Monton et al v. America's Servicing Company et al, No. 2:2011cv00678 - Document 34 (E.D. Va. 2012)
Court Description: OPINION AND ORDER - Plaintiffs' motion to remand is DENIED as Defendants properly invoked this Court's diversity jurisdiction. Defendants' unopposed motions to dismiss the original Complaint and Amended Complaint are GRANTED, and Plaintiffs' claims are DISMISSED with prejudice. Plaintiffs' recently filed motion for leave to amend is DENIED as futile. Signed by District Judge Mark S. Davis and filed on 8/20/12. (jcow, )
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UNITED STATES DISTRICT COURT FILED EASTERN DISTRICT OF VIRGINIA Norfolk Division JOCELYN J. AUG 2 0 2012 MONTON, and CLERK, US DISTRICT CUURT NORFOLK, VA JOSELITO MONTON, Plaintiffs, v. Civil No.2:llcv678 AMERICA'S SERVICING COMPANY, and SAMUEL I. WHITE, P.C., Defendants. OPINION AND ORDER This matter, initially filed in the Circuit Court City of Virginia Beach, Virginia, Monton by (collectively, defendant consent of Trustee") basis of defendant (collectively, both jurisdiction. Servicing Samuel I. was Currently removed Company White, "Defendants"). diversity the by Jocelyn Monton and Joselito "Plaintiffs"), America's for this ("ASC")1 P.C. ("the Court with the Substitute Such removal was on the jurisdiction pending to and before federal-question the Defendants' motions to dismiss the Amended Complaint, Court are as well as 1 Defendant ASC indicates that ASC is a division of Wells Fargo Home Mortgage, Inc., which was merged N.A., and that Wells Fargo Bank, N.A. Dakota. Removal citizens of facts. Notice Virginia, 1, do ECF not No. into Wells Fargo is a citizen of 1. challenge Plaintiffs, such Bank, South who are jurisdictional | Plaintiffs' later filed motion for leave to file a leave to Second Amended Complaint and motion to remand.2 Defendants Second oppose Amended Plaintiffs' Complaint and request oppose for the motion for urging the Court to dismiss this matter on the merits, because Plaintiffs' file a remand, primarily claims are predicated on the Home Affordable Modification Program ("HAMP"), a federal program which provides loan modification regulations, but does not provide borrowers a private right of action for alleged HAMP violations. failed to motions to dismiss. For file the Plaintiffs' diversity motion to over this Amended Complaint to any below, the Court unopposed as the pending Court the DENIES finds matter. exists, of that it has Having found that discussed below, the dismiss, and motions to motion to amend as futile. I. the forth as Defendants' Plaintiffs' opposition remand jurisdiction DENIES Plaintiffs' of in set jurisdiction GRANTS support brief reasons subject-matter Court a Plaintiffs FACTUAL AND PROCEDURAL HISTORY original relief is Complaint sought alleges therein, essentially devoid of detailed facts in whereas Plaintiffs' facts. Plaintiffs' 2 Plaintiffs also request an award of attorney's fees associated with the motion to remand; however, separate motion seeking such relief. Plaintiffs fail to file a motion for leave to file a Second Amended Complaint is based on Plaintiffs' inadvertent omission of Complaint. Because Plaintiffs failed to attach a copy of their proposed Second Amended Complaint amend, as facts to from their their motion for leave the Court cannot analyze such proposed filing. discussed erroneously motions herein, even omitted to from dismiss if the the Court Amended Plaintiffs' pleadings are to However, considers Complaint, Amended the facts Defendants' meritorious, rendering any amendment futile. Summarizing the facts as stated in the original Complaint, Plaintiffs executed a Deed of Trust ("DOT") and Promissory Note in June of 2006 in order to obtain a mortgage loan for a home in Virginia Beach, Virginia. September of 2010, Plaintiffs Id. f 2 5, ECF No. 1-3. Monton was laid off from his job, In leading to miss a mortgage loan payment in October of 2010. 12. immediately Mr. Compl. After missing contacted such ASC to loan ask payment, for Plaintiffs assistance. Id. Plaintiffs thereafter submitted to ASC several HAMP applications seeking a Plaintiffs' ASC loan modification. attempts scheduled a Id. to modify foreclosure 3 14. However, their loan were sale of Plaintiffs' none successful, home. Id. of and 53 15-17. Plaintiffs such scheduled filed their foreclosure, original Complaint and record the in before advance the of Court suggests that the foreclosure Amended Complaint, Compliant, sale has submitted several includes virtually no not months facts, ECF No. occurred. after but that a foreclosure sale had not occurred. 