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Lasisi v. Bank of America


July 29, 2009


The opinion of the court was delivered by: Ludwig, J.


This action arises from the refinancing on July 29, 2005 of a residential mortgage by plaintiff William Lasisi. The gravamen of the claim is that he obtained from defendant Bank of America a "Borrower's Protection Plan" to protect him from default in the event of his inability to pay his mortgage. Thereafter, plaintiff lost his job. He did not obtain benefits under the Plan. He defaulted on his mortgage. Defendant foreclosed on his property, located in Delaware Count, Pa., and on August 29, 2008, it was sold at sheriff's sale.

Plaintiff's original complaint contained a breach of contract claim based on defendant's non-payment of benefits under the plan, together with other common-law causes of action. It also alleged violations of eight consumer-lending statutes. Defendant moved to dismiss the original complaint, and plaintiff filed an amended complaint. By order dated January 29, 2009, defendant's motion to dismiss the amended complaint was granted.

There was no appeal.

The amended complaint alleged that on July 29, 2005, plaintiff refinanced his mortgage by executing a note and mortgage in favor of defendant, Bank of America. First Amended Civil Action Complaint, ¶ 11. The mortgage was accompanied by a "Borrower's Protection Plan," for which plaintiff paid $65 per month, and which, according to the complaint, "would protect plaintiff in case of Disability, Unemployment and/or Accidental Death." Id., ¶¶ 13-15. After termination of his employment, plaintiff contacted defendant in an eventually unsuccessful effort to invoke the Plan's protections. Id., ¶¶ 17-20, 23, 24.

The amended complaint asserted the following: violations of the Truth in Lending Act (Count I), the Real Estate Settlement Procedures Act (Count II), the Credit Services Act (Count III), Pennsylvania's Unfair Trade Practice and Consumer Protection Law (Count IV), and the Fair Credit Extension Uniformity Act (Count V).*fn1 In addition to compensatory, punitive and statutory damages, plaintiff requests recission of his loan.

Rooker-Feldman bars review of state court mortgage foreclosure proceedings. To the extent that plaintiff requests relief that is not precluded by Rooker-Feldman, the amended complaint does not state a claim for relief that is cognizable on its face.*fn2

The Rooker-Feldman doctrine "is narrowly tailored and only applies to 'cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those proceedings.'" Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005).*fn3 It prohibits the exercise of lower federal court jurisdiction over claims that were actually litigated in state court*fn4 or where the claim is inextricably intertwined with the state court's adjudication. ITT Corp. v. Intelnet Int'l. Corp., 366 F.3d 205, 210 (3d Cir. 2004).*fn5

Here, plaintiff's TILA claim requesting recission of his loan, and his RESPA claim, are barred. Moreover, "[i]nsofar as Plaintiff['s] action in this court would require a determination that [his] liability on the mortgage differs ( i.e., is less than) the amount of the state court foreclosure judgment . . . such relief is precluded by Rooker-Feldman." In re Stuart, 367 B.R. 541, 552 (E.D. Pa. 2007). To the extent that plaintiff's request for damages includes a request for return of funds paid by plaintiff under the mortgage, or forfeiture of loan proceeds, they are not subject to review. A judgment in plaintiff's favor would have the effect either of negating the state court's judgment or constituting a finding that the judgment was erroneously entered.

As to plaintiff's TILA claim, the amended complaint alleges that plaintiff was not supplied with the disclosures required by that Act, or that the information he received was inaccurate. Amended complaint, ¶¶ 40, 41. Defendant attached to its motion the "FEDERAL TRUTH IN LENDING DISCLOSURE STATEMENT" alleged to have been given to plaintiff. Exhibit "A" to defendant's motion.*fn6 That document sets forth the annual percentage rate, finance charge and amount financed - all disclosures that plaintiff avers he was not given. Defendant also attached the "NOTICE OF RIGHT TO CANCEL" signed by plaintiff, which correctly states that the third business day after closing was August 2, 2005, and is, therefore, not in violation of TILA.*fn7 Exhibit "B" to defendant's motion. Contrary to assertions in the complaint, plaintiff was not entitled to special disclosures in connection with his residential mortgage. 12 C.F.R. § 226.3(a)(2)(I). ("This section does not apply to . . . a residential mortgage transaction.").

