United States District Court, W.D. Arkansas, Harrison Division
MEMORANDUM OPINION AND ORDER
Timothy L. Brooks Judge.
pending before the Court are Defendant Bank of America,
N.A.'s ("BOA") Motion to Dismiss (Doc. 15) and
Brief in Support (Doc. 16), and Plaintiff Mitzi Leigh
Cantrell's Response in Opposition (Doc. 20) and Brief in
Support (Doc. 21). On March 2, 2017, the Court held a hearing
on the Motion, during which time counsel for both parties
presented oral argument. At the conclusion of the hearing,
the Court orally granted the Motion from the bench, finding
that the case should be dismissed due to the expiration of
the statutes of limitation that are applicable to all four
causes of action in the Amended Complaint. The following
Opinion and Order sets forth in greater detail the reasons
for the Court's decision. To the extent anything in this
Order conflicts with statements made from the bench, the
Order will control.
Cantrell filed a lawsuit in Boone County Circuit Court on
October 24, 2016, against BOA and John Doe Defendants 1-20.
See Doc. 2. The case was removed to this Court on December 1,
2016, (Doc. 1), and an Amended Complaint was filed on
December 16, 2016, (Doc. 11).
Amended Complaint, Ms. Cantrell alleges generally that BOA
failed to live up to its end of the agreements it made to the
federal government as a participating servicer in the
"Home Affordable Modification Program, " better
known by its acronym, "HAMP." As a participating
servicer for HAMP, BOA agreed to gather information on
homeowners who were more than 60 days delinquent in paying
their loans, and who requested HAMP-based loan modifications.
After the initial information-gathering process was complete,
BOA would next decide whether to offer the homeowner a Trial
Period Plan ("TPP"), which is an agreement that
allows the homeowner to make reduced mortgage payments for a
three-month period, based on the homeowner's disclosed
financial information. Under HAMP guidelines, if the
homeowner lived up to his or her end of the bargain during
the TPP, then BOA would offer a permanent loan modification.
Ms. Cantrell asserts that BOA engaged in a company-wide
practice of willfully refusing to screen HAMP applications
and failing to offer loan modification agreements to worthy
Cantrell's particular situation, she owned a home that
was mortgaged with BOA. After she was divorced, she suffered
a loss of income due to the lowering of her ex-husband's
child support payments. She attempted to qualify for a loan
modification by submitting HAMP paperwork to BOA. She claims
she was asked to submit the same paperwork multiple times,
and was assured it would be processed. Even after months of
waiting, she never heard back from BOA as to whether or not
her application would be approved for a TPP. She finally
filed for bankruptcy on May 9, 2011. At around the same time
she lost her home in the bankruptcy proceedings, she received
written notification from BOA that she qualified for a loan
modification. See Id. at 15.
result of BOA's handling of her HAMP application, Ms.
Cantrell now asserts state-law causes of action for deceit,
negligence, unjust enrichment, and promissory estoppel. She
includes factual allegations concerning BOA's alleged
"fraudulent scheme" to avoid the requirements of
HAMP and increase BOA's profits by dragging their feet on
processing loan-modification paperwork, intentionally
"losing" such paperwork, and following through on a
business strategy to deprive customers of permanent loan
modifications under HAMP. The Amended Complaint also states
that the Department of Justice brought a case against BOA as
a result of a whistleblower report, resulting in an August
2014 settlement that required BOA to "pay $7 billion in
relief to struggling homeowners, borrowers and communities
affected by the bank's conduct." Id. at 12.
This alleged conduct also fueled a multidistrict litigation
("MDL") lawsuit, styled In re Bank of America
Home Affordable Modification Program (HAMP) Contract
Litigation, 2013 WL 475649 (D. Mass. Sept. 4, 2013). The
MDL, which was opened in 2011, the same year Ms. Cantrell
lost her home, asserted claims on behalf of a class of BOA
customers who had entered into TPP agreements but had been
denied permanent modifications. Id. at *2. The
purported class in the MDL asserted that BOA had improperly
processed their HAMP applications, and in doing so had
committed breach of contract, breach of the implied covenant
of good faith and fair dealing, and unfair and deceptive acts
and practices. Id. at *1.
argues that Ms. Cantrell's case should be dismissed,
among other reasons, because the statute of limitations on
the four state-law causes of action (deceit, negligence,
unjust enrichment, and promissory estoppel) is only three
years. As her alleged damages accrued as of the
date of her bankruptcy, May 9, 2011, the statute of
limitations on her claims expired on May 9, 2014; yet her
lawsuit was not filed in state court until October 24, 2016.
