Hampton v. Wells Fargo Bank NA
This text of Hampton v. Wells Fargo Bank NA (Hampton v. Wells Fargo Bank NA) is published on Counsel Stack Legal Research, covering District Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 1 of 38
IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS CENTRAL DIVISION
EUGENE HAMPTON PLAINTIFF
v. Case No.: 4:21-cv-00386
WELLS FARGO BANK, N.A. & DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR VENDEE MORTGAGE TRUST 1994-3 DEFENDANTS ORDER
This lawsuit concerns the alleged misconduct of two banks related to Plaintiff’s mortgage
and the demolition of Plaintiff’s home.1 Specifically, Mr. Eugene Hampton brings five state-law
claims against Defendants Wells Fargo and Deutsche Bank: (1) unjust enrichment, (2) negligence,
(3) breach of fiduciary duty, (4) trespass, and (5) violations of the Arkansas Deceptive Trade
Practices Act (“ADTPA”).2
This is the second time Mr. Hampton has prosecuted a lawsuit in this District against these
Defendants covering essentially the same factual ground.3 In the first lawsuit (let’s call it Hampton
I), Judge Billy Roy Wilson entered two orders that, in combination, dismissed Mr. Hampton’s
case.4 Based on Judge Wilson’s dismissal of the last case, Defendants say the Court should dismiss
the case at bar. Defendants principally argue that Judge Wilson’s rulings in Hampton I preclude
Mr. Hampton from taking a second bite at the apple.5 Alternatively, Defendants argue that some
of Mr. Hampton’s claims are untimely and each of Mr. Hampton’s claims fails to state a viable
1 See Compl. (Doc. 2). 2 Id. 3 See Hampton v. Wells Fargo Bank, N.A., No. 4:19-cv-00810-BRW (E.D. Ark.) (Hampton I) (Doc. 2). 4 Hampton I (Docs. 63, 81); see also Hampton I (Doc. 86) (Judgment). 5 Defs.’ Mot. to Dismiss (Doc. 3). Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 2 of 38
cause of action.6 Mr. Hampton disputes all of Defendants’ arguments.7 For the reasons that follow,
Defendants’ Motion to Dismiss is GRANTED. Mr. Hampton’s breach-of-fiduciary-duty and
negligence claims are barred by the claim preclusion facet of res judicata doctrine. Mr. Hampton’s
ADTPA, unjust enrichment, and trespass claims are untimely.
I. Factual Background8
Mr. Hampton’s Complaint alleges two courses of conduct by Defendants that overlap in
time. The Court will first set out the facts involving Mr. Hampton’s home loan. The Court will
then provide the facts related to the demolition of Mr. Hampton’s home. After all this, the Court
will recount the somewhat convoluted procedural history of the related prior lawsuit (Hampton I)
and the lawsuit presently at bar.
A. Mr. Hampton’s Home Loan
On July 31, 1991, Mr. Hampton purchased property, including a house, in Little Rock,
Arkansas.9 On the same date, Mr. Hampton executed a Deed of Trust Note for the principal sum
of $19,400 in favor of the Department of Veterans Affairs (“VA”).10 Mr. Hampton, as grantor,
also executed a Deed of Trust in favor of the VA.11 Mr. Hampton agreed to repay the loan principal
6 Id. 7 Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 11) ¶ 3 (Mr. Hampton disputing all grounds Defendants press for dismissal). 8 On a motion to dismiss, the Court treats the facts alleged in the Complaint as true and draws all reasonable inferences in Mr. Hampton’s favor. Topchian v. JPMorgan Chase Bank, N.A., 760 F.3d 843, 848 (8th Cir. 2014). Accordingly, the “factual background” section is only for purposes of deciding the Motion to Dismiss. 9 Compl. (Doc. 2) ¶ 5. 10 Id. ¶ 6. 11 Id.; see also Ex. A to Compl. (Doc. 2) at 27 (stating that the loan is “secured by a Deed of Trust . . . executed” by Mr. Hampton). “A deed of trust is a deed conveying title to real property to a trustee as security until the grantor repays a loan.” Mortg. Elec. Registration Sys., Inc. v. Sw. Homes of Ark., 2009 Ark. 152, at 5, 301 S.W.3d 1, 4 (internal quotations omitted). “Under a deed of trust, the borrower conveys legal title in the property by a deed of trust to the trustee.” Id., 301 S.W.3d at 4.
2 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 3 of 38
at an interest rate of 9%.12 Mr. Hampton agreed to make monthly payments of $156.10 over the
course of thirty years with the last payment being due on August 1, 2021.13 Mr. Hampton made
his first payment in September 1991.14
In 1994, the VA assigned its interest in the Deed of Trust to Bankers Trust Company.15 In
1999, Deutsche Bank acquired Bankers Trust Company and thus acquired the interest in the Deed
of Trust.16 Wells Fargo serviced the loan,17 meaning that Wells Fargo, on Deutsche Bank’s behalf,
oversaw the day-to-day operations of Mr. Hampton’s loan by sending payment invoices and
receiving Mr. Hampton’s payments.
Things seemed to go along okay until Mr. Hampton’s 2002 divorce left him unable to make
timely payments on the loan.18 In July 2004, Mr. Hampton filed for bankruptcy.19 In August 2004,
despite the bankruptcy filing, Wells Fargo (on behalf of Deutsche Bank) had its lawyers commence
a nonjudicial foreclosure of Mr. Hampton’s property.20 On November 2, 2004, Deutsche Bank
purchased the property at a foreclosure sale for $27,651.31.21 This sale price exceeded (by an
unknown amount) the balance that Mr. Hampton owed on the loan.22 But Deutsche Bank did not
give Mr. Hampton the excess.23 Two weeks later, Wells Fargo’s lawyers filed a Trustee’s Deed
12 Compl. (Doc. 2) ¶ 7. 13 Id. 14 Id. 15 Id. ¶ 9. 16 Id. ¶ 10. 17 Id. ¶ 8. 18 Id. ¶ 11. 19 Id. ¶ 12. 20 Id. ¶ 13. 21 Id. ¶ 14; see also Ex. F to Compl. (Doc. 2) at 37–38. 22 Compl. (Doc. 2) ¶ 15. The Complaint does not state how much Mr. Hampton still owed on the loan. Nor does it state the difference between the $27,651.31 purchase price and the amount Mr. Hampton still owed on the loan. 23 Id.
3 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 4 of 38
conveying the property from Mr. Hampton to Deutsche Bank in the Pulaski County records.24 Mr.
Hampton received no notice that the foreclosure sale occurred.25 Neither Defendant credited Mr.
Hampton’s account with the proceeds of the sale.26
On November 23, 2004, just a few days after the Trustee’s Deed conveyance was filed,
Wells Fargo entered an appearance in Mr. Hampton’s bankruptcy case.27 On December 16, 2004,
Wells Fargo filed a proof of claim asserting a secured claim totaling $27,120.79.28 On the same
day, Wells Fargo filed an amended proof of claim asserting “a secured claim for the principal sum
of $16,378.83 plus arrears and other charges and costs totaling $23,120.78.”29 For each proof of
claim, Wells Fargo cited the 1991 Deed of Trust as the document supporting the secured claim.30
Wells Fargo did not mention the foreclosure on or the sale of the house.
In February 2005, Mr. Hampton filed an Objection to Wells Fargo’s secured claims.31
Recall that, at this point, Mr. Hampton has no idea about the foreclosure or sale, and he is still
living in the home. In the Objection, Mr. Hampton confirmed that “Wells Fargo [has] a secured
claim against [Mr. Hampton’s] homestead property,” but he insisted that the amount owed was
less than that claimed by Wells Fargo.32 In November 2005, the bankruptcy court entered an
24 Id. ¶ 16. 25 Id. ¶ 18. 26 Id. ¶ 19. 27 Id. ¶ 21; see also Ex. H to Compl. (Doc. 2) at 40. 28 Compl. (Doc. 2) ¶ 23. 29 Id. ¶ 24. Mr. Hampton’s Complaint says Wells Fargo filed the amended proof of claim on December 13, 2005. Id. Mr. Hampton cites Exhibit J for support of this assertion. Exhibit J is an Objection to Wells Fargo’s proof of claim. Ex. J to Compl. (Doc. 2) at 46.
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Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 1 of 38
IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS CENTRAL DIVISION
EUGENE HAMPTON PLAINTIFF
v. Case No.: 4:21-cv-00386
WELLS FARGO BANK, N.A. & DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR VENDEE MORTGAGE TRUST 1994-3 DEFENDANTS ORDER
This lawsuit concerns the alleged misconduct of two banks related to Plaintiff’s mortgage
and the demolition of Plaintiff’s home.1 Specifically, Mr. Eugene Hampton brings five state-law
claims against Defendants Wells Fargo and Deutsche Bank: (1) unjust enrichment, (2) negligence,
(3) breach of fiduciary duty, (4) trespass, and (5) violations of the Arkansas Deceptive Trade
Practices Act (“ADTPA”).2
This is the second time Mr. Hampton has prosecuted a lawsuit in this District against these
Defendants covering essentially the same factual ground.3 In the first lawsuit (let’s call it Hampton
I), Judge Billy Roy Wilson entered two orders that, in combination, dismissed Mr. Hampton’s
case.4 Based on Judge Wilson’s dismissal of the last case, Defendants say the Court should dismiss
the case at bar. Defendants principally argue that Judge Wilson’s rulings in Hampton I preclude
Mr. Hampton from taking a second bite at the apple.5 Alternatively, Defendants argue that some
of Mr. Hampton’s claims are untimely and each of Mr. Hampton’s claims fails to state a viable
1 See Compl. (Doc. 2). 2 Id. 3 See Hampton v. Wells Fargo Bank, N.A., No. 4:19-cv-00810-BRW (E.D. Ark.) (Hampton I) (Doc. 2). 4 Hampton I (Docs. 63, 81); see also Hampton I (Doc. 86) (Judgment). 5 Defs.’ Mot. to Dismiss (Doc. 3). Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 2 of 38
cause of action.6 Mr. Hampton disputes all of Defendants’ arguments.7 For the reasons that follow,
Defendants’ Motion to Dismiss is GRANTED. Mr. Hampton’s breach-of-fiduciary-duty and
negligence claims are barred by the claim preclusion facet of res judicata doctrine. Mr. Hampton’s
ADTPA, unjust enrichment, and trespass claims are untimely.
