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Kosicki v. Nationstar Mortgage, LLC

United States District Court, Third Circuit

May 28, 2013

BRIAN J. KOSICKI, TONY A M. KOSICKI, Plaintiffs,
v.
NATIONSTAR MORTGAGE, LLC, CHICAGO TITLE INSURANCE COMPANY, FIDELITY NATIONAL FINANCIAL, INC., AMTRUST FINANCIAL CORPORATION d/b/a AMTRUST BANK, FIDELITY CLOSING SERVICES, LLC, FANNIE MAE, Defendants.

MEMORANDUM OPINION AND ORDER OF COURT

KIM R. GIBSON, District Judge.

I. SYNOPSIS

Pending before the Court is Defendants Nationstar Mortgage, LLC ("Nationstar") and Federal National Mortgage Association ("Fannie Mae, " collectively with Nationstar, "Defendants") Motion to Dismiss For Lack of Subject Matter Jurisdiction and Failure to State a Claim Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (Doc. No. 3). Plaintiffs Brian J. Kosicki and Tonya M. Kosicki (collectively, "Plaintiffs") did not file a response in opposition to Defendants' motion, but rather filed a Motion to Remand Case to the Court of Common Pleas of Cambria County, Pennsylvania (Doc. No. 6), of which Defendant Fannie Mae[1] opposes (See Doc. No. 11). For the reasons that follow, the motion to dismiss is GRANTED with respect to Defendants Nationstar and Fannie Mae, and Plaintiffs' motion to remand is GRANTED in accordance with this Memorandum.

II. BACKGROUND

This case arises from Plaintiffs' alleged refinancing in November 2008 of their property located in Patton, Pennsylvania. (Doc. Nos. 1-4 at 2; 5 at 3). The refinance involved AmTrust Financial Corporation d/b/a AmTrust Bank (hereinafter, "AmTrust"), which loaned Plaintiffs the amount of $129, 000 in return for an executed mortgage and note with Plaintiffs' real property[2] listed as collateral. (Doc. Nos. 1-4 at 2; 5 at 3). Under this refinance, Plaintiffs were to receive $47, 026.04 in cash. (Doc. Nos. 1-4 at 3; 5 at 3). Defendant Fidelity Closing Services, LLC[3] served as the closing agent for AmTrust and allegedly issued Plaintiffs a check in the amount of $47, 026.04. (Doc. Nos. 1-4 at 6; 5 at 4). Plaintiffs' alleged injury in this case arises from the allegation that Fidelity absconded with these funds. Specifically, Plaintiffs contend that after attempting to cash the check, they received notice that there were "insufficient funds available, " in the maker's (Fidelity Closing Services, LLC) account to cover the check. (Doc. No. 1-4 at 6). Plaintiffs have alleged that "[d]espite not receiving the proceeds from the refinance, Plaintiffs have paid all sums due and payable pursuant to the terms of the Mortgage and Note...." (Id. at 7).

Subsequently, Plaintiffs initiated this lawsuit in October 2009 in the Court of Common Pleas of Cambria County against AmTrust, Ticor Insurance Services, Inc., Ticor Title Insurance Company, Fidelity National Insurance Services, Inc., and Fidelity National Financial, Inc., and Fidelity National Title Group. (See Doc. No. 1-5 at 33-34). Plaintiffs complaint alleged several different claims including breach of contract, unjust enrichment, restitution, and conversion. (Doc. No. 5 at 4). Then, on December 4, 2009, AmTrust ceased doing business and the Federal Deposit Insurance Company ("FDIC") was appointed as receiver pursuant to the Federal Financial Institutions Reformation, Recovery, and Enforcement Act of 1989 ("FIRREA"), 12 U.S.C. ยง 1821. (Doc. Nos. 1-4 at 7; 5 at 4). The next day, the FDIC transferred, "substantially all of the assets and almost none of the liabilities of AmTrust, " to New York Community Bank pursuant to a Purchase and Assumption Agreement (the "P & A Agreement"). (Doc. No.5 at 5). The P & A Agreement expressly stated that AmTrust's liabilities were retained by the FDIC in its capacity as receiver for AmTrust.[4] (See Doc. No. 3-6).

Plaintiffs allege that in February 2010, the FDIC provided them with notice that AmTrust no longer owned Plaintiffs' mortgage and note, and that these were now, "owned by an investor... and being serviced by a division of New York Community Bank." (Doc. No. 1-4 at 7). Plaintiffs then filed an amended complaint naming Nationstar as a Defendant, [5] alleging that they did not become aware that Nationstar became the successor in interest to AmTrust as owner of the mortgage and note until January 2011. (Doc. No. 1-4 at 7). Defendants, however, aver that, "Nationstar never purchased the Loan, " but was rather only assigned the, "servicing rights to the Loan... from the FDIC as receiver for AmTrust, " pursuant to a separate purchase and sale agreement that was executed on September 3, 2010. (Doc. Nos. 5 at 6; 3-11 to 3-16).