12, yet the 12(b)(6) Plaintiffs did dismiss of not the file to dismiss the failed to file brief dismissal motion. to Federal Amended in Thereafter, amend/correct Rules Defendants Complaint pursuant of briefs, Civil but Procedure. instead filed Defendants then jointly filed a second motion a the original responsive their Amended Complaint. leave St! 10, 17. each filed a motion to Rule implies Compl. Subsequent to removal of the case to this Court, to original similarly Amend. The Complaint. opposition Plaintiffs the to again filed newly Plaintiffs filed a motion seeking their Amended Complaint in order to add facts inadvertently omitted from such pleading. Plaintiffs also filed court a motion to remand this matter to state based this Court's purported lack of subject-matter jurisdiction. on All of the pending motions discussed above are now ripe for review. II. A. In order jurisdiction, laws, or treaties REVIEW Subject-Matter Jurisdiction for the STANDARD OF this matter of the Court must to have "aris[e] United under States." According to the United States Court of "federal the 28 Appeals question" Constitution, U.S.C. § 1331. for the Fourth Circuit, "[tjhere is no means for an action to Inc. v. Global Naps, 'single, 'arise under' Inc., (quoting Merrell Dow Pharm. (1986)). precise definition' 377 Inc. federal law." F.3d 355, 362 v. Thompson, of what it Verizon Md., (4th Cir. 478 U.S. 2004) 804, 808, However, [t]he Supreme Court has recognized § 1331 jurisdiction in a variety of cases, such as (1) when a federal right or immunity forms an essential element of the plaintiff's claim; (2) when a plaintiff's right to relief depends upon the construction or application of federal law, and the federal nature of the claim rests upon a reasonable foundation; (3) when federal law creates the cause of action; and (4) when the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law. Id. (internal citations and quotations omitted). In addition may invoke federal this to federal-question Court's statute, this jurisdiction, "diversity jurisdiction." Court has "original a litigant Pursuant jurisdiction of to all civil actions where the matter in controversy exceeds the sum or value of between $75,000, . . . a court exclusive citizens of of interest different and costs, and 28 U.S.C. States." is § 1332(a)(1). Being address limited the challenge to considering Brown, of 462 any of F.3d the jurisdiction, this Court must its subject-matter jurisdiction before other 312, established that before a 316 pending (4th federal motions. Cir. 2006) See ("It Miller is v. well court can decide the merits of a claim, If the claim must invoke the jurisdiction of the court."). this Court jurisdiction, entirety." "concludes the court Arbaugh v. that must Y & H it lacks dismiss Corp., the 546 of Civil Procedure, determines at jurisdiction, P. 12(h)(3) which provides time that any 514 its (2006). "[i]f lacks the court subject-matter the action." Fed. R. Civ. (emphasis added). B. Rule 12(b)(6) Rule 500, in of the Federal Rules that it the court must dismiss complaint U.S. This principle is embodied in Rule 12(h)(3) subject-matter 12(b)(6) permits a Standard defendant to move for dismissal when a complaint fails to state a claim upon which relief can be granted. Fed. R. Civ. a district court must P. 12(b)(6). In assessing such a motion, "assume the truth of all facts alleged in the complaint and the existence of any fact that can be proved, consistent Mkts., Cir. Inc. 2000). with v. further for of a factual Rule J.P. While the light most elements the complaint's Assocs. a district favorable cause of to Consumeraffairs.com, 213 fail and to Eastern F.3d 175, construe the plaintiff, purposes." Inc., P'ship, court must action, enhancement 12(b)(6) Ltd. allegations." the 180 facts in "legal conclusions, devoid constitute well-pled 591 F.3d 250, (4th assertions bare Nemet Shore Chevrolet, 255 (4th Cir. of facts Ltd. 2009). v. After viewing the facts in plaintiff's favor, a complaint must be dismissed if it does not allege "enough facts to state a claim to relief that is plausible on its face." v. Twombly, Johnson, 