Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_14-cv-02129/USCOURTS-alnd-2_14-cv-02129-0/pdf.json

Nature of Suit Code: 230
Nature of Suit: Rent, Lease, Ejectment
Cause of Action: 28:1441 Petition for Removal

---

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

FEDERAL HOME LOAN MORTGAGE )

CORPORATION, )

)

Plaintiff-Counterclaim Defendant, )

)

vs. ) Case No. 2:14-cv-2129-TMP

)

NORMAN D. ANCHRUM, JR., and )

ANDREA ANCHRUM, )

)

Defendants-Counterclaimants, )

)

vs. )

)

WELLS FARGO BANK NATIONAL )

ASSOCIATION; UNITED GUARANTY )

RESIDENTIAL INSURANCE COMPANY; )

UNITED GUARANTY RESIDENTIAL )

INSURANCE COMPANY OF NORTH )

CAROLINA, )

)

Counterclaim Defendants. )

REPORT AND RECOMMENDATION

This cause is before the court on the motion for partial dismissal filed by the plaintiffcounterclaim defendant Federal Home Loan Mortgage Corporation (“Freddie Mac”) and 

counterclaim defendant Wells Fargo Bank N.A. (“Wells Fargo”) on November 7, 2014 (Doc. 

10). The motion was joined and adopted by counterclaim defendants United Guaranty 

Residential Insurance Company and United Guaranty Residential Insurance Company of North 

Carolina (collectively “UGC”) on November 11, 2014. (Doc. 12). The motion seeks the 

dismissal of some, but not all, counts of the counterclaim filed by Norman and Andrea Anchrum 

on September 21, 2014, in the Circuit Court of Shelby County, Alabama, prior to the removal of 

FILED

 2015 Apr-10 PM 01:04

U.S. DISTRICT COURT

N.D. OF ALABAMA

Case 2:14-cv-02129-TMP Document 28 Filed 04/10/15 Page 1 of 17
the case on October 31, 2014. The motion has been fully briefed by the parties. (See Docs. 25, 

26, and 27). The parties have not consented to the exercise of dispositive jurisdiction by the 

undersigned magistrate judge.

I. Procedural History and Facts Alleged

On August 7, 2014, plaintiff Freddie Mac sued the Anchrums in the Circuit Court of 

Shelby County, Alabama, for ejectment, alleging that Freddie Mac became the owner of property 

located at 552 North Grande View Trail, Alabaster, Alabama, following foreclosure of a 

mortgage on the property by Wells Fargo. Attached to the complaint was a copy of the 

foreclosure deed to Freddie Mac dated December 5, 2011. The Anchrums filed their answer and 

counterclaim on September 21, 2014, joining as additional counterclaim defendants, Wells Fargo 

and UGC. The counterclaim alleges seven causes of action for breach of contract (Count One), 

wrongful foreclosure (Count Two), unjust enrichment (Count Three), slander of title (Count 

Four), breach of covenant of good faith and fair dealing (Count Five), declaratory judgment 

(Count Six), and violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. 

§ 1692k et seq. (Count Seven). In support of these claims, the Anchrums’ counterclaim alleged 

factually that they purchased their home in Alabaster on September 5, 2003, financing it with a 

loan from Wells Fargo in the amount of $305,790.00. On that date, Norman Anchrum (but not 

Andrea Anchrum) executed a promissory note in favor of Wells Fargo. The note was secured by 

a mortgage on the property executed by both Norman and Andrea Anchrum. (See Doc. 10-1).1

 

1

 The promissory note was annexed as an exhibit to the Anchrums’ answer and 

counterclaim and thus is considered part of the pleading itself for purposes of this motion. Fed. 

R. Civ. P. 10(c). The mortgage was not made an exhibit to the answer and counterclaim, but it is 

referred to in the pleading and is central to it. Under circuit precedent, a document central to a 

pleading and whose authenticity is not disputed, but which was not offered as an exhibit to the 

2

 

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As part of the loan agreement, Wells Fargo required the Anchrums to purchase and pay for 

private mortgage insurance covering 25% of the mortgage balance, which PMI was purchased 

from UGC. The counterclaim alleges that on October 17, 2011, the Anchrums received a 

“default letter” from Wells Fargo. (Counterclaim, ¶ 16, Doc. 1-3).2 During this same time 

period, the Anchrums appear to have been in discussions with Wells Fargo about restructuring

their mortgage to prevent foreclosure. By October 25, 2011, Wells Fargo acknowledged that the 

Anchrums had submitted documentation sufficient to allow Wells Fargo to decide upon possible 

restructuring. (See Counterclaim Ex. C, Doc. 1-4). In correspondence dated November 28, 

2011, however, Wells Fargo notified the Anchrums that they did not qualify for mortgage debt 

relief under the Home Affordable Modification Program (“HAMP”). (Counterclaim, Ex. E, Doc. 