Nationstar was added as a defendant based upon the theory that as a successor in interest to AmTrust via the FDIC, Nationstar could be held liable. (Doc. Nos. 1-9, 1-10). In May 2011, the FDIC published in the Federal Register a notice of "Determination of Insufficient Assets to Satisfy Claims Against Financial Institution in Receivership, " for AmTrust Bank. (Doc. No. 3-9 at 9). Specifically, the FDIC, "determined that insufficient assets exist in the receivership of AmTrust Bank, Cleveland, Ohio, to make any distribution to general unsecured claims, and therefore such claims will recover nothing and have no value." (Id. The FDIC provided a copy of this notice as well as a notice of improper service of litigation upon the Plaintiffs and their attorney subsequent to May 2011, but no later than February 2012. (Id. at 3-8). In this notice of improper service, the FDIC made clear the administrative process for receivership claims against AmTrust pursuant to FIRREA. (Id. at 6-8). Specifically, the FDIC spelled out in its notice that while, "[t]he time for filing administrative claims against the Receiver expired on March 10, 2010 (the "Claims Bar Date"), " it would still, "consider a late filed claim under certain circumstances, " and give Plaintiffs the opportunity for any submitted claim to be reviewed under the administrative process set up by FIRREA.[6] (Id. at 6). In addition to providing Plaintiffs with notice of the mandatory FIRREA administrative process, the letter also indicated that any judicial determination or judgment in Plaintiffs favor would be moot, "because the receivership estate ha[d] insufficient assets to pay the claims of any general unsecured creditors." (Id.).

Subsequently, in April 2012, Plaintiffs became aware that Fannie Mae is in fact the current owner and holder of the mortgage and note, and filed a Complaint Against Additional Defendant alleging five counts against Fannie Mae. (Doc. Nos. 1-2 at 8; 5 at 6). Fannie Mae then removed the action to this Court on August 24, 2012. To date, there has been no indication that Plaintiffs ever filed a claim with the FDIC concerning their allegations against AmTrust. Shortly after Fannie Mae's removal to this Court, Defendants filed the instant motion to dismiss and Plaintiffs filed their motion to remand. The motions have been fully briefed and are now ripe for determination.

III. STANDARD OF REVIEW

Defendants assert two bases for their motion to dismiss: lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1) and failure to state a claim under Rule 12(b)(6). Plaintiffs request that this case be remanded to Pennsylvania State Court. The Court will discuss the relevant standards below.

A. Motion to Dismiss Pursuant to 12(b)(1)

"At issue in a Rule 12(b)(1) motion is the court's very power to hear the case."' Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006) (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977)). Consequently, a court must grant a motion to dismiss under Rule 12(b)(1) if it lacks subject matter jurisdiction to hear a claim. In re Schering-Plough Corp. Intron/Temodar Consumer Class Action, Nos. 10-3046 and 10-3047, 2012 U.S.App. LEXIS 9832, *14 (3d Cir. May 16, 2012). In evaluating such a motion, a court must first determine whether the movant presents a facial or factual challenge. Id. at *15 (citing Mortensen, 549 F.2d at 891).

Where a defendant brings a facial challenge, the court must accept as true the allegations contained in the complaint. See Petruska, 462 F.3d at 302. Instantly, however, Defendants have presented a factual challenge to this Court's subject matter jurisdiction by attacking this Court's jurisdictional power to hear the case. See CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008) (noting that, "a factual attack concerns the actual failure of [a plaintiffs] claims to comport [factually] with the jurisdictional prerequisites.' ") (quoting United States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir. 2007)). Consequently, the Court may "consider affidavits, depositions, and testimony to resolve factual issues bearing on jurisdiction." Gotha v. United States, 115 F.3d 176, 179 (3d Cir.1997); see also Mortensen, 549 F.2d at 891-92 (explaining that because a trial court's power to hear a case is at issue in a factual 12(b)(1) motion, the court is free to weigh evidence beyond the plaintiffs allegations). Additionally, "[i]n the typical factual' attack, the plaintiffs allegations are not controlling, but are mere evidence on the issue to be considered by the trial court. The court may also consider exhibits outside the pleadings." Rhoades v. United States, 950 F.Supp. 623, 628 (citing International Ass'n of Machinists & Aerospace Workers v. Northwest Airlines, Inc., 673 F.2d 700, 711 (3d Cir. 1982)). Under this standard, "no presumptive truthfulness attaches to plaintiffs allegations, and the existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of jurisdictional claims.' " Davis, 2003 WL 21219821, at *1 (quoting Carpet Group Intern. v. Oriental Rug Importers, Ass'n., 227 F.3d 62, 69 (3d Cir.2000)).

B. Motion to Dismiss Pursuant to 12(b)(6)

The Federal Rules of Civil Procedure require that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. Civ. P. 8(a)(2). Federal Rule of Civil Procedure 12(b)(6) allows a party to seek the dismissal of a complaint or portion of a complaint for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). In order to avoid dismissal under Rule 12(b)(6), a pleading party's complaint must provide "enough factual matter" to allow the case to move beyond the pleading stage of litigation; the pleader must "'nudge [his or her] claims across the line from ...


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