550 521 U.S. 544, (2007); 302 F.3d 298, 570 (4th Cir. Bell Atl. Corp. accord 2008). Giarratano To v. satisfy such plausibility standard the "[f]actual allegations must be enough to raise a right assumption that to relief above the speculative level on all the allegations (even if doubtful in fact)." citation omitted). in Twombly, "Threadbare the complaint 550 U.S. recitals of at 555 the the are true (internal elements of a cause of action, supported by mere conclusory statements, do not suffice" to survive a motion to dismiss. U.S. 662, 193 (4th 678 (2009); Cir. 2009) (indicating that see Francis v. (quoting 'factual enhancement' line between possibility relief"). within and Giacomelli, Twombly, "'naked assertions' some Ashcroft v. Iqbal, 556 the 550 588 F.3d 186, U.S. at 557) of wrongdoing necessitate complaint plausibility of to cross 'the entitlement to As always, the above standard is applied in light of Rule 8(a)'s requirement of only "a short and plain statement of the claim showing that the pleader is entitled to relief." R. Civ. P. 8(a) (2) . Fed. III. A. Defendants based on similar to Motion to Remand justified the removal both jurisdiction. DISCUSSION federal-question This Court has Plaintiffs' Bank, N.A., However, the because, 802 as F. Supp. Court need discussed the case to jurisdiction this Court and diversity repeatedly held that HAMP claims claims federal-question jurisdiction. of are See, 2d insufficient e.g., 695, not below, the invoke Mosley v. Wells Fargo 698-99 revisit to (E.D. 2011). analysis such Va. herein Defendants have properly invoked this Court's diversity jurisdiction. 1. Amount in Controversy Considering diversity first jurisdiction, the amount in Plaintiffs controversy assert that component the amount of in controversy is less than $75,000 because the original Complaint did not seek monetary damages, seeks $30,000 in damages.3 jurisdictional damages sought, calculus and and the Amended Complaint only Defendants, however, argue that the does not highlight turn the solely fact on that the money Plaintiffs' complaints seek injunctive relief involving a home mortgage well in excess of $300,000. 3 Plaintiffs do not contend that their pending motion seeking leave to file a Second Amended Complaint would have any impact on the jurisdictional calculus. 8 Defendants damages, requests determining amount 635, are in correct whether "like injunctive for that relief the plaintiff controversy." 639 (4th declaratory Cir. or JTH 2010). injunctive Tax, Inc. for must be valued alleged has requests a v. Accordingly, relief, it is well in sufficient Frashier, in money 624 lawsuits F.3d "seeking established that the amount in controversy is measured by the value of the object of the litigation." 432 U.S. 333, Hunt 347 (1977) Plaintiffs' v. Wash. State Apple Adver. Comm'n, (emphasis added). home mortgage loan that they sought under HAMP required interest-only payments to modify for a period of years and began in June of 2006 with a balance of $371,902. No. 3-2, at 7.4 demonstrate that Such fact, the amount case based on the even such and assuming 2011 due Servicing, a HAMP to by itself, value market conditions. that the See 766 "manifest exceeded in this Plaintiffs' substantially 796 F. Supp. 2d. 753, case of real decreased Sherman (E.D. Va. fact ECF appears sufficient to in controversy is apparent value ten that between 2006 Litton Loan v. 2011) the property, (holding in value of the 4 It is appropriate for the Court to consider evidence outside the pleadings in determining whether it has subject-matter jurisdiction. Velasco v. Government of Indonesia, 370 F.3d 392, 398 (4th Cir. 2004). Furthermore, in ruling on the pending motions to dismiss, the Court may consider the Note and DOT as such documents are "integral to the complaint" and there is no dispute as to their authenticity. Philips v. Pitt County Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009) . Property exceeds jurisdictional (4th Cir. $75,000" was threshold); 1938) sufficient Peterson v. (indicating that "in to Sucro, satisfy 93 suits to F.2d quiet actions in ejectment, the amount in controversy is the whole estate of the the value of real defendant's to which claim") the claim (internal the 878, 882 title or the value of extends and not quotation marks and citations omitted). Even if the jurisdictional above to Amended