1-4).3 The mortgage foreclosure sale proceeded on December 5, 2011, resulting in Freddie Mac 

purchasing the property and receiving a foreclosure deed.

The instant motion to dismiss challenges only Counts Three, Five, and Seven of the 

counterclaim, for unjust enrichment, breach of the covenant of good faith and fair dealing, and 

violations of the FDCPA. Freddie Mac, Wells Fargo, and UGC contend that, under the facts 

pleading itself, can be supplied as an exhibit to a motion to dismiss the pleading without 

converting the motion to one under Rule 56. “[T]he court may consider a document attached to a 

motion to dismiss without converting the motion into one for summary judgment if the attached 

document is (1) central to the plaintiff's claim and (2) undisputed.” Day v. Taylor, 400 F.3d 

1272, 1276 (11th Cir. 2005), citing Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir. 2002). 

Thus, the mortgage attached to the motion to dismiss may be considered by the court without the 

necessity of converting the instant motion to dismiss into a motion for summary judgment. The 

court has not considered, and hereby excludes for purposes of this motion, other exhibits 

annexed to the motion to dismiss because they appear to be in dispute.

2

 A copy of this default letter is not supplied by any party.

3

 The court notes that the letter advising the Anchrums of their rejection under HAMP 

was addressed to them at “552 N. Grande View Trl, Maylene, AL 35411-6051.” Likewise, they 

received another letter from Wells Fargo dated November 30, 2011, at the same Maylene 

address. Additionally, they received a letter from UGC at the Maylene address. (Counterclaim 

Ex. D, Doc. 1-4). All three letters are attached as exhibits to the Anchrums’ counterclaim.

3

 

Case 2:14-cv-02129-TMP Document 28 Filed 04/10/15 Page 3 of 17
alleged in the counterclaim, Alabama law simply does not recognize causes of action for unjust 

enrichment and breach of a covenant of good faith and fair dealing. Moreover, they argue that 

none of them can be liable under the FDCPA because none of them is a debt collector.

II. Standards for Assessing Motions to Dismiss

On a motion to dismiss a pleading seeking relief, the court must analyze the 

pleading pursuant to the pleading standards set forth in Fed. R. Civ. P. 8(a), as construed by the 

Supreme Court of the United States in Bell Atlantic Corporation v. Twombly, 550 U.S. 554, 127 

S. Ct. 1955, 167 L. Ed. 2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 173 

L. Ed. 2d 868 (2009). These standards replace and enhance those outlined in Conley v. Gibson, 

355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957), which allowed a claim to survive a motion to 

dismiss unless it could be shown Abeyond doubt that the Plaintiff can prove no set of facts in 

support of his claim that would entitled him to relief.@ Id. at 45-46. According to Twombly, 

Conley has been put out to “retirement,” Twombly at 563, or “interred,” id. at 577 (Stevens, J., 

dissenting).

The Supreme Court commented in 2007 on Rule 12(b)(6) dismissals, saying:

Federal Rule of Civil Procedure 8(a)(2) requires only Aa short and plain statement 

of the claim showing that the pleader is entitled to relief,@ in order to Agive the 

defendant fair notice of what the . . . claim is and the grounds upon which it rests.@ 

Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). While a 

complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed 

factual allegations, ibid.; Sanjuan v. American Bd. of Psychiatry and Neurology, 

Inc., 40 F.3d 247, 251 (C.A.7 1994), a plaintiff=s obligation to provide the 

Agrounds@ of his Aentitle[ment] to relief@ requires more than labels and 

conclusions, and a formulaic recitation of the elements of a cause of action will 

not do, see Papasan v. Allain, 478 U.S. 265, 286, 106 S. Ct. 2932, 92 L.Ed.2d 209 

(1986) (on a motion to dismiss, courts Aare not bound to accept as true a legal 

conclusion couched as a factual allegation@). Factual allegations must be enough 

to raise a right to relief above the speculative level, see 5 C. Wright & A. Miller, 

Federal Practice and Procedure ' 1216 pp. 235-236 (3d ed. 2004) (hereinafter 

4

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Wright & Miller) (A[T]he pleading must contain something more . . . than . . . a 

statement of facts that merely creates a suspicion [of] a legally cognizable right of 

action), on the assumption that all the allegations in the complaint are true (even if

doubtful in fact), ....

