Schmidt v. Wells Fargo Bank, N.A.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

W. SCHMIDT,

Plaintiff,

v. Case No. 8:20-cv-150-T-33AAS

WELLS FARGO BANK, N.A.,

Defendant.

______________________________/

ORDER

This matter comes before the Court upon consideration of

Defendant Wells Fargo Bank, N.A.’s Motion to Dismiss the

Complaint with Prejudice (Doc. # 5), filed on January 22,

2020. Plaintiff W. Schmidt responded on February 5, 2020.

(Doc. # 11). For the reasons that follow, the Motion is

denied.

I. Background

Schmidt initiated this action against Wells Fargo in

state court on October 19, 2019. (Doc. # 1). Wells Fargo

removed the case to this Court on the basis of federal

question jurisdiction on January 21, 2020. (Doc. # 2).

Schmidt alleges that Wells Fargo was both the lender and

servicer for a refinanced mortgage on his home in Tampa,

Florida. (Doc. # 1 at 3-4). The mortgage had a fifteen-year

term, beginning on June 1, 2003, and ending on May 1, 2018.

(Id.).

The mortgage required Schmidt to make monthly payments

into an escrow account to cover “property taxes and

assessments and insurance required by the lender.” (Id. at

4). Schmidt alleges that Wells Fargo “exercised extensive,

unilateral control over the required escrow account for taxes

and insurance and received greater economic benefit than in

a typical transaction since it was not required to pay any

interest to [Schmidt] on the funds paid into escrow and held

by Wells Fargo.” (Id.).

Although Schmidt satisfied all requirements under the

mortgage, he “repeatedly experienced numerous and unexpected

demands from Wells Fargo regarding the [m]ortgage, including

but not limited to the coverages and limits of the property

insurance required to be maintained by [Schmidt] pursuant to

the terms of the [m]ortgage.” (Id. at 4-5).

On October 5, 2017, Schmidt “submitted to Wells Fargo by

Certified Mail . . . a Qualified Written Request (‘QWR’)

pursuant to [the Real Estate Settlement Procedures Act

(‘RESPA’)].” (Id. at 5, 28-37). This QWR requested numerous

categories of documents and information, including an

accounting of Schmidt’s loan from “the inception of [the]

loan to the present.” (Id. at 30-31).

On October 20, 2017, Wells Fargo replied by letter and

attached copies of various documents, including a copy of the

mortgage, a property appraisal from 2003, and a statement

detailing the last three years of account activity. (Doc. #

1 at 5-6, 39-41). The letter stated that Wells Fargo would

not turn over much of the information because it was

“confidential, privileged and/or proprietary.” (Id. at 40).

The letter also stated that, although Schmidt’s other

requests were “too broad” to respond to, Wells Fargo would

“review [Schmidt’s] request again” if he provided “more

specific details about what [he was] seeking.” (Id. at 41).

Schmidt alleges that this reply letter was “a

boilerplate template” that “did not respond directly to the

specific requests contained within [his] QWR.” (Id. at 6). He

complains that “none of the documents or materials provided

included the information specifically requested by

[Schmidt’s] October 5, 2017 QWR, namely, the complete

foundation materials and data needed for a complete

accounting of his mortgage and related required escrow

account from its inception through the date of the response.”

(Id. at 7).

In a letter dated February 15, 2018, “Wells Fargo advised

[Schmidt] that ‘we have processed the funds required to pay

off your loan in full.’” (Id. at 8, 42). Yet, Schmidt also

received an invoice from Wells Fargo, dated January 29, 2018,

showing an amount due by March 1, 2018, of $1,251.91. (Id. at

8, 44). Schmidt received another invoice, dated February 12,

2018, showing an amount due by April 1, 2018, of $1,251.91.

(Id. at 8, 45).

“To protect his credit and his home, [Schmidt] paid both

the March 1, 2018 and April 1, 2018 invoices in full and these

payment checks were each cashed by Wells Fargo.” (Id. at 8).

Schmidt later received an April 16, 2018, letter from Wells

Fargo with a refund check of $1,251.91 because his loan had

already been paid in full. (Id.). Schmidt also received a

February 28, 2018, letter from Wells Fargo including a final

disbursement check of $4,265.52 because the escrow account

had been closed in light of his paying off the mortgage. (Id.

at 8-9). Because “[i]n the absence of RESPA compliance by

Wells Fargo, [Schmidt] did not know whether the enclosed check

was for the proper amount due,” Schmidt “was hesitant to cash

this escrow account check.” (Id. at 9).