Complaint documents loan, halt the before Plaintiffs at 7. also the of their order required to that, make from 2006 establish the in addition home, The under to 2016. ASC to relevant their monthly to Plaintiffs' requiring modification. establish $2,130 to controversy, an loan Court current interest-only ECF No. 3 Exh. Interest and principal payments would then be due for a period of twenty years. Court in seeks a are of insufficient foreclosure perform mortgage payments 2, were threshold amount seeking specifically facts order that would Id. Because Plaintiffs' require ASC to stop contracted for payments, and instead accept a is instant apparent that remaining life of the the loan, controversy, involves payments 10 suit seeks a receiving such lesser amount, it implicating the to ASC where the interest alone would be far in excess of $75,000.5 624 F.3d at 639 See Frashier, (indicating that the jurisdictional calculus may consider "future value generated by injunction"). Court notes money that because the Amended Complaint seeks damages, Plaintiffs 106, smaller only (4th claims the value the injunctive more Id. Cir. in of be threshold. 109 threshold."). that the need jurisdictional F.3d Finally, than $45,000 1995)) order in to (citing Shanaghan v. (" [P] laintif fs to reach controversy may the For all of the above reasons, amount relief is the $30,000 in sought by meet the Cahill, 58 aggregate jurisdictional the Court concludes in excess of the jurisdictional threshold. 2. Diversity The Court next considers whether complete diversity exists. It is undisputed completely diverse, that from and defendant but the Substitute Trustee, is a citizen of Virginia. decisions Plaintiffs this However, district, this foreclosure sale has not yet Substitute Trustee is joinder. See Jones 2:llcv443, 2012 WL 405053, Court at occurred, *4 v. are like Plaintiffs, in line with several recent immaterial fraudulent ASC finds the under Bank (E.D. of Va. that because citizenship of the doctrine of the America, Feb. 7, N.A., 2012); a No. Kenny 5 It appears that in the four years remaining in the "interestonly period," ASC is scheduled to receive approximately $100,000 in interest payments. 11 v. Bank of America, (E.D. Va. Dec. 5, N.A. , No. 4:llcvl20, 2011 WL 6046452, at *4 2011) . Under the doctrine of fraudulent joinder, assume can "a district court . jurisdiction nondiverse Mayes v. named to show defendants Rapoport, burden is over 198 a at F.3d case the 457, even time 461 if . . there the case is (4th Cir. are removed." 1999). The on the party claiming fraudulent or improper joinder that there has been either outright fraud in the pleading of jurisdictional facts--which is not at issue here--or that a claim could not defendant even favor the of F.3d 229, after misleading, the all Marhsall (4th Cir. that established against resolving plaintiff. 232-33 (indicating be 1993); "term issues v. of various citizenship in Sales Corp., 6 198 F.3d at 461 n.8 'fraudulent joinder' is a bit (internal citations omitted). Federal district court decisions diverge, on fact inasmuch as the doctrine requires neither a showing of fraud nor joinder") part non-diverse law and Manville see Mayes, the of states' a substantive substitute laws, trustee is based at least in as to whether the taken into properly account in determining whether complete diversity of citizenship exists among the opposing parties. 2d. at these 759-60 (collecting cases). divergent decisions is that See Sherman, However, the what status of 796 F. Supp. is clear from a substitute trustee hinges on the nature of the actions allegedly taken by 12 the trustee, trustee, if if 3:09cv80, any, any. 2010 (holding a plaintiff and the type of Compare WL 546770, substitute made Payne v. at extensive Bank of *3-5 trustee to factual relief sought against (W.D. be America, Va. properly and legal Feb. the N.A. , No. 11, 2010) joined when allegations the against the trustee and sought specific relief from the trustee--namely, setting aside a previously titling the property at *3-4 (concluding joined as no no part cf. that Dempsey v. (W.D.N.C. a nominal issue); the foreclosure with Jones, substitute the bank's trustee was 1999) the loan modification Transouth Mortg. Corp., sale and re- 2012 WL 405053, foreclosure sale had occurred and to play in 85 conducted 88 F. improperly trustee had