IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

KELIA WEAVER MCCLEARY, )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 15-0098-WS-C

 )

DLJ MORTGAGE CAPITAL, INC., )

et al., )

 )

Defendants. )

ORDER

This matter is before the Court on the motion to dismiss filed by defendant 

Green Tree Servicing LLC (“Green Tree”). (Doc. 57). The parties have filed 

briefs in support of their respective positions, (Docs. 58, 65, 68), and the motion is 

ripe for resolution. After careful consideration, the Court concludes the motion is 

due to be granted in part and denied in part.

BACKGROUND

According to the amended complaint, (Doc. 55), the plaintiff financed the 

purchase of her home. Wilmington Finance was the lender; defendant Mortgage 

Electronic Registration Systems, Inc. executed the mortgage as Wilmington

Finance’s nominee. The loan was purportedly sold and transferred to defendant 

U.S. Bank, N.A., Inc., with the mortgage and note purportedly assigned to U.S. 

Bank as trustee. A procession of defendants acted as loan servicer. Green Tree 

serviced the loan from May 3, 2010 to June 2, 2013, followed (in chronological 

order) by Select Portfolio Servicing, Inc., Selene Finance, LP, and DLJ Mortgage 

Capital, Inc.

The amended complaint lists fourteen counts. Green Tree is named as a 

defendant in five of them:

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• Count One – negligence

• Count Two – wantonness

• Count Three – unjust enrichment

• Count Six – breach of contract

• Count Seven - fraud

Green Tree seeks the dismissal of all claims against it other than Count Six.

DISCUSSION

I. Negligence and Wantonness.

Count One alleges that the servicer defendants, including Green Tree,

negligently: (1) serviced the loan; (2) attempted to collect sums not owed by the 

plaintiff; (3) caused her property insurance to be canceled; (4) defaulted the 

plaintiff; (5) attempted a foreclosure sale; (6) failed to ensure that information 

disseminated to third parties was maximally accurate; (7) failed to train their 

employees properly on the thorough investigation of disputed accounts; (8) failed 

to train and/or supervise their employees and agents properly on handling her loan 

account; and (9) failed to remove adverse reporting once she disputed it. (Doc. 55 

at 9-10). Count Two alleges that the same defendants were wanton in these 

respects. (Id. at 10-11).

Green Tree presents two arguments: (1) Alabama recognizes no cause of 

action for negligent or wanton loan servicing; and (2) the claims are time-barred. 

(Doc. 58 at 3-5).

As the Court has noted, “[r]ecent federal precedent interpreting Alabama 

law has uniformly found that no cause of action for negligent or wanton servicing 

of a mortgage account exists under Alabama law, at least in the absence of 

personal injury or property damage ....” Selman v. CitiMortgage, Inc., 2013 WL 

838193 at *5 (S.D. Ala. 2013). Moreover, “[t]he Court agrees with these 

decisions’ construction of Alabama law, and particularly their emphasis that the 

mortgage servicing obligations at issue here are a creature of contract, not of tort, 

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and stem from the underlying mortgage and promissory note executed by the 

parties, rather than a duty of reasonable care generally owed to the public.” Id. at 

*6. Therefore, “[t]hese claims fail as a matter of law.” Id. at *5; accord Quinn v. 

Deutsche Bank National Trust Co., 2014 WL 977632 at *6-7 (S.D. Ala. 2014).

To the extent Counts One and Two attempt to assert claims for negligent or 

wanton loan servicing, then, Green Tree’s motion to dismiss is due to be granted. 

Unfortunately, Green Tree has not acknowledged the various sub-parts of these 

counts or undertaken to demonstrate that each of them is captured by the foregoing 

rule. For example, Green Tree has neither argued nor attempted to show that 

negligent or wanton failure to train constitutes negligent or wanton loan servicing 

for purposes of the rule. The parameters of Green Tree’s legal victory thus remain 

indeterminate. 