. . . 

The need at the pleading stage for allegations plausibly suggesting (not merely 

consistent with) [the alleged claims] reflect the threshold requirement of 

Rule 8(a)(2) that the Aplain statement@ possess enough heft to Asho[w] that the 

pleader is entitled to relief.”

Bell Atlantic Corp. v. Twombly, 550 U.S. 544-70, 127 S. Ct. 1955, 1964-74, 167 L. Ed. 2d 929 

(2007) (internal footnotes omitted). In Twombly, the Supreme Court clearly raised the threshold 

for factual allegations in a complaint from Aconceivable@ to Aplausible.@ Edwards v. Prime, Inc., 

602 F.3d 1276, 1291 (11th Cir. 2010); Rivell v. Private Health Care Systems, Inc., 520 F.3d 

1308, 1309 (11th Cir. 2008); Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1261 (11th Cir. 

2009); Financial Securities Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282 (11th Cir. 

2007)). Mere legal conclusions are insufficient substitutes for factual allegations. 

Two years after the Twombly decision, the Supreme Court again discussed pleading 

requirements in the Ashcroft v. Iqbal decision. 556 U.S. 662, 129 S. Ct. 1937, 173 L. Ed. 2d 868 

(2009): 

Two working principles underlie our decision in Twombly. First, the tenet that a 

court must accept as true all of the allegations contained in a complaint is 

inapplicable to legal conclusions. Threadbare recitals of the elements of a cause 

of action, supported by mere conclusory statements, do not suffice. Id., at 555, 

127, S. Ct. 1955 (Although for the purposes of a motion to dismiss we must take 

all of the factual allegations in the complaint as true, we Aare not bound to accept 

as true a legal conclusion couched as a factual allegation@ (internal quotation 

marks omitted)). Rule 8 marks a notable and generous departure from the hypertechnical, code-pleading regime of a prior era, but it does not unlock the doors of 

discovery for a plaintiff armed with nothing more than conclusions. Second, only 

a complaint that states a plausible claim for relief survives a motion to dismiss. 

Id., at 556, 127 S. Ct. 1955. Determining whether a complaint states a plausible 

claim for relief will, as the Court of Appeals observed, be a context-specific task 

5

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that requires the reviewing court to draw on its judicial experience and common 

sense. 490 F.3d, at 157-158. But where the well-pleaded facts do not permit the 

court to infer more than the mere possibility of misconduct, the complaint has 

alleged B but it has not Ashow[n]@ B Athat the pleader is entitled to relief.@ Fed. 

Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss can 

choose to begin by identifying pleadings that, because they are no more than 

conclusions, are not entitled to the assumption of truth. While legal conclusion 

can provide the framework of a complaint, they must be supported by factual 

allegations. When there are well-pleaded factual allegations, a court should 

assume their veracity and then determine whether they plausibly give rise to an 

entitlement to relief.

Iqbal, 556 U.S. at 667-84, 129 S. Ct. at 1949-52. The Eleventh Circuit Court of Appeals has 

applied Iqbal, noting that Aa claim has facial plausibility when the plaintiff pleads factual content

that allows the court to draw the reasonable inference that the defendant is liable for the 

misconduct alleged.@ Speaker v. Dept. of Health and Human Services, 623 F.3d 1371, 1380 

(11th Cir. 2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 

868 (2009)).

The court of appeals has taken the Supreme Court=s admonition to heart. AThe Supreme 

Court=s most recent formulation of the pleading-specificity standard is that >stating such a claim 

requires a complaint with enough factual matter (taken as true) to suggest= the required element.@ 

Watts v. Florida Int=l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007), quoting Twombly, 127 S. Ct. 

At 1965. The rule does not Aimpose a probability requirement at the pleading stage;@ instead the 

standard Asimply calls for enough facts to raise a reasonable expectation that discovery will 

reveal evidence@ of the elements of the claims. Twombly, 127 S. Ct. at 1965. AIt is sufficient if 

the complaint succeeds in >identifying facts that are suggestive enough to render [the element] 

plausible.=@ Watts, 495 F.3d at 1296, quoting Twombly, 127 S. Ct. at 1965.