decision); Supp. at 2d 482, but 484- (holding that the substitute trustee was only party notwithstanding foreclosure, and thus, its citizenship did not impact the jurisdictional calculus). Here, mentions although the Plaintiffs' Substitute Amended Trustee, it Complaint only repeatedly does so within conclusory legal statements involving alleged breaches of duties purportedly Amended owed to Complaint, Plaintiffs. and the What original is lacking Complaint, are from facts the that would support a cause of action against the Substitute Trustee. Plaintiffs intends do there state to be a Substitute Trustee] in their original foreclosure . . Complaint . and will to foreclose on the home." 13 that "ASC expect [the Compl. 51 17, ECF No. 1-3 (emphasis added). single act (or omission) they allege that occurred. are far facts in Payne, completed, titled. and foreclosure sale of closer The Court the to where the Plaintiffs never set forth a taken by the Substitute Trustee, Accordingly, Court a However, factual those a in Plaintiffs foreclosure plaintiff sought therefore finds property has allegations Jones, and sale to that have before Kenny, had the nor do than already this the been property re- the citizenship of the Substitute Trustee should not be considered for the purposes of the jurisdictional calculus. that the doctrine of district court to Mayes, fraudulent disregard, 198 F.3d at 461 joinder for (indicating "effectively permits jurisdictional citizenship of certain nondiverse defendants").6 purposes, a the Based on such finding, diversity exists in this case. 6 As the district court noted in Payne, in addition to the question of improper or fraudulent joinder, there exists "a related but not identical doctrine" providing that "in the Court's inquiry into diversity jurisdiction, [the citizenship of] 'nominal' or 'formal' parties that have been joined are to be disregarded and only [the citizenship of] 'real parties to the controversy' are considered relevant." Payne, 2010 WL 546770, at *4 (quoting Navarro Sav. Ass'n v. Lee, 446 U.S. 458, 460-61 (1980)). The district court in Payne further noted that although the Fourth Circuit has not yet explicitly articulated a test for determining whether a party is "nominal" or "formal," other courts have regarded the standard as being essentially the same as that for fraudulent joinder. Id. Although this Court does not perform a separate and detailed inquiry into whether the Substitute Trustee was merely a "nominal" or "formal" party, were the Court to engage in such inquiry, the conclusion would be the same as the conclusion reached above because has no substantive role in the instant dispute. 14 the Trustee Because threshold have the for was before diversity carried Trustee facts their burden to jurisdiction on such denial, satisfy and demonstrate joined, the over motion to remand for lack of Based Court jurisdiction, improperly subject-matter the because that Court this the finds case, jurisdiction is Plaintiffs' the statutory Defendants Substitute that and it has Plaintiffs' therefore denied. informal request for attorney's fees is also denied. B. Defendants original each Complaint Amended Complaint. Motion to Dismiss separately and jointly Plaintiffs to any of these motions, filed a motion to dismiss the filed a motion to dismiss the filed no response in opposition but rather, to file another amended complaint. now ask the Court for leave Because Plaintiffs failed to attach a copy of their proposed Second Amended Complaint to such motion, legal the the Court focuses its analysis on the viability of the claims reasons set forth discussed Amended Complaint were the original Complaint, in Plaintiff's below, even corrected such to assuming include pleading claim on which relief can be granted. below, Defendants' unopposed motions Amended Complaint. would the to dismiss Plaintiff's facts fail Therefore, Complaint and Amended Complaint are granted. 