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Birchall v. Countrywide Home Loans

November 12, 2009


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


In her Second Amended Complaint, Plaintiff Jennifer Birchall has sued Defendant Countrywide Home Loans, Inc. ("Countrywide") for "wrongful use" and fraud, and pursuant to the Unfair Trade Practices and Consumer Protection Law ("UTPCPL"), 73 P.S. § 201-1, et seq. Ms. Birchall seeks damages arising out of allegedly unlawful behavior by Countrywide relating to its servicing of Ms. Birchall's mortgage. Since filing this Complaint, Ms. Birchall has filed a Cross-Motion to Amend the Second Amended Complaint in order to convert her "wrongful use" claim into a claim for "abuse of legal process."

Countrywide moves to dismiss the entire Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1), on the ground that Ms. Birchall's claims are barred by the Rooker-Feldman doctrine; and pursuant to Rule 12(b)(6), on the ground that Ms. Birchall has failed to state any claim upon which relief can be granted. Countrywide also argues that all of Ms. Birchall's claims are barred by the doctrine of res judicata, and that her "wrongful use" claim was previously dismissed with prejudice by this Court. Furthermore, Countrywide contends that Ms. Birchall's fraud claim is barred by the "gist of the action" doctrine and by Pennsylvania's two-year statute of limitations, and that it fails to satisfy the requirements of Federal Rule of Civil Procedure 9(b), which requires that fraud be pled with particularity. Finally, Countrywide states that Ms. Birchall's UTPCPL claim should fail because Ms. Birchall has failed to allege justifiable reliance.

Countrywide also asserts that granting Ms. Birchall's Cross-Motion to Amend would be futile, and that the Motion should therefore be denied, since the amended pleading would set forth a claim upon which, as a matter of law, Ms. Birchall is not entitled to relief.

For the reasons discussed below, the Court will grant Countrywide's Motion to Dismiss as to Ms. Birchall's fraud claim and all of her claims under sections of the UTPCPL other than the so-called "catchall" provision, 73 P.S. § 201-2(4)(xxi). With regard to Ms. Birchall's claim under the catchall provision of the UTPCPL, the Motion to Dismiss is denied. In addition, Ms. Birchall's Cross-Motion to Amend is denied as futile.


The Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. In addition, for reasons discussed infra, the Court also has subject matter jurisdiction.


For the purposes of this Motion to Dismiss, the facts alleged in the Second Amended Complaint are considered to be true. Conley v. Gibson, 355 U.S. 41, 45 (1957). On that basis, the facts are as follows.

In or around August of 2005, Ms. Birchall entered into a mortgage refinancing agreement with the mortgagee Countrywide in order to remove her ex-husband from her mortgage (Second Amend. Compl. ¶ 12). Ms. Birchall now brings three claims relating to Countrywide's servicing of this mortgage (Id. ¶¶ 75-85).

According to Ms. Birchall, Countrywide made a variety of servicing and accounting errors relating to her account (Id. ¶ 2), and also engaged in "misrepresentation[ ]" and "willful misconduct" (Id. ¶ 3). In particular, Ms. Birchall claims that Countrywide, inter alia, failed to credit certain of her payments towards her account (Id. ¶¶ 14, 19, 27-29, 52, 60); tardily credited other payments so as to collect late fees and keep her in danger of foreclosure (Id. ¶ 48); failed to communicate with her regarding important matters (Id. ¶¶ 31, 40, 44-46, 50, 56); and failed to correct servicing errors that she identified despite promising to do so (Id. ¶¶ 16, 22, 26, 27).

Ms. Birchall further claims that Countrywide's conduct rendered it "impossible" for her to remain current with her mortgage payments (Id. ¶ 3), thereby enabling Countrywide to file a foreclosure action against her in February of 2007 (Id. ¶¶ 54-57). On the basis of the foreclosure, which Ms. Birchall alleges to have been erroneous, a default judgment was entered against Ms. Birchall in Pennsylvania state court, and her mortgaged property was sold to Countrywide for $1.00 in a November 2007 sheriff's sale (Id. ¶¶ 67-68).

Ms. Birchall's initial complaint, filed in May of 2008, alleged 13 causes of action.*fn1 After Countrywide filed a motion to dismiss, she withdrew most of her claims (including, nota bene, her claim that Countrywide had engaged in wrongful use), leaving her with only two remaining causes of action -- viz., fraud and abuse of process. In December of 2008, this Court dismissed these two claims without prejudice, and granted Ms. Birchall leave to file an amended complaint, which she did in January of 2009. Countrywide then filed a Motion to Dismiss the Second Amended Complaint. This motion is currently before the Court.

The Second Amended Complaint includes three counts. One of these counts alleges fraud, and another contains a new UTPCPL claim. The third is titled "Wrongful Use," in spite of her counsel having already withdrawn such a claim on her behalf. In her response to the motion to dismiss, Ms. Birchall has included a Cross-Motion to Amend the Second Amended Complaint, asking to rename this count as "Abuse of Process."*fn2 Ms. Birchall's Cross-Motion to Amend is also before the Court.


A Rule 12(b)(6) motion to dismiss tests the sufficiency of a complaint. Conley, 355 U.S. at 45-46 (1957). Rule 8 of the Federal Rules of Civil Procedure requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley, 355 U.S. at 47). While a complaint need not contain detailed factual allegations, the plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (citations omitted). Specifically, "[f]actual allegations must be enough to raise a right to relief above the speculative level ... ." Id. (citations omitted).

In making such a determination, courts "must only consider those facts alleged in the complaint and accept all of those allegations as true." ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994) (citing Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)); see also Twombly, 550 U.S. at 555-556 (stating that courts must assume that "all the allegations in the complaint are true (even if doubtful in fact)"). The Court must also accept as true all reasonable inferences that may be drawn from the allegations, and view those facts and inferences in the light most favorable to the non-moving party. Rocks v. Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989). The Court, however, need not accept as true "unsupported conclusions and unwarranted inferences," Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173, 183-84 (3d Cir. 2000) (citing City of Pittsburgh v. West Penn Power Co., 147 F.3d 256, 263 n.13 (3d Cir. 1998)), or the plaintiff's "bald assertions" or "legal conclusions." Morse v. Lower Merion Sch. Dist., 132 F.3d. 902, 906 (3d Cir. 1997).

In ruling on a motion to dismiss, the Court may consider the allegations contained in the complaint, exhibits attached to the complaint, matters of public record, and records of which the Court may take judicial notice. See Tellabs v. Makor Issues & Rts., 551 U.S. 308, 322 (2007); Pension ...

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