United States District Court, M.D. Tennessee, Nashville Division
NEWBERN MAGISTRATE JUDGE.
WILLIAM L. CAMPBELL, JR. UNITED STATES DISTRICT JUDGE.
before the Court is the Renewed Motion to Dismiss filed by
Defendants RoundPoint Mortgage Servicing Corporation
(“RoundPoint”) and Embrace Home Loans, Inc.
(“Embrace”) (Doc. No. 36), and the Motion to
Dismiss filed by Defendant LoanCare, LLC
(“LoanCare”). (Doc. No. 38). Plaintiffs filed
Responses in Opposition (Doc. Nos. 42, 45) and Defendant
LoanCare filed a Reply. (Doc. No. 47). For the reasons
discussed below, the Renewed Motion to Dismiss filed by
Defendants RoundPoint and Embrace is DENIED
in part and GRANTED in part, and Defendant
LoanCare's Motion to Dismiss is DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
are borrowers on a federally related mortgage loan. (Doc. No.
33 ¶ 8). Plaintiffs allege Defendants RoundPoint,
Embrace, and LoanCare were all loan servicers for their home
mortgage loan at the time relating to the factual allegations
in the Amended Complaint. (Id. ¶¶ 5-7).
This lawsuit arises from Defendants' servicing of
Plaintiffs' mortgage loan escrow account in connection
with their home mortgage loan. (Id. ¶ 1).
Plaintiffs claim Defendants violated the Real Estate
Settlement Procedures Act, 12 U.S.C. § 2605(g),
(“RESPA”) by failing to timely pay the insurance
premium for their mortgaged property from their funded escrow
account when the policy became due and, as a result,
Plaintiffs suffered damages. (Id. ¶¶ 9-15,
January 16, 2018, Plaintiffs filed a Complaint against
Defendants RoundPoint and Embrace alleging violations of
Sections 2605(g) and 2605(e)(1)(A) of RESPA. (Doc. No. 1
¶¶ 23-24). On March 12, 2018, RoundPoint and
Embrace moved to dismiss the Complaint for failure to state a
claim. (Doc. No. 13). On September 7, 2018, Plaintiffs filed
a First Amended Complaint, adding Loancare as a defendant.
(Doc. No. 33). On September 17, 2018, RoundPoint and Embrace
filed a Renewed Motion to Dismiss Amended Complaint,
reasserting their arguments from their first Motion to
Dismiss. (Doc. No. 36). On October 9, 2018, Loancare moved to
dismiss the First Amended Complaint for failure to state a
claim. (Doc. No. 38).
STANDARD OF REVIEW
Rule of Civil Procedure 12(b)(6), permits dismissal of a
complaint for failure to state a claim upon which relief can
be granted. For purposes of a motion to dismiss, a court must
take all of the factual allegations in the complaint as true.
Ashcroft v. Iqbal, 556 U.S. 662 (2009). To survive a
motion to dismiss, a complaint must contain sufficient
factual allegations, accepted as true, to state a claim for
relief that is plausible on its face. Id. at 678. A
claim has facial plausibility when the plaintiff pleads facts
that allow the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.
Id. In reviewing a motion to dismiss, the Court
construes the complaint in the light most favorable to the
plaintiff, accepts its allegations as true, and draws all
reasonable inferences in favor of the plaintiff. Directv,
Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007). Thus,
dismissal is appropriate only if “it appears beyond
doubt that the plaintiff can prove no set of facts in support
of his claim which would entitle him to relief.”
Guzman v. U.S. Dep't of Children's Servs.,
679 F.3d 425, 429 (6th Cir. 2012).
RoundPoint and Embrace argue Plaintiffs' claims against
them should be dismissed for failure to state a claim because
there is no supportable allegation that they were in
possession of information in order to pay Plaintiffs'
renewal insurance premium. (Doc. No. 14 at 1). Defendant
Loancare argues dismissal is appropriate because
“[n]owhere in the Complaint are there any factual
allegations or claims against [it]…” (Doc. No.
38-1 at 3). Plaintiffs argue dismissal is unwarranted because
the Amended Complaint adequately alleges that Defendants
failed to pay insurance premiums in violation of 12 U.S.C.
§ 2605(g). (Doc. Nos. 23, 45).
Defendants RoundPoint and Embrace
12 U.S.C. § 2605(g)
allege Defendants violated section 2605(g) of RESPA by
failing to pay timely the insurance premium for their
mortgaged property from their funded escrow account when the
policy became due. (Doc. No. 33 ¶ 24). Section 2605(g)
of RESPA provides:
If the terms of any federally related mortgage loan require
the borrower to make payments to the servicer of the loan for
deposit into an escrow account for the purpose of assuring
payment of taxes, insurance premiums, and other charges with
respect to the property, the servicer shall make payments
from the escrow account for such taxes, ...