United States District Court, W.D. Pennsylvania
GIBSON UNITED STATES DISTRICT JUDGE
United States Code is the official compilation of codified
federal law. As of March 2017, the U.S. Code contains 54
titles. Those 54 titles contain hundreds of chapters, and
those hundreds of chapters contain thousands of laws. To a
layperson, it may seem as though all those laws are bases
upon which to sue. After all, if a law is broken, is it not
up to the courts to declare it so?
simple answer is maybe. Our legal system has certain
threshold requirements that must be met before a person can
sue. These requirements include the existence of a private
cause of action; just because a law was broken does not mean
that Congress intended that law be judicially enforceable by
a private litigant. This means that flipping through the U.S.
Code in search of aptly named laws upon which to sue is a
poor litigation strategy. Which brings us to this case.
April 11, 2016, Debra Heverly Campbell-representing
herself-sued M&T Bank in the Blair County Court of Common
Pleas. Campbell's case arises out of the
foreclosure of her residence in Honolulu, Hawaii, in the
early 2000s. M&T Bank removed the case to this Court on
May 26, 2016. (ECF No. 1.) Pending before the Court is
M&T Bank's motion to dismiss Campbell's complaint
(ECF No. 3). For the reasons that follow, M&T Bank's
motion to dismiss is GRANTED.
Campbell's recital of the facts underlying this case is
disjointed and difficult to understand, the Court has
attempted below to distill the relevant facts from her
complaint and the exhibits thereto (ECF No. 1-3), which the
Court may also consider in deciding a motion to dismiss.
Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir.
2010). The Court accepts as true the factual allegations of
Campbell's complaint for purposes of deciding the motion
to dismiss, but “[w]here those allegations are
contradicted by written exhibits that [Campbell] attached to
[her] . . . complaint, . . . the exhibits trump the
allegations.” Abcarian v. McDonald, 617 F.3d
931, 933 (7th Cir. 2010).
April 14, 2000, Pohaku Funding Investment Corporation-as
trustee for the Pohaikealoha Trust-obtained a $400, 000 loan
from Keystone Financial Bank, N.A. (ECF No. 1-3 at 37-40,
41-42). Campbell was a guarantor for this loan
(id.), and asserts that she was the beneficiary of
the Pohaikealoha Trust (see Id. ¶ 84). The
purpose of the loan was to finance the purchase of an
apartment in Honolulu, Hawaii, at Colony Surf Apartments.
(Id. ¶ 9.) At the time, Keystone Bank already
held a mortgage on that property. (Id.; see also
Id. at 45.) Campbell made the payments on this loan
directly to Keystone Bank-presumably through her bank account
with Keystone Bank. (Id. ¶ 8-9.)
October 2000, M&T Bank became the successor to Keystone
Bank via merger. (Id. ¶ 10.) When M&T Bank
merged with Keystone Bank, M&T Bank without notice placed
10-business-day holds on all deposits. (Id.) This
caused Campbell's loan payments to become late and caused
her to incur late and overdraft fees. (Id.) At the
same time, M&T Bank canceled Campbell's lines of
credit and demanded immediate payment on her outstanding
balances. (Id. ¶ 11.) Campbell then closed her
accounts with M&T Bank, opened a bank account with a bank
in California, and began making her loan payments through
that bank. (Id. ¶¶ 14-15.)
is not clear on the chronology of the subsequent events, but
as best the Court can make out the following occurred:
although Campbell remained current on her loan payments to
M&T Bank, she fell behind on her payment of maintenance
fees to Colony Surf Apartments due to medical issues
involving her daughter. (Id. ¶ 28.) Campbell
was never more than three months behind on her
maintenance-fee payments and was making monthly catch-up
payments. (Id.) Nevertheless, Colony Surf sent
Keystone Bank-and not M&T Bank, Campbell, or the
Pohaikealoha Trust-a notice of default for Campbell's
maintenance fees plus legal fees.(Id. ¶¶
20, 29, 33.) Campbell's default was not cured by the
relevant deadline. (Id. ¶ 31.) Colony Surf
thereafter refused to accept any more monthly payments from
Campbell unless she paid all her arrears and legal fees,
which totaled approximately $16, 500. (Id. ¶
point during these events, Campbell also filed for bankruptcy
under Chapter 13 “in an effort to have a federal judge
address the egregious legal fees being charged by Colony
Surf, ” though Campbell later withdrew her bankruptcy
filing. (Id. ¶¶ 37, 39.) Although Campbell
claims she never fell behind on her payments to M&T Bank
(id. ¶ 28), she contradicts this assertion
later in her complaint by stating that she paid an
“amount owed to Keystone Bank/M&T Bank, ”
(id. ¶ 39).
appears that Campbell's default to Colony Surf was not
timely addressed, and Colony Surf filed an
accelerated-foreclosure action in the Circuit Court of the
First Circuit for the State of Hawaii. (Id. ¶
40; see ECF No. 1-3 at 56.) Campbell admits she was
served with notice of the accelerated-foreclosure action.
