The opinion of the court was delivered by: John D. Bates United States District Judge
Plaintiff George R. Hughes brings this action against Wells Fargo Bank ("Wells Fargo") alleging violations of the D.C. Consumer Protection Procedures Act ("CPPA") and seeking to quiet title to his primary residence after refinancing his mortgage.*fn1 Hughes alleges that Wells Fargo provided him financing on unconscionable terms and misrepresented material facts. Now before the Court is Wells Fargo's motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). For the reasons discussed below, Wells Fargo's motion will be granted in part and denied in part.
Hughes purchased 5236 5th Street NW, Washington, DC ("the Property") in November 1997. Compl. ¶¶ 1, 9. He took out two mortgages against the Property in order to pay for it, the larger of the two from Chase Manhattan Bank. Id. ¶¶ 10, 11. After Hughes became delinquent on the larger loan in 2004, Chase Manhattan notified Hughes that it would foreclose on the property. Id. ¶¶ 13, 14. Prior to foreclosure, defendant Baltimore, working with defendants Abell and Modern Management, solicited Hughes's business and represented that he would help Hughes remain in his home. Id. ¶¶ 15--17, 25, 27. Hughes signed a series of documents, the effect of which was to transfer title to the Property to Abell, who then rented it back to Hughes. Id. ¶¶ 19, 25. Hughes alleges that he understood the transaction "as a way to retain ownership of his home." Id. ¶ 24. Around August 2006, Hughes received notice from Chase Manhattan that it had changed his contact information to that of the offices of Modern Management. Id. ¶ 29. He also received notice from Modern Management that he was behind in his payments. Id. ¶ 30.
Sensing problems with Modern Management and with Chase Manhattan, which he "believed to be connected to Modern Management," Hughes approached defendant Wells Fargo to seek refinancing of his Chase Manhattan mortgage. Id. ¶¶ 31, 32. Wells Fargo offered to refinance his Chase Manhattan mortgage so long as Hughes consolidated his second mortgage and other, nonmortgage debts, which together totaled $33,517.03, into his agreement with Wells Fargo. Id. ¶¶ 33, 35. The statute of limitations had passed for some of these nonmortgage debts. Id. ¶ 34. Hughes's outstanding balance on his Chase Manhattan mortgage was $87,775.43, so that after consolidation Wells Fargo was proposing to make a loan with a 38% increase over the value of Hughes's prior mortgage debt. Id. ¶ 35. Hughes was to pay $1,604.18 per month for this loan, a 97% increase from his $815 monthly payment to Chase Manhattan. Id. ¶¶ 11, 37. This payment amounted to approximately 46% of Hughes's monthly income of $3,511.83. Id. ¶ 36. Hughes reported this income to Wells Fargo and made no representations about whether it would increase or decrease in the future. Id. Wells Fargo reserved the right to increase the loan's initial interest rate of 7.875% up to a limit of 13.875% after the first two years of the loan.
Id. ¶ 40. Hughes accepted these terms and closed the loan on September 22, 2006. Id. ¶ 39. Hughes paid $10,127.32 in closing costs and received $61,080.22 as part of the loan. Id. ¶¶ 35, 42.
Hughes brought the present action on January 15, 2009 in the Superior Court of the District of Columbia. Four of his six counts are against Abell, Baltimore, and Modern Management for violations of the CPPA, creation of an equitable mortgage, violations of the federal Truth in Lending Act ("TILA") and Home Ownership and Equity Protection Act ("HOEPA"), and common law fraud. Id. ¶¶ 45--74. Those counts are not presently at issue. Hughes's fifth count is against Wells Fargo for violation of the CPPA. Id. ¶¶ 75--79. The sixth count seeks to quiet title against both Wells Fargo and Abell, who also claims an interest in the Property. Id. ¶¶ 80--84.
Wells Fargo removed the case to this Court on January 29, 2009. Shortly thereafter, Wells Fargo moved to dismiss Hughes's claims against it under Fed. R. Civ. P. 12(b)(6). Wells Fargo's motion is now fully briefed and ripe for resolution.
All that the Federal Rules of Civil Procedure require of a complaint is that it contain "'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)); accord Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam). Although "detailed factual allegations" are not necessary to withstand a Rule 12(b)(6) motion to dismiss, to provide the "grounds" of "entitle[ment] to relief," a plaintiff must furnish "more than labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555-56; see also Papasan v. Allain, 478 U.S. 265, 286 (1986). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570); Atherton v. District of Columbia Office of the Mayor, --- F.3d ---, 2009 WL 1515373, at *6 (D.C. Cir. 2009). A complaint is plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949. This amounts to a "two-pronged approach" under which a court first identifies the factual allegations entitled to an assumption of truth and then determines "whether they plausibly give rise to an entitlement to relief." Id. at 1950-51.
The notice pleading rules are not meant to impose a great burden on a plaintiff. Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005); see also Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512-13 (2002). When the sufficiency of a complaint is challenged by a motion to dismiss under Rule 12(b)(6), the plaintiff's factual allegations must be presumed true and should be liberally construed in his or her favor. Leatherman v. Tarrant County Narcotics & Coordination Unit, 507 U.S. 163, 164 (1993); Phillips v. Bureau of Prisons, 591 F.2d 966, 968 (D.C. Cir. 1979); see also Erickson, 551 U.S. at 94 (citing Twombly, 550 U.S. at 555-56). The plaintiff must be given every favorable inference that may be drawn from the allegations of fact. Scheuer v. Rhodes, 416 U.S. 232, 236 (1974); Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1113 (D.C. Cir. 2000). However, "the court need not accept inferences drawn by plaintiffs if such inferences are unsupported by the facts set out in the complaint." Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Nor does the court accept "a legal conclusion couched as a factual allegation," or "naked assertions [of unlawful misconduct] devoid of further factual enhancement." Iqbal, 129 S.Ct. at 1949-50 (internal quotation marks omitted); see also Aktieselskabet AF 21. November 21 v. Fame Jeans Inc., 525 F.3d 8, 17 n.4 (D.C. Cir. 2008) (explaining that the court has "never accepted legal conclusions cast in the form of factual allegations").
I. Violations of the D.C. Consumer Protection Procedures Act
Hughes alleges that Wells Fargo violated the CPPA by providing him financing on unconscionable terms and misrepresenting material facts about the transaction. Compl. ¶¶ 76--79. Hughes filed this suit in the Superior Court of the District of Columbia pursuant to D.C. Code § 28-3905(k)(1). The CPPA applies to real estate finance transactions like the one ...