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Wainright v. Bank of America

September 21, 2010


The opinion of the court was delivered by: Judge Caputo


Presently before the Court is Defendants' Motion to Dismiss the Plaintiff's Complaint. (Doc. 5.) For the reasons discussed more fully below, Defendants' Motion to Dismiss will be denied.


Plaintiffs owned a home at 298 Packer St., Weatherly, Pennsylvania 18255, which was their residence. After getting behind on their mortgage payments, Defendant Bank of America filed a foreclosure action in the Court of Common Pleas of Carbon County Pennsylvania on November 25, 2009, and a Sherriff's Sale was set for March 2010. In late November, 2009, Plaintiffs contacted their mortgage servicer, Defendant Ocwen Loan Servicing ("Ocwen"), in an attempt to work out their mortgage arrears and become current on their mortgage. When paperwork was submitted, Plaintiffs allege they were repeatedly told that the Sheriff's Sale would be postponed while it was determined whether or not Plaintiffs qualified for a loan modification. (Compl. ¶ 26.)They received paperwork stating the same. (Compl. ¶ 27.) After allegedly being told in March 2010 that their HAMP application was in the process of final review and that the trial period for their modification would begin in May 2010, Plaintiffs learned on May 18, 2010 from a real estate agent that their home had in fact been sold at a Sheriff's Sale on May 14, 2010. (Compl. ¶ 35.) On June 7, 2010, Plaintiffs filed a Petition to Set Aside the Sheriff's Sale. Defendant Bank of America opposed the Petition and it was denied on July 9, 2010. Plaintiffs then brought the instant suit in state court on July 19, 2010.

In their Complaint, Plaintiffs claim that they were intentionally misled into not pursuing their rights in the foreclosure action with promises from the Defendants of a loan modification. The Plaintiffs' Complaint alleges: (1) Common Law Fraud; (2) Unfair Trade Practices; (3) Negligence; (4) Intentional Infliction of Emotional Distress; and (5) Injunctive Relief. Defendants removed the suit to federal court on August 6, 2010 (Doc. 1) and then filed a Motion to Dismiss on August 11, 2010 (Doc. 5). Plaintiffs Motion for Preliminary Injunction was denied on September 7, 2010. (Doc. 20.) In their Motion to Dismiss, Defendants argue that Plaintiffs are essentially asking this Court to overturn the final judgment of a state court in the foreclosure matter and re-litigate issues in federal court which have already been litigated in state court. Defendants contend that, as a result, this Court lacks subject-matter jurisdiction to hear the suit, being prohibited on both Rooker-Feldman and preclusionary grounds.


Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint, in whole or in part, for failure to state a claim upon which relief can be granted. Dismissal is appropriate only if, accepting as true all the facts alleged in the complaint, a plaintiff has not pleaded "enough facts to state a claim to relief that is plausible on its face," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), meaning enough factual allegations "'to raise a reasonable expectation that discovery will reveal evidence of'" each necessary element, Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556); see also Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993) (requiring a complaint to set forth information from which each element of a claim may be inferred). In light of Federal Rule of Civil Procedure 8(a)(2), the statement need only "'give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Twombly, 550 U.S. at 555). "[T]he factual detail in a complaint [must not be] so undeveloped that it does not provide a defendant [with] the type of notice of claim which is contemplated by Rule 8." Phillips, 515 F.3d at 232; see also Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663, 667 (7th Cir. 2007).

In deciding a motion to dismiss, the Court should consider the allegations in the complaint, exhibits attached to the complaint, and matters of public record. See Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). The Court may also consider "undisputedly authentic" documents when the plaintiff's claims are based on the documents and the defendant has attached copies of the documents to the motion to dismiss. Id. The Court need not assume the plaintiff can prove facts that were not alleged in the complaint, see City of Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 263 & n.13 (3d Cir. 1998), or credit a complaint's "'bald assertions'" or "'legal conclusions,'" Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (quoting In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1429-30 (3d Cir. 1997)). "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1950 (2009). When considering a Rule 12(b)(6) motion, the Court's role is limited to determining whether a plaintiff is entitled to offer evidence in support of her claims. See Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The Court does not consider whether a plaintiff will ultimately prevail. See id. A defendant bears the burden of establishing that a plaintiff's complaint fails to state a claim. See Gould Elecs. v. United States, 220 F.3d 169, 178 (3d Cir. 2000).


I. Lack of Subject-Matter Jurisdiction

Defendants argue that this Court lacks subject-matter jurisdiction to hear Plaintiffs' Complaint because it seeks to overturn a final state court judgment in federal court. According to the Defendants, Plaintiffs had two legitimate ways to challenge the foreclosure proceeding: appeal the foreclosure, which they did not, or file a motion to set aside the judgment, which they did and which was denied. As a result, the instant suit is according to Defendants a surreptitious attempt by Plaintiffs to re-litigate issues in federal court which they have already lost on in state court.

However, Plaintiffs argue that they are not seeking to collaterally attack the Sheriff's Sale or have the state court final judgment overturned. Rather, they are suing Defendants regarding their behavior throughout the foreclosure process, namely, misleading the Plaintiffs about the possibility of a loan modification while pressing forward with the Sheriff's Sale.

Plaintiffs argue that the state court's final judgment in the foreclosure action and their instant suit against the Defendants are two analytically separate and independent proceedings, and therefore this Court has subject-matter jurisdiction over the suit. As their main piece of evidence supporting this claim, Plaintiffs point to the significant legal differences between a state foreclosure action and the instant suit for damages.

First, mortgage foreclosure proceedings are brought in rem, pursuant to Pa.R.C.P. 1141, and their sole purpose is ...

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