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Hersh v. CitiMortgage, Inc.

United States District Court, W.D. Pennsylvania

April 21, 2014

RANDY A. HERSH also known as RANDY HERSH, and MELINDA A. HERSH also known as MELINDA HERSH, his wife, Plaintiffs,

For RANDY A. HERSH, also known as RANDY HERSH, MELINDA A. HERSH, his wife, also known as MELINDA HERSH, Plaintiffs: David A. McGowan, LEAD ATTORNEY, Caroselli, Beachler, McTiernan & Conboy, Pittsburgh, PA.

For CITIMORTGAGE, INC., CITIGROUP, INC., and, CITIBANK, N.A., Defendants: Daniel McKenna, LEAD ATTORNEY, Ballard Spahr LLP, Philadelphia, Pa; Martin C. Bryce, Jr., LEAD ATTORNEY, Ballard, Spahr, Andrews & Ingersoll, Philadelphia, PA.


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Terrence F. McVerry, United States District Judge.

Pending before the Court is the MOTION TO DISMISS SECOND AMENDED COMPLAINT (ECF No. 18) filed by CitiMortgage, Inc. (" CitiMortgage" or " Defendant" ), with brief in support (ECF No. 19). Randy A. and Melissa A. Hersh (" Plaintiffs" ) filed a brief in opposition (ECF No. 20). Defendant submitted a reply brief (ECF No. 21), and Plaintiff, upon request from the Court, submitted a sur-reply brief (ECF No. 22). The motion is ripe for disposition.

I. Background

This case arises out of a mortgage foreclosure proceeding initiated by CitiMortgage in 2009. On August 16, 2013, Plaintiffs filed suit in the Court of Common

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Pleas of Fayette County, raising claims for breach of contract and a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (" UTPCPL" ), 73 P.S. § 201 et seq., against CitiMortgage, Citibank, N.A., and Citigroup, Inc. Defendants removed the action to this Court on September 13, 2013, on the basis of diversity jurisdiction (ECF No. 1). A week later, they filed a motion to dismiss the entire action (ECF No. 7). Plaintiffs responded by filing an Amended Complaint, which contained allegations largely mirroring those in the first Complaint (ECF No. 9). Another motion to dismiss then followed, in which Defendants asserted a number of grounds for dismissal: they claimed that Citibank and Citigroup were improper defendants; res judicata barred Plaintiffs' claims; the statute of limitations had run on Plaintiffs' breach of contract claim; Pennsylvania law does not recognize a claim for breach of the implied covenant of good faith and fair dealing; and the UTPCPL claim failed insofar as Plaintiffs' did not allege any fraudulent or deceptive behavior on Defendants' part (ECF No. 12). On December 30, 2013, the Court granted Defendants' motion but granted Plaintiff leave to file a Second Amended Complaint. (ECF No. 16).

Plaintiffs filed their Second Amended Complaint on January 14, 2014, naming only CitiMortgage as a Defendant (ECF No. 17). The Second Amended Complaint, which repeats all of the allegations of the prior versions of the Complaint but raises a few new allegations, includes just one count: a breach of contract claim founded upon a breach of the implied covenant of good faith and fair dealing. Sec. Am. Compl. ¶ 37. Specifically, Plaintiffs allege that Defendant breached the contract " by adding charges they knew they had no right to add, to the monthly mortgage bills . . . specifically the Fayette County Tax claim Bureau lien and the judgment of $4,067.55." Id. ¶ 39. According to the Second Amended Complaint, " Defendant knew or should have known that it had no right to add these charges because Defendant possessed a copy of the Trustee's final report which clearly showed that the tax lien was paid in full and that the Plaintiffs advised them that the $ 4,067.55 judgment in favor the Teamsters Union had been discharged in 1998 in Chapter 7 proceeding at Case No. 98-29343." Id. ¶ 40. Plaintiffs also allege that CitiMortgage breached the contract " by fraudulently claiming that Plaintiffs had not paid the amount of $ 1,003.18 for each month from September 2008 through February of 2009, because Defendant knew or should have known Plaintiffs had paid Defendant CitiMortgage, Inc. directly in the amount of $1,003.18 per month from September 2008 through February 2009." Id. ¶ 41. In addition, they aver that the contract was breached when Defendant " fail[ed] to accept and apply the Plaintiffs' correct payments to the mortgage made throughout 2008 and into 2009, which led to the eventual foreclosure on Plaintiffs' property[; ]" " initiat[ed] a foreclosure action in the Court of Common Pleas of Fayette County on May 20, 2009[; ]" and took " a default judgment against the Plaintiffs and [sold] the property through the Fayette County Sheriff's Office in March, 2010." Id. ¶ ¶ 43, 44, 45. Plaintiffs seek damages for the loss " of their home, real property, and residence" and " the loss, destruction, and diminution of their personal property as a result of the actions taken by contractors and/or agents at FHMLC when ejecting them from their property." Id. ¶ 47. They also request damages for " [p]ast, present and future embarrassment, emotional distress, anxiety, and mental anguish as a result of the above[.]" Id.

II. Standard of Review

A motion to dismiss pursuant to Rule 12(b)(6) challenges the legal sufficiency of

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a complaint. The Court must accept as true all well-pleaded facts and allegations and must draw all reasonable inferences therefrom in favor of the plaintiff. However, as the Supreme Court made clear in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the " factual allegations must be enough to raise a right to relief above the speculative level." Id. The Supreme Court has subsequently broadened the scope of this requirement, stating that only a complaint that states a plausible claim for relief survives a motion to dismiss. Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009) (emphasis added).

A district court must conduct a two-part analysis when presented with a motion to dismiss for failure to state a claim. First, the Court must separate the factual and legal elements of the claim. Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). Although the Court " must accept all of the complaint's well-pleaded facts as true, [it] may disregard any legal conclusions." Id. at 210-211. Second, the Court " must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a 'plausible claim for relief.' In other words, a complaint must do more than allege the plaintiff's entitlement to relief. A complaint has to 'show' such an entitlement with its facts." Id. at 211 (citing Iqbal, 129 S.Ct. at 1949). The determination of " plausibility" will ...

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