(ECF No. 1-3 ¶ 26.) The Pohaku Funding Investment
Corporation-one of the defendants in the
accelerated-foreclosure action-was represented by counsel in
that case. (ECF No. 1-3 at 56.) Colony Surf prevailed in that
action, and on March 27, 2003, the court cancelled
Pohaku's sublease to the property. (Id.) The
court also ordered that Pohaku “and all persons
claiming any interest in the leasehold property . . . [were]
forever barred and foreclosed of and from any and all right,
title, and interest and claims at law or equity in and
to” the property, and awarded possession to Colony
Surf. (Id. at 57.)
being awarded possession, Colony Surf transferred the
property to M&T Bank. (Id. ¶ 61.) On
October 18, 2004, M&T Bank sold the property to a third
party. (Id. ¶ 71; id. at 45.) At some
point before the sale, M&T Bank and Colony Surf entered
into an agreement about how the proceeds of the
property's sale would be divided. (See Id. at
48-52.) That agreement is the crux of this case; Campbell
alleges the agreement is a “kickback/quid pro quo
agreement, ” and states that she did not learn about
the agreement until “almost two years after the loss of
her home and its subsequent sale by M&T Bank.”
(Id. ¶¶ 4-6.) She further states that she
was not able to obtain an escrow settlement statement
regarding the property's sale and the division of funds
until August 2012. (Id. ¶ 3.)
also alleges that M&T Bank did something unlawful with
the loan and her bank account. At some point in 2009 Campbell
obtained a statement and lien release from M&T Bank's
collections department. (Id. ¶ 8.) Campbell
alleges she also spoke to an M&T Bank employee, who told
her that her loan with M&T Bank was written down to zero
when M&T took over Keystone. (Id.) Campbell
states that this occurred three years before the foreclosure
proceedings, meaning she made payments on the loan while
“unaware that loan had been written down to zero, and .
. . that the loan was never paid off, but rather
‘satisfied' by an alleged forty thousand dollar
debit from [her] account in 2006.” (Id.)
Campbell implies that this alleged debit constitutes unlawful
conduct in light of the fact that she closed her accounts
with M&T Bank in 2000. (See id.)
August 10, 2015, Campbell, representing herself, filed a
praecipe for writ of summons against M&T Bank in the
Pennsylvania Court of Common Pleas for Blair County. (ECF No.
1-2 at 2.) Campbell failed to file a complaint in that case.
(Id.) On April 11, 2016, Campbell filed another case
in the Blair County Court of Common Pleas, but this time did
file a complaint. (ECF No. 1-4 at 2.) The two cases were
consolidated by the Court of Common Pleas, (id.) and
M&T thereafter removed the case to this Court (ECF No.
complaint contains 15 counts; 3 common-law counts and 12
federal counts. Specifically, Campbell has sued M&T Bank
for (1) fraud, (2) breach of fiduciary duty, (3) material
breach of contract, (4) a violation of the False Claims Act
(31 U.S.C. § 3731(b)), (5) bank fraud (18 U.S.C. §
1344), (6) a RICO violation involving bank fraud (18 U.S.C.
§ 1963), (7) theft, embezzlement, or misapplication by
bank officer or employee (18 U.S.C. § 656), (8) fraud
concerning bank entries, reports, and transactions (18 U.S.C.
§ 1005), (9) wire fraud affecting a financial
institution (18 U.S.C. § 1343), (10) mail fraud
affecting a financial institution (18 U.S.C. § 1341),
(11) fraud concerning FDIC transactions (18 U.S.C. §
1007), (12) disclosure of classified information (50 U.S.C.
§ 783), (13) communication of restricted data (42 U.S.C.
§ 2274), (14) obstruction of justice (18 U.S.C. §
1581), and (15) unfair or deceptive acts or practices by
state chartered banks (15 U.S.C. § 45).
Standard of Review
Bank has filed a motion to dismiss Campbell's complaint
on the basis that it fails to state a claim upon which relief
can be granted (Federal Rule of Civil Procedure 12(b)(6)) and
on the basis that Campbell has failed to join an
indispensable party (Rule 12(b)(7)).
Failure to State a Claim upon Which Relief Can Be
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). Rule 12(b)(6) allows a party to seek
dismissal of a complaint for failure to state a claim upon
which relief can be granted. In determining the sufficiency
of a complaint challenged under Rule 12(b)(6), a district
court must conduct a two-part analysis. First, the court
should separate the factual and legal elements of the claims.
Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.
2009). Second, the court must determine whether the factual
matters alleged are sufficient to establish that the
plaintiff has a “plausible claim for relief.”