“In order to attempt to straighten out the amounts timely

paid each month to Wells Fargo for almost 15 years and to

determine the amount due to be refunded form the escrow

account as well as to resolve the problems created by Wells

Fargo’s correspondence claiming that an additional mortgage

payment was due April 1, 2018, [Schmidt] submitted on August

2, 2018, a second letter . . . asking that this correspondence

be treated by Wells Fargo as both a ‘reconsideration of your

handling of my October 5 request as well as a New RESPA

[QWR].’” (Id. at 9, 48). This August 2 QWR stated that “Wells

Fargo had failed to make a meaningful effort to comply with

the provisions of RESPA as [Schmidt] had specifically

previously requested” and “also asked Wells Fargo for the

production of a privilege log.” (Id. at 9-10).

Finally, the August 2 QWR addressed the “two Wells Fargo

refund checks that [Schmidt] had received but was hesitant to

negotiate since he was without the previously requested

information to be able to know if they were in a proper amount

and did not want to waive any of his rights.” (Id. at 10).

Schmidt sought “Wells Fargo’s written permission to negotiate

these checks without prejudice to reserving all of [his] legal

rights” and requested Wells Fargo “specifically address this

request and grant the requested authorization in writing

within twenty (20) days.” (Id. at 10, 52).

Wells Fargo’s response to the August 2 QWR is dated

August 20, 2018, and simply reiterated and enclosed a copy of

Wells Fargo’s previous response to the October 5 QWR. (Id. at

10, 58). According to Schmidt, “Wells Fargo refused to

reconsider their prior objections and non-responsiveness and

totally ignored the subsequent events reported in the August

2, 2018 letter as well as the specific request for permission

for [Schmidt] to be able to negotiate the two refund checks

without prejudice.” (Id. at 11).

Schmidt maintains that “[w]ith respect to both the

escrow account and the loan payment information and balance

owed by [him] to Wells Fargo, an accounting is needed since

said accounts are sufficiently complicated that an ordinary

legal action demanding a fixed sum is clearly impracticable.”

(Id. at 7).

The complaint asserts six counts: equitable accounting

of the escrow account (Count One); equitable accounting of

payment account (Count Two); violations of RESPA (Counts

Three and Four); and negligence (Counts Five and Six). (Doc.

# 1). Wells Fargo now seeks dismissal of all counts with

prejudice. (Doc. # 5). Schmidt has responded (Doc. # 11), and

the Motion is now ripe for review.

II. Legal Standard

On a motion to dismiss pursuant to Rule 12(b)(6), this

Court accepts as true all the allegations in the complaint

and construes them in the light most favorable to the

plaintiff. Jackson v. Bellsouth Telecomms., 372 F.3d 1250,

1262 (11th Cir. 2004). Further, the Court favors the plaintiff

with all reasonable inferences from the allegations in the

complaint. Stephens v. Dep’t of Health & Human Servs., 901

F.2d 1571, 1573 (11th Cir. 1990). But,

[w]hile a complaint attacked by a Rule 12(b)(6)

motion to dismiss does not need detailed factual

allegations, a plaintiff’s obligation to provide

the grounds of his entitlement to relief requires

more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action

will not do. Factual allegations must be enough to

raise a right to relief above the speculative

level.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal

citations omitted). Courts are not “bound to accept as true

a legal conclusion couched as a factual allegation.” Papasan

v. Allain, 478 U.S. 265, 286 (1986). The Court must limit its

consideration to well-pleaded factual allegations, documents

central to or referenced in the complaint, and matters

judicially noticed. La Grasta v. First Union Sec., Inc., 358

F.3d 840, 845 (11th Cir. 2004).

III. Analysis

Wells Fargo seeks to dismiss all the counts of the

complaint. The Court will address each claim in turn.

A. RESPA

In Counts Three and Four, Schmidt asserts claims under

RESPA, alleging that Wells Fargo failed to respond

appropriately to Schmidt’s two QWRs. (Doc. # 1 at 16-21).