Ms. Cantrell does not dispute that a three-year limitations
period applies to all her claims. She argues that the Court
should toll the limitations period due to BOA's
fraudulent concealment of certain material facts that she
claims were necessary for her to know prior to filing suit,
and that she did not learn until after she consulted with an
attorney in 2016. See Doc. 21, p. 4.
Court initially observes that the Amended Complaint does not
clearly identify what material facts were allegedly concealed
by BOA from Ms. Cantrell, so as to prevent her from filing
suit prior to October of 2016. The Motion hearing was
therefore an opportunity for the Court to engage with counsel
in an attempt to ferret out the basis for Ms. Cantrell's
fraudulent concealment argument. After an extensive period of
back-and-forth questioning with counsel during the hearing,
the record is clear that Ms. Cantrell's argument is as
follows: she had no idea that BOA had processed her HAMP
application incorrectly, negligently, or with deceitful
motivation, until after her attorney advised her of such in
2016, and she blames the late filing of her lawsuit on
BOA's concealment of what was allegedly going on
"behind the scenes" at BOA, i.e., BOA's alleged
business practice of delaying the processing and approval of
its customers' HAMP applications.
survive a Rule 12(b)(6) motion to dismiss, a complaint must
provide "a short and plain statement of the claim that
[the plaintiff] is entitled to relief." Fed.R.Civ.P.
8(a)(2). The purpose of this requirement is to "give the
defendant fair notice of what the ... claim is and the
grounds upon which it rests." Erickson v.
Partus, 551 U.S. 89, 93 (2007) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Court
must accept all of a complaint's factual allegations as
true, and construe them in the light most favorable to the
plaintiff, drawing all reasonable inferences in the
plaintiffs favor. See Ashley Cnty., Ark. v. Pfizer,
Inc., 552 F.3d 659, 665 (8th Cir. 2009). However, the
complaint "must contain sufficient factual matter,
accepted as true, to 'state a claim to relief that is
plausible on its face.'" Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S.
at 570). "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." Id. "A
pleading that offers 'labels and conclusions' or
'a formulaic recitation of the elements of a cause of
action will not do.' Nor does a complaint suffice if it
tenders 'naked assertion[s]' devoid of 'further
factual enhancement."' Id. In other words,
while "the pleading standard that Rule 8 announces does
not require 'detailed factual allegations, '... it
demands more than an unadorned, the
defendant-unlawfully-harmed-me accusation." Id.
Arkansas law, once it is clear from the face of the complaint
that an action is barred by an applicable statute of
limitations, the burden shifts to the plaintiff to prove that
the limitation period was in fact tolled."
Summerhill v. Terminix, Inc., 637 F.3d 877, 880 (8th
Cir. 2011). Here, Ms. Cantrell's attorney conceded in
open court that he was well aware at the time he filed the
Amended Complaint that all four causes of action pleaded were
filed after the three-year statute of limitations had
expired. Nevertheless, he argued that these statutes of
limitation should be tolled due to BOA's fraudulent
concealment of certain material facts, namely, that BOA had a
business scheme in place to intentionally deny meritorious
HAMP loan modifications, delay HAMP loan modifications
unnecessarily, and deceive its financially distressed clients
into thinking that their loan applications would be processed
is clear that "[i]n order to toll a limitation period on
the basis of fraudulent concealment, there must be: (1) a
positive act of fraud (2) that is actively concealed, and (3)
is not discoverable by reasonable diligence."
Id. (internal citation and quotation marks omitted).
Further, the Arkansas Supreme Court, quoting from its 1896
opinion in McKneelyv. ...