United States District Court, D. South Carolina, Columbia Division
D. RANDOLPH WHITT, Plaintiff,
SETERUS, INC. and FEDERAL NATIONAL MORTGAGE ASSOCIATION, Defendants.
ORDER AND OPINION
Margaret B. Seymour Senior United States District Judge
D. Randolph Whitt filed a complaint in the Court of Common
Pleas for Lexington Country, South Carolina, on June 1, 2016,
bringing causes of action against both Defendants Seterus,
Inc. (“Seterus”), and Federal National Mortgage
Association (“Fannie Mae”) for class action,
breach of contract, civil conspiracy, violations of
regulations issued by the Consumer Financial Protection
Bureau through “dual tracking”, and punitive
damages. ECF No. 1-1 at 7-12. Defendant Fannie Mae filed a
Notice of Removal on July 5, 2016. ECF No. 1 at 1. On August
2, 2016, Plaintiff filed a motion to remand, to which
Defendants replied in opposition on August 19, 2016. After
consideration of Defendants' sur-reply and
Plaintiff's response, the Court denied Plaintiff's
motion to remand on December 14, 2016, finding that removal
in this case was proper.
matter is before the court on Defendants' July 12, 2016,
motion to dismiss and motion to strike class allegations,
pursuant to Fed.R.Civ.P. 12(b) and 12(f). Plaintiff filed a
response in opposition on December 22, 2016, to which
Defendants filed a reply on January 5, 2017. Argument on the
motion to dismiss and strike class allegations was heard on
February 23, 2017. For the following reasons, Defendants'
motion to dismiss is GRANTED and
Defendants' motion to strike class allegations is
DENIED AS MOOT.
RELEVANT FACTUAL AND PROCEDURAL BACKGROUND
about August 1, 2014, Defendant Fannie Mae brought a
foreclosure action in the Court of Common Pleas, Lexington
County, South Carolina against Plaintiff based on nonpayment
of a Note. Case No. 2014-CP-32-02795 (“Foreclosure
Action”). Plaintiff subsequently filed an amended
answer and counterclaims in the Foreclosure Action on or
about March 27, 2015, asserting: “(1) Breach of
Contract/Breach of Duty of Good Faith and Fair Dealing and
(2) Dual Tracking/Violation of CFPB Regulations.” ECF
No. 8-1 at 2. On December 10, 2015, Defendant Fannie Mae
filed a motion for summary judgment that was granted on April
29, 2016, by Special Referee Lisa Lee Smith. Id. at
1, 2016, Plaintiff filed the instant suit in federal court.
Id. at 3. Plaintiff alleges that Seterus, acting as
a servicer and agent for Fannie Mae, filed an action for
foreclosure in the Court of Common Pleas, Lexington County,
South Carolina, against Plaintiff. ECF No. 1-1. Plaintiff
contends that Seterus offered a modification of the mortgage
loan on February 18, 2016, during the pendency of the
foreclosure suit. Plaintiff also alleges that he was denied a
loan modification on May 9, 2016, and that between February
18, 2016 and May 9, 2016, “Defendants (i) scheduled a
foreclosure hearing, (ii) attended a foreclosure hearing and
presented evidence, (iii) submitted a judgment of
foreclosure, (iv) filed a judgment for foreclosure after
signature by the judge, and (v) scheduled a foreclosure
sale.” ECF No. 1-1 at 5. Further, Plaintiff alleges
that he did not receive notice of the foreclosure hearing
that was ultimately held in his absence. Id.
to Plaintiff, “the pursuit of the foreclosure during
the pendency of the loan modification is prima face
evidence of improper ‘dual tracking' by the
Defendants.” Id. at 5. Plaintiff also alleges
that Defendants participated in the conduct set forth in the
complaint with other residents in South Carolina.
Id. at 6. As a result, Plaintiff alleges a class
action lawsuit with a proposed class composed of “all
persons (i) whose properties were foreclosed upon, during the
pendency of Defendants' sham Loan Modification offers,
while the Defendants were pursuing a Foreclosure action, and
persons (ii) who received improper Notice of Foreclosure
2, 2016, Plaintiff filed a motion to vacate the Special
Referee's Order and Judgment of Foreclosure Sale.
2014-CP-32-02795, Order to Vacate and Reschedule at 1. The
Special Referee held a hearing, and vacated her April
Foreclosure Order on August 1, 2016. Id. On November
28, 2016, Special Referee Smith issued an Order Allowing
Supplemental Materials re: Motion for Summary Judgment at the
request and with the consent of the parties. ECF No. 26-1 at
2. The foreclosure action is still under consideration by the
Motion to Dismiss
Rule12 (b)(6) motion to dismiss for failure to state a claim
upon which relief can be granted tests the legal sufficiency
of a complaint. Schatz v. Rosenberg, 943 F.2d 455,
489 (4th Cir. 1991). While the complaint need not be minutely
detailed, it must provide enough factual details to put the
opposing party on fair notice of the claim and the grounds
upon which it rests. Bell Atlantic Corp. v. Twombly,
550 U.S 544, 555 (2007)(citing Conley v. Gibson, 355
U.S. 41, 47 (1957)).
order to withstand a motion to dismiss, a complaint must
contain factual content that allows the court to reasonably
infer that the defendant is liable for the alleged
misconduct. Ashcroft v. Iqbal, 556 U.S 662, 678
(2009). The court must accept the allegations in the
complaint as true, and all reasonable factual inferences must
be drawn in favor of the party opposing the motion.
Id. at 679. If the court determines that those
factual allegations can “plausibly give rise to an
entitlement to relief, ” dismissal is not warranted.
Id. To determine plausibility, courts are to
“draw on its judicial experience and common
sense.” Id. “But where the well-pleaded
facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged---but it
has not ‘show[n]'---‘that the pleader is
entitled to relief.” Id. (citing Fed. Rule
Civ. P. 8(a)(2)).
Motion to Strike Class Allegations
12(f) states that “the court may strike from a pleading
an insufficient defense or any redundant, immaterial,
impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f).
The court may act on its own or on motion made by a party
either before responding to the pleading or, if a response ...