15 that For to pled in state a as discussed the original 1. HAMP does not Create a Private Right of Action This Court has consistently held there is no private right of action for individual borrowers lenders for violations of HAMP. 699; Sherman, 780 F. Supp. J.P. Va. that Supp. 2d 458, Morgan Apr. 796 F. Chase, 1, No. 2011) allege a implementing 459 Va. (collecting 2011 12 be against F. Supp. 2d at Suntrust Bank, see also Bourdelais v. WL cases). under 802 claims Melton v. 2011); 3:10cv670, statute should assert See Mosley, 2d at 761; (E.D. violation to 1306311, at Therefore, U.S.C. § dismissed. *3 any (E.D. claims 5219 (a)(1)--HAMP's Here, it appears that Plaintiffs may be attempting to couch HAMP violation claims as claims fact advanced that no under private state right law of in order action to circumvent exists under HAMP. Although this Court is skeptical of such characterizations, Court to individually assess will proceed each of the the Plaintiffs' state law claims.7 2. State Law Claims a. Breach of Contract Arising from the Implied Covenant of Good Faith and Fair Dealing Plaintiffs covenant Note by of assert good failing that faith to and Defendants fair properly dealing consider violated under the the Plaintiffs implied Promissory for loan 7 This Court applies Virginia law in its analysis of Plaintiffs' state law claims. See Felder v. Casey, 487 U.S. 131, 151 (1988); Erie R. Co. v. Tompkins, 304 U.S. 64 (1938). 16 modification States" as Compl. M pursuant "enacted 5-13, to the [under] ECF No. "public 12 policy U.S.C. § of the 5219(a)(1)." United Amend. 17. The United States Court of Appeals for the Fourth Circuit has recognized that contracts governed by Virginia law generally contain an implied covenant of good faith and fair dealing. Vermiculite, Cir. Ltd. v. W.R. Grace & Co., 1998); Residential 893-95 see Ins. (E.D. SunTrust Co. Va. of 156 F.3d 535, Mortg., Inc. North Carolina, 2011) (examining at 541-42 v. United F. Supp. 806 length how Va. (4th Guar. 2d 872, state and federal courts in Virginia have acknowledged an implied duty of good faith and fair finding under law); 28, 33 no the reason Uniform dealing to U.C.C.'s contractual differentiate Commercial Charles E. Brauer Co. (1996) in Code between relationships, contracts ("U.C.C.") and v. NationsBank of Va., well-established that "when parties to New Holland N. Am., 254 Va. 379, 385 explained by the Fourth Circuit, [under Virginia a However, contract it create an implied covenant of good faith and fair dealing is inapplicable to those rights." faith 251 Va. implied covenant of good faith and fair dealing gives valid and binding rights, As common (indicating that under Virginia law, breach of the rise to a cause of action for breach of contract). is falling the N.A., and law] does 17 (1997) Ward's Equip, v. (emphasis added). "although the duty of good not prevent a party from exercising exercise its explicit contractual discretion is F.3d at 542 discretion vested solely is the implied "simply a expressed promises." that in in rights, bad a faith, party even that party." may when not such Vermiculite, 156 (emphasis added). Therefore, dealing contractual end, the affirmative recognition of of good not does not otherwise faith conditions Eastern Shore Mkts., covenant action covenant and fair inherent 213 F.3d at 184. compel required a party under to the in To take contract, does not establish independent duties not otherwise agreed upon by the parties, and express contractual 2:12cvl7, cannot rights. 2012 WL 2400627, Here, be invoked De Vera v. at *3 to undercut a Bank of Am., (E.D. Va. June 25, party's N.A., No. 2012). Plaintiffs argue that Defendants breached the implied covenant of good faith and fair dealing by failing to postpone foreclosure until application(s) evidence a right underwriter that obligations result under However, failed failure, ASC had payment and foreclose have failed Promissory Note or Similarly, the to point DOT neither to Plaintiffs' the undisputed satisfy their the Promissory Note and the such Plaintiffs faith. Plaintiffs evaluate accelerate to of could loan modification. demonstrates contractual As for an that the 18 to any the express on contractual the "discretion" Defendants Promissory property. under exercised Note DOT. nor the in bad the DOT created an express duty on ASC to facilitate loan modification in the event Plaintiffs fell into arrears on their obligation to make timely payments. See Stanley's Cafeteria Inc. v. Abramson, 226 Va. (quoting Warren v. 68, 73 (1983) Goodrich, 133 Va. 366, 389 (1922)) (holding that an agreement to modify a contract must be proven by direct or "'clear, unequivocal implied'"). not have breached any the Promissory Note Moreover, and the convincing Substitute implied duty allegedly or the DOT because