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Swope v. Northumberland National Bank

United States District Court, Middle District of Pennsylvania

April 1, 2014

RODNEY A. SWOPE, Plaintiff
THE NORTHUMBERLAND NATIONAL BANK, J. TODD TROXELL, individually and in his official capacity as Senior Vice President for Lending and Loan Administration for the Northumberland National Bank, and JOHN DOES 1- 0, Defendants

Brann Judge


Martin C. Carlson United States Magistrate Judge


In this case, the Court has been invited into a long-standing dispute between a defaulted borrower and the bank that sold his home in foreclosure proceedings that were duly authorized under Pennsylvania law. The plaintiff, Rodney Swope, has alleged that the Northumberland National Bank, a Pennsylvania corporation, engaged in a variety of unlawful conduct during this foreclosure process by, inter alia, unilaterally increasing the judgment claimed to be owed, refusing to accept a judgment payoff that the plaintiff timely offered, and causing the Sheriff of Snyder County, Pennsylvania to sell the plaintiff’s home through a foreclosure sale. (Doc. 11, Am. Compl)

Although the complaint is short on factual allegations and long on legal conclusions, the plaintiff generally asserts that these alleged acts or omissions were part of an overarching custom, policy or practice of the bank “to unlawfully increase judgment amounts without adjudication and force Sheriff’s Sales despite opportunity towards, at least, judgment pay off, under color State law [sic], including by and through a failure to train, supervise, otherwise abide due process and the law.” (Id. ¶ 16.) The plaintiff has endeavored to claim that these asserted unlawful acts amount to violations of the United States Constitution and Pennsylvania state law.

The defendants have moved to dismiss the amended complaint, and have argued a number of substantive legal points that they contend compels judgment in their favor. Although the parties quarrel about a number of factual and legal matters, we believe that these matters are secondary to a central flaw in this action: the plaintiff has failed to allege facts that plausibly show that the named defendants constitute state actors, and thus all of his federal claims are fatally flawed. Because the plaintiff’s federal claims fail as a matter of law, and because numerous courts have on very similar facts rejected claims by plaintiffs that banks and their officers who are involved in foreclosure proceedings constitute “state actors”, we will recommend that the plaintiff’s federal claims be dismissed. Moreover, we will recommend that the Court decline to exercise supplemental jurisdiction in this case, which involves issues of state law arising out of a dispute between a bank and a defaulted borrower that has already been through the state courts.


This action arises out of Northumberland National Bank’s civil action in mortgage foreclosure that was taken against the plaintiff on November 3, 2008, in the Snyder County Court of Common Pleas.[1] (Doc. 15, Ex. A) The plaintiff was served with notice of the action, but failed to timely respond. The bank, in turn, moved in state court for entry of default judgment. (Id., Ex. D.) On December 23, 2008, the Snyder County Prothonotary entered judgment against the plaintiff in the amount of $107, 552.71, plus costs and interest from the date of the judgment.

On January 9, 2009, the bank filed a praecipe for writ of execution in the amount of $109, 902.61. (Id., Ex. E.) The plaintiff was served with the writ of execution. (Id., Ex. F.) On January 29, 2009, the bank put the plaintiff on notice that the Snyder County Sheriff intended to conduct a Sheriff’s sale to sell the property that secured the bank’s loan to the plaintiff. (Id., Ex. G.) On April 17, 2009, the Sheriff’s sale was continued until July 24, 2009.

On July 17, 2009, however, the plaintiff filed a petition for relief pursuant to Chapter 13 of the United States Bankruptcy Code. (Id., Ex. H.) The plaintiff subsequently filed for Chapter 13 bankruptcy protection on July 15, 2010, and July 11, 2012. (Id., Exs. I and J.) None of the plaintiff’s bankruptcies resulted in a discharge because each of the petitions was either dismissed or otherwise were withdrawn. However, throughout the bankruptcy proceedings, the automatic stay prevented the bank from taking action to have the property sold.

According to the plaintiff, during the pendency of one of his bankruptcy proceedings, in or around September 2012, his bankruptcy attorney contacted defendant J. Todd Troxell, a Senior Vice President of Lending and Loan Administration at the bank, in order to explore a potential private sale of the property to satisfy the judgment amount. (Am. Compl., ¶ 11.) The plaintiff alleges that Troxell demanded $175, 000 as a payoff amount, even though this was far in excess of the bank’s actual judgment amount. (Id.) When the plaintiff contacted Troxell directly, he was told that the bank would not accept a private sale. (Id., ¶ 12.)

Upon the dismissal of the plaintiff’s third bankruptcy proceeding, on December 21, 2012, the bank filed a praecipe for reissue of writ of execution in the amount of $115, 869.57. (Doc. 15, Ex. K) The plaintiff thereafter was served with notice of the bank’s praecipe. (Id., Ex. L.) On December 21, 2012, the Snyder County Prothonotary’s office reissued the writ of execution in the amount claimed. (Id., Ex. M.) On February 14, 2013, the bank filed an affidavit of service attesting that it provided the plaintiff with notice of an intended Sheriff’s sale of the property scheduled to take place on March 22, 2013. (Id., Ex. N.) On February 15, 2013, the Snyder County Sheriff’s Office filed a return certifying that the plaintiff had been served a copy of the reissued writ of execution. (Id., Ex. O.)

On April 30, 2013, the Snyder County Sheriff filed a return to certify that a Sheriff’s sale had been properly executed and that the property had been sold for $27, 000. (Id., Ex. Q.) The plaintiff asserts that in holding the sale in this way, the bank and defendants “unilaterally increased the judgment, refused to accept a judgment pay-off, and caused the Sheriff of Snyder County to sell Plaintiff’s home.” (Am. Compl., ¶ 15.)

The plaintiff initiated this action by filing a complaint on August 29, 2013. (Doc. 1) The bank moved to dismiss the complaint on October 7, 2013. (Doc. 3) On November 15, 2013, the plaintiff filed an amended complaint. (Doc. 11) On December 10, 2013, the bank moved to dismiss and filed a brief in support. (Docs. 15, 16) After being granted additional time, the plaintiff filed a brief in opposition to the motion on January 27, 2014. The bank ...

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