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Ross v. Pennymac Corp.

United States District Court, S.D. Ohio, Western Division

May 15, 2018

JOSHUA D. ROSS, Plaintiff,
v.
PENNYMAC CORP., Defendant.

          OPINION AND ORDER

          Michael R. Barrett, United States District Court Judge

         This matter is before the Court on Defendant's Motion for Judgment on the Pleadings (Doc. 11). Plaintiff has filed a response (Doc. 13) and Defendant has filed a reply (Doc. 15). This matter is now ripe for disposition.

         I. FACTS

         On November 12, 2014, Plaintiff entered into a Contract to Purchase (hereinafter referred to as the “Contract”) a home (hereinafter referred to as the “Property”). (Doc. 4, PageID 27 at ¶ 4). Plaintiff purchased the property from Defendant, PennyMac, with the understanding that Defendant had “acquired the property by foreclosure, deed-in-lieu of foreclosure, forfeiture, tax sale, or similar process and consequently, [Defendant] has little or no direct knowledge concerning the condition of the property.” (Doc. 7-1, PageID 65). As such, Plaintiff agreed to purchase the Property in “as is” condition. (Id.)

         Before entering into the Contract, Plaintiff “performed a comprehensive property inspection that revealed multiple issues with the Property, all of which Plaintiff was aware in negotiating the bargained-for price to be paid for the Property.” (Doc. 4, PageID 28 at ¶ 5). Indeed, Plaintiff agreed that he was purchasing the Property in reliance upon his own inspection, and not based upon any information provided by Defendant. (Doc. 7-1, PageID 66). Plaintiff also acknowledged that mold could be present in or around the Property, and accepted full responsibility for all hazards that resulted from the presence of mold. (Id.)

         Nevertheless, Plaintiff alleges the Property was constructed in a manner to conceal mold, a fact which Plaintiff alleges was known to Defendant. He brings the following claims: 1) fraud; 2) breach of contract; 3) negligence; 4) claim pursuant to Ohio Revised Code § 5302.30; and 5) punitive damages. Defendant moves for judgment on the pleadings, asserting it is entitled to judgment on all of Plaintiff's claims.

         II. STANDARD

         A motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) is analyzed using the same standards applicable to a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). Tucker v. Middleburg-Legacy Place, LLC, 539 F.3d 545, 549 (6th Cir. 2008) (citing Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291, 295 (6th Cir. 2008)). “[T]o survive a motion to dismiss[, ] a complaint must contain (1) ‘enough facts to state a claim to relief that is plausible, ' (2) more than ‘a formulaic recitation of a cause of action's elements, ' and (3) allegations that suggest a ‘right to relief above a speculative level.'” Tackett v. M&G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007)). A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). Although the plausibility standard is not equivalent to a “‘probability requirement, ' . . . it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. at 678 (quoting Twombly, 550 U.S. at 556).

         In reviewing a motion to dismiss, the Court must “construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.” Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008) (quoting Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007)). Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing the pleader is entitled to relief.” “Specific facts are not necessary; the statement need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291, 295 (6th Cir. 2008) (quoting Erickson v. Pardus, 551 U.S. 89, 93 (2007)).

         III. ANALYSIS

         1. Fraud

         Plaintiff brings a claim for “fraud in the inducement and/or the tort of constructive fraud.” (Doc. 4, PageID 28 at ¶ 12). Federal Rule of Civil Procedure 9(b) requires a party alleging fraud to “state with particularity the circumstances constituting fraud or mistake.” Fed.R.Civ.P. 9(b). The rule requires a plaintiff to: 1) specify the allegedly fraudulent statements; 2) identify the speaker; 3) plead when and where the statements were made; and 4) explain what made the statements fraudulent. Republic Bank & Trust Co. v. Bear Stearns & Co., 683 F.3d 239, 247 (6th Cir. 2012) (citing Ind. State Dist. Council of Laborers and Hod Carriers Pension and Welfare Fund v. Omnicare, Inc., 583 F.3d 935, 942-43 (6th Cir.2009)). The pleading requirement for fraud claims is heightened because such claims present “a high risk of abusive litigation.” Republic Bank, 683 F.3d at 247 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 569 n. 14 (2007)).

         Plaintiff alleges the following in his Complaint related to his fraud claim:

6. Unknown to Plaintiff was that the Property was constructed in a manner to specifically conceal mold damage that ...

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