United States District Court, D. South Carolina, Spartanburg Division
MEMORANDUM OPINION AND ORDER GRANTING IN PART,
DENYING IN PART, AND DENYING WITHOUT PREJUDICE IN PART
DEFENDANTS' MOTION TO DISMISS AND GRANTING PLAINTIFFS
LEAVE TO AMEND THE COMPLAINT
GEIGER LEWIS UNITED STATES DISTRICT JUDGE
an action for violation of the Real Estate Settlement
Procedures Act (RESPA), specifically 12 U.S.C. § 2607,
and related state law claims arising out of the refinancing
of Plaintiffs' home loan. The Court has jurisdiction over
this matter under 28 U.S.C. §§ 1331 and 1367.
before the Court is Defendants' Partial Motion to Dismiss
the Amended Complaint (Motion to Dismiss) under Rule 12(b)(6)
of the Federal Rules of Civil Procedure. The Court notes that
because Defendants filed their answer and Motion to Dismiss
simultaneously, the Motion to Dismiss technically should have
been filed under Rule 12(c). See Walker v. Kelly,
589 F.3d 127, 139 (4th Cir. 2009). The distinction, however,
is one without a difference because motions under Rule 12(c)
are evaluated under the same standard as those under Rule
12(b)(6). See Id. The Court will therefore assess
the Motion to Dismiss under the standard for Rule 12(b)(6)
motions. Having carefully considered the motion, the
response, the reply, the record, and the applicable law, it
is the judgment of the Court Defendants' Motion to
Dismiss will be granted in part, denied in part, and denied
without prejudice in part with leave to refile, and
Plaintiffs will be granted leave to amend their Amended
FACTUAL AND PROCEDURAL HISTORY
action arises out of Plaintiffs' refinancing of their
home loan with Defendants. Plaintiffs complain of alleged
improprieties in the closing of their loan, including
Defendants' failure to honor their attorney preference
and failure to disclose the relationship among Defendants and
others involved in the closing of their loan. The Complaint
asserts claims against Defendants collectively for
fraud/constructive fraud/fraud in the inducement, violation
of the South Carolina Unfair Trades Practices Act (UTPA),
negligence, violations of the South Carolina Consumer
Protection Code (CPC), breach of fiduciary duty, violation of
RESPA, and violation of the Licensing of Mortgage Brokers Act
(Mortgage Brokers Act). ECF No. 1-1 at 70-78.
filed their initial complaint in the South Carolina Court of
Common Pleas for Spartanburg County on October 31, 2016.
Id. at 3-11. Defendants filed an answer and a motion
to dismiss the initial Complaint on January 6, 2017.
Id. at 12-64. On February 9, 2017, Plaintiffs filed
a motion to amend the initial Complaint, id. at 65,
and the Spartanburg County Court of Common Pleas entered a
consent order on April 4, 2017, granting Plaintiffs leave to
amend the complaint, id. at 66-68.
filed the Complaint currently at issue in the Spartanburg
County Court of Common Pleas on April 10, 2017. Id.
at 70-78. The Complaint asserts two additional causes of
action not previously included in the initial complaint,
including one for violation of RESPA.
removed this action on April 25, 2017. ECF No. 1. That same
day, Defendants filed an answer to the Complaint as well as
their Motion to Dismiss currently before the Court. ECF Nos.
4 and 5. Plaintiffs responded to Defendants' Motion to
Dismiss on May 9, 2017, ECF No. 10, and Defendants filed a
reply on May 16, 2017, ECF No. 13. Having been fully briefed
on the relevant issues, the Court is now prepared to discuss
the merits of Defendants' Motion to Dismiss.
STANDARD OF REVIEW
purpose of a Rule 12(b)(6) motion is to test the sufficiency
of a complaint.” Edwards v. City of Goldsboro,
178 F.3d 231, 243 (4th Cir. 1999). To survive a motion to
dismiss, the Federal Rules of Civil Procedure require a
complaint contain “a short and plain statement of the
claim showing that the pleader is entitled to relief.”
Fed.R.Civ.P. 8(a)(2). Rule 9(b) requires a heightened
standard of pleading “[i]n alleging fraud or mistake,
” under which “a party must state with
particularity the circumstances constituting fraud or
mistake.” Fed.R.Civ.P. 9(b).
8(a) does not require “detailed factual allegations,
” but “more than an unadorned,
the-defendant-unlawfully-harmed-me accusation, ”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp v. Twombly, 550 U.S. 554, 555
(2007)), to “‘give the defendant fair notice of
what the . . . claim is and the grounds upon which it rests,
'” Twombly, 550 U.S. at 555 (quoting
Conley v. Gibson, 255 U.S. 41, 47 (1957)). In other
words, “a complaint must contain sufficient factual
matter, accepted as true, to ‘state a claim to relief
that it plausible on its face, '” Iqbal,
556 U.S. at 678 (quoting Twombly, 550 U.S. at 570).
A claim is considered facially plausible “when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. (citing
Twombly, 550 U.S. at 556).
considering a motion to dismiss, a plaintiff's well-pled
allegations are taken as true, and the complaint and all
reasonable inferences are liberally construed in the
plaintiff's favor. Mylan Labs., Inc. v. Matkari,
7 F.3d 1130, 1134 (4th Cir. 1993). The Court may consider
only the facts alleged in the complaint, which may include
any documents either attached to or incorporated in the
complaint, and matters of which the Court may take judicial
notice. Tellabs, Inc. v. Makor Issues & Rights,
Ltd., 551 U.S. 308, 322 (2007). Although the Court must
accept the plaintiff's factual allegations as true, any
conclusory allegations are unentitled to an assumption of
truth, and even those allegations pled with factual support
need to be accepted only to the extent “they plausibly
give rise to an entitlement to relief.” Iqbal,
556 U.S. at 679. In sum, the factual allegations must be
enough to raise a right to relief above the speculative
level, on the assumption that all the allegations in the
complaint are true, even if doubtful in fact.
Twombly, 550 U.S. 544, 555 (2007).
court should freely give leave [to amend a complaint] when
justice so requires.” Fed.R.Civ.P. 15(a)(2).
“[L]eave to amend a pleading should be denied only when
the amendment would be prejudicial to the opposing party,
there has been bad faith on the part of the moving party, or
the amendment would be ...