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Gerald Gesiorski; Dawn Gesiorski, H/W; and Lil' Bit of Chicago, Inc v. Branch Banking & Trust Company

May 10, 2013

GERALD GESIORSKI; DAWN GESIORSKI, H/W; AND LIL' BIT OF CHICAGO, INC.,
PLAINTIFFS
v.
BRANCH BANKING & TRUST COMPANY, F/N/A CARROLL COUNTY BANK & TRUST,
DEFENDANT



The opinion of the court was delivered by: Sylvia H. Rambo United States District Judge

(Judge Rambo)

MEMORANDUM

Presently before the court is Defendant's motion to dismiss Plaintiffs' complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). (Doc. 3.) Specifically, Defendant argues, inter alia, that Plaintiffs' complaint should be dismissed because the action is barred by the doctrine of res judicata. For the reasons set forth below, Defendant's motion will be granted, and Plaintiffs' claims will be dismissed.

I. Background*fn1

Plaintiff Lil' Bit of Chicago, Inc., is a Pennsylvania business corporation with a principal place of business address at 20 McKinley Ave., Hanover, York County. (Doc. 1-2, ¶ 1.) Plaintiffs Gerald and Dawn Gesiorski are adult residents of Pennsylvania. (Id. ¶ 2.) Defendant Branch Banking & Trust Company ("BB&T") is a banking corporation with business offices in Maryland and North Carolina. (Id. ¶ 3.)

At all times relevant to this litigation, the Gesiorskis were tenants by the entireties of a parcel identified as 894 Hershey Heights Road, Penn Township, York County, Pennsylvania. (Id. ¶ 5.) On December 23, 1992, Plaintiffs obtained a mortgage from BB&T's predecessor-in-interest, Carroll County Bank & Trust. (Id.) The mortgage secures a mortgage note executed contemporaneously with the mortgage. (Id.) Sometime thereafter, BB&T filed an action in assumpsit with confession of judgment against Plaintiffs. (Id. ¶ 6.) Plaintiffs each filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Middle District of Pennsylvania. (Id.) During the pendency of the Bankruptcy, the Gesiorskis asked for an accounting of loan repayments made to BB&T and for permission to apply insurance proceeds from the payment of an insured casualty loss to one of the business premises to reconstruction of the collateral. (Id. ¶ 7.) On May 1, 2006, both bankruptcies were dismissed without discharging the BB&T mortgage debt. (Id. ¶ 8.)

On July 8, 2003, BB&T filed an action in mortgage foreclosure against Plaintiffs, and on August 6, 2004, judgment was entered in the amount of $351,793.50. (Id. ¶¶ 9, 10, & 11.) On December 13, 2004, a Sheriff Sale was conducted and BB&T was the successful bidder at the sale, with a bid amount of $1,769.15, thus creating a deficiency that was not satisfied by the sale. (Id. ¶¶ 12, 13 & 15.) However, BB&T failed to commence an action for a deficiency judgment, in violation of 42 Pa. C.S. §8103(a). (Id. ¶ 17.)

At various times subsequent to the Sheriff's Sale of the home, the Gesiorski's had opportunities to sell the remaining parcels, subject to BB&T's mortgage. (Id. ¶ 19.) The Gesiorski's, through counsel, made multiple requests to BB&T on each occasion to provide a current statement of account and an amount for each remaining parcel which BB&T would accept to release each parcel from the mortgage lien as each sale concluded. (Id.) However, the bank did not respond and those opportunities to sell the home were lost. (Id.)

On December 1, 2009, counsel for Gesiorski made a formal written demand upon BB&T to satisfy the outstanding judgments and mortgage. (Id. ¶ 20.) Plaintiffs allege that they had a statutory right to satisfaction of the judgments, mortgage, and mortgage modifications no later than on and after June 13, 2005. (Id. ¶ 21.) Plaintiffs also allege that BB&T failed to satisfy the mortgage. (Id. ¶ 26h.) Specifically, Plaintiffs each bring the following claims against BB&T: (1) Breach of Contractual Duty of Good Faith and Fair Dealing (Counts I, IV, and VII); (2) Breach of Fiduciary Duty of Care (Counts II, V, and VIII); and (3) Attorneys' Fees for Defendant's vexatious behavior (Counts III, VI, and IX). (Doc. 1-2 ¶¶ 27-47.)

On March 13, 2013, Defendant filed the present motion to dismiss for failure to state a claim, accompanied by a brief in support. (Docs. 3 & 4.) On April 2, 2013, having received no brief in opposition from Plaintiffs, the court issued a rule to show cause why Defendant's motion should not be deemed unopposed, and granted Plaintiffs an extension of time to April 12, 2013, to respond. On April 5, 2013, Plaintiffs filed an answer to Defendant's motion to dismiss (Doc. 12) and a brief in opposition (Doc. 13). On April 19, 2013, Defendant filed a reply brief. Having now been fully briefed, the matter is ripe for disposition.

II. Standard

"Although res judicata and collateral estoppel are affirmative defenses, they may be raised in a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)." Walzer v. Muriel, Siebert & Co., Inc., 221 F. App'x 153, 155 (3d Cir. 2007.) When presented with a motion to dismiss for failure to state a claim, the court "must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions," Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009), and ultimately must determine "whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.'" Id. at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). The complaint must do more than allege the plaintiff's entitlement to relief; it must "show such an entitlement with its facts." Fowler, 578 F.3d at 211 (citations omitted). As the Supreme Court instructed in Iqbal, "[w]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a) (alterations in original).) In other words, a claim has "facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice." Id. "To decide a motion to dismiss, courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (citations omitted); see also Sands v. McCormick, 502 F.3d 263, 268 (3d Cir. 2007).

III. Discussion

The basis of Defendant's res judicata argument lies in a very similar case also filed in the Middle District of Pennsylvania before the Honorable John E. Jones. See Docket No. 1:12-CV-449-JEJ. In that case, the Gesiorskis and Lil' Bit of Chicago, Inc. brought claims against BB&T regarding the same mortgage at issue in this case. Specifically, Plaintiffs claimed that: (1) BB&T failed to satisfy the mortgage within sixty (60) days of the presumptive receipt of all sums due, in violation of the 21 P.S. § 721-6(d); (2) BB&T failed to satisfy the judgments within thirty (30) days as required; and (3) sought attorneys' fees for Defendant's "vexatious" conduct under 42 Pa. C.S. § 2503(9) and 21 P.S. § 721-6(d). On June 6, 2012, Judge Jones granted Defendant's motion to dismiss and dismissed the complaint with prejudice, finding that: (1) Plaintiffs failed to state a claim under the Mortgage Satisfaction Act, and; (2) under 42 Pa. C.S. § 8104, Plaintiffs claims for liquidated damages for Defendant's alleged failure to satisfy the mortgage foreclosure and judgments must be heard by the tribunal in which the original judgment was entered, in this case, the York County Court of Common Pleas. See Gesiorski v. BB&T, 2012 U.S. Dist. LEXIS 79077 (M.D. Pa. June 7, 2012). The court subsequently denied Plaintiffs' motion for reconsideration, and the ...


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