The parties agree that Counts One and Two are subject to a two-year 

limitations period. The complaint was filed January 20, 2015. (Doc. 1-1 at 3). 

Green Tree argues that Counts One and Two are barred in their entirety, on the 

grounds that the plaintiff first experienced injury in 2012 when, the amended 

complaint alleges, Green Tree misapplied several payments and wrongfully 

returned several others. (Doc. 58 at 5). The plaintiff responds that Counts One 

and Two are not barred to the extent based on conduct occurring between January 

20, 2013 and June 2, 2013 (when Green Tree ceased to be loan servicer). (Doc. 65 

at 14).

The Court agrees with the plaintiff. The amended complaint expressly 

alleges that Green Tree wrongfully returned and/or refused to accept her payments 

from October 2012 through March 2013, (Doc. 55 at 7), which on its face reflects 

alleged misconduct within the limitations period. The Court cannot credit Green 

Tree’s assumption that, because it returned some payments in 2012, the limitations 

period as to payments it returned in 2013 began to run in 2012. Green Tree says 

the limitations period begins to run “as soon as the alleged injury occurs,” (Doc. 

58 at 4), but it has not explained how the plaintiff was injured in 2012 from the 

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2013 return of her 2013 payments; it seems clear that such injury occurred in 

2013, when or after the misconduct occurred.

In its reply brief, Green Tree changes tack, now insisting that the 

allegations regarding returned payments are directed exclusively to the plaintiff’s 

contract claim. (Doc. 68 at 4 n.1). This pivot comes too late to be considered,1

but it is in any event unavailing. The amended complaint asserts that Green Tree’s 

return of these payments violated the mortgage contract, (Doc. 55 at 7), but this 

does not rule out the plaintiff’s reliance on the same conduct in support of her tort 

claims as well.

2

 

Green Tree also complains that the plaintiff “points to no actual facts, 

occurrences, or events during that period [on or after January 20, 2013] that give 

rise to her tort causes of action.” (Doc. 68 at 4). This argument fails both because 

it was raised too late and because it depends on the unsupported premise that a 

defendant is entitled to dismissal on limitation grounds any time the complaint 

does not state when the objectionable conduct occurred. That is not the law. “A 

Rule 12(b)(6) dismissal on statute of limitations grounds is appropriate only if it is 

apparent from the face of the complaint that the claim is time-barred.” Arthur v. 

Thomas, 674 F.3d 1257, 1269 n.9 (11th Cir. 2012) (internal quotes omitted). 

II. Unjust Enrichment.

Count Three expressly limits its scope to “[t]he actions of the Defendants in 

attempting foreclosure.” (Doc. 55 at 12). As Green Tree points out, (Doc. 58 at 8-

9), the amended complaint alleges that foreclosure proceedings began in 

 1 “District courts, including this one, ordinarily do not consider arguments raised 

for the first time on reply.” Gross-Jones v. Mercy Medical, 874 F. Supp. 2d 1319, 1330 

n.8 (S.D. Ala. 2012) (citing cases and explaining the underlying rationale). Green Tree 

identifies no reason to depart from this well-established rule, and the Court declines to do 

so.

2 Of course, returning a mortgagor’s payments likely constitutes loan servicing 

within the prohibition on claims for negligent or wanton loan servicing.

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November 2014 and that Green Tree was no longer servicing the loan after June 

2013. (Id. at 4). The amended complaint thus on its face negates Green Tree’s 

liability.

In her response, the plaintiff asserts that Count Three is based on 

allegations that the defendants “unlawfully and improperly charged fees and 

expenses to her and her account which she paid resulting in the unjust enrichment 

to the Defendants.” (Doc. 65 at 14-15). According to Count Three, however, she 

paid “unauthorized and unearned fees and expenses” in response to the “threat of 

foreclosure,” (Doc. 55 at 12), long after Green Tree had disappeared.