I. Factual Background8
Mr. Hampton’s Complaint alleges two courses of conduct by Defendants that overlap in
time. The Court will first set out the facts involving Mr. Hampton’s home loan. The Court will
then provide the facts related to the demolition of Mr. Hampton’s home. After all this, the Court
will recount the somewhat convoluted procedural history of the related prior lawsuit (Hampton I)
and the lawsuit presently at bar.
A. Mr. Hampton’s Home Loan
On July 31, 1991, Mr. Hampton purchased property, including a house, in Little Rock,
Arkansas.9 On the same date, Mr. Hampton executed a Deed of Trust Note for the principal sum
of $19,400 in favor of the Department of Veterans Affairs (“VA”).10 Mr. Hampton, as grantor,
also executed a Deed of Trust in favor of the VA.11 Mr. Hampton agreed to repay the loan principal
6 Id. 7 Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 11) ¶ 3 (Mr. Hampton disputing all grounds Defendants press for dismissal). 8 On a motion to dismiss, the Court treats the facts alleged in the Complaint as true and draws all reasonable inferences in Mr. Hampton’s favor. Topchian v. JPMorgan Chase Bank, N.A., 760 F.3d 843, 848 (8th Cir. 2014). Accordingly, the “factual background” section is only for purposes of deciding the Motion to Dismiss. 9 Compl. (Doc. 2) ¶ 5. 10 Id. ¶ 6. 11 Id.; see also Ex. A to Compl. (Doc. 2) at 27 (stating that the loan is “secured by a Deed of Trust . . . executed” by Mr. Hampton). “A deed of trust is a deed conveying title to real property to a trustee as security until the grantor repays a loan.” Mortg. Elec. Registration Sys., Inc. v. Sw. Homes of Ark., 2009 Ark. 152, at 5, 301 S.W.3d 1, 4 (internal quotations omitted). “Under a deed of trust, the borrower conveys legal title in the property by a deed of trust to the trustee.” Id., 301 S.W.3d at 4.
2 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 3 of 38
at an interest rate of 9%.12 Mr. Hampton agreed to make monthly payments of $156.10 over the
course of thirty years with the last payment being due on August 1, 2021.13 Mr. Hampton made
his first payment in September 1991.14
In 1994, the VA assigned its interest in the Deed of Trust to Bankers Trust Company.15 In
1999, Deutsche Bank acquired Bankers Trust Company and thus acquired the interest in the Deed
of Trust.16 Wells Fargo serviced the loan,17 meaning that Wells Fargo, on Deutsche Bank’s behalf,
oversaw the day-to-day operations of Mr. Hampton’s loan by sending payment invoices and
receiving Mr. Hampton’s payments.
Things seemed to go along okay until Mr. Hampton’s 2002 divorce left him unable to make
timely payments on the loan.18 In July 2004, Mr. Hampton filed for bankruptcy.19 In August 2004,
despite the bankruptcy filing, Wells Fargo (on behalf of Deutsche Bank) had its lawyers commence
a nonjudicial foreclosure of Mr. Hampton’s property.20 On November 2, 2004, Deutsche Bank
purchased the property at a foreclosure sale for $27,651.31.21 This sale price exceeded (by an
unknown amount) the balance that Mr. Hampton owed on the loan.22 But Deutsche Bank did not
give Mr. Hampton the excess.23 Two weeks later, Wells Fargo’s lawyers filed a Trustee’s Deed
12 Compl. (Doc. 2) ¶ 7. 13 Id. 14 Id. 15 Id. ¶ 9. 16 Id. ¶ 10. 17 Id. ¶ 8. 18 Id. ¶ 11. 19 Id. ¶ 12. 20 Id. ¶ 13. 21 Id. ¶ 14; see also Ex. F to Compl. (Doc. 2) at 37–38. 22 Compl. (Doc. 2) ¶ 15. The Complaint does not state how much Mr. Hampton still owed on the loan. Nor does it state the difference between the $27,651.31 purchase price and the amount Mr. Hampton still owed on the loan. 23 Id.
3 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 4 of 38
conveying the property from Mr. Hampton to Deutsche Bank in the Pulaski County records.24 Mr.
Hampton received no notice that the foreclosure sale occurred.25 Neither Defendant credited Mr.
Hampton’s account with the proceeds of the sale.26
On November 23, 2004, just a few days after the Trustee’s Deed conveyance was filed,
Wells Fargo entered an appearance in Mr. Hampton’s bankruptcy case.27 On December 16, 2004,
Wells Fargo filed a proof of claim asserting a secured claim totaling $27,120.79.28 On the same
day, Wells Fargo filed an amended proof of claim asserting “a secured claim for the principal sum
of $16,378.83 plus arrears and other charges and costs totaling $23,120.78.”29 For each proof of
claim, Wells Fargo cited the 1991 Deed of Trust as the document supporting the secured claim.30
Wells Fargo did not mention the foreclosure on or the sale of the house.
In February 2005, Mr. Hampton filed an Objection to Wells Fargo’s secured claims.31
Recall that, at this point, Mr. Hampton has no idea about the foreclosure or sale, and he is still
living in the home. In the Objection, Mr. Hampton confirmed that “Wells Fargo [has] a secured
claim against [Mr. Hampton’s] homestead property,” but he insisted that the amount owed was
less than that claimed by Wells Fargo.32 In November 2005, the bankruptcy court entered an
24 Id. ¶ 16. 25 Id. ¶ 18. 26 Id. ¶ 19. 27 Id. ¶ 21; see also Ex. H to Compl. (Doc. 2) at 40. 28 Compl. (Doc. 2) ¶ 23. 29 Id. ¶ 24. Mr. Hampton’s Complaint says Wells Fargo filed the amended proof of claim on December 13, 2005. Id. Mr. Hampton cites Exhibit J for support of this assertion. Exhibit J is an Objection to Wells Fargo’s proof of claim. Ex. J to Compl. (Doc. 2) at 46. The proofs of claim in the record indicate that they were both completed on December 16, 2004. See Ex H to Compl. (Doc. 2) at 40 (listing the date of the proof of claim as December 16, 2004); Ex. I to Compl. (Doc. 2) at 43 (same). 30 Compl. (Doc. 2) ¶ 25; Ex. H to Compl. (Doc. 2) at 42; Ex. I to Compl. (Doc. 2) at 45. 31 Compl. (Doc. 2) ¶ 28. Mr. Hampton’s Complaint says he objected to the amount Deutsche Bank claimed, but the documentation Mr. Hampton provided shows that he was objecting to Wells Fargo’s claim. Ex. J. to Compl. (Doc. 2) at 46. 32 Ex. J. to Compl. (Doc. 2) at 46.
4 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 5 of 38
agreed-upon order establishing that the total amount of the “mortgage debt, including the amount
of the principal, all pre-petition arrears, attorney fees, and costs was $20,601.53.”33
Mr. Hampton’s bankruptcy lasted forty-seven months.34 During that time, Mr. Hampton
paid $15,716.99 on the secured claim.35 That amount “included the payment of taxes and insurance
for the sole benefit of Deutsche Bank.”36 On June 18, 2008, the bankruptcy court entered an order
reflecting the total amount Mr. Hampton paid and releasing Wells Fargo’s claim “with future
payments to be made directly by [Mr. Hampton] beginning [on August 1, 2008] . . . .”37 At this
point, Mr. Hampton owed $4,884.64 on the secured claim.38 Mr. Hampton began making direct
payments to Wells Fargo in August 2008.39
In September 2008, Mr. Hampton moved out of the house and allowed his adult children
to remain there.40 Mr. Hampton left all his personal possessions in the house, including his
“keepsake[s] and family memories . . . .”41 Mr. Hampton continued to make payments on the loan
secured by the Deed of Trust.42 In February 2010, “the Deed of Trust Note was satisfied, and Mr.
Hampton was no longer obligated on this debt.”43 Nevertheless, Wells Fargo continued to demand
monthly payments from Mr. Hampton, “allegedly for the payment of the mortgage debt secured
by the Real Property and payment of taxes and insurance through an escrow that could only be for
33 Ex. K to Compl. (Doc. 2) at 48; Compl. (Doc. 2) ¶ 30. 34 Compl. (Doc. 2) ¶ 31. 35 Id. ¶ 32. 36 Id. ¶ 33. 37 Id. ¶ 34; Ex. N to Compl. (Doc. 2) at 52. 38 Compl. (Doc. 2) ¶ 34. 39 Id. ¶ 35. 40 Id. ¶ 36. 41 Id. 42 Id. ¶ 37. 43 Id.
5 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 6 of 38
the benefit of Deutsche Bank.”44 Wells Fargo continued to make the monthly payment demands
because Wells Fargo had not properly credited Mr. Hampton’s account with the payments Mr.
Hampton made during bankruptcy.45
Mr. Hampton, still not knowing that Deutsche Bank foreclosed on and apparently now
owned the house, complied with Wells Fargo’s demands.46 He continued to make payments to
Wells Fargo until October 2017.47 At that time, “Mr. Hampton questioned whether he was paying
more than what he was supposed to pay.”48 Mr. Hampton thus requested an accounting of his loan
balance.49
On October 6, 2017, Mr. Hampton received a partial accounting from Wells Fargo.50 He
could not determine from this accounting “if or when his payments were applied and whether they
were applied correctly.”51 The accounting did not show how the payments Mr. Hampton made
during bankruptcy were applied to his loan.52 On January 25, 2018, Mr. Hampton’s counsel sent
a letter to Wells Fargo that requested a complete accounting from August 2008 to the present.53
Wells Fargo responded on June 8, 2018.54 “Wells Fargo’s counsel stated in an email that Mr.
Hampton [was] entitled to a refund amount of $14,289.13.”55 The email attached a detailed
44 Id. ¶ 39. 45 Id. 46 Id. ¶ 41. 47 Id. ¶ 49. 48 Id. ¶ 50. 49 Id. 50 Id. ¶ 52. 51 Id. ¶ 53. 52 Id. 53 Id. ¶ 57. 54 Id. ¶ 61. 55 Id.; see also Ex. U to Compl. (Doc. 2) at 96 (stating that “the refund amount being offered is $14,289.13 so please review with your client accordingly”).
6 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 7 of 38
spreadsheet showing Mr. Hampton paid Wells Fargo a total of “30,166.29 in post-discharge
payments.”56 Despite offering Mr. Hampton a refund, Wells Fargo continued to send Mr.
Hampton payment demands.57 Wells Fargo also sent “Mr. Hampton dunning correspondence with
threats of a foreclosure on the Real Property.”58 It seems that even at this late date, Mr. Hampton
did not know that the foreclosure had occurred and that Deutsche Bank was the record owner of
the property.
