United States District Court, E.D. Pennsylvania
a legal malpractice and fraud case. The case arises out of
plaintiff Christine Bernstein's interactions with
Keaveney Legal Group (“KLG”), which provided
plaintiff with legal assistance relating to a foreclosure
action. Plaintiff asserts claims against defendants KLG,
James P. Keaveney, Esquire, and Joshua Thomas, Esquire, based
on violations of the Pennsylvania Unfair Trade Practices and
Consumer Protection Law (“UTPCPL”), common law
fraud, and violations of the federal Bankruptcy Abuse
Prevention and Consumer Protection Act
(“BAPCPA”); and claims against James P. Keaveney,
Esquire, and Joshua Thomas, Esquire, for legal malpractice.
Presently before the Court is Defendants, Keaveney Legal
Group, James P. Keaveney, Esquire, and Joshua Thomas
Esquire's Motion to Dismiss Pursuant to Fed.R.Civ.P.
reasons that follow, the Court grants in part and denies in
part defendants' Motion to Dismiss.
relevant facts as alleged in plaintiff's Amended
Complaint are as follows. A foreclosure action relating to
plaintiff's home was filed on January 17, 2014. Am.
Compl. ¶ 30. Plaintiff learned of KLG's foreclosure
services by way of an advertisement on the internet sometime
in early January of 2014. Am. Compl. ¶ 22. On January 7,
2014, plaintiff met with Antonio Romero, “a salesperson
from the KLG” who was “an agent of the
Defendants, ” at an office in Philadelphia. Am. Compl.
¶¶ 23-24. Romero “showed Plaintiff a video
describing the difficulty for a homeowner to secure a loan
modification on their own” and “informed
Plaintiff that attorneys were the only ones that could
communicate with the bank at [that] point.” Am. Compl.
¶¶ 26, 30. Romero also “indicated that the
KLG would be able to secure a loan modification for
Plaintiff, ” and stated that “some people receive
a loan modification as quickly as two months.” Am.
Compl. ¶¶ 28, 31. Plaintiff “believed [it]
was a fact, that she could not obtain a loan modification
without the assistance of a law firm”-indeed,
“Romero had Plaintiff convinced that if she did not
retain the services of the KLG she would lose her home to
foreclosure.” Am. Compl. ¶¶ 27, 32.
ultimately entered into a “Representation Agreement on
Foreclosure Defense” under which plaintiff agreed to an
initial payment of $1, 500 and a monthly fee of $695, to be
billed automatically “until the conclusion of the
case.” Am. Compl. ¶¶ 34, 35, 37. All of these
payments were nonrefundable. Am. Compl. ¶ 36. Plaintiff
paid KLG a total of $8, 195 in legal fees. Am. Compl. ¶
immediately provided to Defendants the requested documents
required to submit an application for loan
modification.” Am. Compl. ¶ 39. Defendant Thomas
entered his appearance in plaintiff's foreclosure action
on February 27, 2014, and filed an Answer to the Foreclosure
Complaint on March 14, 2014. Am. Compl. ¶¶ 45-46.
Santander, plaintiff's foreclosure servicer, filed a
Motion for Summary Judgment against plaintiff on October 24,
2014. Am. Compl. ¶¶ 51. The court granted the
Motion for Summary Judgment on December 9, 2014, and
Santander filed a Praecipe to Enter Judgment on December 26,
2014. Am. Compl. ¶¶ 55-56. Defendants did not
inform plaintiff that the Motion for Summary Judgment had
been filed, that the court had granted the Motion, or that
the Praecipe to Enter Judgment had been filed. Am. Compl.
¶¶ 51, 55-56.
on December 15, 2014, defendants informed plaintiff that they
“finally submitted” her application for a loan
modification to the servicer. Am. Compl. ¶ 54. On
December 27, 2014, plaintiff received a
“surprise” notice of sheriff's sale of her
home. Am. Compl. ¶ 57. Plaintiff then contacted
Santander to inquire about the status of her loan
modification application. Am. Compl. ¶ 59. Santander
told plaintiff that its only contact with defendants
regarding plaintiff's loan was a notification from
defendants informing Santander that defendants were
representing plaintiff. Am. Compl. ¶¶ 59-60.
Defendants had never submitted to Santander a loan
modification application on plaintiff's behalf. Am.
Compl. ¶¶ 59-60.
own, plaintiff submitted a loan modification application to
Santander, which was acknowledged on January 2, 2015, and
granted on February 27, 2015. Am. Compl. ¶¶ 58, 61.
Plaintiff sold her home in April 2015 because of the fees
that had accrued on her mortgage, and because she took a job
in Massachusetts. Am. Compl. ¶ 62. Plaintiff sold the
home for “a significantly lower price” than she
would have obtained if it were not in foreclosure. Am. Compl.
filed her original Complaint on October 16, 2016. Defendants
filed a Motion to Dismiss the Complaint on December 30, 2016,
and plaintiff filed an Amended Complaint on January 20, 2017.
Defendants filed a Motion to Dismiss the Amended Complaint on
February 21, 2017; plaintiffs filed a Response in Opposition
to the Motion to Dismiss on March 31, 2017; and on April 14,
2017, defendants filed a Reply in Support of the Motion to
reasons set forth below, the Court grants in part and denies
in part defendants' Motion.
12(b)(6) of the Federal Rules of Civil Procedure permits a
party to respond to a pleading by filing a motion to dismiss
for “failure to state a claim upon which relief can be
granted.” To survive a motion to dismiss, the complaint
must allege facts that “‘raise a right to relief
above the speculative level.'” Victaulic Co. v.
Tieman, 499 F.3d 227, 234 (3d Cir. 2007) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)). A complaint must contain “sufficient factual
matter, accepted as true, to ‘state a claim to relief
that is plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570). A district court first
identifies those factual allegations that constitute nothing
more than “legal conclusions” or “naked
assertions.” Twombly, 550 U.S. at 555, 557.
Such allegations are “not entitled to the assumption of
truth” and must be disregarded. Iqbal, 556
U.S. at 679. The court then assesses “the
‘nub' of the plaintiff['s] complaint-the
well-pleaded, nonconclusory factual allegation[s]”-to
determine whether it states a plausible claim for relief.
Count I: Pennsylvania's Unfair Trade Practices and
Consumer Protection Law
of the Amended Complaint alleges that all defendants violated
the UTPCPL by making various false and misleading statements
in their advertising and communications with plaintiff.
Defendants argue that attorneys are exempt from UTPCPL
liability when they are engaged in the practice of law. The
Court agrees; however, because plaintiff has pointed to
non-attorney actions that can be imputed to KLG, the Court
grants in part and denies in part defendants' Motion as
to Count I.
Supreme Court of Pennsylvania has exclusive authority to
regulate the practice of law in Pennsylvania, and has held
that attorneys cannot be liable under the UTPCPL when
“Pennsylvania's Rules of Professional Conduct and
Rules of Disciplinary Enforcement exclusively address the
conduct complained of.” Beyers v. Richmond,
937 A.2d 1082, 1092 (Pa. 2007). Plaintiff concedes that
Beyers precludes liability for “actions by the
Attorney Defendants [which] constitute violations of the
Pennsylvania Rules of Professional [Conduct].” Resp. at
10. Following Beyers, the Court concludes that
plaintiff cannot recover under Count I based on any
allegations of attorney conduct which is exclusively governed
by the Pennsylvania Rules of Professional Conduct and Rules
of Disciplinary Enforcement. The Court therefore ...