III. Fraud.

Green Tree argues that Count Seven fails to plead fraud with particularity 

and that the claim is time-barred. (Doc. 58 at 5-8). 

“[A] party must state with particularity the circumstances constituting fraud 

....” Fed. R. Civ. P. 9(b). As the plaintiff acknowledges, (Doc. 65 at 17-18), in 

order to satisfy Rule 9(b) she must allege: “(1) the precise statements, documents, 

or misrepresentations made; (2) the time, place, and person responsible for the 

statement; (3) the content and manner in which these statements misled the 

Plaintiffs; and (4) what the defendants gained by the alleged fraud.” American 

Dental Association v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010) (internal 

quotes omitted). The particularity requirement must be met as to each defendant. 

Id. (“The plaintiff must allege facts with respect to each defendant’s participation 

in the fraud.”).

Count Seven alleges that certain defendants “misrepresented that the loan 

was in default. Further, the Defendants made false and misleading 

representations, to wit: dissemination of inaccurate information regarding the loan 

account as being in default and dissemination of inaccurate information regarding 

the credit history and credit of the Plaintiff that was known to be false.” (Doc. 55 

at 18). 

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Count Seven identifies the general subject matter (default, credit, credit 

history), but it does not identify the “precise statements” made regarding these 

subjects. Nor does Count Seven even generally allege who (or even which 

defendant) made each representation, when they did so, where they did so, or by 

what medium. Indeed, it is not clear from Count Seven to whom each 

representation was made, whether to the plaintiff or to others. Count Seven 

patently falls far short of the particularity required by Rule 9(b). The plaintiff’s 

ipse dixit to the contrary, (Doc. 65 at 19), changes nothing.

Green Tree argues that Count Seven is time-barred because it alleges the 

plaintiff relied on the fraudulent representations by “proceed[ing] with the 

execution of the loan,” (Doc. 55 at 18), which the amended complaint indicates 

occurred in 2006. (Id. at 3). It seems doubtful the plaintiff alleges the defendants 

fraudulently represented that her loan was in default before the loan existed; more 

likely is that Count Seven refers to the loan modification mentioned in the 

plaintiff’s brief (although not in her pleading). (Doc. 65 at 13). In any event, the 

amended complaint does not disclose on its face that the fraud claim is barred by 

the statute of limitations.

IV. Amendment.

The plaintiff requests leave of Court to file a second amended complaint 

should the Court grant any portion of Green Tree’s motion to dismiss. (Doc. 65 at 

14, 16, 20). Green Tree opposes such relief. (Doc. 68 at 4-5). 

The plaintiff’s request is subject to Rule 15(a), which provides that a court 

“should freely give leave [to amend] when justice so requires.” Without 

acknowledging this authority, Green Tree argues the Court should deny leave due 

to the plaintiff’s “repeated failure to state a claim.” (Doc. 68 at 4). The amended 

complaint, however, is the first pleading reviewed by the Court; the plaintiff 

sought and received leave to file an amended complaint after the defendants filed 

motions to dismiss the original complaint (which had been filed in state court and 

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was not subject to federal pleading standards), and the Court’s grant of the 

plaintiff’s motion mooted the defendants’ motions. (Doc. 54). Green Tree thus 

has failed to show any “repeated” failure to state a claim. 

CONCLUSION

For the reasons set forth above, Green Tree’s motion to dismiss is granted

with respect to the plaintiff’s claims against Green Tree for negligent or wanton 

loan servicing, unjust enrichment and fraud. To the extent Green Tree seeks other 

or additional relief, its motion is denied. The plaintiff’s request for leave to file a 

second amended complaint, construed as a motion for such relief, is granted. The 

plaintiff is ordered to file and serve any second amended complaint on or before 

August 14, 2015. 

DONE and ORDERED this 27th day of July, 2015.

s/ WILLIAM H. STEELE

CHIEF UNITED STATES DISTRICT JUDGE

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