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Heuer v. Nationstar Mortgage, LLC

United States District Court, N.D. Indiana, South Bend Division

June 4, 2019

MARY HEUER, Plaintiff,



         Plaintiff Mary Heuer filed this case against the company that services her mortgage, alleging a litany of statutory violations. She alleges that Nationstar Mortgage LLC failed to timely notify her when it became her servicer, failed to credit payments to her account, charged improper fees, and failed to respond to a written request for information. Nationstar moves to dismiss the complaint in its entirety, arguing that Ms. Heuer's claims are procedurally and substantively deficient. The Court disagrees and denies the motion.


         Ms. Heuer took out a mortgage on her property in 2009. Her loan was initially serviced by Bank of America. In June 2013, servicing was transferred to defendant Nationstar Mortgage LLC. Ms. Heuer alleges that Nationstar failed to notify her of the transfer of servicing until three months later. She also alleges that Nationstar charged her late fees within sixty days of the transfer, even though she timely made payments to the transferor. Ms. Heuer further alleges that Nationstar took out force-placed insurance on her property in August 2013, even though she maintained insurance throughout the life of the mortgage and Nationstar was aware of her insurance. Nationstar paid for that insurance out of her escrow account, which increased her future payments. In addition, Ms. Heuer alleges that Nationstar placed her monthly payments into a suspense account instead of crediting them against her account, even though her account was current. She finally alleges that Nationstar imposed late fees that exceeded the four percent fees allowed under the loan.

         Ms. Heuer retained counsel, who sent Nationstar a written request for information about the loan. While Nationstar acknowledged receipt of the letter and provided some preliminary information in response, it never provided a complete response to the inquiries in the letter. Ms. Heuer thus filed this suit against Nationstar in November 2018. Nationstar moved to dismiss under Rule 12(b)(6). Briefing on that motion concluded when Nationstar filed a reply brief. Local Rule 7-1(d). Without seeking leave, Ms. Heuer then filed a “Final Response” to the motion. Because Ms. Heuer did not seek leave to file a sur-reply, and because the filing contains no substantive argument anyway, the Court strikes that filing.


         In reviewing a motion to dismiss for failure to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6), the Court construes the complaint in the light most favorable to the plaintiff, accepts the factual allegations as true, and draws all reasonable inferences in the plaintiff's favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). A complaint must contain only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). That statement must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and raise a right to relief above the speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). However, a plaintiff's claim need only be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012). Evaluating whether a plaintiff's claim is sufficiently plausible to survive a motion to dismiss is “‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 678).


         Ms. Heuer's complaint asserts six counts, alleging violations of the Real Estate Settlement Procedures Act, the Truth in Lending Act, and the Fair Debt Collection Practices Act. Nationstar moves to dismiss the complaint in its entirety. It first argues that several of the claims should be dismissed on procedural grounds under the statute of limitations, but its own motion is procedurally deficient in that respect. Nationstar also argues that the claims fail on their merits, but those arguments fail to respect the principle that allegations must be accepted as true on a motion to dismiss, as Nationstar's arguments rely largely on disputing the allegations in Ms. Heuer's complaint. The Court therefore denies the motion to dismiss.

         A. Statute of Limitations

          Nationstar first moves to dismiss several of the claims, in whole or in part, as barred by the statute of limitations. Nationstar's own motion is procedurally improper, though. The statute of limitations is an affirmative defense. Reiser v. Residential Funding Corp., 380 F.3d 1027, 1030 (7th Cir. 2004). That means, first, that a motion invoking the statute of limitations at the pleading stage should be brought under Rule 12(c), not Rule 12(b)(6). Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687, 690 n.1 (7th Cir. 2012) (“[W]e have repeatedly cautioned that the proper heading for such motions is Rule 12(c), since an affirmative defense is external to the complaint.”); see Brooks v. Ross, 578 F.3d 574, 579 (7th Cir. 2009). Nationstar filed its motion under Rule 12(b)(6), and it has not filed an answer to the complaint, which is a prerequisite to a motion under Rule 12(c).

         Courts will often overlook that distinction when the difference is only semantic. E.g., Brooks, 578 F.3d at 579. The Court declines to do so here, though, as Nationstar fails to confront another effect of this procedural posture. A complaint has no duty to “anticipate and attempt to plead around affirmative defenses, ” and the “mere presence of a potential affirmative defense does not render the claim for relief invalid.” Hyson USA, Inc. v. Hyson 2U, Ltd., 821 F.3d 935, 939 (7th Cir. 2016). Thus, a complaint need not show that its claims are timely. Rather, “dismissal is appropriate only when the factual allegations in the complaint unambiguously establish all the elements of the defense.” Id. “In other words, the plaintiff ‘must affirmatively plead himself out of court'” for a claim to be dismissed as untimely at the pleading stage. Id.; see also Foss v. Bear, Stearns & Co., 394 F.3d 540, 542 (7th Cir. 2005) (“Unless the complaint alleges facts that create an ironclad defense, a limitations argument must await factual development.”).

         Nationstar's filings do not acknowledge or confront this standard. Nationstar argues that one claim is barred by the statute of limitations because the complaint is “vague” as to “when exactly” the violation occurred. [DE 14]. That statement forecloses Nationstar's own argument, though. Ms. Heuer has no obligation to plead that the claim is not barred by an affirmative defense. And if the complaint is vague as to when the violation occurred, then it has not unambiguously established that the claim is untimely, so Ms. Heuer has not pled herself out of court. Nationstar's arguments as to the other claims are conclusory and fail to engage with the applicable standard of review. Also, Ms. Heuer argues in part that the statute of limitations should be tolled, which could depend on facts that may be external to the complaint. Reiser, 380 F.3d at 1030 (“[B]ecause the period of limitations is an affirmative defense it is rarely a good reason to dismiss under Rule 12(b)(6).”). At later stages of the case, at which Ms. Heuer will bear a burden of proof, the statute of limitations may pose an impediment to Ms. Heuer's claims. But Nationstar has failed to establish that dismissal is warranted on the pleadings, so the Court will not grant the motion to dismiss on that basis.

         B. ...

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