Boster v. TIAA, FSB

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF WEST VIRGINIA

AT CHARLESTON

WILLIAM W. BOSTER, JR.,

Plaintiff,

v. Civil action no. 2:17-cv-3857

LIVE WELL FINANCIAL, INC.,

And COMPU-LINK CORPORATION

d/b/a Celink,

Defendants.

MEMORANDUM OPINION AND ORDER

Pending is the motion to dismiss, filed by defendant

Live Well Financial, Inc. on August 28, 2017, and the joinder

motion to dismiss, filed by defendant Compu-Link Corporation

d/b/a Celink on August 29, 2017.

I. Factual and Procedural Background

This is a civil action to quiet plaintiff’s title in

his personal residence. Compl. ¶ 1. Plaintiff, William Boster,

resides in a home that was previously owned by his parents,

William Wayne Boster, Sr. and Wanda Jean Boster. Id. at ¶¶ 5-6,

8. Following his father’s death, Wanda Boster “deeded ownership

of the home in which she lived to plaintiff . . . reserving to

herself a life estate.” Id. at ¶ 7. Mr. Boster later moved

into the home to care for his mother. Id. at ¶ 8. On July 9,

2007, Wanda Boster granted her son “a durable power of attorney

authorizing plaintiff to handle her personal, medical, and

financial affairs, including power to encumber the life estate

which constituted her only real property.” Id. at ¶ 9.

Because of Wanda Boster’s deteriorating health and

associated costs, in 2014, Mr. Boster, on his mother’s behalf,

obtained a Home Equity Conversion Mortgage, known commonly as a

reverse mortgage, on the home from Proficio Mortgage Ventures

LLC (“Proficio”). Id. at ¶¶ 11, 23-25. Proficio was authorized

to make reverse mortgages, between the years 2006 and 2016,

pursuant to the license issued to it by the West Virginia

Commissioner of Financial Institutions. Compl. ¶¶ 11-12. A

reverse mortgage is “a nonrecourse loan secured by real property

which[] (1) [p]rovides cash advances to a borrower based on the

equity in a borrower's owner-occupied principal residence . . .

[and] (2) [r]equires no payment of principal or interest until

the entire loan becomes due and payable.” W. Va. Code § 47-24-

3; see also Reverse Annuity Mortgage, Black’s Law Dictionary

(10th ed. 2014).

Proficio represented to Mr. Boster, on behalf of his

mother, “that it would extend an open-end, revolving reverse

mortgage loan to [his] 79 year-old mother.” Compl. ¶ 27.

Because Ms. Boster only had a life estate in the property,

Proficio also “required [that] plaintiff separately obligat[e]

his own fee simple remainder interest to secure payment by

[cosigning] the Deeds of Trust in Proficio’s favor, even though

plaintiff would not have any contractual right to obtain [or]

use the line of credit in his personal capacity.” Id. at ¶¶ 28-

29. At the closing of the reverse mortgage loan, plaintiff

signed “two1 Fixed Rate Note-Open End (Home Equity Conversion)

instruments” on behalf of his mother, a “Home Equity Conversion

Mortgage Loan Agreement Open End” on behalf of his mother, and

Deeds of Trust2 which he signed both on behalf of his mother and

separately in his personal capacity. Id. at ¶¶ 30-34. The

Deeds of Trust identified plaintiff as “remainderman” and Ms.

Boster as the “grantor/borrower.” Id. at ¶¶ 33-34. Only the

Deeds of Trust were signed by the plaintiff in his personal

capacity.

At some point after the reverse mortgage loan was

made, defendant Live Well Financial, Inc. (“Live Well”) took the

loan by assignment from Proficio. Id. at ¶ 16. Live Well is

also authorized to make and own reverse mortgage loans in West

1 While the complaint states that Mr. Boster signed two Fixed

Rate Note-Open End instruments, Compl. ¶ 30, he provides no

additional details on the content of the Notes, or the reason

why there were two associated with the reverse mortgage. See

generally Compl.

2 Plaintiff provides no information on the reason for the

multiple Deeds of Trust, nor does he draw any distinctions

between them. See generally Compl.

Virginia pursuant to the license issued to it by the West

Virginia Commissioner of Financial Institutions. Id. at ¶¶ 14-

15. The loan is serviced by defendant Compu-Link Corporation

d/b/a Celink (“Celink”) who is similarly licensed to service

loans in West Virginia. Id. ¶ 20.

Ms. Boster’s full debt was due on April 14, 2085, but

the lender was allowed to accelerate the debt if, in pertinent

part:

(i) A Borrower dies and the Property is not the

principal residence of at least one surviving

Borrower; or

. . .

(iii) The Property ceases to be the principal

residence of a Borrower for reasons other than death

and the Property is not the principal residence of at

least one other Borrower; or

(iv) For a period of longer than 12 consecutive

months, a Borrower fails to occupy the Property

because of physical or mental illness and the Property

is not the principal residence of at least one other

Borrower; or

(v) An obligation of the Borrower under this Security

Instrument is not performed.

