The opinion of the court was delivered by: Yvette Kane, Chief Judge United States District Court Middle District of Pennsylvania
In his complaint, Plaintiff Jerry Dusich brings a litany of claims against a dozen defendants. (Doc. No. 1.) On August 27, 2010, Defendant Bank of America filed a motion to dismiss the claims stated against it in Counts I, II, VI, and XII of Plaintiff's complaint. (Doc. No. 6.) These four counts represent the only claims pending against Bank of America. (Doc. No. 1.) Bank of America supported its motion with a brief in support. (Doc. No. 7.) Plaintiff failed to respond to Bank of America's motion. On October 5, 2010, this Court ordered Plaintiff to show cause on or before October 12, 2010, why Bank of America's motion to dismiss should not be granted. (Doc. No. 8.) Plaintiff responded on October 12, 2010, with a motion for a twenty day extension of time to prepare an amended complaint in lieu of a brief in opposition to Bank of America's motion to dismiss. (Doc. No. 9.)Plaintiff did not actually file a proposed amended complaint or explain how an amended complaint would cure any of the defects cited in Bank of America's motion to dismiss. (Doc. No. 9.) Bank of America filed a response on October 25, 2010. (Doc. No. 13.) For the following reasons the Court will deny Plaintiff's request for leave to amend and will grant Bank of America's motion to dismiss.*fn1
According to Plaintiff's complaint, this case arises from a housing fraud scam run by individuals who targeted homeowners facing the loss of their homes. Plaintiff's home was scheduled to be sold at a sheriff's sale on April 28, 2008. (Doc. No. 1 ¶ 19.) In March 2008, two individuals came to Plaintiff's home to notify him of a program offered by Defendant Joanne Seeley, which was purported to assist him with his financial difficulties and allow him to keep his home. (Id. ¶ 18, 23-24.) The following day, Plaintiff met with Seeley at her office where she explained that she could help Plaintiff with his financial problems by having an investor provide the funds necessary to save his home. (Id. ¶ 23-24.) On April 30, 2008, Plaintiff signed a variety of paperwork, including an authorization for S&D Property Solutions, LLC (hereinafter "S&D") to withdraw $950.00 per month from Plaintiff's debit account to pay the investor towards the new mortgage. (Id. ¶ 40-42). Plaintiff asserts that he was not given time to look over the remaining paperwork before signing it, but that he knows he did not sign a deed. (Id. ¶ 43, 47.) However, a deed on Plaintiff's home was recorded. (Id. ¶ 48.) During this time, Plaintiff claims he believed he was only refinancing his home. (Id. ¶¶ 26, 60.)
In fact, various individuals were scheming to take possession of Plaintiff's home. On May 23, 2008, the mortgage on Plaintiff's home, which was held by CitiMortgage, was paid. (Id. ¶ 49.) Jeffrey Deardorff purchased Plaintiff's home with the aid of a mortgage from EverBank. (Id. ¶ 51-52.) Subsequently, EverBank went out of business "due to illegal and shoddy business practices." (Id. ¶ 53.) Bank of America purchased Deardorff's mortgage from EverBank in a lot purchase. (Id. ¶ 54.) Plaintiff alleges that Bank of America did not pay full value for Deardorff's mortgage and "knew or should have known of the business practices of EverBank when purchasing this loan." (Id. ¶ 55-56.) Further, Plaintiff alleges "upon information and belief, the oversight of this mortgage transfer has involved either Freddie Mac, Fannie Mae and/or the oversight of the Federal Government through acts of various agencies." (Id. ¶ 57.) Plaintiff stopped making regular payments to S&D after November 2008, at which time Plaintiff's daughter was informed by Deardorff that Plaintiff no longer owned his home. (Id.¶ 59-60.) Plaintiff is currently residing in the home, but alleges that he is in imminent danger of losing his home due to Bank of America's desire to foreclose on the property. (Id. ¶ 61-62.)
