               Case: 17-11131       Date Filed: 12/11/2018      Page: 1 of 18


                                                                      [DO NOT PUBLISH]



                 IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                              ________________________

                                    No. 17-11131
                              ________________________

                         D.C. Docket No. 0:15-cv-62511-WPD

LORIS B. RANGER,
GORDON GEORGE,

                                                                     Plaintiffs - Appellants,

versus

WELLS FARGO BANK N.A.,
a foreign corporation,
d.b.a. America's Servicing Company,

                                                                      Defendant - Appellee.

                              ________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                            ________________________

                                   (December 11, 2018)

Before TJOFLAT and ROSENBAUM, Circuit Judges, and UNGARO, * District
Judge.

         *
          The Honorable Ursula Ungaro, United States District Judge for the Southern District of
Florida, sitting by designation.
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PER CURIAM:

       Plaintiffs Loris B. Ranger and George Gordon seek to recover damages from

Wells Fargo Bank, N.A. (“Wells Fargo”), under the Real Estate Settlement

Procedures Act (“RESPA”) and Florida law. The parties’ dispute stems from

whether Wells Fargo had erroneously concluded that Plaintiffs had failed to pay their

home mortgage and subsequently neglected to correct that error. The district court

dismissed all of Plaintiffs’ claims. After careful consideration and for the reasons

that follow, we affirm in part and reverse in part.

                                                I. 1

       In 2005, Plaintiffs took out a $550,000 mortgage to buy a house in Miramar,

Florida. Wells Fargo acted as the servicer of Plaintiffs’ mortgage, and HSBC Bank

USA, N.A., (“HSBC”) owns Plaintiffs’ mortgage.

       Seven years after Plaintiffs took out their mortgage, HSBC commenced a

foreclosure suit against them in state court. Wells Fargo “caused” HSBC to file the

foreclosure suit and verified the complaint in that action, which alleged that

Plaintiffs had been derelict in making their monthly mortgage payments since

January 1, 2012. At that time, Wells Fargo placed every mortgage payment it



       1
         For purposes of our review, we accept as true the allegations in the operative complaint
and construe them in the light most favorable to Plaintiffs, since Plaintiffs challenge the district
court’s grant of Wells Fargo’s motion to dismiss. See Ray v. Spirit Airlines, Inc., 836 F.3d 1340,
1347 (11th Cir. 2016).
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received from Plaintiffs during the pendency of the foreclosure suit into a “suspense

account,” rather than applying them to the mortgage.

      On October 29, 2014, approximately two years after Wells Fargo “caused”

the foreclosure suit to be filed, Plaintiffs sent Wells Fargo the first of two Qualified

Written Requests (the “2014 QWR”). Invoking 12 C.F.R. § 1024.35(e)—so-called

Regulation X of RESPA—the 2014 QWR contended that the allegations in the

foreclosure action that they had neglected to pay their mortgage since January 1,

2012, were “absolutely not true” because Plaintiffs have “continued to make

payments throughout the year 2012 and well into 2013 . . . .”

      Once Plaintiffs invoked Regulation X, Wells Fargo was obligated to

investigate the errors alleged in the 2014 QWR.            At the conclusion of its

investigation, 12 C.F.R. § 1024.35(e) afforded Wells Fargo two options: correct the

purported error or explain to Plaintiffs why they were wrong. Wells Fargo attempted

to take the latter path, insisting to Plaintiffs that the foreclosure suit was “valid”

because Plaintiffs had missed mortgage payments, the payments they had

subsequently made failed to bring the loan current, and, accordingly, Wells Fargo

properly accelerated the mortgage.

      But the state court foreclosure trial did not agree with Wells Fargo’s response.

Instead, on April 21, 2015, the state court ruled that HSBC had failed to prove it was

entitled to foreclose on Plaintiffs’ house.


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      The story, however, did not end there. Around October 5, 2015—just six

months after the foreclosure trial ended—Wells Fargo sent Plaintiffs a letter that

essentially recycled the allegations it had made in the foreclosure suit. The letter

asserted that Plaintiffs were in default and owed $104,997.39—a sum that appeared

to be the same as what Wells Fargo claimed Plaintiffs owed in the prior foreclosure

action.

