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Ihebereme v. Capital One

August 9, 2010

CHRISTOPHER IHEBEREME, PLAINTIFF,
v.
CAPITAL ONE, N.A., AS SUCCESSOR BY MERGER TO CHEVY CHASE BANK, F.S.B., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge

MEMORANDUM OPINION

Christopher Ihebereme is the mortgagor of a $280,000 home mortgage loan currently held by Chevy Chase Bank, F.S.B. ("Chevy Chase"). After Chevy Chase asserted that he had defaulted on his debt, Ihebereme sued Chevy Chase and its successor by merger, Capital One, N.A. ("Capital One"); and Capital One's Vice President, Kate Stone. Plaintiff filed his Amended Complaint in the Superior Court of the District of Columbia, claiming breach of contract, tortious interference with contract, breach of the contractual duty of good faith and fair dealing, fraud, violation of the D.C. Consumer Protection Procedures Act ("DCCPPA"), D.C. Code §§ 28-3901 to -3913, violation of the D.C. Human Rights Act ("DCHRA"), D.C. Code § 2-1402-1, intentional infliction of emotional distress, and defamation of character. Defendants have removed the case to this Court on the basis of diversity of citizenship*fn1 and have moved to dismiss the Amended Complaint. For the reasons stated herein, defendant Capital One N.A.'s motion will be granted in part and denied in part, and defendant Kate Stone's motion will be granted.

BACKGROUND

On March 28, 2007, Chevy Chase issued to plaintiff a $280,000 mortgage*fn2 for plaintiff's purchase of a home in the District of Columbia. (Am. Compl. ¶¶ 13-14, 16.) The mortgage called for interest at an annual percentage rate of 6.797% and repayment over 360 months. (Id. ¶ 16.) According to the terms of his mortgage, plaintiff was required to make monthly payments of $2,469.89. (Id. ¶ 18.) Chevy Chase charges a fee of ninety dollars for late payments (id. ¶ 25) and a service charge of approximately twenty-five dollars for payments made by telephone. (Id. ¶ 27.)

The mortgage also required monthly payments of $406.09 for private mortgage insurance ("PMI"), waivable if plaintiff made twelve consecutive monthly payments not more than thirty days past due and twenty-four consecutive monthly payments not more than sixty days past due. (Id. ¶¶ 65-66.) According to plaintiff, Chevy Chase substantially overcharged him for PMI, based on its calculation of plaintiff's premium; plaintiff insists that the actual amount he should have been charged monthly under a standard formula for a PMI premium is $210 per month. (Id. ¶¶ 72-79.) This overcharge, plaintiff alleges, amounts to fraud, a material misrepresentation, and an unfair business practice. (Id. ¶¶ 80, 86.)

For the first ten months of the mortgage term, plaintiff made his monthly payments on time and without incident, using Chevy Chase's Internet-based medium for bill payment. (Id. ¶ 22.) When plaintiff attempted to make his March 2008 payment using the same online service, he found that Chevy Chase had stopped accepting his online payments. (Id. ¶ 23.) Almost immediately, plaintiff's relationship with Chevy Chase began to deteriorate, as he sought an explanation for the change but received none, began to incur late fees for rejected payments, and lost his good standing for timely payments. (Id. ¶¶ 24-26.) Chevy Chase first notified plaintiff that he must pay either over the telephone (and incur a service charge) or in-person to a bank teller, and subsequently, that instead of a bank teller, he must thenceforth pay a branch manager directly. (Id. ¶¶ 27-29.) Owing to the newfound inconveniences related to his mortgage payments, plaintiff alleges that his job performance was interrupted and he was fired. (Id. ¶¶ 32(e), 33.)

Plaintiff also alleges that three consecutive mortgage payments, which he made under the changed requirements, were not credited in a timely fashion, resulting in a declaration of default, the commencement of foreclosure proceedings, and false reports of default to credit bureaus. (Id. ¶ 32(f)-(g).) The foreclosure proceedings and false reports of default-including in notices sent to plaintiff's household-caused plaintiff's family to distrust him and caused him embarrassment in his community. (Id. ¶¶ 35-37.) Moreover, according to plaintiff, this prevented him from refinancing the mortgage, in turn keeping him from recovering his credit. (Id. ¶ 32(h).)

Plaintiff, initially proceeding pro se, filed his Complaint in the Superior Court of the District of Columbia on March 25, 2010, seeking thirteen million dollars in damages. (Compl. ¶¶ 479-80.) Defendants moved to dismiss the Complaint, and, with the court's leave, plaintiff obtained counsel and filed an Amended Complaint on May 28, 2010. (See Am. Compl.; Order of May 24, 2010.) Plaintiff's Amended Complaint pleads twelve claims, of which nine are against Capital One, four are against Chevy Chase, and three are against Stone. He seeks declaratory and injunctive relief in addition to unspecified money damages. (Am. Compl. ¶ 126.)

