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Khan v. Ocwen Financial Corp.

United States District Court, E.D. Pennsylvania

February 13, 2017

KAMRAN KHAN
v.
OCWEN FINANCIAL CORP., et al.

          MEMORANDUM

          John R. Padova, J.

         Plaintiff Kamran Khan brought suit against Defendants Ocwen Financial Corporation, Ocwen Loan Servicing LLC (collectively “Ocwen”), One West Bank, and U.S. Bank after his home was threatened with foreclosure. He asserts state law claims of (i) quiet title, (ii) abuse of process, (iii) intentional infliction of emotional distress, and (iv) fraud. Defendants move to dismiss all four Counts of the Complaint. For the following reasons, we grant Defendants' Motion and dismiss Plaintiff's Complaint with prejudice.

         I. BACKGROUND

         The Complaint alleges the following facts. Plaintiff and his then-wife executed a mortgage in 2005 using the Mortgage Electronic Registration System (“MERS”). (Compl. ¶ 12). MERS later assigned the loan to One West Bank. (Id. ¶ 13). According to the Complaint, MERS and One West Bank routinely accomplished assignments using a robo-signer, conducting no prior review and failing to properly notarize relevant documents. (Id. ¶¶ 14-16).

         In 2010, One West initiated foreclosure proceedings against Plaintiff in the Court of Common Pleas of Montgomery County. (Id. ¶ 17). While Plaintiff admitted in that action that he was behind on payments, he claimed that the mortgage was not in default because he was wrongly denied a loan modification.[1] One West subsequently assigned the loan to Lehman Brothers and then, when Lehman went bankrupt, U.S. Bank took over the loan as part of Lehman's bankruptcy proceedings. (Compl. ¶¶ 18, 21-22).

         At some point, Ocwen began servicing the loan and took over as the plaintiffs in the foreclosure proceedings.[2] (Id. ¶ 28). During discovery in those proceedings, Plaintiff attempted to depose a representative of MERS and One West who had testified in other cases about the robo-signing of assignments without prior review or proper notarization. (Id. ¶¶ 29, 31). However, in June of 2016, before that deposition was conducted, Ocwen discontinued the foreclosure proceedings. (Id. ¶¶ 32-33). Soon after Ocwen discontinued the foreclosure proceedings, Plaintiff initiated this suit.

         Count I of the Complaint asserts a quiet title claim, averring that the “underlying mortgage [on Plaintiff's home] is a nullity” because the assignments were “fraudulently created.” (Id. ¶¶ 40-41). Count II asserts that the foreclosure action against Plaintiff was “malicious, dilatory, and an intentional and flagrant abuse of process.” (Id. ¶¶ 45-47). Count III asserts an intentional infliction of emotional distress claim, alleging that, as a result of Defendants' conduct, Plaintiff “has suffered severe emotional and psychological distress, including but not limited to the fact that the financial pressures caused by Defendants contributed to . . . the dissolution of his marriage and the disproportionate division of the net marital estate.” (Id. ¶ 50). Finally, Count IV asserts a claim for fraud based on Defendants' conduct in “robo-signing purported assignments.” (Id. ¶¶ 51-54).

         Defendants have filed a Motion to Dismiss all four Counts of the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff's response to this Motion contests the dismissal of the quiet title claim, but does not address Defendants' arguments as to the abuse of process, intentional infliction of emotional distress, and fraud claims.[3]

         II. LEGAL STANDARD

         When considering a motion to dismiss pursuant to Rule 12(b)(6), we “consider only the complaint, exhibits attached to the complaint, [and] matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)). We take the factual allegations of the complaint as true and “construe the complaint in the light most favorable to the plaintiff.” DelRio-Mocci v. Connolly Props., Inc., 672 F.3d 241, 245 (3d Cir. 2012) (citing Warren Gen. Hosp. v. Amgen, Inc., 643 F.3d 77, 84 (3d Cir. 2011)). Legal conclusions, however, receive no deference, as the court is “‘not bound to accept as true a legal conclusion couched as a factual allegation.'” Wood v. Moss, 134 S.Ct. 2056, 2065 n.5 (2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         A plaintiff's pleading obligation is to set forth “a short and plain statement of the claim, ” Fed.R.Civ.P. 8(a)(2), which gives the defendant “‘fair notice of what the . . . claim is and the grounds upon which it rests.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). The complaint must contain “‘sufficient factual matter to show that the claim is facially plausible, ' thus enabling ‘the court to draw the reasonable inference that the defendant is liable for [the] misconduct alleged.'” Warren Gen. Hosp., 643 F.3d at 84 (quoting Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009)). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). In the end, we will grant a motion to dismiss brought pursuant to Rule 12(b)(6) if the factual allegations in the complaint are not sufficient “‘to raise a right to relief above the speculative level.'” W. Run Student Hous. Assocs., LLC v. Huntington Nat'l Bank, 712 F.3d 165, 169 (3d Cir. 2013) (quoting Twombly, 550 U.S. at 555).

         III. DISCUSSION

         Plaintiff asserts state law claims for quiet title, abuse of process, intentional infliction of emotional distress, and fraud against all Defendants. Defendants move to ...


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