B. The Demolition of Mr. Hampton’s Home
In 2015, the City of Little Rock, Department of Housing and Neighborhood Programs
“began notifying Deutsche Bank of municipal code violations on” the property at issue in this
case.59 On April 17, the City sent notice to Deutsche Bank that the property “was inspected and .
. . contained defects that made the home unsafe.”60 The notice said that the house “has been
declared by the City to be a nuisance and detrimental to the public welfare of the citizens of the
City of Little Rock.”61 The notice also said that Deutsche Bank had fifteen days “in which to begin
substantial repairs or to demolish the structure.”62 Failure to do so, the City said, would result in
legal proceedings against Deutsche Bank and the property to abate the nuisance.63 The City left a
56 Compl. (Doc. 2) ¶ 61. 57 Id. ¶ 62. 58 Id. ¶ 68. 59 Id. ¶ 42. 60 Id.; see also Ex. P to Compl. (Doc. 2) at 75 (notice stating that information obtained by the City “indicate[d] that [Deutsche Bank] [was] the owner/agent” of the property and that Deutsche Bank had fifteen days to begin “substantial repairs”). 61 Ex. P to Compl. (Doc. 2) at 75. 62 Id. 63 Id.
7 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 8 of 38
copy of this notice at the house.64 Mr. Hampton’s children found the notice and told Mr. Hampton
about it.65 Here’s the notice in relevant part:
Warning Notice
April 17, 2015
Deutsche Bank Natl Trust Co[.] 3476 Stateview Blvd Fort Mill[,] SC 29715
Re: 6601 Wakefield Dr., Parcel ID 3413980000700, CT 20.02, WD 2, Valuation: $30,000 Date Inspected: 4/17/15, Legal: Wakefield Village Block 0 Lot 7[]
Dear Deutsche Bank Natl Trust Co[.]:
Information obtained by our office indicates that you are the current owner/agent of the above referenced property. This notice will advise you that City staff made an inspection of the structure on the above property. The inspection revealed that the structure is unsafe, unfit for human habitation, offensive to the neighborhood, and it is dangerous to persons in the vicinity or lawfully passing by the structure. It is hereby declared to be in violation of City ordinances. Pursuant to the authority granted by Ark. Code Ann. SS 14-56-203 (West 2004), and Little Rock Ark. Rev. Code SS 20-28 (1988) the structure has been declared by the City to be a nuisance and detrimental to the public welfare of the citizens of the City of Little Rock.
Therefore, you have fifteen (15) days in which to begin substantial repairs or to demolish the structure. If you fail to comply with this directive, the City will initiate legal proceedings against you and the property to abate the nuisance.
You are required to secure this dwelling and/or structure in an approved manner within seven (7) days. Failure to secure all accessible windows, doors, and/or openings within the allotted time may result in the City taking appropriate action to have this accomplished and the owner will be responsible for all incurred costs. The owner is responsible for maintaining the security of this dwelling and/or structure until all code requirements have been met by either full rehabilitation, as specified by the Little [R]ock Housing Code, or demolition. Please be advised that neither issuance of a permit for repairs or demolition of this structure nor an extension of time granted by the Department of Housing and Neighborhood Programs, relieves the owner of the responsibility to secure the structure.
64 Compl. (Doc. 2) ¶ 44. 65 Id.
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... Sincerely, [Signature] Leroy Jones Code Enforcement Officer.66
Mr. Hampton immediately contacted the City “to determine what the problem was, and he
was only informed that the foundation of the Home was cracked and needed repair.”67 Mr.
Hampton tried to refinance the property or to receive a home improvement loan to fund the needed
repairs.68 Wells Fargo and another bank turned Mr. Hampton down.69 Unable to get a loan, Mr.
Hampton got an estimate for the needed repairs and learned the repairs would cost over $10,000.70
While trying to save that amount, Mr. Hampton boarded up the house and visited the home bi-
monthly to check on it.71 Mr. Hampton also paid to maintain the yard.72
In 2016 and 2017, Wells Fargo and Deutsche Bank “received notices from [the City],
indicating that Deutsche Bank was the owner of the property, and permitted [the City] to believe
that.”73 Wells Fargo and Deutsche Bank did nothing to dispute the City’s belief or to change the
real estate records.74 And while they passed along some of the notices to Mr. Hampton, Wells
Fargo and Deutsche Bank “withheld the vital notices that would have told Mr. Hampton that [the
City] had begun legal proceedings in late 2017.”75 During this timeframe, the City told Wells
Fargo and Deutsche Bank “it was about to demolish” the home, and Wells Fargo and Deutsche
66 Ex. P to Compl. (Doc. 2) at 75. 67 Compl (Doc. 2) ¶ 44. 68 Id. 69 Id. ¶¶ 45–46. 70 Id. ¶ 47. 71 Id. 72 Id. 73 Id. ¶ 54. 74 Id. 75 Id.
9 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 10 of 38
Bank did not tell Mr. Hampton.76 In late 2017 and early 2018, Wells Fargo and Deutsche Bank
communicated with the City to aid in demolishing Mr. Hampton’s home.77 Specifically, Wells
Fargo and Deutsche Bank represented that they “had the right to receive notices, had authority to
consent to a demolition, and that demolition was an acceptable option for them.”78 In January
2018, agents from Wells Fargo and Deutsche Bank entered Mr. Hampton’s home unannounced
and without his consent to further assist the City with its demolition efforts.79
On March 2, 2018, Mr. Hampton’s home “and all of its contents were demolished at Wells
Fargo’s direction.”80 Because Mr. Hampton did not receive any notices from the City, he was
unaware of the impending demolition and only learned of it when he found an empty lot while
conducting one of his regular trips to check on the house.81
There’s one final twist to this plotline. It appears that in March 2019––after Mr. Hampton
filed Hampton I––Wells Fargo’s lawyers (on behalf of Wells Fargo and Deutsche Bank) filed
documents affecting the title to the property at issue.82 Specifically, Wells Fargo’s lawyers filed
an “Affidavit to Clarify Title.”83 The Affidavit asserted that the title to Mr. Hampton’s property
“should be clarified because the Foreclosure Sale occurring more than 14 years ago was a
nullity.”84 The Affidavit shows that Deutsche Bank, as grantor, conveyed the property to Mr.
Hampton, as grantee.85 Wells Fargo and Deutsche Bank appeared not to have told Mr. Hampton
76 Id. 77 Id. ¶ 55. 78 Id. 79 Id. ¶ 56. 80 Id. ¶ 58. 81 Id. ¶ 59. 82 Id. 83 Id. 84 Id.; see also Ex. Y to Compl. (Doc. 2) at 131. 85 Ex. Y to Compl. (Doc. 2) at 131.
10 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 11 of 38
about this conveyance. Mr. Hampton only learned about it later, in May 2019, when the City
began addressing notices to him regarding the condition of the property.86
C. Procedural History of Hampton I
On March 5, 2019, Mr. Hampton sued Wells Fargo in state court for conversion and unjust
enrichment.87 So begins Hampton I. Mr. Hampton alleged a lot of facts about Wells Fargo’s
involvement in Mr. Hampton’s bankruptcy case.88 Specifically, the complaint alleged that Mr.
Hampton and Wells Fargo entered into an agreed-upon order establishing Wells Fargo’s
entitlement to a secured claim of $20,601.53.89 The complaint alleged that Mr. Hampton paid
$15,716.99 on this claim over the life of the bankruptcy plan.90 The complaint noted that the
bankruptcy court released the claim on June 18, 2008, directing Mr. Hampton to begin making
payments to Wells Fargo.91 Mr. Hampton alleged that he made such payments and satisfied the
balance of the claim in February 2010.92 Nevertheless, Wells Fargo continued to demand
payments from Mr. Hampton, which he made because he feared foreclosure.93
In October 2017, the complaint alleged, Mr. Hampton received an accounting from Wells
Fargo showing he had paid $16,375 in post-discharge payments, “which [was] significantly higher
than the $4,884.54 that [Mr. Hampton] was ordered to pay post-discharge.”94 In January 2018,
Mr. Hampton’s counsel requested a complete accounting covering August 2008 through January
86 Compl. (Doc. 2) ¶ 64. 87 Hampton I, 4:19-cv-810-BRW (Doc. 2) at 4–5. Mr. Hampton’s original complaint listed a request for an injunction and punitive damages as additional counts. Id. at 6–7. 88 Id. at 2–4. 89 Id. at 2. 90 Id. at 3. 91 Id. 92 Id. 93 Id. 94 Id. at 4.
11 Case 4:21-cv-00386-LPR Document 16 Filed 03/15/22 Page 12 of 38
2018.95 Wells Fargo’s attorney provided this accounting and stated that Mr. Hampton was
“entitled to a refund amount of $14,289.13.”96 Mr. Hampton countered with a claim in excess of
the proposed refund amount.97 Wells Fargo then changed lawyers and took the position that Mr.
Hampton, “in fact, owe[d] [Wells Fargo] more money.”98 Wells Fargo also indicated to Mr.
Hampton that it had referred Mr. Hampton’s account to its foreclosure unit.99
It is interesting to note the absence of any allegations regarding the 2004 nonjudicial
foreclosure and sale of Mr. Hampton’s home. It appears that Mr. Hampton did not yet know of
the foreclosure or sale to Deutsche Bank. Then, on October 30, 2019, Mr. Hampton filed an
amended complaint.100 Mr. Hampton added Deutsche Bank as a defendant.101 Mr. Hampton added
a claim for fraud, a claim under the Arkansas Deceptive Trade Practices Act (“ADTPA”), and a
claim under the Arkansas Fair Debt Collection Practices Act (“AFDCPA”).102 The ADTPA allows
a person to sue a business for, inter alia, “unconscionable, false, or deceptive” business
practices.103 The AFDCPA “imposes civil liability on debt collectors for certain prohibited debt-
collection practices.”104
The factual allegations in the amended complaint largely mirrored those of the original
complaint. However, Mr. Hampton did add allegations related to the nonjudicial foreclosure that
95 Id. 96 Id. 97 Id. 98 Id. 99 Id. 100 Hampton I (Doc. 4). 101 Id. 102 Id. at 10, 12–15. 103 See Ark. Code Ann. § 4-88-107(a)(10) (listing unconscionable business practices as one type of violation of the ADTPA; id. § 4-88-113(f)(1)(A) (giving a person a cause of action under the ADTPA). 104 McMullen v. McHughes Law Firm, 2015 Ark. 15, at 8, 454 S.W.3d 200, 205.
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occurred in November 2004 (discussed above).105 He must have learned of the 2004 nonjudicial
foreclosure sometime between filing the original complaint and the first amended complaint.
