United States District Court, E.D. Arkansas, Jonesboro Division
BRIAN S. MILLER, District Judge.
The motion to dismiss filed by defendants SunTrust Mortgage, Inc., and Federal National Mortgage Association ("Fannie Mae") [Doc. No. 61] is granted.
Viewed in the light most favorable to plaintiffs, the non-moving parties, the facts are as follows. In 2008, plaintiffs Robert and Pamela Dickinson ("the Dickinsons") refinanced their mortgage loan with First National Bank. First National immediately assigned the mortgage and the associated promissory note to Mortgage Electronic Registration Systems, Inc., and SunTrust later became the loan servicer. Some time later, SunTrust initiated foreclosure proceedings on the Dickinsons' home and charged them various associated fees and expenses, including $275 for courthouse posting, $295 for statutory internet posting, and $360 for foreclosure attorney fees. The Dickinsons filed this lawsuit alleging that the fees and expenses charged by Suntrust violate the Arkansas Deceptive Trade Practice Act ("ADTPA"), and constitute unjust enrichment. Defendants move to dismiss.
II. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(6) permits dismissal when the plaintiff fails to state a claim upon which relief can be granted. To meet the 12(b)(6) standard, a complaint must allege sufficient facts to entitle the plaintiff to the relief sought. See Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). Although detailed factual allegations are not required, threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, are insufficient. Id. In ruling on a motion to dismiss, materials embraced by the pleadings, as well as exhibits attached to the pleadings and matters of public record, may all be considered. Mills v. City of Grand Forks, 614 F.3d 495, 498 (8th Cir. 2010). Additionally, to survive a motion to dismiss, ADTPA claims must be pled with the particularity required under Federal Rule of Civil Procedure 9(b). Jarrett v. Panasonic Corp. of N. Am., CASE NO. 4:12CV00739 SWW, 2013 WL 8148643 (E.D. Ark. June 21, 2013).
A. ADTPA Claims
Defendants' motion to dismiss is granted because the ADTPA does not apply to "[a]ctions or transactions permitted under laws administered by... a regulatory body... acting under statutory authority of... the United States...." Ark. Code Ann. § 4-88-101(3). Moreover, the Dickinsons have failed to sufficiently plead an ADTPA claim against either defendant.
1. ADTPA Application
a. Application to Fannie Mae
The ADTPA claim against Fannie Mae is dismissed because the ADTPA does not apply to foreclosure fees charged by Fannie Mae. The Secretary of the United States Department of Housing and Urban Development ("HUD") has regulatory power over Fannie Mae and is required to enforce the provisions of the Federal National Mortgage Association Charter Act ("Fannie Mae Charter"). 24 C.F.R. § 81.1(a). The Fannie Mae Charter broadly gives Fannie Mae the power "to purchase, service, sell, or otherwise deal in any mortgages." See 12 U.S.C.A.§ 1717; Dickinson v. SunTrust Nat'l Mortgage Inc., 451 S.W.3d 576, 581 (Ark. 2014). Consequently, Fannie Mae's ability to charge fees related to foreclosures is broadly controlled by the Fannie Mae Charter and regulated by the HUD. See Dickinson, 451 S.W.3d at 581-82. Because the fees charged by Fannie Mae are impliedly authorized by the charter and regulated by the HUD, the ADTPA does not control them.
b. Application of ADTPA to SunTrust's Actions
Defendants' assertion that the ADTPA does not apply to SunTrust's actions because it is subject to state regulation is unsupported and overly broad. Defendants incorrectly read subsection 4-88-101(a)(3) to exempt all actions taken by an entity regulated under Arkansas law. See Ark. Code Ann. § 4-88-101(a)(3) (providing that the ADTPA does not apply to actions or transactions "permitted under laws administered by... a regulatory body"). Defendants failed to show that a mortgage servicer's ability to charge and collect foreclosure related fees ...