Fixed Rate Home Equity Conversion Second Deed of Trust a Credit

Line Deed of Trust3 Ex. 2 to Pl.’s Resp. to Def. Live Well’s Mot.

3 The court notes that this document was not attached to the

complaint and will not be considered to the extent that

plaintiff offers it to make new factual allegations, as that

would be an impermissible amendment of the pleading through

briefing. See Walk at Broadlands Homeowner’s Ass’n, Inc. v.

OpenBank at Broadlands, LLC, 713 F.3d 175, 184 (4th Cir. 2013)

Dismiss at pp. 1, 4; see also W. Va. Code § 47-24-4(g). Ms.

Boster’s health further declined such that she was transferred

into a nursing home in November of 2016. Compl. ¶ 37. On

November 25, 2016, Ms. Boster passed away. Id.

Plaintiff alleges that “[b]eginning when his mother

required nursing home care, defendants wrongly began attempts to

collect payment of Ms. Boster’s reverse mortgage loan.” Id. at

¶ 38. Celink told Mr. Boster that “unless he personally paid

the amount claimed due,” Live Well would sell the home to pay

off the loan. Id. at ¶ 39. On November 16, 2016, defendants,

by their debt collection agent Samuel L. White, P.C., “falsely

represented that the terms of the Fixed Rate Note-Open End

[(“the Notes”)] had been breached ‘by reason of your failure to

pay the installments’” because the Notes required no installment

payments. Id. at ¶ 40. The letter demanded payment of the

entire loan by December 16, 2016 in order to cure the purported

breach. Id. at ¶ 41. Plaintiff asserts that the amount

demanded included “fees and charges not allowed by West Virginia

law, including ‘property inspection’ fees,” and that the letter

“wrongfully and unlawfully [represented] that defendants could

sell plaintiff’s home if the amount demanded was not paid by the

(“It is well-established that parties cannot amend their

complaints through briefing or oral advocacy.”).

date stated.” Id. at ¶¶ 42-43. Mr. Boster received a second

letter on December 27, 2016, which was sent by defendants’ debt

collection agent Seneca Trustees, Inc. Id. at ¶ 44. This

letter “wrongfully and unlawfully” represented that defendants

would collect the amount due “by selling plaintiff’s home on the

steps of the Kanawha County courthouse on February 9, 2017.”

Id.

In January of 2017, Mr. Boster “discovered facts

constituting all the elements of a cause of a cause of action

under W. Va. Code Article § 31-17 and Article § 47-24, and their

implementing regulations.” Id. at ¶ 47. Mr. Boster alleges

that Proficio contracted for and collected illegal charges and

fees, took a security interest in excess of that permitted by W.

Va. Code R. § 106-9-6.6, and “otherwise failed to comply with

the prerequisites [of W. Va. Code] Article § 47-24 and its

implementing regulations.” Id. at ¶¶ 48-49. Mr. Boster argues

that the reverse mortgage and Deeds of Trust securing it are

“void and unenforceable by operation of law, including pursuant

to W. Va. Code § 31-17-17.” Id. at ¶ 52. Therefore, plaintiff

states that he may not be held liable for the repayment of the

reverse mortgage loan through the sale of the home. Id. at ¶

55.

On July 3, 2017, Mr. Boster brought this action in the

Circuit Court of Kanawha County, West Virginia. With the

consent of Celink, Live Well timely removed the case to this

court, invoking diversity jurisdiction pursuant to 28 U.S.C. §

1332. Notice of Removal at ¶¶ 6, 11. Plaintiff asserts two

counts against the defendants in connection with these events.

First, Mr. Boster asks that the court “declare defendants’

claimed lien void and unenforceable, and to enter a preliminary

and a permanent injunction barring defendants from any action to

enforce or assign it.” Id. at ¶ 59. Mr. Boster asserts that

the lien is unenforceable because the reverse mortgage violates

the West Virginia Residential Mortgage Lender, Broker, and

Servicer Act (“RMLBSA”), W. Va. Code § 31-17-1, et seq., the

West Virginia Reverse Mortgage Enabling Act (“Reverse Mortgage

Act”), W. Va. Code § 47-24-1, et seq., and the West Virginia

Consumer Credit and Protection Act (“WVCCPA”), W. Va. Code §

46A-2-104(a). See Id. at ¶¶ 47-49, 53-55. Second, he asserts

that defendants engaged in illegal debt collection acts in

violation of provisions of the WVCCPA, W. Va. Code §§ 46A-2-127,

46A-2-128. Id. ¶¶ 66-67.