On November 19, 2019, Wells Fargo and Deutsche Bank removed the case to the United
States District Court for the Eastern District of Arkansas.106 Judge Billy Roy Wilson presided over
the case in federal court.107 In September 2020, Mr. Hampton filed a second amended
complaint.108 The second amended complaint added yet another claim, this one under the Real
Estate Settlement and Procedures Act (“RESPA”).109 The Supreme Court says that RESPA
“regulates the market for real estate ‘settlement services’ . . . .”110 Part of RESPA sets out how a
mortgage servicer must respond to borrower inquiries.111 Under the RESPA claim, Mr. Hampton
referenced the March 2018 demolition of the home.112 Specifically, Mr. Hampton alleged that
“Defendants[’] failure to respond properly directly resulted in the home being demolished . . . .”113
Defendants filed a Motion to Dismiss the second amended complaint.114 Judge Wilson
granted the motion in part and denied it in part.115 First and foremost, Judge Wilson explained that
“the law is clear: the foreclosure sale was void ab initio, and had no legal effect.”116 To Judge
105 Hampton I (Doc. 4) at 3–4. 106 Hampton I (Doc. 1). 107 Id. Normally, the case at bar would go back to Judge Wilson. However, one of the lawyers in the case at bar is on Judge Wilson’s recusal list. So random draw of a judge, like what occurred here, is the appropriate result. 108 Hampton I (Doc. 37). The facts section of the second amended complaint was unchanged from the parallel section in the first amended complaint. Compare Hampton I (Doc. 4) ¶¶ 1–74, with Hampton I (Doc. 37) ¶¶ 1–74. 109 Id. (Doc. 37) at 15. 110 Freeman v. Quicken Loans, Inc., 566 U.S. 624, 626 (2012). 111 See 12 U.S.C. § 2605(e). 112 Hampton I (Doc. 37) at 20. 113 Id. at 22. 114 Hampton I (Doc. 42). 115 Hampton I (Doc. 63). 116 Id. at 5. Judge Wilson dismissed Mr. Hampton’s claim for punitive damages, stating that “punitive damages are grounds for relief, not a separate cause of action.” Id. at 6.
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Wilson, this meant that Mr. Hampton maintained ownership of the property and remained liable
“under the mortgage” after the foreclosure sale.117 It also had some negative consequences for Mr.
Hampton’s claims.
Judge Wilson dismissed Mr. Hampton’s claims for conversion, fraud, and for violations of
the AFDCPA.118 With respect to the conversion claim, Judge Wilson ruled that it was fatally
flawed because it was premised on Defendants’ failure to give Mr. Hampton the proceeds of the
void foreclosure sale.119 With respect to fraud, Judge Wilson said this claim was predicated on
Defendants’ alleged false representations that Mr. Hampton was the owner of the property at
issue.120 Based on Judge Wilson’s void-ab-initio ruling, Mr. Hampton was the owner of the
property, and thus Mr. Hampton’s fraud claim failed.121 And with respect to the AFDCPA, Judge
Wilson ruled that (1) Defendants’ demand for payment was valid because the 2004 foreclosure
sale was void ab initio, and (2) the AFDCPA did not apply to Defendants because “[n]either
Defendant [was] a ‘debt collector’ under the AFDCPA.”122
Judge Wilson found the other claims in the case lacking, but Mr. Hampton was allowed
the opportunity to try to amend them.123 With respect to unjust enrichment, Judge Wilson ruled
that (1) this claim failed to the extent it was premised on the idea that Mr. Hampton’s mortgage
debt was fully satisfied with the foreclosure sale and (2) Mr. Hampton could amend his complaint
to the extent this claim was based on payments Mr. Hampton made after he allegedly satisfied the
117 Id. at 5. 118 Id. at 10. 119 Id. at 5. 120 Id. at 6. 121 Id. 122 Id. at 7. 123 Id. at 10.
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mortgage debt in 2010.124 With respect to Mr. Hampton’s claim under the ADTPA, Judge Wilson
ruled that (1) this claim failed to the extent it was based on Defendants’ collection of a debt
discharged in bankruptcy and (2) Mr. Hampton “has not sufficiently pled what actions
[Defendants] took that were unconscionable, false, or deceptive other than sending a bill on a
mortgage that Defendant[s] believed (based on documents provided by Plaintiff) did not mature
until 2021.”125 Judge Wilson granted Mr. Hampton leave to clear up his allegations related to
ADTPA violations.126 Finally, Judge Wilson was dubious of Mr. Hampton’s assertions that
RESPA violations caused the demolition of Mr. Hampton’s home but nonetheless granted Mr.
Hampton leave to amend his RESPA claim.127
In summary, Judge Wilson dismissed Mr. Hampton’s claims for conversion, fraud, and
violations of the AFDCPA.128 And Judge Wilson gave Mr. Hampton the opportunity to “file an
amended complaint clearing up the allegations related to his claims respecting unjust enrichment,
the ADTPA, and RESPA.”129
Mr. Hampton filed a third amended complaint.130 Pursuant to Judge Wilson’s October 10,
2020 Dismissal Order, Mr. Hampton narrowed his claims to unjust enrichment and violations of
the ADTPA and RESPA.131 Mr. Hampton added to his factual allegations by quoting language
from the Deed of Trust and emphasizing that Mr. Hampton did not have notice of the 2004
124 Id. at 5–6. 125 Id. at 7. 126 Id. at 10. 127 Id. at 8–10. 128 Id. at 10. 129 Id. 130 Id. (Doc. 65). 131 Id. at 16, 18, 26.
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foreclosure sale.132 Mr. Hampton also alleged that Wells Fargo failed to credit his account with
the amount Deutsche Bank allegedly paid to purchase Mr. Hampton’s home at foreclosure.133 The
largest addition to Mr. Hampton’s fact section involved allegations concerning the City’s notices
about the condition of the house and the ultimate demolition of the house.134 Many of the
allegations in the third amended complaint in Hampton I appear in the Complaint in the case at
bar.135
In the unjust enrichment section of the third amended complaint, Mr. Hampton pressed the
issue that Wells Fargo failed to properly credit Mr. Hampton with monies from the 2004
foreclosure sale.136 Mr. Hampton also said that if the 2004 foreclosure sale was a nullity, Mr.
Hampton is still “entitled to the time value of these funds for 14 years.”137 Mr. Hampton claimed
the money he paid to Wells Fargo during the bankruptcy went to taxes and insurance on a home
that solely benefited Deutsche Bank.138 Mr. Hampton said that the $30,166.29 he paid after his
bankruptcy flowed from a “snowball effect” begun by Wells Fargo charging interest on an
inaccurate principal amount.139 Additionally, Mr. Hampton alleged that Deutsche Bank deprived
him of his “beneficial interest in the Real Property as homeowner,” which included “interest
payment deductions under the Federal Tax Code . . . .”140 Instead, Deutsche Bank “was entitled
to this deduction for 14 years and retained this benefit . . . .”141
132 Id. at 6. 133 Id. 134 Id. at 10–11, 13. 135 Compare Compl. (Doc. 2) ¶¶ 42–48, 50, 58–59, with Hampton I (Doc. 65) ¶¶ 43–49, 51, 56–57. 136 Hampton I (Doc. 65) at 16. 137 Id. 138 Id. 139 Id. at 17. 140 Id. 141 Id.
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In the ADTPA section of the third amended complaint, Mr. Hampton extensively discussed
Defendants’ conduct during the bankruptcy.142 Mr. Hampton also alleged that Wells Fargo
“willfully, falsely and inaccurately appl[ied] payments made after Mr. Hampton’s bankruptcy to
his mortgage accounts creating false principal balances every month as a matter of policy and
practice.”143 Mr. Hampton said that Wells Fargo covered up this practice and failed to provide
requested information that would have revealed Wells Fargo’s “ongoing practices of maintaining
inaccurate mortgage accounts.”144 Mr. Hampton went on to say that Defendants continue to violate
the ADTPA by “sending notices in an attempt to collect a debt that Defendant[s] have actual
knowledge that Mr. Hampton does not owe and have admitted Mr. Hampton does not owe.”145
For his RESPA claim, Mr. Hampton primarily cited statutory and regulatory provisions
related to RESPA.146 Mr. Hampton alleged that he made an inquiry to Wells Fargo under RESPA
in January 2017.147 He said that Wells Fargo violated RESPA by seeking excessive extensions of
time to respond, and then going “radio silent.”148 Mr. Hampton continued making payments during
this time.149 Mr. Hampton said Wells Fargo should have discovered Mr. Hampton’s overpayment
and refunded him.150 Then, the reasoning goes, Mr. Hampton could have regained ownership of
142 Id. at 26–28. 143 Id. at 27. 144 Id. 145 Id. 146 Id. at 18–23. 147 Id. at 20. 148 Id. at 21. 149 Id. 150 Id.
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the home and been able to address the code violations.151 Mr. Hampton also said that the response
he finally received on October 6, 2017 (the partial accounting), was “woefully inadequate.”152
Mr. Hampton said basically the same thing happened in 2018.153 Mr. Hampton sent a
Qualified Written Request on January 25, 2018.154 “But there is no record that Wells Fargo sent
an acknowledgment” of this request.155 “If Deutsche Bank or Wells Fargo had told Mr. Hampton
he had overpaid and title was not in his name . . ., he would have found out about the demolition
notices and been able to save his home.”156
Defendants filed a Motion to Dismiss the third amended complaint.157 Judge Wilson
granted the Motion.158 Judge Wilson reiterated his previous principal finding: The foreclosure sale
was void ab initio.159 As a result, Mr. Hampton’s unjust enrichment claim again failed to the extent
it depended on the foreclosure sale.160 Judge Wilson went on to describe as conclusory Mr.
Hampton’s assertions that Defendants’ failure to properly apply bankruptcy payments led to Mr.
Hampton owing more interest than he otherwise would have.161 Judge Wilson noted that he
“directed Plaintiff to clear up his allegations,” and concluded that the third amended complaint did
not do so.162 Judge Wilson dismissed Mr. Hampton’s unjust enrichment claim.163
151 Id. 152 Id. at 22. 153 Id. 154 Id. 155 Id. 156 Id. 157 Hampton I (Doc. 69) at 1. 158 Hampton I (Doc. 81) at 1. 159 Id. at 5. 160 Id. at 5–6. 161 Id. at 6. 162 Id. 163 Id. at 9.