      In response, on October 20, 2015, Plaintiffs sent their second QWR (the “2015

QWR”), which alerted Wells Fargo to the same perceived error Plaintiffs had

claimed in the 2014 QWR, and gave Wells Fargo “a second opportunity to

investigate and correct the existing errors.” The 2015 QWR referenced Plaintiffs’

victory in the foreclosure suit and asserted that the same servicing error must still be

plaguing Plaintiffs’ account, given the similarity between Wells Fargo’s letter and

the allegations made in the foreclosure suit.

      Two days after Plaintiffs sent the 2015 QWR, they filed this suit.

      Nevertheless, Wells Fargo eventually responded to Plaintiffs’ 2015 QWR. In

that response, Wells Fargo told Plaintiffs that it had investigated Plaintiffs’

assertions, but once again, it concluded that Plaintiffs’ account contained no errors.

Thus, according to Wells Fargo, Plaintiffs’ loan was past due for over two years.

      Based on these allegations, Plaintiffs’ Amended Complaint asserts four

claims. First, Plaintiffs make a claim under the Florida Consumer Collection


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Practices Act (“FCCPA”). Second, in Plaintiffs’ lone federal cause of action,

Plaintiffs contend under RESPA that Wells Fargo violated 12 C.F.R. 1026.36(c)

twice because, had Wells Fargo conducted a reasonable investigation into the 2014

and 2015 QWRs, it would have found Plaintiffs’ account had errors. Third, as a

tagalong to Plaintiffs’ RESPA claim, Plaintiffs assert that Wells Fargo was negligent

per se. In other words, Plaintiffs allege that by violating 12 C.F.R. 1026.36(c) of

RESPA, Wells Fargo negligently investigated the 2014 and 2015 QWRs.

      Fourth and finally, Plaintiffs assert a claim for conversion under Florida law.

Plaintiffs’ theory is that 12 C.F.R. 1026.36(c) obligated Wells Fargo to keep their

mortgage payments “intact” and ensure that HSBC applied those payments to their

account. Instead of doing that, Wells Fargo put Plaintiffs’ payments into a suspense

account, thereby allowing Wells Fargo to invest these payments and potentially

profit from them. According to Plaintiffs, this cost them significantly because it

inflated the principal, fees, and the interest due on their mortgage.

      Wells Fargo moved to dismiss each of Plaintiffs’ claims on December 15,

2016. The district court found that Plaintiffs had failed to adequately allege any of

their claims, except for their claim under the FCCPA. Consequently, the court

dismissed Plaintiffs’ RESPA, negligence per se, and conversion claims with

prejudice.




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         More specifically, the court concluded that Plaintiffs’ RESPA claim failed

because Plaintiffs had not alleged damages, and to the extent they had, they had not

asserted a causal connection between Wells Fargo’s responses to the QWRs and

Plaintiffs’ asserted damages. The district court also reasoned that Plaintiffs could

not recover attorney’s fees incurred from the foreclosure action because, taking

judicial notice of the foreclosure proceedings in state court, Plaintiffs had recovered

“full settlement” of those fees and found it “troubling” that Plaintiffs were

attempting to obtain a double-recovery of those fees. Because the district court

found that Plaintiffs’ RESPA claim failed, it also dismissed their negligence per se

claim.

         As for Plaintiffs’ conversion claim, the district court determined that Plaintiffs

had failed to allege a demand for return of the money paid to Wells Fargo, or that

Wells Fargo had refused such a demand. Finally, the district court ordered Plaintiffs

to show cause for why it should exercise supplemental jurisdiction over their claim

under the FCCPA.

         After the district court denied Plaintiffs motion for reconsideration, it

dismissed Plaintiffs’ FCCPA claim without prejudice so that Plaintiffs could file it

in state court. Plaintiffs now appeal.




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                                              II.

      We review de novo a district court’s grant of a motion to dismiss. Renfroe v.

Nationstar Mortg., LLC, 822 F.3d 1241, 1243 (11th Cir. 2016) (citing Timson v.

Sampson, 518 F.3d 870, 872 (11th Cir. 2008)).

