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Bourque v. Bank of America

United States District Court, M.D. Tennessee, Nashville Division

March 29, 2018

BANK OF AMERICA, et al., Defendants.

          William L. Campbell Judge



         Pending before the Court are four motions to dismiss Plaintiff Peggy Ann Bourque's Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. These motions were filed by Defendants Seterus, Inc. (Seterus) (Doc. No. 58); Dwayne Hampton (Doc. No. 63); Bank of America, N.A. (BANA) (Doc. No. 71); and Harry Tinsley, his spouse, and estate (collectively, Tinsley) (Doc. No. 75). Bourque, proceeding pro se, has filed one response to the four motions. (Doc. No. 81.) For the reasons given below, the Magistrate Judge RECOMMENDS that Defendants' motions to dismiss be GRANTED.

         I. Background

         This action is brought under the Fair Debt Collection Practices Act and alleges a conspiracy to defraud Bourque beginning with the October 15, 2006 sale of real property to her at a fraudulently inflated purchase price and culminating in unlawful collection efforts and a foreclosure sale following her default on the mortgage. In response to the filing of the original complaint on February 13, 2017, by Bourque and her son and co-plaintiff Rodger Dudley Mason (Doc. No. 1), Defendants Seterus, Hampton, BANA, and Tinsley filed motions to dismiss that are substantially similar to their currently pending motions. Bourque and Mason subsequently moved for leave to amend the complaint, and Defendants' motions were denied without prejudice to refiling based on the amended pleading. (Doc. No. 46, PageID# 458.)

         On July 17, 2017, Bourque filed an Amended Complaint (Doc. No. 56) that no longer identifies Mason as a plaintiff or bears his signature. The docket reflects that Mason was terminated as a plaintiff on the date the Amended Complaint was filed. Defendants refiled their motions to dismiss. Bourque responded in opposition on grounds that the motions had previously been denied by the Court and that they “are generally presented in bad faith and full of deceitful misrepresentations[.]” (Doc. No. 81.)

         II. Bourque's Amended Complaint

         Bourque alleges that she entered into a verbal agreement with Tinsley to purchase property in Lebanon, Tennessee for the price of “$45, 000.00 plus costs, ” with closing in sixty days and designated repairs to be completed by Tinsley prior to closing. (Doc. No. 56, PageID#545-46, ¶ 11.) The closing took place on October 15, 2006, when Bourque's son, Mason, represented Bourque under a power of attorney “with Defendant Hampton in attendance as the closing agent/broker.” (Id. at PageID# 546, ¶ 12.) “Mason was fully authorized to sign for [Bourque] as agent on all closing documents presented to him by Hampton.” (Id.) During the closing, Hampton told Mason that “[a]ll the paper work is in order, just sign here, and here, ” and that “[y]our mother has already agreed to everything, she voluntarily waived the inspection of the property.” (Id. at PageID# 547, ¶ 15.) Based upon Tinsley's representations prior to closing Hampton's representations at the closing, Bourque (through Mason) closed on the property on October 15, 2006. (Id. at ¶ 17.) However, Bourque alleges that Mason was “verbally pressured and physically intimidated” by Hampton into signing the documents without adequate time to inspect them. (Id. at PageID# 549-50, ¶¶ 24, 30.)

         On the Warranty Deed issued approximately two days after closing “Gary Willis” was listed as the seller and the purchase price was listed at over $88, 000.00. (Id. at PageID# 548, ¶ 21; see also Doc. No. 58-1, PageID# 670.) Bourque alleges that Tinsley willfully failed to disclose to Bourque or Mason that Willis was “the true owner of the house affixed to the property.” (Doc. No. 56, PageID# 548, ¶ 22.) She alleges that Tinsley and Hampton conspired “to cover the payment at closing, to the True Seller [Willis], with an extra credit application for a mortgage rider in the amount of $17, 000.00.” (Id. at PageID# 548-49, ¶ 23.) Bourque also alleges that Tinsley never completed the promised repairs, leaving her to complete the repairs over the course of a year after closing at substantial cost to her. (Id.)