the evidence, Trustee could owed pursuant Trustee was to not a contractual party thereto. Plaintiffs' breach of contract claim arising from the implied covenant of good faith and fair dealing therefore fails because, without discretion in evidence bad faith, expressly provided ASC loan and ultimately Plaintiffs' first of the the is exercising Promissory right foreclose claim ASC to on contractual Note and the accelerate payment the dismissed property. for of DOT the Therefore, failure to state a claim on which relief can be granted. b. Duty to Mitigate Damages Plaintiffs mitigate assert damages by loan modification. that failing Amend. Defendants to properly Compl. M breached the duty review Plaintiffs 14-16, ECF No. 17. to for The Virginia Supreme Court has "long recognized the obligation of an injured party to mitigate damages." 19 Forbes v. Rapp, 269 Va. 374, 380 (2005) . However, an assertion that an injured party has failed to mitigate damages is an affirmative defense. e.g., R.K. Chevrolet, 74, 77 (1998); 266 (1993). Inc. v. Bank of Marefield Meadows, The injured party's the Commonwealth, Inc. v. common Lorenz, See, 256 Va. 245 Va. law duty 255, to mitigate damages requires the injured party to "'exercise reasonable care and diligence to avoid loss or to minimize resulting damage.'" Lawrence, v. Va. 176, 182 (1948)). reasonable care and diligence Massie, exercise 188 226 Va. at 412 or be reducing damages, it does not bar all recovery.8 Here, remedy a failure to reason for Id. Plaintiffs argue that because foreclosure is a damage stemming Note and DOT, mitigate the (quoting Haywood Although may lessen from Plaintiffs' breach of the Promissory then as a matter of law, Defendants have a duty to damages modification. the by considering However, an application for loan a proper understanding of an allegation that a party breached its duty to mitigate damages and should be precluded from obtaining additional damages as a result, reveals 8 For example, when a purchaser has breached a contract for the sale of real estate, the seller has the duty of making reasonable efforts to mitigate damages resulting from the breach, and to the extent that the breaching party shows that the seller--the injured party--failed to do so, the breaching party may avoid a portion of the resulting damages. See Lawrence v. Wirth, 226 Va. 408, 412-13 (1983); Haywood, 188 Va. at 181-83; see also Restatement (Second) of Contracts § 350, cmt. b. (1981); Charles Damages § 33 (1935) . T. McCormick, 20 Handbook on the Law of the lack state of a force claim Notably, behind against Plaintiffs' Plaintiffs Defendants attempt to attempt under such impose on to affirmatively defensive Defendants remedy. a non contractual duty regarding loan modification finds no support in the common have cannot foreclose the law, act once common prohibition and to any duty trump Plaintiffs law duty on to to their fell express into mitigate foreclosure, mitigate that contractual arrears. damages rather, the Defendants is In not duty may right to other words, a categorical simply requires reasonableness under the circumstances. Plaintiffs' for breach of attempt to state an affirmative cause of action the duty to mitigate damages is nothing more than an attempt to couch a HAMP violation--which provides no private right of action under a different name. at *6 n.8. Jones, 2012 WL 405053, Although loan modification and foreclosure may each have been options for ASC, the common law duty Plaintiffs seek to invoke does not eviscerate ASC's express contractual right to opt to initiate Plaintiffs' foreclosure proceedings. Consequently, claim for breach of the duty to mitigate damages is dismissed. c. Plaintiffs failing that to the Breach of the Deed of Trust assert comply that Defendants' the implementing Trustee violated with Substitute 21 breached statute HAMP by the of DOT HAMP, scheduling by and a foreclosure sale Plaintiffs' denied. waiting for action as stated above, against a lender therefore, no for cannot through reliance on HAMP. matter an establish De Vera, such a at *6 n.8 motion to futile because amend claim, to be inter attempt to name). Furthermore, relief implicitly, couch alia, an based claim alleged HAMP fact requires ASC to to Plaintiffs' instituting more than DOT at *5; see the an under a SI 24, seek order entering a second deed of innovative a different not state a plausible right that the exhaust DOT, any foreclosure expressly loan or modification proceedings. As a Injunctive Relief a to ECF No. preliminary HAMP. the preliminary "preserve injunction the status or quo temporary until complaint can be reviewed and the matter adjudicated." Compl. is claim for breach of the DOT is dismissed. 