      To survive a motion to dismiss, a pleading must set out facts sufficient to

“raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 555 (2007). Consequently, a plaintiff must imbue its pleading with

“enough heft to show that the pleader is entitled to relief.” Id. at 557. And

plausibility is the test for that heft: The “well-pled allegations must nudge the claim

‘across the line from conceivable to plausible.’” Sinaltrainal v. Coca-Cola Co., 578

F.3d 1252, 1261 (11th Cir. 2009) (quoting Twombly, 550 U.S. at 570). To do so, the

complaint must contain “more than labels and conclusions,” Twombly, 550 U.S. at

555, and enough “factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009).

      While Plaintiffs receive the benefit of reasonable factual inferences,

“‘unwarranted deductions of fact’ are not admitted as true.” Aldana v. Del Monte

Fresh Produce, N.A. Inc., 416 F.3d 1242, 1248 (11th Cir. 2005). Similarly, we do

not credit bare legal conclusions. See Am. Dental Ass’n v. Cigna Corp., 605 F.3d

1283, 1290 (11th Cir. 2010).


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                                         III.

      Plaintiffs challenge the district court’s dismissal of their RESPA, negligence

per se, and conversion claims. We address each in turn below.

      A. Plaintiffs provided just enough heft to salvage some of their RESPA
         theories

      “RESPA is a consumer protection statute that imposes a duty on servicers of

mortgage loans to acknowledge and respond to inquiries from borrowers.” Bivens

v. Bank of Am., N.A., 868 F.3d 915, 918–19 (11th Cir. 2017). Under RESPA,

servicers must comply with the obligations specified in Regulation X, 12 U.S.C. §

2605. See 12 U.S.C. § 2605(k)(1).

      Section 2605 provides a mechanism for borrowers to write to their mortgage

servicers to seek information about their mortgages and object to perceived errors in

their account. It also requires servicers to respond to a borrower’s qualified written

request (QWR). A QWR is a “written correspondence” from the borrower to the

servicer that (1) identifies the borrower and the borrower’s account; and (2) either

(a) asserts an error in the borrower’s account or (b) requests information related to

the servicing of the borrower’s account. 12 U.S.C. § 2605(e)(1).

      Once a servicer receives a borrower’s QWR, it must “provide a written

response acknowledging receipt of the correspondence within 5 [business] days.” §

2605(e)(1)(A). Then, within 30 business days, the servicer must (1) correct the

asserted error; (2) explain why it believes the account isn’t in error; (3) provide the
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requested information; or (4) explain why the requested information is unavailable.

§ 2605(e)(2).

       If the servicer’s response or investigation falls short, borrowers can file suit.

But not all RESPA violations are actionable. Two key limitations confine RESPA’s

reach, both of which are relevant here. First, borrowers must show “actual damages”

from a servicer’s failure to comply. See Renfroe, 822 F.3d ay 1246.2 And second,

borrowers must plausibly allege a “causal link” between the servicer’s violation and

the borrower’s alleged damages. Id. (explaining “there must be a ‘causal link’

between the alleged [RESPA] violation and the damages”) (quoting Turner v.

Beneficial Corp., 242 F.3d 1023, 1028 (11th Cir. 2001)).

       Plaintiffs argue that their Amended Complaint asserted five types of damages

under RESPA that were caused by Wells Fargo’s failure to adequately respond to

their QWRs: emotional distress, attorney’s fees from the foreclosure litigation in

state court, attorney’s fees from sending the 2015 QWR, improper finance and

interest charges, and damage to their credit. They further assert that they alleged

sufficient facts about how those damages were linked to Wells Fargo’s RESPA

violations.




       2
        Borrowers may also recover statutory damages of up to $2,000 per violation if they can
show the violation was part of a “pattern or practice of noncompliance” with RESPA’s
requirements. § 2605(f)(1)(B). However, this portion of RESPA is not at issue in this appeal.
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      As explained below, we conclude that Plaintiffs alleged enough facts to

connect three of their damage theories to Wells Fargo’s RESPA violations:

emotional distress, higher mortgage costs and fees, and damage to their credit.

Though the allegations concerning damages in the Amended Complaint could have

been more plentiful, at the motion-to-dismiss stage, we conclude that they allege

enough to “nudge” Plaintiffs’ RESPA claim past Wells Fargo’s motion to dismiss.

