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U.S. Bank National Association v. Gerber

United States District Court, M.D. Pennsylvania

July 26, 2018




         Plaintiff U.S. Bank National Association (“U.S. Bank”) filed a complaint in mortgage foreclosure against defendants Brian A. Gerber and Tracy L. Gerber (“the Gerbers”). In addition to answering the complaint and raising affirmative defenses, the Gerbers assert two counterclaims. U.S. Bank moves to dismiss both counterclaims under Federal Rule of Civil Procedure 12(b)(6) and also moves to strike many of the Gerbers' affirmative defenses. (Doc. 10). The court will grant U.S. Bank's motion to dismiss and will grant in part and deny in part the motion to strike.

         I. Factual Background & Procedural History

         In 2007, the Gerbers borrowed $247, 500 from HOMELOANADVISORS.COM and executed a promissory note in consideration for the loan. (Doc. 1 ¶ 8; Doc. 1-2, Ex. A; Doc. 8 at 2 ¶ 8, 19 ¶ 38). The loan was a refinance transaction, not a purchase-money loan. (Doc. 8 at 19 ¶ 38). The Gerbers secured the note with a mortgage, which offers as collateral real property located in Dillsburg, Pennsylvania. (Doc. 1 ¶¶ 8, 12, 17; Doc. 8 at 2-3 ¶¶ 8, 12, 17). The Gerbers are the record owners of the mortgaged property, and the mortgage was duly recorded. (Doc. 1 ¶¶ 12, 18; Doc. 1-2, Ex. B; Doc. 8 at 3 ¶¶ 12 & 18, 19 ¶ 38).

         According to U.S. Bank, HOMELOANADVISORS.COM indorsed the note to Encore Credit, and Encore Credit indorsed the note in blank.[1] (Doc. 1 ¶¶ 9-10). U.S. Bank claims that it currently possesses the original note. (Id. ¶ 11). U.S. Bank further asserts that HOMELOANADVISORS.COM assigned the mortgage to Mortgage Electronic Registration Systems, Inc. (“MERS”), and MERS assigned the mortgage to Bank of America National Association (“Bank of America”) as trustee for certain mortgage-backed securities. (Id. ¶ 14). Around the time of the assignment from MERS to Bank of America, the mortgage was “securitized.”[2] (Doc. 8 at 11 ¶ 8). When U.S. Bank succeeded Bank of America as trustee for the mortgage-backed securities, Bank of America assigned the mortgage to U.S. Bank. (Doc. 1 ¶¶ 15-16; Doc. 8 at 3 ¶ 16). U.S. Bank avers that all of these mortgage assignments were duly recorded. (Doc. 1 ¶¶ 13, 14, 16; Doc. 1-2, Ex. C, D, E).

         U.S. Bank alleges that beginning in March 2009 and continuing thereafter, the Gerbers failed to make loan payments as required under the note. (Doc. 1 ¶ 19). U.S. Bank avers that it provided the Gerbers notice of default and notice of its intention to foreclose on the mortgaged property. (Id. ¶ 24; Doc. 1-2, Ex. G; Doc. 8 at 4 ¶ 24). U.S. Bank filed the instant complaint in mortgage foreclosure in August 2017. At that time, U.S. Bank claimed the Gerbers owed approximately $456, 000 in outstanding principal, interest, escrow deficit, and costs. (Doc. 1 ¶¶ 21-22).

         The Gerbers answered the complaint and raised 22 affirmative defenses. The Gerbers also assert two declaratory judgment counterclaims against U.S. Bank. U.S. Bank moves to dismiss both counterclaims under Rule 12(b)(6) and to strike many of the Gerbers' affirmative defenses under Rule 12(f). The motion is fully briefed and ripe for disposition.

         II. Legal Standard

         Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for the dismissal of complaints that fail to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). When ruling on a motion to dismiss under Rule 12(b)(6), the court must “accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (quoting Pinker v. Roche Holdings, Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). In addition to reviewing the facts contained in the complaint, the court may also consider “exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents” attached to a defendant's motion to dismiss if the plaintiff'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)).

         Federal notice and pleading rules require the complaint to provide “the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Phillips, 515 F.3d at 232 (alteration in original) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). To test the sufficiency of the complaint, the court conducts a three-step inquiry. See Santiago v. Warminster Township, 629 F.3d 121, 130-31 (3d Cir. 2010). In the first step, “the court must ‘tak[e] note of the elements a plaintiff must plead to state a claim.'” Id. at 130 (alteration in original) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009)). Next, the factual and legal elements of a claim must be separated; well-pleaded facts are accepted as true, while mere legal conclusions may be disregarded. Id. at 131-32; see Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). Once the court isolates the well-pleaded factual allegations, it must determine whether they are sufficient to show a “plausible claim for relief.” Iqbal, 556 U.S. at 679 (citing Twombly, 550 U.S. at 556); Twombly, 550 U.S. at 556. A claim is facially plausible when the plaintiff pleads facts “that allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

         Federal Rule of Civil Procedure 8(c) classifies a statute of limitations claim as an affirmative defense that must be pled in an answer to the complaint. Fed.R.Civ.P. 8(c). Nevertheless, the court may dismiss a complaint as time-barred under Rule 12(b)(6) if “the time alleged in the statement of a claim shows that the cause of action has not been brought within the statute of limitations.” Robinson v. Johnson, 313 F.3d 128, 135 (3d Cir. 2002); see Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 n.1 (3d Cir. 1994). This deficiency must be apparent on the face of the pleading. Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (citation omitted). The Third Circuit has indicated that the meaning of “the face of the complaint, ” as it relates to asserting affirmative defenses in a motion to dismiss, is coextensive with the general Rule 12(b)(6) limitations. Id.; see also Hoffman v. Nordic Nats., Inc., 837 F.3d 272, 280 & n.52 (3d Cir. 2016) (citations omitted) (discussing raising affirmative defense of preclusion in Rule 12(b)(6) motion). Thus, the materials properly considered include not only the complaint but also matters of public record, exhibits attached to the complaint, and undisputed materials embraced by the complaint but provided by the defendant. Schmidt, 770 F.3d at 249; Hoffman, 837 F.3d at 280 & n.52.

         III. Discussion

         U.S. Bank attacks the sufficiency of the Gerbers' counterclaims and moves to strike many of the Gerbers' affirmative defenses. We begin by addressing the Rule 12(b)(6) motion to dismiss.

         A. Motion to Dismiss Counterclaims

         The Gerbers' counterclaims seek relief under the Declaratory Judgments Act, 28 U.S.C. §§ 2201-2202, which authorizes federal courts to “declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). In other words, declaratory judgment actions are intended to adjudicate “rights and obligations prior to the enforcement of a remedy.” Rarick v. Federated Serv. Ins. Co., 852 F.3d 223, 227 (3d Cir. 2017) (citations omitted). The Gerbers seek declaratory relief in two forms: first, a declaration of unilateral contract modification and, second, a declaration of rescission.

         1. Counterclaim Count I - Declaratory Judgment, Unilateral ...

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