United States District Court, W.D. New York
ROCKY KNOLL ESTATES MHC, LLC AND KENNETH C. BURNHAM, Plaintiffs,
C W Capital Asset Management, LLC; and U.S. Bank, N.A. as Trustee for Registered holders of Banc of America Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2007-1, Defendants.
DECISION AND ORDER
MICHAEL A. TELESCA, District Judge.
Plaintiffs Rocky Knoll Estates MHC, LLC ("RKE") and Kenneth C. Burnham ("Burnham") (collectively, "plaintiffs") bring this action pursuant to diversity jurisdiction alleging that defendants C W Capital Asset Management, LLC ("CWCAM") and U.S. Bank, N.A. ("US Bank"), Trustee of Banc of America Commercial Mortgage Pass-Through Certificates, Series 2007-1 (the "Trust"), (collectively, "defendants") breached a loan agreement ("the loan agreement") entered into by the parties.
Specifically, plaintiffs allege that defendants conspired to wrongly assess loan default fees, default interest, and attorney fees to plaintiffs by placing loan payments made in October, November, and December 2011 into a "suspension account, " for which there was no provision in the parties' loan agreement. Plaintiffs concede that they defaulted on the loan on September 12, 2011, but also assert that the default was cured within the period fixed in the loan agreement.
Defendants deny plaintiff's allegations and move this Court for dismissal of the amended complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Specifically, defendants contend that the voluntary payment doctrine bars all of plaintiffs' claims, and that, in any event, their actions adhered to the language of the loan agreement. Defendants further contend that claims against CWCAM must be dismissed because CWCAM is not a party to the loan agreement.
For the reasons that follow, defendants' motion is granted to the limited extent that the complaint is dismissed as to the claims against CWCAM, but is otherwise denied.
Plaintiffs Rocky Knoll Estates MHC, LLC ("RKE") and Kenneth Burnham ("Burnham") (collectively "plaintiffs") acquired a mobile home park for senior citizens located in Massachusetts ("the property") by executing the mortgage loan agreement with mortgagee Bank of America ("BOA"). The property was held by RKE and Rocky Knoll West ("RKW") as tenants in common until 2011 when RKE alone desired to sell the property. A partition action was ultimately filed by RKE, and a buy-sell agreement with RKW was signed in November 2011. On December 13, 2011, the loan amount was paid off in its entirety.
Pursuant to section 11.1(o) of the loan agreement, however, if a partition action affecting the property is filed by either borrower, unless the action is dismissed within 45 days of filing or the ownership interest held by the filing borrower is transferred to another borrower within 30 days of filing, "not withstanding the cure period stated herein, Lender shall be entitled to exercise such rights and remedies available to it... immediately upon the commencement of such partition action and such cure rights shall end at such time as Lender or its designee acquires title to the Property." Loan agreement, section 11.1(o). Here, because RKE's partition action was not dismissed within 45 days and its property interest was not transferred to RKW within 30 days of the commencement of the action, Section 11.1(o) of the agreement triggered the partition action into a technical default. Defendants sent a "Notice of Default, Acceleration and Demand for Payment" to plaintiffs on November 15, 2011. Although the loan was paid in full on December 13, defendants demanded that RKE pay late charges, default interest, and attorneys' fees amounting to $116, 357.30, which related, in part, to plaintiffs' default and the suspense account.
In their complaint, plaintiffs contend that pursuant to section 11.1(m) of the agreement, they had 30 days from defendants' November 15, 2011 notice of default to cure the default and that defendants wrongfully assessed the aforementioned fees. Plaintiffs assert claims of breach of contract and the implied covenant of good faith, unjust enrichment, and conversion with respect to those fees. In their motion to dismiss the complaint, defendants assert that: (1) all of plaintiffs' claims are barred by the voluntary payment doctrine; (2) there is no contract between plaintiffs and CWCAM as special servicer of the loan; (3) they complied with the express terms of the loan agreement; and (4) the existence of the written contract precludes findings of unjust enrichment and conversion. Plaintiffs respond that: (1) they were forced to pay the fees imposed by defendant under duress; (2) CWCAM is liable for breach of the loan agreement as a special servicer who managed the loan; (3) the implied covenant of good faith and fair dealing is not excluded by the loan agreement; and (4)claims of conversion and unjust enrichment are based on allegations that defendants generated artificial fees and penalties.
I. Motion to Dismiss Standard
When evaluating a Rule 12(b)(6) motion to dismiss the complaint, a court must ascertain, after presuming all factual allegations in the pleading to be true and viewing them in the light most favorable to the plaintiff, whether or not the plaintiff has stated any valid ground for which relief can be granted. Ferran v. Town of Nassau, 11 F.3rd 21, 22 (2d Cir.1993), cert. denied, 513 U.S. 1014 (1994). The court may grant a Rule 12(b)(6) motion only where "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would ...