Defendants seek to dismiss the entire two-count

complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to

state a claim upon which relief can be granted. Defendant Live

Well asserts that Count I of the complaint fails because it is

(1) untimely, (2) does not adequately plead any violations of

the RMBLSA, (3) pleads no facts to support a violation of the

Reverse Mortgage Act, and (4) Mr. Boster is not a “cosigner”

eligible for protection under the WVCCPA. See Def. Live Well’s

Mem. Supp. Mot. Dismiss (“Live Well Mem.”) at 7-12.

Furthermore, Live Well seeks to dismiss Count II of the

complaint, alleging that Mr. Boster does not have standing to

bring the claim, as he is not a “consumer” under the WVCCPA.

Id. at 4. Defendant Celink joins and adopts all of these

arguments for dismissal, and further adds that Count II fails

because the complaint fails to include sufficient factual

allegations to support plaintiff’s claims for fraudulent,

deceptive, or misleading representations, and unfair and

unconscionable means of collection under the WVCCPA. Def.

Celink’s Mem. Supp. Mot. Dismiss (“Celink Mem.”) at 2-3.

II. Governing Standard

Federal Rule of Civil Procedure 8(a)(2) requires that

a pleading “contain . . . a short and plain statement of the

claim showing that the pleader is entitled to relief.”

Correspondingly, Rule 12(b)(6) provides that a pleading may be

dismissed for a “failure to state a claim upon which relief can

be granted.

To survive a motion to dismiss, a pleading must recite

“enough facts to state a claim to relief that is plausible on

its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570

(2007); see also Monroe v. City of Charlottesville, 579 F.3d

380, 386 (4th Cir. 2009) (quoting Giarratano v. Johnson, 521

F.3d 298, 302 (4th Cir. 2008)). In other words, the “[f]actual

allegations must be enough to raise a right to relief above the

speculative level.” Twombly, 550 U.S. at 555 (citation

omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(“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.”); Andrew v. Clark, 561 F.3d 261, 266 (4th Cir. 2009)

(quoting Twombly, 550 U.S. at 555).

A district court’s evaluation of a motion to dismiss

is underlain by two principles. First, when considering a

motion to dismiss, the court “must accept as true all of the

factual allegations contained in the [pleading].” Erickson v.

Pardus, 551 U.S. 89, 94 (2007) (citation omitted); see also

Twombly, 550 U.S. at 555 (“Factual allegations must be enough to

raise a right to relief above the speculative level, . . . on

the assumption that all the allegations in the complaint are

true (even if doubtful in fact).”) (citations omitted). In

doing so, factual allegations should be distinguished from “mere

conclusory statements,” which are not to be regarded as true.

Iqbal, 556 U.S. at 678 (“[T]he tenet that a court must accept as

true all of the allegations contained in a complaint is

inapplicable to legal conclusions.”). Second, the court must

“draw[] all reasonable factual inferences . . . in the

[nonmovant’s] favor.” Edwards v. City of Goldsboro, 178 F.3d

231, 244 (4th Cir. 1999); see also Jenkins v. McKeithen, 395

U.S. 411, 421 (1969) (“[T]he complaint is to be liberally

construed in favor of plaintiff.”).

III. Analysis

A. Count I

Count I of the complaint asks that the court declare

defendants’ lien void and unenforceable and enter an injunction

barring defendants from any effort to enforce or assign the

reverse mortgage. Compl. ¶ 59. Mr. Boster claims that the

reverse mortgage agreement violated the RMLBSA, the Reverse

Mortgage Act, and the WVCCPA. Specifically, he asserts that (1)

the reverse mortgage included “illegal charges, fees, and

closing[] costs . . . including an origination fee that exceeded

2% of the value of the real estate as lawfully calculated, an

illegal ‘MERS’ charge, an illegal counseling fee, [and] an

illegal closing fee,” in violation of the RMLBSA and Reverse

Mortgage Act; (2) that Proficio “took a security interest to

guarantee payment in excess of that permitted by [W. Va. Code

R.] § 106-9-6.6,” and that Proficio otherwise “failed to comply

with the prerequisites [of the Reverse Mortgage Act] and its

implementing regulations require[ed] to make any reverse

mortgage loan secured by residential real estate in West

Virginia;” and (3) that Proficio failed to comply with notice

requirements for cosigners, as required by the WVCCPA. Id. at

¶¶ 47-49, 53-54.

Each basis offered by plaintiff for declaring the loan

void will be separately considered.

i. Violations of RMBLSA

Under the RMBLSA, a court may cancel “any primary or

subordinate mortgage loan . . . made in willful violations of

the provisions of this article.” W. Va. Code § 31-17-17(a).

Defendants argue that plaintiff’s claims of “illegal charges,

fees, and closing costs” are untimely and barred by the statute

of limitations, and that the claim is not sufficiently pled

because the complaint fails to specify the applicable sections

of RMBLSA that were allegedly violated. Live Well Mem. at 7, 9-

10.

a. Statute of Limitations

Federal courts sitting in diversity apply state

statutes of limitations to state law claims. See Walker v. Armco

Steel Corp., 446 U.S. 740, 753, 100 S. Ct. 1978, 64 L. Ed. 2d

659 (1980). To determine whether an action is time-barred, the

Supreme Court of Appeals of West Virginia has outlined a five-

step analysis that courts should follow:

First, the court should identify the applicable

statute of limitation for [the] cause of action.