3. Plaintiffs of the breach of violation Plaintiffs do the breach of (finding the plaintiffs' nothing on prior restraining was a 2012 WL 2400627, 2012 WL 405053, result, how alleged violation Jones, process the homeowner borrowers simply do not have a private right Plaintiffs, to that Amend. Compl. flfl 17-23, ECF No. 17. phrased, trust certification loan modification application had been reviewed and However, of before 17. injunction temporary the Amend. The substantive standard for granting is the restraining 22 same order. as the Moore standard v. for Kempthorne, 464 F. Court Supp. 2d to grant 519, 525 (E.D. such relief, Va. 2006) . In order the moving party must (1) he is likely to succeed on the merits; (2) for the demonstrate: that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor; and (4) an injunction is in the public interest. Def. Council, As Inc., 555 U.S. 7, 20 that individual borrowers violations. there is even if 802 viewed this opinion, private right lenders for against See Mosley, complaints, no Winter v. Natural Res. (2008). repeatedly stated throughout established that F. Supp. 2d at collectively, it of is well- action purported 699. fail for HAMP Plaintiffs' to adequately plead claims for breach of implied covenants, breach of the duty to mitigate therefore, the damages, breach cannot establish that merits. injunction or Thus, or of DOT. Plaintiffs, they are likely to succeed on Plaintiffs' temporary the request restraining for order is a preliminary dismissed for failure to state a claim on which relief can be granted.9 C. Plaintiffs Amended filed a motion seeking leave Complaint jurisdiction Motion to Amend over in this the event case. Mo. 9 that for to the Leave, file a Second Court retains ECF No. 25. Alternatively, the motion for a preliminary injunction is dismissed as moot because the Court's ruling herein terminates the case in favor of Defendants. 23 Plaintiffs Second failed, Amended Plaintiffs seek to Complaint explain "leave to ground however, in attach to their such brief that the Amended legal causes of action." The Federal Rules to in been amendment 404, 426 bad a proposed Nevertheless, support Complaint that Plaintiffs Id. amend a faith would have (4th Cir. the 2006) . forth only Plaintiff's Procedure provide that district complaint been omitted at 3. of Civil on inadvertently and sets is part Fed. R. generally Civ. P. 15(a)(2), only denied "when to the opposing party, the amendment would be prejudicial has of motion. courts should freely allow amendment, leave copy file the Second Amended Complaint solely on the allegations of necessary facts, and a there of the futile," moving Laber An amendment v. is party, Harvey, or 438 Line R. Co. (E.D. Va. v. M/V Marlin, Apr. 3, 2009) Kellogg Brown & Root, Here, futile. Plaintiffs' solves fails alter to Inc., one this 2:08cvl34, 525 F.3d 370, request for facts problem Court's leave as with set the analysis 24 if motion Norfolk & Portsmouth Belt 2009 WL 1974298, (citing United States ex rel. Incorporating the Complaint No. F.3d considered futile "the amended complaint could not survive a Rule 12(b)(6) by the party opposing the amendment." the 376 to at *2 Wilson v. (4th Cir. 2008)). amend denied as is forth in Amended regarding the original Complaint, the merits but of Defendants' Plaintiffs' unopposed motion Defendants jurisdiction. original properly Defendants' Complaint Plaintiffs' Accordingly, CONCLUSION For the foregoing reasons, as dismiss. motion for leave to amend is denied. V. DENIED to claims and are Plaintiffs' invoked unopposed Amended motion to remand is this Court's motions to Complaint DISMISSED with diversity the GRANTED, are dismiss and prejudice. Plaintiffs' recently filed motion for leave to amend is DENIED as futile. The Clerk is DIRECTED to send a copy of this Opinion and Order to all counsel of record. IT IS SO ORDERED. -TMfcT /s/ Mark S. Davis UNITED STATES DISTRICT JUDGE Norfolk, Virginia August 5Q . 2012 25
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