As to plaintiff's RESPA claim, the amended complaint alleges that the "pre-paid finance charges paid by Plaintiff is believed neither properly disclosed nor bona fide and/or reasonable under TILA/HOEPA, thus 'fee splitting.'" Amended complaint, ¶ 47. RESPA requires lenders to supply borrowers who request it information regarding charges associated with the settlement process. 12 U.S.C. § 2603(b). The complaint does not allege that plaintiff requested information, or that defendant failed to supply information in violation of RESPA. In response to defendant's motion, plaintiff contends that he was overcharged finance charges and that these overcharges constituted fee-splitting or kick-backs, which are prohibited under RESPA. Santiago v. GMAC Mortgage Group, Inc., 417 F.3d 384 (3d Cir. 2005). However, the sole sentence in the amended complaint setting forth an alleged RESPA violation does not state a claim for fee-splitting or kick-backs, see Santiago, 417 F.3d at 388-89. It merely alleges overcharges.

The Credit Services Act claim states "Defendant was in violation of the CSA, 73 P.S. § 2182, et seq., for the reasons stated above." Amended complaint, ¶ 48. However, the amended complaint does not specify that defendant engaged in conduct prohibited by CSA As to paragraph 4 of § 2183, the amended complaint alleges:

Defendant misrepresented and/or omitted material facts to Plaintiff, including the aforesaid (incorporated herein by reference)*fn8 and as more fully described as following [sic] but not limited to: (a) that the loan was beneficial to Plaintiff when it was not; (b) that their [sic] fees and costs were usual and customary, when they were not; (c) that their [sic] loans were conventional and fixed, when they were not; (d) that the loan contained characteristics which it did not; and/or (e) that the certain amounts were due and owing, when they were not.

Amended complaint, ¶ 37.

This does not satisfy the pleading requirements of Fed. R. Civ. P. 9(b), which requires that fraud be pleaded with particularity, including "who, what, when and where." Rosen v. Communication Serv. Group, 155 F.Supp.2d 310, 316 (E.D. Pa. 2001). The amended complaint does not "contain either direct or inferential allegations respecting all the material elements necessary to recovery under" CSA. Bell Atlantic Corp. v. Twombly, __ U.S. __ , 127 S.Ct. 1955, 1969 (2007). Contrary to plaintiff, lender liability statutes such as CSA are not "self-descriptive and factually supported on their face by reference if not more." Plaintiff's response, at 15.

Similarly, the amended complaint, with respect to plaintiff's Fair Credit Extension Uniformity Act claim, states, "Defendants were in violation of the FCEUA, 73 Pa.C.S. § 2270.1, et seq., for the reasons aforesaid (incorporated by reference)." Amended complaint, ¶ 51. The FCEUA prohibits lenders from engaging in unfair or deceptive debt collection practices as defined in that statute. The amended complaint does not contain any allegations describing any debt collection efforts engaged in by defendant.*fn9

Plaintiff's Unfair Trade Practices and Consumer Protection law claim is a virtual recitation of the language of the statute. Amended complaint, ¶ 50. Compare 73 P.S. § 202-1 and 2. However, the misrepresentations alleged to have been made by defendant, and the fraudulent and deceptive conduct engaged in are not described at all, and there is no allegation of reliance. Hunt v. U.S. Tobacco Co., 538 F.3d 217, 225-26 (3d Cir. 2008) (on interlocutory appeal, overruling denial of motion to dismiss UTPCPL claim where plaintiff did not plead justifiable reliance).

In his rebuttal memorandum, plaintiff requested leave to amend. Docket no. 26, at 3. However, the request does not attach a proposed amended pleading, and does not describe facts that would cure its pleading deficiencies. In re NAHC, Inc. Sec. Lit., 306 F.3d 1314, 1332 (3d Cir. 2002) (denial of request to amend complaint was not abuse of discretion where plaintiff did not "provide proposed amendments or specific facts that would cure the Complaint's pleading deficiencies.") Accordingly, the request to amend was denied.

Edmund V. Ludwig, J.

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