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Judge Wilson also dismissed Mr. Hampton’s RESPA claim, concluding that Defendants’
alleged failures to provide required appropriate information in an appropriate RESPA response
was unrelated to the City’s later demolition of the house.164 Judge Wilson further said that “[e]ven
if Defendants directed [the City] to tear down the home . . ., the actions do not support a claim
under RESPA.”165
Regarding Mr. Hampton’s ADTPA claim, Judge Wilson again concluded that this claim
was inextricably tied to the void 2004 foreclosure and therefore “without merit.”166 Judge Wilson
also found that Mr. Hampton’s third amended complaint included a “hodgepodge of conclusory
allegations in an effort to make a claim under the ADTPA.”167 Judge Wilson ruled that Mr.
Hampton did not meet his pleading burden on this claim.168
In the same Order, Judge Wilson addressed Mr. Hampton’s then-pending Motion for Leave
to Amend.169 Judge Wilson noted that Mr. Hampton wanted to file another complaint––this would
have been the fifth complaint in the case––to add claims for negligence, breach of fiduciary duty,
and trespass.170 Judge Wilson concluded, “to a legal certainty,” that Mr. Hampton’s new claims,
“could not satisfy the amount-in-controversy requirement.”171 Judge Wilson explained that the
absence of diversity jurisdiction meant no reason existed for Mr. Hampton to amend his case.172
164 Id. at 8. 165 Id. 166 Id. at 9. 167 Id. 168 Id. Judge Wilson noted that, “to the extent that some claim might be parsed out of the allegations,” he would decline jurisdiction. Id. 169 Id.; see also Hampton I (Doc. 75) (Plaintiff’s Motion to Amend). 170 Hampton I (Doc. 81) at 9. 171 Id. 172 Id. In the third amended complaint, there had been a federal claim: the alleged RESPA violation. Now that this dual claim was dismissed, the new claims would need to fall within the Court’s diversity jurisdiction to go forward.
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Before Judgment was entered, Mr. Hampton filed a Motion to Clarify, asking Judge Wilson
“for an order making it clear that a dismissal of the unjust enrichment claim is without
prejudice.”173 Judge Wilson obliged and stated that Mr. Hampton’s claims for unjust enrichment
and violations of the ADTPA were dismissed without prejudice.174 With respect to Mr. Hampton’s
RESPA claim, Judge Wilson said that “it is impossible for Plaintiff to establish a RESPA claim
under the facts of this case” and that the RESPA claim was dismissed with prejudice.175
D. Procedural History of the Case at Bar
On February 26, 2021, about a month after Judge Wilson entered Judgment in Hampton I,
Mr. Hampton filed the instant lawsuit in state court.176 As mentioned, Mr. Hampton sued Wells
Fargo and Deutsche bank for violations of the ADTPA, unjust enrichment, negligence, breach of
fiduciary duty, and trespass.177 On May 11, 2021, Defendants removed the case to this District
based on diversity-of-citizenship jurisdiction.178 About a week later, Defendants filed the pending
Motion to Dismiss.179
In the Motion, Defendants argue that all of Mr. Hampton’s claims are precluded by either
issue preclusion (Mr. Hampton’s ADTPA and unjust enrichment claims) or claim preclusion (Mr.
Hampton’s negligence, breach-of-fiduciary-duty, and trespass claims).180 Defendants also argue
that Mr. Hampton’s claims fail to state viable causes of action.181 Finally, Defendants argue that
173 Hampton I (Doc. 82-1) at 3. 174 Hampton I (Doc. 85) at 1. 175 Id. 176 Compl. (Doc. 2). 177 Id. ¶¶ 69, 79, 103, 108, 113. 178 Notice of Removal (Doc. 1) at 1–2. 179 Defs.’ Mot. to Dismiss (Doc. 3). 180 Id. at 2. 181 Id.
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Mr. Hampton’s unjust enrichment, ADTPA, and trespass claims are barred by the applicable
statutes of limitations.182 Mr. Hampton disputes all of these points.183
II. Discussion
Mr. Hampton’s claims must be dismissed. Some are barred by the applicable statutes of
limitations. The others are barred by res judicata (claim preclusion).
A. Mr. Hampton’s unjust enrichment, ADTPA, and trespass claims are time-barred.
In a diversity suit, this Court applies “federal pleading standards . . . to the state substantive
law to determine if a complaint makes out a claim under state law.”184 Statute of limitations issues
are considered substantive, and so this Court will “apply the law of Arkansas, the forum state, to
determine statute-of-limitations issues.”185 Both sides agree Arkansas law governs the applicable
limitations periods.186
It is true, of course, that a court must resolve 12(b)(6) dismissal motions based solely on
the complaint.187 But that does not always preclude a 12(b)(6) dismissal on time-bar grounds.
Indeed, the Eighth Circuit “recognize[s] that when it ‘appears from the face of the complaint itself
that the limitation period has run,’ a limitations defense may properly be asserted through a Rule
182 Id. 183 See Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 11) (denying all grounds upon which Defendants’ Motion to Dismiss is based). 184 Karnatcheva v. JPMorgan Chase Bank, N.A., 704 F.3d 545, 548 (8th Cir. 2013). 185 Highland Indus. Park, Inc. v. BEI Def. Sys. Co., 357 F.3d 794, 796 (8th Cir. 2004). 186 See, e.g., Br. in Supp. of Defs.’ Mot. to Dismiss (Doc. 4) at 16 (applying Arkansas law to argue that Mr. Hampton’s unjust enrichment claim is time-barred); Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 2 (listing applicable statutes of limitations based on Arkansas law). 187 A complaint is subject to 12(b)(6) dismissal only when it “fail[s] to state a claim upon which relief can be granted . . . .” Fed R. Civ. P. 12(b)(6). To survive dismissal, then, a complaint must simply contain “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “Factual allegations are taken to be true at the motion-to-dismiss stage because the plaintiff has not had a full opportunity to conduct discovery and thereby uncover facts that support his or her claim.” Ashley v. U.S. Dep't of Interior, 408 F.3d 997, 1000 (8th Cir. 2005). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.
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12(b)(6) motion to dismiss.”188 If it is clear from the face of the complaint that an action is “barred
by the applicable limitations period, the burden shifts to the plaintiff to prove by a preponderance
of the evidence that the statute of limitations was in fact tolled.”189
Defendants argue that Mr. Hampton’s claims for unjust enrichment, trespass, and
violations of the ADTPA are time-barred.190 For the reasons explained below, the Court agrees.
1. Unjust Enrichment
The Eighth Circuit has held that unjust enrichment claims are subject to a three-year statute
of limitations under Arkansas law.191 And Arkansas caselaw is clear that “[t]he limitations period
commences upon occurrence of the wrongful act.”192 Specifically, the Arkansas Supreme Court
says that the period “begins to run when there is a complete and full cause of action, and in the
absence of concealment or wrong, when the injury occurs, not when it is discovered.”193
Importantly, the Eighth Circuit has noted that “Arkansas has repeatedly and consistently rejected
any continuing-tort theory . . . .”194 In other words, the Arkansas Supreme Court has held tight to
the occurrence rule.
188 Varner v. Peterson Farms, 371 F.3d 1011, 1016 (quoting Wycoffe v. Menke, 773 F.2d 983, 984–85 (8th Cir. 1985)). 189 Id.; see also Graham v. Catamaran Health Sols. LLC, 940 F.3d 401, 409 (8th Cir. 2017) (stating that a plaintiff “bears the burden of establishing the applicability of” tolling theories). 190 Br. in Supp. of Defs.’ Mot. to Dismiss (Doc. 4) at 16, 19, 24. 191 Graham, 940 F.3d at 408. 192 Id. 193 Quality Optical of Jonesboro, Inc. v. Trusty Optical, LLC, 365 Ark. 106, 110, 225 S.W.3d 369, 372 (2006) (internal citation omitted). 194 Graham, 940 F.3d at 409; see also Trusty Optical, 365 Ark. at 110, 225 S.W.3d at 372 (“As we have repeatedly stated, this court does not recognize a ‘continuing tort’ theory.”); Chalmers v. Toyota Motor Sales, USA, Inc., 326 Ark. 895, 906, 935 S.W.2d 258, 264 (1996) (“[W]e have specifically rejected the continuing-tort theory of tolling the statute of limitations as inconsistent with the General Assembly's intent in stating that limitations begin to run at the date of the wrongful act complained of and no other time.”) (citation and internal quotation marks omitted).
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Under Arkansas caselaw, “[t]o find unjust enrichment, a party must have received
something of value, to which he or she is not entitled and which he or she must restore.”195 As in
Hampton I, Mr. Hampton’s instant Complaint presents two major theories of unjust enrichment.
The first theory relies on the 2004 foreclosure sale.196 Mr. Hampton argues that “Deutsche Bank
failed to remit to Mr. Hampton the surplus proceeds.”197 He also says Deutsche Bank benefited
from Mr. Hampton’s payment of taxes and insurance on the foreclosed property during the life of
Mr. Hampton’s bankruptcy.198 This conduct occurred well outside the limitations period.
According to the Complaint, the foreclosure sale happened on November 2, 2004.199 And Wells
Fargo’s secured claim was released from the bankruptcy plan on June 18, 2008.200 Even if the
Court uses this later date for the commencement of the limitations period, any claim for unjust
enrichment factually dependent on the foreclosure and bankruptcy proceedings must have been
brought before June 18, 2011.201
For his second theory, Mr. Hampton says that “the doctrine of unjust enrichment requires
Wells Fargo to return . . . all sums of money received after the satisfaction of the Deed of Trust
Note in 2010.”202 (Recall that Mr. Hampton says that he paid off the Deed of Trust Note in
February 2010.203) Mr. Hampton contends that Wells Fargo “has continued, every month, to send
195 Campbell v. Asbury Auto., LLC, 2011 Ark. 157, at 21, 381 S.W.3d 21, 36. 196 Compl. (Doc. 2) ¶ 71. 197 Id. 198 Id. ¶ 73. 199 Id. ¶ 14. 200 Ex. L to Compl. (Doc. 2) at 49. 201 Mr. Hampton, perhaps wisely, seems to give up the ghost on this unjust-enrichment theory. In his briefing in response to Defendants’ Motion to Dismiss, Mr. Hampton says that he is “not suing for the foreclosure sale or the bankruptcy case.” Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 1. 202 Compl. (Doc. 2) ¶ 77. 203 Id. ¶ 37.