Second, the court . . . should identify when the

requisite elements of the cause of action occurred.

Third, the discovery rule should be applied to

determine when the statute of limitation began to run

by determining when the plaintiff knew, or by the

exercise of reasonable diligence should have known, of

the elements of a possible cause of action . . . .

Fourth, if the plaintiff is not entitled to the

benefit of the discovery rule, then determine whether

the defendant fraudulently concealed facts that

prevented the plaintiff from discovering or pursuing

the cause of action. Whenever a plaintiff is able to

show that the defendant fraudulently concealed facts

which prevented the plaintiff from discovering or

pursuing the potential cause of action, the statute of

limitation is tolled. And fifth, the court or the jury

should determine if the statute of limitation period

was arrested by some other tolling doctrine.

Syl. Pt. 5, Dunn v. Rockwell, 225 W. Va. 43, 689 S.E.2d 255, 258

(W. Va. 2009). Defendants assert that the applicable statute of

limitations should be two years pursuant to W. Va. Code § 55-2-

12, which provides that

[e]very personal action for which no limitation is

otherwise prescribed shall be brought: (a) Within two

years next after the right to bring the same shall

have accrued, if it be for damage to property; (b)

within two years next after the right to bring the

same shall have accrued if it be for damages for

personal injuries; and (c) within one year next after

the right to bring the same shall have accrued if it

be for any other matter of such nature that, in case a

party die, it could not have been brought at common

law by or against his personal representative.

Id. In support of this contention, defendants note that this

district has previously held claims brought pursuant to section

31-17-17 of the RMBLSA are barred by this statute of

limitations. See Woods v. Reverse Mortg. USA, Inc., No. 2:17-

cv-0256, 2017 U.S. Dist. LEXIS 161500 (S.D. W. Va. Sept. 29,

2017); Lavis v. Reverse Mortg. Sols., LLC, No. 5:17-cv-0209,

2017 U.S. Dist. LEXIS 89144 (S.D. W. Va. June 9, 2017). Mr.

Boster, on the other hand, contends that his claim under Count I

is purely equitable, as it seeks to quiet title in the property,

and is not subject to the statute of limitations.

"Where a suit . . . is not for damages but seeks to

rescind a writing or impose a trust or other equitable relief,

it is not a common law action for fraud but is equitable in

nature. Consequently, the doctrine of laches is applicable

rather than any specific statute of limitations period." Syl.

Pt. 7, Dunn, 689 S.E.2d at 258. However, "[t]his is not to say

that there is no time limit for filing an equitable cause of

action." Id. at 267 n.11. "Laches applies to equitable demands

where the statute of limitation does not." Syl. Pt. 2, Condry

v. Pope, 152 W. Va. 714, 166 S.E.2d 167, 167 (W. Va. 1969).

"Laches is a delay in the assertion of a known right

which works to the disadvantage of another." Syl. Pt. 2, Bank

of Marlinton v. McLaughlin, 123 W. Va. 608, 17 S.E.2d 213, 214

(W. Va. 1941). But "[m]ere delay will not bar relief in equity

on the ground of laches." Syl. Pt. 1, State ex rel. Smith v.

Abbot, 187 W. Va. 261, 418 S.E.2d 575, 576 (W. Va. 1992).

Instead, the West Virginia Supreme Court "has consistently

emphasized the necessity of a showing that there has been a

detrimental change of position in order to prove laches." Dunn,

689 S.E.2d at 267 (citing Maynard v. Board of Educ. of Wayne

Cnty., 178 W. Va. 53, 357 S.E.2d 246, 253 (W. Va. 1987); Syl.

Pt. 3, Carter v. Price, 85 W. Va. 744, 102 S.E. 685 (W. Va.

1920)).

Plaintiff appears to have intentionally pled his claim

under W. Va. Code § 31-17-17 for equitable relief only even

though the statute permits a party to seek damages, should one

so choose. See Pl.’s Resp. to Def. Live Well’s Mot. Dismiss at

13; compare W. Va. Code § 31-17-17(a) with § 31-17-17(c).

Notably, the plaintiffs in both Woods and Lavis sought damages

in addition to the equitable relief permitted by the statute.

See Woods Complaint, attached as Ex. A to Notice of Removal,

Docket No. 1-1 at pp. 13-14, 2:17-cv-0256, Jan. 6, 2017; Lavis

Complaint, attached as Ex. A to Notice of Removal, Docket No. 1-

1 at pp. 15-16, 5:17-cv-0209, Jan. 6, 2017. Thus, under West

Virginia law, laches, rather than a statute of limitations,

applies to Mr. Boster’s request for declaratory and injunctive

relief. Therefore, "[o]ur analysis . . . is at an end, and we

need not consider the remaining steps in our five-step

analysis." Dunn, 689 S.E.2d at 267. Despite this, the Court

must still analyze whether laches bars this claim.