“Specifically, Wells Fargo failed to conduct a reasonable

investigation and to provide the borrower with an explanation

or clarification that included the information requested by

the borrower or an explanation of why the information

requested was unavailable or could not be obtained by the

servicer.” (Id. at 17, 20).

“RESPA prescribes certain actions to be followed by

entities or persons responsible for servicing federally

related mortgage loans, including responding to borrower

inquires.” McLean v. GMAC Mortg. Corp., 398 F. App’x 467, 471

(11th Cir. 2010)(per curiam)(citing 12 U.S.C. § 2605). “To

state a claim for violation of RESPA § 2605(e), plaintiff[]

must allege facts showing that (1) defendant is a loan

servicer, (2) plaintiff[] sent defendant a valid QWR, (3)

defendant failed to adequately respond within the 20/60 day

statutory period, and (4) plaintiff[] [is] entitled to actual

or statutory damages.” DeBoskey v. SunTrust Mortg., Inc., No.

8:14-cv-1778-MSS-TGW, 2017 WL 4083557, at *11 (M.D. Fla.

Sept. 14, 2017)(quoting Smith v. Bank of Am. Home Loans, 968

F. Supp. 2d 1159, 1170 (M.D. Fla. 2013)).

RESPA defines a “qualified written request” as:

a written correspondence, other than notice on a

payment coupon or other payment medium supplied by

the servicer, that—

(i) includes, or otherwise enables the servicer to

identify, the name and account of the borrower; and

(ii) includes a statement of the reasons for the

belief of the borrower, to the extent applicable,

that the account is in error or provides sufficient

detail to the servicer regarding other information

sought by the borrower.

12 U.S.C. § 2605(e)(1)(B).

Wells Fargo argues that Schmidt’s two letters, from

October 2017 and August 2018, are not QWRs as defined by

RESPA. (Doc. # 5 at 6-8). Wells Fargo emphasizes that neither

letter alleges an error with his mortgage payment or escrow

accounts. (Id.). Instead, the two letters request various

types of information and documents.

This argument fails because “Section 2605(e)(1)(B)(ii)

is written in the disjunctive.” Gnipp v. Bank of Am. N.A.,

No. 2:15-cv-99-FtM-29CM, 2016 WL 4810541, at *5 (M.D. Fla.

Sept. 14, 2016). “In other words, a communication can satisfy

RESPA by ‘includ[ing] a statement of the reasons . . . that

the account is in error,’ or by ‘provid[ing] sufficient detail

to the servicer regarding other information sought by the

borrower.’” Id. (quoting 12 U.S.C. § 2605(e)(1)(B)); see also

Goldman v. Aurora Loan Servs., LLC, No. 109-CV-3337-RWS, 2010

WL 3842308, at *5 (N.D. Ga. Sept. 24, 2010)(“Defendants allege

that Plaintiff’s letter was not a QWR because it did not set

forth any reasons for why the account was in error, but

Defendants fail to recognize that the definition of a QWR is

disjunctive and also ‘includes a statement . . . [that]

provides sufficient detail to the servicer regarding other

information sought by the borrower.’” (quoting 12 U.S.C. §

2605(e)(1)(B)(ii))).

Here, Schmidt’s letters unquestionably request

information from Wells Fargo. Thus, despite lacking a clear

allegation of error, Schmidt’s letters may still qualify as

QWRs under RESPA. And Wells Fargo has not argued that

Schmidt’s numerous requests for various types of information

and documents fail to “provide sufficient detail to the

servicer regarding other information sought by the borrower.”

12 U.S.C. § 2605(e)(1)(B)(ii). Nor is the Court persuaded by

Wells Fargo’s assertion — unsupported by any case law — that

“even if [Schmidt’s] correspondence were a proper QWR . . .

he would only be entitled to three (3) years of his loan

payment history since violations of RESPA . . . have a 3 year

statute of limitations.” (Doc. # 5 at 8).

Accordingly, Schmidt has sufficiently alleged that his

letters were QWRs to which Wells Fargo inadequately

responded. The Motion is denied as to the RESPA claims.

B. Negligence

In Counts Five and Six, Schmidt asserts claims for

negligence based on Wells Fargo’s alleged violations of

RESPA. (Doc. # 1 at 22-25).