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payment demands to Mr. Hampton in an attempt to collect a debt that Mr. Hampton” doesn’t
owe.204 Mr. Hampton says he made timely monthly payments to Wells Fargo until October
2017.205 Taking all that as true, as the Court must, Mr. Hampton made a March 2010 payment to
Wells Fargo after he satisfied the debt. When he made that payment, he had a “complete and full
cause of action” for unjust enrichment.206 In other words, the limitations period for Mr. Hampton’s
unjust enrichment claim ran, at the latest, in March 2013. But he didn’t bring suit (Hampton I)
until six years later––in March 2019. So, Mr. Hampton’s unjust enrichment claim was nearly six
years late when he asserted it in Hampton I.
Mr. Hampton offers a few arguments in response. His first argument is that Hampton I
was timely filed because he made his last payment in October 2017 (less than three years before
Hampton I was filed).207 Mr. Hampton argues that, by operation of the Arkansas savings statute,
his unjust enrichment claim in the case at bar is still timely.208 The problem with this argument is
the fact that Hampton I was filed well beyond the statute of limitations. The Arkansas savings
statute applies when a plaintiff suffers a nonsuit of a timely filed action.209 If that happens, the
plaintiff can “commence a new action within one (1) year after the nonsuit suffered . . . .”210
Because Hampton I was untimely, the savings statute provides no quarter to Mr. Hampton.211
204 Id. ¶ 40. 205 Id. ¶ 49. 206 Trusty Optical, 365 Ark. at 110, 225 S.W.3d at 372. 207 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 2–3. 208 Id. 209 Ark. Code Ann. § 16-56-126(a)(2). 210 Id. 211 See Elzea v. Perry, 340 Ark. 588, 592, 12 S.W.3d 213, 216 (2000) (stating that the savings “statute is only used when the original statute of limitations period expires in the interim between the filing of the complaint and the time at which either a nonsuit is entered or the judgment is reversed or arrested”).
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Mr. Hampton seems to think that “each overpayment was a new and different injury.”212
From this premise, Mr. Hampton argues that his “payments between March 2016 (3 years before
the Hampton I was filed) and October 2017 should be recoverable.”213 Mr. Hampton provides no
caselaw to support this argument. The Court hasn’t found any either. Indeed, the Eighth Circuit’s
decision applying Arkansas law in Graham v. Catamaran Health Solutions, LLC cuts the other
way.214 There, a plaintiff sued an insurer for unjust enrichment in 2014 based on an allegedly
substandard policy that he purchased in 2001 and on which he continued making payments until
2014.215 The Eighth Circuit used 2001 (not 2014) as the time when plaintiff’s unjust enrichment
claim arose.216 The Eighth Circuit reasoned that, “[a]lthough [plaintiff] continued paying
premiums through 2014, the inapplicability of the continuing-tort theory makes the ongoing nature
of his payments and the insurance relationship immaterial.”217
So too here. Mr. Hampton clearly alleges that Defendants’ post-February 2010 receipt of
Mr. Hampton’s monthly payments gave rise to an unjust enrichment claim. Accordingly, that is
when the limitations period began to run. The fact that Defendants continued to receive these
payments until October 2017 goes to the amount of Mr. Hampton’s damages flowing from
Defendants’ wrongful act (charging him for a debt he didn’t owe), but each month’s bill does not
give rise to a discrete claim for unjust enrichment.218
212 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 3. 213 Id. 214 940 F.3d at 408–09. 215 Id. at 405. 216 See id. at 409 (discussing the fact that plaintiff’s allegations surrounding “marketing, underwriting, and purchase of his policy occurred in 2001” and stating that plaintiff’s continued payments were of no moment). 217 Id. 218 The best case for Mr. Hampton is Pennington v. BHP Billiton Petroleum (Fayetteville), LLC. In Pennington the Arkansas Supreme Court considered the following certified question: In the oil and gas leases at issues in this case, does the five-year statute of limitations set forth in Arkansas Code section 16-56-111(a) bar Plaintiffs from bringing a breach of contract lawsuit for
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Mr. Hampton also argues that the limitations period on his unjust enrichment claim did not
begin until Wells Fargo said he was entitled to a refund on June 8, 2018.219 As stated above, “[t]he
statutory limitations period begins to run when there is a complete and full cause of action, and in
the absence of concealment or wrong, when the injury occurs, not when it is discovered.”220 So,
if Mr. Hampton is arguing that his claim did not accrue until he discovered the injury, Arkansas
law clearly forecloses that argument. However, to be safe, the Court construes this argument as
raising fraudulent concealment as a reason to toll the limitations period.
The Eighth Circuit, applying Arkansas law, says that “[t]he concealment of a wrong
through misrepresentations . . . may toll the limitations period.”221 But “[c]oncealment of facts,
no matter how fraudulent or otherwise wrongful, has no effect on the running of a statute of
limitations if the plaintiffs could have discovered the fraud or sufficient other facts on which to
alleged underpayments of monthly royalties that occurred within the statute of limitations period because similar underpayments of monthly royalties took place outside of the limitations period? 2021 Ark. 179, at 3, 631 S.W.3d 555, 556–57. The Arkansas Supreme Court answered in the negative. Id., 631 S.W.3d at 557. The court reasoned that the leases at issue required defendants to “remit payment based on gross proceeds, a monthly calculation.” Id. at 6, 631 S.W.3d at 558. Plaintiffs had alleged that defendants improperly made this calculation, which infected the payments they disbursed each month. Id., 631 S.W.3d at 558. The court said “[t]he damage element of breach of contract would have been established monthly and, potentially, in a different amount each month.” Id., 631 S.W.3d at 558. Each underpayment thus constituted a “separate and singular breach[] under Arkansas law.” Id., 631 S.W.3d at 558. Mr. Hampton’s case doesn’t fall under this rubric. Assuming Mr. Hampton paid off the Deed of Trust when he said he did, no contractual obligations remained between Defendants and Mr. Hampton. From that point on, neither party was contractually bound to the other, and thus the “separate-contract-breach” theory is inapplicable here. An unjust enrichment claim like Mr. Hampton’s is more like a tort claim where repeat damages might flow from a single wrongful event. Perhaps put a little differently, unlike successive breaches of a contract that are separate and distinct claims in and of themselves, an unjust enrichment claim like Mr. Hampton’s accrues once at a single time period, even if the damages from that claim increase over time because of additional unnecessary payments. 219 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 3. 220 Trusty Optical, 365 Ark. at 110, 225 S.W.3d at 372 (emphasis added). 221 Graham, 940 F.3d at 409.
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bring their lawsuit, through a reasonable effort on their part.”222 Mr. Hampton, “as the plaintiff,
bears the burden of establishing the applicability of this tolling theory.”223
According to Mr. Hampton, he continued paying Wells Fargo after February 2010 because
he was threatened with the loss of his property (not because Wells Fargo duped him into believing
that he still owed on the property).224 Nowhere in the Complaint or in the briefing does Mr.
Hampton say that Wells Fargo prevented him from discovering the fact that he had already paid
off the debt.225 Mr. Hampton does not allege that he requested payment records during the
limitations period. Mr. Hampton does not allege that Defendants engaged in “some positive act
of fraud, something so furtively planned and secretly executed as to keep [Mr. Hampton’s] cause[s]
of action concealed, or perpetrated in a way that conceals itself.”226 In fact, Wells Fargo sent Mr.
Hampton payment demands monthly. And these demands listed what Wells Fargo represented to
be Mr. Hampton’s unpaid principal balance each month.227 Any reasonable effort on Mr.
Hampton’s part during the limitations period would have revealed that he did not owe the money
Defendants claimed he did. But Mr. Hampton did not inquire into his payment history with
Defendants until October 2017––over seven years after he allegedly paid off the loan. In short, if
Mr. Hampton did pay on a debt he did not owe for as long as he says he did, he certainly alleges
222 Varner, 371 F.3d at 1017; see also Graham, 940 F.3d at 409. 223 Graham, 940 F.3d at 409. 224 Compl. (Doc. 2) ¶ 41. 225 See Chalmers, 326 Ark. at 902, 935 S.W.2d at 261–62 (“No mere ignorance on the part of the plaintiff of his rights, nor the mere silence of one who is under no obligation to speak, will prevent the statute bar. There must be some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiff’s cause of action concealed or perpetrated in a way that it conceals itself. And if the plaintiff, by reasonable diligence, might have detected the fraud he is presumed to have had reasonable knowledge of it.”) (internal quotations and citations omitted). 226 Delanno, Inc. v. Peace, 366 Ark. 542, 545, 237 S.W.3d 81, 84 (2006). 227 See, e.g., Ex. W to Compl. (Doc. 2) at 124.
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no facts showing that a reasonable effort on his part would not have uncovered Defendants’ alleged
perfidy.
Defendants have sufficiently established that Mr. Hampton’s unjust enrichment claim is
time-barred. Mr. Hampton has not carried his burden of establishing an applicable tolling
provision. Mr. Hampton’s unjust enrichment claim will be dismissed with prejudice based on the
statute of limitations.
2. ADTPA
The same result obtains on Mr. Hampton’s ADTPA claim. The statute of limitations under
the ADTPA is five years.228 The limitations period begins “on the date of the occurrence of the
violation or the date upon which the cause of action arises.”229 Under the ADTPA, “[a] person
who suffers an actual financial loss” because of a violation of the ADTPA can “bring an action to
recover” his or her loss caused by the violation.230 The plain language of this statute allows a
person to sue under the statute when that person suffers a loss.
Relying on the ADTPA, Mr. Hampton first takes aim at Defendants’ conduct surrounding
the foreclosure sale and their application of bankruptcy payments to Mr. Hampton’s loan
balance.231 Any ADTPA cause of action arising out of this conduct arose, at the latest, in June
2008, when the bankruptcy court released the secured claim and directed Mr. Hampton to resume
making direct payments to Wells Fargo. Mr. Hampton had five years from that time to pursue an
ADTPA claim based on the foreclosure and bankruptcy issues. He did not.
228 Ark. Code Ann. § 4-88-115. 229 Id. 230 Id. § 4-88-13(f). 231 See Compl. (Doc. 2) ¶¶ 81–88.
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Mr. Hampton also alleges Defendants violated the ADTPA by “willfully, falsely and
inaccurately apply[ing] payments made after Mr. Hampton’s bankruptcy to his mortgage accounts
creating false principal balances every month as a matter of policy and practice.”232 Defendants,
Mr. Hampton alleges, “deceptively charged Mr. Hampton interest on false unpaid principal
balances . . . .”233 If this is true, and if Mr. Hampton paid off the principal amount when he says
he did (February 2010), any ADTPA cause of action based on this conduct arose, at the latest,
when Mr. Hampton started paying these deceptive amounts (suffered a loss) in March 2010. This
means the limitations period ran on this potential claim in March 2015, nearly four years before
he filed Hampton I. Defendants have established that Mr. Hampton’s ADTPA claim is time-
barred.