First, it must be noted that a motion under 12(b)(6)

ordinarily “cannot reach the merits of an affirmative defense,

such as that the plaintiff’s claim is time-barred.” Goodman v.

Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007). An exception,

applicable “where facts sufficient to rule on an affirmative

defense are alleged in the complaint,” requires that all “facts

necessary to the affirmative defense ‘clearly appear[] on the

face of the complaint.’” Id. (quoting Richmond, Fredericksburg

& Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993). For

laches to bar a claim, the defendant must establish a

detrimental change of position as a result of a plaintiff's

delay in bringing the action. See White v. Daniel, 909 F.2d 99,

102 (4th Cir. 1990) ("Laches imposes on the defendant the

ultimate burden of proving '(1) the lack of diligence by the

party against whom the defense is asserted, and (2) prejudice to

the party asserting the defense.") (citing Costello v. United

States, 365 U.S. 265, 282, 81 S. Ct. 534, 5 L. Ed. 2d 551

(1961)).

No party addressed the issue of laches in the

briefing, and so defendants have not pointed to any prejudice to

them arising from Mr. Boster’s delay in filing this suit. While

the complaint clearly indicates when the reverse mortgage loan

was made, Compl. ¶¶ 50, 52, it does not include facts that

clearly indicate defendants’ detrimental change in position as a

result of the allegedly dilatory action. Nevertheless, some

courts presume prejudice applies in certain cases.

"Under equitable principles the statute of limitations

applicable to analogous actions at law is used to create a

'presumption of laches.' This principle 'presumes' that an

action is barred if not brought within the period of the statute

of limitations and is alive if brought within the period."

Tandy Corp. v. Malone & Hyde, Inc., 769 F.2d 362, 365 (6th Cir.

1985). Some courts agree with the Sixth Circuit's bright-line

principle. See, e.g., Ashley v. Boyle's Famous Corned Beef Co.,

66 F.3d 164, 169 n.3 (8th Cir. 1995) ("But even when applying

laches to an equitable claim, courts apply a presumption that

the action is not barred if brought within the statute of

limitations period for 'analogous' actions at law."), overruled

on other grounds by Rowe v. Hussmann Corp., 381 F.3d 775, 782

n.6 (8th Cir. 2004). Others, however, view the analogous

statute of limitations more as a benchmark. See, e.g., DeSilvio

v. Prudential Lines, Inc., 701 F.2d 13, 15 (2d Cir. 1983) ("In

analyzing whether a party is guilty of laches, a district court

may not mechanically apply the local statute of limitations.").

“When federal courts, in the exercise of their

equitable power, consider laches, they are guided by the

limitations period that they would borrow for actions at law and

presume that if an equitable claim is brought within the

limitations period, it will not be barred by laches.” Lyons

P’ship, L.P. v. Morris Costumes, Inc., 243 F.3d 789, 799 (4th

Cir. 2001), abrogated in part by Petrella v. Metro-Goldwyn-

Mayer, Inc., 134 S. Ct. 1962 (2014), (citing, among others,

Tandy 769 F.2d at 365-66). Additionally, several short per

curiam opinions from the Fourth Circuit Court of Appeals

indicate its willingness to presume prejudice as a result of

dilatoriness in bringing an equitable action. See Riddick v.

Baltimore Steam Packet Co., 374 F.2d 870, 871 (4th Cir. 1967)

(per curiam) (recognizing a "presumption of prejudice"); Davis

v. Nelson, 285 F.2d 214, 215 (4th Cir. 1960) (per curiam) ("As

this delay of nearly seven years exceeds any possibly applicable

limitations period, it became the duty of the libellant to plead

and prove facts negativing a presumption of prejudice from

inexcusable delay. The presumption would be against prejudice

if suit had been brought during the legal period of

limitations."). But see Giddens v. Isbrandtsen Co., 355 F.2d

125, 128-29 (4th Cir. 1966) (reversing the district court's

application of laches because "Giddens' dereliction alone did

not establish laches" and because "the shipowner presented no

proof of prejudice beyond the inference arising from the

procrastination").

Additionally, the Northern District of West Virginia

has adopted the Tandy presumption on several occasions. See

Litten v. Quicken Loans, Inc., No. 1:13CV192, 2013 U.S. Dist.

LEXIS 161172 ( N.D. W. Va. Nov. 12, 2013); Heavener v. Quicken

Loans, Inc., No. 3:12CV68, 2013 U.S. Dist. LEXIS 79006 (N.D. W.

Va., June 5, 2013); May v. Nationstar Mortg., LLC, No. 3:12CV43,

2012 U.S. Dist. LEXIS 102956 (N.D. W. Va., July 24, 2012); In re

Consolidation Coal Co., 228 F. Supp. 2d 764, 768-69 (N.D.W. Va.

