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IN	THE	UNITED	STATES	DISTRICT	COURT	FOR	THE

SOUTHERN	DISTRICT	OF	ALABAMA

SOUTHERN	DIVISION

GEORGE	P.	SHEDD,	JR.,	et	

al.,

Plaintiffs.

v.

WELLS	FARGO	HOME	

MORTGAGE,	INC.,	et	al.,

Defendants.

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CIVIL	ACTION	NO.

14-00275-CB-M

ORDER

This	matter	is	before	the	Court	on	Plaintiffs’	motion	to	dismiss	the	

counterclaims filed	against	them	by	Defendants	Wells	Fargo	Bank,	N.A.	and	

Monument	Street	Funding,	II,	LLC1		(Doc.	170)	and	on	Defendants’	response	to	the	

motion	(Doc.	190).		For	reasons	discussed	below,	the	motion	is	denied,	in	part,	and	

granted,	in	part.

Procedural	Background

The	tortuous	history	of	this	action	is	well	documented	in	prior	orders.		

Currently	at	issue	is	the	First	Amended	Counterclaim	filed	by	Defendants Wells	

Fargo	Bank,	N.A.	(Wells	Fargo)	and Monument	Street Funding,	II,	LLC. (Monument)	

which	asserts	a	claim for	breach	of	contract	against	Pamela	Shedd	and	a	claim	for	

unjust	enrichment	against	both	Pamela	Shedd	and	George	Shedd.		The	facts	in	

support	of	those	claims	are	relatively	brief.		In	2001	Pamela	Shedd	executed	a	

promissory	note	to	the	Mortgage	Outlet,	Inc.		(Countercl.	¶	4.)		That	promissory	note	

																																																							 1 Defendants’	First	Amended	Counterclaim	is	part	of	their	Answer	to	Third	

Amended	Complaint	and	Amended	Summary	Statement	of	Facts.	(Doc.	164.)		

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was	secured	by	mortgage	on	566	Brawood	Drive	in	Mobile.		George	Shedd	cosigned	

the	mortgage,	but	he	was	not	obligated	on	the	promissory	note.		(Id. 5.) The	note	

and	mortgage	were	subsequently	transferred	and	assigned	to	Monument,	a	wholly	

owned	subsidiary	of	Wells	Fargo.		(Ans.	¶	6.)		The	Shedds	subsequently	failed	to	

make	payments	on	the	Note	and,	in	2008,	filed	a Chapter	11	bankruptcy	petition.		

(Countercl.	¶¶	6-7.)		Ultimately,	the	bankruptcy	plan	required the	Shedds	to	make	

the	payments	as	set	out	in	the	promissory	note	and	to	pay	an	additional	amount	per	

month	for	60	months	to	cure	their	pre-petition	arrearage. (Id. ¶	8.)		According	to	

Wells	Fargo	and	Monument,	“[t]he	Shedds	subsequently	failed	to	remit	the	required	

direct	monthly	payments	on	the	[l]oan	and	the	pre-petition	arrearage,”	and	the	loan	

“remains	in	default.”		(Id. ¶¶	13-15.)		

Legal	Analysis2

Pamela	Shedd	argues	that	the	breach	of	contract	claim	is	due	to	be	dismissed	

for	two	reasons.		First,	she	argues	that	it	is	impossible	for	both	Wells	Fargo	and	

Monument	to	hold	the	note	and	claim	the	debt.		In response	to	this	argument	Wells	

Fargo	and	Monument	assert,	without	explaining	how,	they	have	each	sufficiently	

alleged	breach	of	contract	claims.		They	argue	that	“as	the	owner	of	Monument,	

Wells	Fargo	is	in	privity	of	any	contractual	agreement to	which	Monument	is	a	

party.”		(Defs.’	Br.	4,	Doc.	190.)		Alabama	law	directly	contradicts	this	assertion.		In	