The parties agree that Schmidt’s negligence claim rises

or falls with his RESPA claims. (Doc. # 5 at 10; Doc. # 11 at

10); see also Ranger v. Wells Fargo Bank N.A., 757 F. App'x

896, 904 (11th Cir. 2018)(“The parties agree that Plaintiffs’

negligence per se claim rises and falls alongside Plaintiffs’

RESPA claim. It is impossible to see how they could disagree

since Plaintiffs’ sole negligence theory is that Wells Fargo

violated RESPA by conducting an unreasonable

investigation.”).

Because the Motion has been denied as to the RESPA

claims, the Motion is also denied as to the negligence claims.

See Id. (“Plaintiffs have stated a claim under RESPA.

Therefore, their negligence per se claim must survive the

motion to dismiss as well.”).

C. Equitable Accounting

In Count One, Schmidt seeks an equitable accounting of

his escrow account. (Doc. # 1 at 14). He maintains that he

and Wells Fargo “shared a fiduciary relationship with respect

to the escrow account” and that the “mortgage loan transaction

between the parties was involved and complicated by its

nature.” (Id.). He insists that “[a] remedy at law is

inadequate.” (Id.).

In Count Two, Schmidt seeks an equitable accounting of

the payment account for his mortgage. (Id. at 15-16). Schmidt

and Wells Fargo allegedly “shared a contractual relationship

with respect to the crediting of payments . . . pursuant to

the note and mortgage” and “the payments and adjustments made

by Wells Fargo, often on an annual or even more frequent

basis, involved extensive estimates, calculations and

complicated transactions.” (Id. at 15). He insists that “[a]

remedy at law is inadequate.” (Id.). Schmidt highlights that

“there [was] an additional overpayment of [] $1,251.91,”

which Wells Fargo has not refunded Schmidt, and, thus, “a

complete accounting of the payments made and interest charged

on the Wells Fargo loan over its 15-year term [is needed] to

determine the refund due and owing to” Schmidt. (Id.).

As an initial matter, the Court notes that equitable

accounting is generally considered a remedy rather than a

stand-alone cause of action. See Zaki Kulaibee Establishment

v. McFliker, 771 F.3d 1301, 1310 n.21 (11th Cir. 2014)(“Zaki

purports to appeal the dismissal of its accounting ‘claim.’

We note that an accounting is best understood as a remedy for

a cause of action, not as a cause of action in its own

right.”); see also Becker v. Davis, 491 F.3d 1292, 1305 (11th

Cir. 2007), abrogated on other grounds by Arthur Andersen LLP

v. Carlisle, 556 U.S. 624 (2009)(“[A]n accounting is a remedy

attached to a separate independent cause of action.”).

Nevertheless, some Florida courts have allowed stand-alone

causes of action for equitable accounting to proceed, so this

Court will not dismiss Schmidt’s equitable accounting claims

on that ground. See, e.g., Cassedy v. Alland Invs. Corp., 128

So. 3d 976, 978 (Fla. 1st DCA 2014)(“[A]n action for an

accounting is a separate and distinct cause of action that

may be available where a fiduciary duty exists.”).

“To obtain an accounting under Florida law, . . . a party

must show either (1) a sufficiently complicated transaction

and an inadequate remedy at law or (2) the existence of a

fiduciary relationship.” Zaki Kulaibee Establishment, 771

F.3d at 1311. “As to complexity, transactions are deemed

‘sufficiently complicated to warrant an equitable accounting

when a jury would not be reasonably able, based on the time

and effort required, to assess the evidence and reach an

accurate value of the amount owed.’” Cox Television

Jacksonville, LLC v. Fla. Cable, Inc., No. 5:16-cv-6-Oc-

32PRL, 2016 WL 11578269, at *6 (M.D. Fla. July 13,

2016)(quoting Blitz Telecom Consulting, LLC v. Peerless

Network, Inc., No. 6:14-cv-307-Orl-40GJK, 2015 WL 9269413, at

*9 (M.D. Fla. Dec. 21, 2015)), report and recommendation

adopted, No. 5:16-cv-6-Oc-32PRL, 2016 WL 11578270 (M.D. Fla.

Aug. 17, 2016). “[T]he determination of whether a series of

transactions is sufficiently complex to warrant equitable

accounting is fact specific.” Traditions Senior Mgmt., Inc.

v. United Health Adm’rs, Inc., No. 8:12-cv-2321-T-30MAP, 2013

WL 3285419, at *5 (M.D. Fla. June 27, 2013).