             1. Emotional Distress

      Plaintiffs first argue that they specifically alleged they suffered “emotional

distress,” and they were entitled to a reasonable inference that this distress stemmed

from their ongoing struggle with Wells Fargo. In response, Wells Fargo contends

that emotional distress damages are not cognizable under RESPA, and even if they

are, Plaintiffs have failed to allege how their emotional distress is connected to Wells

Fargo’s RESPA violations.

      Because RESPA is a consumer-protection statute, we must construe “it

liberally in order to best serve Congress’s intent.” Renfroe, 822 F.3d at 1244.

Construing RESPA’s unqualified language of “actual damages” broadly, and based

on the interpretations of “actual damages” in other consumer-protection statutes that

are remedial in nature,” we see no reason why a plaintiff cannot recover non-

pecuniary damages, such as emotional distress, under RESPA. See In Catalan v.




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GMAC Mortg. Corp., 629 F.3d 676, 696 (7th Cir. 2011) (assuming that emotional-

distress damages are recoverable under RESPA).

      Here, a reasonable inference from the Amended Complaint plausibly links

Plaintiffs’ allegation that they suffered emotional distress to Wells Fargo’s violations

of RESPA. That’s because Plaintiffs allege that they experienced emotional distress

and that it was upsetting for Wells Fargo to insist upon pressing forward with the

foreclosure, even after the 2014 QWR, even after the state court dismissed the

foreclosure suit, and even after Plaintiffs sent the 2015 QWR.

      Moreover, the thrust of Plaintiffs’ allegations is that all of their emotional

distress could have been avoided had Wells Fargo heeded their requests to correct

the alleged error that they had failed to pay their mortgage. Of course, it would have

been better if Plaintiffs had alleged more details about how they suffered emotional

distress. But construing Plaintiffs’ allegations in the light most favorable to them

and affording them all reasonable inferences, we find that Plaintiffs have adequately

alleged that their emotional distress was causally linked to Wells Fargo’s RESPA

violations.

              2. Plaintiffs’ payment of higher mortgage fees and damage to their
                 credit

      Taking the other two adequately pled RESPA theories together, Plaintiffs

have also alleged enough to link (1) their payment of more fees and interest and (2)

damage to their credit score to Wells Fargo’s RESPA violations. In Renfroe, we
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held that the plaintiff could establish actual damages because he alleged that his

servicer failed to respond to the plaintiff’s QWR and did not issue refunds of

erroneous charges. See 822 F.3d at 1246. Therefore, as long as the plaintiff

“plausibly alleges that a servicer violated its statutory obligations and as a result the

plaintiff did not receive a refund of erroneous charges, she has been cognizably

harmed.” Id. at 1246–47; see also Marais v. Chase Home Fin. LLC, 736 F.3d 711,

720 (6th Cir. 2013) (“Marais’s complaint . . . alleged that [d]ue to these violations,

Defendant is liable . . . equaling the amount of money Chase converted plus interest.

A reasonable inference arising from these allegations is that because Chase

(undisputedly) failed to correct or investigate the misapplied payments, Marais paid

interest on a higher principal balance than she should have.”) (internal quotation

marks omitted).

      Here, Wells Fargo does not contest that it violated its statutory obligations

under RESPA. And Plaintiffs alleged that they paid higher fees on their mortgage

and that their credit score was deflated, causing them to lose “access to credit,”

because Wells Fargo—as a consequence of failing to discharge its RESPA

obligations—declined to correct the account errors and apply Plaintiffs’ mortgage

payments to the outstanding mortgage balance. See Renfroe, 822 F.3d at 1246;

Marais, 736 F.3d at 721 (holding that plaintiffs could recover for damages relating




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to credit misreporting). Thus, Plaintiffs have alleged enough to withstand Wells

Fargo’s motion to dismiss on this aspect of their RESPA claim. 3

                3. Attorney’s fees

        That is the extent of Plaintiffs’ adequately pled RESPA theories. Taking their

pursuit of attorney’s fees from the 2014 QWR and the foreclosure suit first, Plaintiffs

concede they recovered all the attorney’s fees they could have in the state action,

and despite their dissatisfaction with the amount of those fees, an appeal to the state

appellate court would have been “useless since Florida law does ordinarily not allow

for a prevailing party to recover all of the attorneys’ [fees] incurred.” Plaintiffs also

concede that their pleadings were silent about whether they were seeking to recover

the same attorney’s fees they had already recovered in the state-court litigation.

