United States District Court, E.D. Pennsylvania
ABRAHAM A. SIWONIKU et al. Plaintiffs,
FEDERAL NATIONAL MORTGAGE ASSOCIATION, et al. Defendants.
DARNELL JONES, II J.
Abraham A. Siwoniku and Alero Smith-Kidd
(“Plaintiffs”) bring this diversity action to
remedy the alleged wrongful designation of their mortgage as
defaulted. Their original Complaint set forth claims against
Defendants Federal National Mortgage Association
(“FNMA”) and Seterus, Inc.
(“Seterus”) (collectively, the
“Defendants”) for fraud, defamation, breach of
contract, violations of the Pennsylvania Unfair Trade
Practices and Consumer Protection Law, 73 Pa. C.S. 201-1 et
seq., violations of the Truth in Lending Act, and violations
of Sections 1692f and 1692g of the Fair Debt Collection
Practices Act (the “FDCPA”), 15 U.S.C. §
1601 et seq. Defendants filed a Motion to Dismiss the
Complaint (“First Motion to Dismiss”) for failure
to state a claim in accordance with Rule 12(b)(6) of the
Federal Rules of Civil Procedure. The Court granted the
motion, in part, and dismissed each of those claims with
leave to amend, which Plaintiffs did.
before the Court is Defendants' Motion to Dismiss the
Amended Complaint (“Second Motion to Dismiss”),
which sets forth claims for: (1) fraud; (2) negligence; (3)
violations of §§1692f and 1692g of the FDCPA; and
(4) breach of contract. After reviewing the Amended Complaint
(ECF No. 26), Defendants' Second Motion to Dismiss (ECF
No. 27), and Plaintiffs' Opposition thereto
(“Plaintiffs' Opposition”) (ECF No. 28) the
Court will grant Defendants' motion and dismiss the
Amended Complaint with prejudice.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
factual background and procedural history of this case was
set forth in this Court's Memorandum discussing the First
Motion to Dismiss (ECF No. 23). Rather than repeat that
discussion, the Court incorporates the “Relevant
Background” in its prior Memorandum here. Those facts
were construed in a light most favorable to Plaintiffs.
Court will, however, set forth two new allegations from the
Amended Complaint that bear on the Court's analysis.
First, Plaintiffs now allege that although the mortgage at
issue was assigned to Defendant FNMA, Defendant Seterus
“became the ‘servicer' of said note/mortgage
as the term is defined in 12 CFR § 1024.2, and was
acting at all times as the agent, servant and representative
of Defendant FNMA, in furtherance of their own interest and
the interest of Defendant FNMA.” Am. Compl. at 2 (ECF
No. 25). Second, Plaintiffs now allege that Defendants filed
a motion for summary judgment in the foreclosure proceeding
in the Court of Common Pleas of Montgomery County on the
mortgage at issue. Am. Compl. at 3. Plaintiffs allege that
the motion was denied and that the transcript of the hearing
attached to the Amended Complaint demonstrates that
“Defendant was unable to produce evidence that the
Plaintiffs had defaulted on the mortgage and in fact had
produced records that were missing pages.” Am. Compl.
at 3. Plaintiffs use this to support their claim that
“Defendants have been unable to account for or in any
way justif[y] the allegation of a default or filing of a
foreclosure action.” Am. Compl. at 3.
STANDARD OF REVIEW
well-established standards of Rule 12(b)(6) govern this
motion. See Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009); Fowler v. UPMC Shadyside, 578 F.3d 203, 210
(3d Cir. 2009).
have challenged the sufficiency of each of Plaintiffs'
claims. In the interest of clarity the Court will consider
whether each count states a claim for relief in turn.
Count One - Fraud
Court previously dismissed Plaintiffs' fraud count for
failure to plead with the particularity required by Rule
9(b). Mem. Granting First Mot. Dismiss at 4 (ECF No. 23). The
Amended Complaint contains the same general allegations found
lacking in the original Complaint. Plaintiffs attempt to add
particularity by including allegations about a hearing held
on a motion for summary judgment in a foreclosure action on
the mortgage at issue. Plaintiff pleads that Defendants were
“unable to produce evidence that the Plaintiffs had
defaulted on the mortgage” and could not justify
deeming their mortgage defaulted or filing a foreclosure
argue that this Count must be dismissed for three reasons.
First, Plaintiffs have still failed to plead reasonable
reliance on Defendants' alleged misrepresentation given
their express denial of default or delinquency. Sec. Mot.
Dismiss at 7. Second, any statements made at the hearing on
the motion for summary judgment are judicially privileged and
unable to be relied upon here. Sec. Mot. Dismiss at 8. Third,
the gist of the action doctrine bars this claim because the
alleged fraud arose out of a breach of the terms of the
governing mortgage loan agreement - a contract. Sec. Mot.
Dismiss at 8.
Court need not address each of Defendants' arguments
because Plaintiffs have again failed to plead the elements of
fraud with particularity. See Chase v. Creegan, 169
A.3d 1136 (Pa. Super. Ct. 2017). Plaintiffs fail to plead
that they reasonably relied upon Defendants' alleged
misrepresentation about their mortgage being in default.
Plaintiffs also fail to plead Defendants knowingly or
recklessly made false representations regarding the status of
Plaintiffs' mortgage. Presumably, Plaintiffs included
allegations about the hearing on the motion for summary
judgment to address this prong of the fraud analysis.
However, the portion of the transcript relied upon by
Plaintiffs in the Amended Complaint does not have the import
they believe. At that hearing the Court questioned Defendants
about an electronically submitted exhibit to their motion for
summary judgment that was missing a page. Am. Compl. at Ex.
A, 8:14-20. In response, counsel attempted to submit a
complete history in hardcopy, but the Court denied the
request and, subsequently, the motion for summary judgment,
finding there ...