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Anderson v. Bank of America, N.A.

United States District Court, D. Montana, Missoula Division

November 20, 2018

BANK OF AMERICA, N.A., a subsidiary of Bank of America a/k/a BAC HOME LOANS SERVICING, LP tfk/a COUNTRYWIDE HOME LOANS SERVICING, LP, and JOHN DOES I-X, Defendants.



         Plaintiffs Phillip and Neoma Anderson (the "Andersons") brought this action against Defendant Bank of America, National Association, a subsidiary of Bank of America, a/k/a BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP ("Bank of America"), asserting eleven claims based on its servicing, modifying, and eventual foreclosure of their mortgage. (Doc. 4.) Pursuant to Federal Rule of Civil Procedure 12(c), Bank of America moves for partial judgment on the pleadings as to all but two of the Andersons' claims. (Doc. 13.) For the reasons discussed below, Bank of America's motion is granted in part and denied in part.

         Factual Background

         As a preliminary matter, Bank of America's brief refers to material outside the pleadings. "Judgment on the pleadings is limited to material included in the pleadings." Yakima Valley Memorial Hosp. v. Wash. St. Dep't of Health, 654 F.3d 919, 925 n.6 (9th Cir. 2011). However, in ruling on a Rule 12(c) motion, a court may consider-in addition to the complaint-"documents incorporated into the complaint by reference, and matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). A document "may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiffs claim." United States v. Ritchie, 342 F.3d 903, 908 (9th Cir.2003). A court's decision to incorporate documents by reference is reviewed for abuse of discretion. Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1160 (9th Cir. 2012).

         This case arises from allegations that Bank of America mishandled the servicing, modifying, and eventual foreclosure of the Andersons' mortgage, which secured property located at 120 Highland Drive, Kalispell, Montana 59901 (the "Property"). (Doc. 4 at ¶ 5.) In March 2006, the Andersons obtained a mortgage loan for $270, 000 (the "Mortgage") evidenced by a promissory note and secured by a Deed of Trust recorded against the Property. (Id. at ¶¶ 5, 7; Doc. 14-1.) By 2009, the Andersons fell behind on the Mortgage payments. (Doc. 4 at ¶ 9.) The Property was sold at a foreclosure sale nearly three years later. (Doc. 14-2.)

         The Andersons assert that they made numerous attempts to negotiate a loan modification between October 2009 and March 2011. (Doc. 4 at ¶ 10.) These ongoing negotiations included a series of "trial period payment plans" to establish a lower monthly payment and modify the Mortgage. During this period, the Andersons were granted two trial period payment plans beginning in 2009. (Id. at ¶¶ 10, 12.) The Andersons allege they made the required trial payments in 2009 but were not given a permanent modification. (Id. at ¶ 10.) In 2011, Bank of America approved the Andersons for a second trial period payment plan, requiring them to make three monthly payments to permanently modify the Mortgage. (Id. at ¶ 12.) The Andersons allege that they made the required payments and executed and returned the permanent loan modification agreement, which established a new, lower payment in May 2012. (Id. at ¶¶ 13-14). The Andersons allege that, despite following Bank of America's instruction regarding their Mortgage and modified agreement, Bank of America did not honor this agreement. "Unbeknownst" to the Andersons, Bank of America foreclosed and sold the Property on September 24, 2012. (Id. at ¶ 19.) The Andersons were evicted from the Property on June 6, 2013. (Id., at ¶ 21.)

         This case commenced in Montana state court on June 3, 2016. A First Amended Complaint ("Amended Complaint") was filed on October 19, 2017, asserting eleven claims: (1) breach of original contract; (2) breach of trial plan period contract; (3) breach of modified contract; (4) promissory estoppel; (5) negligence; (6) tortious breach of covenant of good faith and fair dealing; (7) negligent misrepresentation; (8) violations of Montana's Consumer Protection Act; (9) fraud; (10) constructive fraud; and (11) punitive damages. (Doc. 4.) Bank of America timely removed to this Court, (Doc. 1), and on May 9, 2018, sought partial judgment on the pleadings as to all but two of the Andersons' claims, (Doc. 13). Bank of America does not seek judgment on the pleadings for the claims for breach of trial plan period contract (Count II) or breach of modified contract (Count III). In response, the Andersons concede their claims for Montana Consumer Protection Act violations (Count VIII); fraud (Count IX); and constructive fraud (Count X) are time-barred.

         Legal Standard

         A Rule 12(c) motion for judgment on the pleadings is the functional equivalent of a Rule 12(b)(6) motion to dismiss for failure to state a claim, except it is filed after the answer. See Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 (9th Cir. 2011). Accordingly, the inquiry is "whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief." Id. A facially plausible complaint "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 676 (2009). "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). In considering the motion, a court "must accept all factual allegations in the complaint as true and construe them in the light most favorable to the non-moving party." Fleming v Pickard, 581 F.3d 922, 925 (9th Cir. 2009). However, a court is not required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. Sprewell v. Golden St. Warriors, 266 F.3d 979, 988 (9th Cir. 2001). "A judgment on the pleadings is properly granted when there is no material fact in dispute, and the moving party is entitled to judgment as a matter of law." Ventress v. Japan Airlines, 603 F.3d 676, 681 (9th Cir. 2010).


         I. Count I: Breach of Original Contract

         Bank of America argues that the Andersons' Amended Complaint does not meet pleading standards for a breach of contract claim because it contains only conclusory facts, fails to identify the contract language breached, and fails to allege damages. (Doc. 14 at 12-13.) The Andersons' breach of contract claim is sufficiently pled to survive a Rule 12(c) motion.

         A breach of contract is an actionable wrong regardless of whether actual damages stemmed from the breach. Puryer v. HSBC Bank USA, 419 P.3d 105, ¶ 20 (Mont. 2018) ("A failure to show actual damages and the resulting inference that none were sustained does not defeat the cause of action.") It is undisputed that a valid contract existed between the parties beginning in March 2006 when the Andersons obtained the Mortgage. Count I of the Amended Complaint alleges that Bank of America breached its obligations under the Mortgage. (Doc. 4 at ¶ 25.) The Andersons also allege they suffered "general and special damages" because of the breach. Under Montana law, a failure to plead actual damages for a contractual breach is not fatal. Puryer at ¶ 21. Thus, the Andersons "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

         II. Count IV: ...

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