶ 6-9.) According to the complaint, Plaintiff entered into a contract with Defendant Premier Mortgage Funding, Inc. ("Premier") for the provision of mortgage services, and subsequently closed two mortgages on his property, with Premier acting as "his mortgage broker." ( Id. ¶ 10.) Plaintiff executed and delivered two promissory notes (the "Notes") in the original principal amounts of $137, 000 and $34, 250, respectively, to M&I Bank, FSB (the "Original Lender"). ( Id. ¶¶ 11-12.) These loans were secured by deeds of trust granting the Original Lender first- and second-priority liens on Plaintiff's residence (collectively the "loans"). ( Id. ¶¶ 6, 11, 12.)

Plaintiff alleges that Premier fraudulently induced him into closing the loans by misrepresenting the loan terms. Specifically, Plaintiff claims that Premier's representative, Mike Orlando, promised to find Plaintiff a fixed-rate mortgage with "fair and equitable terms" that Premier would refinance into one loan within a year and that Orlando assured Plaintiff that his loan would have a fixed interest rate and would not be sold to another company. ( Id. ¶ 19.) Plaintiff alleges that before the closing Premier presented him with notes and deeds of trust that contained variable interest rates that were higher than what had been promised to Plaintiff. ( Id. ¶¶ 25-29.) Upon noticing the higher rates, Plaintiff questioned Premier about the terms of the notes and deeds of trust but still proceeded with the closing. ( Id. ¶ 31.) In October 2006, HSBC acquired the notes and deeds of trust. ( Id. ¶ 47.)[1]

Plaintiff paid off the 2006 second mortgage loan in 2009, but the property remains subject to the 2006 first mortgage loan. (Compl. ¶ 13.) Plaintiff alleges that "in recent months" Caliber became the servicer of the 2006 first mortgage loan. ( Id. ¶¶ 48-49.) A foreclosure proceeding is currently pending in Alamance County Superior Court.

In this action, which was filed prior to a foreclosure hearing in state court, Plaintiff alleges four causes of action against Caliber: breach of contract, negligence, negligent misrepresentation, and unfair and deceptive trade practices in violation of the North Carolina Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1. (Compl. at 22-27.) Plaintiff seeks actual, incidental, and punitive damages. ( Id. )


Defendant seeks dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. A motion to dismiss under Rule 12(b)(6) should be granted if the complaint does not "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct. Id. In other words, to survive a 12(b)(6) motion, a complaint must "advance the plaintiff's claim across the line from conceivable to plausible.'" Walters v. McMahen, 684 F.3d 435, 439 (4th Cir. 2012) (quoting Twombly, 550 U.S. at 570).

In making this determination, a court must "assume the truth of all facts alleged in the complaint and the existence of any fact that can be proved, consistent with the complaint's allegations." E. Shore Mkts. Inc. v. J.D. Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir. 2000). However, a court need not consider "legal conclusions, elements of a cause of action, ... bare assertions devoid of factual enhancement[, ]... unwarranted inferences, unreasonable conclusions, or arguments." Nemet Chevrolet, Ltd. v. Consumera ffairs.corn, Inc., 591 F.3d 250, 255 (4th Cir. 2009) (citations omitted).


a. Generally

"As an initial matter, a court is not bound by conclusory allegations and unsupported assertions." Bryant v. Wells Fargo Back, Nat. Ass'n, 861 F.Supp.2d 646, 663 (E.D.N.C 2012). The Court notes that in spite of the length of Plaintiff's complaint, Plaintiff has done little more than offer, in conclusory fashion, the elements of his claims without providing sufficient facts to state claims against Caliber under the Iqball Twombly federal pleading standards. See Aziz v. Alcolac, Inc., 658 F.3d 388, 391 (4th Cir. 2011) (a complaint must allege facts sufficient "to raise a right to relief ...

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