         Bourque alleges that Hampton's access to an “established lending network and brokerage tools” enabled him, with Tinsley, “to forge [Bourque's] signature on a pre-approval application that was later used as the basis for the creation of a mortgage rider loan agreement” and was included in the closing documents signed by Mason; that agreement increased Bourque's indebtedness on the property by $17, 000.00 over the $45, 000.00 plus costs that Bourque agreed to. (Id. at PageID# 550, ¶¶ 27-28.) Bourque alleges that Hampton and Tinsley succeeded in concealing the second mortgage loan “for a period of four months after closing.” (Id. at PageID# 552, ¶ 36(a).) Hampton allegedly structured the loan so that the second mortgage principal and interest would be paid before the first mortgage amount of $45, 000.00, “effectively making the second mortgage rider loan disappear in the course of [Bourque's] payments in the first year.” (Id. at PageID# 553, ¶36(b).)

         Bourque “was first made aware of the fraud a few months after the closing, when her son Mason called her . . . to inform her that a ‘Credit Card' had arrived in the mail” with “a statement of balance due and owing . . . bearing the amount of $17, 000.00.” (Id. at ¶ 37.) Bourque asserts that, if this additional indebtedness had been properly disclosed in advance of or at the time of closing, she would not have agreed to its terms. (Id. at ¶ 38.) She alleges harm due to the fraud perpetrated during this transaction, the resulting collection activity, and the eventual foreclosure of the loan and sale of the property. (Id. at PageID# 553-54, ¶ 39.) Bourque alleges that Defendants BANA, Seterus, and others engaged in “collection activity” and “negative reporting on her credit, ” while failing or refusing “to investigate and/or validate the alleged mortgage debt, ” thereby causing her to make “[e]ight years of erroneous payments” to BANA and Seterus. (Id. at PageID# 554, ¶¶ 40-42.) She alleges that, despite BANA's statement that an investigation into the alleged fraud would be opened, “[n]o investigation was had by the time [BANA] assigned the alleged mortgage debt over to Defendant [Seterus] during 2015.” (Id. at PageID# 555, ¶ 43.) Seterus also allegedly promised to open an investigation, but failed to do so prior to assigning the debt collection account to Priority Trustee Services of Tennessee, LLC, Stephen Routh, and RCO Legal, P.S. (Id. at ¶¶ 44-45, 47.) Despite Bourque's demands that BANA, Seterus, and these other Defendants cease and desist their communications with her, the collection efforts continued in the form of multiple delinquency notices containing “duplicate, confusing, and/or misleading account information, ” as well as “harassing and unlawful telephon[e] communications from Defendants to [Bourque's] landline phone consistently start[ing] around 7am EST in the morning, during lunchtime, during dinner, and occasionally after 9pm EST at night.” (Id. at PageID# 556-57, ¶¶ 49-53.)

         Bourque summarizes her allegations of Defendants' wrongdoing as follows:

The fraudulent closing scheme of Defendants' Tinsley and Hampton was materially furthered and/or knowingly or willfully participated in by Defendant(s) [BANA, Seterus, et al.] when, each of those latter defendants were given notice by Plaintiff of the Fraud and Conspiracy; yet continued their collection activity, failed to investigate, and thereafter continued their application of Plaintiff's payments to the second “credit line” instead of [principal, interest, taxes and insurance] towards the original Mortgage Balance of $45, 000.00 for nearly Ten (10) Years respectively.

         (Id. at PageID# 558, ¶ 56.) Based on these allegations, Bourque asserts state law claims of civil conspiracy and fraud (including fraud in the factum and fraudulent concealment) against Hampton and Tinsley, and a claim to quiet title with a corresponding request for declaratory judgment regarding title and possession of the property against all Defendants. (Id. at PageID# 560-73.) She further asserts a claim for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., against BANA, Seterus, Priority Trustee Services of Tennessee, LLC, Stephen Routh, and RCO Legal, P.S. (Id. at PageID# 573-77.) She asserts her right to damages against all Defendants. (Id. at PageID# 578-79.)

         III. Legal Standard

         Defendants' motions seek dismissal for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). In deciding a Rule 12(b)(6) motion, the Court must view the complaint in the light most favorable to the plaintiff, and accept all well-pleaded factual allegations as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim.” Fed.R.Civ.P. 8(a)(2). However, the plaintiff ...

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