2001)

Here, the analogous statute of limitations for claims

brought under RMBLSA is two years. See W. Va. Code § 55-2-12;

Woods 2017 U.S. Dist. LEXIS 161500; Lavis 2017 U.S. Dist. LEXIS

89144; CSX Transp., Inc. v. Gilkison, No. 5:05CV202, 2008 U.S.

Dist. LEXIS 25241 (N.D.W. Va., Mar. 28, 2008) (citing Alpine

Prop. Owners Ass'n, Inc. v. Mountaintop Dev. Co., 179 W. Va. 12,

365 S.E.2d 57, 66 (W. Va. 1987)). A cause of action under

RMBLSA accrues “at the time the allegedly illegal fees are

imposed — i.e., at closing.” Woods 2017 U.S. Dist. LEXIS 161500

at *26 (cataloguing cases). Ms. Boster’s reverse mortgage

closed on March 20, 2014. See Compl. ¶¶ 50, 52. Consequently,

the statute of limitations may have expired in March of 2016.

Mr. Boster did not bring his claim under RMBLSA until July of

2017. Whether laches applies requires an even more intensive

fact-finding analysis. See White 909 F.2d at 102 (“[W]hether

laches bars an action depends upon the particular circumstances

of the case.”) Without facts “clearly appear[ing] on the face

of the complaint,” Richmond 4 F.3d at 250, and with no argument

on the application of laches to this claim, the court does not,

at this juncture, find that defendants have experienced any

prejudice or detrimental change in position to warrant a finding

of laches, nor have they otherwise established laches.

b. Sufficiency of Pleadings

Defendants contend that Mr. Boster failed to

adequately plead a cause of action under the RMBLSA because he

did not specify which sections of the statute Proficio had

violated by the charging of allegedly improper fees. See Live

Well Mem. at 9-10. Additionally, defendants appear to argue

that the fees underlying Mr. Boster’s RMBLSA claim were

“expressly permitted” by the law, and are therefore not

violations. Id. at 10.

A complaint “does not require ‘detailed factual

allegations.’” Iqbal, 556 U.S. at 678. It “need only give the

defendant fair notice of what the claim is and the grounds upon

which it rests.” E.I. du Pont de Nemours & Co. v. Kolon Indus.,

Inc., 637 F.3d 435, 440 (4th Cir. 2011). Mr. Boster’s complaint

alleges that he “discovered facts constituting all the elements

of a cause of action under W. Va. Code Article § 31-17,” and

that Proficio “willfully contracted for and/or collected illegal

charges, fees, and closing[] costs” in violation of the law.

Compl. ¶¶ 47-48. He then goes on to list the allegedly improper

charges as “an origination fee that exceeded 2% of the real

estate as lawfully calculated; an illegal ‘MERS’ charge; an

illegal counseling fee; an illegal $625.00 closing fee, etc.”

Id. at 48. This sufficiently alleges the purported violation of

the RMBLSA, and provides defendants with notice of the claim.4

4 Based on the complaint, defendant Live Well was able to

determine that plaintiff’s allegations amounted to an alleged

violation of W. Va. Code § 31-17-8. Live Well Mem. at 9.

Defendants’ further argument that the allegedly

improper charges were expressly authorized by the law also fails

to defeat plaintiff’s claim. Even if “recovery is very remote

and unlikely” a well-pleaded complaint may survive a motion to

dismiss. Twombly 550 U.S. at 556 (quoting Scheuer v. Rhodes,

416 U.S. 232, 236 (1974)). The question is “not whether [the

plaintiff] will ultimately prevail . . . but whether [the]

complaint was sufficient to cross the federal court’s

threshold.” Skinner v. Switzer, 562 U.S. 521, 529-30 (2011).

Mr. Boster’s complaint sufficiently alleges that various charges

were made in violation of the RMLBSA, but the minimal

descriptions and listing of fees out of the context of the

entire mortgage loan are not clearly permissible or

impermissible at this juncture

Accordingly, defendants’ motion to dismiss Count I

insofar as it relates to the RMBLSA is denied.

ii. Violations of Reverse Mortgage Act and its Regulations

Mr. Boster also asserts that he is entitled to the

equitable cancellation of the loan under the implementing

regulations of the Reverse Mortgage Act. He argues that

Proficio “required and took a security interest to guarantee

payment in excess of that permitted by [W. Va. Code R. § 106-9-

6.6, and otherwise failed to comply with the prerequisites [of

the Reverse Mortgage Act] and its implementing regulations

require[d] to make any reverse mortgage loan secure by

residential real estate in West Virginia.” Compl. ¶ 49.

Though not asserted by defendants, the court finds

that the Reverse Mortgage Act lacks a private cause of action.