On June 17, 2010, defendants moved to dismiss the Amended Complaint (Mot. of Def. Capital One to Dismiss Am. Compl. ["Capital One Mot."]; Mot. of Def. Stone to Dismiss Am. Compl. ["Stone Mot."]), and on June 25, 2010, defendants removed the case to this Court on the basis of diversity of citizenship.

ANALYSIS

I. STANDARD OF REVIEW

In deciding a motion to dismiss for failure to state a claim upon which relief can be granted, under the Federal Rules of Civil Procedure, a court may consider only "the facts alleged in the complaint, any documents either attached to or incorporated in the complaint and matters of which [the Court] may take judicial notice." EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C. Cir. 1997). As the Supreme Court held in Ashcroft v. Iqbal, "[t]o 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.'" 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A complaint must be dismissed if it consists only of "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Id. "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.'" Gerlich v. Dep't of Justice, 659 F. Supp. 2d 1, 4 (D.D.C. 2009) (quoting Twombly, 550 U.S. at 555-56).

"Where a complaint pleads facts that are 'merely consistent with' a defendant's liability, it 'stops short of the line between possibility and plausibility of entitlement to relief.'" Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 557). The allegations in plaintiff's complaint are presumed true at this stage and all reasonable factual inferences must be construed in plaintiff's favor. Maljack Prods., Inc. v. Motion Picture Ass'n of Am., Inc., 52 F.3d 373, 375 (D.C. Cir. 1995). "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).

II. PLAINTIFF'S CLAIMS

A.Breach of Contract

1. Chevy Chase

Plaintiff alleges that Chevy Chase breached its contract with plaintiff by successively limiting the methods of payment available to plaintiff. Chevy Chase counters that the Amended Complaint does not adequately allege that any contractual duty was breached. Rule 8(a) of the Federal Rules of Civil Procedure requires that a complaint contain a short and plain statement of the grounds upon which the court's jurisdiction depends, a short and plain statement of the claim showing that the pleader is entitled to relief, and a demand for judgment for the relief the pleader seeks. Fed. R. Civ. P. 8(a). The purpose of the minimum standard of Rule 8 is to give fair notice to the defendants of the claim being asserted, sufficient to prepare a responsive answer, to prepare an adequate defense and to determine whether the doctrine of res judicata applies. Brown v. Califano, 75 F.R.D. 497, 498 (D.D.C. 1977).

In the case of a claim for breach of contract, the complaint must allege four necessary elements in order to effect fair notice: "(1) a valid contract between the parties; (2) an obligation or duty arising out of the contract; (3) a breach of that duty; and (4) damages caused by breach." Tsinolas Realty Co. v. Mendez, 984 A.2d 181, 187 (D.C. 2009); see San Carlos Irrigation & Drainage Dist. v. United States, 877 F.2d 957, 959 (Fed. Cir. 1989) (finding that a plaintiff "must allege and establish" all four elements to recover). Obviously, one cannot breach a contract without breaching a particular obligation created under the contract, and thus, "in the absence of a contractual obligation . . . defendants could not have breached their contract." Schoen v. Consumers United Group, Inc., 670 F. Supp. 367, 378 (D.D.C. 1986).

In this case, plaintiff's claim for breach of contract consists of several factual allegations: that he and Chevy Chase signed a contract, that Chevy Chase at first accepted on-line payments and then refused to continue accepting them, that at some point Chevy Chase came to require that plaintiff pay either by telephone or in-person to a bank teller, and that eventually Chevy Chase came to require that he pay a branch manager directly. (Am. Compl. ¶¶ 13-29.) Those allegations include the existence of a contract (id. ¶¶ 13-19), suggestions that Chevy Chase was breaching something (id. ¶¶ 23-24, 27, 29), and an assertion of financial injury caused by the bank's behavior. (Id. ¶¶ 25-26.) But conspicuously absent from the narrative is any allegation as to the existence of any duty relevant to the breach claimed.

Plaintiff's failure to allege that Chevy Chase was under a contractual duty to accept payment online when it notified him that he must instead pay in-person, or to accept payments at the teller window when it instead required payment to a branch manager, represents a critical gap in his claim. The conclusory assertion that "Chevy Chase violated the terms of the contract between Plaintiff and Defendant" (Am. Compl. ¶ 30) does not put defendant on notice of which terms it allegedly breached, so the allegation does not satisfy the notice-pleading purpose of Rule 8's requirement for a plain statement of the claim. Moreover, the section of the contract excerpted by plaintiff in his Amended Complaint (see Am. Compl. ¶ 19) does not appear to impose a duty on the bank to accept any particular form or method of payment, and plaintiff neglects to explain anywhere else in his Amended Complaint whether one might infer a duty from that section. Moreover, the Court has reviewed the contract (Am. Compl., Ex. 1 ["Deed of Trust"]) in its entirety and can find neither an express duty for Chevy Chase to accept mortgage payments through any particular means, to any particular person, or at any particular location, nor any constraint on the bank's power to limit plaintiff's method of payment.*fn3

Without a contractual duty, there can be no breach of contract, and by not identifying any duty under the contract to forbear from taking any of the actions alleged, plaintiff ...


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