United States District Court, E.D. Pennsylvania
WILMINGTON TRUST, NA, Successor Trustee to Citibank, N.A., Trustee, in Trust for Registered Hodlers of Bear Stearns Asset Backed Securities 2007-SD2, Asset-Backed Certificates, Series 2007-SD2, Plaintiff,
ANGELO ADSON, and STACEY L. JULYE, Defendants/Third Party Plaintiffs,
case arises out of Angelo Adson and Stacey L. Julye's
(“borrowers”) default on their mortgage on a
residential property. Wilmington Trust, N.A, successor
mortgagee, brought a foreclosure action against borrowers.
Borrowers thereafter filed a Third Party Complaint against
Dr. Ben Carson in his capacity as Secretary of the United
States Department of Housing and Urban Development
(“HUD”). In the Third Party Complaint, borrowers
bring claims against HUD for breach of contract, fraud, and
breach of the covenant of good faith and fair dealing for not
providing Fair Housing Administration insurance on the
mortgage. Presently before the Court is HUD's Motion to
Dismiss the Third Party Complaint. For the reasons that
follow, the Motion is granted.
facts as alleged in borrowers' Third Party Complaint are
as follows. On July 19, 2000, borrowers obtained a home
mortgage loan from Hansen Mortgage Services, Inc. in the
amount of $147, 682. Third Party Compl. ¶¶ 22, 23.
Borrowers allege that they contracted with HUD for Federal
Housing Administration (“FHA”) mortgage insurance
and paid monthly premiums to HUD. Third Party Compl.
¶¶ 23, 24.
March 12, 2015, Wilmington Trust, NA. (“Wilmington
Trust”), the successor mortgagee, filed a Complaint in
the Court of Common Pleas of Delaware County alleging that
borrowers defaulted on their mortgage. Third Party Compl.
¶ 41; Notice of Removal ¶ 1. On June 26, 2015, the
Court of Common Pleas entered a default judgment against
borrowers. Third Party Compl. ¶ 49. On December 5, 2015,
the Delaware County Sheriff posted a Notice of Sheriff Sale
on borrowers' property, scheduling the sale for January
15, 2016. The Court of Common Pleas postponed the sale on
January 15, 2016, and thereafter stayed the sale on May 23,
2016. Third Party Compl. ¶¶ 53, 58. Borrowers
allege that Wilmington Trust did not provide loss mitigation
measures required for FHA insured mortgages. Third Party
Compl. ¶ 42.
filed the Third Party Complaint on April 12, 2017, against
Dr. Ben Carson in his capacity as HUD Secretary. That
Complaint asserts the following claims: breach of contract
(Count 1); common law fraud (Count 2); and breach of the
covenant of good faith and fair dealing (Count 3). In each
count, borrowers seek repayment of the mortgage loan amount
of $197, 682; attorney's fees of $150, 000; $500 court
costs; and punitive damages.
to 28 U.S.C. § 1442(a)(1), which allows civil actions
commenced in state court against the United States, its
agencies, or it officers, to be removed to the United States
District Court for the district in which the action is
pending, HUD filed a Notice of Removal on May 22, 2017. HUD
thereafter filed a Motion to Dismiss the Third Party
Complaint and borrowers filed their Response. The Motion is
thus ripe for review.
presents the following arguments in its Motion to Dismiss the
Third Party Complaint. HUD first contends that this Court
lacks jurisdiction over these claims because (1) the
borrowers lack standing to asserts claims against HUD; (2)
the National Housing Act, 12 U.S.C. §1701, et.
seq. (“NHA”) precludes judicial review of
loss mitigation decisions; and (3) this Court lacks
jurisdiction on the grounds of sovereign immunity and the
Tucker Act. Second, HUD argues that the borrowers fail to
state a claim upon which relief can be granted because (1)
borrowers fail to allege an enforceable contract; (2) even if
there were an enforceable contract, borrowers fail to allege
a contract between FHA and borrowers; (3) without a valid
contract, there is no claim for breach of the covenant of
good faith and fair dealing; (4) borrowers fail to plead a
fraud claim because they do not allege any representations
made by HUD; and (5) borrowers' Third Party Complaint is
untimely pursuant to Pennsylvania Rule of Civil Procedure
2253(a)(1), Pennsylvania's two-year statute of
limitations for fraud claims, and Pennsylvania's
four-year statute of limitations for contract claims.
Rule of Civil Procedure 12(b)(1) provides that a court may
dismiss a complaint for “lack of jurisdiction over the
subject matter” of a case. The plaintiff has the burden
of establishing subject matter jurisdiction. See Carpet
Group Int'l v. Oriental Rug Imp. Ass'n, 227 F.3d
62, 69 (3d Cir. 2000) (citing Mortensen v. First Fed.
Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.
1977)). “Without jurisdiction the court cannot proceed
at all in any case.” Steel Co. v. Citizens
for a Better Env't, 523 U.S. 83, 94 (1998) (citation
types of challenges to a court's jurisdiction may be made
under Rule 12(b)(1). In re Horizon Healthcare Servs. Data
Breach Litig., 846 F.3d 625, 632 (3d Cir. 2017). A
facial attack under Rule 12(b)(1) “challenges subject
matter jurisdiction without disputing the facts alleged in
the complaint, and it requires the court to 'consider the
allegations of the complaint as true.'” Davis
v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016)
(quoting Petruska v. Gannon Univ., 462 F.3d 294, 302
n.3 (3d Cir. 2006)). In a facial attack, the court applies
the same standard as under Rule 12(b)(6). Horizon
Healthcare Servs., 846 F.3d at 633. In a factual attack,
however, a court may “weigh and consider evidence
outside the pleadings.” Davis, 824 F.3d at
346. In a factual attack, the court “is free to weigh
the evidence and satisfy itself as to the existence of its
power to hear the case” and “the plaintiff will
have the burden of proof that jurisdiction does in fact
exist.” Id. (quoting Mortensen, 549
F.2d at 891). “In short, no presumptive truthfulness
attaches to plaintiff's allegations, and the existence of
disputed material facts will not preclude the trial court
from evaluating for itself the merits of jurisdictional
claims.” Mortensen, 549 F.2d at 891. HUD's
sovereign immunity challenge, which is the basis of the
Court's decision to grant HUD's Motion to Dismiss, is
a facial challenge.
Court agrees with HUD that the Court does not have
jurisdiction over these claims based on sovereign immunity
and the Tucker Act, 28 U.S.C. §§ 1346, 1491. The
Court does not ...