Nevertheless, Plaintiffs now contend they were entitled to a reasonable inference

that they were seeking only the attorney’s fees from the state-court action that they

had not recovered.

        Like the district court, we too are “troubled” by Plaintiffs’ attempt to take a

second bite at the apple. Rather than registering any dissatisfaction with the amount



        3
          We note that it is unsettled whether bare allegations of damage to the plaintiff’s credit
score are sufficient to state a claim. See, e.g., McLean v. GMAC Mortg. Corp., 595 F. Supp. 2d
1360, 1373 (S.D. Fla. 2009) (holding that damage to credit is speculative without, for example,
allegations of lost financing opportunities), aff’d, 398 F. App’x 467 (11th Cir. 2010). However,
we need not decide this issue because here plaintiffs also assert that the hit they took to their credit
score resulted in their lost “access to credit.” At least at the motion-to-dismiss stage, this allegation
suffices, as it asserts more than a simple reduced credit score.
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of attorney’s fees they recovered for fending off the foreclosure suit in state court

through an appeal in the state system, Plaintiffs want use their RESPA claim as a

vehicle to do that. That cannot be cognizable under RESPA for at least two reasons.

       As an initial matter, Plaintiffs’ contention that they seek some undefined

portion of the attorney’s fees from the state-court foreclosure suit is nowhere in the

Amended Complaint. Instead, Plaintiffs seek recovery of all fees “related to legal

services rendered in connection with the foreclosure lawsuit . . . .” But we assume

the truth of all well-pled allegations, so Plaintiffs’ belated contentions that they are

not seeking a double recovery are insufficient since they are contradicted by the

Amended Complaint.

       In all events, the distinction Plaintiffs try to make is one without a difference.

No matter what, if Plaintiffs were dissatisfied with their recovery in state court, they

had to appeal that through the state system. See May v. Morgan Cty. Ga., 878 F.3d

1001, 1004 (11th Cir. 2017) (“[F]ederal district courts and courts of appeals do not

have jurisdiction to review state court decisions.”); see also 28 U.S.C. § 1257.

Having elected to pursue attorney’s fees in state court and then decided not to pursue

an appeal of the attorney’s fees in state court, Plaintiffs may not seek to supplement

those attorney’s fees in federal court. 4


       4
          The problems with Plaintiffs’ suggested approach are magnified upon any close
inspection. For example, under RESPA, Plaintiffs would be unable to recover attorney’s fees that
they incurred in defending the foreclosure suit from September 5, 2012, to December 9, 2014, the
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        Turning to Plaintiffs’ damages allegedly stemming from Wells Fargo’s

response to the 2015 QWR, Plaintiffs argue that the costs they are entitled to arising

out of their 2015 QWR are “modest” because they relate to attorney’s fees and the

“postage cost” of sending that second letter. Plaintiffs, however, recognize that this

Court has refused to allow plaintiffs to recover costs associated with sending a QWR

because sending the QWR occurs before defendants’ response. But Plaintiffs argue

that their case is different because the 2015 QWR was really just a follow-up to their

2014 QWR.

        Whatever the merits of Plaintiffs’ theory, it fails for a more basic reason:

Plaintiffs jumped the gun. RESPA requires the servicer to respond to a QWR within

thirty days after receiving it. See 12 U.S.C. § 2605(e)(2). Because Plaintiffs

commenced this action just two days after sending Wells Fargo the 2015 QWR,

without affording them the opportunity to respond, Plaintiffs may not recover

damages relating to sending the 2015 QWR.