6

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III. Discussion

The essence of the Anchrums’ counterclaim is that the counterclaim defendants breached 

the agreements in the promissory note and mortgage by wrongfully accelerating the note and 

declaring it to be in default, leading to a wrongful foreclosure. Whether there was a breach of 

the note or mortgage, or whether the foreclosure was wrongful, are not currently before the court. 

The only issues raised by the instant motion is whether these basic facts, as alleged in the 

counterclaim, support claims for unjust enrichment, breach of an implied covenant of good faith 

and fair dealing, and for violations of the FDCPA.

A. Unjust Enrichment

The Alabama Supreme Court has described the doctrine of unjust enrichment this way:

In order for a plaintiff to prevail on a claim of unjust enrichment, the plaintiff 

must show that

“the ‘“defendant holds money which, in equity and good 

conscience, belongs to the plaintiff or holds money which was 

improperly paid to defendant because of mistake or fraud.”’ 

Dickinson v. Cosmos Broad. Co., 782 So. 2d 260, 266 (Ala. 2000) 

(quoting Hancock–Hazlett Gen. Constr. Co. v. Trane Co., 499 

So. 2d 1385, 1387 (Ala. 1986)).... ‘The doctrine of unjust 

enrichment is an old equitable remedy permitting the court in 

equity and good conscience to disallow one to be unjustly enriched 

at the expense of another.’ Battles v. Atchison, 545 So. 2d 814, 

815 (Ala. Civ. App. 1989).”

Avis Rent A Car Sys., Inc. v. Heilman 876 So. 2d 1111, 1123 (Ala. 2003). “‘One 

is unjustly enriched if his retention of a benefit would be unjust.’” Welch v. 

Montgomery Eye Physicians, P.C., 891 So. 2d 837, 843 (Ala. 2004) (quoting 

Jordan v. Mitchell, 705 So. 2d 453, 458 (Ala. Civ. App. 1997)). The retention of 

a benefit is unjust if

“‘(1) the donor of the benefit ... acted under a mistake of fact or in 

misreliance on a right or duty, or (2) the recipient of the benefit ... 

engaged in some unconscionable conduct, such as fraud, coercion, 

7

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or abuse of a confidential relationship. In the absence of mistake 

or misreliance by the donor or wrongful conduct by the recipient, 

the recipient may have been enriched, but he is not deemed to have 

been unjustly enriched.’ ”

Welch, 891 So. 2d at 843 (quoting Jordan, 705 So. 2d at 458). The success or 

failure of an unjust-enrichment claim depends on the particular facts and 

circumstances of each case. Heilman, supra.

Mantiply v. Mantiply, 951 So. 2d 638, 654-55 (Ala. 2006); Jordan v. Mitchell, 705 So. 2d 453, 

458 (Ala. Civ. App. 1997); Carroll v. LJC Def. Contracting, Inc., 24 So. 3d 448, 459 (Ala. Civ. 

App. 2009). 

Counterclaim defendants contend that because an express contract existed between the 

parties in the form of the note and mortgage, the Anchrums cannot rely on a theory of unjust 

enrichment. They cite the case of Pattans Ventures, Inc., v. Williams, 959 So. 2d 115, 117 n. 2 

(Ala. Civ. App. 2006), for the proposition that unjust enrichment cannot lie in the face of an

express contract. Indeed, footnote 2 in the opinion says precisely that, but is arguably only dicta. 

Most of the other Alabama authorities on unjust enrichment make no mention of this limitation. 

Many Alabama cases hold that a claim based on implied contract is inconsistent with the 

existence of an express contract, see e.g., Vardaman v. Florence City Bd. of Educ., 544 So. 2d 

962, 965 (Ala. 1989); Brannan & Guy, P.C. v. City of Montgomery, 828 So. 2d 914, 921 (Ala. 

2002), but it is not clear to the court that a claim for unjust enrichment is necessarily predicated 

on an implied contract theory. The description of unjust enrichment quoted above from 

Mantiply emphasizes that it is an equitable remedy intended to prevent an unjust enrichment of 

one party to the detriment of another through mistake, fraud, coercion, breach of fiduciary duty, 

8

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or other misconduct by the benefited party. Unjust enrichment and implied contract are different 

theories of recovery.