Id. at 211 (quoting Ashcroft v. Iqbal, 556
U.S. 662, 679 (2009)). The complaint, however, need not
include “detailed factual allegations.”
Phillips, 515 F.3d at 231 (quoting Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
court must also accept as true all factual allegations in the
complaint and draw all inferences from the facts alleged in
the light most favorable to the non-moving party. See
Id. at 228 (citing Worldcom, Inc. v. Graphnet,
Inc., 343 F.3d 651, 653 (3d Cir. 2003)). But
“legal conclusions” and “[t]hreadbare
recitals of the elements of a cause of action . . . do not
suffice.” Iqbal, 556 U.S. at 678 (citing
Twombly, 550 U.S. at 555). Rather, the complaint
must present sufficient “factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Sheridan v.
NGK Metals Corp., 609 F.3d 239, 262 n.27 (3d Cir .2010)
(quoting Iqbal, 556 U.S. at 678).
whether a plaintiff has stated a “plausible claim for
relief” is a context-specific inquiry that requires the
district court to “draw on its judicial experience and
common sense.” Iqbal, 556 U.S. at 679
(citation omitted). The record to consider in making this
determination includes the complaint and any “document
integral or explicitly relied on in the complaint.”
U.S. Express Lines, Ltd. v. Higgins, 281 F.3d 383,
388 (3d Cir. 2002) (emphasis and citation omitted). If a
claim is vulnerable to dismissal under Rule 12(b)(6), the
district court must permit a curative amendment regardless of
whether a plaintiff seeks leave to amend, unless amendment
would be inequitable or futile. Phillips, 515 F.3d
at 236 (citation omitted).
to Join an Indispensable Party
12(b)(7) allows a party to seek dismissal of a claim for
failure to join a required party. As with (12)(b)(6)
challenges, in analyzing a motion under Rule 12(b)(7) the
court must accept as true all factual allegations in the
complaint and draw all inferences from the facts alleged in
the light most favorable to the non-moving party. See
Jurimex Kommerz Transit G.M.B.H. v. Case Corp., 65 F.
App'x 803, 805 (3d Cir. 2003). In evaluating a 12(b)(7)
motion, the court applies the two-part test found in Rule 19.
Rule 19(a) provides that an absent person is a necessary
party if he is subject to service of process and either: (1)
in his absence, complete relief cannot be accorded among the
parties; or (2) the absent person claims an interest in the
subject matter of the case and his absence will, as a
practical matter, prejudice his ability to protect that
interest or result in multiple or otherwise inconsistent
person is necessary under Rule 19(a) but cannot be joined,
the court must determine whether the case should proceed
among the existing parties or be dismissed. Fed.R.Civ.P.
19(b). In making this determination, the court must consider
the extent to which prejudice will result to the non-party or
the current parties as a result of the non-party's
absence, the extent to which any such prejudice could be
lessened, whether a judgment rendered in the non-party's
absence would be adequate, and whether the plaintiff has an
adequate remedy if the case were to be dismissed.
threshold issue warrants discussion before addressing the
merits of M&T Bank's motion to dismiss, namely
Campbell's failure to file a response to M&T
Bank's motion. This Judge's Practices and Procedures
provide that responses to motions to dismiss “shall be
filed within 21 days from the date of service of the
motion.” Although district courts may grant motions
by default when they are truly unopposed, the United States
Court of Appeals for the Third Circuit has counseled that
district courts should not grant motions to dismiss against
pro se plaintiffs without analyzing the merits of the motion.
Stackhouse v. Mazurkiewicz, 951 F.2d 29, 30 (3d Cir.
1991); see also Xenos v. Hawbecker, 441 F. App'x
128, 131 (3d Cir. 2011) (“unless a plaintiff's
failure to oppose a motion can truly be understood to reflect
that the motion is unopposed-for instance, when the plaintiff
is represented by counsel-we have expressed a preference for
an assessment of the complaint on its merits” (citing
Stackhouse, 951 F.2d at 30)). Thus, the Court will
assess the merits of M&T Bank's motion to dismiss
notwithstanding Campbell's failure to respond.
Bank advances multiple arguments for why Campbell's
complaint should be dismissed. Specifically, it argues that
the three state-law claims are timebarred and that the
statutes of limitations were not tolled, that the False
Claims Act claim does not present a viable claim for relief
and suffers from procedural defects, that seven claims are
predicated on criminal statutes that do provide a private
right of action, that the claim for a RICO violation
involving bank fraud does not present a viable claim for
relief and is timebarred, and that the three remaining claims
fail as a matter of law. M&T Bank argues further that the
Court lacks jurisdiction over Campbell's claims under the
so-called Rooker-Feldman doctrine,  and that her
claims are barred by res judicata and collateral estoppel.