Martin et al v. Bank of America N.A. et al, No. 1:2013cv02350 - Document 94 (E.D.N.Y. 2014)
Court Description: ORDER granting 59 Motion to Dismiss; granting 62 Motion to Dismiss. Ordered by Judge I. Leo Glasser on 3/12/2014. (Ewald, Sylvia)
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Martin et al v. Bank of America N.A. et al Doc. 94 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------------x MARIAN MARTIN, ET AL., MEMORANDUM AND ORDER Plaintiffs, 13 Civ. 0 2350 (ILG) (SMG) - against BANK OF AMERICA, N.A., ET AL., Defendants. ------------------------------------------------------x GLASSER, Senior United States District J udge: Plaintiff m ortgagors (collectively “Plaintiffs”) bring this action against their m ortgage originators and servicers (collectively “Defendants”), alleging ten claim s: breach of contract, breach of the im plied covenant of good faith and fair dealing, prom issory estoppel, fraudulent concealm ent, fraud, unjust enrichm ent, fraud in the inducem ent, violation of 29 state consum er-protection statutes (each Plaintiff alleges the violation of only the statute of the state in which he or she resides), violation of the Federal Truth in Lending Act (“TILA”), 15 U.S.C. § 160 1 et seq., and violation of the Real Estate Settlem ent Procedures Act (“RESPA”), 12 U.S.C. § 260 1 et seq. Defendants m ove to sever the Plaintiffs and dism iss the claim s of the rem aining Plaintiff. The m otion is GRANTED. BACKGROU N D The following facts are taken from Plaintiffs’ com plaint as well as extrinsic docum ents the Court m ay consider in ruling on this m otion. Plaintiffs are 119 1 current and form er hom eowners hailing from 29 states and Defendants are seven 2 m ortgage 1 There were initially 129 Plaintiffs, but ten voluntarily dism issed their claim s. In addition, there are 10 0 Roe Plaintiffs. 2 Plaintiffs initially sued eleven m ortgage originators and servicers, but four of the Defendants have since been dism issed. 1 Dockets.Justia.com originators and servicers hailing from seven states. Each Plaintiff (or pair of Plaintiffs, for husband-wife Plaintiffs) took out an independent m ortgage from one of the Defendants, and each of these m ortgages was serviced “from m onths to several years prior to the com m encem ent of this action” by one of the Defendants. Plaintiffs challenge a num ber of Defendants’ lending and servicing practices, beginning with the origination of Plaintiffs’ m ortgages. Plaintiffs allege that Defendants engaged in “deceptive and predatory lending practices” by m isrepresenting the risks of Plaintiffs’ m ortgages. These m isrepresentations include statem ents that the housing m arket was stable and exaggerations of the expected increase in housing prices; failures to m eaningfully discuss the “individual im plications” of their loans’ term s, such as the risks of interest-only paym ents or adjustable interest rates; and failing to disclose that Plaintiffs’ m ortgages would serve as collateral for m ortgage-backed securities, in effect attenuating or elim inating Defendants’ interest in avoiding foreclosure on Plaintiffs’ hom es. Each Plaintiff at som e point began to fall behind on his or her m ortgage paym ents and thus requested a loan-m odification agreem ent from one of the Defendants. Defendants participate in the Hom e Affordable Modification Program (“HAMP”), pursuant to which they receive funding from the Treasury Departm ent and in exchange are obligated to m odify the m ortgage term s of eligible m ortgagors. According to Plaintiffs, Defendants operated “fraudulent loan m odification program [s]” by offering illusory opportunities for m odification. Defendants did not respond to som e Plaintiffs’ requests for m odification. For those Plaintiffs to whom Defendants did respond, the Defendants told Plaintiffs that perm anent m odification was available if Plaintiffs subm itted necessary docum entation and com pleted a trial m