Russell	v.	Birmingham	Oxygen	Serv.,	Inc., 408	So.	2d	90,	93	(Ala.	1981),	the	plaintiff	

																																																							 2 As	this	Court	has	stated	repeatedly	in	various	orders	addressing	motions	to	

dismiss	for	failure	to	state	a	claim,	facts	pleaded	in	the	complaint	(or,	in	this	case,	

the	counterclaim)	are	taken	as	true	but	conclusions	are	not.		Randall	v.	Scott,	610	

F.3d	701,	709-10	(11th Cir.	2010).			The	court’s	task	is	to	determine	whether	the	

factual	allegations	plausibly	give	rise	to	a	claim	for	relief.			Id. at	710.

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made	a	similar	claim,	arguing	that	it	did	not	matter	which	of	two	related	

corporations	sued	to	enforce	a	contract	because	both	were	owned	by	the	same	

individual.		The	Alabama	Supreme	Court	disagreed.	“A	corporation	is	an	entity	

created	by	compliance	with	statutory	requirements.	A	corporation	has	the	right	to	

sue	and	be	sued	just	like	a	natural	person.	A	corporation,	just	like	an	individual,	must	

enforce	its	own	rights	and	privileges.”		Id.		(internal	citation	omitted)	(emphasis	

added).		Wells	Fargo’s	status	as	owner	of	Monument	does	not	give	it	standing	to	sue	

for	breach	of	contract.	Therefore,	Wells	Fargo’s	breach	of	contract	counterclaim is	

due	to	be	dismissed.

Pamela	Shedd	also	argues	that	the	breach	of	contract	claim	is	due	to	be	

dismissed	because	the	counterclaim	fails	to	allege	that	either	counterclaim	plaintiff	

performed	as	required	by	the	terms	of	promissory	note,	as	modified	by	the	

bankruptcy	plan.		This	argument	is	without	merit	because,	as	the	counterclaim	

plaintiffs	point	out,	the	bankruptcy	plan’s	effect	on	the	terms	of	the	promissory	note	

is	a	legal	issue.		

Next,	both	Pamela	Shedd	and	George	Shedd	argue	that	the	facts	asserted	do	

not	support	an	unjust	enrichment	claim.		The	Alabama	supreme	court	defines	unjust	

enrichment	as	follows:		

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,	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.

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Mantiply	v.	Mantiply,	951	So.	2d	638,	654-55	(Ala.	2006) (internal	citations	and	

quotation	marks	omitted).		As	the	Shedds	point	out,	the	counterclaim	contains	no	

facts	that	would	plausibly	suggest	that	either	Wells	Fargo	or	Monument	acted	under	

a	mistake	or	misreliance	or	that	the	Shedds	engaged	in	wrongful	conduct.		In	their	

response,	Wells	Fargo	and	Monument	casually	overlook	the	omission	of	crucial	

supporting	facts	from	the	counterclaim	and	argue	simply	that	the	Shedds’	ability	to	

remain	in	their	home	without	remitting	payment	due	amounts	to	unjust	

enrichment.3

Conclusion

For	the	reasons	set	forth	above,	the	motion	to	dismiss	is	granted,	in	part,	

and	denied,	in	part,	as	follows:

• Wells	Fargo’s	counterclaim	for	breach	of	contract	is	dismissed.		

• Monument’s	counterclaim	for	breach	of	contract	is	not	dismissed.		

• The	counterclaim	for	unjust	enrichment	is	dismissed	in	its	entirety.

DONE	and	ORDERED this	the	16th day	of	May,	2016.

s/Charles	R.	Butler,	Jr.

Senior	United	States	District	Judge

																																																							 3 In	an	argument	consisting	of	three	sentences	and	a	two-page	string	cite,

Wells	Fargo	and	Monument	point	out	that	they	are	entitled	to	plead	alternative	

theories	of	recovery.		While	that	may	be	true,	none	of	the	cases	cited	relieve	them	

from	asserting	facts	to	support	the	elements	of	each alternative	claim.

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