Mr. Hampton tries to get around his timeliness issues by asserting that his claims “boil
down to events occurring during the last three years prior to [the] filing of [Hampton I].”234 In that
time period, Mr. Hampton argues that “Defendants’ fraudulently claimed to Plaintiff . . . that he
owed them money and was in default and threatened to take his home, and thus got him to pay
them money . . . .”235 But Mr. Hampton does not allege that Defendants somehow changed tacks
between March 2010 (when Mr. Hampton made the first payment after allegedly paying off the
loan) and October 2017 (the last month in which Mr. Hampton made a payment). Mr. Hampton’s
entire ADTPA theory flows from his allegations that Defendants failed to properly credit Mr.
Hampton’s payments, which led Defendants to continuously demand monthly payments from Mr.
Hampton for a debt he did not owe as of February 2010. That is the alleged “unconscionable,
232 Id. ¶ 87. 233 Id. ¶ 88. 234 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 1. The word “fraudulent” appears once in Mr. Hampton’s Complaint. See Compl. (Doc. 2) ¶ 29. Mr. Hampton has not brought a fraud claim in this action. 235 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 1.
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false, or deceptive act or practice . . . .”236 That the practice allegedly continues to this day does
not make it anything other than a single ADTPA violation with ever-increasing damages.
For the same reasons discussed in the unjust enrichment section, Mr. Hampton has not met
his burden of establishing any tolling theory that would save his ADTPA claim from being time-
barred. The Court will dismiss Mr. Hampton’s ADTPA claim with prejudice.
3. Trespass
Mr. Hampton alleges that, “[i]n January 2018, Defendants sent their agents into Mr.
Hampton’s home, as part of the process of aiding [the City] in the demolition of Mr. Hampton’s
home, without Mr. Hampton’s consent, and without any legal right to do so.”237 This is the factual
basis for Mr. Hampton’s trespass claim.
Under Arkansas law, the statute of limitations for trespass is three years.238 Mr. Hampton
filed the Complaint in the case at bar on February 26, 2021.239 Mr. Hampton’s trespass claim was
not in Hampton I. Thus, Mr. Hampton’s trespass claim only reaches back to February 26, 2018,
three years before the Complaint in the case at bar. Assuming Defendants entered Mr. Hampton’s
home on the last day of January 2018, Mr. Hampton’s trespass claim accrued over three years
before the filing of the instant Complaint.
Perhaps recognizing this, Mr. Hampton argues that his trespass claim is timely based on
Rule 15(c)(1)(B) of the Federal Rules of Civil Procedure.240 Under that Rule, “[a]n amendment to
a pleading relates back to the date of the original pleading when the amendment asserts a claim or
236 Ark. Code Ann. § 4-88-107(10). 237 Compl. (Doc. 2) ¶ 56. This is a strange allegation considering Mr. Hampton’s numerous allegations that Defendants owned the house and that Mr. Hampton was paying taxes and insurance on a house he didn’t own. 238 Ark. Code Ann. § 16-56-105(4). 239 Compl. (Doc. 2) at 1. 240 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 4.
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defense that arose out of the conduct, transaction, or occurrence set out––or attempted to be set
out––in the original pleading . . . .”241 Mr. Hampton says that “a comparison of the current
Complaint to the Third Amended and proposed Fourth Amended Complaint shows that the claim[]
for . . . trespass arise[s] out of the same facts and therefore should relate back.”242 He means that
the trespass claim was not in the third amended complaint in Hampton I, but in the unsuccessfully
proposed fourth amended complaint.
This argument fails. Rule 15(c)(1)(b) expressly deals with whether an amended pleading
relates back to an original pleading in the same case.243 It does not allow a pleading in one case to
relate back to a pleading in another case. The Rule simply does not apply to the present
circumstances.244
Defendants have sufficiently raised a limitations defense based on the face of the
Complaint. Mr. Hampton has not met his burden of establishing any applicable tolling provision.
Mr. Hampton’s trespass claim is thus time-barred. The Court will dismiss this claim with
prejudice.
B. Res judicata bars Mr. Hampton’s negligence and breach-of-fiduciary-duty claims.
For his negligence claim, Mr. Hampton asserts that Defendants owed him a duty of care to
provide him fix-or-demolish notices from the City.245 For his breach-of-fiduciary-duty claim, Mr.
241 Fed. R. Civ. P. 15(c)(1)(B). Rule 15(c)(1) of the Arkansas Rules of Civil Procedure mirrors the federal rule. 242 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 4. 243 Fed. R. Civ. P. 15(c)(1). 244 For what it’s worth, the Arkansas savings statute would not toll Mr. Hampton’s trespass claim. The Eighth Circuit has explained that the Arkansas savings statute “allows a party to file a new complaint within one year of a nonsuit as long as the cause of action is ‘the same in substance as the [original complaint] at the time the latter was nonsuited.’” Dillaha v. Yamaha Motor Corp., U.S.A., 23 F.3d 1376, 1377 (8th Cir. 1994) (quoting Morgan Distrib. Co. v. Unidynamic Corp., 868 F.2d 992, 994 (8th Cir.1989)). Mr. Hampton’s trespass claim depends upon elements of proof wholly unlike any claim he brought in Hampton I. Thus, this claim is not the same in substance. 245 Compl. (Doc. 2) ¶¶ 104–06.
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Hampton asserts that (as his agent) Defendants “created a special relationship with Mr. Hampton”
to receive fix-or-demolish notices from the City and “therefore had a fiduciary obligation to give
him any information received.”246 The breach of each of these duties, Mr. Hampton says, resulted
in the demolition of his house.247 Defendants say that Mr. Hampton could have and should have
brought these claims in Hampton I. His failure to do so, their argument continues, means that he
missed his chance to bring these claims.248 Essentially, Defendants argue that res judicata bars
Mr. Hampton’s negligence and breach-of-fiduciary claims.249
Res judicata questions generally require courts to consider pleadings, filings, and orders in
prior cases. Nonetheless, the Eighth Circuit is clear that courts can, in appropriate cases, grant res-
judicata dismissals under Rule 12(b)(6).250 That’s for at least two reasons. First, courts may look
to “public records and materials embraced by the complaint” and “material[s] attached to the
complaint.”251 Second, and additionally, courts “may consider ‘some materials that are part of the
public record or do not contradict the complaint.’”252 Mr. Hampton has not argued that the Court
should ignore the existence of Hampton I.
246 Id. ¶¶ 109–11. 247 Id. ¶¶ 104–06, 109–11. 248 Br. in Supp. of Defs.’ Mot. to Dismiss (Doc. 4) at 11. Defendants also argue that Mr. Hampton’s trespass claim is barred by res judicata. Id. Because the Court has already concluded that this claim is time-barred, it will not address it here. 249 Id. 250 See, e.g., C.H. Robinson Worldwide, Inc. v. Lobrano, 695 F.3d 758, 764 (8th Cir. 2012) (affirming a dismissal under Rule 12(b)(6) on the merits of a res judicata defense). 251 Id. at 763. In the materials attached to the instant Complaint, there are at least two references to the lawsuit filed in Hampton I. First, in a letter dated January 25, 2018, Mr. Hampton’s lawyer threatens Wells Fargo with “the immediate filing of a lawsuit to pursue legal and equitable relief . . . .” Ex. S to Compl. (Doc. 2) at 90. Second, in an email dated June 13, 2018, Mr. Hampton’s lawyer tells Wells Fargo that she has “advised [her] client that he has the option to seek judicial relief” if the settlement talks fell through. Ex. U to Compl. (Doc. 2) at 103. The lawsuit in Hampton I followed. The existence of that first lawsuit is thus necessarily embraced in the materials attached to the complaint in the case at bar. 252 Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (quoting Missouri ex rel. Nixon v. Coeur D’Alene Tribe, 164 F.3d 1102, 1107 (8th Cir. 1999)).
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The Eighth Circuit has made clear that state law applies to the res judicata question even
though Hampton I was decided in federal court and the instant case is in federal court.253 Here,
everyone agrees Arkansas law applies.254 Under Arkansas law, res judicata has two facets, “one
being claim preclusion and the other issue preclusion.”255 With respect to the negligence and
breach-of-fiduciary-duty claims, Defendants are only arguing claim preclusion.256
Claim preclusion “bars not only the relitigation of claims that were actually litigated in the
first suit, but also those which could have been litigated.”257 So “[w]hen a case is based on the
same events as the subject matter of a previous lawsuit, claim preclusion will apply even if the
subsequent lawsuit raises new legal issues and seeks additional remedies.”258 The Arkansas
Supreme Court has set forth the following general test for claim preclusion:
[t]he claim-preclusion aspect of res judicata bars relitigation of a subsequent suit when (1) the first suit resulted in a final judgment on the merits; (2) the first suit was based upon proper jurisdiction; (3) the first suit was fully contested in good faith; (4) both suits involve the same claim or cause of action; and (5) both suits involve the same parties or their privies.259
For the reasons discussed below, the Court concludes that the doctrine of claim preclusion is fatal
to Mr. Hampton’s negligence and-breach-of-fiduciary-duty claims.
First, Hampton I resulted in a final judgment on the merits, at least with respect to some
claims. Under Arkansas caselaw, a dismissal with prejudice amounts to a “final judgment” for res
253 See St. Paul Fire and Marine Ins. Co. v. Compaq Comput. Corp., 539 F.3d 809, 822 (8th Cir. 2008) (stating that although a “previous action was rendered in the federal district court,” the Eighth Circuit applies state law on the “substantive question of res judicata because state law controls this issue in a diversity action”). 254 See, e.g., Br. in Supp. of Defs.’ Mot. to Dismiss (Doc. 4) at 12 (“State preclusion law applies in this diversity action.”); Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 10–11 (citing Arkansas state law to oppose Defendants’ res-judicata arguments). 255 Baptist Health v. Murphy, 2010 Ark. 358, at 7, 373 S.W.3d 269, 278. 256 Br. in Supp. of Defs.’ Mot. to Dismiss (Doc. 4) at 12. 257 Baptist Health, 2010 Ark. 358, at 7, 373 S.W.3d at 278. 258 Id., 373 S.W.3d at 278. 259 Id. at 8, 373 S.W.3d at 278.
