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Hanas v. Seterus, Inc.

United States District Court, E.D. Tennessee

February 19, 2015

GARRETT J. HANAS, Plaintiff,
v.
SETERUS, INC., Defendant

Page 748

Garrett J Hanas, Plaintiff, Pro se, Knoxville, TN.

For Seterus, Inc., Defendant: Kelly Marie Telfeyan, Dickinson Wright, PLLC (Nashville), Nashville, TN.

Page 749

MEMORANDUM OPINION

Pamela L. Reeves, UNITED STATES DISTRICT JUDGE.

Plaintiff, Garrett J. Hanas, has brought this action against Seterus, Inc., the servicer of his residential mortgage, alleging that he is exempt from the payment of property taxes pursuant to Tenn. Code Ann. § 67-5-704. Hanas challenges the payment of property taxes, arguing that as a disabled veteran, he is exempt from paying property taxes pursuant to Tenn. Code Ann. § 67-5-704 and, therefore, should not be held accountable for making a monthly payment that includes an amount intended to cover his real property taxes. Hanas has asserted claims against Seterus for breach of contract, breach of the duty of good faith and fair dealing, defamation, and violation of the Tennessee Consumer Protection Act.

Seterus responds that the Deed of Trust securing Hanas' property contains an escrow provision requiring Hanas to pay, in addition to the amount required to cover his monthly principal, interest, and insurance payments, an amount for taxes, assessments, and other items (referred to in the Deed of Trust as " Escrow Items" ). Despite the Escrow provision, Hanas has refused to include as part of his monthly mortgage payments the amount necessary to cover the designated Escrow Items. Specifically, Hanas has refused to include as part of his monthly payments the amount required to pay the annual property taxes assessed against his residence by Knox County and the City of Knoxville.

II. Factual Background

On October 16, 2009, Hanas executed a Promissory Note in the amount of $148,825.00. A Deed of Trust executed by Hanas that same day secured the Promissory Note and covered the property at 2115 Karnswood Drive, Knoxville, Tennessee. The Deed of Trust was filed and recorded on November 9, 2009, with the Knox County Register of Deeds. As reflected in the Deed of Trust, Quicken Loans, Inc. was the original lender. The Deed of Trust was subsequently transferred to Fannie Mae. Seterus services the loan on behalf of Fannie Mae. The Deed of Trust securing the property contains an Ecrow provision requiring Hanas to pay, in addition to the amount required to cover his monthly principal, interest, and insurance payments, an amount for taxes, assessments, and other items [R. 8-2, pp. 5-6].

This matter is before the court on defendant Seterus' motion to dismiss Hanas' Complaint in its entirety [R. 7]. As grounds for the motion, Seterus asserts (1) the breach of contract claim should be dismissed because there is no privity of contract between Seterus and Hanas; (2) alternatively, the breach of contract claim is barred by the Statute of Frauds; (3) the claim for breach of the duty of good faith and fair dealing is derivative of the contract claim, and is not a stand-alone claim for which relief may be granted; (4) the claim for defamation should be dismissed because Hanas has acknowledged the truth of the information Seterus allegedly reported to the credit bureaus; and (5) the

Page 750

Tennessee Consumer Protection Act claim should be dismissed because Seterus has not engaged in any unfair or deceptive acts or practices.

In response to Seterus' motion to dismiss, Hanas states that he has never missed a monthly mortgage payment on his residence. Seterus has reported him as delinquent to one or more national credit bureaus and threatened foreclosure on his residence. Hanas argues he is not statutorily or contractually required to pay property taxes to defendant due to his status as a disabled veteran, and that Quicken Loans did not require property tax payments under the Deed of Trust.

For the reasons which follow, Seterus' motion to dismiss will be granted and this action dismissed in its entirety for failure to state a claim upon which relief can be granted.

I. Standard for Motion to Dismiss

A motion to dismiss under Rule 12(b)(6), Federal Rules of Civil Procedure, requires the court to construe the complaint in the light most favorable to the plaintiff, accept all the complaint's factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of the plaintiff's claim that would entitle plaintiff to relief. Meador v. Cabinet for Human Resources, 902 F.2d 474, 475 (6th Cir.) cert. denied, 498 U.S. 867, 111 S.Ct. 182, 112 L.Ed.2d 145 (1990). The court may not grant such a motion to dismiss based upon a disbelief of a complaint's factual allegations. Lawler v. Marshall, 898 F.2d 1196, 1198 (6th Cir. 1990); Miller v. Currie, 50 F.3d 373, 377 (6th Cir. 1995) (noting that courts should not weigh evidence or evaluate the credibility of witnesses). The court must liberally construe the complaint in favor of the party opposing the motion. Id. However, the complaint must articulate more than a bare assertion of legal conclusions. Scheid v. ...


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