4

In any event, the court agrees that the Anchrums have not pleaded a sufficient claim for 

unjust enrichment. In Count Three of their counterclaim, the Anchrums allege that “the CounterDefendants” enriched themselves by “foreclosing on the home of Counterclaimants in violation 

of the law” which “resulted in Counter Defendants being unjustly enriched by the payment of 

fees, insurance proceeds, and equity in the home.” They identify three forms of enrichment by 

“the Counter-Defendants”: (1) Wells Fargo accepted and received payments from the Anchrums 

it would not otherwise have received, (2) Wells Fargo and Freddie Mac received the full market 

value of their home on the basis of a lesser foreclosure bid, and (3) Wells Fargo and Freddie Mac 

received PMI insurance proceeds of approximately $160,000 from UGC.

At the outset, it is apparent that none of these theories of enrichment accrued to the 

benefit of UGC. UGC received no money or value from the foreclosure, but, instead, paid out 

PMI insurance proceeds. It cannot be said, therefore, that the UGC defendants enriched 

themselves to the detriment of the Anchrums. UGC is entitled to dismissal of the unjust 

enrichment claim against it.

Next, none of the specific allegations of enrichment by Wells Fargo and Freddie Mac 

alleges any unjust enrichment (or, perhaps, any enrichment at all). The counterclaim makes 

4

 There is Alabama case authority that frequently equates unjust enrichment with 

quantum meruit or quasi-contract (or contracts implied-in-law), but quasi-contract is not the 

same as an implied-in-fact contract. Under an implied-in-fact contract theory, the intention of 

the parties to contract is implied from the facts, so that an actual contract is found to exist. 

Quasi-contract disregards the intention to the parties in order to prevent one party from unjustly 

enriching himself to the detriment of another. See Jewett v. Boihem, 23 So. 3d 658, 661 (Ala. 

2009). Alabama case authority arising in the context of implied contract does not necessarily 

establish the rule that an expressed contract precludes a remedy for quasi-contract or unjust 

enrichment.

9

 

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plain that Norman Anchrum owed payments to Wells Fargo from the note the Anchrums used to 

purchase their home in 2003, and that the home itself was mortgaged to secure the note. 

Whatever payments Well Fargo received under the terms of the note were not unjust, they were 

owned under the terms of the note and/or mortgage. The Anchrums do not allege in the 

counterclaim that they were tricked or defrauded into paying any amounts other than what they 

were obligated to pay under the terms of the note and mortgage. They seem to imply that, if 

Wells Fargo had told them of the impending foreclosure, they would have not made certain 

payments to Wells Fargo. That they made payments they were contractually obligated to make 

is hardly an unjust enrichment of Wells Fargo. Cf. Hancock-Hazlett Gen. Const. Co. v. Trane 

Co., 499 So. 2d 1385, 1387 (Ala. 1986) (subcontractor supplying HVAC equipment was not 

unjustly enriched by payment owed to it for the equipment). They cannot complain that Wells 

Fargo was unjustly enriched by payments they made toward the debt they admit they owed Wells 

Fargo. 

To the extent the Anchrums argued that Wells Fargo and/or Freddie Mac received the full 

market value of their home through a wrongful foreclosure, this raises claims for breach of 

contract or wrongful foreclosure, not unjust enrichment. If the foreclosure was wrongful, the 

Anchrums’ remedy is breach of contract or wrongful foreclosure, and they are not entitled to a 

separate equitable remedy when there is a remedy available at law. If the foreclosure was not 

wrongful, Wells Fargo and Freddie Mac did not unjustly enrich themselves, but only invoked 

their rights under the note and mortgage.5

 

5

 Furthermore, it is apparent that Wells Fargo did not “enrich” itself. It is undisputed 

that Wells Fargo had advanced money to the Anchrums in the form of a loan, and the foreclosure 

did nothing but recoup the money Wells Fargo was out for the loan. The collection of a debt by 

a creditor is not unjust enrichment.

10

 

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Finally, the Anchrums allege that Wells Fargo and Freddie Mac received private 

mortgage insurance payments from UGC. Even if one might conclude that Wells Fargo and 

Freddie Mac benefited from this payment, there is no indication that it harmed the Anchrums. A 

clear element of unjust enrichment is that the party seeking the remedy must allege and prove 

that he suffered a detriment due to the misconduct of the benefited party. The Anchrums have 

not alleged that they suffered any detriment from the payments made by UGC. 

