Webb v. Guaranteed Rate Inc. et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
Anthony-Cortez: Webb,
Plaintiff,
v.
Guaranteed Rate Inc.,
Defendant.
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Case No. 1:25-cv-652
Judge Susan J. Dlott
Order
Plaintiff Anthony-Cortez: Webb sued Defendant Guaranteed Rate Inc. alleging that the
company engaged in wrongful or fraudulent conduct when the parties entered to a residential
Mortgage and Note. (Doc. 3.) Magistrate Judge Stephanie K. Bowman issued a Report and
Recommendation recommending that the Court dismiss the Complaint pursuant to 28 U.S.C.
§ 1915(e)(2)(B). (Doc. 4.) Webb filed an Objection to the Report and Recommendation. (Doc.
6.) Because the Court agrees with the Magistrate Judge that Webb failed to state a claim upon
which relief can be granted, the Court will ADOPT the Report and Recommendation,
OVERRULE the Objection, and DISMISS WITH PREJUDICE the Complaint.
I.
Title 28 U.S.C. § 636(b)(1)(B) & (C) and Federal Rule of Civil Procedure 72(b)(1)
authorize magistrate judges to make recommendations concerning dispositive matters that have
been referred to them. Parties then have fourteen days to make, file, and serve specific written
objections to the report and recommendations. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(2).
If a party files objections to a report and recommendation on a dispositive matter, a district judge
must review it under the de novo standard. Baker v. Peterson, 67 F. App’x 308, 310 (6th Cir.
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2003). “[T]he district court need not provide de novo review where the objections are frivolous,
conclusive or general.” Mira v. Marshall, 806 F.2d 636, 637 (6th Cir. 1986) (per curiam)
(cleaned up).
II.
Webb is proceeding pro se—without the representation of counsel—and in forma
pauperis—without the payment of filing fees. (Docs. 2, 3.) Congress has authorized district
courts to dismiss an in forma pauperis complaint if the district court is satisfied that the action is
frivolous or malicious. Denton v. Hernandez, 504 U.S. 25, 31 (1992); see also 28 U.S.C.
§ 1915(e)(2)(B)(i). A complaint may be dismissed as frivolous when the plaintiff cannot make
any claim with a rational or arguable basis in fact or law. Neitzke v. Williams, 490 U.S. 319,
328–329 (1989); see also Lawler v. Marshall, 898 F.2d 1196, 1198 (6th Cir. 1990). An action
has no arguable legal basis when the defendant is immune from suit or when a plaintiff claims a
violation of a legal interest that does not exist. Neitzke, 490 U.S. at 327.
Congress also has authorized the sua sponte dismissal of complaints that fail to state a
claim upon which relief may be granted. 28 U.S.C. § 1915(e)(2)(B)(ii). A complaint filed by a
pro se plaintiff must be “liberally construed” and “held to less stringent standards than formal
pleadings drafted by lawyers.” Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam) (quoting
Estelle v. Gamble, 429 U.S. 97, 106 (1976)). By the same token, however, the complaint “must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)); see also Hill v. Lappin, 630 F.3d 468, 470–471 (6th Cir. 2010) (stating
that the “dismissal standard articulated in Iqbal and Twombly governs dismissals for failure to
state a claim” under § 1915(e)(2)(B)(ii)).
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III.
Webb purported to assert five claims for relief against Guranteed Rate in the Complaint:
(1) fraudulent inducement; (2) breach of contract/lack of consideration; (3) violation of the Truth
in Lending Act (“TILA”), 15 U.S.C. § 1601, et seq.; (4) unjust enrichment; and (5) a claim for
declaratory and injunctive relief. (Doc. 3 at PageID 44–45.) Counts 1–3 are stated against
Guaranteed Rate only, but Counts 4–5 are stated against Guaranteed Rate and unnamed Does 1–
10. The Magistrate Judge recommended dismissing Webb’s Complaint after screening it on her
own initiative under 28 U.S.C. § 1915(e)(2)(B). (Doc. 4.) Webb objects to the dismissal of his
Complaint. (Doc. 6.)
In the well-reasoned Report and Recommendation, the Magistrate Judge recommended
that Counts 1–4 of the Complaint should be dismissed for failure to state a claim upon which
relief can be granted. Webb’s objects to the dismissal of these claims only by making the
general argument that his claims are plausible. He does not contend that the Magistrate Judge
misstated the applicable legal standards or misunderstood the nature of his claims. But Webb is
simply wrong to assert that he stated plausible claims for relief.
Webb asserted in the fraudulent inducement claim in the Complaint that Guaranteed Rate
“misrepresented the nature of the mortgage transaction and failed to disclose material facts.”
(Doc. 3 at PageID 44.) The Magistrate Judge correctly held that Webb did not identify any
material misrepresentation made by Guaranteed Rate and he did not plead facts that would create
a special duty to disclose information beyond that stated in the Note and Mortgage. The
Mortgage in paragraph 20 granted Guaranteed Rate the right to sell the Note and Mortgage
without prior notice to Webb. (Doc. 3 at PageID 65–66.) Accordingly, Webb has failed to state
a plausible claim for fraudulent inducement upon which relief can be granted.
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In his breach of contract claim, Webb asserted that his contract with Guaranteed Rate
failed for lack of consideration. (Id. at PageID 45.) He did not provide facts to support that
assertion nor to overcome the presumption that consideration exists for promissory notes and
mortgages. See LaFrance v. Ralich, 230 N.E.3d 85, 93, 2023-Ohio-4291, ¶ 33 (Ohio App.
2023). The Note here indicated that Webb received a loan as consideration. (Doc. 3 at PageID
47.) Webb has failed to state a plausible breach of contract claim upon which relief can be
granted.
In the TILA claim, Webb alleged that Guaranteed Rate “failed to disclose the true nature
of the transaction, including the treatment of Plaintiff’s promissory note as a financial asset.”
(Id. at PageID 45.) The Magistrate Judge correctly concluded that Webb failed to identify the
TILA provision violated by Guaranteed Rate and failed to provide facts suggesting that a
violation occurred. The TILA claim is not plausible.
Webb asserted in his unjust enrichment claim that Guaranteed Rate and the Does 1–10
were “unjustly enriched through the use, sale, securitization, or transfer of Plaintiff’s financial
instruments.” (Id.) “Ohio law does not allow parties to seek damages under quasi-contractual
theories of recovery such as a claim of unjust enrichment when a contract governs the
relationship.” Gascho v. Glob. Fitness Holdings, LLC, 863 F. Supp. 2d 677, 699 (S.D. Ohio
2012) (internal quotation and citation omitted). The Note and Mortgage governed the
relationship between the parties here, and moreover, Webb did not plead facts that state a
plausible unjust enrichment claim.
Finally, the Magistrate Judge recommended that Count 5—a claim for declaratory and
injunctive relief—is better understood as a part of Webb’s prayer for relief rather than an
independent cause of action. (Doc. 3 at PageID 45.) Webb is not entitled to any form of relief
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when he failed to state a plausible claim. In sum, the Court agrees with the Magistrate Judge that
all of Webb’s claims should be dismissed.
IV.
For the reasons above, the Report and Recommendation (Doc. 4) is ADOPTED, Plaintiff
Webb’s Objection (Doc. 6) is OVERRULED, and the Complaint (Doc. 3) is DISMISSED
WITH PREJUDICE. The Court certifies under 28 U.S.C. § 1915(a)(3) that an appeal of this
Order would not be taken in good faith.
IT IS SO ORDERED.
BY THE COURT:
S/Susan J. Dlott
Susan J. Dlott
United States District Judge
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