date upon which Wells Fargo responded to the 2014 QWR. See Turner v. Beneficial Corp., 242
F.3d 1023, 1028 (11th Cir. 2001); Baez v. Specialized Loan Servicing, LLC, 709 F. App’x 979,
983 (11th Cir. 2017) (“A cost that is incurred whether or not the servicer complies with its
obligations is not a cost that is caused by, or ‘a result of,’ the failure to comply.”). Plaintiffs offer
no method for how the court could separate the attorney’s fees they were awarded in the state court
and apportion them as they relate to the period after Wells Fargo’s response to the 2014 QWR.
And because the period between Wells Fargo’s response and the state court’s dismissal of the
foreclosure suit was relatively small compared to the life of the foreclosure suit (four months
versus almost three years), the only reasonable inference is that Plaintiffs recovered all the fees
they could have in state court.
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      B. Negligence per se

      The parties agree that Plaintiffs’ negligence per se claim rises and falls

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

since Plaintiffs’ sole negligence theory is that Wells Fargo violated RESPA by

conducting an unreasonable investigation.

      As set forth above, Plaintiffs have stated a claim under RESPA. Therefore,

their negligence per se claim must survive the motion to dismiss as well.

      C. Conversion

      In a bid to save their conversion claim, Plaintiffs argue that their allegations

that Wells Fargo “lawfully obtained the money” they sent for purposes of paying

their mortgage, but that it “unlawfully directed those payments to a suspense account

where they generated investment income for Wells Fargo’s benefit” are sufficient to

establish a claim for conversion. In other words, Plaintiffs contend that Florida law

does not obligate them to allege they demanded Wells Fargo return the money

because Wells Fargo’s transfer of the money into the suspense account was

unlawful. Alternatively, Plaintiffs argue if these allegations are insufficient, the

district court erred in dismissing their conversion claim with prejudice.

      Conversion is an unauthorized act that deprives a person of his property

permanently or for an indefinite time. Shelby Mut. Ins. Co. v. Crain Press, Inc., 481

So. 2d 501, 503 (Fla. 2d DCA 1985); see also Marine Transp. Servs. Sea-Barge


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Group, Inc. v. Python High Performance Marine Corp., 16 F.3d 1133, 1140 (11th

Cir. 1994) (“In Florida, the tort of conversion is an unauthorized act which deprives

another of his property permanently for an indefinite time.”) “A conversion occurs

when a person who has a right to possession of property demands the property’s

return and the demand is not or cannot be met.” Id.

      Before a conversion can occur, a party that was previously in rightful

possession of another party’s funds must be informed by the other party that: “1)

continued possession of the funds is no longer permitted; 2) a demand for return of

the funds is necessary; and 3) the party holding the funds must fail to comply with

the demand.” Black Bus. Inv. Fund of Cent. Fla., Inc. v. Fla. Dep’t of Econ.

Opportunity, 178 So. 3d 931, 937 (Fla. 1st DCA 2015). Thus, while a plaintiff need

not always allege a demand, “[i]f the original taking is lawful, the withholding being

the wrongful element, a demand is necessary . . . .” Mullenmaster v. Newbern, 679

So. 2d 1186, 1186 (Fla. 4th DCA 1996).

      Here, Wells Fargo’s failure to apply the payments to Plaintiffs’ account did

not constitute conversion. As Plaintiffs allege, Wells Fargo lawfully came into

possession of the payments because Plaintiffs made those payments to satisfy their

mortgage. Thus, Plaintiffs needed to allege that they asked Wells Fargo to return

the money. But they have not. And they make no suggestion that they could cure

this pleading failure. See, e.g., Almanza v. United Airlines, Inc., 851 F.3d 1060,


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1075 (11th Cir. 2017) (“Perhaps Plaintiffs could argue their way out of futility if, on

appeal, they explained how they could cure the faults in the proposed amended

complaint. But Plaintiffs’ briefing . . . did not indicate how they could better plead

[their claim], so we cannot find error in the district court’s dismissal with prejudice

on that basis.”) (internal citation omitted). Accordingly, the district court’s dismissal

of Plaintiffs’ claim with prejudice was warranted.

                                                V.

      For the foregoing reasons, we reverse the district court’s dismissal of

Plaintiffs’ RESPA and negligence per se claims. We affirm the district court’s

dismissal of Plaintiffs’ conversion claim.

      REVERSED IN PART, AFFIRMED IN PART.




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