The court agrees, therefore, that the motion to dismiss the counterclaimants’ unjust 

enrichment claim (Count Three of the counterclaim) is due to be granted.

B. Breach of Implied Covenant of Good Faith and Fair Dealing

Count Five of the counterclaim alleges that the foreclosure was a breach of Wells Fargo’s 

and/or Freddie Mac’s implied contractual covenant of good faith and fair dealing. The 

counterclaim defendants contend that such a covenant exists only in insurance contracts and has 

never been extended to other types of contracts under Alabama.

Since at least 1939, Alabama law has recognized that every contract contains an implied 

covenant of good faith and fair dealing. See World's Exposition Shows v. B.P.O. Elks, No. 148, 

237 Ala. 329, 331, 186 So. 721, 723 (1939) (“Every contract, as has been often stated, implies 

good faith and fair dealing between the parties.”). As recently as 2009, in dicta, the Alabama 

Supreme Court wrote:

“ ‘ “There is an implied covenant that neither party shall do anything which will 

have the effect of destroying or injuring the rights of the other party to receive the 

fruits of the contract; ... in every contract there exists an implied covenant of 

good faith and fair dealing.’ ” ’ (quoting Sellers v. Head, 261 Ala. 212, 73 So.2d 

747, 751 (1954))[ ]. See also Restatement (Second) of Contracts § 205 (1981) 

(‘Every contract imposes upon each party a duty of good faith and fair dealing in 

its performance and its enforcement.’).” Hunter v. Wilshire Credit Corp., 927 

So. 2d 810, 813 n. 5 (Ala. 2005) (quoting Lloyd Noland Found., Inc. v. City of 

Fairfield Healthcare Auth., 837 So. 2d 253, 267 (Ala. 2002)).

11

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Shoney's LLC v. MAC EAST, LLC, 27 So. 3d 1216, 1220 n. 5 (Ala. 2009); see also Hunter v. 

Wilshire Credit Corp., 927 So. 2d 810, 813 n. 5 (Ala. 2005). This does not mean however, that a 

breach of the implied covenant carries with it a tort remedy for bad faith. 

Although every contract does imply good faith and fair dealing (see § 7-1-203, 

Code 1975), it does not carry with it the duty imposed by law which we have 

found in the context of insurance cases. We are not prepared to extend the tort of 

bad faith beyond the area of insurance policy cases at this time. See Brown-Marx 

Associates, Ltd. v. Emigrant Savings Bank, 527 F.Supp. 277 (N.D.Ala. 1981).

Kennedy Elec. Co. v. Moore-Handley, Inc., 437 So. 2d 76, 81 (Ala. 1983); see also Tanner v. 

Church's Fried Chicken, Inc., 582 So.2d 449, 451 (Ala.1991); Lake Martin/Alabama Power 

Licensee Ass'n, Inc. v. Alabama Power Co., 601 So. 2d 942, 944 (Ala. 1992). The remedy for a 

breach of the implied covenant is a claim for breach of the contract, but only then if there is a 

breach of a specific provision of the contract.

Neither is the plaintiffs’ bad faith claim viable under contract law, whether there 

is an express or implied obligation of good faith. Tanner v. Church’s Fried 

Chicken, 582 So. 2d at 451-52; Government Street Lumber Co. v. AmSouth 

Bank, N.A., 553 So. 2d 68, 72 (Ala. 1989). In the cases relied upon by the 

plaintiffs, this Court did not recognize a bad faith claim under contract law absent 

a breach of a specific term of the contract.

* * *

This Court has explicitly held that there is no good faith contractual cause of 

action, Tanner v. Church's Fried Chicken, supra; Government Street Lumber Co. 

v. AmSouth Bank, supra; that means that bad faith is not actionable absent an 

identifiable breach in the performance of specific terms of the contract. There is 

no identifiable breach in the performance of the specific terms of the license 

agreement by Alabama Power; and there is no contractual cause of action for 

breach of an implied duty of good faith that nebulously hovers over the 

contracting parties, free from the specific terms of the contract.

