Lansdown v. Bayview Loan Servicing, LLC

Background

Melissa Lansdown brought breach-of-contract claims against Bayview Loan Servicing, LLC, Newrez, LLC doing business as Shellpoint Mortgage Servicing, LLC, Bank of America, N.A. (BANA), and the Bank of New York Mellon concerning financing and foreclosure activity involving her property. The operative third amended complaint asserted one breach-of-contract claim against Bayview and BANA and another against Shellpoint.

Lansdown alleged that Bayview and Shellpoint breached or repudiated agreements by attempting to foreclose, refusing or rejecting payments, and charging interest, late fees, and foreclosure-related costs. She alleged that BANA breached the deed of trust and a memorandum of understanding, and that BANA could be held responsible for conduct by Bayview and Shellpoint through an agency relationship.

Bayview, Shellpoint, and the Bank of New York Mellon moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. BANA separately moved to dismiss Lansdown’s breach-of-contract claim against it in its entirety.

Bayview, Shellpoint, and Bank of New York Mellon’s Motion

The court granted the motion as to any claims against the Bank of New York Mellon. Lansdown had previously voluntarily dismissed that party, then named it again in the third amended complaint. She did not address the dismissal argument in her opposition, and the court also found that the complaint contained no allegations specific to that entity.

The court denied the motion as to Lansdown’s allegation that Shellpoint assumed contractual obligations as Bayview’s successor in servicing the loan. Although Shellpoint did not sign or appear in the alleged contracts, the court concluded that a successor loan servicer could potentially be held responsible for the prior servicer’s contractual obligations. The court therefore allowed that theory to proceed at the pleading stage.

The court denied the motion as to breach-of-contract claims related to the memorandum of understanding. It had previously found that Lansdown’s allegations that she performed the required conditions were sufficient, and the third amended complaint repeated those allegations.

The court granted the motion as to claims based on the confidential settlement agreement. Lansdown’s own complaint and opposition described that agreement as unenforceable, so the court found that she had not adequately alleged the existence of an enforceable contract.

The court also granted the motion as to claims based on the loan modification agreement. Lansdown alleged that agreement was unenforceable, and the court found that she had not adequately alleged a contract supporting a breach claim against Bayview or Shellpoint.

BANA’s Motion

The court granted BANA’s motion. First, the court rejected Lansdown’s attempt to hold BANA responsible for Bayview’s or Shellpoint’s alleged conduct through agency. An agency relationship is a legal relationship in which one party has the right to control another’s actions on its behalf. The court found that Lansdown alleged no facts showing that BANA had the legal right to control Bayview or Shellpoint; general statements that the defendants were each other’s agents were insufficient.

The court also granted BANA’s motion as to claims based on the memorandum of understanding because, without adequately alleged agency, Bayview’s alleged breach could not be attributed to BANA. It granted the motion as to the settlement agreement because Lansdown alleged that BANA did not sign it and did not adequately respond to BANA’s argument that the agreement was unenforceable. It granted the motion as to the loan modification agreement because BANA was not listed as a party and the memorandum of understanding expressly stated that BANA was not a party to the modification.

Finally, the court held that the four-year statute of limitations for a written-contract claim barred the allegations against BANA based on conduct in 2010. Lansdown filed this action in 2022, and the court found that her opposition did not adequately rebut BANA’s limitations argument.

Disposition

The court granted the Bank of New York Mellon’s motion to dismiss and granted BANA’s motion to dismiss. It granted in part and denied in part the motion by Bayview, Shellpoint, and the Bank of New York Mellon. Specifically, it denied the motion as to Shellpoint’s alleged assumption of contractual obligations and claims related to the memorandum of understanding, while granting it as to claims related to the settlement agreement and loan modification agreement.

The court ordered that the dismissals were without leave to amend, citing Lansdown’s two prior opportunities to amend and its conclusion that further amendment would be futile. Bayview and Shellpoint were ordered to file answers by April 27, 2023.