odification 2 period. But despite fulfilling these requirements, Defendants either did not offer perm anent m odification on the pretext that Plaintiffs did not m eet all of the requirem ents or offered perm anent m odification with term s so unfavorable that Plaintiffs could not com ply with even the m odified term s. Som e Plaintiffs’ hom es were later sold in foreclosure. Each Plaintiff later requested inform ation about the servicing of his or her loan from one of the Defendants, pursuant to RESPA, but Defendants did not respond “in a m eaningful way” or “attem pt in any way to resolve the issues” the Plaintiffs com plained of. Plaintiffs filed suit in this Court on April 17, 20 13. Defendants filed a m otion to dism iss on August 26, 20 13. Plaintiffs filed an am ended com plaint on Septem ber 30 , 20 13. Defendants filed a m otion to dism iss the am ended com plaint on October 11, 20 13. Plaintiffs filed a response in opposition to the m otion on Decem ber 2, 20 13. Defendants filed a reply in support of their m otion on J anuary 21, 20 14. D ISCU SSION I. Su bje ct-Matte r Ju ris d ictio n Plaintiffs incorrectly claim that this Court has diversity jurisdiction. See 28 U.S.C. § 1332(a). Diversity jurisdiction, however, requires com plete diversity. Hallingby v. Hallingby, 574 F.3d 51, 56 (2d Cir. 20 0 9). The parties here are not com pletely diverse because m any Plaintiffs and Defendants are citizens of the sam e state. For exam ple, Defendant Bayview Loan Servicing is a citizen of Florida, as are Plaintiffs Harry Evans, Tom m y and Linda Hall, William Schauer, Victoria Sheaf, Sonja Shearer, Ronald and Karol Schwarby, and William Nice. But this Court nonetheless has jurisdiction over at least som e of Plaintiffs’ claim s on the basis of federal-question jurisdiction, see 28 3 U.S.C. § 1331(a), as Plantiffs’ TILA and RESPA claim s arise under federal law. The Court accordingly proceeds to address Defendants’ m otion. See Green v. CitiMortgage, Inc., No. 13 CV 2341, 20 13 WL 6712482, at *1 n.2 (E.D.N.Y. Dec. 18, 20 13) (concluding that court had federal-question jurisdiction for som e claim s and proceeding to sever plaintiffs); Traina v. HSBC Mortgage Servs., Inc., No. 13 CV 2336, 20 13 WL 6576865, at *1 n.3 (E.D.N.Y. Dec. 12, 20 13) (sam e). II. Am e n d e d Co m p lain t A plaintiff m ay file an am ended com plaint m ore than 21 days after service of a m otion to dism iss only if they receive leave from the Court or the defendant consents. F ED. R. CIV. P. 15(a)(1)(B), (a)(2). Plaintiffs’ am ended com plaint was filed m ore than a m onth after Defendants filed their m otion. Although Plaintiffs did not seek leave of Court or receive Defendants’ explicit consent, Defendants have im plicitly consented by filing a new m otion responding to the am ended com plaint. 6 W RIGHT, M ILLER & KANE , F EDERAL P RACTICE AND P ROCEDURE § 1490 (3d ed. 20 10 ) (“[C]onsent m ay be im plied from an act of the party indicating an acquiescence in the am endm ent, especially if that act is evidenced by a writing.”). The am ended com plaint thus survives. III. Mo tio n to Se ve r A. Le gal Stan d ard Multiple plaintiffs m ay be joined in on e action if their claim s arise “out of the sam e transaction, occurrence, or series of transactions or occurrences,” and there is a “question of law or fact com m on to all plaintiffs.” F ED. R. CIV. P. 20 (a)(1). In other words, plaintiffs m ay be joined in one action if “‘the essential facts of the various claim s are so logically connected that considerations of judicial econom y and fairness dictate that all issues be resolved in one lawsuit.’” Peterson v. Regina, 935 F. Supp. 2d 628, 637 4 (S.D.N.Y. 20 13). It is plaintiffs’ burden to dem onstrate that joinder is proper. Liu v. Selective Ins. Co. of Am ., No. 13-CV-5997, 20 13 WL 6537176, at *2 (E.D.N.Y. Dec. 13, 20 13); Kalie v. Bank of Am . Corp., No. 12 Civ. 9192, 20 13 WL 40 44951, at *5 (S.D.N.Y. Aug. 9, 20 