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Lake Martin/Alabama Power Licensee Association, Inc. v. Alabama Power Co., 601 So. 2d 942, 

944-945 (Ala. 1992) (italics added). Alabama courts have made clear that the implied covenant 

of good faith is “directive, not remedial.” Tanner v. Church's Fried Chicken, Inc., 582 So. 2d 

449, 452 (Ala. 1991), citing Government Street Lumber Co. v. AmSouth Bank, 553 So. 2d 68 

(Ala.1989). Thus, a contract claim for breach of an implied covenant of good faith and fair 

dealing provides no remedy separate and apart from the breach of a specific contract provision. 

Unless a party to a contract can point to a breach of a specific provision in the contract, there is 

no breach of an implied duty. But if the party is able to point to a breach of a specific provision 

in the contract, that breach itself supports a claim for breach of contract without the necessity of 

a “nebulously hover[ing]” implied covenant. Because the implied covenant is “directive, not 

remedial,” it provides no separate cause of action. Therefore, this claim also is due to be 

dismissed.

C. Violation of FDCPA

The Anchrums allege in Count Seven of the counterclaim that Wells Fargo6 violated

provisions of the Fair Debt Collection Practices Act, but they do not identify any particular 

provision of the Act they contend Wells Fargo violated. Indeed, paragraph 73 of the 

counterclaim alleges only that “Counterclaim Defendant Wells Fargo has reported inaccurate 

credit information to the three major credit reporting agencies.”7 Nowhere in the counterclaim 

6

 The allegations in Count Seven are limited explicitly to counterclaim defendant Wells 

Fargo. (See Counterclaim ¶ 72, Doc. 1-3). Accordingly, insofar as Freddie Mac and UGC seek 

dismissal of this count, their motions are MOOT because they are not named as counterclaim 

defendants in the count. To be clear, there is no FDCPA claim alleged with respect to either 

Freddie Mac or UGC. 

7

 This appears to be a reference to the Fair Credit Reporting Act, 15 U.S.C. § 1681 et 

seq., rather than the Fair Debt Collection Practices Act, but the Anchrums have not alleged any 

13

 

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do they describe any facts consistent with any potential claim under the FDCPA. They do not 

allege any telephone calls or harassing communications or threats other than notices of 

foreclosure of the mortgage. The counterclaim simply fails utterly to meet the pleading standard 

of Twombly/Ibgal to show facts making out a plausible claim.

But even if the facts were sufficiently alleged, Wells Fargo was a creditor of the 

Anchrums, not a “debt collector” as the term is defined in the Act. Judge Albritton in the Middle 

District of Alabama best summarized the law on this point:

“In order to prevail on an FDCPA claim, a plaintiff must prove that: ‘(1) the 

plaintiff has been the object of collection activity arising from consumer debt, 

(2) the defendant is a debt collector as defined by the FDCPA, and (3) the 

defendant has engaged in an act or omission prohibited by the FDCPA.’” Kaplan 

v. Assetcare, Inc., 88 F.Supp.2d 1355, 1360–61 (S.D.Fla. 2000) (internal citations 

omitted). The FDCPA limits its consumer protections to only those acts done by 

“debt collectors” as defined by the FDCPA. 15 U.S.C. § 1692 et seq.

The FDCPA defines a “debt collector” as:

any person who uses any instrumentality of interstate commerce or 

the mails in any business the principal purpose of which is the 

collection of any debts, or who regularly collects or attempts to 

collect, directly or indirectly, debts owed or due or asserted to be 

owed or due another.... [Debt collector] includes any creditor who, 

in the process of collecting his own debts, uses any name other 

than his own which would indicate that a third person is collecting 

or attempting to collect such debts.

15 U.S.C. § 1692a(6). Accordingly, the FDCPA’s proscriptions target the 

behavior of businesses whose “principal purpose” is to collect debts owed to 

another.

facts sufficient under Twombly/Iqbal to show a plausible claim. They have alleged no facts 

concerning how, when, or what Wells Fargo is purported to have reported to a credit reporting 

agency, or how that information was inaccurate. To the extent, therefore, that the court is 

required to read Count Seven as attempting to allege a claim under the FCRA, rather than the 

FDCPA, it still is due to be dismissed for failure to state a claim.

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Furthermore, within the definition of “debt collector,” the FDCPA explicitly 

states certain persons who will not be considered “debt collectors” including:

any person collecting or attempting to collect any debt owed or due 

or asserted to be owed or due another to the extent such activity ... 

(ii) concerns a debt which was originated by such person [or] 

(iii) concerns a debt which was not in default at the time it was 

obtained by such person ... (Emphasis added).

