United States District Court, M.D. Louisiana
SUSAN BURGER BOMBET, INDIVIDUALLY AND IN HER CAPACITY AS INDEPENDENT EXECUTRIX OF THE SUCCESSION OF LEON H. BOMBET
SHAUN DONOVAN, IN HIS CAPACITY AS SECRETARY OF THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, WORLD ALLIANCE FINANCIAL CORP., GMFS, LLC, AND REVERSE MORTGAGE SOLUTIONS
For Susan Burger Bombet, Individually and in her Capacity as Independent Executrix of the Succession of Leon H. Bombet, Plaintiff: Namisha D. Patel, LEAD ATTORNEY, Roy H. Maughan, Jr., The Maughan Law Firm, Baton Rouge, LA.
For GMFS LLC, Defendant: Robert W. Barton, LEAD ATTORNEY, Taylor, Porter, Brooks & Phillips, Baton Rouge, LA; Jonathan A Moore, Taylor, Porter, Brooks & Phillips LLC, Baton Rouge, LA.
For World Alliance Financial Corp., Defendant: Michael David Ferachi, LEAD ATTORNEY, Jamie Polozola Gomez, McGlinchey Stafford, PLLC, Baton Rouge, LA.
For Shaun Donovan, In his capacity as Secretary of the United States Department of Housing and Urban Development, Defendant: Susan C. Amundson, LEAD ATTORNEY, United States Attorney's Office - BR Middle District of Louisiana, Baton Rouge, LA.
For Reverse Mortgage Solutions, LLC, Defendant: Benjamin Bryan Dean, LEAD ATTORNEY, Dean Morris LLP, Monroe, LA.
SHELLY D. DICK, DISTRICT JUDGE.
This matter is before the Court on the Motions to Dismiss filed by the Defendant World Alliance Financial Corp. (" World Alliance") and Defendant GMFS, LLC (" GMFS"). Plaintiff Susan Bombet has opposed the motions. Because World Alliance and GMFS move to dismiss on essentially all the same grounds, the Court will address both motions in this opinion. For the reasons which follow, the Court finds that the motions should be granted.
I. Factual Background
This case arises out of a reverse mortgage executed by Plaintiff's husband Leon Bombet on April 6, 2009. The Housing and Community Development Act of 1987 authorizes the Housing and Urban Development (" HUD") Secretary to insure lenders who provide Home Equity Conversion Mortgages (" HECM"), known colloquially as reverse mortgages, to enable elderly homeowners to reduce " the effect of the economic hardship caused by the increasing costs of meeting health, housing, and subsistence needs at a time of reduced income, through the insurance of home equity conversion mortgages to permit the conversion of a portion of accumulated home equity into liquid assets."  Generally, a borrower is not required to repay the loan until a triggering event occurs.
Defendant GMFS, LLC (" GMFS") acted as a broker for the reverse mortgage financed by Defendant World Alliance in favor of Leon Bombet. As broker, GMFS was responsible for processing the loan application. World Alliance was not the originator of the loan but was responsible for underwriting and funding the reverse mortgage, providing closing assistance and other functions. Both GMFS and World Alliance are described as lenders on the closing documents.
Under the HECM, HUD does not insure loans where one of the borrowers is under 62. At the time the Bombets applied for a reverse mortgage loan, Plaintiff was not 62 years old and therefore did not meet the eligibility requirements of the program. On April 6, 2009, Plaintiff transferred her interest in their home to her husband Leon Bombet, who was eligible for the loan. On this same date, Leon Bombet executed a reverse mortgage secured by the property located at 17932 Grand Cypress Creek Avenue, Baton Rouge, Louisiana, 70810. Leon Bombet then received a lump sum payment of $100, 171.89, and the Bombets continued to reside in this home. The reverse mortgage was assigned to World Alliance and then later assigned to Reverse Mortgage Solutions, Inc. (" RMS"), also a Defendant in this case.
Plaintiff claims that during the loan application process, she and her husband were presented documents by GMFS and World Alliance showing that both Plaintiff and her husband were identified as borrowers. Plaintiff claims she did not know at that time that her name would be removed from the property title as an owner of the home.
GMFS arranged for a HUD-mandated counseling session with Cynthia Ketchens of the Desire Community Housing Corporation. This counseling was conducted via telephone around March 20, 2009. Plaintiff claims she is listed on the Counseling Certificate as a homeowner and that she was treated during the counseling session as though she was also a borrower. Plaintiff claims she was never told during this counseling that her name would be removed from the title or the consequences that could result by not being listed as a homeowner or borrower on the loan. Plaintiff also claims that her signature was forged on the Counseling Certificate by an unknown party.
On May 29, 2011, two years after executing the reverse mortgage, Leon Bombet died testate. Plaintiff was appointed the independent executrix of his succession. Leon Bombet's death constituted a triggering event pursuant to 12 U.S.C. § 1715z-20(j) at which time the reverse mortgage became due. Plaintiff defaulted on the loan, and RMS initiated executory proceedings to foreclose on the mortgaged property on November 28, 2012. Plaintiff filed this lawsuit against World Alliance, GMFS, RMS, and the HUD on February 26, 2013. The motions to dismiss by GMFS and World Alliance are now before the Court in this Ruling .
II. Law and Analysis
A. Motion to Dismiss under Rule 12(b)(6)
When a court considers a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), " all well-pleaded facts are viewed in the light most favorable to the plaintiff, but plaintiffs must allege facts that support the elements of the cause of action in order to make out a valid claim."  " To avoid dismissal, a plaintiff must plead sufficient facts to 'state a claim to relief that is plausible on its face.'"  " A 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."  The court " do[es] not accept as true conclusory allegations, ...