The posture of this case permits the Court to resolve the parties' motions under the same standard of review. Because the time for a "matter of course" amendment allowed by Rule 15 has passed, Plaintiffs "may amend [their] pleading only with the opposing party's written consent or the court's leave." Fed. R. Civ. P. 15(a)(2). A court is directed to "freely give [such] leave when justice so requires." Id. Here, Bank of America opposes Plaintiffs' motion for leave to amend in part because such motion was not properly raised, and in part because any amendments would be futile. (Doc. No. 13 at 2-4.) "'Futility' means that the complaint, as amended, would fail to state a claim upon which relief could be granted. In assessing 'futility,' the District Court applies the same standard of legal sufficiency as applies under Rule 12(b)(6)." Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000) (citations omitted).
A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint, Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993), and is properly granted when, taking all factual allegations and inferences as true, the moving party is entitled to judgment as a matter of law. Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990). The burden is on the moving party to show that no claim has been stated. Johnsrud v. Carter, 620 F.2d 29, 33 (3d Cir. 1980). Thus, the moving party must show that Plaintiff has failed to "set forth sufficient information to outline the elements of his claim or to permit inferences to be drawn that those elements exist." Kost, 1 F.3d at 183 (citations omitted). A court, however, "need not credit a complaint's 'bald assertions' or 'legal conclusions' when deciding a motion to dismiss." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906, 908 (3d Cir. 1997). Indeed, the Supreme Court has recently held that while the 12(b)(6) standard does not require "detailed factual allegations," there must be a "'showing,' rather than a blanket assertion of entitlement to relief. . . . '[F]actual allegations must be enough to raise a right to relief above the speculative level.'" Phillips v. Cnty of Allegheny, 515 F.3d 224, 231-32 (3d Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).Put otherwise, a civil complaint must "set out 'sufficient factual matter' to show that the claim is facially plausible." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Ashcroft v. Iqbal, 129 S.Ct. 1937, 1955 (2009)).
Bank of America urges this Court to dismiss all counts raised by Plaintiff against Bank of America. Specifically, Bank of America has moved to dismiss the following claims raised in Plaintiff's complaint: (1) deprivation of the right to property under the Fourteenth Amendment in violation of Section 1983; (2) Pennsylvania state constitutional due process violation; (3) violation of the Real Estate Settlement Procedure Act ("RESPA"), 12 U.S.C. § 2601 et seq.; and (4) negligence. The Court will address each count in turn.*fn2
A. Fourteenth Amendment Claim
In Count I, Plaintiff alleges Bank of America violated his right to due process because Bank of America "[has] not afforded due process to Plaintiff concerning his property rights." (Doc. No. 1 ¶ 68.) To state a claim under Section 1983, Plaintiff must establish two jurisdictional prerequisites. Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 946 (1982). First, Plaintiff must allege a violation of a right "secured by the Constitution and laws of the United States." Id. Second, Plaintiff must show that the alleged deprivation was caused by a person acting under color of state law. Id. Bank of America contends that Plaintiff's federal due process claim must fail because a mortgage foreclosure action is not state action for purposes of a Section 1983 claim. (Doc. No. 7 at 9.) The Court agrees.
Plaintiff's complaint does not assert that Bank of America was acting under color of state law. Rather, Plaintiff only makes vague reference to oversight by the government. (Doc. No. 1 ¶ 66.) However, many courts have recognized that a private lender's actions during foreclosure proceedings cannot constitute state action in violation of Section 1983 or the Fourteenth Amendment. See Jacobowitz v. M&T Mortg. Corp., 372 F. App'x 225, 227 (3d Cir. 2010) (finding district court's dismissal of Section 1983 claims against bank proper because "the complaint does not . . . contain any allegations suggesting that M&T was acting under color of state law in effectuating the foreclosure"); Earnest v. Lowentritt, 690 F.2d 1198, 1201-02 (5th Cir. 1982) (finding that, unlike an ex partesituation, "initiation of foreclosure proceedings pursuant to a mortgage implicates no similar 'authority of state law'" and that to hold otherwise would "transform every foreclosure action between private parties into state action of constitutional dimensions") (citations omitted); Zebrowski v. Wells Fargo Bank, N.A., 657 F. Supp. 2d 511, 522 (D.N.J. 2009) ...