According to Wells Fargo, Schmidt “has failed to allege

any facts which demonstrate that he has no adequate remedy at

law and that only an equitable accounting will provide him

with relief.” (Doc. # 5 at 13). Wells Fargo also argues that

Schmidt “still has failed to incorporate any factual

allegations which provide any plausible basis to believe that

Wells Fargo did not properly account for all of his payments

and correctly returned his escrow monies.” (Id. at 11).

Similarly, Wells Fargo contends that Count Two at most

“demonstrates . . . that Wells Fargo may owe [Schmidt] a

refund for $1,251.91.” (Id. at 13). Thus, in Wells Fargo’s

opinion, Schmidt “does not need an accounting,” and “[i]f

[he] truly believes that Wells Fargo has held onto an

additional payment to which it is not entitled, [he] has legal

remedies he may assert.” (Id.).

The Court disagrees with Wells Fargo. Schmidt has

sufficiently pled a claim for equitable accounting of the

escrow account in Count I. He has alleged that Wells Fargo

and Schmidt had a fiduciary relationship regarding the escrow

account (Doc. # 1 at 14) — an allegation that Wells Fargo has

not challenged in its Motion. “Recently, the Eleventh Circuit

clarified the circumstances where a plaintiff is entitled to

an accounting under Florida law, stating that when a fiduciary

relationship exists between the parties, ‘an accounting is

appropriate in every case.’” Samana Inc. v. Lucena, 156 F.

Supp. 3d 1373, 1374 (S.D. Fla. 2016)(quoting Zaki Kulaibee

Establishment, 771 F.3d at 1310-11). Thus, because Schmidt

has alleged a fiduciary relationship regarding the escrow

account, Schmidt has properly stated a claim for equitable

accounting of the escrow account. See Id. (“[T]he Court finds

that because Plaintiff has alleged that the Parties had a

fiduciary relationship, the Plaintiff may properly state a

claim for equitable accounting.”).

Regarding Count II, the allegation that Wells Fargo has

failed to refund an additional $1,251.91 from Schmidt’s

payment account plausibly supports that an accounting of the

payment account is necessary. Indeed, Schmidt has pled that

no adequate remedy at law is available and that the 15-year

mortgage was a sufficiently complicated transaction. (Doc. #

1 at 15-16). Given that the determination of whether a

transaction is sufficiently complex is fact-specific, such

determination is better left for the summary judgment stage.

See Cox Television Jacksonville, LLC, 2016 WL 11578269, at *7

(denying motion to dismiss accounting claim and explaining

that “[w]hether the transaction is sufficiently complex —

such that a jury would not be able to reasonably assess the

evidence — will need to be decided at a later stage of the

litigation”).

And, at this point, it is unclear whether a legal remedy

would allow for sufficient discovery of how much is owed to

Schmidt, so the Court cannot say that a remedy at law is as

full and adequate a remedy as an accounting. See Id. (denying

motion to dismiss accounting claims because “at this point it

is unclear whether the records obtained through discovery

will be sufficient for the Plaintiffs to prove their damages;

it is plausible that as a practical matter they may not”);

Trenton Int’l, Ltd. v. Trenton Int’l, Inc., No. 2:05-cv-581

FtM-29SPC, 2006 WL 3201869, at *4 (M.D. Fla. Nov. 6,

2006)(“[T]here can be grounds for an equitable accounting

where the contract demands between litigants involve

extensive or complicated accounts and it is not clear that

the remedy at law is as full, adequate and expeditious as it

is in equity.” (citation omitted)). The Court finds that Count

Two states a claim for an equitable accounting of the mortgage

payment account.

Accordingly, it is now

ORDERED, ADJUDGED, and DECREED:

(1) Defendant Wells Fargo Bank, N.A.’s Motion to Dismiss the

Complaint with Prejudice (Doc. # 5) is DENIED.

(2) Wells Fargo’s answer to the complaint is due 14 days

from the date of this Order.

DONE and ORDERED in Chambers in Tampa, Florida, this

14th day of February, 2020.

fan fr. Munahy (noiyh

VIR! IA M. HERNANDEZ’COVINGTON

UNITED STATES DISTRICT JUDGE

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