United States District Court, E.D. Louisiana
TILE SOLUTION SERVICES, INC.
CARRINGTON MORTGAGE SERVICES, LLC
ORDER AND REASONS
filed a motion to dismiss plaintiff's claim for lack of
subject matter jurisdiction. Rec. Doc. 4. Plaintiff filed a
memorandum in opposition. Rec. Doc. 10.
reasons discussed below, IT IS ORDERED that the motion to
dismiss is GRANTED in part, without prejudice to consider
additional briefing from parties on remand issues raised
sua sponte by the Court infra.
BACKGROUND AND PROCEDURAL HISTORY
originally filed this suit in the Twenty-Second Judicial
District Court for the State of Louisiana on October 31,
2018. Rec. Doc. 1-1 at 1. Defendant then removed the case to
this Court on November 26, 2018 on the basis of diversity
jurisdiction. Rec. Doc. 1 at 2. Plaintiff, a real estate
title company in the business of closing commercial and
residential sales, alleges that it closed the sale of
property owned by Bryan Joseph Baumy, Jr. and Rori A. Crowley
Baumy on October 17, 2017. Rec. Doc. 1-1 at 1. Plaintiff
states that defendant Carrington Mortgage Services, LLC
(“Carrington”) was the holder of a promissory
note the Baumy's made in favor of Carrington and secured
by a first mortgage on the referenced property. Id.
at 2. Plaintiff asserts that it requested a written payoff
from defendant in conjunction with the sale of Baumy's
referenced property, but defendant would not communicate with
plaintiff. Id. After plaintiff had the Baumy's
request the payoff from defendant, plaintiff states that
defendant responded and supplied the Baumy's with a
written pay off for the amount of $152, 819.77. Id.
Plaintiff states that after the closing documents were
completed for the sale of the property, plaintiff sent
payment of $152, 819.77 to defendant but defendant
unjustifiably demanded additional payment, ultimately
returning the $152, 819.77 and thereafter refusing to cancel
its first mortgage on the property. Id. at 3.
Plaintiff claims that defendant amended its payoff statements
three more times, adding additional fees and charges each
time plaintiff attempted to contact defendant, before
plaintiff was forced to pay the amount of $163, 551.19.
Id. Plaintiff avers that defendant's actions
were negligent and constitute unfair trade practices, and
that pursuant to La. R.S. 9:5385 defendant was required to
produce the satisfied promissory note or an instrument of
release sufficient to cancel the mortgage but failed to do
so. Id. at 4-5. Plaintiff seeks $10, 731.42 in
damages, as well as all special and general damages,
including expert witness fees, attorney's fees, and
statutory penalties. Id. at 5. The latter sum
represents the difference between the final loan payoff
figure and the original payoff amount. Plaintiff further
argues that it paid that difference out of its own funds, not
the closing sale proceeds, to avoid a title insurance claim
against it as carrier on the title insurance policy.
filed the instant motion to dismiss pursuant to F.R.C.P.
12(b)(1) on the grounds that plaintiff lacks standing to
assert any of the claims in the petition as it is not the
owner of the subject property or the borrower on the
pre-existing mortgage loan. Rec. Doc. 4. Plaintiff filed a
response in opposition, arguing that it suffered actual
damages of $10, 731.42 plus fees and costs, there is a causal
connection between the injury and defendant's conduct,
and its injury will be redressed by a favorable decision at
trial of this matter. Rec. Doc. 10.
motion to dismiss pursuant to Federal Rule of Civil Procedure
12(b)(1) challenges a federal court's subject matter
jurisdiction. On a Rule 12(b)(1) motion to dismiss for lack
of subject matter jurisdiction, the parties asserting
jurisdiction bear the burden of “alleg[ing] a plausible
set of facts establishing jurisdiction.” Physician
Hosps. of Am. v. Sebelius, 691 F.3d 649, 652 (5th Cir.
2012). Federal courts are courts of limited jurisdiction, and
therefore have power to adjudicate claims only when
jurisdiction is conferred by statute or the Constitution.
Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375,
377 (1994). Constitutional standing “is an essential
and unchanging part of the case-or-controversy requirement of
Article III.” Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560-61 (1992).
standing has three elements:
First, the plaintiff must have suffered an injury in fact-an
invasion of a legally protected interest which is (a)
concrete and particularized, and (b) actual or imminent, not
conjectural or hypothetical. Second, there must be a causal
connection between the injury and the conduct complained
of-the injury has to be fairly traceable to the challenged
action of the defendant, and not the result of the
independent action of some third party not before the court.
Third, it must be likely, as opposed to merely speculative,
that the injury will be redressed by a favorable decision.
Id. at 560-61 (internal quotation marks and
Accent Title, LLC v. Ocwen Loan Servicing, LLC, 2015
WL 3862904 (M.D. La. June 22, 2015) the Court dismissed a
claim by a closing agent against a mortgage holder for
allegedly providing payoff quotes, refusing to accept payoff
funds, increasing the payoff amount, and failing to cancel
the mortgage. See Accent Title, LLC, 2015
WL 3862904 at 1. The Court held that that “any
ascertainable loss is suffered by the property owner(s), not
the closing agent of the title company” and therefore
the plaintiff's “petition fails to allege an
ascertainable loss or rights relating to the loan that
demonstrate plaintiff's standing.” See
Accent Title, LLC, 2015 WL 3862904 at 2.
discussed by the Court in Accent Title, the
“consumer” of the goods provided by defendant,
i.e. the loan, is the mortgagor and not the title company.
Plaintiff's petition states that the promissory note held
by defendant was made by the Baumy's and secured by a
mortgage on property owned by the Baumy's. Rec. Doc. 1-1
at 2. The payoff request was communicated not to plaintiff,
but to the Baumy's. Id. Unless plaintiff
acquired an identifiable economic interest in the subject
loan or any portion of its final payoff amount, plaintiff
lacks standing to pursue a claim on behalf of the debtors on
plaintiff has no interest in the original loan payoff amount
that was paid out of the closing proceeds, i.e. $152, 819.77,
it has identified an economic interest in the $10, 731.42
difference between the final loan payoff of $163, 551.19 and
the original payoff amount. Unlike the facts in Accent
Title, plaintiff claims it was obliged to pay and did
pay the latter amount from its own funds, not from the sale
proceeds. In support of that claim, plaintiff argues it acted
to avoid a claim against the title insurance policy that it
issued. As a result, plaintiff contends it was damaged by
defendant's alleged “arbitrary failing to honor the
written [loan] payoff that it [Carrington] first gave.”
In summary, the motion to dismiss is granted in
part, based on plaintiff's lack of standing to
assert a claim over the original payoff amount paid by the
borrowers, i.e. $152, 819.77. Because the value of the