The statute refers only to the penalties set forth in Chapter

31A of the W. Va. Code. See § 47-24-8. In pertinent part,

Chapter 31A provides:

(b) Any person or financial institution which violates

the provisions of this chapter, the rules adopted

thereunder, or a lawful order of the commissioner or

board, shall, unless previously fined under the

provisions of subsection (a) of this section, be

subject to civil penalties in an amount not more than

five thousand dollars nor less than fifty dollars in

civil actions brought by the commissioner or the

board.

W. Va. Code § 31A-8F-22(b). Mr. Boster cannot bring a private

claim for relief under the Reverse Mortgage Act. See Woods 2017

U.S. Dist. LEXIS 161500 at *19. Therefore, to the extent Count

I relies on purported violations of the Reverse Mortgage Act, it

must be dismissed.

iii. Violations of WVCCPA

In relevant part, the WVCCPA provides that

No person shall be held liable as cosigner, or be

charged with personal liability for payment in a

consumer credit sale, consumer lease or consumer loan

unless that person, in addition to and before signing

any instrument evidencing the transaction, signs and

receives a separate notice which clearly explains his

liability in the event of default by the consumer and

also receives a copy of any disclosure required by the

“Federal Consumer Credit Protection Act.”

W. Va. Code § 46A-2-104(a). Asserting that he qualifies as a

“cosigner,” Mr. Boster argues that Proficio did not comply with

these notice requirements, and that he “may not be held liable

for payment of his mother’s reverse mortgage loan through the

sale of his home.” Compl. ¶¶ 53-55. Defendants disagree that

plaintiff is considered a “cosigner,” which is defined under the

WVCCPA as

a natural person who assumes liability for the

obligation on a consumer credit sale or consumer loan

without receiving goods, services or money in return

for the obligation or, in the case of a revolving

charge account or revolving loan account of a

consumer, without receiving the contractual right to

obtain extensions of credit under the account. The

term cosigner includes any person whose signature is

requested as a condition to granting credit to a

consumer or as a condition for forbearance on

collection of a consumer's obligation that is in

default. The term cosigner does not include a spouse

whose signature is required to perfect a security

interest. A person who meets the definition in this

paragraph is a “cosigner” whether or not the person is

designated as such on the credit obligation.

W. Va. Code § 46A-2-102(16).

Plaintiff emphasizes that the definition of a cosigner

explicitly states that “any person whose signature is requested

as a condition to granting credit to a consumer,” is a cosigner,

and that anyone “who meets the definition in this paragraph is a

‘cosigner’ whether or not the person is designated as such on

the credit obligation.” Plaintiff is not, however, being held

liable as a cosigner because defendants now seek to foreclose on

the home as authorized under his mother’s reverse mortgage.

“[T]he option to pay money to retain collateral is not

equivalent to a personal obligation to repay a discharged debt.”

Ballard v. Bank of America, N.A., No. 2:12-cv-2496, 2013 U.S.

Dist. LEXIS 159428, *37 (S.D. W. Va. Nov. 7, 2013), aff’d

Ballard v. Bank of America, N.A., 578 Fed. Appx. 226, 2014 U.S.

App. LEXIS 13210 (4th Cir. 2014). In securing his mother’s

reverse mortgage as her power of attorney, Mr. Boster signed the

Deeds of Trust that secured his mother’s home as collateral for

that reverse mortgage. See Compl. ¶¶ 30-34; Arnold v. Palmer,

224 W. Va. 495, 686 S.E.2d 725 (2009) (holding that a deed of

trust “conveys title to real property in trust as security until

the grantor repays the loan” and “[i]n the case of default of a

debt secured by a deed of trust, the property becomes liable to

sale . . .”). After Ms. Boster passed away, her debt was

accelerated, and Mr. Boster has the option to pay that debt to

retain the property. See W. Va. Code § 47-24-4(g). This does

not make him liable as a cosigner for the purposes of the

WVCCPA.

Accordingly, because Mr. Boster does not meet the

definition of a “cosigner,” defendants’ motion to dismiss for

the remainder of Count I is granted.

B. Count II

Count II of the complaint alleges that defendants

further violated the WVCCPA because, “[i]n attempting to collect

the claim, defendants made false, misleading, and deceptive

representations in violation of W. Va. Code § 46A-2-127,” and

“used unfair and unconscionable means in violation of W. Va.

Code § 46A-2-128.” Compl. ¶¶ 66-67. Mr. Boster requests that

this court “quiet title to his home . . . and to award him all

relief to which he may be entitled in law or equity, including a

reasonable attorney fee and the costs of this litigation.” Id.

at p. 10. He asserts that he is entitled to this relief because

“[t]he reverse mortgage loan is a ‘claim’ as defined by and

subject to W, Va. Code § 46A-2-122 et seq.,” “plaintiff is a

‘consumer’ as defined within and protected by W. Va. Code § 46A-

2-122 et seq.,” and defendants were “at all times ‘debt

collectors subject to and governed by W. Va. Code § 46A-2-122 et

seq.” Id. at ¶¶ 62-63, 65.

