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Taggart v. Norwest Mortgage

January 11, 2010

KENNETH J. TAGGART
v.
NORWEST MORTGAGE, INC., ET AL.



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

MEMORANDUM AND ORDER

The pro se plaintiff brings this action involving a mortgage loan held on his property in Holland, Pennsylvania. He alleges that the defendants, as successors to the original lender, are liable for violations of several federal and state statutes arising out of the formation and servicing of the loan. He also claims that the defendants, as lenders, breached a fiduciary duty owed to him as the borrower.

The defendant Deutsche Bank National Trust Co. ("Deutsche Bank") currently owns the loan as part of a securitized trust. Defendant Wells Fargo Home Mortgage, Inc. ("Wells Fargo"), currently acts as servicer of the loan under its trade name, America's Servicing Company ("ACS"). Wells Fargo moves to dismiss all of the plaintiff's claims on behalf of all of the defendants.*fn1

The plaintiff filed the original complaint in the District Court of Bucks County, Pennsylvania, on February 24, 2009. Wells Fargo removed the case to this Court on March 24, 2009. The plaintiff filed an amended complaint on July 7, 2009. The amended complaint includes claims previously asserted in separate state court actions.

The amended complaint lists 40 counts, although count 14 has been omitted. Counts 1-9 and 39 of the amended complaint allege violations of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq. ("RESPA"). Counts 10-13 and 18 allege violations of the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq. ("TILA"). Counts 15-17 and 19 allege violations of the Home Ownership Equity Protection Act, 15 U.S.C. § 1639 ("HOEPA"). Counts 20-22 allege that the defendants breached their fiduciary duty to the plaintiff. Counts 23-37 allege violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Laws, 73 P.S. § 201.1, et seq. ("UTPCPL"). Count 38 alleges violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. ("FCRA"). Finally, count 40 alleges violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA").

The Court grants in part and denies in part the defendants' motion to dismiss.

I. Facts as Alleged in Amended Complaint

The factual allegations made within the amended complaint are sparse. The plaintiff, Kenneth J. Taggart, alleges that he applied for a mortgage on a single family residential property he owned in Holland, Pennsylvania, on or about August 24, 2006. The loan application was made through a company called Community Lending. The plaintiff alleges that Community Lending then brokered the loan to Decision One Mortgage, Inc., who later sold the loan to Wells Fargo/ASC.

The plaintiff alleges that the original lender and broker made various misrepresentations and failed to follow proper procedures in settling the loan. The amended complaint also alleges that the defendants failed to follow proper procedures in resolving disputes that have arisen over the loan.

II. Analysis

In their motion to dismiss, the defendants move to dismiss all of the plaintiff's thirty-nine counts. The defendants' motion to dismiss is granted as to the plaintiff's claims under counts 1, 3, 4, 7, 15, 16, 17, 19, 20, 21, 22, 27, 32, 33, 34, 36 and 37, and those claims are hereby dismissed with prejudice. The defendants' motion to dismiss is also granted as to the plaintiff's claims under counts 2, 5, 6, 8, 9, 10, 11, 12, 13, 18, 23, 24, 25, 26, 28, 29, 30, 31, 35, 38 and 40, and those claims are hereby dismissed without prejudice. The defendants' motion to dismiss count 39 is denied in part and granted in part.

A. Legal Standard

Under Rule 8 of the Federal Rules of Civil Procedure, a plaintiff's complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Although detailed factual allegations are not required, a plaintiff cannot satisfy Rule 8 merely by making "a formulaic recitation of the elements of a cause of action" or "naked assertions devoid of further factual enhancement." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (U.S. 2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

In evaluating a motion to dismiss under Rule 12(b)(6), a court must accept all well-pleaded facts as true, but should disregard any legal conclusions; the court must then determine whether the facts alleged are sufficient to show that the plaintiff has a "plausible claim for relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (citing Iqbal, 129 S.Ct. at 1949). A claim has facial plausibility when the plaintiff pleads sufficient factual content to allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. See Iqbal, 129 S.Ct. at 1949.

B. RESPA

In Counts 1-9 and 39 of the amended complaint, the plaintiff alleges several violations of RESPA. The defendants move to dismiss all of the plaintiff's RESPA claims, on several grounds. The Court grants the defendants' motion to dismiss the plaintiff's claims under counts 1, 3, 4, and 7 with prejudice, grants the defendants' motion to dismiss the plaintiff's claims under counts 2, 5, 6, 8 and 9 without prejudice, and denies in part and grants in part the defendants' motion to dismiss count 39.

1. Counts 1, 3, 4 and 7

In counts 1, 3, 4 and 7, the plaintiff alleges violations of §§ 2603 and 2604 of RESPA.*fn2 See Am. Compl. at 6, 7-9, and 10-11. The defendants argue that the plaintiff's claims under these counts should be dismissed because the statute provides no private right of action under either §§ 2603 or 2604. See Defs' Mot. to Dismiss at 5 n.4.

The Court agrees with the defendants. The primary source of a private right of action is the text of the statute itself. Am. Telephone and Telegraph v. M/V Cape Fear, 967 F.2d 864, 866 (3d Cir. 1992). Section 2614 expressly provides a private right of action for violations of only §§ 2605, 2607, and 2608 of RESPA. Each of those sections has a provision that expressly provides a private right of action. See 12 U.S.C. §§ 2605(f), 2607(d), and 2608(b). No such right is created for §§ 2603 or 2604. Section 2614 does not mention §§ 2603 or 2604, and neither of those sections specifically provides a private right of action in the text. A private right of action, therefore, should not be implied under those sections. Several courts have reached a similar conclusion. See, e.g., Brophy v. Chase Manhattan Mortg. Co., 947 F. Supp. 879, 882 (E.D. Pa. 1996).

2. Counts 2, 5, 6, 8 and 9

In counts 2, 5, 6, 8 and 9, the plaintiff alleges that the defendants violated § 2607 by charging and failing to disclose unearned fees. See Am. Compl. at 9-10, 11-12. The defendants argue, among other things, that the plaintiff's claims under these counts were not timely filed. The Court finds that the plaintiff's claims under these counts are time-barred.

Under 12 U.S.C. § 2607, no person may give or accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed. In addition, no person may give or accept any fee, kickback, or thing of value pursuant to any agreement incident to or a part of a real estate settlement service shall be referred to any person. See 12 U.S.C. § 2607(a)-(b).

Under 12 U.S.C. § 2614, any action brought pursuant to § 2607 must be brought within one year of the date of the occurrence of the violation. See 12 U.S.C. § 2614. The statute of limitations begins to run when the facts that would support the plaintiff's cause of action are apparent or would be apparent to a reasonable person. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1389 (3d Cir. 1994).

The plaintiff alleges that certain fees related to the loan were unearned and were not disclosed at the closing. The defendants, however, submitted the loan's HUD-1 disclosure form, signed by the plaintiff on September 15, 2006, as an exhibit to their motion to dismiss.*fn3 This form shows that these fees were disclosed at the closing. See Defs' Mot. to Dismiss, Ex. B at lines 805, 806, 808, 809 and 901.

Because these fees were disclosed at the closing of the mortgage on September 15, 2006, the facts that would support the plaintiff's cause of action became apparent at that time. The plaintiff's claims, therefore, are time-barred because he did not bring his claims within one year of the closing date.

The plaintiff argues, however, that the doctrine of equitable tolling applies to his claims. See Pl.'s Cross-Mot. at 9-10. The Court of Appeals for the Third Circuit has not explicitly answered the question of whether equitable tolling applies to RESPA. The Court need not reach this question, however, because it finds that, even if equitable tolling were to ...


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