13). If joinder is im proper, the Court m ay sever the m isjoined parties. F ED. R. CIV. P. 21; State of New York v. Hendrickson Bros., Inc., 840 F.2d 10 65, 10 82– 83 (2d Cir. 1988); Abraham v. Am . Hom e Mortg. Servicing, 947 F. Supp. 2d 222, 229 (E.D.N.Y. 20 13). B. An alys is Plaintiffs argue that joinder is proper because their claim s are rooted in “established, corporate-level arrangem ents, which are not at all dependent upon the particular language of any Plaintiffs’ [sic] m ortgage, or the circum stances in which their loan origination arose.” This is an interesting procession of words culm inating in a sentence of uncertain m eaning, glaringly absent from which are “logically connected” essential facts prerequisite to their claim for joinder. Even a cursory exam ination of the am ended com plaint com pels the conclusion that the facts underlying the claim s of each Plaintiff are not com m on to, or “logically connected,” to the claim s of every other Plaintiff. Nor is the alleged grievance against each Defendant so uniform ly and legally egregious that judicial econom y and fairness would counsel that all their claims be resolved en m asse. A reading of their am ended com plaint counsels exactly the opposite. Accordingly, the Defendants’ m otion to sever all Plaintiffs from the first-nam ed Plaintiff, Marian Martin, is granted. 5 This conclusion is in accord with this Court’s recent holdings, in three cases rem arkably sim ilar 3 to this one, that large groups of plaintiffs had been m isjoined. In D’Angelis v. Bank of Am erica, over 10 0 plaintiffs from 28 states sued eight m ortgage providers for “‘deceptive and predatory lending practices’” and operating a “‘fraudulent loan m odification program .’” No. 13-CV-5472, 20 14 WL 20 2567, at *1 (E.D.N.Y. J an. 16, 20 14). J udge Seybert concluded that the plaintiffs were m isjoined because the “over 10 0 discrete loans secured at different tim es for separate properties across 28 different states” were not “sufficiently related to constitute a ‘series of transactions or occurrences’ within the m eaning of Rule 20 (a)(1).” Id. at *2. In Green v. CitiMortgage, Inc., 26 plaintiffs from 15 states sued eight m ortgage providers for, again, “‘deceptive and predatory lending practices’” and operating a “‘fraudulent loan m odification program .’” 20 13 WL 6712482 at *3. J udge Feuerstein concluded, after discussing the factual disparities between plaintiffs’ claim s, that “the discrete loan transactions upon which plaintiffs claim a right to relief do not relate to, or arise out of, the ‘sam e transaction, occurrence, or series of transactions or occurrences’ for purposes of Rule 20 (a)(1).” Id. at *5. And in Traina v. HSBC Mortgage Servs., Inc., 15 plaintiffs from 10 3 This sim ilarity is not a coincidence. In all four of these cases, the plaintiffs are represented by the sam e attorneys. Moreover, these attorneys have filed several other sim ilar m ulti-plaintiff cases in this district. Manginelli v. Hom eward Residential, Inc., No. 13-cv-2334 (E.D.N.Y. Dec. 9, 20 13) (dism issed for lack of subject-m atter jurisdiction); Nabedrik v. Em igrant Mortgage Co., No. 13-cv-2351 (E.D.N.Y. Oct. 30 , 20 13) (plaintiffs voluntarily dismissed their claim s without prejudice); Kelly v. Am erican Hom e Mortgage Holdings, Inc., No. 12-cv-6240 (E.D.N.Y. March 21, 20 13) (plaintiffs voluntarily dism issed their claim s without prejudice); Kilgore v. Ocwen Loan Servicing, LLC, No. 13-cv-5473 (E.D.N.Y.) (a pre-m otion conference regarding a forthcom ing m otion to sever and dism iss is scheduled for March 12, 20 14); Cunniff v. Wells Fargo Bank, NA, No. 13-cv-5471 (E.D.N.Y.) (defendant’s deadline to answer currently set for April 3, 20 14); Brockwell v. J P Morgan Chase Bank, NA, No. 13-cv-5470 (E.D.N.Y.) (defendants’ deadline to answer currently set for April 4, 20 14); Rivera v. J P Morgan Chase Bank, NA, No. 13-cv-2352 (E.D.N.Y.) (claim s by all but one