Defendants contend that Count II should be dismissed

because Mr. Boster lacks standing to bring such an action under

the WVCCPA, as he is not a “consumer” as defined therein.

“Consumer” is defined twice in the WVCCPA. Compare W. Va. Code

§ 46A-1-102(12) with W. Va. Code § 46A-2-122. Because Count II

raises causes of action under W. Va. Code §§ 46A-2-127 and 46A-

2-128, the applicable definition of a “consumer” is the one

found at 46A-2-122: “For the purposes of this section and

sections one hundred twenty-three, one hundred twenty-four, one

hundred twenty-five, one hundred twenty-six, one hundred twenty-

seven, one hundred twenty-eight, one hundred twenty-nine and one

hundred twenty-nine-a of this article,” a consumer is “any

natural person obligated or allegedly obligated to pay any

debt.” W. Va. Code § 46A-2-122.

As the court previously observed, Mr. Boster is not

obligated to pay a debt as a “cosigner,” and he is similarly

unconstrained by any debt as a “consumer.” Although he signed

the Deeds of Trust in his personal capacity, Mr. Boster did not

sign the Notes, except as his mother’s power of attorney, and he

is not obligated to pay a debt merely because he could pay such

a debt to retain the property. Ballard 2013 U.S. Dist. LEXIS

159428 at *37; see Arnold, 224 W. Va. at 503 (finding that a

promissory note is not enforceable against party who signed a

deed of trust but did not sign the promissory note, inasmuch as

promissory notes and deeds of trust are separate legal documents

with individual purposes); see also McNeely v. Wells Fargo Bank,

N.A., 115 F.Supp.3d 779, 785 (S.D.W. Va. 2015) (holding that Mr.

McNeely was not a “consumer” pursuant to W. Va. Code § 46A-2-

122(a) because “Mr. McNeely did not sign and was not a party to

either of the loans at issue, which were all signed by Ms.

McNeely”); Bishop v. Quicken Loans, Inc., No. 2:09-1076, 2011

U.S. Dist. LEXIS 37647, at *32 (S.D.W .Va. Apr 4, 2011) (holding

that plaintiff who executed a deed of trust, but not the

underlying note, is not a “consumer” under the WVCCPA).

Though it is clear that Mr. Boster was not actually

obligated to pay a debt, he has pled facts and allegations

sufficient to leave open the question of whether or not he was

“allegedly obligated” to pay a debt. See W. Va. Code § 46A-2-

122. “Courts consider a person ‘allegedly obligated’ to pay a

debt when the creditor has ‘represented to [him] that [he] is

personally liable on the debt.” McNeely 115 F. Supp. 3d at 784

(S.D. W. Va. 2015) (quoting Fabian v. Home Loan Ctr., Inc., 2014

U.S. Dist. LEXIS 56954, *20 (N.D. W. Va. 2014). “The term

‘alleged obligation’ extends the reach of the WVCCPA to certain

collection activities conducted without regard to whether the

debt is actually owed.” McGuire v. Jim Walter Homes, LLC, 2014

U.S. Dist. LEXIS 146198, *19 (S.D.W.Va. Oct. 14, 2014); see

Croye v. GreenPoint Mortg. Funding, Inc., 740 F. Supp. 2d 788,

787 (S.D. W. Va. 2010) (“While it is unlikely that Mr. Croye was

ever legally obligated to pay the mortgage loans . . . .

repeated efforts to collect payment from him suggest the

existence of an alleged obligation of Mr. Croye to pay the

loans.”).

The complaint alleges that defendants misrepresented

that the loan required the payment of “installments,” and that

the reverse mortgage had been “breached ‘by reason of your

failure to pay the installments.’” Compl. ¶ 40. While Mr.

Boster had no personal liability, the complaint leaves open the

question of whether or not he was “allegedly obligated” based on

the collection practices used by defendants in communicating to

Mr. Boster.

The question is “not whether [the plaintiff] will

ultimately prevail . . . but whether [the] complaint was

sufficient to cross the federal court’s threshold.” Skinner 562

U.S. at 529-30. Mr. Boster sufficiently pleads that he may have

been treated by the defendants as “allegedly obligated” to pay

the reverse mortgage loan and Count II of the complaint should

not be disposed of presently.

Iv. Conclusion

Based upon the foregoing discussion, it is ORDERED

that the defendants’ motion to dismiss and joinder motion be,

and hereby are, denied as to Count I, insofar as it relates to

plaintiff’s claims under the RMBLSA, and Count II. It is

further ORDERED that the defendants’ motion to dismiss and

joinder motion be, and hereby are, granted as to the remainder

of Count I.

The Clerk is directed to transmit copies of this

written opinion and order to counsel of record and any

unrepresented parties.

DATED: March 30, 2018

LO ph Do =p —Q

John T. Copenhaver, Jr.

United States District Judge

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