15 U.S.C. § 1692a(6)(F). Therefore, the statute explicitly states that those entities 

which originated the original debt or which obtained the loan before it was in 

default are exempt from the statutory definition of “debt collector.”

In addition to defining “debt collector,” the statute clearly defines “creditor” as 

“any person who offers or extends credit creating a debt or to whom a debt is 

owed, but such term does not include any person to the extent that he receives an 

assignment or transfer of a debt in default solely for the purpose of facilitating 

collection of such debt for another.” 15 U.S.C. § 1692a(4). Combining the two 

definitions, it is clear that a “debt collector does not include the consumer’s 

creditors, a mortgage servicing company, or an assignee of a debt, as long as the 

debt was not in default at the time it was assigned.” Perry v. Stewart Title Co., 

756 F.2d 1197, 1208 (5th Cir.1985).

Janke v. Wells Fargo & Co., 805 F. Supp. 2d 1278, 1281 (M.D. Ala. 2011) (emphasis in 

original).

It is apparent in this case that Wells Fargo was not and is not a “debt collector” with 

respect to the Anchrums. Not only in their counterclaim, but also in their response to the motion 

to dismiss, they acknowledge that Wells Fargo originated their debt as part of the financing of 

the purchase of their home. As such Wells Fargo is a “creditor” excluded from the definition of 

a “debt collector.” They do not allege that Wells Fargo posed as some other person or entity in 

attempting to collect the mortgage debt. The FDCPA simply does not apply to Wells Fargo 

under the circumstances of this case. Count Seven of the counterclaim is due to be dismissed.

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CONCLUSION

Based on the foregoing considerations, the magistrate judge RECOMMENDS that the 

motion to dismiss Counts Three and Five of the counterclaim be GRANTED as to all 

counterclaim defendants, and those counts should be DISMISSED WITH PREJUDICE. Further, 

it is RECOMMENDED that the motion be GRANTED as to Count Seven as alleged against 

Wells Fargo, and that count be DISMISSED WITH PREJUDICE. The motion to dismiss 

Count Seven with respect to Freddie Mac and UGC is MOOT in that Count Seven is not pleaded 

against them; they are not named as counterclaim defendants in that count. It is further 

RECOMMNDED that the counterclaim defendants be required to file an answer to the remaining 

counts of the counterclaim within fourteen (14) days following the granting of the motion to 

dismiss.

NOTICE OF RIGHT TO OBJECT

Any party who objects to this Report and Recommendation must, within fourteen (14) 

days of the date on which it is entered, file specific written objections with the clerk of this court. 

Any objections to the failure of the magistrate judge to address any contention raised in the 

petition also must be included. Failure to do so will bar any later challenge or review of the 

factual findings or legal conclusions of the magistrate judge. See 28 U.S.C. § 636(b)(1)(C); 

Thomas v. Arn, 474 U.S. 140, 106 S. Ct. 466, 88 L. Ed. 2d 435 (1985), reh’g denied, 474 U.S. 

1111, 106 S. Ct. 899, 88 L. Ed. 2d 933 (1986); Nettles v. Wainwright, 677 F.2d 404 (5th Cir. 

1982)(en banc). In order to challenge the findings of the magistrate judge, a party must file with 

the clerk of the court written objections which shall specifically identify the portions of the 

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proposed findings and recommendation to which objection is made and the specific basis for 

objection. A copy of the objections must be served upon all other parties to the action.

Upon receipt of objections meeting the specificity requirement set out above, a United 

States District Judge shall make a de novo determination of those portions of the report, proposed 

findings, or recommendation to which objection is made and may accept, reject, or modify in 

whole or in part, the findings or recommendation made by the magistrate judge. The district 

judge, however, need conduct a hearing only in his or her discretion or if required by law, and 

may consider the record developed before the magistrate judge, making his or her own 

determination on the basis of that record. The district judge may also receive further evidence, 

recall witnesses or recommit the matter to the magistrate judge with instructions.

Objections not meeting the specificity requirement set out above will not be considered 

by a district judge.

A party may not appeal a magistrate judge’s recommendation directly to the United 

States Court of Appeals for the Eleventh Circuit. Appeals may be made only from a final 

judgment entered by or at the direction of a district judge.

DATED this 10th day of April, 2015.

_______________________________

T. MICHAEL PUTNAM

UNITED STATES MAGISTRATE JUDGE

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