plaintiff withdrawn); Brito v. FNF Servicing, Inc., No. 13-cv-2347 (E.D.N.Y.) (defendants plan to file a m otion to dism iss shortly); Yanes v. Ocwen Loan Servicing, LLC, No. 13-cv-2343 (E.D.N.Y.) (motion to sever and dism iss currently pending); Norm an v. Wells Fargo Bank, NA, No. 13-cv-2342 (E.D.N.Y.) (m otion to sever currently pending); Lewis v. OneWest Bank, FSB, No. 13-cv2340 (E.D.N.Y.) (m otion to sever and dism iss currently pending); McQuoid v. Nationstar Mortgage, LLC, No. 13-cv-2338 (E.D.N.Y.) (m otion to sever and dism iss currently pending); Arroyo v. PHHH Mortgage Corp., No. 13-cv-2335 (E.D.N.Y.) (m otion to sever and dism iss currently pending). 6 states sued HSBC for, once m ore, “‘deceptive and predatory lending practices’” and operating a “‘fraudulent loan m odification program .’” 20 13 WL 6576856 at *3– 4. J udge Feuerstein again held that plaintiffs’ discrete loan transactions “do not relate to, or arise out of, the ‘sam e transaction, occurrence, or series of transactions or occurrences.’” Id. at *6. IV. Mo tio n to D is m is s A. Le gal Stan d ard To survive a m otion to dism iss under Federal Rule of Civil Procedure 12(b)(6), the plaintiff’s pleading m ust contain “sufficient factual m atter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9) (quoting Bell Atl. Corp. v. Twom bly, 550 U.S. 544, 570 (20 0 7)). Although detailed factual allegations are not necessary, m ere legal conclusions, “a form ulaic recitation of the elem ents of a cause of action,” or “naked assertions” by the plaintiff will not suffice. Id. (internal quotations and citations om itted). This court m ust accept as true all of the allegations m ade in the com plaint and draw all reasonable inferences in the plaintiff’s favor. Matson v. Bd. of Educ. of the City Sch. Dist. of N.Y., 631 F.3d 57, 63 (2d Cir. 20 11). B. An alys is Although there are a great num ber of general allegations in the am ended com plaint, there are few allegations specific to Martin, the only rem aining Plaintiff. Martin alleges that she owns a hom e on State Island that was financed through a m ortgage originated and serviced by Bank of Am erica. As for Bank of Am erica’s purported wrongdoing, she says only, “Plaintiff Martin applied for loan m odification from Defendant Bank of Am erica m ultiple tim es, including on or about Septem ber 20 12, and subm itted a QWR [qualified written request] to Defendant Bank of Am erica on or 7 about J uly 20 12. Plaintiff Martin alleges wrongdoing by Defendant Bank of Am erica as detailed throughout this com plaint.” These allegations do not state a claim for relief under any of Martin’s ten claim s because they do not identify any specific wrongdoing as to her by Bank of Am erica. And Martin’s reference to the wrongdoing “detailed throughout this com plaint” does not cure this defect because it is unclear which of m any allegations Martin refers to. This Court, however, will allow Martin to file a second am ended com plaint that is tailored specifically to her claim s. See Kalie, 20 13 WL 40 44951 at *8 (“[T]he Court is m indful that, as form ulated, the Am ended Com plaint attem pts to encom pass the claim s of 52 plaintiffs . . . . Accordingly, it is appropriate to give Kalie an additional opportunity to am end the Am ended Com plaint to reflect the facts of her individual claim s.”). Martin’s claim s are accordingly dism issed without prejudice to the filing of a second am ended com plaint within 30 days. CON CLU SION For all of the foregoing reasons, Defendants’ m otion to sever and dism iss is GRANTED. The claim s of the Plaintiffs other than Martin are dism issed without prejudice to filing separate actions. Martin’s claim s are dism issed without prejudice to filing a second am ended com plaint in this action. SO ORDERED. Dated: Brooklyn, New York March 12, 20 14 / s/ I. Leo Glasser Senior United States District J udge 8
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