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judicata purposes.260 And Mr. Hampton concedes that “some claims were dismissed with
prejudice. . . .”261 Indeed, he acknowledges that “there would be res judicata as to those specific
claims.”262 That’s not surprising. Judge Wilson dismissed with prejudice Mr. Hampton’s claims
based on fraud, conversion, AFDCPA violations, and RESPA violations. With respect to the
RESPA violation, Judge Wilson specifically said the dismissal was with prejudice.263 And with
respect to fraud, conversion, and AFDCPA violations, the Eighth Circuit has made clear that Judge
Wilson’s dismissal of those claims for failure to state viable claims should be considered “an
adjudication on the merits.”264
Second, the Hamption I court properly exercised jurisdiction over the case. Mr. Hampton
does not contest the Hampton I court’s assertion of diversity jurisdiction over the case. And this
Court’s review of the Hampton I case suggests the existence of diversity jurisdiction there. Mr.
Hampton’s first complaint in Hampton I named only Wells Fargo.265 Mr. Hampton’s amended
complaint, filed on October 30, 2019, added Deutsche Bank as a defendant.266 Based on diversity
jurisdiction, Deutsche Bank removed the case twenty days after Mr. Hampton filed the amended
complaint (on November 19, 2019).267 The removal was timely because it occurred within thirty
260 Brown v. Pine Bluff Nursing Home, 359 Ark. 471, 474, 199 S.W.3d 45, 48 (2004); see also Curry v. Hanna, 228 Ark. 280, 283, 307 S.W.2d 77, 80 (1957) (“The rule appears to be well established that a ‘dismissal with prejudice’ is equivalent to a final judgment insofar as the application of the doctrine of res judicata is concerned.”). 261 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 11. 262 Id. 263 Hampton I (Doc. 85) at 1. 264 Ahmed v. United States, 147 F.3d 791, 797–98 (8th Cir. 1998); see also Fed. R. Civ. P. 41(b) (stating that “[u]nless the dismissal order states otherwise, a dismissal under this subdivision (b) and any dismissal under this rule–– except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19––operates as an adjudication on the merits”). Judge Wilson’s Order did not state otherwise. See Hampton I (Doc. 63) at 10 (“The causes of action for conversion, fraud/constructive fraud, punitive damages, and violations of the AFDCPA are DISMISSED.”). 265 Hampton I (Doc. 2). 266 Id. (Doc. 4). 267 Id. at 1–2.
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days of Deutsche Bank being served with process.268 The parties were diverse. And it was a legal
possibility that the damages sought exceeded $75,000.269
Third, Hampton I was fully contested in good faith. Hampton I involved extensive
litigation. It began in state court on March 5, 2019, and did not reach judgment until January
2021.270 Over this nearly two-year span, Mr. Hampton had the opportunity to file four iterations
of his complaint.271 Mr. Hampton’s complaints (and associated exhibits) grew with each
iteration.272 For their part, Defendants had to make and fully litigate two separate dismissal
motions.273 Mr. Hampton thoroughly defended against these motions.274 And in between the two
dismissal motions, Mr. Hampton was given the chance to fix his complaints to try and avoid
dismissal.275 In short, Hampton I was fully contested in good faith.276
268 See 28 U.S.C. § 1446(b)(1) (stating that a “notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based”); Marano Enters. of Kansas v. Z-Teca Rests., L.P., 254 F.3d 753, 757 (8th Cir. 2001) (holding that “later-served defendants . . . had thirty days from the date of service on them to file a notice of removal with the unanimous consent of their co-defendants, even though the first-served co-defendants did not file a notice of removal within thirty days of service on them”). 269 Mr. Hampton sought specific damages in excess of $45,000. Hampton I (Doc. 1) at 3. He also sought statutory damages. Id. He also sought punitive damages. Id. He also sought attorneys’ fees. Id. At one point, he sent a demand letter to Defendants seeking $225,000. Id.; see also Applied Energy of AR-LA-MS, Inc., No. 5:14-cv- 00301-JLH, 2014 WL 1269866, at *1 (E.D. Ark. Oct. 29, 2014) (stating that a settlement demand is probative evidence on the amount-in-controversy question). 270 See Hampton I (Docs. 2, 86) 271 Hampton I (Docs. 2, 4, 37, 65). 272 Compare Hampton I (Doc. 2) (original complaint with nineteen fact paragraphs and 78 pages of exhibits), with Hampton I (Doc. 65) (third amended complaint with 60 fact paragraphs and 131 pages of exhibits). 273 Hampton I (Docs. 42, 69). 274 Hampton I (Docs. 49, 50, 73, 74). 275 Hampton I (Doc. 63) (Judge Wilson’s October 21, 2021 Dismissal Order allowing Mr. Hampton the opportunity to amend his complaint). 276 Discovery also ran its course. Judge Wilson’s Final Scheduling Order initially set the discovery deadline as August 19, 2020. Hampton I (Doc. 10). Mr. Hampton asked Judge Wilson for two extensions of the discovery deadline, and Judge Wilson obliged, ultimately setting October 7, 2020 as the cutoff. See Hampton I (Doc. 18) (Mr. Hampton asking for first extension of the discovery deadline); Hampton I (Doc. 35) (Mr. Hampton asking for a second extension of the discovery deadline); Hampton I (Doc. 39) (setting October 7, 2020 discovery cutoff date). During the extended discovery period and just beyond it, Mr. Hampton filed two motions to compel and two motions for sanctions. See Hampton I (Docs. 20, 51, 57, 59). All to say, Hampton I involved extensive discovery (and discovery disputes). Some of the discovery was even used by Mr. Hampton in his amended complaints.
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Fourth, both suits involve the same claims. In Hampton I, Mr. Hampton specifically
alleged that Defendants’ failures to abide by duties set out by RESPA caused the demolition of his
house. The crux of Mr. Hampton’s RESPA argument was that (1) Defendants failed to properly
investigate and respond to his RESPA inquiries (e.g., the request for an accounting of monies owed
and paid by Mr. Hampton to Defendants) and (2) if they had properly investigated and responded
to his RESPA inquiries, “he would have found out about the demolition notices and been able to
save his home.”277 His third amended complaint reads as follows:
Because Wells Fargo failed to reasonably investigate Mr. Hampton’s mortgage file, only Deutsche Bank received the legal notices from the [City] regarding code violations. These legal notices would have given Mr. Hampton the opportunity to work with the [City] to repair the property or seek extensions as available to homeowners prior to demolition. These legal notices would have, at the very base level, given Mr. Hampton notice that the property would be demolished so he could remove his personal possessions and family memories before they were destroyed as trash.278
In the case at bar, Mr. Hampton alleges that Defendants had either a regular or heightened duty to
provide him with the fix-or-demolish notices from the City. Mr. Hampton says that the breach of
those duties caused the demolition of his house. These new duties are strikingly similar to the
RESPA duties in Hampton I. That’s a problem for Mr. Hampton. The Arkansas Supreme Court
is clear: “When a case is based on the same events as the subject matter of a previous lawsuit,
claim preclusion will apply even if the subsequent lawsuit raises new legal issues and seeks
additional remedies.”279 That’s exactly what is happening here. In fact, Mr. Hampton basically
concedes this point. He says that his third amended complaint in Hampton I “specifically alleged
facts that because of Defendants’ actions the house was demolished.”280 Mr. Hampton also says
277 Hampton I (Doc. 65) at 22. 278 Id. at 25. 279 Baptist Health, 2010 Ark. 358, at 8, 373 S.W.3d at 278. 280 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 4.
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his claims for negligence and breach of fiduciary duty “arise out of the same facts” alleged in the
third amended complaint.281
The only difference between the case at bar and Hampton I is Mr. Hampton’s reliance on
state tort law instead of RESPA. But dressing up the same factual claim in a new legal jacket
doesn’t avoid claim preclusion. As such, for the purposes of res judicata, “both suits involve the
same claim or cause of action.”282
Fifth and finally, both suits involve the same parties. Mr. Hampton is the Plaintiff in both
cases. And Wells Fargo and Deutsche Bank are the Defendants in both cases.
All factors for res judicata are met here. And Mr. Hampton’s arguments against application
of res judicata are not persuasive. Mr. Hampton points out that he attempted to include his
negligence and breach-of-fiduciary-duty claims in a proposed fourth amended complaint in
Hampton I.283 Mr. Hampton argues that Judge Wilson’s denial of leave to file the fourth amended
complaint means that “[t]here was no ruling that no claim was stated” with respect to negligence
and breach of fiduciary duty.284 Technically, that’s true. But it also misses the point. Res judicata
bars new legal theories based on the same subject matter litigated in a prior case. As discussed
above, the exact same factual subject matter was litigated fully in Hampton I. That it was litigated
under different legal nomenclature is of no moment.
Relatedly, Mr. Hampton argues that “[r]es judicata ‘does not bar a subsequent action where
... a party was prohibited from asserting its claim.’”285 The Court takes this to mean that Mr.
281 Id. 282 Baptist Health, 2010 Ark. 358, at 8, 373 S.W.3d at 278. 283 Br. in Supp. of Pl.’s Resp. to Defs.’ Mot. to Dismiss (Doc. 12) at 11. 284 Id. 285 Id. (quoting D & T Pure Tr. v. DWB, Inc., LLC, 2019 Ark. App. 122, at 7, 572 S.W.3d 451, 456).
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Hampton believes that Judge Wilson’s denial of leave to file the fourth amended complaint
prohibited him from bringing his negligence and breach-of-fiduciary-duty claims. This argument
is unavailing. Recall that Mr. Hampton filed four different complaints in Hampton I. Judge
Wilson freely granted Mr. Hampton leave to file two of those complaints. Before filing his third
amended complaint, Mr. Hampton knew (or had at least sufficiently alleged) that (1) property
records showed Deutsche Bank as owning the house, (2) Deutsche Bank had received multiple
notices from the City regarding the condition of the house and the potential for demolition, (3)
neither Defendant ever forwarded any notices to Mr. Hampton, and (4) that the house was
demolished (nearly a year before filing Hampton I). Nothing prevented Mr. Hampton from
bringing his negligence or breach-of-fiduciary claims in the third amended complaint.286
CONCLUSION
For the foregoing reasons, Defendants’ Motion to Dismiss is GRANTED in its entirety.
The Court will DISMISS all claims against Defendants with prejudice.
IT IS SO ORDERED this 15th day of March 2022.
________________________________ LEE P. RUDOFSKY UNITED STATES DISTRICT JUDGE
286 Mr. Hampton’s other arguments against the application of res judicata to these claims are similarly unpersuasive.
Related
Cite This Page — Counsel Stack
Hampton v. Wells Fargo Bank NA, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hampton-v-wells-fargo-bank-na-ared-2022.